Mr. Yeo Keng Lian is the founder of YEO HIAP SENG. In the year 1990, Yeos history has were only available in Amoy, China with a tiny soya sauce factory was set up for the reason that particular year. In the entire year 1957, the first YEO HIAP SENG office in Malaysia was established. Now, YEO HIAP SENG (MALAYSIA) BERHAD has turned into a public listed company on Bursa Malaysia. It operates in the consumer products sector which engages in the production, marketing and sale of food and beverage products. (BURSA MALAYSIA, 2011).
Mr. Tjong Yik Min, who's a Singaporean and was appointed as the principle Executive Officer on 1 June 2010. (YEO HIAP SENG (MALAYSIA) BERHAD, 2011) The company offers its food and beverage products included the Yeo's, Cintan, Justea, SoyRich, Isotonic H-Two-O, and Yogurt brand names. They use the freshest ingredients for his or her products to keep up the quality of their products to be able to achieve their vision which is usually to be the No. 1 Asian food and beverage company in Malaysia. YEO's has achieved their vision in soya milk, tea drink and can meat category; and today they want to achieve their vision in can food and instant noodles category as well. (YEO HIAP SENG (MALAYSIA) BERHAD, 2011).
There are several main competition of this company such as Nestle S. A. , Coca-Cola Co. , Fraser& Neave Holdings Bhd (F&N) plus some others. The most important factor that causes succeed of this company is their 5C's guiding principles that aren't applied by other companies. These 5C's are consumer focus, category leadership, channel management, cost control and confidence. (YEO HIAP SENG (MALAYSIA) BHD, 2004)
CORPORATE SOCIAL RESPONSIBILITY ACTIVITY
Marketplace
Corporate governance
Statement on Corporate Governance
The Board of Directors has fully committed to the principles of corporate governance and guidelines as embodied in the Malaysian Code on Corporate Governance ("the Code"). The Board has taken every step to guarantee the highest standards of corporate governance are practiced throughout the Group to be able to safeguard and enhance shareholders' value and the financial performance of the Group.
Composition of Board Balance
The board of the business contains nine members, including two Executive Directors and seven Non- Executive Directors. There may be one-third of the Independent Non Executive officer in the board membership. Furthermore, the chairman is separate in addition to the leader director. The chairman is responsible for leadership of the board and monitoring the effectiveness of the business. However, the principle executive director is control over the group's business such as implementation of major strategies where adopted by the member of the board.
Senior Management Remuneration
The determination of the remuneration of the Non-Executive Directors is a matter for the Board as a whole. However, Directors are not allowed to participate in decision making where regarding to their own remuneration. Shareholders have approved the remuneration of the directors on the AGM. Besides, the Audit Committee and Independent Non-Executive Directors are paid attendances allowances to be as a board committee.
Internal control
The Board has recognized the value of a audio system of internal control and acknowledged its ultimate obligations in maintaining the same, which includes the establishment of a proper control environment and risk management framework, as well as reviewing, monitoring and ensuring its adequacy and integrity.
CSR Management/ Reporting
Corporate responsibility statement
Yeo's has integrated its corporate responsibility into a sustainable business model that goes beyond shareholders interests, for the betterment of society, as a socially responsible company. It has reflected their commitments to customers, employees, investors, suppliers and the community.
Third Party Report Audit and Review
The board of Yeo Hiap Seng (Malaysia) Berhad is included audit committee as their member. Audit committee is to review the issues of accounting policies and presentation for external financial reporting. Meanwhile, audit committee has monitors the works of the internal audit function and ensures an objective and maintained the partnership with external auditors.
Reporting guideline
The Directors of Yeo Hiap Seng (Malaysia) Berhad are responsible to ensure the integrity of the financial record and the potency of the financial controls, risk management systems and internal control. Besides that, the directors are also responsible to ensure that financial statements are accordance with Companies Act, 1965 and Malaysian Accounting Standards (MASB).
Stakeholder Engagement
Yeo Hiap Seng (Malaysia) Berhad take part in constant dialogue with their stakeholders through Annual General Meeting (AGM) and other meetings. Their AGM are in the primary platform for just two direct way interactions with stakeholders and board of the business. They can be constantly updating the business's performance to the stakeholders such as quarterly financial announcement.
Procurement policies
Maintain the Highest Halal Standard Compliance
During the entire year 2011, Yeo Hiap Seng (Malaysia) Berhad has commitment with the highest Halal Standard Compliance. This honor had proven that the business had contributed a lot of works on their ingredients, employees and systems to be able to maintain the most rigorous of halal standards in Malaysia. Moreover, the business adheres to strict hygiene standards and stringent quality control in order to ensure the high quality of all its products to their consumers.
ENVIRONMENT
Environmental policy
Reusable Resources.
Yeo's has committed and interested in environmental conservation. Yeo's is among the most first food and beverage to introduce their Asian Drinks products in Tetra Pak packaging which is environmental friendly and recyclable.
Set targets for improvements and significant initiatives to reduce
Moving Toward Paper-less
Yeo's has introduced several programmes to upgrade IT infrastructure which aim to encourage paperless environment through electronic communications and e-filing system. Beside, Distributor Management System (DMS) has been introduced and implemented by Yeo's to enhance your time and effort of paperless environment.
WORKPLACE
Committed to Hazard Free Zone
Yeo's has focused on afford a safe, healthy secure and contributive workplace for all the visitors, employees and business stakeholders. The promise to the effective implementation of Occupational Safety and Health Policy has achieved a hazard-free work zone. Yeo's has organized different communications activities and campaigns to verify the employees' knowing of safety precautions.
Human capital development
Continue to develop Human Capital
Yeo's has entrust to provide a supportive working culture for the company's employees through training and development programmes. Through the year 2011, the employees have participated in external training programmes and different in-house from technical-related skill to soft management skills. Yeo's expected to bring up the future workforce with their industry; hence, Yeo's is constantly on the welcome the interns of short-term attachment to complete their degree requirements.
Employee welfare
Employee benefit
Yeo's try to enrich the performance of staff throughout staff recognition schemes, offering equal opportunities, training and development and creating sound employees' relations. Each year, in acknowledgment of the loyal, devoted and committed employees, Yeo's has pleased and rewarded the long service employees at its Annual Dinner and Dance.
COMMUNITY
Details on the company's community investment initiatives
Yeo's Program Susu Soya Sekolah 2
Yeo's initiated a corporate responsibility campaign, "Yeo's Program Susu Soya Sekolah" in year 2010 and received positive feedbacks from public. Thus, Yeo's continued this initiative with "Yeo's Program Susu Soya Sekolah 2". This campaign covered another 100 schools and reached out to another 50, 000 students with an aim to instill the importance of an balanced diet and in educating the students on preserving the environment through recycling.
Yeo's Scholarship Programme
Students from 51 primary schools in the Klang Valley and Putrajaya took part in the "Yeo's Program Tajaan Biasiswa Sekolah" backed by the spirit of enthusiasm and perseverance.
Yeo's logo from empty beverage packs was collected by students to struggle for the scholarship. Yeo's achieved their primary objective in setting a platform for students to exercise imagination and problem solving skills through this programme. It also promotes the spirit of esprit de corps amidst students and teachers to work towards achieving the school category scholarship for school development fund.
1Malaysia Creative Sculpture Recycling Competition
Yeo's support the 1Malaysia philosophy by embarked on its green and remarkable 1Malaysia recycled sculpture competition among all participating schools of "Yeo's Program Susu Soya Sekolah" using Yeo's recyclable materials. It is to encourage the young's imagination and nurture recycling mindset. Yeo's awarded the winning schools each with school development fund to aid the development and extra-educational activities at school level to be able to identify their effort in this competition.
"My New Village" Carnival
Yeo's joined Nanyang Siang Pau in "My New Village" Carnival for three consecutive years to reach out to smaller communities and villages. Yeo's contributed part of its sales generated from the carnival to the schools in those villages to support their infrastructural and facilities building fund. Besides that, Yeo's also embarked on "Embellish Your Village with Yeo's" in which the participating villages has collected, cleaned, and recycled Yeo's recyclable materials to embellish a selected spot in the participating villages. Furthermore, Yeo's in addition has shared knowledge of creative recycling through fun and interactive games.
Dynamic Dance Competition
Yeo's in collaboration with China Press, organized a national dynamic dance competition in line with "Lead a Joyful Life" campaign. The primary objective is to encourage the communities to live a life and lead a healthier and joyful lifestyle.
Support of World Vision Malaysia Movement
In order to improve fund for World Vision Malaysia's movement, Yeo's has supported 30-Hour Famine program through the sponsorship of soy milk to individual camps. It is to help those who are suffering from poverty and hunger, providing them with the chance for improved health, better quality life, and hope.
Factory Educational Visits
Yeo's continues its initiative to welcome the neighborhood and overseas universites and colleges to improve student's understanding of the meals and beverage manufacturing processes.
AUDIT PROCEDURE
MARKETPLACE
Corporate Governance
Statement on Corporate Governance
The audit procedure that will be adopted is observation. For corporate governance, the BOD has fully focused on the principles of corporate governance and best practices. We have to observe what step has been done by Yeo Hiap Seng ( Malaysia ) Berhad to ensure the highest standards of corporate governance are practiced to safeguard and improve the shareholders' value and the financial performance of the group.
Composition of Board Balance
Inspection of records and documents is necessary in the composition of board balance. The documents or records that people needs to observe like the legal form distributed by the company and annual general meetings and circular resolution. Those legal form or meetings are highly reliable being that they are collected from government.
Furthermore, confirmation letter send to third party from auditor to acquire reliable evidence to ensure the existence of the board that are independent. However, receive positive response from third party represents it is reliable evidence.
Senior Management Remuneration
The inspection of records or documents is necessary in audit procedures. Before verify the transactions, we have to examine the reliability of the documentary evidence through vouching and tracing. Vouching is selecting an item from ledger or journal and then examines the underlying document, to ensure the occurrence of the transaction while tracing is another way round, for checking the completeness of the whole transaction. After confirmed the reliability of documentary evidence, just we will in a position to verify the transactions.
Furthermore, computation of remuneration is necessary in this circumstance. Computation involves checking the mathematical accuracy of documents or records. Despite of checking any errors exist, it is normally considered as a highly reliable evidence when auditor creates this type of evidence, it include checking the posting from journals to ledgers, basic computation, recalculation of the transactions, reconciling ledgers to account balances.
Internal control
Control environment and risk management framework were established to keep the internal control. Inquiry have to handle with the board to get a knowledge of the value of the sound internal control system and its own techniques.
Besides that, confirmation from the inner auditor of the company should be obtain to verify if the company internal control function accordingly.
CSR Management/ Reporting
Corporate responsibility statement
The audit procedure which will be used is confirmation of the arrangement to acquire corporate responsibility in marketplace area. Yeo's has integrated into a sustainable business model. Thus, we ought to confirm if it exceeds the shareholders interests and reflects their commitments to customers, employees, investors, suppliers and community.
Third Party Report Audit and Review
Inspection of records and documentation is necessary for the audit committee. Therefore, we ought to review the evidence whether the audit committee is existed.
While at exactly the same time, we have to inspect the partnership between the company and the board. Inspection is essential in order to guage the independence of the board of audit committee. We have to check whether audit committee is having financial interest with the business.
Moreover, inspect the relevance internal document is required in the audit procedures such as total annual return, circular resolution and other form. On this circumstance, inquiries are needed to be able to see the employees are awareness for the policy and regulation.
Reporting Guideline
We should review the policy and observes the data that the policy has been really followed such as Company Act, 1965, Malaysian Accounting Standards (MASB) and financial reporting standard.
Moreover, inspect the relevance internal document is necessary in the audit procedures such as annual return, circular resolution and other form. In this circumstance, inquiries are needed to be able to see the employees are awareness into the policy and regulation.
Stakeholder Engagement
Observation had a need to perform on this circumstance. It consists of looking at a process or procedure being performed by others, for a good example, the auditor might need to attend the organizing committee meeting, review the minutes of meeting or even attend the activity to perform the observation. However, it might face difficulty that individuals might act differently once the auditor is not around and the evidence is very limited.
Procurement Policies
First of most, Inspection of relevance records and documents about Yeo Hiap Seng (Malaysia) Berhad is needed. The primary reason of inspection is to ensure the company is provided a safety and halal food as they apply in the field operation. Besides that, confirmation letter can be send to third party, the distributor of the honor to obtained evidence and ensure the reliability and credibility of the honor received by Yeo Hiap Seng (Malaysia) Berhad.
Besides that, auditor on-site visit is necessary in this commitment. The primary purpose is to have more understanding the workplace environment to ensure that the food provided in clean, halal and safety, though it allowed auditor to obtained evidence but relatively low reliability and it do not leave an audit trail because they might act differently when they were being observed.
ENVIRONMENT
Environmental policy
Reusable Resources
The audit procedure that'll be taken was inquire the management to get more understanding on the concept of Tetra Pak packaging uses in food and beverage's products and the detail information of processing and packaging.
Beside, physical observation on the process of packaging should be perform to ensure quality control on the packaging done time to time and entire process was follow the company policies and procedure.
Moreover, As an auditor, we should obtain Quality Control Report from the management and review report from independent consultant as an evidence whether the Tetra Pak packaging implement by Yeo's is environmental friendly and recyclable.
Lastly, any documentation from relevant authority should be obtain from management.
Set targets for improvements and significant initiatives to reduce
Moving Toward Paper-less
Yeo's has introduced several programmes to upgrade IT infrastructure which aimed to encourage paperless environment. Auditors should inquire the management on if the Distributor Management System (DMS) is implemented and function effectively by Yeo's.
Observation carry out to determine whether the system really helps to improve the effort and work effectively such as enhancing the reliability and quality of service in terms of reducing outages, minimizing outage time and decreasing the uses of paper.
Besides, confirmation from independent IT consultant on the potency of system should be obtain as an evidence.
Services Report of DMS should require from the management to verify whether update and improvement on system have been perform timely to ensure the system function effectively and efficiently.
WORKPLACE
Committed to Hazard Free Zone
The audit procedure taken is review the term of policy. The Occupational Safety and Health Policy were implemented to accomplish a hazard-free work zone. In consequence, we ought to review the word of Occupational Safety and Health Policy to be sure the visitors, employees and business stakeholders know about the policy clearly and focus on safety and health.
Besides, report for the activities and campaign that held by Yeo's and the feedback of the employees should be obtain to perform checking if the activities and campaign have enhance employees, customers, and other stakeholder's awareness of safety n health.
Moreover, confirmation should be obtain from related authority when there is any certificate that awarded by the society.
Human capital development
Continue to generate Human Capital
The audit procedure that will be carried out is inquiry. Yeo's has entrust to provide a caring working culture for the business's employees over and finished with training and development programmes. We've a duty to inquire the employees on whether there is any programme or activities being performed by Yeo's.
Other than that, we must inquire and confirm that what skills will be utilized, learned and can boot the future workforce through the programmes.
Moreover, confirmation should be obtain from external specialize or processor who in-charge for the programmes to guarantee the reliability of the info.
Lastly, we ought to review the program's report of every function to ensure that each employee have involved.
Employee welfare
Employee benefit
The audit procedure that people applied is review of the record of employees. We should review every employees detail and observe whether period of service have been recorded clearly.
Inspection and scanning on the employee welfare policies should be carry out to examine whether management have perform accordingly.
COMMUNITY
Details on the company's community investment initiatives
Yeo's Program Susu Soya Sekolah 2
The audit procedure need to be done is obtaining confirmation from third parties. We've obtained a confirmation from "Yeo's Program Susu Soya Sekolah" which received positive feedbacks from the public.
We also inquire the management and students of some of the schools that involves about their involvement in this campaign. We are able to make sure that the existence of "Yeo's Program Susu Soya Sekolah 2".
Yeo's Scholarship Programme
The audit procedure that we carried out is inspection on the documents that related to "Yeo's Program Tajaan Biasiswa Sekolah" and checked the activities which may have been done by Yeo's to attain their objective.
We also performing the computation on the amounts that being given as scholarships to ensure that the amounts aren't used for other purpose.
1Malaysia Creative Sculpture Recycling Competition
The audit procedure to be done is obtaining confirmation from the winning schools whether they have the fund from Yeo's.
Next, analyzing cash flow and profit of Yeo's. We checked whether the fund is a cash outflow for Yeo's and being minus out from its profit.
"My New Village" Carnival
The audit procedure carried out is inquiry Yeo's whether has participated in "My New Carnival" with Nanyang Siang Pau.
Besides that, we have to get confirmation from Nanyang Siang Pau about the existence of the carnival and involvement of Yeo's.
We should confirm the sales made from the carnival have been contributed to support the schools' infrastructural and facilities building fund.
Dynamic Dance Competition
The audit procedure done is inspection on the documents which related to the campaign and checked the actions done by Yeo's to encourage communities to live on and lead a healthier and joyful lifestyle.
Support of World Vision Malaysia Movement
The audit procedure carried out is obtaining confirmation from third parties about sponsorship of soy milk in 30-Hour Famine Programme. We have obtained the confirmation letter from the average person camps about the sponsorship to them.
Factory Educational Visits
The audit procedure have to be done is obtaining confirmation from colleges or universities about their visiting.
Besides that, we should take notice of the method done by Yeo's to enhance students' knowledge about the manufacturing process of food and beverage.
WEAKNESS AND RECOMMENDATION
MARKETPLACE
As we know that, Yeo Hiap Seng (Malaysia) Berhad is focus more on the facts of the Company's internal control and they didn't much detail on the CSR event of the market place. Yeo Hiap Seng (Malaysia) Berhad need to pay more attention on the CSR event of market. The business is have a good internal control, yet will not focus more on the function of CSR such as empowerment of women and blood donation campaign.
Moreover, product responsibility should disclose in the annual report. Product responsibility is needed because of this company since Yeo Hiap Seng (Malaysia) Berhad is a food and beverage industry. Product responsibility is a status for the company that this has provided a safety product and services.
Recommendation
Product responsibility is necessary in the Yeo Hiap Seng (Malaysia) Berhad. Product responsibility can addresses the effect of product and services management on the clients such as health and safety, information and labeling, marketing and privacy. The business should exercise due care in the design with their products and services in order to ensure they are really fit for the intended use.
Some other specific policies and regulations are needed in order for Yeo Hiap Seng (Malaysia) Berhad to function efficiently. However, the policies and regulations are to be set in spot to govern the procedure of acquiring and keeping goods. As their main products are food and beverage, it is of the importance that the quality is maintained. Yeo Hiap Seng (Malaysia) Berhad should set their reorder levels as a result their inventories level is low and adequate without jeopardizing their daily operation.
ENVIRONMENT
Yeo's does not have measurement systems
The company does not implement the measurement systems in location to measure emissions of skin tightening and and other greenhouse gases, energy consumption, water consumption and waste production and management that will harm the surroundings. The example for the measurement systems is Continuous Emissions Monitoring Systems.
Recommendation
Yeo's should implement Continuous Emissions Monitoring System, a tools to monitor and calculate the carbon footprint of stores and improve performances. Besides, internal control policies should be set up for the environmental concern to measure and reduce the direct and indirect emissions deriving using their operations to get. Yeo's can boost your time and effort by implement environmentally friendly and energy management systems, creating knowledge-based schemes within the company.
Yeo's will not conduct environmental impact assessment
In Section 34A, Environmental Quality Act, 1974, it requires the projects that contain significant impact to the environment have to carry out environmentally friendly impact assessment and submit the report to the Director of Environmental Quality for examination.
Recommendation
EIA is an assessment of the possible negative and positive impact that a proposed project may have on the environment, social and economic. Therefore, the environmental impact assessment should be conducted by Yeo's for preventing environmental problems because of their business operation. Projects which bring the detrimental effects to environment will be discarded. The elements that will be assessed by EIA project are water quality, noise, air quality, wealth and other social impacts. Lastly, when EIA integrated with the prevailing planning and decision-making machinery, it could provides additional information for better decision making.
WORKPLACE
Yeo's does not implement the work-life balance
Use a much better work-life balance to ensure that the employees have good quality of life. Nevertheless, Yeo's company is not exercising the work-life balance. It generally does not offer the flexible working arrangements, pension plans, counselling or assistance programmes and sport activities for the employees.
Recommendation
Yeo's should build-up counselling service at the workplace and sport activities for employees. When a business environment is filled of challenges, employee will easily get nervousness and stressful all the time. Provided the counselling service, it can assist the employees to cope with the strain and mentally problem. Due to that, employees with a good physically and mentally condition will easily deal with the jobs problem and lend a hand company to accomplish a superior performance.
Yeo's does not cultivate diversity in workplace
Having cultivate diversity in workplace is essential since it brings a great deal of creative suggestion, new idea and innovations from folks who are in various background and different experience. Other than that, it could also bring a diverse pool of candidates' means a more qualified workforce. Unfortunately the company can not work on the diversity in workplace it is because Yeo's will not employ people with disabilities.
Recommendation
We recommend that Yeo's should provide equal opportunities to people who have disabilities. Discriminatory case on gender, races, nationality and physical ability should be avoided. We ought to involve everyone one of your employees to assist in attaining organizational goals and objectives no matter race, colour, gender, ethnicity, age, religion, disability, or national origin. Learn to appreciate the initial differences in every individuals. Yeo's should evaluate them based on their qualifications and the skills they possessed but not rejecting them even before they may be been interviewed. Furthermore, Yeo's may provide diversity training and choose diverse individuals for leadership roles.
COMMUNITY
Employment of local workforce in its operation
Yeo's does not only hire local staff in its operation but also employ low-skilled foreign labours. Although it will reduce the expenses of company as the wages are low but it will create unemployment for the neighborhood workers. Furthermore, it will cause a low productivity being that they are low-skilled and struggling to perform some tasks that need professional skills. It requires training to allow them to perform those jobs that may incur additional cost.
Recommendation
We advise that employment of local workforce to be carried out not only in general management area but also the manufacturing area. The salary and welfare of employees should be discussed and improvement should be done to ensure that local workforce to be used and reduce foreign labours. An adorable welfare system can help to attract more local workforce to work in the business.
Internship or graduate placement schemes
Yeo's will not practice internship or graduate placement schemes. An internship provides trainee to learn the skill to handle the jobs and gain some experience before they enter into workplace in future. A graduate placement can help the new graduates in their future career prospects as it builds the confidence and get relevant work experience. However, Yeo's does not offer the internship and graduate placement schemes for the community.
Recommendation
Internship or graduate placement scheme should be provided by Yeo's to community. Yeo's can provide university students to possess their internship in company. This may train undergraduate students to have significantly more understanding of this sector as well as skills and experience in the business. Besides that, Yeo's can offers scholarship to school or university students. The scholarship permits students to save their costs for education expenses. By doing so, students will have chance to work in the business once they graduate.
Encouraging employee volunteerism
Yeo's encourage its employee to voluntary involve in activities that contribute to society. Employee volunteerism to the community is obviously appreciated by the company. The employees of Yeo's aren't unite and don't strive whenever you can in their work and lead to low productivity.
Recommendation
The company should put more effort in encouraging employees' volunteerism in its CSR activities. A WORKER Volunteerism programme should be developed by the company to attract employee involvement. Employee volunteerism is very important to a company as it could improve the performance of employees in their works, enhance the company's image and reputation and boost the employees' loyalty. For instance, company can encourage employees to talk about their skills and talents by contributing their hard work voluntarily towards society through donation campaign, charity projects and fund-raising events.
CONCLUSION
Nowadays, CSR is now an important activity to the business nationally and internationally. It is a technique for corporation or companies to conduct their business ethically, society friendly and good for community, workplace, marketplace and environment in terms of development. Yeo Hiap Seng (Malaysia) Berhad has done a lot of CSR activities so that this can assist in differentiate themselves from the rivals and improve their business reputation and standing in the market. Furthermore, this may also provide usage of investment and funding opportunities.
By performing the audit procedures which are used to verify the CSR activities, it can ensure that their company's missions, goals, and objectives are achieved effectively and efficiently. Furthermore, it can enhance their internal operations and building relationships amongst their customers. However, Yeo's should carry out those activities that did not practiced, in order to strengthen the company and compete for additional new businesses.
