STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL For each project that is being considered for bid submission, PRA is conducted and deliberated at the PRA Sub-Committee, BSRC and subsequently at MISC Board. The PRA framework is continuously reviewed and refined to ensure the robustness of the risk assessment process. Finance Transformation Programme (FTP) MISC is embarking on a FTP. The primary objective of FTP is to shift the role of Finance from transaction processing to becoming strategic business partners, by leveraging analytics and automation to enable data-driven business decisions. The objective will be achieved through re-engineering of financial processes, implementation of modernized financial platforms and automation technologies, as well as upskilling of finance practitioners in the Group, whilst ensuring the adequacy and effectiveness of internal controls. The Group is currently still in the phase of designing its processes, platforms and upskilling program and will roll-out various initiatives upon completion of the design activities in the following year. Procurement The MISC Procurement Transformation Program is underway. The primary focus is two-fold: to improve our Procurement Policies & Processes and to introduce best in class systems which provide greater spend visibility, aid better decision making and drive greater value. New policies and processes are encapsulated in the MISC Group Procurement Guidelines (GPG). The GPG is currently in the process of being rolled out across the Group with the aim of streamlining procurement principles and processes whilst ensuring Governance is maintained. Contract Management In 2021, contract management transformation program was introduced to automate the contract management process, increasing accessibility through a centralized contract repository and enhancing compliance to contract obligations. The initial phase of the contract management platform had gone live in June 2022 and the platform is expected to be fully implemented by the first half of 2023. Project Management Project management of GAS Business and AET newbuilds are handled by the Project Delivery and Technology department (PD&T), Engineering and Projects of the Eaglestar Group, whereas the project management for the Offshore Business will be monitored by the PD&T of the Offshore Business unit. The primary objective of the PD&T department is to strategise, lead and control shipbuilding/conversion of vessels and newbuild/conversion of floaters respectively, to ensure safe and successful execution of projects within the agreed schedule and allocated budget limits. Two main functions of Eaglestar’s PD&T are: • project engineering team, which mainly manages project tendering and contracting, including feasibility studies, design and scope of work; and • project management team, which handles project execution post contract signing, engineering review, supervision and appraisal of builders’ performance. PD&T constantly reviews the execution of the project against the project execution plan, which includes the planned programme, procurement schedule, factory test schedule and commissioning schedule. PD&T also maintains regular reporting to management on progress and escalating pertinent issues. The Offshore Business’s PD&T provides support and oversight for all project phases from the bid, through Front End Engineering Design (FEED) and execution until handover to the asset management team. During project execution, the team will carry out regular project reviews and risk assessments and formulate risk mitigation strategies to ensure that appropriate actions are taken in a timely manner. Independent reviews which may include external experts, if required, are performed during the project execution phase led by MISC GIA. Information & Communication Technology (ICT) MISC has largely implemented the Enterprise ICT systems and corporate applications to automate its core business functions and processes. These systems run on ICT platforms and MISC network infrastructure that connect all businesses within the Group. With the implementation of Cloud services, ICT has continued to expand its digital footprint in pursuit of operational and service excellence. Group ICT continues to innovate while managing ICT risks for MISC Group by developing its strategic roadmap and governance framework. • ICT Strategic Plan MISC has developed the ICT Strategic 5-year plan which aims to build business resiliency and enable further digitalisation for MISC and the Group via these intended outcomes: • Strengthening the core by enhancing core services to enable business transformation; • Building a data driven organisation and culture to drive business competitiveness; and • Driving business innovation via emerging technology to unlock new value and business growth. • ICT Risk and Governance The Information Technology Program Committee (ITPC) serves as the central platform for the Group in evaluating and monitoring ICT strategic investments. ITPC provides management oversight and business alignment on ICT strategic initiatives. Progress of various ICT strategic initiatives are reported at the ITPC meetings where assessment and monitoring of progress and performance measurement of these initiatives are conducted to ensure smooth and successful implementation. MISC has established the ICT Unified Control Framework (UCF) that defines the minimum standards to operate and measure the effectiveness of ICT controls for all ICT functions across the Group. This is to ensure that ICT operates at its highest potential, minimizes risks and improves Information Technology (IT) governance. ICT enhances its project management capabilities by having a dedicated ICT Project Management Office (PMO) function. PMO provides management oversight on all ICT projects to ensure project delivery is done within budget, schedule, and resources. The ICT PMO establishes the ICT Project Management Handbook by adopting the Project Management Body of Knowledge (PMBOK) standard for project deliveries. 229 228 Governance Governance MISC Berhad Integrated Annual Report 2022
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