1.0
In our assignment, we had chosen WCT Holding Berhad which listed at bursa Malaysia.In year 1981, the group was first established with the incorporation of a humble one-machine company which is WCT Earthworks & Buildings Construction Sdn Bhd and subsequently changed to its name to WCT Berhad (WCTB). WCTB made its entrance on Second Board of Bursa Malaysia in year 1995 and promoted to Main Market of Bursa Malaysia in year 1999 As WCTB continue to growth in prominence, the company successful transferred its listing status to from WCTB to WCT Holdings Berhad (WCTH) on 8 July 2013.
WCT Berhad involve in engineering and construction which engineering works specialising in construction of highways, earthworks, buildings and related infrastructure works and provision of management services. The division has cover airport, iconic buildings, dam and water supply scheme, F1 racing circuits, expressway and highway, civil works and LRT and MRT. WCT Land Sdn Bhd involved in two segment which is property division and investment and management division. It mainly engaged in the development of residential properties, commercial, property registration, commercial properties, shopping mall and concession assets. The groups own Première Hotel, Klang and New World Petaling Jaya and four shopping malls.
The goal of the WCTH is to inspire and strive for excellence in area of expertise. Next, WCTH also develop, train and rewards passionate and committed employee, leverage on technology for greater effectiveness and productivity and contribute betterment of community. As WCT continue to grow their portfolio, they are still remaining to stay real to their core value of winning, commitment and teamwork, humility and respect.
2.0
Independent director is a non-executive director of a company that does not have any kind of relationship with the company that may affect the independence of the person’s judgement. The role of the independent director is act as a guide to the company such as improving corporate credibility, governance standards functioning and so on. Moreover, independent director must include at least two-third of the director in the audit committee of listed company. This is because to ensure the company compliance with listing and other legal requirements, oversee the financial reporting process, disclosure the company’s information and so on. Furthermore, the board of director of the company should have executive and non-executive directors. It must at least 50% of non-executive director. Furthermore, a non-independent director is also the company’s board of director who is not the executive team. It does not involve in the daily management of the company but engage in the planning exercises and policy making.
Audit committee is the major operating committees of a company’s board of director that overseeing financial reporting, independence of the auditor and so on. Next, the audit committee plays a key role in the company’s governance structure.
WCT Holding Berhad’s board of directors consist of Tan Sri Lim Siew Choo, executive chairman, Dato Lee Tuck Fook who is Group managing director, Goh Chin Liong who is deputy managing director, Liang Kai Chong who is executive director. The independent non-executive director and audit committee are Tan Sri Marzuki Bin Mohd Noor, Datuk Ab Wahab Bin Khalil, Dato Ng Sooi Lin, Ng Soon Lai.
3.0
Audit committee’s main objective is to assist the Board in carrying out its responsibility that related to the group’s financial reporting and internal control system.
According to the Intended Outcome 8.0 of the Malaysian Code of Corporate Governance (MCCG) (Securities Commission Malaysia, April 2017), there is an effective and independent Audit Committee and the Board is able to objectively review the Audit Committee’s findings and recommendations. The company’s financial statement is a reliable source of information. In WCT Holding Berhad (WCT), it is led by Board which play important role in stewardship of the Group direction and operations. The Board of WCT have several Board Committees and one of them is Audit Committee. When the board delegated matter to these Board Committees, they are required to done in written term to assist Board. Besides, Board have also set out the function delegated to the Board Committee to discharge its roles and responsibilities effectively. Hence, WCT have compliance with the Intended Outcome 8.0 of MCCG which WCT have independent Audit Committee and the Board is reviewed and updated the Audit Committee’s findings periodically in the Company’s websites. In other words, the information in the financial statements that distribute by the WCT is reliable information.
Besides, the intended outcome 8.0 of MCCG, such as the Board can objectively review the finding and recommendation carry out by the audit committee will be achieve if the following practices applied.
Under practice 8.1 of MCCG, it set out that chairman of audit committee and the board is not the same person. In WCT, it has complied with this practice which audit committee’s chairman Tan Sri Marzuki Bin Mohd Noor is not the chairman of the Board. Besides, WCT have act in accordance with the Guidance of practice 8.1 MCCG which the chairman of the Audit Committee is responsible for ensuring the overall effectiveness and independence of the Committee. Audit Committee of WCT had work closely with external auditors, Ernst & Young, company internal auditors and management to carry out its functions and duties in line with the term of reference of Audit Committee. This has complied with the Guidance set out in the Practice 8.1 MCCG which
Besides, Practice 8.1 MCCG also set out that. The Audit Committee of WCT had act accordance with all of this guidance. The Audit Committee of WCT have reviewed the quarterly unaudited financial reports and annual audited financial reports and had reviewed the declaration and distribution of share dividend with external auditors. Besides, Audit Committee have also involved in the audit planning and procedures and have reviewed the results together with the management of the Group and also have two discussion solely with the external auditors without management of the WCT on 23 February 2017 and 22 November 2017. Besides, Audit Committee had reflected on important audit findings and management’s responses in the internal audit reports and follow-up these action taken on the respective audit recommendations. Finally, they will come out a written report and will discuss and recommended to the Board and raise the issue and ask probing question to the management. Besides, the internal audit functions of WCT are performed in-house and are reported directly to the Audit Committee. This further provide independent and objective assurance on the effectiveness of internal controls within the Group. Hence, the Board of WCT are very effective on maintains and reviews the activities of the Audit Committee to ensure the information reported to the shareholders and accurate and transparent.
Under practice 8.3, The Audit Committee has policies and procedures to assess the suitability, objectivity and independence of the external auditor. WCT also practice in accordance with the Guidance which Audit Committee have establish policies and procedures that consider the competence, audit quality and resource capacity of the external Besides, Audit Committee of WCT also have obtaining the written assurance from external auditors confirming that they have been independent throughout the conduct of audit engagement with term of relevant professional and regulatory requirements as stated in the guidance of Practice 8.3 MCCG.
Furthermore, under practice 8.4, audit committee shall consist solely of independent directors. WCT also have comply with this as the Audit committee of WCT consist of Tan Sri Marzuki Bin Mohd Noor, Datuk Ab Wahab Bin Khalil, Dato’ Ng Sooi Lin and Ng Soon Lai which all of them are Independent Non-Executive Directors.
As for practice 8.5, it stated that committee should have a wide range of necessary skill to perform its duties. All members should be financially literate and are able to understand matters under the purview if Audit Committee including financial reporting process. Besides, it also stated that all members should undertake continuous professional development to keep themselves abreast of relevant developments in accounting and auditing standards, practices and rules. Audit Committee of WCT are qualified and experienced which they are Bachelor of Arts (Honours) Degree holder, M.Litt holder,xxxxxxxxx xxxxxxx and the member, Mr. Ng Soon Lai @ Ng Siek Chuan is fellow member of Institute of Chartered Accountants in England & Wales. Besides, in order to keep abreast with the standards for accounting as well as auditing, Audit Committee members of WCT in various seminar and also training during the year. For instance, Tan Sri Marzuki Bin Mohd Noor, chairman of the audit committee attended a seminar – Audit Committee (AC) Leadership Track on 9 October 2017. And other members of audit committee also attended seminar or training such as The New Malaysian Code on Corporate Governance, Bursa CG Breakfast Series, Fraud Risk Management Workshop etc.
As a conclusion, WCT’s financial statement can be said is reliable source of information as WCT have conduct and comply with the Intended Outcome 8.0 of MCCG and have act accordance with most of the Practice and Guidance set out in the MCCG from 8.1 to 8.5.
4.0
There are some weaknesses found in WCT Holdings Berhad. According to Malaysian Code on Corporate Governance (MCCG) practice 4.5, the company policy and the gender diversity of the large companies should have at least 30% of women directors. WCT Holdings Berhad is currently no women as directors for the company. This gender diversity may have a benefit because sometimes the point of view for the man and women are different. For women, they may be more detail in decision making and man will be more decisive in decision making. Thus, if a company has gender diversity of more than 30% will have the benefit because the board of director can discuss and come out a more efficient and better result on decision making. In order to improve the performance of board of directors, WCT have to appoint a few numbers of women as directors of the company.
Moreover, based on MCCG practice 4.6, the existing board of directors must not solely rely on the recommendations and need to utilize independent sources when appointing a director. In year 2017, WCT Holdings Berhad has appointed Mr. Ng Soon Lai @ Ng Siek Chuan as an Independent Non-Executive Director for the company though the recommendation of the management. There is a possibility that the company purposely want to fulfill the Para 15.09 of the Listing Requirement which stated that at least one member of the audit committee for the company must a financial expertise. Thus, the performance of the company may not be efficient because Mr. Ng may not be a suitable and qualified director and he may not be able to make an appropriate decision as an audit committee.
Furthermore, the audit committee members should have sufficient understanding of the company’s business under (MCCG) practice 8.5. Mr. Ng Soon Lai @ Ng Siek Chuan is the audit committee of WCT Holdings Berhad and fellow member of the Institute of Chartered Accountants. The profile of directors of the Annual Report of WCT Holdings Berhad stated that Mr. Ng has many year experiences in banking and finance industries (refer to Appendix 1.0). Thus, he has sufficient understanding about banking and finance industries but not construction industries. Therefore, Mr. Ng will not perform well as an audit committee because he may not able to provide an appropriate judgments and advice for a certain circumstance of a problem. In order to reduce these risks, the company should provide some training for Mr. Ng. Thus, Mr. Ng can be more familiar to the business of the company.