MISC Integrated Annual Report 2020

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, details as follows: Board Chairman Retainer Fees RM240,000 per annum Board Member Retainer Fees RM120,000 per annum Attendance Fee RM3,500 per meeting • Fees in respect of the Non-Independent Non-Executive Directors are paid directly to PETRONAS instead of the individual Directors. For the financial year ended 31 December 2020, details of the 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) Datuk Abu Huraira Abu Yazid (appointed as INED on 9 October 2020) 41,419.00 Nil Nil 41,419.00 Dato’ Ab. Halim Mohyiddin (redesignated as INED on 1 June 2020) 219,000.00 Nil 128.36 219,128.36 Dato’ Sekhar Krishnan 190,000.00 Nil 3,282.54 193,282.54 Datuk Nasarudin Md Idris 218,000.00 554,461.00 4,777.81 777,238.81 Lim Beng Choon 218,000.00 Nil 2,432.23 220,432.23 Dato’ Rozalila Abdul Rahman 190,000.00 Nil 3,431.07 193,431.07 Datin Norazah Mohamed Razali (appointed as INED on 9 October 2020) 41,419.00 Nil Nil 41,419.00 Mohammad Suhaimi Mohd Yasin (appointed as INED on 9 October 2020) 41,419.00 Nil Nil 41,419.00 Tengku Muhammad Taufik * (resigned on 15 July 2020) 89,339.00 Nil 89,339.00 Liza Mustapha * 183,000.00 Nil Nil 183,000.00 Mohd Yusri Mohamed Yusof * 197,000.00 Nil Nil 197,000.00 Tan Sri Noh Omar (appointed as Chairman/Non-INED on 1 June 2020 and resigned on 17 June 2020) 11,333.00 Nil Nil 11,333.00 Total 1,639,929.00 554,461.00 14,052.01 2,208,442.01 * Fees paid to PETRONAS During the year under review, the President/Group CEO of MISC received a total remuneration of RM3,185,362.00 in salary, 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. For more information on the remuneration structure for MISC’s Directors, please refer to the NRC Report on page 280 of this Integrated Annual Report. PRINCIPLE B: EFFECTIVE AUDIT AND RISK MANAGEMENT Board Audit Committee (BAC) The BAC (previously known as the ‘Board Audit and Risk Committee’) 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 internal control systems of the Group. The BAC also monitors compliance with established policies and procedures and assesses the suitability, objectivity and independence of both the external and internal audit functions. Further to the establishment of the standalone Board Governance and Risk Committee (BGRC) with effect from 1 January 2021, the BGRC will take over the responsibilities relating to MISC’s risk management framework and process from the BAC. The Terms of Reference of the BAC have been amended accordingly pursuant to the establishment of the BGRC and also reflect the MCCG 2017 best practices. For more information on the BAC and how it has met its responsibilities in 2020, please refer to the BAC Report on pages 282 to 289 of this Integrated Annual Report. 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 BARC 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 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 Board has taken cognisance of Step Up Practice 9.3 of the MCCG 2017, which recommends that a dedicated company-wide risk oversight at the Board Committee level could enhance scrutiny on risk management matters and thus enable more effective anticipation and reaction in managing events and trends that could lead to disruptive changes to the business model. This culminated in the establishment of the BGRC with effect from 1 January 2021, to serve as a sounding board to Management and to perform deep dive and challenge on risk matters. For more information on MISC’s risk management and internal control frameworks, please refer to the BAC Report on pages 282 to 289 of this Integrated Annual Report, the BGRC Report on pages 290 to 293 of this Integrated Annual Report, as well as the Statement on Risk Management and Internal Control (SORMIC) on pages 294 to 307 of this Integrated Annual Report . CORPORATE GOVERNANCE OVERVIEW STATEMENT /////// Business Review / Leadership / Governance / Financial Statements / Additional Information / MISC Berhad / Integrated Annual Report 2020 9 272 MISC Berhad / Integrated Annual Report 2020 9 273 / Additional Information / Financial Statements / Governance / Leadership / Business Review /////// Section Section