BOARD AUDIT COMMITTEE REPORT C) External Audit (cont’d) To ensure that the External Auditors’ independence is not impaired, the Audit Engagement Partner in charge of the Company is changed every 5 years. Internally, the External Auditors conduct an Independent Partner Review in order to preserve their independence. The External Auditors had also provided written assurance to the BAC that in accordance with the terms of all relevant professional and regulatory requirements, they had been independent throughout the audit engagement for the financial year ended 31 December 2015. The Company also engages the External Auditors for other non-audit works as and when required. For the financial year ended 31 December 2015, the amount of non-audit fees incurred for services rendered by the External Auditors or their affiliates to MISC Group is RM643,000. D) Financial Results and Other Finance Matters • Reviewed the quarterly and annual financial statements of the Company and the Group including Bursa’s announcements with focus on compliance with the Financial Reporting Standards and other relevant regulatory requirements or changes in accounting policy. • Reviewed the adequacy and effectiveness of MISC Group Financial Risk Appetite Settings for financial year 2015 relating to interest rate exposure, foreign exchange exposure and financial institutions credit counterparty exposure. • Deliberated on the financial impact of different estimated useful lives of ships and floating assets for setting up the Depreciation Policy for Ships and Floating Assets of MISC Group. E) Corporate Governance and Compliance • Reviewed and deliberated on the Recurrent Related Party Transactions (“RRPTs”) reports on quarterly basis and reviewed the framework and procedures of RRPTs. • Reviewed and recommended to the Board the Statement on Risk Management and Internal Control, BAC Report and Additional Compliance Information for inclusion in the 2014 Annual Report. • Reviewed the following transactions that were deemed as related party transactions: i. Acquisition of PETRONAS Maritime Services Sdn. Bhd. from PETRONAS; and ii. Tenancy Agreement between MISC and PETRONAS for MISC’s Office at Menara Dayabumi, Kuala Lumpur. • Reviewed the Register of Directors’ Conflict of Interest for MISC Group. F) Ship Management Audit (“SMA”) • Reviewed the SMA’s semi-annual and annual audit reports focusing on the efficiency and effectiveness of the internal control systems in the management of the Group’s vessels (including FSO/FPSOs). REDISCOVER I REBUILD I SUSTAIN 126
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