d) External Audit • Discussed with the external auditors the annual audit plan, nature and scope of audit as well as audit procedures, prior to the commencement of audit; • Conducted two (2) private sessions with external auditors in March 2021 and December 2021 respectively, without the presence of Executive Directors and/or Management; • Reviewed the external auditors’ audit findings for the financial year under review; • Reviewed with the external auditors the SORMIC of the Group for inclusion in the Annual Report; and • Reviewed the overall performance of the external auditors, including assessment of their independence, technical competency, resources and reasonableness of their audit fees and non-audit fees. e) Other matters • Prepared Report on AC for the Board which includes the composition of the AC, the reference to its terms of reference, number of meetings held, a summary of its works and a summary of the works of the Internal IA function for inclusion in the Annual Report; • Verified criteria for allocation of share options to eligible employees for FYE 2022 under ESS; • Reviewed and monitored the Recurrent Related Party Transactions; and • Reviewed and recommended the dividend pay-out. INTERNAL AUDIT FUNCTION The Group’s IA function is carried out via a co-sourcing engagement between the Group’s in-house IA Department and EY. The IA function assists the AC in its duties and responsibilities and is free from any relationships or conflicts of interest, thus retaining its objectivity and independence. IA Department and EY report directly to the AC on the adequacy and effectiveness of the Group’s internal controls. The AC is aware that an independent and adequately resourced IA function is essential to obtaining assurance on the effectiveness of the system of internal control. IA department is led by Mr Ho Guan Ming effective from 1 February 2022, assisted by an in-house audit staff and the co-sourced team from EY comprising of two to three persons in each audit engagement. Mr Ho Guan Ming previously held the position of Group Financial Controller since joining the Group in February 2016. The IA function performs internal audit reviews in accordance with the principles of the International Professional Practice Framework on internal auditing covering the conduct of the audit planning alongside with an in-house adopted Audit Engagement Roadmap in the process of execution, documentations, communication of findings and consultation with key stakeholders on audit concerns. The IA function carried out audits according to the internal audit plan which had been approved by the AC. Internal audits were carried out to provide assurance that internal controls are established and operating as intended to achieve effective and efficient operations while adhering to applicable policies, guidelines, and procedures. IA function conducted independent reviews and risk exposure evaluations relating to the operations and management information system. In performing such reviews, recommendations for improvements and enhancements to the existing internal control system and work processes were made. During FYE 2022, a total of four (4) internal audit reports, incorporating audit findings, audit recommendations and management’s responses, were issued to the AC and the Management of the respective operations. The Management is responsible for ensuring that corrective actions are taken within the required timeframe and all findings identified by IA function are tracked and followed up on a quarterly basis with the status of the implementation reported to the AC accordingly. The internal audit activities carried out in accordance with the approved internal audit plan for FYE 2022 were in the following areas: • Strategic Projects • Vessel Conversion and Capital Expenditure • C rew Management & HSEQ • I nformation Technology Systems & Cybersecurity In FYE 2022, the Chairman of the AC highlighted the key audit issues, and recommended the decision and resolutions made at the AC meetings for the approval of the Board. The total cost incurred for maintaining the IA function for the financial year under review was approximately RM500,000. This Report on AC was made in accordance with the approval of the Board on 28 April 2022. REPORT ON AUDIT COMMITTEE 206 YINSON HOLDINGS BERHAD GOVERNANCE
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