BOARD SUSTAINABILITY & RISK COMMITTEE REPORT Dear Shareholders, The Board Governance & Risk Committee (BGRC) was established on 1 January 2021 to enhance oversight on risk management matters and enable more effective anticipation and reaction in managing events and trends that could lead to disruptive changes to MISC’s business model. The scope of the BGRC also encompasses governance, compliance and ethics, sustainability and health, safety, security and environment (HSSE). With effect from 1 January 2023, the BGRC was renamed as the Board Sustainability & Risk Committee (BSRC), to reflect MISC’s commitment to the sustainability agenda at the Board level and to place further emphasis on sustainability as a core component embedded in MISC’s activities and operations. Throughout this BSRC Report, use of the term ‘BSRC’ may also denote its former name, BGRC, depending on the context. Composition The BSRC comprises five members, all of whom are Independent Non-Executive Directors. The BSRC’s Terms of Reference requires a majority of the BSRC members to be Independent Directors, which complies with the requirements of the MCCG. At least one member of the BSRC must also be a member of the Board Audit Committee (BAC) to foster a common understanding of the risk management and internal control systems and ensure co-ordination between the two standing Board Committees of MISC in its risk, internal controls and governance oversight roles. As at the date of this report, the composition of the BSRC is as follows: Members Date of appointment as BSRC member DATIN NORAZAH MOHAMED RAZALI Chairperson Independent Non-Executive Director 1 January 2021 DATO’ SEKHAR KRISHNAN Member Senior Independent Non-Executive Director 1 January 2021 DATIN NORAZAH MOHAMED RAZALI Chairperson Board Sustainability & Risk Committee The Board of Directors (Board) had during the year 2022 approved the previously named Board Governance & Risk Committee (BGRC) to the Board Sustainability & Risk Committee (BSRC). The change of name which took effect on 1 January 2023 demonstrates MISC's commitment to sustainability at the Board level. Sustainability continuously plays an important agenda throughout the year under review with BSRC's endorsement of the MISC Carbon Intensity 2030 Targets and Net-Zero Commitment 2050 which is in line with MISC's strategic priority to decarbonise. We also conducted periodic reviews of the Group's Sustainability Strategy progress status report and performance dashboard based on the five-year MISC Group Sustainability Strategic Priorities 2021-2025 to ensure compliance of policies and adherence to regulatory requirements. In addition, the BSRC continued to maintain oversight on risks faced by the Group. As part of our regular agenda, the BSRC continues to focus on risk management, particularly MISC's material risks and potential impact through comprehensive review of Quarterly Risk Reports covering key areas including financial performance, project and operational status, risk assessments for new projects and business lines, cybersecurity, governance & compliance as well as human resource related risks. Members Date of appointment as BSRC member DATO’ AB. HALIM MOHYIDDIN Member Independent Non-Executive Director 1 January 2021 MOHAMMAD SUHAIMI MOHD YASIN Member Independent Non-Executive Director 1 January 2021 DATO' TENGKU MARINA TUNKU ANNUAR Member Independent Non-Executive Director 1 April 2022 Terms of Reference The BSRC is governed by its own Terms of Reference (TOR), which is consistent with the requirements of the MMLR and best practices of the MCCG. For more information on the BSRC’s TOR, please refer to MISC’s corporate website at www.misc.com.my. Meetings The BSRC met ten times in 2022. Details of each BSRC member’s attendance are as follows: Members Number of meetings attended in 2022 Datin Norazah Mohamed Razali 10 out of 10 Dato’ Sekhar Krishnan 10 out of 10 Dato’ Ab. Halim Mohyiddin 10 out of 10 Mohammad Suhaimi Mohd Yasin 10 out of 10 (1) Dato' Tengku Marina Tunku Annuar 7 out of 7 (1) Dato' Tengku Marina Tunku Annuar was appointed as a member of the BSRC on 1 April 2022. Through the periodic Project Independent Review (PIR) reports which are tabled to the BSRC, particular focus is placed on MISC's sizeable projects which are on-going to ensure the projects are progressing as planned, delivery is within the expected timeline and within the expected budget, as well as compliance with quality and safety standards which are benchmarked against international and industrial standards. Other focus areas which had been reviewed and tracked by the BSRC during year 2022: 1. Risks associated with China's Zero-COVID policy, to ensure MISC has put in place the necessary mitigation measures to minimise schedule and cost pressures; 2. Commercialisation phase of MISC's investment in digital ventures. BSRC had provided the necessary guidance to steer this venture forward; and 3. In ensuring robust Cybersecurity as MISC ventures into digital space, BSRC continues to review the updates on MISC's plan to further enhance Cybersecurity position. As we moved into 2023, our major projects which are under execution remain high on the BSRC's agenda. We continue to ensure that these projects remain on track for delivery to our clients. In line with MISC's strategic priority to decarbonise, the BSRC will oversee the Group's investments for the year ahead and prioritise investments that are aligned with the energy transition and the decarbonisation of the maritime industry. BSRC will continue to monitor the status of these projects to ensure that the Group delivers on the targets identified under MISC's Climate Framework. As the Group builds its momentum in sustainability related initiatives and investments, the BSRC will also emphasise the need to develop MISC's talent pool to fortify MISC's bench strength as it transitions into a thriving business in the net-zero economy of 2050 in the medium to long-term. Lastly, I would also like to take this opportunity to welcome Dato' Tengku Marina Tunku Annuar, who became a member of the BSRC from 1 April 2022. DATIN NORAZAH MOHAMED RAZALI Chairperson Board Sustainability & Risk Committee CHAIRPERSON’S REMARKS 213 212 Governance Governance MISC Berhad Integrated Annual Report 2022
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