MISC BERHAD 180 INTEGRATED ANNUAL REPORT 2023 181 www.miscgroup.com GOVERNANCE SECTION 12 The RRPTs entered into by the Group during the financial year ended 31 December 2023 are summarised below: Nature of transaction Transacting party Related party 1 Charters of LNG vessels from MISC by PETRONAS Group MISC Berhad and/or its subsidiaries PETRONAS* 2 Charters of petroleum and chemical tankers and liquefied petroleum gas carriers from MISC by PETRONAS Group MISC Berhad and/or its subsidiaries PETRONAS* 3 Operating, maintaining and lease/charter of Floating Production, Storage and Off-Loading (FPSO), Floating Storage and Off-Loading (FSO) and other floating solutions by PETRONAS Group MISC Berhad and/or its subsidiaries PETRONAS* 4 Fabrication and construction of oil and gas offshore/onshore structures for PETRONAS Group MISC Berhad and/or its subsidiaries PETRONAS* 5 Marine and consultancy services to PETRONAS Group MISC Berhad and/or its subsidiaries PETRONAS* 6 Sungai Udang Port management MISC Berhad and/or its subsidiaries PETRONAS* 7 Purchase of industrial gases, lubricants and other petroleum products including bunker oil from PETRONAS Group MISC Berhad and/or its subsidiaries PETRONAS* 8 Port management services to PETRONAS Group MISC Berhad and/or its subsidiaries PETRONAS* 9 Supply of information technology services provided by PETRONAS Group MISC Berhad and/or its subsidiaries PETRONAS* 10 Rental of premises with PETRONAS Group MISC Berhad and/or its subsidiaries PETRONAS* 11 Supply of bunkers, manpower and other services by PETRONAS Group MISC Berhad and/or its subsidiaries PETRONAS* * PETRONAS is a major shareholder of the Company The BAC also confirmed that the methods or procedures for determining the prices and terms of the RRPTs have not changed since the issuance of the Independent Adviser’s opinion by PricewaterhouseCoopers Capital Sdn. Bhd. dated 26 March 2012. The same was published in the Company’s Annual Report for the year ended 31 December 2011. CHEW LIONG KIM Chairman Board Audit Committee Board Audit Committee Report Board Sustainability & Risk Committee Report 2023 was a year of dynamic progress and dedication for MISC Group in our journey towards sustainability. As we forge ahead with our ambitious goal to achieve Net-Zero emissions by 2050, our focus remains unwavering: to transition MISC into a leading Net-Zero energy-related maritime solutions and services provider. This journey is not just about meeting targets; it is about leading a transformative shift in the industry and creating lasting value for all our stakeholders. Strengthening Risk Management Throughout the year, the Board Sustainability & Risk Committee (BSRC) exercised strategic oversight to embed sustainability and prudent risk management into every facet of our organisation. As the Group builds its momentum through existing and new investments, the BSRC carries out a comprehensive review of all projects to ensure our projects are aligned with our sustainability goals and contribute to our overall financial performance as well as business growth and resilience. As part of this review, the Project Risk Assessment (PRA) and Post Implementation Economic Review (PIER) are mandated key check and balance mechanisms, reinforcing risk management as an integral component in driving business growth. In addition to project evaluations, the BSRC also regularly monitors risk factors affecting MISC’s operations through our quarterly risk register. This sharpens our understanding and tracking of MISC’s overall risk exposure. To further mitigate risks and to fortify our commitment to responsible practices, the Responsible Supply Chain Programme 2023 - 2025 was implemented, ensuring that our procurement processes and value chain align with our sustainability agenda. Upholding Ethical Practices and Human Rights In 2023, MISC reinforced its commitment to upholding human rights standards and ethical practices across the globe. Our endorsement of the updated Modern Slavery Statement for 2023 is not just a testament to our dedication to ethical conduct; it reflects our adherence to global best practices. Recognising our international footprint, this Statement is benchmarked against stringent international laws and practices, ensuring we meet and exceed the highest standards of human rights across all regions we operate in. Excellence in Sustainability Governance The BSRC played a pivotal role in endorsing the MISC Group’s Sustainability Strategy in 2022, with a subsequent first internal audit conducted in 2023 by Group Internal Audit on the implementation of this Sustainability Strategy. This resulted in an “Effective” rating which not only reaffirms the effectiveness of our governance, risk management and controls but also highlights our success in integrating sustainability into the core of our business operations. Furthermore, the operationalisation of the Internal Carbon Pricing Framework marks a significant stride in our journey as this mechanism provides consideration on the financial impact of decarbonisation in our decision-making, as well as to allow for pricing of transition risks and opportunities. MISC also established our MISC Group Risk Appetite in 2023 to govern our business strategies and decision-making process. It will help to further strengthen and enhance MISC’s overall strategy towards effective risk management and governance. Looking Ahead Our commitment is to pursue growth and progress towards creating a sustainable future that benefits our stakeholders. As we move forward, our focus remains on responsible investments that are aligned with the energy transition and to ensure that MISC continues to build momentum on its sustainability strategy. On behalf of the BSRC, I would like to extend my sincere thanks to Dato’ Sekhar Krishnan and Dato’ Ab. Halim Mohyiddin for their insightful wisdom and invaluable contribution to the committee. I would also like to take this opportunity to welcome Mr. Chew Liong Kim who joined the BSRC on 15 January 2024. DATIN NORAZAH MOHAMED RAZALI Chairperson Board Sustainability & Risk Committee RELATED PARTY TRANSACTIONS (RPT) AND RECURRENT RPT (RRPT) (CONT’D)
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