Annual Report 2012, PDF - Axiata Group Berhad - Investor Relations

Statement onCorporate GovernanceRRPT transactions are recorded, and the same presentedto the BAC, on a quarterly basis. This includes theutilisation of the RRPT mandate and/or where applicable,new RRPT transactions for the BAC’s review andendorsement.Axiata had at its 20th AGM, held on 23 May 2012,obtained a general mandate for the Group to enter intoRRPT with Telekom Malaysia Berhad Group (TM Group)for transactions predominantly related totelecommunications and/or related services. Theprocurement of mandate for the Group to enter intoRRPT with TM Group was obtained as these transactionsin aggregate may result with the Company having toobtain shareholders’ approval prior to the Group enteringinto the transactions. As these transactions may beconstrained by time sensitive nature and confidentiality,it would be impractical for the Company to seekshareholders’ approval on a case-by-case basis. Theprocurement of the mandate will also substantially reducethe expenses associated with convening of generalmeetings and improve administrative efficiency.Based on the actual amount utilised from the date of theabove AGM until 31 March 2013, none of the actualaggregate value of transaction has exceeded 10% ormore of the estimated amount under the mandate. Theamount of RRPT entered into during the FY12, pursuantto RRPT mandate, is disclosed on page 321.Internal Control and Risk ManagementThe Board has the overall responsibility and accountabilityfor the Group’s internal control systems and continues tomaintain and review them to ensure, as far as possible,the protection of the Group’s assets and the Company’sshareholder investments. A quarterly updated risk profileof the Group and each of the OpCos is presented to theBAC and the Board. The BAC reviews in detail the majorrisks that the Group faces in its business and operationsand management controls and processes that are inplace to manage those risks. Such systems are designedto manage rather than eliminate risks and provide onlyreasonable assurance against misstatement or loss.In addition to the above, a high level register is maintainedwhich is reviewed and updated annually. This comprisesrisks specific to the divisional activities of the business,as well as more group-wide risks such as long termbusiness strategy, regulatory, substitution risks andtechnology. Focus areas of these risks are deliberated bythe Board as they are raised by the Chairman of theBAC at Board meetings.The Company has also established an enterprise widerisk management (ERM) framework to proactivelyidentify, evaluate and manage key risks to an optimallevel. In line with the Company’s commitment to deliversustainable value, this framework aims to provide anintegrated and organised approach entity–wide. Itoutlines the ERM methodology which is in line with theISO31000, mainly promoting risk ownership andcontinuous monitoring of key risks identified.Based on the ERM framework, a risk reporting structurehas been established to ensure prompt communication tothe BAC and the Board. Axiata has established a GroupRisk Management Committee (RMC) comprising of seniormanagement of the Company and chaired by the Chairmanof the BAC. The RMC is mainly responsible for managingthe overall ERM process and recommends quarterly ERMreports to the BAC for its onward submission to theBoard. The RMC ensures continuous review of the keyrisks of the Group, and monitors the implementation ofthe mitigation plans on a quarterly basis.Although many risks remain outside the Company’sdirect control, a range of activities are in place tomitigate the key risks identified as set out in theStatement on Internal Control. A significant number ofrisks faced relate to wider operational and commercialaffairs of the Company and the Group including those inrelation to competition and regulatory developments.An overview of the state of internal control within theGroup, which includes the risk and internal controlframework and key internal control structures, are setout in the Statement on Internal Control on pages 96 to105 of this Annual Report.92