Audit Committee Report

COMPOSITION

Tang Kin Kheong
(Chairman/Independent Non-Executive Director)

Choo Yoo Kwan @ Choo Yee Kwan
(Member/Independent Non-Executive Director)

Raja Noorma Binti Raja Othman
(Member/Independent Non-Executive Director)

Sharifatu Laila Binti Syed Ali
(Member/Independent Non-Executive Director)

 

TERMS OF REFERENCE

The terms of reference of the Audit Committee can be found under the “Governance” section on the Company’s website at www.ytl.com.

 

NUMBER OF MEETINGS HELD AND DETAILS OF ATTENDANCE

During the financial year, a total of 5 Audit Committee Meetings were held and the details of attendance are as follows:-

	Attendance
Tang Kin Kheong	5/5
Choo Yoo Kwan @ Choo Yee Kwan	5/5
Raja Noorma Binti Raja Othman	5/5
Sharifatu Laila Binti Syed Ali	5/5

 

SUMMARY OF WORK CARRIED OUT FOR THE FINANCIAL YEAR

The Audit Committee carried out the following work for the financial year ended 30 June 2026 in the discharge of its functions and duties:-

1.	Financial Reporting
	(a)	Reviewed the unaudited quarterly financial reports and audited annual financial statements (collectively “the Financial Reports”) prior to recommending them to the Board of Directors for approval.
	(b)	In respect of the Financial Reports, the following matters were reviewed and discussed with management, and in respect of the audited annual financial statements, with the external auditors as well: The appropriateness and consistent application of the accounting policies adopted, and compliance with statutory and regulatory requirements; The adequacy of the Group’s resources to continue in operation for the foreseeable future, including whether there were any material uncertainties that could cast significant doubt on the Group’s ability to continue as a going concern; Significant management judgments and estimates in key areas, including goodwill impairment, the fair value of investment properties, purchase price allocation for newly acquired subsidiaries, equity interests in associated companies, impairment of property, plant and equipment, and the recoverability of deferred tax assets, with consideration given to the reasonableness of the underlying assumptions and estimates and their compliance with Malaysian Financial Reporting Standards (“MFRS”); and Whether the Financial Reports were fairly presented in all material respects in accordance with the applicable accounting standards.
2.	External Audit
	(a)	Reviewed with the external auditors, HLB Ler Lum Chew PLT (“HLB”): their audit plan for the financial year ended 30 June 2026 (“FY 2026”) which outlined the audit scope, areas of audit emphasis, multi-location audit coverage, relevant legal and regulatory developments affecting financial reporting, and the roles and responsibilities of the Board and the external auditors relating to financial reporting; their interim status report and final report for FY 2026, which set out their comments and conclusions on significant auditing and accounting matters, including management’s judgements and estimates as well as the adequacy of disclosures in the financial statements;
	(b)	Reviewed the audit fees proposed by HLB together with management and recommended the agreed fees to the Board of Directors for approval.
	(c)	Held 2 private meetings with HLB, without the presence of management, on 19 August 2026 and 23 September 2026, to discuss matters arising from the audit and the financial statements. The Audit Committee also enquired into the level of assistance and co-operation given by management to HLB.
	(d)	Reviewed, on a quarterly basis, the nature and extent of non-audit services provided by HLB and its affiliates to the Company and its directly-held unlisted subsidiaries and concluded that such services had not impaired their independence and objectivity.
	(e)	Obtained written assurance from HLB that it had complied with applicable independence requirements and that their objectivity remained uncompromised in accordance with regulatory and professional requirements.
	(f)	Reviewed HLB’s Condensed Transparency Report, which sets out the firm’s governance structure, quality control measures, independence practices, and commitment to upholding audit quality in accordance with regulatory and professional requirements. The Audit Committee noted the disclosures therein and considered them as part of its ongoing assessment of HLB’s independence, objectivity, resources and overall capability to audit the Group’s financial statements effectively.
	(g)	Assessed the performance of HLB for FY 2026 and recommended to the Board of Directors their re-appointment at the forthcoming annual general meeting.
3.	Internal Audit
	(a)	Reviewed internal audit reports (including follow-up reports) with the internal auditors, covering audit findings and recommendations, management’s responses and actions taken, and monitored the resolution of material findings by management.
	(b)	Reviewed the internal audit risk analysis reports for FY 2026 which were used by the internal auditors to determine the focus of its audit activities on key business processes.
	(c)	Reviewed and approved the internal audit plan for FY 2027.
	(d)	Reviewed the resources of the Internal Audit Department (“YTLIA”) to ascertain whether it is appropriately structured, staffed and resourced to discharge its responsibilities effectively.
	(e)	Monitored the internal auditors’ progress in adopting Global Internal Audit Standards (“GIAS”), including reviewing the Internal Audit Manual required to support compliance with GIAS, which sets out the requirements relating to assurance, advisory and related internal audit activities.
	(f)	Noted the outcome of YTLIA’s review of the processes and controls relating to the collation of ESG data by certain unlisted subsidiaries, including Scope 1 and Scope 2 greenhouse gas emissions data, with reference to applicable sustainability reporting standards. The review considered the processes and controls underpinning the collection and compilation of the relevant ESG and greenhouse gas emissions data, with the scope of assurance being limited to the processes and controls reviewed and not extending to the accuracy or completeness of the underlying data in the Sustainability Report.
4.	Related Party Transactions
	(a)	Reviewed, on a quarterly basis, recurrent related party transactions of a revenue and trading nature (“RRPTs”) entered into with related parties to ensure that the Group’s internal policies and procedures governing RRPTs are adhered to, and disclosure requirements under the Bursa Malaysia Securities Berhad Main Market Listing Requirements (“Listing Requirements”) are observed.
	(b)	Reviewed the projected amount of ongoing and anticipated RRPTs for FY 2027 to assess the need for shareholders’ mandate to be sought at the annual general meeting, and advising the Board of Directors accordingly.
5.	Annual Report
	Reviewed this Audit Committee Report and the Statement on Risk Management and Internal Control prior to recommending them to the Board of Directors for approval and inclusion in the 2026 Annual Report.
6.	Conflict of Interest (“COI”)
	Reviewed the quarterly disclosures of actual or potential COIs, including interest in competing businesses, submitted by the Directors and key senior management of the Company and its directly-held unlisted subsidiaries. Where necessary, the Audit Committee assessed the declared COIs and considered the appropriate conflict management and/or mitigation measures. The outcomes of the assessments were subsequently reported to the Board of Directors.
	In addition, all Directors and key senior management were required to make an annual declaration to ensure that all actual or potential COI arising during the financial year had been appropriately disclosed during the financial year.
	Based on the declarations received, two potential COIs were identified, one involving a competing business and another related to a vendor relationship. Additionally, three potential COIs arose from directorships held in financial institutions. These potential COIs have been reported to the Board of Directors. The Audit Committee will continue to monitor these potential COIs and take the necessary action should any of them materialises as an actual COI in the future.
7.	Environmental, Social & Governance (“ESG”) Reporting
	Received updates on developments in ESG reporting requirements, the applicable implementation timeline for the Group and management’s ongoing preparations for adoption of the IFRS Sustainability Disclosure Standards.
	The Audit Committee also met with the Sustainability Reporting team to understand and discuss the process for preparing the Sustainability Report, including the approach to materiality, significant judgements, data collection and related controls.

 

INTERNAL AUDIT FUNCTION

The Group’s internal audit function is carried out through a combination of the Company’s Internal Audit Department (“YTLIA”), the respective in-house internal audit teams of certain listed subsidiaries, and outsourced service providers.

YTLIA performs the internal audit activities of the Company and its directly-held unlisted subsidiaries, and reports to the Audit Committee. The Audit Committee is responsible for overseeing the internal audit activities of the Company and its directly-held unlisted subsidiaries.

The internal audit functions of the other subsidiaries, comprising the listed subsidiaries and their respective subsidiaries (collectively “the Listed Subgroups”) are subject to the oversight of the respective audit committees of the listed subsidiaries in accordance with their respective governance arrangements. Accordingly, the Company’s Audit Committee does not oversee the internal audit activities of the Listed Subgroups.

As such, the Audit Committee’s oversight of the Group’s internal audit function is limited to the Company and its subsidiaries that do not form part of the Listed Subgroups. Consequently, the matters disclosed above in paragraph 3 Internal Audit under SUMMARY OF WORK CARRIED OUT FOR THE FINANCIAL YEAR and in the paragraphs appearing hereinafter relate solely to the internal audit function of the Company and its subsidiaries that do not form part of the Listed Subgroups.

YTLIA reports directly to the Audit Committee on the adequacy and effectiveness of the risk management and internal control systems.

All YTLIA team members have confirmed that they are free from conflict of interest or any relationships that could impair their objectivity and independence in carrying out their internal audit responsibilities.

The Audit Committee reviews annually the adequacy of YTLIA’s scope, function, competency and resources to ensure that it is able to discharge its responsibilities effectively. Details of YTLIA’s resources and the qualifications of the Chief Audit Executive are set out in the Corporate Governance Overview Statement and Corporate Governance Report.

During the year, the YTLIA evaluated the adequacy and effectiveness of key controls in addressing risks relating to the Group’s governance, operations and information systems, including:-

• the reliability and integrity of financial and operational information;
• the effectiveness and efficiency of operations;
• the safeguarding of assets; and
• compliance with relevant laws, regulations and contractual obligations.

The work of the internal audit function during the year under review included the following:-

1.	Conducted discussions with management to identify concerns and risk areas, developed the annual internal audit plan, and presented the plan to the Audit Committee for approval.
2.	Conducted internal audit engagements in accordance with the approved audit plan, focusing primarily on the adequacy and effectiveness of internal controls and recommending improvements where appropriate.
3.	Conducted follow-up reviews to assess if appropriate action had been taken to address matters highlighted in previous audit reports.
4.	Presented to the Audit Committee the significant audit findings and areas for improvements together with the recommended corrective measures and management’s responses.
5.	Reviewed RRPTs to assess the accuracy and completeness of the information reported for presentation to the Audit Committee, and to ensure compliance with the Listing Requirements.
6.	Conducted discussions with management to identify, analyse, assess and prioritise the internal and external corruption risks, with the view to establishing appropriate processes, systems and controls to mitigate the specific corruption risks exposure.

The cost of the internal audit function in FY 2026 in respect of the Company and its subsidiaries (excluding those forming part of any of the Listed Subgroups) amounted to RM837,660.