SUMMARY OF THE BAC’S WORK IN 2022 BOARD AUDIT COMMITTEE REPORT Dear Shareholders, The Board Audit Committee (BAC) was established with the objective of assisting the Board in an oversight role to help ensure effective financial management, financial accounting, internal control systems, and whistleblowing policy and management process of the Group. Composition The BAC comprises of four members, all 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. Effective 1 April 2022, the composition of the BAC meets Step-Up Practice 9.4 of the Malaysian Code on Corporate Governance (MCCG) by being comprised of only independent directors. 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 DATO’ AB. HALIM MOHYIDDIN Member Independent Non-Executive Director 1 April 2022 (1) Puan Liza Mustapha, a Non-Independent Non-Executive Director of MISC, retired from the BAC on 1 April 2022. 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. The BAC’s TOR was revised effective 20 June 2022 in alignment with the revised MISC Internal Audit Charter, namely to expand the BAC’s function to cover the endorsement of the annual performance evaluation and remuneration for the Head of Group Internal Audit in consultation with the President/Group CEO. 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 2022. Details of each BAC member’s attendance are as follows: Members Number of meetings attended in 2022 Dato’ Sekhar Krishnan 5 out of 5 Datuk Nasarudin Md Idris 5 out of 5 Chew Liong Kim 5 out of 5 (1) Dato’ Ab. Halim Mohyiddin 3 out of 3 (2) Liza Mustapha 2 out of 2 (1) Dato’ Ab. Halim Mohyiddin was appointed as a member of the BAC on 1 April 2022. (2) Puan Liza Mustapha, a Non-Independent Non-Executive Director of MISC, retired from the BAC on 1 April 2022. Overview of matters addressed at BAC meetings in 2022 Quarterly • Unaudited quarterly financial results • Group Internal Audit (GIA) reports • GIA quarterly audit status (closure) reports • Related party & recurrent related party transactions • Whistleblowing updates • Summary of special engagements performed by GIA Half-yearly • Private sessions with the external auditors • Group Health, Safety, Security and 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 • Revision of BAC Terms of Reference • Internal finance, procurement and contract management transformation initiatives 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 BAC members to have access to the papers electronically, anytime and anywhere. This practice also ensures consistency 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. Appended below is a summary of the BAC’s work in 2022, in discharging its functions and duties: Financial Reporting • Reviewed the quarterly financial results for announcement to Bursa Securities before recommending the same for Board’s approval upon being satisfied that it has complied with the Malaysian Financial Reporting Standards (MFRS), International Financial Reporting Standards (IFRS), the Bursa Main Market Listing Requirements (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. The abovementioned reviews were conducted together with the President/Group CEO and Vice President, Finance. Internal Audit • Reviewed internal audit reports issued by Group Internal Audit (GIA) based on the approved Annual Internal Audit Plan (AIAP). • Reviewed the adequacy and effectiveness of action plans provided by Management on the deliberated audit reports. • Reviewed and endorsed GIA’s AIAP for FY2023 as guided by the approved Enhanced Risk Based Internal Audit Framework of MISC in order 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 the yearly assessments of GIA’s performance. 205 204 Governance Governance MISC Berhad Integrated Annual Report 2022
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