GOVERNANCE BOARD AUDIT COMMITTEE REPORT Dear Shareholders, From 1 January 2021, the Board Audit & Risk Committee was renamed as the Board Audit Committee (BAC), pursuant to the establishment of the standalone Board Governance & Risk Committee (BGRC). The responsibilities relating to MISC’s risk management framework and process as well as compliance and ethics initiatives now fall within the remit of the BGRC. 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 Main Market Listing Requirements (MMLR) of Bursa Securities. As at the date of this report, the composition of the BAC is as follows: (1) 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 CHEW LIONG KIM Member Independent Non-Executive Director 1 January 2022 LIZA MUSTAPHA Member Non-Independent Non-Executive Director 1 September 2017 (1) Mr. Lim Beng Choon retired as Independent Non-Executive Director of MISC and ceased being a member of the BAC on 15 August 2021. 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 Malaysian Code on Corporate Governance (MCCG). The BAC’s TOR was revised effective 1 January 2022 to incorporate the relevant practices from the latest MCCG 2021. For more information on the BAC’s TOR, please refer to MISC’s corporate website at www.misc.com.my. Meetings The BAC met five times in 2021. Details of each BAC member’s attendance are as follows: (1) Members Number of meetings attended in 2021 Dato’ Sekhar Krishnan 5 out of 5 Datuk Nasarudin Md Idris 5 out of 5 (2) Lim Beng Choon 4 out of 4 Liza Mustapha 3 out of 5 (1) Mr. Chew Liong Kim was appointed as a member of the BAC on 1 January 2022. (2) Mr. Lim Beng Choon retired as Independent Non-Executive Director of MISC and ceased being a member of the BAC on 15 August 2021. Overview of matters addressed at BAC meetings Quarterly • Unaudited quarterly financial results • Group Internal Audit (GIA) reports • GIA quarterly audit status reports • Related party transactions • Whistleblowing updates Half-yearly • Private sessions with the external auditors • Group Health, Safety, Security & Environment (GHSSE) audit and assurance reports • GIA performance review Annually • External audit plan • External audit results • Audited financial statements • Assessment of external auditors • GIA audit plan • GHSSE audit and assurance plan • Content for the Integrated Annual Report Special • Adoption of policies • Revision of BAC Terms of Reference The President/Group CEO is invited to attend the BAC meetings to facilitate the discussion, as well as to provide explanation on audit issues, financials, internal controls as well as other matters within the BAC’s TOR. The Group Chief Audit Executive, GIA of PETRONAS or his representative and the Head, GIA of MISC 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 distribution of meeting papers and minimises leakage of sensitive information, as well as enabling the Directors to have access to the papers electronically, anytime and anywhere. All proceedings of the BAC meetings are duly recorded in the minutes and are properly kept by the Company Secretary. SUMMARY OF THE BAC’S WORK IN 2021 Appended below is a summary of the BAC’s work in 2021, in discharging its functions and duties: Financial Reporting • Reviewed the quarterly results for announcements to Bursa Securities, focusing on compliance with the Malaysian Financial Reporting Standards (MFRS), International Financial Reporting Standards (IFRS), the MMLR and other relevant regulatory requirements, before recommending the same for approval by the Board. • Reviewed the audited financial statements of the Company prior to submission to the Board for approval, upon being satisfied that the audited financial statements were drawn up in accordance with the MFRS, IFRS and provisions of the Companies Act 2016 in Malaysia. The abovementioned reviews were conducted together with the President/Group CEO and Vice President, Finance. Internal Audit • Reviewed internal audit reports issued by GIA based on the approved Annual Internal Audit Plan (AIAP) and ensured that appropriate agreed corrective actions are taken by the Management on the gaps in controls as identified by GIA. • Reviewed and approved GIA’s AIAP for the financial year ending 31 December 2022 as guided by the approved Enhanced Risk Based Internal Audit Framework of MISC in order to ensure adequacy of coverage on auditable entities and resources allocated. • Reviewed the responses and action plans provided by Management on the deliberated audit reports. • Reviewed the adequacy and effectiveness of agreed corrective actions taken by Management on all significant and secondary issues raised in the audit reports. • Reviewed the adequacy of resources and competencies of GIA’s staff to execute the audit plan. • Conducted half-yearly and yearly assessments on the performance of GIA. MISC Berhad 258 Integrated Annual Report 2021 MISC Berhad Integrated Annual Report 2021 259
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