Minutes of BAC meetings which include records of the deliberations, decisions and resolutions of the meetings are properly maintained by the Secretary of the BAC. The President/Group CEO is invited to the BAC meetings to facilitate the discussion as well as to provide explanation on audit issues, risk management and financial matters as well as other matters within the terms of reference of the BAC. The Senior General Manager, Group Internal Audit of PETRONAS and the General Manager, GIA of MISC are also invited to the meetings to observe the proceedings and provide clarification on any relevant Internal Audit reports tabled to the BAC, together with relevant management personnel. The External Auditors are also invited to present their Audit Plan and Audit Results, Memorandum of Suggestions, and other relevant matters. During the financial year ended 31 December 2016, the following activities were carried out by the BAC in discharging its functions and duties:- A) Risk Management • Reviewed the adequacy and effectiveness of Risk Management Framework and the on-going activities for identifying, evaluating, monitoring and mitigating risks. • Received and reviewed reports on key strategic and operational risk issues arising from quarterly Risk Management Committee (“RMC”) meetings, including review of the mitigation plans to address the said risks. • Reviewed and endorsed the Group’s Financial Year 2016 Enterprise Risk Management (“ERM”) Risk Register emanating from the Annual Planning Cycle and ensured that appropriate systems and processes are in place to effectively monitor and manage the identified risks. • Reviewed the emerging risks affecting the Company’s businesses as a result of the depressed oil and gas market environment. • Reviewed MISC’s Business Continuity Plan (“BCP’) and the status of implementation of the BCPs within the Group. • Reviewed and endorsed the Group’s Financial Year 2017 ERM Risk Register and ensured that systems and processes are in place to monitor and manage the identified risks in 2017. • Reviewed the Statement on Risk Management and Internal Control for inclusion in the Company’s 2016 Annual Report in compliance with Paragraph 15.23 of the MMLR. B) Internal Audit • Reviewed and approved GIA’s long term audit plan and Annual Internal Audit Plan (“AIAP”) as guided by the approved Enhanced Risk Based Internal Audit Framework of MISC in order to ensure adequacy of coverage on auditable entities and resources allocated. • The areas of audit engagements covered during the year under review are as follows:- ➢ Improvement in the Processes and Effective Cost Management, i.e., Procurement Activities for Offshore Business Unit (OBU) and Fleet Ma n a g eme n t S e r v i c e s ( FMS ) , P o s t Implementation of Goods & Services Tax (GST), Quality, Health, Safety, Security and Environment (QHSSE) & Victualing, Information and Communication Technology (ICT) Service Desk Ma n a g eme n t Sy s t em a nd I n s u r a n c e Management; ➢ Safeguarding MISC’s Investment, i.e., Marginal Marine Production Unit (MAMPU1) Project, audit on subsidiaries, joint venture companies within MISC Group including associated companies; and ➢ Governance and regulatory compliance oversight, i.e., Financial Control Framework, Tax Management Review and review of Quarterly Recurrent Related Party Transactions. • Reviewed internal audit reports issued by GIA based on the approved AIAP and ensured that appropriate agreed corrective actions are taken by the Management on the gaps in controls or procedures as identified by GIA. Corporate Governance 149
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