162 YINSON HOLDINGS BERHAD | INTEGRATED ANNUAL REPORT 2024 STATEMENT ON RISK MANAGEMENT & INTERNAL CONTROL BOARD’S RESPONSIBILITIES The Statement is made pursuant to Paragraph 15.26 (b) of the Main Market Listing Requirements (“MMLR”) of Bursa Malaysia Securities Berhad (“Bursa Securities”) and is in line with the Malaysian Code on Corporate Governance 2021 where the Board of Directors are required to make a statement about the state of risk management and internal control of the listed issuer of a Group. Yinson’s Board of Directors (“Board”) recognises the importance of maintaining sound risk management processes and internal control practices to safeguard stakeholders’ interests, including reputation and shareholder returns, and the Group’s assets. The Board affirms its overall responsibility to establish and maintain a robust risk management and internal control system by reviewing the Board’s adequacy in identifying, assessing, evaluating, and responding to risks that could have material impacts on the Group’s ability to achieve its objectives. In evaluating the adequacy of risk management and internal control across the Group, the Board is assisted by the Board Risk & Sustainability Committee (“BRSC”) and Audit Committee (AC) to oversee and ensure that the updated Enterprise Risk Management (“ERM”) Framework is being implemented effectively and consistently together with adequate internal control processes and procedures to manage these risks across the Group. The Board takes a proactive approach to safeguard Yinson’s interests in joint ventures and associated companies by leveraging its representatives and establishing monitoring controls within these entities to identify potential issues. Nonetheless, it is crucial to acknowledge the inherent limitations of this approach which could only provide reasonable and not absolute assurance against the risk of material errors, misstatements, fraud, or occurrences of unforeseeable circumstances. BOARD RISK & SUSTAINABILITY COMMITTEE’S RESPONSIBILITIES The BRSC is chaired by an Independent Non-Executive Director. The BRSC meets on a quarterly basis to review the effectiveness of the risk management process, to discuss matters relating to risk management activities and the reports produced therein, and to evaluate new and emerging risks together with the action and mitigation plans of the identified risks. The BRSC’s duties and responsibilities are governed by the Terms of Reference (“TOR”) accessible on the Company’s corporate website. MANAGEMENT & SUSTAINABILITY COMMITTEE’S RESPONSIBILITIES The Management & Sustainability Committee (“MSC”) is responsible for implementing the policies and procedures established by the Board to ensure effective risk management and control processes while integrating sustainability considerations. Within their respective areas of responsibility, MSC members collectively ensure that all identified risks are effectively managed within acceptable levels. The Group CEO is responsible for the day-to-day management of risks while the Head of Business Units are responsible for representing the Group CEO’s obligations to all business units. The responsibilities of the MSC entail but are not limited to the following: • Formulate relevant risk policies, procedures, and frameworks to manage these risks in accordance with the Group’s risk appetite; • Design, assist, and implement the effective risk management and internal control system to ensure that standardised methodology is used throughout the Group; • Monitor and ensure that remedial action plans are taken to mitigate the likelihood and the impact of the risk from escalating further; • Communicate the requirements of the ERM Policy Statement and Framework and ensure continuous enhancement of ERM annually or as and when required; • Ensure that the ERM reports prepared are submitted to BRSC / Board in a timely manner, and flash reports are submitted in the event of any new risk(s) that require urgent attention; and • Review the ERM Policy Statement and Framework and consider adopting the best practices based on the corporate governance framework. ERM POLICY STATEMENT & FRAMEWORK Yinson’s ERM Policy Statement and Framework provides a standardised and systematic approach for the identification, evaluation, monitoring, and reporting of key risks and controls to ensure that there are adequate measures to implement, track, and review the action plans. The Framework is aligned with ISO31000:2018 and has been adopted across the operating companies as well as corporate functions within the Group. The Framework also enables the Management to effectively deal with uncertainties and associated risks and opportunities, enhancing the capacity to build value for stakeholders. The Framework is key to ensuring that all potential business strategic risks of the Group are reasonably recognised, and the Group demonstrates commitment to managing existing and emerging risks to protect our key stakeholders’ and shareholders’ interests.
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