Yinson Annual Report 2019

PROCUREMENT ACTIVITY In order to provide a more comprehensive disclosure of the supply chain practices of our core business area, namely providing FPSOs, we describe here our supply chain management for these key assets. Each year, our procurement activities reflect the needs of our active projects, or those FPSOs currently under construction, as well as our operational projects, or those FPSOs that are currently in use by clients. Procurement needs are greatest during an asset’s active phase, as compared to when the asset is operational. For FYE 2019, our active project consisted of the construction of FPSOHelang, which is currently under construction in China for its eventual deployment to offshore Miri, Malaysia. Our operational phase FPSOs during the year included FPSOAllan in Gabon, FPSO JAK in Ghana and FPSOAdoon in Nigeria. FPSOAllan has been excluded from the scope of this supply chain management section as the asset has reached the end of its contract and is currently being decommissioned for its redeployment to the Anyala and Madu Fields in Nigeria. Reporting on procurement activity for FPSOAllan, which will be renamed FPSO Abigail-Joseph, will be included in the next reporting cycle. Active phase assets Our active project within the financial year, FPSOHelang, was secured via a novation agreement in June 2018. In consultation with the client, it was determined that construction would take place in China in the interest of meeting the project’s timeline, budget and technical requirements. However, because the project entity is registered in Malaysia and the asset is destined for operation in a Malaysian field, local vendors for the project have remained defined as those fromMalaysia. In total, 14 Malaysian-based vendors were contracted for the project, with Malaysian-based vendors accounting for close to 30% of the spending on the top ten vendors based on total order value. FPSOHelang is expected to be operational by Q4 2019. Operation phase assets For our two key operational assets in FYE 2019, FPSO JAK and FPSO Adoon, local suppliers are defined as those registered in the countries in which the vessels are currently operating. Across both projects, an average of 44% of suppliers were local, with these suppliers accounting for 70% of the projects’ top ten vendors. In total, local suppliers amounted to 65% of total spending. This expenditure breakdown demonstrates Yinson’s commitment to supporting the local economy by awarding larger and more significant contracts to local suppliers so as to promote their business growth. Foreign suppliers 56% Proportion of suppliers engaged for our operation phase assets by number of vendors Proportion of suppliers engaged for our operation phase assets by total spent Local suppliers 44% Foreign suppliers 35% Local suppliers 65% Sustainability Statement Yinson Holdings Berhad ANNUAL REPORT 2019 48