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The Board of Directors (“Board”) of YTL e-Solutions Berhad
(“YTL e-Solutions” or “Company”) remains firmly committed
to ensuring an appropriate and sound system of corporate
governance throughout the Company and its subsidiaries
(“YTL e-Solutions Group”).
In implementing its governance system and ensuring
compliance with the ACE Market Listing Requirements
(“Listing Requirements”) of Bursa Malaysia Securities Berhad
(“Bursa Securities”), the Board has been guided by the
measures and best practices recommended in the Malaysian
Code on Corporate Governance, which was issued in 2000
and revised in 2007 (“Code”). The Directors are also
cognisant of the revised Malaysian Code on Corporate
Governance 2012 issued by the Securities Commission
Malaysia in March 2012 and will determine the measures
to be adopted by the Board to comply with the relevant
revisions.
Good corporate governance is a fundamental part of the
Board’s responsibility to protect and enhance long-term
shareholder value and the financial performance of the YTL
e-Solutions Group, whilst taking into account the interests
of all stakeholders.
BOARD STRUCTURE
YTL e-Solutions 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 e-Solutions Group’s operations. This broad spectrum
of skills and experience ensures the YTL e-Solutions 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 e-Solutions Group and have
adopted the six primary responsibilities as listed in the Code, which
facilitate the discharge of the Board’s stewardship responsibilities.
The Board currently has 10 Directors, comprising 6
executive members and 4 non-executive members, 3 of
whom are independent. 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.
Due to the strong independent component of the Board, the roles
of the Managing Director and Chairman have not been divided, and
both functions continue to be exercised by the same person. He is
primarily responsible for the orderly conduct and effectiveness of the
Board, day-to-day running of the business, implementation of Board
policies and making of operational decisions, in addition to advancing
relationships with regulators and all other stakeholders. The Managing
Director and the Executive Directors are accountable to the Board for
the profitable operation and development of the YTL e-Solutions
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 Company.
The differing roles of Executive and Non-Executive Directors are
delineated, 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 judgement 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 e-Solutions 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
e-Solutions Group conducts its business.
Together, the Directors believe that the structure of the Board
satisfactorily reflects the interests of its shareholders and is able to
provide clear effective leadership to the YTL e-Solutions Group. The
composition of the Board reflects the wide range of business,
commercial and financial experience essential in the management
and direction of a corporation of this size. A brief description of the
background of each Director is presented in the Profile of the Board
of Directors in this Annual Report.
To date, the Board has not found it necessary to designate a senior
independent non-executive to whom concerns may be conveyed,
mainly because full deliberation of issues affecting the YTL e-Solutions
Group by all members of the Board and shareholders is encouraged.
DIRECTORS' TRAINING
The Directors are fully cognisant of the importance and value of
attending seminars, training programmes and conferences in order to
update themselves on developments and changes in the industries in
which the YTL e-Solutions Group operates, as well as wider economic,
financial and governance issues to enhance their skills, knowledge
and expertise in their respective fields. All Directors have attended
and completed the Mandatory Accreditation Programme prescribed
by Bursa Securities, and the Board will continue to evaluate and
determine the training needs of its Directors on an ongoing basis.
Throughout the financial year under review, the Directors attended
various briefings, conferences, seminar programmes and speaking
engagements covering areas that included corporate governance,
leadership, relevant industry updates and global business developments
which they have collectively or individually considered as useful in
discharging their stewardship responsibilities.
BOARD MEETINGS & ACCESS TO INFORMATION
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 e-Solutions 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 2012. Details of
each Director’s attendance of Board meetings are disclosed
in the Profile of the Board of Directors in this Annual
Report.
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 e-Solutions Group’s business and affairs to
enable them to discharge their duties. There are matters specifically
reserved for the Board’s decision to ensure that the direction and
control of the YTL e-Solutions Group rests firmly with the Board.
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. A record of the Board’s deliberations of the
issues discussed and conclusions reached in discharging its duties and
responsibilities is captured in the minutes of each meeting, prepared
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 YTL e-Solutions Group.
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 e-Solutions 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.
All Directors have full access to the advice and services of the
Company Secretary who consistently 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.
APPOINTMENT & RE-ELECTION OF DIRECTORS
The appointment of Directors is undertaken by the Board as a whole.
The Managing Director recommends candidates suitable for
appointment to the Board, and the final endorsement lies with the
entire Board to ensure that the required mix of skills, experience and
expertise of members of the Board is sufficient to address the issues
affecting the YTL e-Solutions Group. In its deliberations, the Board is
required to take into account the integrity, professionalism, skill,
knowledge, expertise and experience of the proposed candidate. In
accordance with the Board’s procedures, deliberations and conclusions
in this process reached are recorded by the Company Secretary.
During the financial year under review, Dato’ Ahmad Fuaad Bin
Mohd Dahalan and Yasmin Binti Mahmood were appointed to the
Board, whilst Dato’ Yeoh Seok Hong and Dato’ Mark Yeoh Seok Kah
resigned from the Board. Dato’ Ahmad Fuaad Bin Mohd Dahalan was
also appointed as a member of the Audit Committee.
In accordance with the Company’s Articles of Association, at least
one-third of the Directors are required to retire from office at each
Annual General Meeting (“AGM”) and may offer themselves for reelection
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. Directors who are
over seventy years of age are required to submit themselves for reappointment
by shareholders annually in accordance with Section
129 of the Companies Act 1965. The names and details of Directors
seeking re-election at the forthcoming AGM are disclosed in the
Notice of AGM and the Profile of the Board of Directors, respectively,
in this Annual Report.
In accordance with the Listing Requirements, each member of the
Board holds not more than ten directorships in public listed companies
and not more than fifteen directorships in non-public listed companies.
This ensures that their commitment, resources and time are focused
on the affairs of the YTL e-Solutions Group, thereby enabling them
to discharge their duties effectively.
DIRECTORS' 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 needed to lead the YTL e-Solutions Group
successfully. In general, the remuneration of the directors is reviewed
against the performance of the individual and the YTL e-Solutions
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.
Details of the aggregate remuneration of Directors categorised into
appropriate components and the range of remuneration for each
Director can be found in Note 6 to the Financial Statements in this
Annual Report. Details are not shown with reference to Directors
individually, both for security reasons and because the Board believes
that such information will not add significantly to the understanding
and evaluation of the YTL e-Solutions Group’s standards of corporate
governance.
DIALOGUE WITH SHAREHOLDERS & INVESTORS
The YTL e-Solutions 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 shareholders’ interests. The Board believes
that a constructive and effective investor relationship is essential in
enhancing shareholders 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
developments of the YTL e-Solutions 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.
The 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 e-Solutions Group’s
financial results but to provide updates on strategies and new
developments to ensure mutual understanding of the YTL e-Solutions
Group’s operations and activities. Presentations based on permissible
disclosures are made to explain the YTL e-Solutions 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, information that is price-sensitive or that may be regarded
as undisclosed material information about the YTL e-Solutions Group
is not disclosed to any party until after the prescribed announcement
to Bursa Securities has been made.
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 e-Solutions Group, the resolutions being proposed and the
business of the YTL e-Solutions Group in general at every AGM and
extraordinary 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 are sent to shareholders at least 21 days prior to the AGM
in accordance with the Listing Requirements and the Companies Act
1965 in order to enable shareholders to review the YTL e-Solutions
Group’s financial and operational performance for the financial year
and to fully evaluate new resolutions being proposed.
The Managing Director and Executive Directors takes the opportunity
to present a comprehensive review of the progress and performance
of the YTL e-Solutions 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 e-Solutions Group’s business operations, strategy and
goals. 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 issues
involved.
During the course of each financial year, the Company ensures
prompt and timely release and dissemination of quarterly results,
announcements, circulars and notices to enable shareholders to keep
abreast of the YTL e-Solutions Group’s financial and operational
performance and to make informed decisions with regards to
significant corporate developments.
THE AUDIT COMMITTEE
The Company has in place an Audit Committee which comprises 3
Non-Executive Directors in compliance with the Code and the Listing
Requirements which require all the members of the Audit Committee
to be Non-Executive Directors.
The Audit Committee holds quarterly meetings to review matters
including the YTL e-Solutions 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 2012. Full details of the composition,
complete terms of reference and a summary of the activities
of the Audit Committee during the financial year are set
out in the Audit Committee Report in this Annual Report.
FINANCIAL REPORTING
The Directors are responsible for ensuring that financial statements
are drawn up in accordance with the Companies Act 1965 and
MASB Approved Accounting Standards in Malaysia for Entities Other
Than Private Entities. In presenting the financial statements, the
Company has used appropriate accounting policies, consistently
applied and supported by reasonable and prudent judgements and
estimates to present a true and fair assessment of the Company’s
position and prospects. Quarterly financial statements were reviewed
by the Audit Committee and approved by the Board prior to release
to Bursa Securities and the Securities Commission.
The Statement by Directors made pursuant to Section 169 of the
Companies Act 1965, is set out in this Annual Report.
RELATIONSHIP WITH THE AUDITORS
The Board has established formal and professional arrangements for
maintaining an appropriate relationship with the Company’s external
auditors, Messrs HLB Ler Lum. The external auditors also attend each
AGM in order to address clarifications sought pertaining to the
audited financial statements by shareholders.
INTERNAL CONTROL & INTERNAL AUDIT
During the year under review, YTL e-Solutions continued to enhance
its system of internal control and risk management. The Board is
responsible for maintaining a sound system of internal control to
safeguard shareholders’ investments and the YTL e-Solutions Group’s
assets, and for reviewing the adequacy and integrity of the system.
The system of internal control covers not only financial controls but
operational and compliance controls and risk management. However,
the Board recognises that reviewing the YTL e-Solutions Group’s
system of internal control is a concerted and continuing process,
designed to manage rather than eliminate the risk of failure to
achieve business objectives. Accordingly, the system of internal
control can only provide reasonable but not absolute assurance
against material misstatement, fraud and loss.
The Board believes that the YTL e-Solutions Group’s system of
internal control, financial or otherwise, should provide reasonable
assurance regarding the achievement of the YTL e-Solutions Group’s
objectives in ensuring effectiveness and efficiency of operations,
reliability and transparency of financial information and compliance
with laws and regulations.
The YTL e-Solutions Group’s internal audit function is co-sourced by
the YTL Corporation Berhad Group Internal Audit department
(“YTLIA”) and IBDC (Malaysia) Sdn Bhd (“IBDC”). Both YTLIA and
IBDC provide independent assurance on the efficiency and effectiveness
of the internal control systems implemented by management, and
report directly to the Audit Committee. A description of the activities
of the internal audit function can be found in the Audit Committee
Report included in this Annual Report.
YTLIA provides periodic reports to the Audit Committee, reporting on
the outcome of the audits conducted which highlight the effectiveness
of the system of internal control and significant risks. The Audit
Committee reviews and evaluates the key concerns and issues raised
by YTLIA and ensures that appropriate and prompt remedial action
is taken by Management.
None of the internal control weaknesses or issues identified during
this review has resulted in non-compliance with any relevant policies
or procedures, listing requirements or recommended industry practices
that would require disclosure in the Company’s Annual Report.
The principal features of the YTL e-Solutions Group’s system of
internal control can be summarised as follows:-
Definition of authorisation procedures and a clear line of
accountability, with strict authorisation, responsibility levels,
approval and control procedures within which senior management
operates;
Delegation of authority levels for major tenders, capital expenditure
projects, acquisitions and disposals of businesses and other
significant transactions to the Executive Directors. The approval of
capital and revenue proposals above authorised limits is reserved
for decision by the Board;
Interim financial results are reviewed by the Audit Committee and
approved by the Board upon recommendation of the Audit
Committee before release to Bursa Securities. The full year
financial results and analyses of the YTL e-Solutions Group’s state
of affairs are disclosed to shareholders after review and audit by
the external auditors; and
Monitoring of compliance with internal financial controls through
management reviews and reports which are internally reviewed
by key personnel. Updates of internal policies and procedures are
undertaken to reflect changing risks or resolve operational
deficiencies.
ADDITIONAL DISCLOSURE
Employee Retention Policies: The Board believes that maintaining the calibre
of its employees is vital to ensure the continued success of the YTL e-Solutions
Group and the consequent increase in returns to shareholders. To these ends, the
YTL e-Solutions Group has implemented various staff retention and assessment
practices, including a Thirteenth Month wage supplement, annual bonuses and biannual
reviews of staff performance, as well as an Employees’ Share Option Scheme which was
approved by shareholders at an extraordinary general meeting in November 2010.
Share Buy-Back Programme: Details of the Company’s share
buy-back exercises for the year under review have also been
included in this Annual Report.
The Board is satisfied that the Company has, in all material
aspects, complied with the best practices of the Code as at
30 June 2012.
This statement was approved by the Board of Directors on
4 October 2012.
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