For the purpose of risk reporting, the MISC Common Risk Dashboard will be updated and reported to the RMC and BAC on a quarterly basis, complete with the mitigation action plans to mitigate the risks. • Project Evaluation The Group had, during the year under review, introduced the Project Return Framework (“PRF”), a risk-based pricing framework that is used to ensure that the returns of any capital investment or project, adequately covers the risks assumed from undertaking such investment or project. Amongst the risk elements considered within the PRF are Project Risk Assessment (“PRA”), counter party credit risk, project tenure, assumed level of debt taken to fund the project and the residual value risk of the asset at the end of the contract period. PRA is a stringent tool adopted by the Group in identifying a project’s risks prior to embarking on a new capital intensive project. PRA enables the business to identify and implement appropriate controls to at least reduce, if not eliminate, the risk impact to projects. Ultimately, the objective of PRA is ensuring that project returns commensurate with the level of risk taken. During the year, there were five (5) PRAs conducted and deliberated at the RMC. In addition, the PRA advocates and ensures a consistent approach to project prioritisation during the overall planning and budget cycle throughout the Group, as well as promoting investment discipline. • Business Continuity Planning Business Continuity Planning (“BCP”) has been implemented in stages to ensure continuity of critical business functions in the event of disruption. 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, legal, environmental and regulatory matters. Financial performance is deliberated monthly 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. Corporate Governance 141
RkJQdWJsaXNoZXIy NDgzMzc=