MISC BERHAD INTEGRATED ANNUAL REPORT 2025 08 09 10 01 02 03 04 05 06 07 12 13 SEC 11 GOVERNANCE 10 206 www.miscgroup.com 207 www.miscgroup.com #deliveringProgress BOARD AUDIT COMMITTEE REPORT BOARD AUDIT COMMITTEE REPORT The President & Group CEO is invited to attend the BAC meetings to facilitate discussions, as well as to provide explanation on audit issues, financials, internal controls as well as other matters within the BAC’s Terms of Reference (TOR). The Head of Group Internal Audit (GIA) of MISC Group and the Group Chief Audit Executive, GIA of PETRONAS or her representative, are also invited to the BAC meetings, together with the relevant management personnel, to observe the proceedings and provide clarification on any relevant internal audit reports tabled to the BAC. The external auditors are invited to present their audit plan, audit results and other relevant matters. BAC meetings, together with the tentative agendas, are scheduled in advance of any new financial year to allow the BAC members to plan ahead and incorporate the year’s meetings into their respective schedules. The agenda and meeting papers are distributed to the BAC members via a secured collaborative software, which eases the process of distributing meeting papers and minimises leakage of sensitive information, and enables the BAC members to have access to the papers electronically at any given time. This practice is also consistent with the Board’s and Company’s commitment to sustainable practices. All proceedings of the BAC meetings are duly recorded in the minutes and are properly kept by the Company Secretary. TERMS OF REFERENCE The BAC is governed by its own TOR, which is consistent with the requirements of the MMLR of Bursa Securities and best practices of the Malaysian Code on Corporate Governance (MCCG). As part of the overall governance review, the BAC assessed the adequacy and relevance of its TOR and recommended updates to reflect evolving regulatory requirements and best practices. The revised TOR was subsequently approved by the Board. SUMMARY OF THE BAC’S WORK IN 2025 During the year under review, the BAC discharged its functions and duties through the following activities: Financial Reporting • Reviewed and endorsed the quarterly financial results for announcements to Bursa Securities before recommending the same for the Board’s approval upon being satisfied that it has complied with the Malaysian Financial Reporting Standards (MFRS), International Financial Reporting Standards (IFRS), MMLR and other relevant regulatory requirements. • Reviewed the audited financial statements of the Company and the Group prior to submission to the Board for the Board’s consideration and approval, upon being satisfied that the audited financial statements were drawn up in accordance with the MFRS, IFRS, MMLR and Companies Act 2016. These reviews were conducted with the President & Group CEO and Chief Financial Officer. Internal Audit • Reviewed and approved the revision to the Internal Audit Charter which has been aligned with the expectations prescribed in the Institute of Internal Auditors’ (IIA) Global Internal Audit Standards (GIAS). • Reviewed and approved internal audit reports issued by GIA based on the approved Annual Internal Audit Plan (AIAP). • Reviewed and approved the adequacy and effectiveness of action plans provided by Management on the deliberated audit reports. • Reviewed the status of conformity on implementation of MISC Berhad Anti-Bribery Management System (ABMS) against the requirement of the ISO 37001:2016 ABMS standards. • Reviewed and approved GIA’s AIAP for FY2026 as guided by the approved Enhanced Risk Based Internal Audit Framework of MISC, to ensure adequacy of coverage on auditable entities. • Reviewed the adequacy of resources and competencies of GIA’s staff to execute the audit plan. • Reviewed GIA’s half-yearly and yearly performance status of the approved audit plan, strategic initiatives and other GIA’s activities. • Conducted yearly assessments of GIA’s performance. • Reviewed outcome and updates of special review and/or investigation, as and when required. Prior to BAC meetings, the Chairman of the BAC held private meetings and discussions with the Head and Principal Auditors of GIA on internal audit reports and any related matters. External Audit • Reviewed and endorsed the external auditors’ terms of engagement, audit plan, scope and proposed fees for FY2025. • Reviewed the results and issues arising from the external auditors’ audit, including the key audit matters and the resolution of issues highlighted in the external auditors’ report to the BAC and Management’s responses thereto. • The BAC had two (2) private meetings with the external auditors without the presence of Management during the year under review (i.e. on 13 February 2025 and 18 November 2025) 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. • Reviewed and recommended the reappointment of the external auditors to the Board for proposal to the shareholders at the Annual General Meeting for approval. To ensure that the external auditors’ independence is not impaired, the Audit Engagement Partner in charge of the Company is changed every seven (7) years and is required to observe a cooling-off period of five (5) years before being reappointed, which is in line with the recommendation by the MIA. The current Audit Engagement Partner has been in the role for three (3) years during the financial year under review. 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. In line with the Company’s adoption of the Policy on External Auditors, the BAC had carried out an assessment on the performance, suitability and independence of the external auditors based on the following criteria, and will continue to do so on an annual basis. For more information on the BAC’s TOR, please refer to MISC’s corporate website at www.miscgroup.com. Quality of engagement team (including adequacy of resources) Quality of communication and interaction Independence, objectivity and professional scepticism 1 2 3 The BAC met five (5) times in 2025, with the BAC Chairman and all members in attendance for all meetings.
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