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Audit Committee

COMPOSITION

 

Eu Peng Meng @ Leslie Eu

(Chairman/Independent Non-Executive Director)

 

Tan Sri Datuk Seri Panglima Dr. Abu Hassan Bin Othman

(Member/Independent Non-Executive Director)

 

Dato’ Cheong Keap Tai

(Member/Independent Non-Executive Director)

 

Primary Purposes 

The Committee shall :–

1. Provide assistance to the Board of Directors ( "Board" ) in fulfilling its fiduciary responsibilities relating to the corporate accounting and practices for YTL Land & Development Berhad and its subsidiaries ( "Group" ).

2. Assist to improve the Company and the Group's business efficiency, the quality of the accounting function, the system of internal controls and the audit function to strengthen the confidence of the public in the Company and the Group's reported results.

3. Maintain through regularly scheduled meetings, a direct line of communication between the Board and the external auditors as well as internal auditors.

4. Establish policies and procedures to access the suitability, objectivity and independence of the external auditors.

5. Ensure that the internal audit function is effective and able to function independently.

6. Strengthen the role of the Independent Directors by giving them a greater depth of knowledge as to the operations of the Company and of the Group through their participation in the Committee.

7. Act upon the Board's request to investigate and report on any issues or concerns in regard to the management of the Company and the Group.

8. Review existing practices and recommend to management to formalise an ethics code for all executives and members of the staff of the Company and the Group.

9. Instil discipline and control to reduce incidence of fraud.

 

Composition 

1. The Committee shall be appointed by the Board from amongst their number and shall comprise no fewer than three ( 3 ) members, all of whom must be non-executive directors, with a majority of them being Independent Directors.

2. All members of the Audit Comittee should be financially literate. At least one member of the Audit Committee :–

( a ) must be a member of the Malaysian Institute of Accountants; or

( b ) if he is not a member of the Malaysian Institute of Accountants, he must have at least 3 years' working experience and :–

( i ) he must have passed the examinations specified in Part I of the First Schedule of the Accountants Act 1967; or

( ii ) he must be a member of one of the associations of accountants specified in Part II of the First Schedule of the Accountants Act 1967; or

( c ) fulfils such other requirements as prescribed or approved by Bursa Malaysia Securities Berhad ("Bursa Securities").

3. The Board must ensure that no alternate Director is appointed as a member of the Audit Committee.

4. The members of the Committee shall elect a Chairman from amongst their number who shall be an Independent Director. The Chairman of the Comittee shall not be the Chairman of the Board.

5. In the event of any vacancy in the Committee resulting in the non-compliance of sub-paragraph 15.09(1) of the Bursa Securities Main Market Listing Requirements ("Main LR"), the Company must fill the vacancy within three (3) months.

 

Authority 

The Committee shall in accordance with the procedure determined by the Board and at the cost of the Company :–

1. have explicit authority to investigate any matter within its terms of reference;

2. have the resources which are required to perform its duties;

3. have full and unrestricted access to any information pertaining to the Company and the Group;

4. have direct communication channels with the external auditors and person(s) carrying out the internal audit function or activity;

5. be able to obtain independent professional or other advice and to secure the attendance of outsiders with relevant experience and expertise if it considers this necessary;

6. be able to convene meetings with the internal auditors without the presence of other directors and employees of the Company, whenever deemed necessary; and

7. to meet with the external auditors at least twice a year without the presence of the other directors and employees of the Company.

 

 Functions and Duties 

The Committee shall, amongst others, discharge the following functions –

1. Financial Reporting

( a ) Review the quarterly financial results and annual financial statement, prior to its recommendation to the Board for approval, focusing particularly on :–

• changes in or implementation of major accounting policies and practices; • significant matters highlighted including financial reporting issues, significant judgements made by management, significant and unusual events or transactions, and how these matters are addressed; • the accuracy and adequacy of the disclosure of information essential to a fair and full presentation of the financial affairs of the Company and the Group; • compliance with appplicable approved accounting standards, other regulatort and legal requirements;

• the going concern assumption.

2. External Audit

( a ) Review the audit plan, scope of audit and audit report with the external auditors;

( b ) Review with the external auditors their evaluation of the system of internal controls, during the course of their audit, including any significant suggestions for improvements and management's response;

( c ) Review the assistance given by the employers of the Company to the external auditors;

( d ) Recommend the nomination of a person or persons as external auditors and the audit fee;

( e ) Review any letter of resignation from the external auditors of the Company;

( f ) Review whether there is reason (supported by grounds) to believe that the Company's external auditors are not suitable for re-appointment;

( g ) Review any significant audit findings, reservations, difficulties encountered or material weaknesses reported by the external auditors.

3. Internal Audit

( a ) Review the adequacy of the scope, competency and resources of the internal audit functions and that it has the necessary authority and resources to carry out its work;

( b ) Review the internal audit plan, processes, the results of the internal audit assessments, investigation undertaken and whether or not appropriate action is taken on the recommendations;

( c ) Review any significant audit findings, reservations, difficulties encountered or material weaknesses reported by the internal auditors.

4. Related Party Transactions

( a ) Review any related party transaction and conflict of interest situation that may arise within the Company/Group and any related parties outside the Company/Group including any transaction, procedure or course of conduct that raises questions of management integrity.

5. Employees Share Option Scheme ( "ESOS" )

( a ) Verify allocation of share options to the eligible employees pursuant to the criteria set out in the By-Laws of the ESOS in accordance to the Main LR.

6. Other Matters

( a ) Carry out any other function that may be mutually agreed upon by the Committee and the Board which would be beneficial to the Company/ Group and ensure the effective discharge of the Committee's duties and responsibilities;

( b ) Promptly report to Bursa Securities on any matter reported by it to the Board of the Company which has not been satisfactorily resolved resulting in a breach of the Main LR.

 

Meetings 

1. To form a quorum in respect of a meeting of the Committee, the majority of members present must be Independent Directors.

2. The Committee shall meet at least five ( 5 ) times a year, although additional meetings may be called at any time at the discretion of the Chairman of the Committee. An agenda shall be sent to all members of the Committee and any other persons who may be required/invited to attend. All meetings to review the quarterly financial results and annual financial statements, shall be held prior to such quarterly financial results and annual financial statements being presented to the Board for approval.

3. Notwithstanding item 2 above, upon the request of any member of the Committee, the external auditors or the internal auditors, the Chairman of the Committee shall convene a meeting of the Committee to consider any matter which should be brought to the attention of the Directors or shareholders.

4. The external auditors and internal auditors have the right to appear and be heard at any meeting of the Committee and shall appear before the Committee when required to do so by the Committee.

5. The Committee may invite any Board member or any member of the management within the Company/Group whom the Committee thinks fit to attend its meetings toassist in resolving and clarifying matters raised in audit reports.

6. The internal auditors shall be in attendance at meetings of the Committee to present and discuss the audit reports of findings and the recommendations relating thereto and to follow up on decisions made at these meetings.

7. The Committee may establish any regulations from time to time to govern its administration.

 

Minutes 

1. The Secretary shall cause minutes to be duly entered in the books provided for the purpose of all resolutions and proceedings of all meetings of the Committee. Such minutes shall be signed by the Chairman of the meeting at which the proceedings were held or by the Chairman of the next succeeding meeting and if so signed, shall be conclusive evidence without any further proof of the facts thereon stated.

2. Minutes of each meeting shall also be distributed to the members of the Committee prior to each meeting.

3. Detailed minutes of the Committee's meetings will be made available to all Board members. A summary of significant matters and resolutions will be reported to the Board by the Committee.

4. The books containing the minutes of proceedings of any meeting of the Committee shall be kept by the Company at the registered office of the Company and shall be opened to the inspection of any member of the Committee or the Board.

Secretary 

The Secretary to the Committee shall be the Company Secretary.

 

NUMBER OF MEETINGS HELD AND DETAILS OF ATTENDANCE

During the financial year, a total of 5 Audit Committee meetings were held and the details of attendance are as follows:-

                                                                                                    Attendance

Eu Peng Meng @ Leslie Eu                                                              3

Tan Sri Datuk Seri Panglima Dr. Abu Hassan Bin Othman               5

Dato’ Cheong Keap Tai                                                                     5

 

SUMMARY OF WORK CARRIED OUT DURING FINANCIAL YEAR

The Audit Committee carried out the following work during thefinancial year ended 30 June 2018 in the discharge of its functions and duties:-

1. OVERSEEING FINANCIAL REPORTING

(a) Reviewed the following quarterly financial results and annual financial statements (“Financial Reports”) prior to their recommendation to the Board of Directors for approval:-

• Quarterly financial results for the fourth quarter of financial year ended 30 June 2017, and the annual audited financial statements for the financial year ended 30 June 2017 at the Audit Committee meetings held on 24 August 2017 and 20 September 2017, respectively;

• First, second and third quarters of the quarterly results for the financial year ended 30 June 2018 at the Audit Committee meetings held on 21 November 2017, 21 February 2018 and 23 May 2018, respectively.

(b) Reviewed the variance analysis, in particular, the deviation of the profit after tax and minority interest in the audited financial statements for the financial year ended 30 June 2017 from that of the announced quarterly financial results for the financial year ended 30 June 2017 and confirmed that no obligation was triggered under Paragraph 9.19(35) of Bursa Malaysia Securities Berhad (“Bursa Securities”) Main Market Listing Requirements (“Main LR”).

(c) At the Audit Committee meetings, the Senior Finance Manager/Finance Manager presented the Financial Reports wherein the following matters were reviewed and confirmed, with clarification and/or additional information provided wherever required by the

Executive Director primarily in charge of the financial management of the Company:-

• Appropriate accounting policies had been adopted and applied consistently, and other statutory and regulatory requirements had been complied with;

• The Company has adequate resources to continue in operation for the foreseeable future and that there are no material uncertainties that could lead to significant doubt as to the Group’s ability to continue as a going concern;

• Significant judgements made by management in respect of matters such as assessment of net realisable value of inventories, impairment assessment of goodwill and investment in subsidiaries, provision for foreseeable losses arising from obligation to build low cost apartments and affordable housing units, and revenue recognition were prudent and the underlying assumptions and/or estimates used were reasonable in accordance with the requirements of the Financial Reporting Standards (“FRS”);

• Adequate processes and controls were in place for effective and efficient financial reporting and disclosures under the FRS and the Main LR;

• The Financial Reports were fairly presented in conformity with the relevant accounting standards in all material aspects.

2. EXTERNAL AUDIT

(a) Reviewed with the external auditors, Messrs Ernst & Young (“EY”):-

• the audit results report on the audit of the financial statements for financial year ended 30 June 2017 setting out their comments and conclusions on the significant auditing and accounting issues highlighted, including management’s judgements, estimates and/or assessments made, and adequateness of disclosures in the financial statements;

• the audit plan for the financial year ended 30 June 2018 outlining, amongst others, their scope of work, areas of audit emphasis, multi-location audit, and development in laws and regulations affecting financial reporting and the responsibilities of directors and management, and auditors.

(b) Reviewed the audit fees proposed by EY together with management and recommended the negotiated fees agreed by EY to the Board of Directors for approval.

(c) Had discussions with EY twice during the financial year, namely on 20 September 2017 and 23 May 2018, without the presence of management, to apprise on matters in regard to the audit and financial statements. EY confirmed there was full support and good co-operation from management and employees of the Company.

(d) Reviewed the profiles of the audit engagement team and other support teams (tax accounting and risk advisory services, transaction advisory services, and IT risk and assurance) which enabled the Audit Committee to assess their qualification, expertise, resources, and independence, as well as the effectiveness of the audit process. EY also provided written confirmation of their independence in all of the reports presented to the Audit Committee. The Audit Committee also reviewed on a regular basis, the nature and extent of the non-audit services provided by EY and was satisfied with the suitability, performance, independence and objectivity of EY.

3. INTERNAL AUDIT

(a) Reviewed with the internal auditors the internal audit report on the audit findings and recommendations, management’s responses and/or actions taken there to, and ensured that material findings were satisfactorily addressed by management;

(b) Reviewed and adopted the internal audit risk analysis report for 2018. Internal audit would leverage on the Group’s risk analysis to focus on the business processes and relevant areas that address the key risks identified;

(c) Reviewed and adopted the risk-based internal audit plan for financial year ending 30 June 2019 to ensure sufficient scope and coverage of activities of the Company and the Group;

(d) Reviewed internal audit resourcing, with focus on ensuring that the function has sufficient resources together with the right calibre of personnel to perform effectively, and that the head of internal audit has adequate authority to discharge his functions objectively and independently.

4. RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE (“RRPT”)

(a) Reviewed, on a quarterly basis, the RRPT entered into by the Company and/or its subsidiaries with related parties to ensure that the Group’s internal policies and procedures governing RRPT are adhered to, the terms of the shareholder mandate are not contravened, and disclosure requirements of the Main LR are observed;

(b) Received updates on the directorships and shareholdings held by the Directors of the Company and persons connected with them via the general notices given under and in accordance with Section 221 of the Companies Act, 2016. These disclosures enabled an assessment of the potential or actual conflicts of interest which may arise in relation to related party transactions or RRPT;

(c) Reviewed the 2017 circular to shareholders in relation to the renewal of shareholder mandate for RRPT and new shareholder mandate for additional RRPT, prior to its recommendation to the Board of Directors for approval.

5. AMENDMENTS TO TERMS OF REFERENCE (“TOR”)

(a) Reviewed the proposed amendments to its TOR to include enhancements to its oversight role as introduced by the changes to the Main LR and practices recommended in the Malaysian Code on Corporate Governance (“MCCG 2017”), prior to approval of the Board of Directors.

6. ANNUAL REPORT

(a) Reviewed the Audit Committee Report, and Statement on Risk Management and Internal Control before recommending these to the Board of Directors for approval for inclusion in 2017 Annual Report.

INTERNAL AUDIT FUNCTION

The objective of the Internal Audit (“IA”) is to help management evaluate the effectiveness and efficiency of the internal control systems. The IA is part of the Company and the Group’s governance system, and according to the MCCG 2017, the IA is in charge of supervising internal control activities. IA’s goal is to focus mainly on risk-based audits related to operations and compliance that are aligned with the risks of the Company and the Group to ensure that the relevant controls addressing those risks are reviewed.

During the financial year, the IA Department evaluated the adequacy and effectiveness of key controls in responding to risks within the organisation’s governance, operations and information systems regarding:-

• Reliability and integrity of financial and operational information;

• Effectiveness and efficiency of operations;

• Safeguarding of assets; and

• Compliance with relevant laws, regulations and contractual obligations. The work of the internal audit function during the year under review include:-

1. Developed the annual internal audit plan and proposed the plan to the Audit Committee.

2. Conducted scheduled and special internal audit engagements, focusing primarily on the effectiveness of internal controls and recommended improvements where necessary.

3. Conducted follow-up reviews to assess if appropriate action has been taken to address issues highlighted in previous audit reports.

4. Presented significant audit findings and areas for improvements raised by the IA to the Audit Committee for consideration on the recommended corrective measures together with the management’s responses.

5. Conducted recurrent related party transactions reviews to assess accuracy and completeness of reporting for presentation to the Audit Committee, and ensure compliance with the Main LR.

6. Conducted discussions with management in identifying significant concerns and risk areas perceived by management for inclusion in the internal audit plan.

Costs amounting to RM82,708 were incurred in relation to the internal audit function for the financial year ended 30 June 2018.  

 

 

 

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Corporate Governance Overview Statement

The Board of Directors (“Board”) of YTL Land & Development Berhad (“YTL L&D” or “Company”) remains firmly committed to ensuring an appropriate and sound system of corporate governance throughout the Company and its subsidiaries (“YTL L&D Group”). The YTL L&D Group has a long-standing commitment to corporate governance and protection of stakeholder value, which has been integral to the YTL L&D Group’s achievements and strong financial profile to date.

The YTL L&D Group’s corporate governance structure is a fundamental part of the Board’s responsibility to protect and enhance long-term shareholder value and the financial performance of the YTL L&D Group, whilst taking into account the interests of all stakeholders.

In implementing its governance system and ensuring compliance with the Main Market Listing Requirements (“Listing Requirements”) of Bursa Malaysia Securities Berhad (“Bursa Securities”), the Board has been guided by the principles and practices set out in the Malaysian Code on Corporate Governance (“Code”) issued by the Securities Commission Malaysia.

The new Code was issued in April 2017 and required companies to report their application of the practices in the new Code for financial years ending on or after 31 December 2017, making this the Company’s first report prepared with reference to its compliance with the new Code. In November 2017, Bursa Securities issued amendments to the Listing Requirements which, amongst others, replaced the previous narrative statement on corporate governance with the requirement for an overview of the application of the principles of the Code and set out the prescribed format for the Corporate Governance Report (“CG Report”) required to be issued in conjunction with the annual report.

Therefore, an  overview of the Board’s implementation of the practices set out in the Code during the financial year ended 30 June 2018 is detailed in this statement, together with targeted timeframes for measures expected to be implemented in the near future, where applicable, and the Company’s CG Report for the financial year ended 30 June 2018 is available below and has been released via the website of Bursa Securities at www.bursamalaysia.com in conjunction with the Annual Report.

 

PRINCIPLE A: BOARD LEADERSHIP AND EFFECTIVENESS

RESPONSIBILITIES OF THE BOARD

YTL L&D is led and managed by an experienced Board with a wide and varied range of expertise to address and manage the complexity and scale of the YTL L&D Group’s operations. This broad spectrum of skills and experience ensures the YTL L&D Group is under the guidance of an accountable and competent Board. The Directors recognise the key role they play in charting the strategic direction, development and control of the YTL L&D Group.

Key elements of the Board’s stewardship responsibilities include:

• Reviewing and adopting strategic plans for the YTL L&D Group; to ensure long-term, sustainable value creation for the benefit of its stakeholders;

• Overseeing the conduct of the YTL L&D Group’s business operations and financial performance, including the economic, environmental and social impacts of its operations;

• Identifying and understanding the principal risks affecting the YTL L&D Group’s businesses in order to determine the appropriate risk appetite within which management is expected to operate;

• Maintaining a sound risk management and internal control framework, supported by appropriate mitigation measures;

• Succession planning; and

• Overseeing the development and implementation of shareholder communications policies.

The Board is led by the Chairman who is responsible for instilling good corporate governance practices, leadership and effectiveness of the Board. In June 2018, the Board approved the re-designations of Tan Sri Dato’ (Dr) Francis Yeoh Sock Ping, who was re designated as the Executive Chairman, from Managing Director previously, and Dato’ Yeoh Seok Kian, who was re-designated as the Managing Director, from Executive Director previously. Dato’ Suleiman bin Abdul Manan stepped down from his current position as the Non-Executive Chairman and remains on the Board as a Non-Executive Director.

There is a balance of power, authority and accountability between the Executive Chairman and the Managing Director with a clear division of responsibility between the running of the Board and the Company’s business respectively. The positions of Executive Chairman and Managing Director are separate and clearly defined, and are held by different members of the Board.

The Chairman is responsible for leadership of the Board in ensuring the effectiveness of all aspects of its role, and is primarily responsible for leading the Board in setting the values and standards of the Company, the orderly and effective conduct of the meetings of the Board and shareholders, maintaining a relationship of trust with and between the Executive and Non- Executive Directors, ensuring the provision of accurate, timely and clear information to Directors, facilitating the effective contribution of Non-Executive Directors and ensuring that constructive relations are maintained between Executive and Non-Executive Directors.

The Managing Director is responsible for, amongst others, overseeing the day-to-day running of the business, implementation of Board policies and strategies, and making of operational decisions, serving as the conduit between the Board and the Management in ensuring the success of the Company’s governance and management functions, ensuring effective communication with shareholders and relevant stakeholders, providing strong leadership, i.e., effectively communicating a vision, management philosophy and business strategy to employees, and keeping the Board informed of salient aspects and issues concerning the Group’s operations.

The Managing Director and Executive Directors are accountable to the Board for the profitability and development of the YTL L&D Group, consistent with the primary aim of enhancing long term shareholder value. The Independent Non-Executive Directors have the experience and business acumen necessary to carry sufficient weight in the Board’s decisions and the presence of these Independent Non-Executive Directors brings an additional element of balance to the Board as they do not participate in the day-to-day running of the YTL L&D Group.

The roles of Executive and Non-Executive Directors are differentiated, both having fiduciary duties towards shareholders. Executive Directors have a direct responsibility for business operations whereas Non-Executive Directors have the necessary skill and experience to bring an independent judgment to bear on issues of strategy, performance and resources brought before the Board. The Executive Directors are collectively accountable for the running and management of the YTL L&D Group’s operations and for ensuring that strategies are fully discussed and examined, and take account of the long-term interests of shareholders, employees, customers, suppliers and the many communities in which the YTL L&D Group conducts its business.

In the discharge of their responsibilities, the Directors have established functions which are reserved for the Board and those which are delegated to management. Key matters reserved for the Board’s approval include overall strategic direction, business expansion and restructuring plans, material acquisitions and disposals, expenditure over certain limits, issuance of new securities and capital alteration plans. Further information on authorisation procedures, authority levels and other key processes can also be found in the Statement on Risk Management & Internal Control set out in the Annual Report.

The Board believes sustainability is integral to the long-term success of the YTL L&D Group. Further information on the YTL L&D Group’s sustainability activities can be found in the Sustainability Statement in the Annual Report.

 

BOARD MEETINGS AND PROCEDURES

Board meetings are scheduled with due notice in advance at least 5 times in a year in order to review and approve the annual and interim financial results. Additional meetings may also be convened on an ad-hoc basis when significant issues arise relating to the YTL L&D Group and when necessary to review the progress of its operating subsidiaries in achieving their strategic goals. The Board met 5 times during the financial year ended 30 June 2018.

The Directors are fully apprised of the need to determine and disclose potential or actual conflicts of interest which may arise in relation to transactions or matters which come before the Board. In accordance with applicable laws and regulations, the Directors formally disclose any direct or indirect interests or conflicts of interests in such transactions or matters as and when they arise and abstain from deliberations and voting at Board meetings as required.

The Directors have full and unrestricted access to all information pertaining to the YTL L&D Group’s business and affairs to enable them to discharge their duties. At least one week prior to each Board meeting, all Directors receive the agenda together with a comprehensive set of Board papers encompassing qualitative and quantitative information relevant to the business of the meeting. This allows the Directors to obtain further explanations or clarifications, where necessary, in order to be properly briefed before each meeting.

Board papers are presented in a consistent, concise and comprehensive format, and include, where relevant to the proposal put forward for the Board’s deliberation, approval or knowledge, progress reports on the YTL L&D Group’s operations and detailed information on corporate proposals, major fund raising exercises and significant acquisitions and disposals. Where necessary or prudent, professional advisers may be on hand to provide further information and respond directly to Directors’ queries. In order to maintain confidentiality, Board papers on issues that are deemed to be price-sensitive may be handed out to Directors during the Board meeting.

The minutes of the Board and/or Board Committee meetings are circulated and confirmed at the next meeting. Once confirmed, the minutes of the Board Committee meetings are subsequently presented to the Board for notation.

 

COMPANY SECRETARY

The Board is supported by a professionally qualified and competent Company Secretary. The Company Secretary, Ms Ho Say Keng, is a Fellow of the Chartered Association of Certified Accountants, a registered member of the Malaysian Institute of Accountants and an affiliate member of the Malaysian Institute of Chartered Secretaries and Administrators, and is qualified to act as Company Secretary under Section 235(2)(a) of the Companies Act 2016.

The Company Secretary ensures that Board procedures are adhered to at all times during meetings and advises the Board on matters including corporate governance issues and the Directors’ responsibilities in complying with relevant legislation and regulations.The Company Secretary works very closely with Management for timely and appropriate information, which will then be passed on to the Directors. In accordance with the Board’s procedures, deliberations and conclusions in Board meetings are recorded by the Company Secretary, who ensures that accurate and proper records of the proceedings of Board meetings and resolutions passed are recorded and kept in the statutory register at the registered office of the Company.

During the financial year under review, the Company Secretary attended training, seminars and regulatory briefings and updates relevant for the effective discharge of her duties. The Company Secretary also carried out an ongoing review of existing practices in comparison with the new measures introduced in the Code.

 

BOARD CHARTER

The Board’s functions are governed and regulated by its Charter, the Constitution of the Company and the various applicable legislation, Listing Requirements and other regulations and codes. The Board’s Charter was formalised during the financial year ended 30 June 2014 and a copy can be found under the “Governance” section on the Company’s website at www.ytlland.com. The Board Charter clearly sets out the role and responsibilities of the Board, Board committees, Directors and Management and the issues and decisions reserved for the Board. The Board Charter is reviewed and updated periodically when necessary.

 

BUSINESS CONDUCT AND ETHICS

The Directors observe and adhere to the Code of Ethics for Company Directors established by the Companies Commission of Malaysia, which encompasses the formulation of corporate accountability standards in order to establish an ethical corporate environment. YTL L&D has an established track record for good governance and ethical conduct, and is also guided by the corporate culture of its parent company, YTL Corporation Berhad (“YTL Corp”). YTL Corp is in the process of updating and formalising the code of conduct for all employees of its group of companies in a consolidated employee handbook, which also sets out a whistleblowing policy and procedures.

 

COMPOSITION OF THE BOARD

The Board currently has 10 Directors, comprising 6 executive members and 4 non-executive members, 3 of whom are independent.

The Independent Directors comprise 30.0% of the Board. This provides an effective check and balance in the functioning of the Board, and complies with the Listing Requirements, which require one-third of the Board to be independent. The Directors are cognisant of the recommendation in the Code for at least half of the Board to comprise independent directors and will assess the composition and size of the Board on an ongoing basis to ensure the needs of the Company are met. The Board is of the view that the current Independent Non-Executive Directors have the experience and business acumen necessary to carry sufficient weight in the Board’s decisions, and act in the best interests of the shareholders.

There are currently 3 Independent Non-Executive Directors, Tan Sri Datuk Seri Panglima Dr Abu Hassan Bin Othman, Dato’ Cheong Keap Tai and Mr Eu Peng Meng @ Leslie Eu, who have served on the Board for a period exceeding the nine-year term limit recommended in the Code. In accordance with current practice, approval through a vote of all shareholders via the single-tier voting process will continue to be sought at the forthcoming seventy-eighth Annual General Meeting (“AGM”) of YTL L&D for Tan Sri Datuk Seri Panglima Dr Abu Hassan Bin Othman, Dato’ Cheong Keap Tai and Mr Eu Peng Meng @ Leslie Eu to continue to serve as Independent Non-Executive Directors. Further information on the review and assessment process can be found in the Nominating Committee Statement, whilst details of the resolution, together with the rationale for approval sought, can be found in the Notice of Annual General Meeting in the Annual Report.

In accordance with the Company’s Constitution, at least one-third of the Directors are required to retire from office at each Annual General Meeting (“AGM”) and may offer themselves for re-election by rotation. Directors who are appointed by the Board during the financial year are subject to re-election by shareholders at the next AGM held following their appointments.

The names of Directors seeking re-election at the forthcoming AGM are disclosed in the Notice of Annual General Meeting, which can be found in the Annual Report. The details of the Directors can be found in the Profile of the Board of Directors set out in the Annual Report and this information is also available under the “Governance” section on the Company’s website at www.ytlland.com.

 

BOARD AND SENIOR MANAGEMENT APPOINTMENTS

The Nominating Committee is chaired by an Independent Non- Executive Director and is responsible for assessing suitable candidates for appointment to the Board for approval, taking into account the required mix of skills, diversity, experience and expertise of members of the Board before submitting its recommendation to the Board for decision. Nevertheless, in identifying future candidates, the Board will also endeavour to utilise independent sources including external human resources consultants and specialised databases, as appropriate.

Meanwhile, members of senior management are selected based on relevant industry experience, with due regard for diversity in skills, experience, age, background and gender, and are appointed by the Executive Chairman and/or the Managing Director following recommendation by the Executive Director in charge of the relevant division.

As the Board’s overriding aim is to maintain a strong and effective Board, it seeks to ensure that all appointments are made on merit, taking into account the collective balance of elements such as skills, experience, age, gender, ethnicity, background and perspective. The Board recognises the importance of encouraging and developing female talent at all levels. Currently there is one female director on the Board comprising 10.0% of the Board. Although it has not set any specific measurable objectives, the Board intends to continue its current approach to support diversity in all aspects while at the same time seeking Board members of the highest calibre, and with the necessary strength, experience and skills to meet the needs of the Company.

 

EVALUATION OF THE BOARD

Annual evaluation of the Board as a whole, Board Committees and the individual Directors is carried out by the Nominating Committee. The evaluation carried out during the financial year under review involved an annual assessment of the effectiveness of each individual Director and the Board as a whole with the objectives of assessing whether the Board and the Directors had effectively performed its/their roles and fulfilled its/their responsibilities, and devoted sufficient time commitment to the Company’s affairs, in addition to recommending areas for improvement.

The assessment exercise was facilitated by the Company Secretary and took the form of completion of questionnaires/ evaluation forms comprising a Board and Nominating Committee Effectiveness Evaluation Form, Individual Director Performance Evaluation Form, Independent Directors’ Evaluation Form, Audit Committee Effectiveness Evaluation Form and Audit Committee Members Evaluation Form. Further information on the activities of the Nominating Committee can be found in the Nominating Committee Statement set out in the Annual Report. This information is also available under the “Governance” section on the Company’s website at www.ytlland.com.

 

REMUNERATION

Directors’ remuneration is decided in line with the objective recommended by the Code to determine the remuneration for Directors so as to attract, retain, motivate and incentivise Directors of the necessary calibre to lead the YTL L&D Group successfully. In general, the remuneration of the Directors is reviewed against the performance of the individual and the YTL L&D Group. The Executive Directors’ remuneration consists of basic salary, other emoluments and other customary benefits as appropriate to a senior management member. The component parts of remuneration are structured so as to link rewards to performance. Directors do not participate in decisions regarding their own remuneration packages and Directors’ fees must be approved by shareholders at the AGM.

The Board does not currently have a separate committee to perform this function but will target to establish a remuneration committee within the next two years.

Details of the Directors’ remuneration categorised into appropriate components can be found in Note 9 in the Notes to the Financial Statements in the Annual Report. Meanwhile, as regards the remuneration of the YTL L&D Group’s senior management team, the Board is of the view that the disclosure of these details would not be in the best interests of YTL L&D Group due to confidentiality and the competitive nature of the industries in which the YTL L&D Group operates, as well as for business and personal security reasons.

 

BOARD COMMITMENT

In accordance with the Listing Requirements, each member of the Board holds not more than five directorships in public listed companies. This ensures that their commitment, resources and time are focused on the affairs of the YTL L&D Group thereby enabling them to discharge their duties effectively.

Presently, each Board member is required to assess (via the annual assessment process) whether he/she devotes the necessary time and energy to fulfilling his/her commitments to the Company. The Board recognises that an individual’s capacity for work varies depending on various factors that weigh very much on his/her own assessment. Hence, having rigid protocols in place before any new directorships may be accepted is not practical. Each Board member is also expected to inform the Board whenever he/she is appointed as an officer of a corporation.

The details of each Director’s attendance of Board meetings can be found in the Profile of the Board of Directors whilst details of the training programmes attended during the year under review are disclosed in the Nominating Committee Statement in the Annual Report. This information is also available under the “Governance” section on the Company’s website at www.ytlland.com.

 

PRINCIPLE B: EFFECTIVE AUDIT AND RISK MANAGEMENT

INTEGRITY IN FINANCIAL REPORTING

The Directors are responsible for ensuring that financial statements are drawn up in accordance with the Listing Requirements, Financial Reporting Standards and the requirements of the Companies Act 2016 in Malaysia. The Statement of Directors’ Responsibilities made pursuant to Section 248-249 of the Companies Act 2016 is set out in the Annual Report.

In presenting the financial statements, the Company has used appropriate accounting policies, consistently applied and supported by reasonable and prudent judgments and estimates, to present a true and fair assessment of the Company’s position and prospects. Interim financial reports were reviewed by the Audit Committee and approved by the Board prior to release to Bursa Securities.

 

AUDIT COMMITTEE

The Company has in place an Audit Committee which comprises 3 Independent Non-Executive Directors, in compliance with the Listing Requirements and the Code, namely Mr. Eu Peng Meng @ Leslie Eu, Tan Sri Datuk Seri Panglima Dr Abu Hassan Bin Othman and Dato’ Cheong Keap Tai. The Chairman of the Audit Committee is Mr Eu Peng Meng @ Leslie Eu, in accordance with the recommendations of the Code that the chairman of the audit committee should not be the chairman of the Board.

The members of the Audit Committee possess a wide range of necessary skills to discharge their duties, and are financially literate and able to understand matters under the purview of the Audit Committee including the financial reporting process. The members of the Audit Committee also intend to continue to undertake professional development by attending training to keep themselves abreast of relevant developments in accounting and auditing standards, practices and rules.

The Audit Committee holds quarterly meetings to review matters including the YTL L&D Group’s financial reporting, the audit plans for the financial year and recurrent related party transactions, as well as to deliberate the findings of the internal and external auditors.

The Audit Committee met 5 times during the financial year ended 30 June 2018. Full details of the composition and a summary of the work carried out by the Audit Committee during the financial year can be found in the Audit Committee Report set out in the Annual Report. This information and the terms of reference of the Audit Committee are available under the “Governance” section on the Company’s website at www.ytlland.com.

The Audit Committee has established formal and professional arrangements for maintaining an appropriate relationship with the Company’s external auditors, Messrs Ernst & Young (“EY”). The external auditors also attend each AGM in order to address clarifications sought pertaining to the audited financial statements by shareholders.

During the financial year under review, the Terms of Reference of the Audit Committee were updated to include the establishment of policies to assess the suitability, objectivity and independence of external auditors. It is intended that these policies, which will also include a requirement that a former key audit partner must observe a cooling-off period of two years before being appointed as a member of the Audit Committee, will be implemented within the next one year.

 

Details of the audit and non-audit fees paid/payable to EY for the financial year ended 30 June 2018 are as follows:-

 

                                                                         Company                                               Group

                                                                            RM’000                                                RM’000

Statutory audit fees paid/payable to:-

– EY                                                                      151                                                        250

– Affiliates of EY                                                      –                                                            –

Total                                                                      151                                                         250

Non-audit fees paid/payable to:-

– EY                                                                       10                                                           10

– Affiliates of EY                                                      –                                                             –

Total                                                                        10                                                          10

 

RISK MANAGEMENT & INTERNAL CONTROL

The Board acknowledges its overall responsibility for maintaining a sound system of risk management and internal control to safeguard the investment of its shareholders and the YTL L&D Group’s assets, and that these controls are designed to provide reasonable, but not absolute, assurance against the risk of occurrence of material errors, fraud or losses.

Details of the YTL L&D Group’s system of risk management and internal control are contained in the Statement on Risk Management & Internal Control and the Audit Committee Report as set out in the Annual Report.

 

INTERNAL AUDIT

YTL L&D’s internal audit function is carried out by the Internal Audit department within the YTL Corp Group (“YTLIA”), which reports directly to the Audit Committee. The Head of YTLIA, Mr Choong Hon Chow, is a member of the Malaysian Institute of Accountants and a fellow member of the Association of Chartered Certified Accountants (ACCA) UK. He started his career with the external audit division of a large public accounting firm before moving on to the internal audit profession in public listed companies and gained valuable and extensive internal audit experiences covering many areas of diversified commercial businesses and activities. He has a total of 35 years of internal and external audit experience.

YTLIA comprises 8 full-time personnel. The personnel of YTLIA are free from any relationships or conflicts of interest which could impair their objectivity and independence.

The internal audit function adopts the framework based on the International Standards for the Professional Practice of Internal Auditing issued by the Institute of Internal Auditors.

The activities of the internal audit function during the year under review included:-

• Developing the annual internal audit plan and proposing this plan to the Board;

• Conducting scheduled internal audit engagements, focusing primarily on the effectiveness of internal controls and recommending improvements where necessary;

• Conducting follow-up reviews to assess if appropriate action has been taken to address issues highlighted in audit reports; and

• Presenting audit findings to the Board for consideration.

Further details of the YTL L&D Group’s internal audit function are contained in the Statement on Risk Management & Internal Control and the Audit Committee Report as set out in the Annual Report.

 

PRINCIPLE C: INTEGRITY IN CORPORATE REPORTING AND MEANINGFUL RELATIONSHIP WITH STAKEHOLDERS

COMMUNICATION WITH SHAREHOLDERS

The YTL L&D Group values dialogue with investors and constantly strives to improve transparency by maintaining channels of communication with shareholders and investors that enable the Board to convey information about performance, corporate strategy and other matters affecting stakeholders’ interests. The Board believes that a constructive and effective investor relationship is essential in enhancing shareholder value and recognises the importance of timely dissemination of information to shareholders.

Accordingly, the Board ensures that shareholders are kept well informed of any major development of the YTL L&D Group. Such information is communicated through the Annual Report, the various disclosures and announcements to Bursa Securities, including quarterly and annual results, and corporate websites. Corporate information, annual financial results, governance information, business reviews and future plans are disseminated through the Annual Report, whilst current corporate developments are communicated via the Company’s corporate website at www.ytlland.com and the YTL Corp Group’s community website at www.ytlcommunity.com, in addition to prescribed information, including its interim financial results, announcements, circulars, prospectuses and notices, which is released through the official website of Bursa Securities.

The Executive Chairman, Managing Director and the Executive Directors meet with analysts, institutional shareholders and investors throughout the year not only to promote the dissemination of the YTL L&D Group’s financial results but to provide updates on strategies and new developments to ensure better understanding of the YTL L&D Group’s operations and activities. Presentations based on permissible disclosures are made to explain the YTL L&D Group’s performance and major development programs.

Whilst efforts are made to provide as much information as possible to its shareholders and stakeholders, the Directors are cognisant of the legal and regulatory framework governing the release of material and sensitive information so as to not mislead its shareholders. Therefore, the information that is price-sensitive or that may be regarded as undisclosed material information about the YTL L&D Group is not disclosed to any party until after the prescribed announcement to Bursa Securities has been made.

 

CONDUCT OF GENERAL MEETING

The AGM is the principal forum for dialogue with shareholders. The Board provides opportunities for shareholders to raise questions pertaining to issues in the Annual Report, corporate developments in the YTL L&D Group, the resolutions being proposed and the business of the YTL L&D Group in general at every general meeting of the Company.

The Notice of the AGM and a circular to shareholders in relation to the renewal of the Company’s share buy-back and recurrent related party transactions mandates, if applicable, are sent to shareholders at least 28 days prior to the AGM in accordance with the Code, which also meets the criteria of the Listing Requirements and Companies Act 2016, which require the Notice of AGM to be sent 21 days prior to the AGM. This provides shareholders with sufficient time to review the YTL L&D Group’s financial and operational performance for the financial year and to fully evaluate new resolutions being proposed to make informed voting decisions at the AGM.

The Executive Chairman, Managing Director and Executive Directors take the opportunity to present a comprehensive review of the progress and performance of the YTL L&D Group and provide appropriate answers in response to shareholders’ questions during the meeting, thereby ensuring a high level of accountability, transparency and identification with the YTL L&D Group’s business operations, strategy and goals. The Directors are mindful of the recommendation under the Code that all directors must attend general meetings and fully appreciate the need for their attendance at all such meetings.

Extraordinary general meetings are held as and when required to seek shareholders’ approval. The Executive Chairman, Managing Director and Executive Directors take the opportunity to fully explain the rationale for proposals put forth for approval and the implications of such proposals for the Company and to reply to shareholders’ questions.

Voting in absentia is not applied as general meetings are always held at easily accessible locations, in the centre of Kuala Lumpur. Shareholders who are unable to attend the meetings can appoint a proxy to vote on their behalf.

Where applicable, each item of special business included in the notice of the meeting is accompanied by an explanatory statement for the proposed resolution to facilitate full understanding and evaluation of the issues involved. All resolutions are put to vote by electronic poll voting and an independent scrutineer is appointed to verify poll results. The results of the electronic poll voting are announced in a timely manner, usually within half an hour of the voting process to enable sufficient time for the results to be tabulated and verified by the independent scrutineer.

The rights of shareholders, including the right to demand for a poll, are found in the Constitution of the Company. At the 77th AGM of the Company, held on 12 December 2017, the resolutions put forth for shareholders’ approval were voted on by way of a poll.

This statement and the CG Report were approved by the Board of Directors on 29 August 2018.

Click here to view CG report.

 

 

 

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Nominating Committee Statement

NOMINATING COMMITTEE (“NC”)

The NC assists the Board of Directors of YTL Land & Development Berhad (the “Company”) (“Board”) in discharging its responsibilities by overseeing the selection and assessment of Directors to ensure that the composition of the Board meets the needs of the Company and its subsidiaries (“YTL Land Group”).

The terms of reference of the NC can be found under the “Governance” section on the Company’s website at www.ytlland.com.

Members of the NC are as follows:-

• Tan Sri Datuk Seri Panglima Dr. Abu Hassan Bin Othman (Chairman)

• Dato’ Cheong Keap Tai

• Eu Peng Meng @ Leslie Eu

The NC met twice during financial year ended 30 June 2018, attended by all members.

 

TERMS OF REFERENCE

 

1. Primary Purposes

1.1 To provide assistance to the Board of Directors (“Board”) in overseeing the selection and assessment of Directors to ensure that the Board composition meets the need of YTL Land & Development Berhad and its subsidiaries (“Group”).

1.2 To develop, maintain and review the criteria to be used in the recruitment process and annual assessment of Directors and the independence of Independent Directors.

1.3 To recommend suitable candidate(s) for appointments to the Board and the Committee of the Board.

1.4 To facilitate Board induction and training programmes.

 

2. Composition

2.1 The Committee shall be appointed by the Board from amongst their number and shall comprise no fewer than three (3) members, all of whom must be Non-Executive directors, with a majority of them being Independent Non-Executive Directors.

2.2 The members of the Committee shall elect a Chairman from amongst their number who shall be an Independent Non-Executive Director.

2.3 Members of the Committee may relinquish their membership in the Committee with prior written notice to the Company Secretary and may continue to serve as directors of the Company.

2.4 In the event that the number of members is reduced below three (3), the Board shall appoint such new members as may be required as soon as practicable provided that

 

3. Authority The Committee, in carrying out its duties and responsibilities, shall in accordance with the procedure determined by the Board and at the cost of the Company:-

3.1 have the resources which are required to perform its duties;

3.2 have full and unrestricted access to any information pertaining to the Company and the Group;

3.3 be able to obtain independent professional or other advice and to secure the attendance of outsiders with relevant experience and expertise if it considers this necessary; and

3.4 have access to the advise and services of the Company Secretary.

 

4. Functions and Duties The Committee shall, amongst others, discharge the following functions:-

4.1 To formulate the nomination, selection and succession policies for members of the Board.

4.2 To recommend to the Board suitable candidates for appointments, the re-appointments/re-election of Directors to the Board and any removals, and appointment of members of Board Committee established by the Board. In making its recommendation, the Committee should consider and assess the candidates’ character, skills, knowledge, expertise and experience, professionalism, integrity, competence, commitment, contribution and time to effectively discharge his/her role as a director, and in the case of candidates for the position of independent non-executive directors, to evaluate the candidates’ ability to discharge such responsibility/functions as expected from independent non-executive directors.

4.3 Review annually the overall composition of the Board in terms of the appropriate size, mix of skills, experience and other qualities of the Board, the balance between executive directors, non-executive and independent directors, and other core competencies required.

4.4 Assess annually the effectiveness of the Board and Board Committees as well as the contribution by each individual Director and Board Committee.

4.5 Establish a set of quantitative and qualitative performance criteria to review and evaluate the performance of each member of the Board.

4.6 Develop criteria to assess independence for application by the Board upon admission, annually and when any new interest or relationship develops.

4.7 Establish a policy formalising Board’s approach to boardroom diversity and ensure disclosure in the Annual Report its gender diversity policies.

4.8 Facilitate and determine board induction and continuing education programmes to be provided for the Board in areas that would best strengthen their contributions to the Board.

 

5.         Meetings

5.1        The quorum for each meeting shall be two (2) members of the Committee including the Chairman. No business shall be transacted at any meeting of the Committee unless the quorum is present. The meeting of the Committee shall be governed by the provisions of the Company’s Articles of Association relating to Board meetings unless otherwise provided for in this Terms of Reference.

5.2        A member of the Committee may participate in a meeting by means of a telephone conference or video conference or any other means of audio-visual communications and shall be deemed to be present in person at the meeting and shall be entitled to vote or counted in a quorum.

5.3        The Committee may at its discretion and as necessary, invite any Board member or any member of the Management within the Company/Group whom the Committee thinks fit to attend its meetings to carry out the Committee’s responsibilities.

5.4.       The Committee shall meet at least once a year, although additional meetings may be called at any time at the discretion of the Chairman of the Committee. An agenda shall be sent to all members of the Committee and any other persons who may be required/invited to attend.

5.5        Notwithstanding item 5.4 above, upon the request of any member of the Committee, the Chairman of the Committee shall convene a meeting of the Committee to consider any matter which should be brought to the attention of the Board.

5.6        Where only two (2) members are competent to vote on a question in issue and there is an equality in vote, the resolution shall be deemed not to have been passed, whereupon the question in issue shall be tabled at the next meeting of the Committee or referred to the Board, whichever is more expedient.

5.7        The Committee may deal with matters by way of circular resolution in lieu of convening a formal meeting.

5.8        All recommendations and findings of the Committee shall be submitted to the Board for approval.

5.9        The Committee may establish any regulations from time to time to govern its administration.

 

6.         Minutes

6.1   The Secretary shall cause minutes to be duly entered in the books provided for the purpose of all resolutions and proceedings of all meetings of the Committee. Such minutes shall be signed by the Chairman of the meeting at which the proceedings were held or by the Chairman of the next succeeding meeting and if so signed, shall be conclusive evidence without any further proof of the facts thereon stated.

6.2    Minutes of each meeting shall also be distributed to the members of the Committee.

6.3    Minutes of the Committee’s meetings will be made available to all Board members. A summary of significant matters and resolutions will be reported to the Board by the Committee.

6.4    The books containing the minutes of proceedings of any meeting of the Committee shall be kept by the Company at the registered office of the Company and shall be opened to the inspection of any member of the Committee or the Board.

 

7.         Secretary

The Secretary to the Committee shall be the Company Secretary.

 

ACTIVITIES OF THE NC FOR THE FINANCIAL YEAR ENDED 30 JUNE 2018

(a) Board nomination and election process and criteria used

The NC is responsible for considering and making recommendations to the Board candidates for directorship when the need arises such as to fill a vacancy arising from resignation or retirement or to close any skills, competencies, experience or diversity gap that has been identified. Candidates may be proposed by the Managing Director or any Director or shareholder and must fulfil the requirements prescribed under the relevant laws and regulations for appointment as director. In assessing the suitability of a candidate, the NC will take into consideration a number of factors including but not limited to the candidate’s skills, knowledge, expertise, competence and experience, time commitment, character, professionalism and integrity. For the position of independent non-executive director, the NC will evaluate the candidate’s ability to discharge such responsibilities as expected from an independent nonexecutive director.

i. Review of Directors proposed for re-election

In accordance with Article 84 of the Company’s Constitution (“Article 84”), Directors are to be elected at every annual general meeting when one-third of the Directors longest in office shall retire, subject always to the requirement that all Directors shall retire from office once at least in each three years, and if eligible, may offer themselves for re-election.

In June 2018, based on the results of the assessment undertaken for the financial year, the NC resolved to recommend to the Board that:-

• Tan Sri Dato’ (Dr) Francis Yeoh Sock Ping, Dato’ Yeoh Seok Kian and Dato’ Yeoh Seok Hong who are due to retire pursuant to Article 84 at the Seventy-Eighth Annual General Meeting of the Company (“AGM”), stand for re-election. The Board, save for the members who had abstained from deliberations on their own re-election, supported the NC’s views and recommends that shareholders vote in favour of the resolutions for their re-election at the forthcoming AGM.

ii. Review of Directors proposed for continuing in office as Independent Non-Executive Directors (“INED”)

As part of the annual assessment of Directors, anassessment of independence was conducted on theINED. In addition to the criteria for independence prescribed in the Bursa Malaysia Securities Berhad Main Market Listing Requirements and Practice Note 13, INED were assessed on their ability and commitment to continue to bring independent and objective judgment to board deliberations.

The Board is of the view that there are significant advantages to be gained from the INED who have served on the Board for more than 12 years as they possess greater insights and knowledge of the businesses, operations and growth strategies of the YTL Land Group. Furthermore, the ability of a director to serve effectively as an independent director is very much a function of his calibre, qualification, experience and personal qualities, particularly of his integrity and objectivity in discharging his responsibilities in good faith in the best interest of the Company and his duty to vigilantly safeguard the interests of the shareholders of the Company.

The Board, save for Tan Sri Datuk Seri Panglima Dr. Abu Hassan Bin Othman, Dato’ Cheong Keap Tai and Eu Peng Meng @ Leslie Eu, who had abstained from deliberations on the matter, is satisfied with the skills, contributions and independent judgment that Tan Sri Datuk Seri Panglima Dr. Abu Hassan Bin Othman, Dato’ Cheong Keap Tai and Eu Peng Meng @ Leslie Eu bring to the Board. For these reasons, the Board, save for Tan Sri Datuk Seri Panglima Dr. Abu Hassan Bin Othman, Dato’ Cheong Keap Tai and Eu Peng Meng @ Leslie Eu, recommends and supports the resolutions for their continuing in office as INED of the Company which will be tabled for shareholders’ approval to be sought via the single-tier voting process at the forthcoming AGM.

(b) Annual assessment

In May 2018, the annual assessment of the effectiveness of the Board as a whole, the Board Committees and individual Directors was carried out with the objectives of assessing whether the Board and the Board Committees, as well as the Directors have effectively performed its/ their roles and fulfilled its/their responsibilities, and devoted sufficient time commitment to the Company’s affairs; and to recommend areas for improvement. The assessment exercise was facilitated by the Company Secretary and took the form of completion of questionnaires/evaluation forms. In evaluating the effectiveness of the Board, several areas were reviewed including the composition, degree of independence, right mix of expertise, experience and skills, quality of information and decision making, and boardroom activities. Board Committees were assessed on their composition, expertise, and whether their functions and responsibilities were effectively discharged in accordance with their respective terms of reference.

The assessment of the individual Directors covered areas such as fit and properness, contribution and performance, calibre, character/personality and time commitment and whether they have shown the will and ability to deliberate constructively, ask the right questions and confidence to stand up for a point of view.

Results of the assessment were summarised and discussed at the NC meeting held in June 2018 and reported to the Board by the Chairman of the NC. No evident weakness or shortcoming was identified which require mitigating measure. The Board and the Board Committees continue to operate effectively and that the performance of the Directors and the time commitment in discharging their duties as Directors of the Company for the year ended 30 June 2018 were satisfactory. These results form the basis of the NC’s recommendations to the Board for the reelection of Directors at the AGM.

(c) Succession in the Boardroom

In June 2018, the NC deliberated on the succession in the boardroom after Dato’ Suleiman Bin Abdul Manan indicated his desire to step down from his position as Non-Executive Chairman. The NC evaluated candidates best matched to the roles required and recommended the re-designation of Tan Sri Dato’ (Dr) Francis Yeoh Sock Ping to the role of Executive Chairman from Managing Director previously, and Dato’ Yeoh Seok Kian, to Managing Director from Executive Director previously. Dato' Suleiman Bin Abdul Manan then stepped down from his position as the Non-Executive Chairman and remains on the Board as a Non-Executive Director.

(d) Review of the NC Statement for financial year ended 30 June 2017

The NC Statement was reviewed by the NC prior to its recommendation to the Board for approval for inclusion in 2017 Annual Report.

(e) Review of the Evaluation Criteria in the Assessment Forms

The NC reviewed and revised the evaluation criteria in the assessment forms to ensure consistency with the requirements of the Malaysian Code on Corporate Governance 2017.

 

POLICY ON BOARD COMPOSITION

As the Board’s overriding aim is to maintain a strong and effective Board, it seeks to ensure that all appointments are made on merit, taking into account the collective balance of elements such as skills, experience, age, gender, ethnicity, background and perspective. The Board recognises the importance of encouraging and developing female talent at all levels. Currently, one or 17% of the Company’s Executive Directors is woman and she makes up 10% of the full Board. Although it has not set any specific measurable objectives, the Board intends to continue its current approach to diversity in all aspects while at the same time seeking Board members of the highest calibre, and with the necessary strength, experience and skills to meet the needs of the Company.

 

INDUCTION, TRAINING AND DEVELOPMENT OF DIRECTORS

Upon joining the Board, a newly appointed Director will be given an induction pack containing the Company’s latest annual report, Constitution, and schedule of meetings of the Board and Committee (if the Director is also a Committee member) which will serve as an initial introduction to the YTL Land Group as well as an ongoing reference.

The Board, through the NC, assesses the training needs of its Directors on an ongoing basis by determining areas that would best strengthen their contributions to the Board.

Besides the findings from the annual performance assessment of Directors, which provide the NC with useful insights into the training needs of the Directors, each Director is requested to identify appropriate training that he/she believes will enhance his/her contribution to the Board.

The Board has taken steps to ensure that its members have access to appropriate continuing education programmes. The Company Secretary facilitates the organisation of in-house development programmes and keeps Directors informed of relevant external training programmes.

During the financial year ended 30 June 2018, the following three in-house training programmes were organised for the Directors:- • YTL Leadership Conference 2017; • Malaysian Code of Corporate Governance 2017; • Companies Act 2016.

All the Directors have undergone training programmes during the financial year ended 30 June 2018. The conferences, seminars and training programmes attended by one or more of the Directors covered the following areas:-

 

Seminars/Conferences/Training                                                                                   Attended by

- Corporate Governance (“CG”)/Risk Management and

Internal Controls/Taxation/Financial/Legal/Technology

• National Tax Conference 2017

–Managing Tax Issues for growth and nation building

(25 & 26 July 2017)                                                                                                  Dato’ Cheong Keap Tai                                                                                                                                            

• Bursa Malaysia Directors Risk Management Programme:

“I am ready to manage risks!”                                                                  Tan Sri Datuk Seri Panglima Dr. Abu Hassan Bin 

(22 August 2017)                                                                                      Bin Othman (“Tan Sri Abu Hassan”)

• National Tax Seminar 2017 (IRBM)

(2 November 2017)                                                                                                  Dato’ Cheong Keap Tai

• MIA Conference 2017

(7 & 8 November 2017)                                                                                            Dato’ Cheong Keap Tai

• Bursa Malaysia Case Study Workshop for Independent Directors –

“Rethinking - Independent Directors: A New Frontier”                                                   Tan Sri Abu Hassan

(9 November 2017)                                                                                                  Eu Peng Meng @ Leslie Eu

• National GST Conference 2018                                                                                           

(27 & 28 February 2018)                                                                                               Dato’ Cheong Keap Tai

• Audit Committee Institute (ACI) Breakfast Roundtable 2018 –

KPMG Report on Non-Executive Directors’ Remuneration 2017                                 

(19 March 2018)                                                                                                                Tan Sri Abu Hassan                                       

• Malaysian Code of Corporate Governance 2017                            Tan Sri Dato’ (Dr) Francis Yeoh Sock Ping (“Tan Sri Francis Yeoh”)

(19 March 2018)                                                                                                             Dato’ Yeoh Seok Kian   

                                                                                                                                Dato’ Suleiman Bin Abdul Manan

                                                                                                                                       Dato’ Cheong Keap Tai

                                                                                                                                     Dato’ Mark Yeoh Seok Kah

                                                                                                                                     Dato’ Hamidah Binti Maktar  

                                                                                                                                    

• Companies Act 2016

(18 June 2018)                                                                                                             Tan Sri Francis Yeoh                                     

                                                                                                                                     Dato’ Yeoh Seok Kian                                   

                                                                                                                                  Dato’ Mark Yeoh Seok Kah 

- Sustainability

• Bursa Malaysia CG Breakfast series: Board excellence -

“How to engage and enthuse beyond compliance and sustainability”

(17 July 2017)                                                                                                            Dato’ Hamidah Binti Maktar

- Leadership, and Business Management

• 30% Club Business Leaders roundtable meeting

(at Securities Commission)

(14 August 2017)                                                                                                             Tan Sri Abu Hassan

• Bursa Malaysia CG Breakfast Series: Thought Leadership Session

for Directors – Leading in a Volatile, Uncertain, Complex,

Ambiguous (VUCA) World

(13 October 2017)                                                                                                           Dato’ Yeoh Seok Kian

• YTL Leadership Conference 2017

(6 November 2017)                                                                                                         Tan Sri Francis Yeoh

                                                                                                                                        Dato’ Yeoh Seok Kian

                                                                                                                                   Dato’ Suleiman Bin Abdul Manan

                                                                                                                                         Tan Sri Abu Hassan

                                                                                                                                        Dato’ Yeoh Seok Hong

                                                                                                                                  Dato’ Sri Michael Yeoh Sock Siong

                                                                                                                                         Dato’ Mark Yeoh Seok Kah

                                                                                                                                         Dato’ Hamidah Binti Maktar

• Bursa Malaysia CG Breakfast Series for Directors –

Leading Change @ The Brain

(5 December 2017)                                                                                                           Dato’ Hamidah Binti Maktar  

                                                         

 

 

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Code Of Conduct & Ethics

This Code of Conduct & Ethics sets out the acceptable practices and ethics that guide the employees of the YTL Group of Companies ("YTL Group").
      
1.Accountability
1.1  All employees of the YTL Group are responsible for acting in accordance to the Core Values, policies and Code of Conduct of the YTL Group ("Code") and ensure compliance with the relevant laws, rules and regulations of the respective countries that the YTL Group conducts its business in.
1.2  Any employee who violates the Code may be subjected to disciplinary action, including dismissal, depending on the facts and circumstances of each case.
1.3  All employees of the YTL Group are obliged to exercise all reasonable care in safeguarding the YTL Group's properties and assets against any loss, damage, misuse, illegal use and/or theft and are expected to use such resources for the YTL Group's business purposes.
2.Responsible Corporate Citizenship
2.1  The YTL Group conducts its businesses ethically, honestly, and in compliance with the laws and regulations of the respective countries that it conducts its businesses in.
2.2  The YTL Group is committed to being a responsible employer and a good corporate citizen in line with our vision and values.
2.3  All YTL Group activities including the sourcing, distribution, sale, repair and end of life treatment of products, must be conducted with respect and in consideration of issues relating to legal rights, health and safety, and the environment.
3.Non-Discrimination
3.1  The YTL Group maintains a policy of non-discrimination and greatly values and respects the diversity, cultural and religious differences of its employees.
3.2  Every employee is expected to cooperate and support the YTL Group's vision of cultivating and maintaining a work environment that is free from discrimination.
3.3  During the hiring process, candidates will also be evaluated based on their willingness to adhere to the vision, values and overall corporate culture of the YTL Group.

                        
4.Business Communications
4.1  All employees of the YTL Group are expected to exercise due care, diligence and etiquette in all work-related communications, be it in written form, verbal or otherwise, and to ensure that the contents are clear, truthful, courteous and accurate.
4.2  The YTL Group exercises a no tolerance policy for any communications made by its employees over the course of business and/or using YTL Group's resources that contain any material found to be discriminatory, defamatory, offensive, contains sexual connotations, pornographic, misleading and/or any other communications of a similar nature.
5.Conflicts of Interest
5.1  All employees of the YTL Group are obliged to act solely in the best interests of the Group at all times.
5.2  No employee is permitted to engage, either directly or indirectly, in any act or practice that conflicts with, or appears to conflict with, the interests of the YTL Group, even in their own time. This includes using any of the YTL Group's assets or resources, or abusing any loopholes in the YTL Group's process and procedures for personal interests and gain.
5.3  A conflict of interest may arise where the employee has a personal relationship or financial or other interest that would or could potentially interfere with his existing obligations or exercise of judgment in decision making as an employee of the YTL Group. It is also a conflict of interests where a supervisor or a person in a position to determine the remuneration and/or promotion of a subordinate is in a personal, romantic or intimate relationship with the subordinate.
5.4  All employees of the YTL Group are obliged to disclose and report in writing as soon as practically possible concerning all potential and real conflicts of interest, stating in detail the facts, nature and extent of the conflict. This written report should be made either to the employee's immediate supervisor(s) and/or executive director(s).
5.5  The employee must take prompt action in eliminating the said conflict if requested to do so by the YTL Group. The YTL Group has the sole discretion in determining the nature of conflict of interests and the next steps or disciplinary action to be taken in relation to it.
5.6  Where it is found that the employee is engaged in any activity that is in conflict of interests with the YTL Group which provides personal and monetary gain, whether directly or indirectly, particularly where it is at the expense and loss of the YTL Group, the YTL Group is entitled to claim compensation for such unlawful profiteering from the conflict of interest, which may include deduction of the employee's salary until such payments are repaid in full or legal action against the employee.
5.7  External Board Membership:

Employees of the YTL Group are allowed to serve on the boards of government agencies or bodies and/or incorporated or unincorporated entities outside the YTL Group only under exceptional circumstances, provided that prior written approval has been obtained from the said employee's immediate supervisor or executive director. The exception to this is where such board appointments relate only to businesses or entities that were formed by non-profit organisations, such as social or community-related clubs or associations.
5.8  Political Activities:
a.  All employees of the YTL Group have the right to participate as individuals in the political process of their local jurisdiction provided that all acts pertaining to the same are carried out entirely of the employee's own volition, in his/her own time and using his/her own resources. The employee must ensure at all times that such activities will and do not have any impact on his/her performance at the workplace.
b.  The employee must ensure that his/her political views are clearly communicated as his/her personal political views and that it is not reflective of the position adopted by the YTL Group and/or any of the companies under the YTL Group, if any.
c.  If any employee of the YTL Group has any interest or intends to hold any key position as an office bearer in any political party, this interest or intention must first be disclosed to his immediate supervisor and head of department.
d.  Any director of any company under the YTL Group who has any interest or intends to hold any key position as an office bearer in any political party must disclose such interest or intention to the executive directors of YTL Corporation Berhad.
e.  Employees of the YTL Group are not permitted to endorse any political act, activity and/or event or political donation using the YTL Group’s name, reputation and/or connections.
6.Business Ethics
6.1  We are determined to maintain a work environment where trust is of paramount importance.
6.2  All YTL Group companies, and/or their employees shall refrain from offering, giving, demanding or receiving bribes and/or any other improper gratification.
6.3  "Gratification" shall include but not be limited to pecuniary and non-pecuniary benefits such as money, donation, gift, loan, fee, reward, valuable security, property or interest in property, movable or immovable property, financial benefit, office, dignity, employment, contract of employment or services, agreement to give employment or render services in any capacity, any offer, undertaking or promise, whether conditional or unconditional, of any gratification, including favours which is of value to the recipient, forbearance which is beneficial to the recipient, and any other gratification as defined in the Malaysian Anti-Corruption Commission Act 2009.
6.4  Any gratifications to be given, if at all and only under circumstances which are approved by the employee's head of department or Human Resource Department, should only be a token gift either for purposes of expressing appreciation or for customary and festive purposes. Such gifts should not at any material time, be given with the intention of obtaining any favour or hopes of retaining business or undue influence for obtaining future business from the recipient of the gifts.
6.5  "Public officials" are defined as any person who is a member, an officer, an employee or a servant of a public body.
6.6  When dealing with public officials, employees of the YTL Group should ensure that any giving or receiving of gratification does not relate to, in any form whatsoever, the public official's official dealings or public duty. The YTL Group recognises that the practice of giving and receiving gratification varies between countries, regions, cultures, and religions, so the definitions of what is acceptable and not acceptable will inevitably differ for each. At all material times, employees are to ensure compliance with laws of their respective jurisdictions, and the higher standard will be applicable to all employees to avoid non-compliance of any laws on anti-bribery which may be applicable to the YTL Group as a whole.
6.7  Where it is inappropriate to decline the offer of a gratification (i.e. when meeting with an individual of a certain religion/culture who may take offence), the gratification may be accepted so long as it is declared and surrendered to the employee’s immediate supervisor and/or head of department, who will assess the relevant circumstances and take the necessary steps, including returning the gratification on the employee's behalf, where appropriate.
6.8  Any gratifications given and received should always be disclosed to the employee's immediate supervisor and/or head of department, and the employee must ensure that all requisite approvals have been obtained.
6.9  The intention behind a gratification being given and/or received should always be considered. If there is any uncertainty, the gratification should be declined where possible, failing which the employee should seek the advice of the employee's immediate supervisor and/or head of department.
6.10  Other than as permitted above, no employee of the YTL Group is allowed to accept any gratification, including but not limited to gifts, hospitality favours, benefits or any form of advantage from third parties, unless specific approval has been given by the employee's head of department or Human Resource Department.
6.11  Any employee that breaches any of the above rules will fall within the scope of serious misconduct and may be subjected to disciplinary action, up to and including dismissal, depending on the facts and circumstances of each case.
7.Outside Employment
7.1  Employees are hired on the premise that YTL is their primary employer and that any other employment or commercial involvement, even outside of working hours is strictly prohibited particularly where it conflicts with the interests of the YTL Group, unless express approval is obtained.
7.2  Employees and managers are required to obtain written approvals from their head of department or Human Resources Department before participating in outside work activities. If you are already engaged in any outside employment, you are required to disclose and obtain approval from the Human Resource Department. Any approval given is at the sole discretion of the YTL Group and can be withdrawn at any time with or without prior notice, and the employee is required to immediately cease such outside employment, failing which the YTL Group is entitled to claim compensation for any unlawful profiteering as a result of any conflict of interest.
8.Insider Trading
8.1  Any employee of the YTL Group who is in the possession of market sensitive information is prohibited from trading in the securities of the listed companies of the YTL Group or any other listed company if that information has not been made public. Foreign laws on insider trading may apply where the information concerns companies listed outside of Malaysia.
8.2  This prohibition extends to any act of disclosing the insider information to another person, including family members and friends, if the employee knows or reasonably knows that the other person would make a trade in reliance on that information, even if the employee does not derive any direct economic benefit from the trade.
8.3  Under the Capital Markets and Services Act 2007 ("CMSA"), an "insider" refers to a person who possess information that is not generally available and which, upon it becoming generally available, would have a material effect on the price or the value of securities.
8.4  The scope of information is wide and includes inter alia:
a.  matters of supposition and other matters that are insufficiently definite to warrant being made known to the public;
b.  matters relating to the intentions or likely intentions of a person;
c.  matters relating to negotiations or proposals with respect to commercial dealings or dealing in security;
d.  information relating to the financial performance of the YTL Group;
e.  information that a person proposes to enter into, or has previously entered into one or more transactions or agreements in relation to securities or has prepared or proposes to issue a statement relating to such securities; and
f.  matters relating to the future.
8.5  Employees are encouraged to consult with his or her manager or supervisor if they are uncertain of the status and nature of the information they possess.
9.Anti-Money Laundering
9.1  "Money laundering" concerns the process of engaging with and/or concealing, directly or indirectly, the identity of the proceeds of illegal activities or converting the illegal proceeds to a legitimate source of income or asset.
9.2  All employees of the YTL Group are prohibited from dealing in any money laundering activities and must comply with the applicable anti-money laundering laws.
9.3  In the event that any employee has a reasonable suspicion of money laundering activities being conducted as part of the YTL Group’s business, employees are expected to alert their immediate manager or supervision to the same.
10.Distribution and Group's Bulletin Boards
10.1  Employees cannot distribute non-YTL Group related materials during their working hours and on the YTL Group’s premises.
10.2  Bulletin boards are to be used purely for the YTL Group's related announcements and related activities.
10.3  The acts of solicitation and/or distribution of any materials relating to the sale of any goods or services unrelated to the YTL Group's business is strictly prohibited anywhere on the Group's premises.
11.Personal Data Protection Notice
11.1  The YTL Group respects and is committed to the protection of employee’s personal information and privacy. The Personal Data Protection Notice issued to employees explains how the YTL Group collects and handles employee information in accordance with the Malaysian Personal Data Protection Act 2010.
11.2  All employees, particularly employees who have access to personal data of any persons, whether employees, consultants, customers, suppliers, and/or any related party whereby personal data is processed and accessed, must not unlawfully use, access and/or revise such personal data for any purpose or reason. All employees are to ensure that such personal data processed within the YTL Group is protected at all material times and in compliance with the applicable laws.
12.Confidential and Proprietary Information
12.1  The YTL Group greatly values and protects all confidential and proprietary information.
12.2  Proprietary information includes but is not limited to emails, documents and all other files, electronic or otherwise, edited and/or stored on the YTL Group equipment and are considered to be the exclusive property of the YTL Group.
12.3  All employees of the YTL Group are expected to exercise the highest possible standards of professionalism, ethics and integrity in order to protect the Group's assets and standing and ensure the proper use of the same.
12.4  Employees may have access to confidential and proprietary information during their employment with the YTL Group. Such information cannot be shared or utilised for personal gain or any other gain to any individual, business or third party entity, including family and friends, except where expressly approved by the relevant company under the YTL Group, required by law and/or reasonably necessary for the purposes of carrying out your duties under employment within the YTL Group. This obligation of non-disclosure is effective even after the termination of employment.
12.5  Where such confidential and proprietary information needs to be disclosed to persons outside the YTL Group, the relevant parties are recommended to undertake all necessary measures to ensure that all confidential and/or proprietary information are sufficiently protected for instance through the execution of a non-disclosure agreement.
12.6  The YTL Group reserves its right to take any and all appropriate action against previous or current employees who, whether directly or indirectly, breach the aforesaid obligation relating to the confidential and proprietary information of the YTL Group.
12.7  In the event that you are unsure of what is permissible or non-permissible, you are advised to seek guidance from your head of department or the Human Resource Department.
13.Social Media Policy
13.1  Employees of the YTL Group are a representative of the YTL Group at all times and are prohibited from bringing the YTL Group's (and each of the companies under the YTL Group) name and reputation into disrepute.
13.2  All employees of the YTL Group are reminded that any messages or posts made online are presumed to be public and permanent. Online messages or posts can be copied, forwarded or subpoenaed and the original publisher will have no control over the ultimate use, distribution and/or publication of the message or post. As such, all employees are strongly encouraged to exercise discretion at all times when using and publishing on online platforms.
14.Press Release and Public Statements
14.1  All queries and/or requests made by members of the third party media outlets are to be directed to the Group Company Secretary or Group Legal Counsel of YTL Corporation Berhad to ensure that a consistent and professional approach is adopted when addressing all external media queries.
14.2  No employee of the YTL Group is permitted to make any public releases or public statements on behalf of the YTL Group, or any of the companies within the YTL Group, whether orally, in writing or otherwise, without having obtained prior written approval from their executive director.
15.Whistleblowing
15.1  The Company encourages employees to raise genuine concerns, including the reporting of unlawful, unethical or questionable behaviour, in confidence and without risk of reprisal.
15.2  The policy covers, but is not limited to:
a.  Abuse of Power;
b.  Bribery;
c.  Breach of law;
d.  Criminal Activity;
e.  Conflict of Interest;
f.  Danger to health and safety or the environment;
g.  Fraud;
h.  Overpayment to suppliers or under any contract;
i.  Miscarriage of justice;
j.  Misuse of any property belonging to the YTL Group;
k.  Negligence;
l.  Theft or embezzlement; and/or
m.  Non-compliance with YTL Group (or any company under the YTL Group) policies, including cover-up of any of the above in the workplace.
15.3  If any employee has concerns about any of the matters set out above or that the integrity of the YTL Group is being compromised in any other way, the employee should bring this to the attention of his immediate supervisor, head of department or a Human Resource Manager.
15.4  Employees must exercise sound judgment to avoid baseless allegations.
15.5  Employees who intentionally file false reports will be subjected to disciplinary action and possible termination.
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