Hence, PRA is a tool for business to identify the projects’ risks in advance and implement controls either to reduce or eliminate the risk impact. During the year, there was one PRA conducted and deliberated at the RMC. In addition, Post Implementation Economic Review (“PIER”) is also performed on specific projects/assets, where necessary, to assess whether agreed objectives, targets and returns have been achieved. PIER is an integral process of the entire PRA value chain. • Business Continuity Planning Business Continuity Planning (“BCP”) has been implemented in stages to ensure continuity of critical business functions in the event of disaster. During the year under review, BCP simulations were organised for critical units based in Menara Dayabumi to test the resiliency and robustness of the BCP initiative put in place, as well as to familiarise employees with the business continuity plans. The scenario-based simulation was designed to test all roles and responsibilities of the critical business functions, including critical staff who are required to carry out business recovery from the alternate site. The purpose of the BCP simulations is to ensure that employees understand their specific roles and responsibilities as laid out in the plans, as well as establishing familiarity with the alternate site. The outcome of the simulations identifies the improvement measures that need to be taken, and the lessons learned were employed to enhance and update the plan. This strategy allows MISC to recognise benefits from the investment made, taking advantage of knowledge gained and experience attained through the testing of the business continuity plans. OTHER KEY INTERNAL CONTROL PROCESSES To further enhance the internal control system, the Group’s other internal control processes are as follows:- 1. The Board reviews quarterly reports from Management on key operating performance and legal, environmental and regulatory matters. Financial performance is deliberated by the MC and tabled to the BAC and the Board on a quarterly basis. 2. The Group performs a comprehensive annual planning and budgeting exercise which involves the development of business strategies for the next five years to achieve the Group’s vision. The long term strategies are supported by initiatives to be pursued in the upcoming year, and for effective implementation, the initiatives are tied to specific measurable indicators which will be evaluated against the relevant business/service units and subsidiaries’ deliverables. The Group’s strategic direction is then reviewed annually taking into account current progress level and other indicators such as latest developments in the industry, changes in market conditions and significant business risks. In addition to that, the Group’s business plan is translated into budgetary numbers for the next five years, and financial performance and variance against budget is analysed and reported quarterly to the MC and the Board. 3. The Limits of Authority (“LOA”) manual provides a framework of authority and accountability within the organisation and facilitates sound and timely corporate decision making at the appropriate level in the organisation’s hierarchy. 4. To enhance the quality of the Group’s financial reports, the Group has implemented the PETRONAS Financial Control Framework (“FCF”) initiative. FCF is a structured process of ensuring the adequacy and effectiveness of key internal controls operating at various levels within the Group at all times. FCF requires among others, documentation of process workflows, key controls, remediation of control gaps as well as regular testing of control effectiveness. MISC BERHAD Annual Report 2015 115
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