A dedicated Compliance Unit was established with the responsibility to drive compliance of the CoBE and to ensure adequacy of MISC’s systems and processes, and the training of all employees, in relation to ethics and integrity, to support an effective compliance and ethics programme. From the business angle, Compliance Unit supports all necessary ethical due diligence inquiries to ensure integrity standards are upheld by MISC’s joint venture partners, vendors and/or persons conducting work on MISC’s behalf. 11. The Company keeps a register on conflict of interest or potential conflict of interest situation for company directors in the Group which is reviewed on an annual basis. Results of the review and any new recommendations for improvement, together with contents of the register are tabled to the BAC and Board for information and further action, where necessary. ASSURANCE FUNCTIONS The Group has in place the following assurance functions to review the effectiveness of internal control systems and processes:- 1. The Ship Management Audit (“SMA”), which reports to the MC and the BAC, performs independent scheduled inspections on the Group’s vessels and floating facilities. The objectives of the inspections are to verify, evaluate and review the Group’s operational activities to ensure the vessels’ and floating facilities’ operational integrity and reliability are maintained at all times, consistent with international regulations and internal policies. MISC Group vessels are subjected to stringent audits, vetting and inspections to meet various regulatory and commercial requirements. These include vetting by oil majors, audits by the Malaysian Marine Department and ship classification societies to maintain international safety and security management certification under the relevant codes. In addition, MISC is also subjected to periodic management reviews by its customers’ risk management units. The Ship Management Audit Division submits its findings and recommendations on corrective actions of each ship and floating facilities inspected to the Fleet Management Services (“FMS”) Division and Offshore Business Unit (“OBU”) respectively. The monitoring and follow-up on the status of the corrective actions are maintained on a monthly basis until closure. On a six-monthly as well as annual basis, findings on each ship inspected are collated and analysed into a consolidated report. The consolidated reports are submitted and presented to the MC for review, comments and further actions. The reports are then presented to BAC with the deliberations and decisions shared. 2. The Corporate Health, Safety and Environment (“CHSE”) Division drives various sustainable HSE initiatives and defines the framework that exemplifies CHSE’s effort to continuously meet legal compliance as a minimum. CHSE also drives strategies and monitors performance to ensure HSE risks are managed to as low as reasonably practicable. 3. The Corporate Security Division (“CSD”) maintains a clear policy, procedures and framework with the aim to continuously monitor conformance to established industry security standards as well as international security standards applicable under the relevant codes. GROUP INTERNAL AUDIT MISC Group Internal Audit (“GIA”) supports the BAC by providing feedback as an independent assurance body on the adequacy of risk management, governance and the efficiency and effectiveness of the internal control system. The GIA processes and activities are guided by the approved Internal Audit Charter and aligned with internal audit industry standards (i.e. The International Professional Practices Framework (“IPPF”) and Statement of Responsibilities issued by the Institute of the Internal Auditors (“IIA”)). MISC BERHAD Annual Report 2015 117
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