160 YINSON HOLDINGS BERHAD | INTEGRATED ANNUAL REPORT 2023 STATEMENT ON RISK MANAGEMENT & INTERNAL CONTROL CORPORATE COMPLIANCE The Corporate Compliance function was established to oversee the compliance initiatives, compliance monitoring reviews and reports to the BRSC and Board of Directors. The following subsections describe policies initiatives to strengthen our Corporate Compliance Framework. Limit of Authority Revamp With Yinson’s expansion into new business areas, the management has taken steps to ensure that the LOA framework is revamped so that Yinson’s operations are able to run efficiently with timely decision-making approvals. The previous iteration of the LOA framework has become increasingly challenging to be maintained and to cater to all Yinson’s business units. The LOA revamp will be business unit centric, catering to the specific needs for the individual business units and will ensure that the business units’ management team has the adequate authority to approve what is needed whilst maintaining proper governance within Yinson’s group of companies. The specific lines of accountability, responsibility and delegation of authority, as approved by the Board, is to facilitate the Group’s daily operations and is vested with the Group CEO and the Senior Management team accordingly. Whistleblowing Yinson encourages all stakeholders including business partners, general public, employees, third parties and vendors to raise any genuine concerns about suspected or possible violations of Yinson’s Code of Conduct and Business Ethics (“COBE”), improprieties in matters of financial reporting, non-compliances with laws and regulations, non-compliance with Yinson’s policies and procedures and to disclose any improper conduct or other malpractices with Yinson without fear of unfair treatment or reprisal. The Whistleblowing Policy and Procedure was established in 2018 and has undergone necessary updates with the latest being in 2021. Yinson has enhanced awareness of the Whistleblowing Policy by implementing the following initiatives: • Improving accessibility to employees within the Group’s intranet page, YNet. • Hosting the Whistleblowing Policy and Procedure on our corporate website for our external stakeholders. • Incorporating Whistleblowing information in Yinson’s ABAC Online Training Module which are assigned to all employees. • Communication memos on Whistleblowing that are sent to our third parties. • Whistleblowing posters are placed at common areas around the offices in countries which Yinson operates. • Surveys are sent to third parties relating to Anti-Bribery Management System (“ABMS”) which includes awareness on Whistleblowing. For the financial year under review, the LOA revamp exercise has identified the primary objective for the LOA framework to be segregated into individual LOA documents for the specific business units under Yinson as follows: • Group level Corporate Functions • Offshore Production business unit • Renewables business unit • Green Technologies business unit • Offshore Marine business unit No Top 5 Risks Descriptions Key Controls and Mitigations in FYE 2023 5. Project delay In the FPSO segment, the entire project phase starting from approval of the FEED, preparation and review of procurement schedule and project budget, contract review and signing and finally the construction and commissioning are required to progress accordingly to the project timeline which has been committed to the client. Major delays of more than 30% of the project timeline is considered as extreme and may pose significant consequences to the Company. Inability to perform the required deliverables as per the stipulated timeline may lead to penalties, Liquidated Ascertained Damages (LAD) charges or potential contract termination which could further cause reputational damage to Yinson. • To establish RACI matrix for each department within project. • AVEVA process to be implemented and integrated with CMS, IFS and CMMS systems.
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