MISC BERHAD INTEGRATED ANNUAL REPORT 2025 08 09 10 01 02 03 04 05 06 07 12 13 SEC 11 GOVERNANCE 10 208 www.miscgroup.com 209 www.miscgroup.com #deliveringProgress BOARD AUDIT COMMITTEE REPORT BOARD AUDIT COMMITTEE REPORT In carrying out its audit activities, GIA adopts the standards and principles outlined in the IIA’s GIAS and the Committee of Sponsoring Organisations of the Treadway Commission (COSO) framework; a comprehensive, structured and globally recognised auditing approach, in conducting the audit activities. The conduct of internal audit work is also governed by the MISC Internal Audit Charter and GIA’s established procedures and guidelines. The annual audit plan and strategy, including the scope of works and resources, are approved by the BAC. The audit plan is established primarily based on a risk-based approach, supplemented by input from various sources, including feedback from Management and the BAC, as well as trends, track records and findings from past audit engagements. GIA conducts scheduled audits independently to provide the level of assurance required by the Board on the adequacy and effectiveness of risk monitoring, internal controls, governance processes and compliance procedures. In addition, GIA supports and undertakes special reviews, including investigations, upon request by Management, the BAC and the ARSC of AET Pte. Ltd. GIA has incorporated digital technologies into the audit processes. This includes the deployment of the Continuous Auditing (CA) dashboard and the development of the risk sensing (RS) framework. GIA submits its audit reports to the Management Audit Committee (MAC) for executive review. Subsequently, the reports together with deliberations by the MAC are tabled at the BAC meetings for approval. At the Board meetings, the BAC Chairman highlights the key audit issues and overall decisions and resolutions arising from BAC meetings to the Board. The audit reports prepared by GIA provide details of audit findings and corresponding Agreed Corrective Actions (ACAs). The status of implementation of these ACAs are captured through the Quarterly Audit Status Reports (QASR), from which, the ACAs are monitored and analysed. The consolidated reports are submitted and presented to the MAC and the BAC for deliberation and approval on a quarterly basis. Such regular monitoring is essential to ensure the integrity and effectiveness of the Group’s internal controls. During the financial year, GIA reported the following engagements as per the approved internal audit plan: • Audit on MISC Marine Cybersecurity and Related IT Controls • Audit on AET Legal and Corporate Secretarial Activities • Audit on ALAM Campus Management Application (CMA) System • Audit on AET Cybersecurity and Related IT Controls (Revisit) • Audit of Offshore Business Unit (OBU) Asset Management Activities • Audit on Post-Implementation of Icertis Contract Intelligence (ICI) • Audit on Group Corporate Communications Activities • Audit on Gas Assets & Solutions (GAS) Business Development Activities • Audit on MISC Marine Services Fleet Operations and Maintenance for Gas and Non-Gas Vessels • Audit on Tax Compliance for AET Entities • Audit on AET Capital Investment Project • Audit on Project Management Activities for Maritime Services • Audit on MISC Berhad Anti-Bribery Management System (ABMS) for FY2025 MISC as a Group has consistently achieved a high closure rate for the audit findings through close and continuous monitoring. The status of the ACAs is reported to the BAC on a quarterly basis. In FY2025, a 92% closure rate was achieved, with the remaining 8% being granted extension with defined timelines based on valid justifications. To support the BAC’s oversight, GIA conducted quarterly reviews on the internal control process and reporting of RPTs and RRPTs to provide assurance to the BAC that its implementation conforms to the requirements of Bursa Securities. In addition, material RPTs and RRPTs were reviewed as and when they arose. This included the proposal relating to the provision of long-term LNG shipping services to PETRONAS LNG Sdn. Bhd., a wholly owned subsidiary of PETRONAS, which was tabled at the Special BAC meeting held on 12 December 2025. As at 31 December 2025, all internal audit activities for the financial year under review were performed by 21 internal auditors from diverse backgrounds, disciplines and operational experiences such as accounting and finance, business administration, human resource, engineering, information technology, as well as shipping and logistics. This multidisciplinary composition supports comprehensive audit coverage across the Group’s operations. In maintaining independence and objectivity, the Head of GIA provides annual confirmation to the BAC on the organisational independence of the internal audit function, including any impairments and related safeguards. GIA also ensures that the internal auditors are free from any relationship or conflict of interest (COI) when performing their duties. All auditors have declared their independence through the annual COI declaration. GIA also continues its commitment to strengthening audit effectiveness by equipping the internal auditors with requisite knowledge, proficiencies and competencies to discharge their duties and responsibilities by providing sufficient and relevant functional trainings. The total cost incurred in discharging the internal audit functions during FY2025 was RM9.4 million. Corporate Governance and Regulatory Compliance • Reviewed and deliberated the reports on RPTs and RRPTs on a quarterly basis and material RPTs and/or RRPTs as they arise. • Reviewed and recommended to the Board the Statement on Directors’ Responsibility, Statement on Risk Management and Internal Control (SORMIC) (with particular focus on internal control related matters), BAC Report and Additional Compliance Information for inclusion in the Integrated Annual Report 2024. • Reviewed the minutes of meetings of the Board Audit Committee of Malaysia Marine and Heavy Engineering Holdings Berhad (MHB) and the Audit, Risk and Sustainability Committee (ARSC) of AET Pte. Ltd. to obtain oversight of the state of internal control systems and key audit matters within these subsidiaries. • Reviewed the Whistleblowing quarterly reports of the Company, including the status of cases reported and actions taken, to assess the adequacy and effectiveness of the Group’s Whistleblowing Framework. • Reviewed the Group Health, Safety, Security & Environment Audit and Assurance Bi-Annual Reports, with particular focus on the efficiency and effectiveness of the maintenance of the Group’s vessels and floating assets. • Reviewed the revision to the Guidelines on RPTs and RRPTs for MISC Group to ensure continued alignment with regulatory expectations and best practices. • Reviewed the TOR to ensure continued relevance and alignment with regulatory requirements taking into account the BAC’s overall function. • Reviewed updates on sanctions breach incidents within the Group, including remedial and preventive measures implemented to strengthen compliance controls. STATEMENT ON INTERNAL AUDIT FUNCTION The internal audit function of the Company is carried out in-house by the GIA. GIA undertakes a systematic and disciplined approach to evaluate and improve the effectiveness of governance, risk management and control processes within the Group. The Head of GIA reports functionally to the BAC and administratively to the President & Group CEO of MISC. Izran Kassim is the Head of GIA. He is an Associate Member of the Chartered Institute of Management Accountants (CIMA), a member of MIA and holds a Bachelor of Arts in Economics and Social Studies from the University of Manchester, UK.
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