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Overview Our Business
Strategic Review
Corporate Governance
Financial Statements
Other Information
Related Party Transaction (“RPT”)
The Group has put in place review and approval processes and procedures for RPT to ensure that the transaction prices, terms
and conditions of the agreement and the quality of the products/services are comparable with those prevailing in the market. The
quality of the products/services must meet industry standards. The transaction should be entered into on normal commercial
terms, and on terms that are consistent with the Group’s usual business practices and policies. This will ultimately ensure that the
terms of the transactions are not favourable to the related party and are not detrimental to the minority shareholders of the Group.
The RPT review and approval processes and procedures focus on four areas:
(i) Create RPT Awareness
All Heads of business units, Finance, Legal, Company Secretary and Internal Audit departments are made aware of all related
parties to enable the Group to capture information on RPTs at source. The LOA specifies processes for RPT.
(ii) RPT Approval Process
All RPT (irrespective of their values) must be tabled to the AC for review and to the Board for approval. Any new RPT
proposed for the AC’s recommendation and the Board’s approval will be reviewed by various internal parties including
the Company Secretary, Finance and Internal Audit departments, all of which are tasked with monitoring and reviewing
transactions before the Board paper is submitted to the AC and the Board.
Where transactions are on single-source quotation and where benchmarking is not possible, justification by business units
must be provided to ensure that the transactions are at arm’s length basis, not favourable to the related party and not
detrimental to the minority shareholders. Interests of Directors and conflict of interests are disclosed to the AC and the Board
and the interested Directors will abstain from deliberating and voting on the RPT.
The non-interested Directors of the Board will consider the transaction as proposed in the Board paper and if deemed
appropriate, approve the RPT upon recommendation by the AC. In respect of the recurrent related party transactions
(“RRPTs”) which are within the shareholders’ mandate (“Mandate”) obtained at the Company’s Extraordinary General Meeting,
additional review and approval procedures are adopted.
Any individual RRPTs exceeding RM60 million each in value will be reviewed and considered by the AC prior to
recommendation to the Board for approval, before the transaction can be entered into. Any variations to the terms and
conditions of the individuals RRPTs will be reviewed and approved in accordance with the Company’s LOA.
(iii) Monitoring Compliance and Reporting
The Group has a process for monthly reporting on the status of mandated RRPTs whereby the mandated RRPTs amount
will be tracked on a monthly basis to ensure that the actual value of the mandated RRPTs entered into with parties within
the same related party group does not exceed the aggregated estimated value of such mandated RRPTs. Where the value of
transaction(s) exceeds the aggregated estimated value by 10% or more, a disclosure will be made to Bursa Securities.
Disclosure on the RRPTs for which the Mandate has been obtained together with the breakdown of the aggregate value of the
RRPTs which had been conducted during the financial year ended 31 December 2015 is provided on pages 188 to 191 of this
Annual Report.
(iv) Disclosures in Securities and Interests
In addition, all disclosures on trading in shares and securities of the Company by Directors and principal officers are tabled at
Board Meetings.
Risk Management and Internal Control
The Group’s Statement on Risk Management and Internal Control is set out on pages 61 to 66 of this Annual Report.
Relationship with Auditors
The statement on roles, duties and responsibilities of the AC in relation to both the internal and external auditors is described in the
Audit Committee Report as set out on pages 58 to 60 of this Annual Report.
Corporate Governance
