Maxis Berhad | Annual Report 2012

Maxis Berhad // Annual Report 2012 207 V. BOARD INTEGRITY IN FINANCIAL REPORTING, RISK RECOGNITION AND MANAGEMENT Accountability and Audit 1. Financial reporting In presenting the annual financial statements and quarterly announcement of results to shareholders, the Directors will endeavour to present a clear, balanced and comprehensive assessment of the Group’s financial position, performance and prospects. This also applies to other price-sensitive public reports and reports to regulators. The assessment is provided in this Annual Report through the Directors’ Responsibility Statement as set out on page 216 of the Annual Report. 2. Related Party Transaction ("RPT") The Company 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 Company. The RPT review and approval processes and procedures focus on three areas: (i) Create RPT Awareness – All Heads of business units, Finance, Legal, Company Secretary and Internal Audit teams are made aware of all related parties to enable the Company to capture information on RPTs at source. Formal and informal briefings on the RPT requirements and relevant compliance requirements are conducted regularly for all business units. (ii) RPT approval process All RPTs (irrespective of their values) must be tabled to the Audit Committee ("AC") for review and 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 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. Interest of Directors and conflict of interests are disclosed to the Audit Committee and 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 it thinks 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 RM30 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 Limits of Authority. (iii) Monitoring Compliance and Reporting The Company 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. (iv) Disclosures in securities and interests In addition, all disclosures on tradings in shares and securities of the Company by Directors and principal officers are tabled at the Board. Disclosure on the RRPTs for which Shareholders’ 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 2012 is provided on pages 230 to 248 of this Annual Report. FINANCIAL STATEMENTS CORPORATE GOVERNANCE ANALYSIS OF SHAREHOLDINGS OTHER INFORMATION ANNUAL GENERAL MEETING