MISC Annual Report 2019

Board Audit and Risk Committee Report Dear Shareholders, The Board Audit and Risk Committee (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 controls of the Group. Composition The BARC comprises of four members, the majority of whom are Independent Non-Executive Directors of the Company. The Chairman of the BARC, Dato’ Sekhar Krishnan, is a member of the Malaysian Institute of Accountants and the Malaysian Institute of Certified Public Accountants. The composition of the BARC and qualifications of its members comply with Paragraph 15.09(1) of the Main Market Listing Requirements (MMLR) of Bursa Malaysia Securities Berhad (Bursa Securities). As at the date of this report, the composition of the BARC is as follows: Members Date of appointment as BARC Member DATO’ SEKHAR KRISHNAN Chairman Senior Independent Non-Executive Director 1 March 2015 (Re-designated as Chairman on 28 May 2015) DATUK NASARUDIN MD IDRIS Member Independent Non-Executive Director 20 April 2017 LIM BENG CHOON Member Independent Non-Executive Director 16 August 2012 LIZA MUSTAPHA Member Non-Independent Non-Executive Director 1 September 2017 Terms of Reference The BARC is governed by its own Terms of Reference (TOR), which is consistent with the requirements of the MMLR and best practices of the Malaysian Code on Corporate Governance 2017 (MCCG 2017). For more information on the BARC’s TOR, please refer to MISC’s corporate website at www.misc.com.my . Meetings MISC’s Board Audit and Risk Committee assists the Board in an oversight role, where we are like the “eyes and ears” of the shareholders to help ensure the effectiveness of areas such as the financial functions, audit, risk management and internal controls, as well as related governance and compliance matters. We have a good balance of talent among the members of the Committee, which enables us to draw on a variety of perspectives and views to achieve a balanced conclusion or resolution to help the Board in its decision-making. DATO’ SEKHAR KRISHNAN Chairman, Board Audit and Risk Committee We have a good balance of talent among the members of the Committee, which enables us to draw on a variety of perspectives and views to achieve a balanced conclusion or resolution to help the Board in its decision-making The BARC met five times during the year under review. Details of each BARC member’s attendance are as follows: Member Number of meetings attended in 2019 Dato’ Sekhar Krishnan 5 out of 5 Datuk Nasarudin Md Idris 5 out of 5 Lim Beng Choon 5 out of 5 Liza Mustapha 5 out of 5 The BARC meets every quarter to review and deliberate the quarterly and annual financial statements, the Enterprise Risk Management report, emerging risks updates, Group Internal Audit (GIA) reports, related party transaction matters, whistleblowing updates, compliance & ethics updates and other relevant matters within the BARC’s TOR. Additional meetings are convened as and when required. The President/Group CEO is invited to attend the BARC 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 BARC’s TOR. The Portfolio Head, GIA of PETRONAS or his representative and the Head, GIA of MISC are also invited to the BARC meetings, together with the relevant management personnel, to observe the proceedings and provide clarification on any relevant Internal Audit reports tabled to the BARC. The External Auditors are invited to present their audit plan and audit results, Memorandum of Suggestions, and other relevant matters. In 2019, the Committee continued to review and monitor compliance with the necessary requirements under our Terms of Reference. One area of risk management that we have begun to review on a regular basis is emerging risks, in addition to inherent risks, which takes into consideration the possible changes to the maritime and oil and gas industry. It is important for MISC to be future ready to face a changing operating landscape. DATO’ SEKHAR KRISHNAN Chairman, Board Audit and Risk Committee C H A I R M A N ’ S R E M A R K S 213 212 OUR GOVERNANCE MISC BERHAD PEOPLE. PASSION. POSSIBILITIES ANNUAL REPORT 2019