The GIA adopted the Committee of Sponsoring Organisations of the Treadway Commission (“COSO”) framework; a comprehensive, structured and widely used auditing approach, in conducting the audit works. Based on COSO framework, all aspects of controls are given emphasis in order to ensure risk is well managed and mitigated. The GIA, through its Risk Based Internal Audit (“RBIA”) methodology, makes reference to the approved risk register in identifying areas to be audited and more focus are given to areas with higher risk exposure. OTHER MATTERS With regard to the associated companies and joint ventures, the Board does not regularly review the internal control system as the Board has no direct control over their operations. Nevertheless, MISC’s interests in the associated companies and jointly controlled entities are served via representations on the boards as well as review of management accounts and inquiries thereof. AFFIRMATION BY THE BOARD The Board has received assurance from the President/Chief Executive Officer and Vice President, Finance that the risk management and internal control systems of the Company and its subsidiaries for the year under review up to the date of approval of the statement are, in all material aspects, operating adequately and effectively. There were no material losses incurred during the financial year under review as a result of weaknesses of internal control. Management would continue to take measures to strengthen MISC’s control environment. REVIEW BY EXTERNAL AUDITOR The external auditor, Messrs Ernst & Young, have reviewed this Statement on Risk Management and Internal Control for inclusion in the Annual Report for the financial year ended 31 December 2015, in compliance with paragraph 15.23 of the Listing Requirements in accordance with guidelines issued by the Malaysian Institute of Accountants, and reported to the Board that nothing has come to their attention to cause them to believe that the statement intended to be included in the annual report is not prepared, in all material respects, in accordance with disclosures required by paragraph 41 and 42 of the Statement on Risk Management and Internal Control: Guidelines for Directors of Listed Issuer, or that the statement is factually inaccurate. For the financial year under review, based on enquiry, information and assurance provided, the Board is satisfied that the system of internal control was generally satisfactory. Measures would continuously be taken to ensure ongoing adequacy and effectiveness of internal controls, and to safeguard the Group’s assets and shareholders’ investment. This statement is made in accordance with the resolution of the Board of Directors dated 23 February 2016. STATEMENT ON RISK MANAGEMENT & INTERNAL CONTROL REDISCOVER I REBUILD I SUSTAIN 118
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