298 YINSON HOLDINGS BERHAD ACCOUNTABILITY REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS (CONTINUED) Key audit matters How our audit addressed the key audit matters During the financial year, the Group recognised RM4,075 million of revenue from three Floating, Production, Offloading and Storage (“FPSO”) contracts under construction. Revenue stems from Engineering, Procurement, Construction, Installation and Commissioning (“EPCIC”) activities of FPSO Maria Quiteria, FPSO Atlanta, and FPSO Agogo, which are continuations of contracts from the previous year. Our risk assessment highlights critical judgements and significant estimates, including evaluating the satisfaction of performance obligations over time, the completeness of estimated costs to fulfill these obligations, and the accuracy of construction progress measurements. This involves assessing the subjectivity and uncertainty in estimating costs of the remaining obligations and contingencies throughout the EPCIC period. Given the magnitude and complexity of the Group’s revenue contracts and the significant judgements and estimates, the accounting of these contracts were particularly subject to risk of material misstatement. Consequently, we have identified this as a key audit matter. - Tested, on a sample basis, costs incurred to date of significant cost elements to relevant documents such as sub-contractor reports verified by the Group’s operations team; - Evaluated the adequacy of the disclosures included in the consolidated financial statements; For FPSOs under construction, the following audit procedures were performed: - Tested relevant key controls implemented by management to record, track and monitor costs for EPCIC contracts; - Tested the reasonableness of total estimated budgeted construction costs based on approved budgets to corroborating documentation, including management’s evaluation of budget variances and contingencies; - Checked accuracy of management’s percentage of completion calculations by recomputing construction costs incurred against total estimated construction costs to completion; and For completed FPSOs, the following audit procedures were performed: - Evaluated the appropriateness of accruals for remaining obligations or costs relating to projects by examining supporting documentation, such as invoices received after the year-end, final progress reports or contractual obligations that have not yet been invoiced. Based on procedures performed, no material exceptions were noted. We have determined that there are no key audit matters to report for the Company. Information other than the financial statements and auditors’ report thereon The Directors of the Company are responsible for the other information. The other information comprises the Directors’ Report and the Integrated Annual Report, but does not include the financial statements of the Group and of the Company and our auditors’ report thereon. Our opinion on the financial statements of the Group and of the Company does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements of the Group and of the Company, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements of the Group and of the Company or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the Directors for the financial statements The Directors of the Company are responsible for the preparation of the financial statements of the Group and of the Company that give a true and fair view in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act 2016 in Malaysia. The Directors are also responsible for such internal control as the Directors determine is necessary to enable the preparation of financial statements of the Group and of the Company that are free from material misstatement, whether due to fraud or error. In preparing the financial statements of the Group and of the Company, the Directors are responsible for assessing the Group’s and the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Group or the Company or to cease operations, or have no realistic alternative but to do so.
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