Audit Committee Report

   
COMPOSITION
   
Faizal Sham Bin Abu Mansor
(Chairman/Independent Non-Executive Director)

Datuk Seri Long See Wool
(Member/Independent Non-Executive Director)

Datuk Loo Took Gee
(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.ytlpowerinternational.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
Faizal Sham Bin Abu Mansor 5/5
Datuk Seri Long See Wool 5/5
Datuk Loo Took Gee 5/5
   
   
SUMMARY OF WORK CARRIED OUT FOR 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 results and annual financial statements (“Financial Reports”) prior to its recommendation to the Board of Directors for approval;
  (b) In respect of the Financial Reports, the following matters were reviewed and discussed with management, with clarifications and/or additional information provided wherever required:-

• Appropriate accounting policies had been adopted and applied consistently, and other statutory and regulatory requirements had been complied with;
• The Company has adequate resources to continue in operation for the foreseeable future and that there are no material uncertainties that could lead to significant doubt as to the Group’s ability to continue as a going concern;
• Significant judgements made by management in respect of matters such as impairment assessment on goodwill, investment and property, plant and equipment, capitalisation policy of infrastructure assets in property, plant and equipment, expected credit loss assessment on trade receivable, capitalisation of borrowing costs and the underlying assumptions and/or estimates used were reasonable and appropriate in accordance with the requirements of the Malaysian Financial Reporting Standards (“MFRS”);
• Adequate processes and controls were in place for effective and efficient financial reporting and disclosures under the MFRS and Bursa Malaysia Securities Berhad Main Market Listing Requirements (“Listing Requirements”);
• 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, PricewaterhouseCoopers PLT (“PwC”):-

• the audit plan for the financial year ended 30 June 2025 outlining, amongst others, significant developments that affect the Group’s business, risk assessment, their scope of work, areas of audit emphasis, multi-location audit, and development in laws and regulations affecting financial reporting and the roles and responsibilities of directors/audit committee members and auditors, as well as their latest transparency report;
• their status report, and final report on the audit of the financial statements for financial year ended 30 June 2025 setting out their comments and conclusions on the significant audit and accounting matters highlighted, including management’s judgements, estimates and/or assessments made, and adequacy of disclosures in the financial statements. The review also covered the report on the Information Technology (“IT”) General Controls review conducted on YTL Communications Sdn Bhd and an update on the prior financial year’s findings, and internal control matters highlighted by the external auditors that arose during the course of their audit;

  (b) Reviewed the audit fees proposed by PwC together with management and recommended the fees agreed with PwC to the Board of Directors for approval;
 
  (c) Had discussions with PwC without the presence of management twice on 18 August 2025 and 22 September 2025, to apprise on matters in regard to the audit and financial statements;
   
  (d) Reviewed the profiles of the audit engagement team from PwC, specialised audit support (taxation, advisory, and IT risk assurance) to assess their qualifications, expertise, resources, and independence, as well as the effectiveness of the audit process;
   
  (e) Reviewed on a quarterly basis, the nature and extent of the non-audit services provided by PwC and its affiliates and was satisfied with the suitability, performance, independence and objectivity of PwC. Endorsed and concurred with PwC’s conclusion that the provision of non-assurance services by PwC and its affiliates were permissible and did not impair their independence with respect to the Company and the Group;
   
  (f) Obtained written assurance from PwC that they have complied with the independence requirements and that their objectivity has not been compromised in accordance with regulatory and professional requirements;
   
  (g) Assessed performance of PwC for the financial year ended 30 June 2025 and recommended to the Board of Directors for re-appointment at the forthcoming annual general meeting.
   
3. Internal Audit
   
  (a) Reviewed with the internal auditors the internal audit reports (including follow-up review reports), the audit findings and recommendations, management’s responses and/or actions taken thereto and ensured that material findings were satisfactorily addressed by management. Also took note of the salient findings set out in the internal audit reports reviewed by the audit and risk committee and audit committee of Wessex Water Limited group and YTL PowerSeraya Pte. Limited, respectively;
   
  (b) Reviewed and adopted the internal audit risk analysis report for 2024. Internal audit would leverage on the Group’s risk analysis to focus on the business processes and relevant areas that address the key risks identified. Risk management and internal control report of the significant associated corporation, P.T. Jawa Power was also submitted to the Audit Committee;
   
  (c) Reviewed and adopted the internal audit plan for financial year ending 30 June 2026 to ensure sufficient scope and coverage of activities of the Company and the Group;
   
  (d) Reviewed internal audit resourcing, with focus on ensuring that the function has sufficient resources together with the right caliber of personnel to perform effectively and that the head of internal audit has adequate authority to discharge his functions objectively and independently.
   
4. Related Party Transactions
   
  (a) Reviewed, on a quarterly basis, the recurrent related party transactions of a revenue or trading nature (“RRPTs”) entered into by the Company and/or its subsidiaries with related parties to ensure that the Group’s internal policies and procedures governing RRPTs are adhered to, the terms of the shareholder mandate are not contravened, and disclosure requirements of the Listing Requirements are observed;
   
  (b) Reviewed the circular to shareholders in relation to the renewal of shareholder mandate for RRPTs, prior to its recommendation to the Board of Directors for approval.
   
5. Annual Report
   
  Reviewed this Audit Committee Report, and Statement on Risk Management and Internal Control before recommending these to the Board of Directors for approval for inclusion in 2025 Annual Report.
   
6. Conflict of Interest (“COI”)
   
  Reviewed the disclosure of actual or potential COI, including interest in any competing business, submitted by the Directors and key senior management of the Company and the Group via the ‘COI Declaration Form’ to the Secretary, who then escalated the same to the Audit Committee for assessment, conflict management and/or mitigation on a quarterly basis.
   
  In addition, all Directors and key senior management were required to make an annual declaration to ensure that any COI or potential COI had been appropriately disclosed during the financial year under review.
   
  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.
   
  There were eight potential COIs identified arising from declarants’ interest in competing businesses in water and sewerage, broadband services, solar energy and information technology, including data centre, private cloud and artificial intelligence solutions businesses. Such potential COI will be monitored by the Audit Committee and necessary action taken as required. The Board of Directors was informed of these.
   
7. Employees Share Option Scheme (“ESOS”)
   
  Verification on the allocation of share options to eligible employees and Directors of the Company and/or subsidiaries as approved by the options committee on 26 December 2024 and concurred that the allocation under the ESOS complied with the criteria set out in the By-Laws of the ESOS.
   
   
INTERNAL AUDIT FUNCTION

The Group’s internal audit function is carried by the internal audit department within the YTL Corporation Berhad Group (“YTLIA”), which provides assurance on the efficiency and effectiveness of the internal control systems implemented by management, and reports functionally to the Audit Committee of the Company.

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 qualifications of the head of YTLIA are set out in the 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 for the year under review include the following:-
   
1. Developed the annual internal audit plan and proposed the plan to the Audit Committee.
   
2. Conducted scheduled internal audit engagements, focusing primarily on the adequacy and effectiveness of internal controls and recommended improvements where necessary.
   
3. Conducted follow-up reviews to assess if appropriate action has 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 on the recommended corrective measures together with the management’s response.
   
5. Conducted RRPT reviews 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 in identifying significant concerns and risk areas perceived by management for inclusion in the internal audit plan.
   
7. 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.
   
Costs amounting to RM2,193,251 were incurred in relation to the internal audit function for the financial year ended 30 June 2025.