• Group Internal Audit shall review the internal control process and records of RPTs and RRPTs within the affected scope to verify that relevant approvals have been obtained and review procedures in respect of such transactions are adhered to. Any divergence will be reported to the BAC. • The BAC shall review the internal audit reports and will also review from time to time any related party transactions that may arise within the Group. If the BAC is of the view that the procedures are insufficient to ensure that RPTs and RRPTs are undertaken on an arm’s length basis and on normal commercial terms and on terms that are not more favourable to the transacting party than those generally available to public during their periodic review of the procedures, the BAC has the discretion to request for additional procedures to be imposed on the RPTs and RRPTs. • An interested/deemed interested Director in any particular RPTs or RRPTs shall be required to declare his or her interest in the RPTs or RRPTs and will have to refrain from any deliberation and also abstain from voting on the matter at the Board meeting in respect of that RPTs or RRPTs. • MISC’s Limits of Authority also reflect the relevant thresholds for the approval of RPTs or RRPTs. A process flow is also defined to articulate the necessary steps of the process. The RRPTs entered into by the Group during the financial year ended 31 December 2015 are summarised below:- Nature Of Transaction Transacting Party Related Party 1. Provision of freight forwarding activities and/or logistics services to PETRONAS Group MISC Integrated Logistics Sdn. Bhd. PETRONAS* 2. Purchase of lubricants and other petroleum products including bunker oil from PETRONAS Dagangan Berhad MISC and/or its subsidiaries PETRONAS* 3. Charters of petroleum and chemical tankers and LNG carriers from MISC by PETRONAS Group MISC and/or its subsidiaries PETRONAS* 4. Fabrication and construction of oil and gas offshore structures for PETRONAS Group MISC and/or its subsidiaries PETRONAS* 5. Marine and consultancy Services** MISC and/or its subsidiaries PETRONAS* 6. Sungai Udang Port management** MISC and/or its subsidiaries PETRONAS* * PETRONAS is a major shareholder of the Company ** RRPTs come into view due to the acquisition of PETRONAS Maritime Services Sdn. Bhd. and its wholly-owned subsidiary, Sungai Udang Port Sdn. Bhd. However, the amount of transaction did not exceed the threshold of the MMLR. The BAC has reviewed the above RRPTs and confirmed that the methods or procedures for determining the prices and terms of the RRPTs have not changed since the issuance of the Independent Adviser’s opinion by PricewaterhouseCoopers Capital Sdn Bhd dated 26 March 2012. The same was published in the Company’s Annual Report for the year ended 31 December 2012. The BAC has also confirmed that the methods or procedures, as mentioned above, are sufficient to ensure that the RRPTs will be carried out on normal commercial terms and are not detrimental to the Company’s minority shareholders. This Statement on Corporate Governance is made in accordance with the resolution of the Board of Directors passed on 23 February 2016. MISC BERHAD Annual Report 2015 111
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