137 INTEGRATED ANNUAL REPORT 2025 GOVERNANCE | OTHER COMPLIANCE INFORMATION 3. MATERIAL CONTRACTS INVOLVING DIRECTORS’ AND MAJOR SHAREHOLDERS’ INTEREST During FY2025, none of the Company and/or its subsidiaries have entered into material contracts (not being contracts entered into in the ordinary course of business) involving interests of Directors and Major Shareholders of Yinson. 4. MATERIAL LITIGATION a. Change in law claim by Rising Sun Energy (K) Private Limited (“RSEK”), an indirect subsidiary of the Company, held via YR Nokh Pte Ltd, against NTPC Limited (“NTPC”) and Chhattisgarh State Power Distribution Company Limited (“Chhattisgarh”) RSEK entered into a power purchase agreement dated 30 March 2021 (“the PPA”) with NTPC whereby RSEK was commissioned to develop a solar power generating system for the supply of power to Chhattisgarh. Due to various changes in law resulting in increase in the rate of goods and services tax and imposition of basic customs duty for which RSEK under the PPA is entitled to compensation, RSEK filed a petition dated 14 July 2022 to Central Electricity Regulatory Commission (“CERC”) at New Delhi, India, the mandated body to decide on such matter, seeking for an order for compensation amounting to Indian Rupee (INR) 3.6 billion (approximately RM184 million) plus carrying costs. On 19 May 2024, CERC issued its order stating among others, that RSEK is entitled to compensation on account of the change in law corresponding to the mutually agreed project capacity under the PPA by way of an increase in tariff, and payment of carrying cost by way of a lump sum. The parties are to carry out reconciliation of additional expenditures on account of the change in law along with incurred carrying cost. Following reconciliation of the costs, the net present value awarded to RSEK equalled around INR 4 billion (approximately RM204 million), in majority payable as increase in the tariff under the PPA and a smaller part payable as lump sum. Following the order, NTPC commenced payment of the increase in tariff ordered by CERC on account of the change in law due to the increase in the rate of goods and services tax and imposition of basic customs duty, but not on account of the carrying costs. On 31 May 2024, Chhattisgarh has filed an appeal to Appellate Tribunal for Electricity (“APTEL”) in respect of the CERC order arguing that the order must be set aside. The first hearing of the appeal was held on 18 June 2024 where APTEL refused to hear the appeal on an urgent basis. The parties to the appeal have later provided written submissions in respect of the appeal and also, upon APTEL’s request, made an effort to reconcile the total amount of the carrying costs. The parties did not succeed in agreeing a reconciled amount. On 30 January 2025, APTEL, as an interim measure, without prejudice to the final hearing of the case, ordered that RSEK shall be entitled to an increase in the tariff under the PPA towards the payment of carrying costs, taking effect from February 2025, in addition to the already increase in tariff ordered by CERC on account of the change in law due to the increase in the rate of goods and services tax and imposition of basic customs duty. The basis for the increased tariff related to the carrying costs is a total amount of around INR 540 million (approximately RM28 million) vs. the amount of around INR 600 million (approximately RM31 million) claimed by RSEK. In the same interim order, APTEL permitted Chhattisgarh to file an amended appeal and RSEK to respond to such appeal. Final hearing of the appeal has not yet been scheduled. b. Change in law claim by Chhattisgarh against RSEK and NTPC On 29 July 2024, Chhattisgarh filed a petition to CERC at New Delhi, India, the mandated body, seeking a declaration that an abolition of a safeguard duty with effect from 30 July 2021 is a change in law event and seeking compensation from RSEK of INR 918 million (approximately RM47 million) plus carrying costs. Chhattisgarh is arguing that RSEK has benefitted from this change in law event. The first hearing by CERC of Chhattisgarh’s petition was held on 14 January 2025 under which RSEK and NTPC were permitted to file comprehensive replies to the petition. RSEK filed its reply on 18 February 2025 arguing that the petition should be rejected, i.a. as the abolition of the safeguard duty does not constitute a change in law event, there is no contractual relationship between Chhattisgarh and RSEK and furthermore as the petition is barred by time. The case is progressing with the parties exchanging pleadings. 5. RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE All recurrent related party transactions (“RRPTs”) are dealt with in accordance with the Main Market Listing Requirements (“MMLR”) of Bursa Malaysia Securities Berhad (“Bursa Securities”) and a summary of RRPT Register is tabled for AC’s review and monitoring on a quarterly basis. All relevant processes and procedures are for ensuring that all related party transactions are monitored and conducted in a manner that is fair and at arms’ length. Directors and Major Shareholders who have interests in a transaction will abstain from deliberating and voting on the transaction at Board meetings and general meetings. Audited Financial Statements - RRPTs, pg 254 to 255.
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