With formidable roots in the Oil & Gas services sector, T7 Global stands today as a brand that is focused, energetic and enduring. Over the years, we have grown to diversify into industries that make a difference to the way we live. We are actively changing the game in today’s oil & gas, design & engineering, education, property, infrastructure, aerospace and investment sectors, delivering with integrity, transparency and clarity of vision.
ANNUAL GENERAL MEETINGS
STATEMENT OF CORPORATE GOVERNANCE
The Board of Directors (“Board”) of T7 Global Berhad recognises and is committed in upholding a high benchmark of corporate governance and ensuring controls, systems and processes are well sustained for the Group. The Board will continuously evaluate the status of the Group’s corporate governance practices and procedures with a view to adopt and implement the Best Practices of the Code wherever applicable in the best interests of the stakeholders of the Group. This statement is prepared pursuant to the Malaysian Code on Corporate Governance (“MCCG” or the “Code”) and the Main Market Listing Requirements (“MMLR”) of Bursa Malaysia Securities Berhad (“Bursa Securities”).
On 31st December 2017 T7 Global Berhad has five (5) Directors – the Acting Chairman, the executive deputy chairman and three (3) independent non-executive directors. There are One (1) independent non-executive director and One (1) executive director were appointed on 5 March 2018. The Board composition complies with the Main Market Listing Requirements of Bursa Malaysia that requires a minimum of two (2) Directors or one-third (1/3) of the Board, whichever is higher, to be Independent Directors.
Together the Directors act in the best interest of the Group and believe that the current Board composition fairly reflects the interests of its shareholders to provide effective leadership, strategic direction and necessary governance to the Group. These Directors collectively have skills and experiences from different field of business, in terms of commercial, financial, technical, corporate and legal for the effective management of the Group’s businesses. The director profiles are presented in the Director Profile section of Annual Report.
The Group has also formalised a set of ethical standards through a code of conduct, which is subject to periodical review, to ensure Directors practice ethical, business-like and lawful conduct, including proper use of authority and appropriate decorum when acting as the Board.
The Board conducted assessments on the independence of the Independent Directors and is satisfied that the Independent Directors have met the independence criteria stated in the MMLR. There are three out of five Board members are Independent Directors.
All Board members fulfil the requirements to serve as directors in no more than five Boards of listed companies to ensure sufficient time has been devoted to carry out their responsibilities.
None of the Independent Directors have served the Group exceeding a cumulative term of nine (9) years. At present, the Group does not have a formal policy to limit the tenure of independent director to nine (9) years. However, the Board is mindful of the recommendation in the Code to ensure effectiveness of Independent Directors.
The Board comprises of board members with different background, skill sets and experiences in oil & gas and various industries, gender etc., which enable T7 Global Berhad to make a difference.
Roles & Responsibilities of the Board
The Board of T7 Global Berhad meets at least four times a year. Circular resolutions will be conducted for resolving additional matters.
The Chairman ensures smooth and effective functioning within the Board.
The Executive Directors (“EDs”) are responsible for overseeing the day-to-day operations and affairs of the Group.
The Non-Executive Directors (“NEDs”), both Independent and Non-independent, are responsible in providing insights, unbiased and independent views, advice and judgement towards the Board and bring impartiality to Board deliberations and decision making. NEDs play as a vital check and balance role by challenging and scrutinising the Management’s proposals and recommendations in an objective manner to the decision making process at the Board level.
The Board is fully aware of its responsibilities and has adopted key roles in strategizing the direction of the Group and has assumed the following duties in demonstrating the following fiduciary and leadership roles:-
- Overseeing and monitoring the conduct of business, financial performance and any major capital-intensive investments of the Group;
- Reviewing and implementing appropriate budgets and strategic business plans of the Group, monitoring compliance with applicable financial reporting standards and integrity and adequacy of all financial information disclosure;
- Identifying principal risks and ensuring the implementation of appropriate internal controls and mitigation measures to effectively monitor and manage risks;
- Reviewing the adequacy and integrity of the internal control and management information systems of the Group;
- Developing a corporate code of conduct within the Group to address any conflicts of interest relating to the stakeholders of the Group; and establishing and overseeing the development and implementation of the corporate communication policies with shareholders, stakeholders and the public.
Functions of the Board and Delegation to Management
During 2017, there are three (3) Independent Directors to provide valuable opinion on T7 Global Berhad’s issues including strategy, performance and KPIs standards of management team, resource management, risk management and code of conducts etc. Day-to-day operation and management are delegated by Acting Chairman and Executive Deputy Chairman (“EDC”).
The Board regularly controls and reviews its delegation and authority level to Acting Chairman and EDC. In order to prevent any abuse of authority, strict procedure of authority and different levels of independence review are followed. Procedures of authority are clearly set up and all operation decisions are made after review. Committees’ Charters are under annual review.
Board Leadership and Responsibility in Discharging Fiduciary and Leadership Functions
The Board is the ultimate authority of T7 Global Berhad, which is responsible for authorizing and reviewing all long-term and short-term business and strategic plans unless the matters require shareholders’ approval. Specific goals set up with KPIs for management to implement those plans. Along with Independent Director’s extensive experiences and expertise in various fields of business and industries, T7 Global Berhad management strives to achieve goals so as to protect minority shareholder’s rights. Management reviews all matters reserved to the committees comprised solely of Independent Directors, and the Board.
The Board has established board committees to assist the Board in discharging their duties. These committees are as follows:-
- Audit Committee
- Nominating Committee
- Remuneration Committee
- Share Issuance Scheme Committee
- Risk Management Committee
STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL
Pursuant to paragraph 15.26(b) of the Bursa Malaysia Securities Berhad Main Market Listing Requirements, and as guided by the Statement on Risk Management and the state of Internal Control: Guidelines for Directors of Listed Issuers (“the Guidelines”), the Board of Directors (“The Board”) is responsible for the adequacy and effectiveness of the T7 Global Group’s (“the Group”) risk management and internal control system.
The Board has established an ongoing process for identifying, evaluating and managing the significant risks faced by the Group and this process includes enhancing the risk management and internal control system from time to time in response to the changes to the business environment or regulatory guidelines.
The Board ensures that the system manages the Group’s key areas of risk within an acceptable risk profile to increase the likelihood that the Group’s policies and business objectives will be achieved. The Board continually reviews the system to ensure that the risk management and internal control system provides a reasonable but not absolute assurance against material misstatement of management and financial information and records or against financial losses or fraud.
This statement is to be read together with the Corporate Governance Report 2017 of the Group which is available on the Group’s website at www.t7global.com.my.
The Board is responsible for the Group’s internal control and risk management system to safeguard shareholders’ investment and the Group’s assets as well as reviewing the adequacy and effectiveness of the said system.
The Board is of the view that the risk management and internal control system in place for the year under review and up to the date of issuance of the financial statements is adequate and effective to safeguard the interests of shareholders, customers, employees and the Group’s assets.
In view of the limitations inherent in any system of risk management and internal control, these systems are designed to manage, rather than eliminate, the risk of failure to achieve the Group’s business and corporate objectives. These systems can therefore only provide reasonable, but not absolute assurance, against material misstatement or loss.
RISK MANAGEMENT GOVERNANCE
Risk Management is regarded by the Board to be an integral part of the business operations. The Board maintains an on-going commitment to enhance the Group’s control environment and processes. The key risks relating to the Group’s operations and strategic and business plans are addressed at Management’s meetings. Significant risks identified by the Management are to be brought to the attention of the Board at their scheduled meetings.
The abovementioned practices/initiatives put in place by the Board serve as the on-going practice used to identify, evaluate and manage significant risks during the financial year under review. In view of the recent weaknesses on the Group’s corporate governance and internal control systems that have come to the Board’s attention, the Board is in the process of addressing these weaknesses noted so as to improve the effectiveness and efficiency of the risk management function and the internal control systems of the Group.
The Group Risk Management Framework which sets out the fundamental principles on risk governance is to drive the development of risk management practices and tools which enable the identification, measurement and continuous monitoring of all applicable risks of the Group including the identification of emerging risks.
The Board established a governance structure that is designed to govern the Group’s business activities to be: consistent with the Group’s overall business objectives and risk appetite conducted within clearly defined lines of responsibility, authority limits, and accountability aligned to risk management and control responsibilities subjected to adequate risk management and internal controls.
SYSTEM OF INTERNAL CONTROL AND COMPLIANCE PROCESS
The Group maintains a system of internal control that serves to safeguard its assets; identify and manage risk; ensure compliance with statutory and regulatory requirements; and to ensure operational results are closely monitored and substantial variances are promptly explained.
Whilst the Board maintains control and direction over appropriate strategic, financial, organizational and compliance issues, it has delegated the implementation of the system of internal controls to the executive management, led by
the Executive Director. The Executive Director, who is empowered to manage the business of the Group, has primary operational responsibility for the system of internal controls.
The management of the Group identifies key compliance risk areas as guided by the Group Compliance Framework and conduct ongoing compliance checks. Reports on the compliance status of the entities are submitted to the Group’s Audit Committee for review. The Group Compliance Framework is established to outline the governance structure on compliance risk management functions and control responsibilities.
The Audit Committees of the Group reviews internal control issues identified by the respective Internal Auditors, the external auditors and management, and evaluate the adequacy and effectiveness of their risk management and internal control systems. They also review the internal audit functions with particular emphasis on the scope and frequency of audits and the adequacy of resources.
The Group’s risk appetite sets out the level of risk tolerance and limits to govern, manage and control the Group’s risk-taking activities. The strategic objectives, business plans, desired risk profile and capital plans are required to be aligned with the risk appetite.
The Board convenes meetings on quarterly basis in order to maintain full and effective supervision. The Executive Director, being the principal channel of communication between the Board and the management, will lead the presentation of Board papers and provide comprehensive explanation on key issues. In arriving at any decisions based on recommendations by management and the Audit Committee, a thorough deliberation and discussion by the Board is a prerequisite.
The Board recognized all risks can be controlled or eliminated by an effective system on internal control. Key features of the Group’s internal controls include:-
- An organizational structure with clearly defined lines of responsibility and relevant authority has been set up for the Group.
- The Group’s management with the assistance of a centralized human resource function sets the policies for recruitment, training and appraisal of the employees within the Group.
- Policies and procedures which sets out the compliance standards for daily operations for the respective business units of the Group.
- The Group’s management meets monthly to review the operational and financial performance of the businesses in the Group and its subsidiaries, and to discuss key business, operational and management issues.
- The Board of Directors receives and reviews quarterly performance reports on the Group and its subsidiaries from the management, and discuss on significant business and risk issues.
CODE OF CONDUCT AND ETHICS
Code of Conduct and Ethics is represented to the Board, the Management Team and all employees as a reference of conduct. The policy of T7 Global Berhad complies with all governmental laws, rules, and regulations applicable to its businesses. Code of Ethics is applied when it is stricter than the local law and regulations. Code of conducts includes four main sections:
- Conflicts of Interest Policy
It is T7 Global Berhad’s policy that all directors, management and employees are expected to avoid conflict between personal interests and the interests of the Group. If conflict exists, interests of the Group are priority to personal interests.
- Asset Policy
All directors, management and employees are expected to protect the assets of the Group, and use all assets efficiently to advance the interests of the Group.
- Directorships Policy
The Group restricts the holding by officers and employees of directorships in non-affiliated, for-profit organizations and to prohibit the acceptance by any officer or employee of such directorships that would involve a conflict of interest with, or interfere with, the discharge of the officer’s or employee’s duties to the Corporation.
- Whistle-Blowing Procedures and Open-Door Communication
The Group has a whistle-blowing policy and procedure to provide opportunity for all stakeholders including employees, shareholders and others to raise their concerns of any malpractice within the Group. The objective of the policy and procedure is to provide and facilitate a mechanism for whistle-blower to report concern about any suspected and/or known misconduct, wrongdoings, corruption, fraud, waste and/or any abuse of power.
This will enable each case/issue can be investigated and for appropriate action to be taken to ensure that the matter is resolved effectively and within the Group wherever possible.
If an employee found any misconduct, wrongdoings, corruption, fraud, waste and/or any abuse of power, he or she should report to immediate supervisor. Each supervisor is expected to be available subordinates for this purpose. And investigation should be conducted by the supervisor. If the employee is dissatisfied the review or investigation from the supervisor, further reviews by the Executive Deputy Chairman and the Chairman are encouraged. Investigation team will be set up to investigate the issue and take actions. Reviews should contribute to the level of management appropriate to resolve the issue. If issue cannot be resolved, the whistle-blowers can escalate the report to the Audit Committee Chairman. The Audit Committee will deliberate the matter reported and decide on the appropriate action.
The Executive Directors (“ED”) and Chief Financial Officer (“CFO”) are fully aware of the issues highlighted to the Board arising from the weaknesses in the corporate governance and internal control systems of the Group. The ED and CFO had given their assurance that the Group’s risk management and internal control system are operating adequately and effectively in all material aspects. Together with the Board, the EDC and the CFO are in the process of improving the adequacy, effectiveness and efficiency of the corporate governance practices and the systems of internal control in the Group to continue to safeguard the interest of the shareholders’ investment and the Group’s assets.
There are guidelines within the Group for hiring and termination of staff, formal training programmes for staff and annual performance appraisals to enhance the level of staff competency in carrying out their duties and responsibilities. There are policy guidelines and authority limits imposed on executive directors and management within the Group in respect of the day-to-day operations.
Policies and procedures to ensure compliance with internal controls and the relevant laws and regulations are set out in operations manuals, guidelines and directives issued by the Group which are updated from time to time.
Procedural guidelines are established to set out a systematic process and procedure in the review of the adequacy and effectiveness of the risk management and internal control system.
The Board is of the view that the risk management and internal control systems of the Group require continuous pertinent efforts from the Board to improve its adequacy, effectiveness and efficiency in meeting the Group’s strategic objectives.
The Board received assurance from Acting Chairman, Executive Deputy Chairman and the Chief Financial Officer that the Group’s risk management and internal control system is operating adequately and effectively, in all material aspects, based on the risk management framework adopted by the Group. Internal auditor reviews risk management and internal control annually and when review is requested. Review results will be reported to QHSE department and the Board.
The Group has engaged an internal audit professional firm during the year to perform the internal audit function of the Group. The internal audit firm reports directly to the Audit Committee and administratively to the CFO. The works of the internal audit firm are guided by the Code of Conduct that provides its independence in evaluating and reporting on adequacy, integrity and effectiveness of the overall internal control system, risk management and corporate governance in the Group using a systematic and disciplined approach. The works of internal audit including:-
- Review existence of processes to monitor the effectiveness and efficiency of operations and the achievement of the objectives of T7 Global;
- Review the efficiency and effectiveness of the internal control system for safeguarding of assets and providing consistent and accurate financial and operational data;
- Promoting risk awareness and the value and nature of an effective internal control system;
- Review compliance with T7 Global’s policies, procedures, and regulations; and if such policies, procedures and regulations are inadequate, we will make the necessary recommendations to ensure proper policies are in place;
- Assisting Management in accomplishing its objectives by adopting a systematic and disciplined audit approach to evaluating and improving the governance process within T7 Global’s operations;
- Challenging and providing alternatives to accepted practices, and
- Add value and improve operational activities.
The Audit Committee consists of:
- Tan Sam Eng– Chairman
- Datuk Sheikh Fahmi bin Sheikh Jaafar – Member
- Ir Abd Rashid Md Sidek – Member
The primary objective of the Audit Committee is to assist the Board of Directors in discharging its statutory duties and responsibilities relating to accounting and reporting practices and to ensure the adequacy and effectiveness of the Group’s internal control measures.
Terms of Reference
- The Audit Committee shall be granted the authority to investigate any activity of the Company and its subsidiaries, and all employees shall be directed to co-operate as requested by members of the Committee
- The Audit Committee shall be empowered to retain persons having special competence as necessary to assist the Committee in fulfilling its responsibilities
- The Audit Committee shall provide assistance to the Board in fulfilling its fiduciary responsibilities particularly relating to business ethics, policies and financial management control
- The Audit Committee shall maintain a direct line of communication between the Board, External Auditors, Internal Auditors and Management through regularly scheduled meetings
- The Audit Committee shall provide greater emphasis on the audit functions by increasing the objectivity and independence of External and Internal Auditors and providing a forum for discussion that is independent of the Management
- The Audit Committee may invite any person to the meeting to assist the Audit Committee in decision-making process and that the Audit Committee may meet exclusively as and when necessary
- Serious allegations that have financial implications against any employee of the Company shall be referred to the Audit Committee for investigation to be conducted.
Duties and Responsibilities
The duties and responsibilities of the Audit Committee are as follows:-
- To oversee the function of the Finance Department for financial reporting;
- To review the arrangements established by Management for compliance with the any regulatory or other external reporting requirements, by laws and regulations relayed to the Group’s operations;
- To oversee the function of the Internal Auditor and evaluation of the system of the internal controls and review the quarterly and year-end financial statements of the Group;
- To consider the appointment of the External Auditor, the audit fees and any questions of resignation or dismissal, to discuss with the External Auditor before the audit commences, the nature and code of the audit, and ensure coordination where more than one audit firm are involved, their audit report;
- To discuss problems and reservations arising from the external audits, and any matter the auditor may wish to discuss and to oversee the internal audit function; and
- To obtain satisfactory response from the Management on the reports issued by the External and Internal Auditors;
- To consider any related party transactions that may arise within the Group including any transaction, procedure or course of conduct that raises the questions of Management’s integrity.