MISC Annual Report 2018

D. Ethics and Compliance The Company observes its own Code of Conduct and Business Ethics (CoBE), including the Whistle-blowing Policy and the No Gift Policy. The CoBE is applicable to the Company, Directors, employees and third parties performing works or services for and on behalf of the Company. It governs the desired standard of behaviour and ethical conducts expected from each individual to whom the CoBE applies. The MISC Anti-Bribery and Corruption Manual also serves to guide the Company in relation to such matters. MISC’s CoBE can be viewed at www.misc.com.my under Compliance and Business Ethics. A Whistleblowing structure to review and manage any whistleblowing reports is in place, along with an enhanced whistleblowing framework and management process. The Chairman of the BARC, is also the Chairman of Whistleblowing Committee 1 (WBC 1). The WBC 1 reviews reports made against any Senior Management whereas the Whistleblowing Committee 2 (WBC 2) reviews reports made against any other employee of the Company. The Board, through the BARC, reviews whistleblowing reports on a quarterly basis. The Board places emphasis on fighting bribery and corruption and con- tinuously reviews the Company’s Compliance and Ethics Plan and related initiatives. The Board also demonstrated its commitment for fighting bribery and corruption by signing the Corruption Free Pledge (CFP). In January 2019, MISC was awarded with ISO 37001:2016 Anti-Bribery Management System certification. E. Directors’ Remuneration The Company aims to set remuneration for Directors at levels which are sufficient to attract and retain persons of calibre to guide the Group, taking into consideration the workload and responsibilities involved. The level of remuneration for Non-Executive Directors reflects the level of responsibilities undertaken and contributions made by them. MISC’s policy for remunerating its Directors is based on the PETRONAS Public Listed Companies Non-Executive Directors’ Guidelines and Remuneration Package. Further details of the remuneration structure are disclosed in the Nomination & Remuneration Committee Report on pages 180 to 185 of this Annual Report. For the financial year ended 31 December 2018, details of Directors’ remuneration excluding the President/Group CEO are as follows: Directors Directors’ Fees (Inclusive of Annual Fees and Meeting Allowance) Benefits-in-kind (RM) Total (RM) By MISC (RM) By Subsidiaries (RM) Dato’ Ab. Halim Mohyiddin 282,000 - - 282,000 Dato’ Sekhar Krishnan 190,000 - 1,708 191,708 Datuk Nasarudin Md Idris 218,000 250,260 6,000 474,260 Lim Beng Choon 218,000 - 2,415 220,415 *Liza Mustapha 193,500 - - 193,500 *Mohd Yusri Mohamed Yusof 176,000 - - 176,000 Dato’ Rozalila Abdul Rahman (Appointed on 1 August 2018) 67,500 - 2,300 69,800 *Datuk Manharlal Ratilal (Resigned on 1 November 2018) 131,500 - - 131,500 *Tengku Muhammad Taufik (Appointed on 15 November 2018) 22,000 - - 22,000 Total 1,498,500 250,260 12,423 1,761,183 * Fees paid to PETRONAS During the year under review, the President/Group CEO of MISC received a remuneration of RM2,484,000 for salary and other emoluments; and benefits-in-kind. As an Executive Director, the President/Group CEO is not entitled to Directors’ fees or any meeting attendance allowance. PRINCIPLE B: EFFECTIVE RISK MANAGEMENT AND INTERNAL CONTROL A. Audit and Risk Committee The BARC of MISC was established with the objective of assisting the Board in fulfilling its responsibilities primarily relating to financial management, financial accounting, risk management framework and process and systems of internal control of the Group. The BARC also monitors compliance with established policies and procedures and assess the suitability, objectivity and independence of both external and internal audit function. The Board has deliberated on having a separate Board Risk Committee as recommended by MCCG 2017 and concluded that the current structure of combining the audit, internal control oversight and risk management functions should remain with the BARC. The Terms of Reference of the BARC have been enhanced to reflect the MCCG 2017 best practices. Further details on BARC’s responsibilities and duties implemented are provided in the BARC Report on pages 186 to 192 of this Annual Report. B. Risk Management and Internal Control Framework The Board acknowledges its overall responsibility for continuous maintenance of a sound risk management framework and internal control to safeguard shareholders’ investment and the Group’s assets. Over and above the quarterly review by the Board Audit and Risk Committee on risk events, relevant risk appetite and mitigation measures at the enterprise level, the Board reviews the status of risk management activities and the updated Risk Register. The Board also ensures that all relevant project and investment risks, including the mitigation measures, are deliberated when making such decisions. Such Project Risk Assessments encompass, amongst others, project execution risk, contract management risk, counter-party risk, operations risk, geopolitical risk, and asset integrity risk. In relation to reviewing the adequacy and the integrity of the Company’s internal control systems (conducted via the BARC), the Board reviewed the reports on Related Party Transactions, Conflict of Interest oversight, Whistleblowing cases and enhanced management processes thereof, and certain improvements to internal controls as highlighted by the Group Internal Audit. The Company’s Risk Management and Internal Control practice is further elaborated in the Statement on Risk Management and Internal Control in pages 194 to 201 of this Annual Report and further details on Risk Management and Internal Control oversight are provided in the BARC Report on pages 186 to 192 of this Annual Report. PRINCIPLE C: INTEGRITY IN CORPORATE REPORTING AND MEANINGFUL RELATIONSHIP WITH STAKEHOLDERS A. Communication with Stakeholders Investor Relations The Board values its dialogue with the investment community including both the institutional shareholders and private investors to enhance investors’ understanding of the Group. MISC aims to continuously build and maintain transparent communication with the shareholders, potential investors and the investing community. Through MISC Group Investor Relations programme, MISC is committed to uphold best practices in corporate governance and ensure timely and equal dissemination of material information to the stakeholders. Other than the AGM as the principal forum of dialogue with the shareholders, the Company also uses the following forum for communication between the Company and stakeholders: • the Company’s other general meetings (if any); • quarterly financial statements and annual reports; • announcements on major developments to Bursa Securities; • the Company’s website at www.misc.com.my; and • quarterly briefing sessions between the Company’s Management and analysts/investors. Further details on the Company’s investor relations activities are provided in pages 136 to 137 of this Annual Report. CORPORATE GOVERNANCE OVERVIEW STATEMENT HIGHLIGHTS OF THE YEAR OUR BUSINESS OUR LEADERSHIP OUR PERFORMANCE OUR COMMITMENT TO SUSTAINABILITY OUR GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 50 TH ANNUAL GENERAL MEETING 177 MISC BERHAD ANNUAL REPORT 2018 176