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
(appointed on 26 September 2024)
(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 6 Audit Committee Meetings were held and the details of attendance are as follows:-

 
Attendance
Tang Kin Kheong
6/6
Choo Yoo Kwan @ Choo Yee Kwan
6/6
Raja Noorma Binti Raja Othman
6/6
Sharifatu Laila Binti Syed Ali
4/4

 

SUMMARY OF WORK CARRIED OUT FOR THE FINANCIAL YEAR

The Audit Committee carried out the following work for the financial year ended 30 June 2025 in the discharge of its functions and duties:-

1. Financial Reporting
  (a) Reviewed the unaudited quarterly financial reports and audited annual financial statements (“Financial Reports”) prior to recommending it to the Board of Directors for approval.
  (b) In respect of the Financial Reports, the following matters were reviewed and discussed with management, and additionally, in respect of the audited annual financial statements, with the external auditors as well:
  • Appropriate accounting policies had been adopted and applied consistently, and that statutory and regulatory requirements had been complied with;
  • The Group had adequate resources to continue in operation for the foreseeable future and that there were no material uncertainties that could cast significant doubt on the Group’s ability to continue as a going concern;
  • Reviewed significant management judgments in areas such as goodwill impairment, fair value of investment properties, purchase price allocation for newly acquired subsidiaries, equity interests in associated companies, impairment of property, plant and equipment, and recoverability of deferred tax assets, ensuring that the underlying assumptions and estimates were reasonable and in compliance with Malaysian Financial Reporting Standards (MFRS);
  • The Financial Reports were fairly presented in conformity with the relevant accounting standards in all material aspects.
   
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 2025 (“FY 2025”) 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 auditors relating to financial reporting;
  • their interim status report and final report on the audit of the financial statements for FY 2025 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 fees agreed with HLB to the Board of Directors for approval.
  (c) Held 2 private meetings with HLB, without management present, on 20 August 2025 and 24 September 2025, to discuss matters relating to 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 unlisted subsidiaries and concluded that such services had not impaired their independence and objectivity.
  (e) Obtained written assurance from HLB that they 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 Committee noted the disclosures made and considered them in 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 the financial year ended 30 June 2025 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 ensured that material findings were satisfactorily addressed by management.
  (b) Reviewed the internal audit risk analysis reports for FY 2025 which were used by the internal auditors to focus on the business processes and relevant areas of audit.
  (c) Reviewed and approved the internal audit plan for FY 2026.
  (d) Reviewed the internal audit resources to ascertain if the internal audit department is appropriately tasked and resourced.
  (e) Monitored the internal auditors’ progress in adopting Global Internal Audit Standards (“GIAS”), including reviewing the Internal Audit Manual required under GIAS which sets out assurance, advisory and related procedures.
   
4. Related Party Transactions
  (a) Reviewed, on a quarterly basis, the 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 2026 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 2025 Annual Report.
   
6. Conflict of Interest (“COI”)
  Reviewed quarterly disclosures of actual or potential COI (including interest in any competing businesses), submitted by the Directors and key senior management of the Company and its unlisted subsidiaries and undertook the assessment, conflict management and/or mitigation measures of any declared COIs where necessary. The outcomes 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 any actual or potential COI had been appropriately disclosed during the financial year.
   
  In accordance with the COI Policy, the review process focused on the following key areas:
  • Assessing the nature and extent, materiality, and potential impact of conflicts on decision-making;
  • Ensuring timely and complete declarations of actual or potential conflicts;
  • Maintaining records of disclosures and actions taken, with periodic monitoring and reporting to the Board of Directors;
  • Recommending appropriate mitigation measures, including but not limited to recusal from deliberations and restricted access to sensitive information;
  • Reviewing the adequacy and effectiveness of the COI Policy to ensure alignment with best practices and governance standards.
   
  Based on the declarants’ interest, 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. The Audit Committee will monitor these potential COIs and take the necessary action should the actual COI materialises in the future. These potential COIs have been reported to the Board of Directors.
   
7. Employees Share Option Scheme (“ESOS”)
  Verification of the number of share options allocated to eligible employees and Directors of the Company and subsidiaries as approved by the options committee on 26 December 2024.

 

INTERNAL AUDIT FUNCTION

The Group’s internal audit function is substantially carried out by its Internal Audit Department (“YTLIA”).

YTLIA undertakes the internal audit function for the following Group of companies:

  • YTL Power International Berhad and its subsidiaries (“YTL Power Group”),
  • Malayan Cement Berhad and its subsidiaries (“Malayan Cement Group”),
  • YTL Hospitality REIT and its subsidiaries, (“YTL REIT Group”); and
  • YTL Corporation Berhad and those of its subsidiaries outside of the listed sub-groups (as defined below)

save for certain subsidiaries of the YTL Power Group, namely, the YTL PowerSeraya Pte Ltd group of companies where the internal audit function is outsourced, Wessex Water Limited group of companies and Ranhill Utilities Berhad group of companies (“Ranhill Group”) where the internal audit function is undertaken by their own in-house internal audit teams.

Additionally, the internal audit function of another subsidiary, NSL Ltd, and its subsidiaries (“NSL Group”), is undertaken by its own in-house internal audit team. NSL Ltd is listed on the Singapore Exchange.

The YTL Power Group, Ranhill Group, Malayan Cement Group, YTL REIT Group and NSL Group are referred to collectively as “the listed sub-groups”.

YTL Power International Berhad, Ranhill Utilities Berhad, Malayan Cement Berhad, YTL Hospitality REIT and NSL Ltd (collectively, “the listed subsidiaries”), have their respective board audit committees as part of their corporate governance frameworks.

Accordingly, when in discharging its internal audit responsibilities for any listed sub-groups, where applicable, YTLIA reports directly to the audit committees of the respective listed subsidiaries.

As such, the Audit Committee’s oversight of the internal audit function covers the Company and its subsidiaries that are not part of any listed sub-groups. Therefore, 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 refer solely to the internal audit function within the Company and its subsidiaries that are not part of any listed sub-groups.

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

Every YTLIA team member has confirmed that they are free from conflict of interest or any relationship that could impair their objectivity and independence as internal auditors.

The Audit Committee reviews annually the adequacy of the scope, function, competency and resources of YTLIA to ensure that it is able to fully discharge its responsibilities. Details of the resources and the qualifications of the head of YTLIA 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 responding to risks within the organisation’s governance, operations and information systems regarding:-

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

The work of the internal audit function during the year under review include 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 according to the audit plan, focusing primarily on the adequacy and effectiveness of internal controls and recommending improvements where necessary.
3. Conducted follow-up reviews to assess if appropriate action had been taken to address issues highlighted in previous audit reports.
4. Presented significant audit findings and areas for improvements to the Audit Committee for consideration of the recommended corrective measures together with management’s response.
5. Reviewed RRPTs to assess accuracy and completeness of reporting for presentation to the Audit Committee, and ensure compliance with the Listing Requirements.
6. Conducted discussions with management to identify, analyse, assess and prioritise the internal and external corruption risks, for the purpose of establishing appropriate processes, systems and controls to mitigate the specific corruption risks exposure.

The cost of the internal audit function in FY 2025 in respect of the Company and its subsidiaries (excluding those forming part of any of the listed sub-groups) amounted to RM1,011,711.