CORPORATE GOVERNANCE OVERVIEW STATEMENT
for the financial year ended 30 June 2023
YTL Hospitality REIT ("YTL REIT" or "Trust") was established on 18
November 2005 pursuant to a trust deed (as amended and restated)
("Deed") entered into between Pintar Projek Sdn Bhd ("PPSB" or
"Manager") and Maybank Trustees Berhad ("Trustee"), as the
manager and trustee, respectively, of the Trust. YTL REIT has been
listed on the Main Market of Bursa Malaysia Securities Berhad
(“Bursa Securities”) since 16 December 2005.
The Board of Directors of PPSB ("Board") is firmly committed to
ensuring that the Manager implements and operates good corporate
governance practices in its overall management of the Trust and
its subsidiaries ("YTL REIT Group" or "Group").
In implementing its system of corporate governance, the Directors
have been guided by the measures set out in the Guidelines on
Listed Real Estate Investment Trusts ("REIT Guidelines"), the
Malaysian Code on Corporate Governance (“Code”) and the Guidelines
on Corporate Governance for Capital Market Intermediaries ("Corporate
Governance Guidelines") issued by the Securities Commission
Malaysia ("SC"), and the Main Market Listing Requirements of Bursa
Securities ("Listing Requirements").
This statement details YTL REIT's compliance with the Code and
the applicable requirements under the Corporate Governance
Guidelines during the financial year ended 30 June 2023.
PRINCIPLE A: BOARD LEADERSHIP AND EFFECTIVENESS
The Role of the Manager
YTL REIT is managed and administered by PPSB, with the primary objectives of:
(a) | providing unitholders of the Trust ("Unitholders") with stable cash distributions with the potential for sustainable growth, principally from the ownership of properties; and |
(b) | enhancing the long-term value of YTL REIT's units ("Units"). |
The Manager is required to ensure that the business and operations of YTL REIT are carried on and conducted in a proper, diligent and efficient manner, and in accordance with acceptable and efficacious business practices in the real estate investment trust industry in the countries in which the Trust owns assets, namely Malaysia, Japan and Australia. Subject to the provisions of the Deed, the Manager has full and complete powers of management and must manage YTL REIT (including all assets and liabilities of the Trust) for the benefit of its Unitholders.
The Board recognises that an effective corporate governance framework is critical in order to achieve these objectives, fulfil its duties and obligations and ensure that YTL REIT continues to perform strongly.
The general functions, duties and responsibilities of the Manager include the following:
(a) | to manage the YTL REIT Group's assets and liabilities for the benefit of Unitholders; |
(b) | to be responsible for the day-to-day management of the YTL REIT Group; |
(c) | to carry out activities in relation to the assets of the YTL REIT Group in accordance with the provisions of the Deed; |
(d) | to set the strategic direction of the YTL REIT Group and submit proposals to the Trustee on the acquisition, divestment or enhancement of assets of the Group; |
(e) | to issue an annual report and quarterly reports of YTL REIT to Unitholders within 2 months of YTL REIT's financial year end and the end of the periods covered, respectively; and |
(f) | to ensure that the YTL REIT Group is managed within the ambit of the Deed, the Capital Markets and Services Act 2007 (as amended) and other applicable securities laws, the Listing Requirements, the REIT Guidelines, the Corporate Governance Guidelines and other applicable laws. |
Responsibilities of the Board
The Manager is led and managed by an experienced Board with a wide and varied range of expertise. This broad spectrum of skills and experience gives added strength to the leadership, thus ensuring the Manager is under the oversight and 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 Manager.
Key elements of the Board's stewardship responsibilities include:
• | Ensuring that the strategic plans for the YTL REIT Group support long-term value creation for the benefit of its stakeholders and include strategies on economic, environmental and social considerations underpinning sustainability; |
• | Promoting good corporate governance culture within the YTL REIT Group which reinforces ethical, prudent and professional behaviour; |
• | Overseeing the conduct of the YTL REIT Group's businesses to evaluate and assess management performance to determine whether businesses are being properly managed; |
• | Ensuring there is a framework of prudent and effective internal control and risk management systems which enable risks to be identified, assessed and managed; |
• | Succession planning for the Board and senior management; |
• | Overseeing the development and implementation of a Unitholder/stakeholder communications policy; |
• | Reviewing the adequacy and integrity of the YTL REIT Group's management information and internal control systems; and |
• | Ensuring the integrity of the YTL REIT Group's financial and non-financial reporting. |
The Board is led by the Executive Chairman who is responsible for
instilling good corporate governance practices, leadership and
effectiveness of the Board.
There is a clear balance of power, authority and accountability
between the Executive Chairman, Tan Sri (Sir) Francis Yeoh Sock
Ping, and the Chief Executive Officer, Dato' Mark Yeoh Seok Kah,
between the running of the Board and the Group's business,
respectively. The positions of the Executive Chairman and the Chief
Executive Officer are separate and clearly defined, and are held by
different members of the Board.
The Executive Chairman is responsible for leadership of the Board
in ensuring the effectiveness of all aspects of its role, and is primarily
responsible for leading the Board in setting the values and standards
of the Group, including good corporate governance practices, the
orderly and effective conduct of the meetings of the Board and
Unitholders, leading discussions, encouraging active and open
participation, managing the interface and encouraging constructive
relations between the Board and management, ensuring the
provision of accurate, timely and clear information to Directors and
effective communications with stakeholders and facilitating the
effective contribution of Non-Executive Directors.
The Chief Executive Officer is responsible for, amongst others,
overseeing the day-to-day running of the business, developing and
implementing Board policies and strategies, making operational
decisions, serving as the conduit between the Board and management
in ensuring the success of the Group's governance and management
functions, ensuring effective communication with Unitholders and
relevant stakeholders, providing strong leadership, i.e. effectively
communicating the Board's vision, management philosophy and
business strategy to employees and keeping the Board informed
of salient aspects and issues concerning the Group's operations.
The Chief Executive Officer and Executive Directors are accountable
to the Board for the profitability and development of the YTL REIT
Group, consistent with the primary aim of enhancing long-term
Unitholder 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 REIT Group.
The differing roles of Executive and Non-Executive Directors are
delineated, both having fiduciary duties to Unitholders. Executive
Directors have a direct responsibility for business operations whereas
Non-Executive Directors have the necessary skill and experience
to bring an independent and objective judgment to bear on issues
of strategy, performance and resources brought before the Board.
The Executive Directors are responsible for the Manager's operations
and for ensuring that the strategies proposed by the executive
management are fully discussed and examined, and take account
of the long term interests of the Unitholders.
In accordance with the Code, the Executive Chairman is not a
member of the Audit Committee, which is chaired by and comprises
Independent Non-Executive Directors. This promotes objectivity in
the Board's deliberations and ensures there are effective checks
and balances, as well as objective review by the Board of
recommendations put forth by the Audit Committee.
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, change
in income distribution policy 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 the Annual Report.
Board Meetings and Procedures
Board meetings are scheduled with due notice in advance at least
four times a year in order to review and approve the interim and
annual financial statements. Additional meetings may also be
convened on an ad-hoc basis when significant issues arise relating
to the Trust. Meetings of the Audit Committee are conducted
separately from those of the main Board to enable objective and
independent discussions. The Board met four times during the
financial year ended 30 June 2023.
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 business and affairs of the YTL REIT Group to
enable them to discharge their duties. At least one week prior to
Board meetings, all Directors receive the agenda together with a
comprehensive set of Board papers containing 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 REIT 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 minutes of the Board and/or Board committee meetings are
circulated and confirmed at the next meeting. Once confirmed, the
minutes of the Board committee meetings are subsequently
presented to the Board for notation.
Company Secretary
The Board is supported by a professionally-qualified and competent
Company Secretary. The Company Secretary, Ms Ho Say Keng, is
a Fellow of the Association of Chartered 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.
The Company Secretary 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
Manager.
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. The Company Secretary carries out ongoing reviews of existing practices in comparison with any new or amended measures introduced in the Listing Requirements, REIT Guidelines and/or legislation, regulations and codes applicable to the governance of YTL REIT and updates the Board accordingly.
Board Charter
The Board's functions are governed and regulated by the Constitution
of the Manager and the laws, rules and regulations governing
companies in Malaysia, including the Companies Act 2016, Listing
Requirements and REIT Guidelines. The Board's Charter was most
recently updated and adopted on 27 June 2022, and a copy can be
found under the "Governance" section on the Trust's website at www.ytlhospitalityreit.com.
The Board Charter serves several important functions, including as
a primary reference to the Board of its role, fiduciary duties and
responsibilities, its governance processes and legal framework
within which it operates and is an induction tool for new Directors.
The Board Charter clearly identifies the respective roles and
responsibilities of the Board, Board committees, Directors and
management and the issues and decisions reserved for the Board.
Policies contained in the Board Charter cover areas including anti-bribery and corruption, conflicts of interests, dealings in securities
and fit and proper criteria for Directors.
The Board Charter is reviewed as and when changes arise and
updated in accordance with the needs of the Manager and any
new regulations that impact the discharge of the Board's
responsibilities.
Business Conduct, Ethics and Whistleblowing
The Directors 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.
The Manager is also guided by the corporate culture of its parent
company, YTL Corporation Berhad ("YTL Corp"), which has an
established track record for good governance and ethical conduct.
Key guidance is contained in the Code of Conduct and Business
Ethics of the YTL Group of Companies ("YTL Group"), which also
sets out the whistleblowing policy and procedures, and the YTL
Group’s Anti-Bribery and Corruption Policy, as detailed in the following
section. A copy of the Code of Conduct and Business Ethics can be
found on the Trust's website at www.ytlhospitalityreit.com.
The Code of Conduct and Business Ethics sets out the acceptable
general practices and ethics for the YTL REIT Group and includes
policies and measures to address conflicts of interest, abuse of
power, corruption, insider trading, money laundering and data
protection.
Training modules and other methods of communication are employed
on an ongoing basis to familiarise employees of the Manager with
their duties and obligations in this area. Training carried out during
the financial year under review focused on areas including data
security and protection, cybersecurity awareness and an anti-bribery
and corruption refresher course.
Anti-Bribery and Corruption Policy ("ABC Policy")
The objective of the ABC Policy is to further enforce the YTL Group's Code of Conduct and Business Ethics in order to ensure that all Directors and employees understand their responsibilities in compliance with the YTL Group's zero tolerance for bribery and corruption within the organisation. This is in line with the corporate liability provision in Section 17A of the Malaysian Anti-Corruption Commission Act 2009 ("MACC Act") which came into force on 1 June 2020.
The ABC Policy outlines the YTL Group's strategies in identifying, preventing and managing bribery and corruption issues. The policies and procedures put in place are guided by the Guidelines on Adequate Procedures issued pursuant to Section 17A(5) of the MACC Act. The ABC Policy applies to all Directors, managers and employees of the Manager in dealing with external parties in the commercial context. The policy will be reviewed at least once every three years to ensure that it continues to remain relevant, appropriate and effective to enforce the principles highlighted therein and to ensure continued compliance with the prevailing law. A copy of the ABC Policy can be found on the Trust's website at www.ytlhospitalityreit.com.
A comprehensive implementation plan has been established to communicate and disseminate the ABC Policy on an ongoing basis throughout the YTL Group through online training modules and other communication methods. Electronic communications put in place over the past three years to comply with physical distancing guidelines implemented in response to the COVID-19 pandemic have proven highly effective and the YTL Group has continued to employ these methods as part of the overall dissemination and training process.
Directors and employees of the YTL Group in Malaysia are required to read and understand the ABC Policy and the Code of Conduct and Business Ethics, successfully complete the online training modules to reinforce their understanding of the policy and sign the YTL Group's Integrity Pledge in acknowledgement of their obligations and responsibilities.
Compliance with the ABC Policy continues to be monitored closely, both on an ongoing basis and in conjunction with the annual assessment of the Group's corruption risks. The annual risk assessment is carried out to identify the corruption risks to which the Group is exposed and the appropriateness of the mitigation measures established to minimise the exposure to these risks.
Sustainability Governance
The Board oversees governance of the YTL REIT Group's sustainability matters which includes setting its environmental, social and governance ("ESG") strategies, priorities and targets, overseeing the progress of ESG strategy and performance and reviewing and addressing the YTL REIT Group's material ESG risks and opportunities. Further information can be found in the Managing Sustainability section in the Annual Report and the YTL Group Sustainability Report 2023 which will be published later this year and will be available for download at www.ytl.com/sustainability.
The Manager's key methods for communicating its sustainability strategies, priorities and targets as well as performance against these targets to internal and external stakeholders include the Annual Report of the Trust, the YTL Group Sustainability Report, which is issued annually, and the YTL Group's Sustainability website at www.ytl.com/sustainability.
The Directors are kept apprised of the key ESG issues relevant and specific to the YTL REIT Group through briefings from management on performance, targets and operational updates, and also stay abreast with more general developments in the ESG arena through training programmes, further details of which are set out in the section below on Board Commitment.
ESG risks are incorporated into the Board's process for addressing and managing significant risks that may have a considerable impact on YTL REIT as they form part of the overall risk management framework, further details of which can be found in the Statement on Risk Management & Internal Control set out in the Annual Report.
Composition of the Board
• | Dato' Hj Mohamed Zainal Abidin Bin Hj Abdul Kadir and Mr Yeoh Keong Shyan resigned from the Board on 13 December 2022 |
• | Dato' Yeoh Soo Min and Miss Au Wei Lien were appointed to the Board on 13 December 2022 |
• | Dato' Hj Mohamed Zainal Abidin Bin Hj Abdul Kadir and Mr Yeoh Keong Shyan were appointed as Alternate Directors to Dato' Yeoh Seok Kah and Dato' Yeoh Soo Min, respectively, on 13 December 2022 |
• | Datuk Mark Victor Rozario was appointed to the Board on 18 May 2023 |
• | Dato' Tan Guan Cheong resigned from the Board on 30 May 2023 |
The Board currently comprises 8 Directors (excluding 2 Alternate Directors) consisting of 4 executive members and 4 non-executive members, all of whom are independent.
The Independent Directors currently comprise 50.0% of the Board. This is in compliance with the provisions of the Listing Requirements and the REIT Guidelines for at least one-third of the Board to be independent and the applicable recommendation under the Code for at least half of the Board to comprise independent directors.
Board and Senior Management Appointments
The appointment of Directors is undertaken by the Board as a
whole whereby the Executive Chairman and/or the Chief Executive
Officer make recommendations on the suitability of candidates
nominated for appointment to the Board and, thereafter, the final
decision lies with the entire Board to ensure that the resulting mix
of experience and expertise of members of the Board is sufficient
to address the issues affecting the Manager. The Board is of the
view that its current practice and procedures are suitable and
appropriate to fulfil the needs of the Trust and to comply with the
applicable Listing Requirements. As previously reported, the Board
will continue to assess the necessity of delegating this function
to a separate nominating committee and will do so if it is deemed
appropriate at the relevant time.
The Directors understand the importance of having a diverse Board
to leverage the varying perspectives, experience and expertise
required to achieve effective stewardship and management, and
this forms a key part of the periodic assessment of the Board’s
composition.
In its deliberations, the Board assesses suitable candidates with
due regard for diversity, taking into account the required mix of
skills, experience, age, gender, ethnicity, time commitment,
background and perspective. Nevertheless, in identifying future
candidates, the Board will also endeavour to utilise independent
sources including external human resources consultants and
specialised databases, as appropriate.
The Board recognises the importance of encouraging and developing
female talent at all levels. There are currently two female directors
on the Board comprising 25% of the Board. This is deemed to
comply with the requirement under the Corporate Governance
Guidelines.
Meanwhile, members of senior management are appointed by the
Executive Chairman and/or the Chief Executive Officer based on
relevant industry experience and with due regard for diversity in
skills, experience, age, background and gender.
Board Remuneration
Directors' remuneration is decided in line with the objective recommended by the Code to determine the remuneration for Directors so
as to attract and retain Directors of the calibre needed to successfully carry on the Manager’s operations. The Executive Directors'
remuneration consists of basic salary, other emoluments and other customary benefits as appropriate to a senior management member.
In general, the component parts of remuneration are structured so as to link rewards to the overall performance of YTL REIT. In the case
of Non-Executive Directors, the level of remuneration reflects the contribution, experience and responsibilities undertaken by the particular
non-executive concerned.
As previously reported, the Board has continued to assess the need to delegate this function to a separate committee and concluded
that its current practice and procedures remain suitable and appropriate to fulfil the needs of the Trust and are in compliance with the
Listing Requirements. In this context, it is pertinent to note that the Directors and senior management are remunerated by the Manager
and not by YTL REIT.
The following tables provide an overview of the remuneration of the Directors for the financial year ended 30 June 2023:-
Remuneration of Executive and Non-Executive Directors for the financial year ended 30 June 2023 | |||||
Salaries and other emoluments RM'000 |
Directors' fees RM'000 |
Meeting attendance allowances RM'000 |
Benefits-in-kind RM'000 |
Total RM'000 |
|
Executive Directors | 6,066 | - | - | 2 | 6,068 |
Non-Executive Directors | - | 747 | 31 | - | 778 |
Range of remuneration per annum | |||||
RM50,000 and below | |||||
RM50,001 – RM200,000 | |||||
RM200,001 – RM400,000 | |||||
RM1,000,001 - RM2,000,000 | |||||
RM2,000,001 and above |
Notes:-
Details of the remuneration of individual directors and members of senior management are not disclosed as the Directors and senior management are remunerated by the Manager and not by YTL Hospitality REIT.
(1) | For the period from 1 July 2022 until the Director's resignation from the Board on 13 December 2022 |
(2) | For the period from the Director's appointment to the Board on 18 May 2023 until 30 June 2023 |
(3) | For the period from the Director's appointment to the Board on 13 December 2022 until 30 June 2023 |
(4) | Including the remuneration of one Director for the period from 1 July 2022 until his resignation from the Board on 30 May 2023 |
Board Commitment
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 REIT industry, as well as wider economic, financial and governance issues to
enhance their skills, knowledge and expertise in their respective fields. The Board will continue to evaluate and determine the training
needs of its Directors on an ongoing basis.
All the Directors have undergone training programmes during the financial year ended 30 June 2023. The conferences, seminars and
training programmes attended by one or more of the Directors covered the following areas:-
Seminars/Conferences/Training | Attended by | ||
▶ | Risk Management/Compliance/Anti-Corruption/ESG/Sustainability | ||
The Securities Commission Malaysia's Audit Oversight Board:
Conversation with Audit Committees – "How the Audit Committees
and Auditors can work together towards reliable audited financial
statements" (Sessions 1 & 2) (17 November & 6 December 2022) |
Dato' Ahmad Fuaad Bin Mohd Dahalan | ||
Malaysian Institute of Management Hybrid Conference: Building
Towards a Corrupt-Free Nation – Fighting Corruption and Embracing
a Culture of Compliance for Good Governance (15 December 2022) |
Dato' Yeoh Soo Min | ||
Preventive Measures and Compliance for Your Condo or Building (15 December 2022) |
Yeoh Keong Shyan (Alternate Director to Dato' Yeoh Soo Min) | ||
Invest Malaysia Webinar: Reshaping Malaysia's Narrative Series 1:
Strengthening Resilience & Sustaining Growth (8 March 2023) |
Dato' Yeoh Soo Min | ||
Anti-Bribery & Corruption (ABC) Refresher Course (March 2023) |
Tan Sri (Sir) Francis Yeoh Sock Ping Dato' Mark Yeoh Seok Kah Dato' Ahmad Fuaad Bin Mohd Dahalan Dato' Zainal Abidin Bin Ahmad |
||
ICDM: Mandatory Accreditation Programme (4 – 6 April 2023) |
Au Wei Lien | ||
Institute of Singapore Chartered Accountants/SAC Capital: Sustainability
E-Training for Directors (17 May 2023) |
Tan Sri (Sir) Francis Yeoh Sock Ping | ||
Sustainable Finance (31 May 2023) |
Tan Sri (Sir) Francis Yeoh Sock Ping Dato' Mark Yeoh Seok Kah Dato' Yeoh Soo Min Dato' Zainal Abidin Bin Ahmad Au Wei Lien Dato' Hj Mohamed Zainal Abidin Bin Hj Abdul Kadir (Alternate Director to Dato' Mark Yeoh Seok Kah) Yeoh Keong Shyan (Alternate Director to Dato' Yeoh Soo Min) |
||
Sustainability Talk - Nature Action, A Session with Martijn Wilder AM,
Founder and CEO of Pollination (31 May 2023) |
Datuk Mark Victor Rozario | ||
▶ | Leadership and Business Management | ||
YTL LEAD Conference 2022 (9 November 2022) |
Tan Sri (Sir) Francis Yeoh Sock Ping Dato' Mark Yeoh Seok Kah Dato' Yeoh Seok Kian Dato' Ahmad Fuaad Bin Mohd Dahalan Dato' Zainal Abidin Bin Ahmad |
||
▶ | Cybersecurity/Technology/Finance/Economy/Investment | ||
Cybersecurity Training – Imposter Among Us (July 2022) |
Tan Sri (Sir) Francis Yeoh Sock Ping Dato' Mark Yeoh Seok Kah Dato' Ahmad Fuaad Bin Mohd Dahalan Dato' Zainal Abidin Bin Ahmad | ||
Cybersecurity Training – Cyberattacks (September 2022) |
Tan Sri (Sir) Francis Yeoh Sock Ping Dato' Mark Yeoh Seok Kah Dato' Ahmad Fuaad Bin Mohd Dahalan Dato' Zainal Abidin Bin Ahmad | ||
Cybersecurity Training – Best Practices (October 2022) |
Tan Sri (Sir) Francis Yeoh Sock Ping Dato' Mark Yeoh Seok Kah Dato' Ahmad Fuaad Bin Mohd Dahalan Dato' Zainal Abidin Bin Ahmad | ||
Directors Guide to Machine Learning and Artificial Intelligence (3 April 2023) |
Tan Sri (Sir) Francis Yeoh Sock Ping Dato' Mark Yeoh Seok Kah Dato' Yeoh Soo Min Dato' Yeoh Seok Kian Dato' Ahmad Fuaad Bin Mohd Dahalan Dato' Zainal Abidin Bin Ahmad Yeoh Keong Shyan (Alternate Director to Dato’ Yeoh Soo Min) | ||
40th JAMECA-MAJECA Joint Conference: Deepening Economic Relations
Between Japan and Malaysia through Multi-Layered Co-Creation (25 May 2023) |
Dato' Yeoh Seok Kian | ||
Cyber Attack Nexus Singapore 2023 (15 & 16 June 2023) |
Datuk Mark Victor Rozario |
PRINCIPLE B: EFFECTIVE AUDIT AND RISK MANAGEMENT
Integrity in Financial Reporting
The Directors are responsible for ensuring that financial statements
of the Trust are drawn up in accordance with applicable approved
accounting standards in Malaysia, the REIT Guidelines and the Deed.
The Statement of Directors' Responsibilities made pursuant to
paragraph 15.26(a) of the Listing Requirements is set out in the
Annual Report.
In presenting the financial statements, the Manager has used
appropriate accounting policies, consistently applied and supported
by reasonable and prudent judgments and estimates to present a
true and fair assessment of the Company's position and prospects.
Interim financial statements are reviewed by the Trustee and the
Audit Committee and approved by the Directors prior to release to
the relevant regulatory authorities.
Audit Committee
The Manager has in place an Audit Committee which comprises
three Independent Non-Executive Directors, in compliance with the
Code, namely Datuk Mark Victor Rozario, Dato' Ahmad Fuaad Bin
Mohd Dahalan and Dato' Zainal Abidin Bin Ahmad. The Chairman
of the Audit Committee is Datuk Mark Victor Rozario, in accordance
with the recommendations of the Code that the chairman of the
Audit Committee should not be the chairman of the Board. Datuk
Mark Victor Rozario was designated as the chairman of the Audit
Committee on 30 May 2023, following the resignation of Dato' Tan
Guan Cheong.
The members of the Audit Committee possess a wide range of
necessary skills to discharge their duties, and are financially literate
and able to understand matters under the purview of the Audit
Committee including the financial reporting process. The members
of the Audit Committee also intend to continue to undertake
professional development by attending training to keep themselves
abreast of relevant developments in accounting and auditing
standards, practices and rules.
The Audit Committee holds quarterly meetings to review matters
including the YTL REIT 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 four times during the financial year
ended 30 June 2023. Full details of the composition and 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 the
Annual Report. This information and the terms of reference of the
Audit Committee are available under the "Governance" section on
the Trust's website at www.ytlhospitalityreit.com.
The Audit Committee has established formal and professional
arrangements for maintaining an appropriate relationship with the
Trust’s external auditors, HLB Ler Lum Chew PLT ("HLB"). The
external auditors also attend each Annual General Meeting ("AGM")
in order to address clarifications sought pertaining to the audited
financial statements by Unitholders.
The Audit Committee's Auditor Independence Policy guides its
assessment of the suitability, objectivity and independence of the
external auditors. This policy was updated during the last financial
year to, amongst others, extend the cooling off period to three
years (from two years previously) for appointment of a former
audit partner of the external audit firm as a member of the Audit
Committee, and to include additional assessment criteria based on
information presented in the Annual Transparency Report of the
external auditors, in line with the Code. None of the Audit Committee
members were formerly audit partners of the Trust's external
auditors.
Details of the audit and non-audit fees paid/payable to HLB for
the financial year ended 30 June 2023 are as follows:-
Trust RM'000 |
Group RM'000 |
|
Statutory audit fees paid/payable to HLB | 101 | 130 |
Non-audit fees paid/payable to HLB | 6 | 6 |
Total | 107 | 136 |
Risk Management & Internal Control
The Board acknowledges its overall responsibility for maintaining
a sound system of risk management and internal control to safeguard
the investment of the Unitholders and the assets of the YTL REIT
Group, and that these controls are designed to provide reasonable,
but not absolute, assurance against the risk of occurrence of
material errors, fraud or losses.
Details of the YTL REIT Group's system of risk management and
internal control are contained in the Statement on Risk Management
& Internal Control and the Audit Committee Report as set out in
the Annual Report.
Conflicts of Interest and Related Party Transactions
The Deed provides that the Manager, the Trustee and any delegate of either of them shall avoid conflicts of interest arising or, if conflicts arise, shall ensure that the YTL REIT Group is not disadvantaged by the transaction concerned. The Manager must not make improper use of its position in managing the YTL REIT Group to gain, directly or indirectly, an advantage for itself or for any other person or to cause detriment to the interests of Unitholders.
In order to deal with any conflict-of-interest situations that may arise, any related party transaction, dealing, investment or appointment carried out for or on behalf of the YTL REIT Group involving parties related to the Trust must be executed on terms that are the best available to the Trust and which are no less favourable than an arm's length transaction between independent parties.
The Manager may not act as principal in the sale and purchase of real estate, securities and any other assets to and from the YTL REIT Group. "Acting as principal" includes a reference to:
(a) | dealing in or entering into a transaction on behalf of a person associated with the Manager; |
(b) | acting on behalf of a corporation in which the Manager has a controlling interest; or |
(c) | the Manager acting on behalf of a corporation in which the Manager's interest and the interests of its Directors together constitute a controlling interest. |
In addition, the Manager must not, without the prior approval of the Trustee, invest any monies available for investment under the Deed in any securities, real estate or other assets in which the Manager or any officer of the Manager has a financial interest or from which the Manager or any officer of the Manager derives a benefit.
In dealing with any related party transactions that may arise, the Manager ensures that the provisions in the REIT Guidelines and the Listing Requirements pertaining to related party transactions are fully complied with in any applicable transactions.
Internal Audit
The Manager's internal audit function is undertaken by the Internal Audit department of YTL Corp ("YTLIA"). YTLIA reports directly to the Audit Committee of YTL Corp and to the Board on matters pertaining to the Manager and the Trust.The Head of Internal Audit, Mr Choong Hon Chow, is a member of the Malaysian Institute of Accountants and a Fellow of the Association of Chartered Certified Accountants (ACCA) UK. He started his career with the external audit division of a large public accounting firm before moving on to the internal audit profession in public listed companies and gained valuable and extensive internal audit experience covering many areas of diversified commercial businesses and activities. He has a total of 40 years of internal and external audit experience.
During the financial year ended 30 June 2023, YTLIA comprised 9 full-time personnel. The personnel of YTLIA are free from any relationships or conflicts of interest which could impair their objectivity and independence.
The internal audit function adopts the framework based on the International Standards for the Professional Practice of Internal Auditing issued by the Institute of Internal Auditors.
The activities of the internal audit function during the year under review included:-
• | Developing the annual internal audit plan and proposing this plan to the Audit Committee; |
• | Conducting scheduled internal audit engagements, focusing primarily on the adequacy and effectiveness of internal controls and recommending improvements where necessary; |
• | Conducting follow-up reviews to assess if appropriate action has been taken to address issues highlighted in audit reports; |
• | Presenting significant audit findings to the Audit Committee for consideration; |
• | Conducting reviews of recurrent related party transactions; |
• | Conducting discussions with management in identifying significant concerns and risk areas perceived by management for inclusion in the internal audit plan; and |
• | Conducting discussions with management to identify, analyse, assess and prioritise the internal and external corruption risks, for the purpose of establishing appropriate processes, systems and controls to mitigate the specific corruption risks exposure. |
Further details of the YTL REIT Group's internal audit function are contained in the Statement on Risk Management & Internal Control and the Audit Committee Report as set out in the Annual Report.
PRINCIPLE C: INTEGRITY IN CORPORATE REPORTING AND MEANINGFUL RELATIONSHIP WITH STAKEHOLDERS
Communication with Unitholders
The Manager values dialogue with Unitholders and investors as a
means of effective communication that enables the Board to convey
information about the YTL REIT Group's performance, corporate
strategy and other matters affecting Unitholders' interests. The
Board recognises the importance of timely dissemination of
information to Unitholders and, accordingly, ensures that they are
well informed of any major developments of YTL REIT. Such
information is communicated through annual reports, the Trust's
various disclosures and announcements to Bursa Securities, including
quarterly and annual results, and the corporate website.
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 Trust's website, www.ytlhospitalityreit.com, in addition to prescribed information, including financial results,
announcements, circulars, prospectuses and notices, which is
released through the official website of Bursa Securities.
The Executive Chairman, Chief Executive Officer and/or the Executive
Directors meet with analysts, institutional Unitholders and investors
throughout the year to provide updates on strategies and new
developments. However, price-sensitive information and information
that may be regarded as undisclosed material information about
YTL REIT is not disclosed in these sessions until after the requisite
announcements to Bursa Securities have been made.
Whilst efforts are made to provide as much information as possible
to its Unitholders 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 Unitholders.
Therefore, the information that is price-sensitive or that may be
regarded as undisclosed material information about the YTL REIT
Group is not disclosed to any party until after the prescribed
announcement to Bursa Securities has been made.
Conduct of General Meetings
The AGM is the principal forum for dialogue with Unitholders. The
Board provides opportunities for Unitholders to raise questions
pertaining to issues in the Annual Report and operational performance
of YTL REIT for the financial year. The Notice of AGM is sent to
Unitholders at least 28 days prior to the AGM in accordance with
the Code, which also meets the criteria of the Listing Requirements
and Companies Act 2016 which require the Notice of AGM to be
sent 21 days prior to the AGM, thus allowing Unitholders to make
adequate preparation.
The Executive Chairman, Chief Executive Officer and Executive
Directors take the opportunity to present a comprehensive review
of the financial and non-financial performance of YTL REIT as well
as progress and long-term strategies. The Directors provide
appropriate answers in response to Unitholders' questions during
the meeting thereby ensuring a high level of accountability,
transparency and identification with YTL REIT's strategy and goals.
The Directors are mindful of the recommendation under the Code
that all directors must attend general meetings and fully appreciate
the need for their attendance at all such meetings. All Directors
attended the Company's tenth AGM held on 13 October 2022.
Extraordinary general meetings are held as and when required to
seek Unitholders' approval. The Chief Executive Officer and Executive
Directors take the opportunity to fully explain the rationale for
proposals put forth for approval and the implications of such
proposals for the Trust, and to reply to Unitholders' questions.
Where applicable, each item of special business included notice of
the meeting is accompanied by an explanatory statement for the
proposed resolution to facilitate full understanding and evaluation
of the issues involved. All resolutions are put to the vote by electronic
poll voting and an independent scrutineer is appointed to verify
poll results. The results of the electronic poll voting are announced
in a timely matter, usually within half an hour of the voting process
to enable sufficient time for the results to be tabulated and verified
by the independent scrutineer.
Where general meetings are held on a virtual basis, the Board
utilises available platforms and technologies that support meaningful
engagement with Unitholders by ensuring smooth broadcast of
the general meeting and enabling interactive participation by
Unitholders via facilities to submit questions before and during the
general meeting. Questions posed by Unitholders are made visible
to all meeting participants during the meeting.
The Manager engages professional service providers to manage
and administer the Trust's general meetings who have in place the
necessary data privacy and protection and cybersecurity policies
and procedures to safeguard the information of the Trust and its
unitholders.
The Manager endeavours to post the minutes of general
meetings on the Trust's website under the "Meetings" page at https://www.ytlhospitalityreit.com/meetings
no later than 30 business days after the general meeting.
The forthcoming eleventh AGM will be held on a fully virtual basis,
the details of which can be found in the Notice of Annual General
Meeting in the Annual Report.
This statement was approved by the Board on 31 July 2023.