• Reviewed the responses and action plans provided by Management Committee on the deliberated audit reports. • Reviewed the adequacy and effectiveness of agreed corrective actions taken by management on all significant and secondary issues raised in the audit reports. • Reviewed the minutes of meetings of the audit committee of Malaysia Marine and Heavy Engineering Holdings Berhad and minutes of meetings of the Audit and Risk Management Committee of AET Tanker Holdings Sdn. Bhd. for overview of the state of risk management and internal control systems of the subsidiary companies. • Reviewed the adequacy of resources and competencies of GIA’s staff to execute the audit plan. • Conducted half-yearly and yearly assessment on the adequacy of GIA’s functions and resources, scope of work, service orientation, and its Annual Plan and Strategy. • Prior to BAC meetings, the Chairman of the BAC held private meetings and discussions with Head and senior staff of GIA on audit reports and any Internal Audit related matters. C) External Audit • Reviewed and approved the External Auditors’ terms of engagement, audit plan, nature and scope for the financial year. • Reviewed the results and issues arising from External Auditors’ audit for the financial year and the resolution of issues highlighted in their report to the BAC and Management’s response. • BAC had 2 private meetings with the External Auditors without the presence of Management during the financial year ended 31 December 2016 (i.e., on 3 February 2016 and 31 October 2016) to discuss any matters the External Auditors may wish to present and to ensure that there were no restrictions in the scope and discharge of their audit activities. • The BAC also recommended the External Auditors’ re-appointment to the Board to be proposed for shareholders’ approval at the last AGM. The Company also engages the External Auditors for other non-audit works as and when required. For the financial year ended 31 December 2016, the amount of non-audit fees incurred for services rendered by the External Auditors or their affiliates to MISC Group is RM340,000. To ensure that the External Auditors’ independence is not impaired, the Audit Engagement Partner in charge of the Company is rotated 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. The Company has also adopted a Policy on the Assessment of External Auditors. With this policy, the BAC will carry out annual assessment on the performance, suitability and independence of the External Auditors based on the following criteria:- • quality of engagement team (including sufficiency of resources). • quality of communication and interaction. • independence, objectivity and professional scepticism. D) Financial Results and Other Finance Matters • Reviewed the quarterly and annual financial statements of the Company and the Group including the relevant announcements to Bursa Securities 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 Interest Rate Risk Appetite, Optimum Gearing Ratio, and Minimum Cash Balance for MISC Group. • 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. MISC BERHAD • Annual Report 2016 150 BOARD AUDIT COMMITTEE REPORT
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