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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. Enhance the independence of both the external and internal auditors' function through active participation in the audit process.

5. 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.

6. 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.

7. 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.

8. 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. 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.

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 statements, prior to its recommendation to the Board for approval, focusing particularly on –

• changes in or implementation of major accounting policies and practices; • significant and unusual events; • 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 statutory and legal requirements and 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 ) Recommend the nomination of a person or persons as external auditors and the audit fee;

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

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

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

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

( 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.

3. 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.

4. 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.

5. 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.

6. 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.

7. 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.

8. 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. 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                                               5

Tan Sri Datuk Seri Panglima Dr. Abu Hassan                    5

Bin Othman

Dato’ Cheong Keap Tai                                                      5

 

 

SUMMARY OF WORK CARRIED OUT DURING FINANCIAL YEAR

The Audit Committee carried out the following work during the financial year ended 30 June 2017 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 2016, and the annual audited financial statements for the financial year ended 30 June 2016 at the Audit Committee meetings held on 24 August 2016 and 21 September 2016, respectively;

• First, second and third quarters of the quarterly results for the financial year ended 30 June 2017 at the Audit Committee meetings held on 16 November 2016, 22 February 2017 and 24 May 2017, 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 2016 from that of the announced quarterly financial results for the financial year ended 30 June 2016 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 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 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 2016 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 2017 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 21 September 2016 and 24 May 2017, without the presence of management, to apprise on matters in regard to the audit and financial statements.

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 qualifications, 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.

e) Arising from the new international standards of auditing relating to key audit matters and going concern which took effect on 15 December 2016, and to facilitate a better understanding of the requirements, a draft illustrative new auditors’ report based on the audit of the financial statements of the Group and of the Company for financial year ended 30 June 2016 was reviewed by the Audit Committee.

3. INTERNAL AUDIT

a) Reviewed with the internal auditors the internal audit reports (including follow-up review reports) on the audit findings and recommendations, management’s responses and/or actions taken thereto, and ensured that material findings were satisfactorily addressed by management;

b) Reviewed and adopted the internal audit risk analysis report for 2017. 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 2018 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 the right calibre of resource in place.

 

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 2016 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. 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 2016 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 Malaysian Code of Corporate Governance, 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, 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 RM157,632 were incurred in relation to the internal audit function for the financial year ended 30 June 2017.

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Corporate Governance 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 shareholder 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 recommendations of the Malaysian Code on Corporate Governance, which was first issued in 2000 and subsequently revised in 2007 and 2012 (“2012 Code”). In April 2017, the Securities Commission Malaysia released the new Malaysian Code on Corporate Governance, a key feature of which is the introduction of the Comprehend, Apply and Report (CARE) approach, and the shift from “comply or explain” to “apply or explain an alternative”, to encourage listed companies to put more thought and consideration into the adoption of and reporting on their corporate governance practices. Companies are expected to report their application of the practices in the new code from the financial year ending 31 December 2017 and, as such, the Board and the Company are in the process of determining the necessary changes to its practices and procedures and will report on compliance with the new code in YTL L&D’s next annual report for the financial year ending 30 June 2018.

The Board is satisfied that the Company has, in all material aspects, complied with the principles and recommendations of the 2012 Code for the financial year ended 30 June 2017. This statement explains the Company’s application of the principles and compliance with the recommendations as set out in the 2012 Code for the financial year under review, including, where otherwise indicated, explanations of its alternative measures and processes.

 

ROLES & 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 those set out in the 2012 Code:

• Reviewing and adopting strategic plans for the YTL L&D Group;

• Overseeing the conduct of the YTL L&D Group’s business operations and financial performance;

• Identifying principal risks affecting the YTL L&D Group’s businesses and maintaining a sound system of internal control and mitigation measures;

• Succession planning;

• Overseeing the development and implementation of shareholder communications policies; and

• Reviewing the adequacy and integrity of the YTL L&D Group’s management information and internal controls system.

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 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 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.

The Directors also 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.

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 this 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 Management Discussion & Analysis in this Annual Report.

The Board’s functions are governed and regulated by 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.

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 2017.

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. 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 Company Secretary 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. 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.

 

COMPOSITION & INDEPENDENCE OF THE BOARD

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.

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 this Annual Report. The details of the Directors can be found in the Profile of the Board of Directors set out in this Annual Report and this information is also available under the “Governance” section on the Company’s website at www.ytlland.com.

The Nominating Committee, which was established by the Board on 23 May 2013, is responsible for assessing suitable candidates for appointment to the Board for approval, taking into account the required mix of skills, experience and expertise of members of the Board before submitting its recommendation to the Board for decision. Further information on the activities of the Nominating Committee can be found in the Nominating Committee Statement set out in this Annual Report. This information is also available under the “Governance” section on the Company’s website at www.ytlland.com.

Directors’ remuneration is decided in line with the objective recommended by the 2012 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.

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. 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.

Details of the aggregate remuneration of Directors categorised into appropriate components and the range of remuneration for each Director can be found in Note 8 in the Notes 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 L&D Group’s standards of corporate governance.

In order to ensure balance of authority and accountability, the roles of the Chairman and the Managing Director are separate and distinct, and these positions are held by separate members of the Board. The Chairman, who is a non-executive member of the Board, is primarily responsible for the orderly conduct and effectiveness of the Board whereas the Managing Director oversees the 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.

 

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 this Annual Report. This information is also available under the “Governance” section on the Company’s website at www.ytlland.com.

 

INTEGRITY IN FINANCIAL REPORTING

The Company has in place an Audit Committee which comprises 3 Non-Executive Directors, in compliance with the Listing Requirements which require all the members of the Audit Committee to be non-executive members. 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 2017. 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 this 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.

Details of the audit and non-audit fees paid/payable to EY for the financial year ended 30 June 2017 are as follows:-

                                                                           Company                                               Group

                                                                            RM’000                                                RM’000

Statutory audit fees paid/payable to:-

– EY                                                                      108                                                        204

– Affiliates of EY                                                      –                                                            –

Total                                                                      108                                                         204

Non-audit fees paid/payable to:-

– EY                                                                       10                                                           10

– Affiliates of EY                                                      –                                                             –

Total                                                                        10                                                          10

 

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 this Annual Report.

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. Interim financial reports were reviewed by the Audit Committee and approved by the Board prior to release to Bursa Securities.

 

RISK MANAGEMENT

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

 

CORPORATE DISCLOSURE & 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 Corporation Berhad 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 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.

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 21 days prior to the AGM in accordance with the Listing Requirements and the Companies Act 2016 in order to enable shareholders to review the YTL L&D Group’s financial and operational performance for the financial year and to fully evaluate new resolutions being proposed.

The 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. 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.

The rights of shareholders, including the right to demand for a poll, are found in the Constitution of the Company. At the 76th AGM of the Company, held on 22 November 2016, the resolutions put forth for shareholders’ approval were voted on by way of a poll.

This statement was approved by the Board of Directors on 29 August 2017.

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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”).

 

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 2017, attended by all members at every meeting.

 

 

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 2017

(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 non-executive director.

i. Review of Directors proposed for re-election/ re-appointment 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.

Although the 70-year age limit for directors had been abolished under the Companies Act, 2016, directors who were re-appointed by the members at the last annual general meeting pursuant to Section 129(6) of the Companies Act, 1965 (“Section 129 CA65”) to hold office until the conclusion of the next annual general meeting, are required to be re-appointed in order to continue in office. If re-appointed, these directors will then be subject to retirement by rotation in accordance with the Company’s Constitution.

In June 2017, based on the results of the assessment undertaken for the financial year, the NC resolved to recommend to the Board that:-

• Dato’ Cheong Keap Tai, Dato’ Mark Yeoh Seok Kah and Dato’ Hamidah Binti Maktar who are due to retire pursuant to Article 84 at the Seventy-Seventh Annual General Meeting of the Company (“AGM”), stand for re-election; and

• Dato’ Suleiman Bin Abdul Manan, Tan Sri Datuk Seri Panglima Dr. Abu Hassan Bin Othman and Eu Peng Meng @ Leslie Eu, who were re-appointed at the Seventy-Sixth AGM of the Company pursuant to Section 129 CA65 to hold office until the conclusion of the Seventy-Seventh AGM, stand for re-appointment.

Dato’ Cheong Keap Tai, Tan Sri Datuk Seri Panglima Dr. Abu Hassan Bin Othman and Eu Peng Meng @ Leslie Eu abstained from deliberations at the NC meeting on their own re-election and re-appointment, respectively.

The Board, save for the members who had abstained from deliberations on their own re-election/re-appointment, supported the NC’s views and recommends that shareholders vote in favour of the resolutions for their re-election/re-appointment 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, an assessment of independence was conducted on the INED. 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 judgement 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 9 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 judgement 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 at the forthcoming AGM.

(B) ANNUAL ASSESSMENT

In May 2017, 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 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.

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.

Results of the assessment were summarised and discussed at the NC meeting held in June 2017 and reported to the Board by the Chairman of the NC. The evaluation results confirmed that 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 2017 were satisfactory. These results form the basis of the NC’s recommendations to the Board for the re-election and re-appointment of Directors at the AGM.

(C) REVIEW OF THE NC STATEMENT FOR FINANCIAL YEAR ENDED 30 JUNE 2016

The NC Statement was reviewed by the NC prior to its recommendation to the Board for approval for inclusion in 2016 Annual Report.

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 2017, the following four in-house training programmes were organised for the Directors:-

• YTL Leadership Conference 2016;

• Organisation for Economic Co-operation and Development (“OECD”) – Base Erosion and Profit Shifting (“BEPS”) Initiative;

• Cybersecurity in the Boardroom;

• Establishing effective Governance, Risk and Compliance (“GRC”) practices to drive Strategy, Performance and Sustainability.

All the Directors have undergone training programmes during the financial year ended 30 June 2017. 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 &

Internal Controls/Taxation/Financial/Legal/Technology

• National Tax Conference 2016 (9 & 10 August 2016)                                               Dato’ Cheong Keap Tai

• Role of the Chairman & Independent Directors (28 September 2016)                      Dato’ Suleiman Bin Abdul Manan                                                                                                                                

                                                                                                                                        Tan Sri Datuk Seri Panglima Dr. Abu Hassan

                                                                                                                                         Bin Othman (“Tan Sri Abu Hassan”)

                                                                                                                                         Eu Peng Meng @ Leslie Eu

• MIA International Accountants Conference 2016                                                           Dato’ Cheong Keap Tai

 

(15 & 16 November 2016)

• National Tax Seminar 2016 (17 November 2016)                                                               Dato’ Cheong Keap Tai

• CG Breakfast Series with Directors: The Cybersecurity Threat and How                             Tan Sri Abu Hassan

Board Should Mitigate the Risks (18 November 2016)

Corporate Governance (“CG”)/Risk Management &

Internal Controls/Taxation/Financial/Legal/Technology

• OECD – BEPS Initiative (23 February 2017)                                                             Tan Sri Dato’ (Dr) Francis Yeoh Sock Ping                                                                                                                                                                                          (“Tan Sri Francis Yeoh”)

                                                                                                                                      Tan Sri Abu Hassan

                                                                                                                                       Dato’ Cheong Keap Tai

                                                                                                                                       Dato’ Yeoh Seok Kian

                                                                                                                                        Dato’ Yeoh Seok Hong

                                                                                                                                       Dato’ Sri Michael Yeoh Sock Siong

                                                                                                                                       Dato’ Mark Yeoh Seok Kah

                                                                                                                                       Eu Peng Meng @ Leslie Eu

• National GST Conference 2017 (28 February 2017 & 1 March 2017)                         Dato’ Cheong Keap Tai

• Cybersecurity in the Boardroom (17 April 2017)                                                          Dato’ Suleiman Bin Abdul Manan

                                                                                                                                        Tan Sri Francis Yeoh

                                                                                                                                        Dato’ Cheong Keap Tai

                                                                                                                                        Dato’ Yeoh Seok Kian

                                                                                                                                        Dato’ Sri Michael Yeoh Sock Siong

                                                                                                                                        Dato’ Mark Yeoh Seok Kah

                                                                                                                                        Dato’ Hamidah Binti Maktar

                                                                                                                                        Eu Peng Meng @ Leslie Eu

• Impact of the Companies Act 2016 on Directors and Shareholders                          Dato’ Cheong Keap Tai

(25 & 26 April 2017)

• Establishing effective GRC practices to drive Strategy, Performance                       Dato’ Suleiman Bin Abdul Manan

and Sustainability (2 June 2017)                                                                                  Tan Sri Francis Yeoh

                                                                                                                                       Tan Sri Abu Hassan

                                                                                                                                       Dato’ Mark Yeoh Seok Kah

Trade/Economic Development, Sustainability

• London School of Economics Insights dinner talk – “After Brexit –                            Dato’ Hamidah Binti Maktar

Britain, Europe and the World” (26 September 2016)

• Listed issuers sustainability education programme – Sector-Specific                        Tan Sri Abu Hassan

Sustainability Reporting Workshop (Property Development/

Investment)

(13 October 2016)

 

Leadership, and Business Management

• YTL Leadership Conference 2016 (19 December 2016)                                             Dato’ Suleiman Bin Abdul Manan

                                                                                                                                         Tan Sri Francis Yeoh

                                                                                                                                         Tan Sri Abu Hassan

                                                                                                                                         Dato’ Yeoh Seok Kian

                                                                                                                                         Dato’ Yeoh Seok Hong

                                                                                                                                         Dato’ Sri Michael Yeoh Sock Siong

                                                                                                                                         Dato’ Mark Yeoh Seok Kah

                                                                                                                                         Dato’ Hamidah Binti Maktar

 

• Global Transformation Forum 2017 (22 & 23 March 2017)                                           Dato’ Yeoh Seok Hong

                                                                                                                                           Dato’ Hamidah Binti Maktar

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