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Axiata Group Berhad | Annual Report 2016
GOVERNANCE
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Underpinning the Group Regulatory Policy is the understanding that the
Group shall comply with all applicable laws and regulations, regulatory
obligations and governmental policies in the jurisdictions in which it
operates, and that regulatory advice should be obtained in an efficient
and cost effective manner as and when required.
It should be noted that the regulatory risks faced by Axiata in most
markets are typical of those faced by telecommunications operators in
emerging markets, where regulatory frameworks may be incomplete,
there may be insufficient consultation with stakeholders, or political
influence may materially affect the operations of mobile markets.
Current regulatory risks which affect Axiata in multiple national
communicationsmarkets include but not limited to: spectrum refarming,
availability of new spectrum and associated acquisition costs, timely
renewal of key operating licenses and spectrum allocations, levels of
sector-specific taxation, quality of service, subscriber registration,
competition, level playing field challenges from OTT providers, network
security, digital services regulations, universal service obligations and
periodic review of legal and regulatory frameworks.
4.0 Information and Communications
Information and communications support all other control components
by communicating control responsibilities to employees and by
providing information in a form and time frame that allows employees
to carry out their duties. The key activities within the Group are as
follows:
4.1 Corporate Communication Policy
There is a Corporate Communications Policy in place to ensure that
communication across the Group and to investors inside and outside of
Malaysia are effectively managed and meets the diverse needs of the
organisation.
The Board recognises the need for a robust reporting framework given
the growth of the Group’s international investments and is working
towards further strengthening that element of the internal control
system. The Board also recognises the need for more dialogue with
investors and analysts as well as with the media moving forward.
Details of investor relations activities are listed within the Statement on
Corporate Governance section of this Annual Report.
4.2 Business Control Incident (BCI) Reporting
The Group has in place BCI Reporting aimed at capturing and
disseminating the lessons learnt from internal control incidents with the
objective of preventing similar incidents from occurring in other OpCos
within the Group and to enable monitoring of internal control incidents
that have caused significant losses. Twelve (12) such incident reporting
were shared with all OpCos in 2016.
5.0 Monitoring
Monitoring covers the oversight of internal control by management or
other parties outside the process or the application of independent
methodologies, such as customised procedures or standard checklists,
by employees within a process. Key monitoring activities within the
Group are as follows:
5.1 Performance Reporting
•
SLT Meetings
The SLT meets monthly and as and when required, to
deliberate on business performance, financial and operating
risks and issues which include reviewing, resolving and
approving all key business strategic measures and policies.
Progress, exceptions and variations are also fully discussed
and appropriate action taken. In 2016, there were 13 SLT
meetings held at Group level. Similar meetings were held
regularly at OpCo level.
Significant matters identified during these meetings
are highlighted on a timely basis to the Board, which
is responsible for setting the business direction and for
overseeing the conduct of the Group’s operations. Through
these mechanisms, the Board is informed of all major control
issues pertaining to internal control, regulatory compliance
and risk taking. This ensures that business objectives stay on
course.
•
Major Control Issues
Quarterly reports on financial and operational control issues
are tabled and subsequently reviewed by the BAC.
•
Headline Performance KPIs
Headline Performance KPIs have been set and agreed
upon by the Board as part of the broader KPI framework
that the Group has in place, as prescribed under the GLCT
programme.
The headline KPIs represent the main corporate performance
measurement targets for the year and are announced
publicly as a transparent performance management
practice.
5.2 Ongoing Monitoring
•
Financial and Operational Review
Quarterly financial statements and the Group’s performance
are reviewed by the BAC, which subsequently recommends
them to the Board for their consideration and approval.
Monthly management accounts containing key financial
results, operational performance indicators and budget
comparisons are also presented to the SLT to enable them
to have regular and updated information of the Group’s
performance.
•
Internal Audit (IA)
The function of IA is highlighted within the BAC Report
section of this Annual Report.
STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL