and enhancing data profitability by focusing on pricing, smart investments,
network capacity utilisation and other cost saving initiatives including forex
mitigation strategies.
ACCOUNTABILITY AND AUDIT
Financial Reporting
The Board is committed to ensuring that a clear, balanced and meaningful
assessment of the Group’s financial performance and prospects through
the audited financial statements and quarterly announcement of results are
provided to shareholders and regulatory bodies. In this respect, the Board
through the BAC oversees the process and the integrity and quality of the
financial reporting, annually and quarterly. The BAC, in this respect, assists the
Board by reviewing the financial statements and quarterly announcements
of results to ensure completeness, accuracy and adequacy in the presence
of external auditors and internal auditors before recommending the same for
the Board’s approval.
The Directors’ Responsibility Statement for the audited financial statements
of the Company and the Group is set out on page 112 of this Annual Report.
The details of the Company’s and Group’s financial statements for the
financial year ended 2015 can be found on page 113 to 248 of the Annual
Report.
Related Party Transactions
The Company has an internal compliance framework to ensure it meets
its obligations under the Main LR including obligations relating to related
party transactions. Processes and procedures are in place, to ensure that
Recurrent Related Party Transactions (RRPT) are entered into on terms not
more favourable to related parties than to the public. This is achieved after
taking into account the pricing and contract rates, terms and conditions, level
of service and expertise required, and the quality of products and services
provided, as compared to prevailing market prices and rates, industry norms
and standards, as well as general practices, adopted by service providers of
similar capacities and capabilities generally available in the open market. The
annual internal audit plan incorporates a review of all RRPTs entered into or
to be entered into under the shareholders’ mandate procured at the AGM, to
ensure that all the relevant approvals for RRPTs have been obtained.
RRPT transactions are recorded and the same presented to the BAC on
a quarterly basis. This includes the utilisation of the RRPT mandate and/
or where applicable, new RRPT transactions for the BAC’s review and
endorsement.
At its 23rd AGM, Axiata obtained a general mandate for the Group to enter
into RRPT with Telekom Malaysia Berhad Group (TM Group) for transactions
predominantly related to telecommunications and/or related services.
The procurement of mandate for the Group to enter into RRPT with TM
Group was obtained as these transactions in aggregate may result with
the Company having to obtain shareholders’ approval prior to the Group
entering into the transactions. As these transactions may be constrained by
time-sensitivity and confidentiality, it would be impractical for the Company
to seek shareholders’ approval on a case-by-case basis. The procurement
of the mandate will also substantially reduce the expenses associated with
convening of general meetings and improve administrative efficiency.
Based on the actual amount utilised from the date of the above AGM until 31
March 2016, none of the actual aggregate value of transaction has exceeded
10% or more of the estimated amount under the mandate. The amount of
RRPT entered into during the FY15, pursuant to RRPT mandate, is disclosed
on pages 90 to 91.
Risk Management and Internal Control
As highlighted earlier, the Board has the overall responsibility and
accountability for the Group’s internal control systems and in maintaining and
reviewing internal control systems. The BAC assists the Board in evaluating
the adequacy of risk management and internal control framework and
through the Axiata Group Risk Management Committee (RMC) comprising
SLT and chaired by the Chairman of the BAC, has put in place a systematic
risk management framework and process to identify, evaluate and monitor
principal risks and implement appropriate internal control processes to
manage these risks across the Group. The RMC is mainly responsible for
managing the overall Axiata Enterprise Risk Management (ERM) process and
recommends quarterly ERM reports to the BAC for its onward submission to
the Board. The RMC ensures continuous review of the key risks of the Group,
and monitors the implementation of the mitigation plans on a quarterly basis.
A high-level risks register is maintained which is reviewed and updated
annually. This comprises risks specific to the divisional activities of the
business, as well as more Group-wide risks such as long-term business
strategy, regulatory, substitution risks and technology. Focus areas of these
risks are deliberated by the Board as they are raised by the Chairman of the
BAC at Board meetings.
The Group has established the ERM Framework as a standardised approach
to rigorously identify, assess, report and monitor risks facing the Group. The
framework, benchmarked against ISO31000:2009 is adopted across the
Group. Based on the ERM framework, a risk reporting structure has been
established to ensure prompt communication to the BAC and the Board.
Although many risks remain outside the Company’s direct control, a range
of activities are in place to mitigate the key risks identified as set out in
the Statement on Risk Management and Internal Control. A significant
number of risks faced relate to wider operational and commercial affairs of
the Company and the Group including those in relation to competition and
regulatory developments.
An overview of the state of internal control within the Group, which includes
the risk and internal control framework and key internal control structures,
are set out in the Statement on Risk Management and Internal Control on
pages 74 to 82 of this Annual Report.
STATEMENT ON
CORPORATE GOVERNANCE
axiata group berhad | annual report 2015
070
