MISC Integrated Annual Report 2020

BOARD AUDIT COMMITTEE REPORT CHAIRMAN’S REMARKS In 2020, the Board Audit and Risk Committee (BARC) had to contend with the impact of the COVID-19 pandemic on the Group’s business segments and the activities that came under the ambit of the Committee within the areas of audit, risk management and internal controls. The movement control restrictions required the Group to shift some of its internal and external audit processes to online platforms, utilising digital applications in lieu of physical verification. Despite these challenges, we remained committed to ensure that the annual audit plans were on track and our auditing quality standards were not compromised. We also maintained strict focus on risk management to regularly assess the impact of the pandemic and the oil and gas industry downturn on the Group’s business and operations. Dear Shareholders, 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. From 1 January 2021, the BARC was renamed as the Board Audit Committee (BAC), pursuant to the establishment of the standalone Board Governance and Risk Committee (BGRC). The responsibilities relating to MISC’s risk management framework and process have been taken over by the BGRC from the BAC. Throughout this BAC Report, use of the term ‘BAC’ may also denote its former name, BARC, depending on the context. Composition The BAC comprises of four members, the majority of whom are Independent Non-Executive Directors of the Company. The Chairman of the BAC, Dato’ Sekhar Krishnan, is a member of the Malaysian Institute of Accountants (MIA) and the Malaysian Institute of Certified Public Accountants (MICPA). The composition of the BAC and qualifications of its members comply with Paragraph 15.09(1) of the MMLR of Bursa Securities. As at the date of this report, the composition of the BAC is as follows: Members Date of appointment as BAC 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 BAC is governed by its own Terms of Reference (TOR), which is consistent with the requirements of the MMLR and best practices of the MCCG 2017. The BAC’s TOR was recently revised on 1 January 2021 to re-organise the functions and scope of the BAC, further to the establishment of the BGRC. For more information on the BAC’s TOR, please refer to MISC’s corporate website at www.misc.com.my . Meetings The BAC met six times in 2020. Details of each BAC member’s attendance are as follows: Member Number of meetings attended in 2020 Dato’ Sekhar Krishnan 6 out of 6 Datuk Nasarudin Md Idris 6 out of 6 Lim Beng Choon 6 out of 6 Liza Mustapha 6 out of 6 The BAC meets every quarter to review and deliberate the quarterly and annual financial statements, the Enterprise Risk Management (ERM) report, emerging risks updates, Group Internal Audit (GIA) reports, related party transaction matters, whistleblowing updates, compliance and ethics updates and other relevant matters within the BAC’s TOR. Additional meetings are convened as and when required. Going forward, matters related to risk management and compliance and ethics updates will come under the purview of the new BGRC. Dato’ Sekhar Krishnan Chairman Board Audit Committee Towards the end of 2020, the Board agreed that risk management requires more dedicated oversight and decided to establish a separate Board Governance and Risk Committee (BGRC) as of 1 January 2021. To ensure a smooth transition and enable effective coordination, a member of the BAC will also sit on the BGRC. This will facilitate a common understanding of the risk management and internal control systems, promoting smoother coordination between the various standing Board Committees of MISC in its risk and governance oversight roles. We look forward to working closely with Datin Norazah Mohamed Razali who has been appointed as the Chairman, and the members of the BGRC. Dato’ Sekhar Krishnan Chairman Board Audit Committee /////// Business Review / Leadership / Governance / Financial Statements / Additional Information / MISC Berhad / Integrated Annual Report 2020 9 282 MISC Berhad / Integrated Annual Report 2020 9 283 / Additional Information / Financial Statements / Governance / Leadership / Business Review /////// Section Section