(PCG Acg18) - 15032019 - PDF

LEADING.
F UTURE FO C U S E D
PETRONAS
CHEMICALS
GROUP
BERHAD
(459830-K)
A COMMITMENT TO
GOVERNANCE
2018
PETRONAS Chemicals Group Berhad A Commitment to Governance 2018
Table of Contents Co v er Ratio n al e
LEADING. FUTURE FOCUSED
Inside This
As the leading integrated chemicals producer in Malaysia and one
of the largest in Southeast Asia, our vision is to be The Preferred
Chemical Company Providing Innovative Customer Solutions,
making a difference to the lives of millions of people around the
Report
world. With our Leading performance in 2018, we have delivered
on our promises. We remain firmly Future Focused and are creating
value for all our stakeholders through a fundamentally resilient
and sustainable business, able to capitalise on opportunities and
withstand the challenges presented by a dynamically shifting global
business landscape.
Th e fo l l o win g ico n s are u s ed th ro u gh out thi s

S tan dal o n e Go v ern an ce Pu bl icatio n
Tells you where you can find more information online

at www.petronaschemicals.com
1
Tells you where you can find more information in
About This the Integrated Report
Report
Page 01
We lay out the scope and boundary of our Governance Report, and the reporting framework
we are reporting against.
01 About This Report

• Integrated Reporting Approach
- Scope and Boundary
- Reporting Framework
Page 02 to Page 31
Corporate
2
In this section, we present our Chairman's message on governance at PCG, as well as detailed
Governance information on our Board of Directors, governance structure, processes and their activities for
Overview the year.
Statement 02 Chairman's Corporate Governance Overview

03 Board Composition, Profiles, Structures
08 Management Committee
12 Our Governance Structure
15 The Board 2018 Activities & Priorities
19 Nomination and Remuneration Committee Report
24 Board Audit Committee Report
29 Integrity and Ethics
30 Communication with Stakeholders
3
Proactive Page 32 to Page 42
Approach to Risk PCG's Statement on Risk Management and Internal Control discloses the main features of the
Company's Risk Management Framework and Internal Control System.
Management and
Internal Control 32 Proactive Approach to Risk Management and Internal Control
• Statement on Risk Management and Internal Control
01
About This Report
About This Report
Integrated Reporting
Approach
We are proud to present PETRONAS Chemicals Group
Berhad’s (PCG) inaugural standalone governance
publication, A Commitment to Governance (ACG) to be
read in conjunction with our Integrated Report 2018 (IR)
and the Corporate Governance Report 2018, which is
accessible online at www.petronaschemicals.com.
The ACG presents a detailed report of how we apply the principles of the
Malaysian Code on Corporate Governance 2017 (MCCG 2017). It includes
expanded information of our Corporate Governance (CG) Overview Statement,
Nomination and Remuneration Committee Report, Board Audit Committee
Report and Statement on Risk Management and Internal Control.
For more information, please log on to our website: www.petronaschemicals.com
Scope and Boundary Reporting Framework
PCG’s CG reporting scope covers the period from This ACG has been prepared in accordance with the relevant
1 January 2018 to 31 December 2018 unless otherwise requirements, guidelines and practices of the Main Market
stated. The boundary is limited to PCG and the principal Listing Requirements (MMLR) by Bursa Malaysia Securities
activities of its subsidiaries, joint operation, joint ventures Berhad (Bursa Malaysia), MCCG 2017, Companies Act 2016
and associates. (CA 2016) and Corporate Governance Guide (3rd Edition) by
Bursa Malaysia Berhad, in addition to being benchmarked
against the Asean Corporate Governance Scorecard.
02
CHAIRMAN’S Creating and Maintaining the

Right Culture for Growth
Integrity and trust in our Group’s behaviour are
Culture and Governance
Our corporate culture defines who we are, what
we stand for and how we do business and it is
CORPORATE
more important than ever in today’s business integral to the success of the Group. Our good
world. One of my key responsibilities as Chairman reputation has been built on the solid foundation
is to set the tone for the Company and ensure of an ethical culture, underpinned by a well
good governance and in this, I have been defined and effective system of governance. It
GOVERNANCE extremely well supported by the members of
the Board. They bring balance and a wealth of
has assisted in the creation and protection of
long term value of the Group and supported our
skills and experiences to our organisation which ongoing corporate strategy to deliver sustainable
OVERVIEW complements the talents of our executive team.

I thank them all for their valuable contribution
growth.
as we continue to uphold the high standards The Board defines the purpose of the Group
expected of us, to maintain oversight of the and identifies the values that guide it. We remain
As a Board, we strategic, operational and compliance risks across committed to upholding the highest ethical
the Group and to define our path to success. standards, operating on the principle that the
have an established tone at the top sets the standard for the rest of
It has been another year of progress and the business.
commitment to maintain development in the Group’s governance agenda.
Throughout this and other parts of the Integrated Over the years, we have carefully developed a
a well defined and Report, we aim to provide investors and other
stakeholders with an insight into the governance
common set of expected behaviours based on
our corporate values and an effective system of
activities and ethical practices which have governance, both of which have been essential
effective system of supported our corporate performance during the in shaping and embedding a strong ethical and
year. governance culture across the Group.
governance which
On behalf of the Board, I am pleased to present While the Board is responsible for changes
supports our corporate this publication - ACG, prepared based on the to corporate governance and culture, from a
three principles of: practical perspective, the Executive Director
strategy to deliver - Leadership & Effectiveness and Senior Management are responsible for
- Accountability implementing behavioural and governance
sustainable growth. - Communication with stakeholders changes and for clearly articulating to colleagues
in the wider business the reasons for change, its
Board Composition and Changes benefits or the consequences of not changing.
As announced on 16 August 2018, Dong Soo
Kim resigned from the Board after numerous We continuously strive to create an environment
years of dedicated service. We thank him for where our corporate values are not just words,
all his invaluable input and wish him well. but are put into practice, promoting positive and
Following his departure, we were delighted to productive behaviour every day. The Managing
welcome two distinguished international business Director/Chief Executive Officer (MD/CEO) and
leaders, Warren William Wilder and Dr. Zafar other members of the Management team take
Abdulmajid Momin to the Board as Independent an active lead, provide encouragement and
Non-Executive Directors. support to colleagues to ensure that ethical
standards are maintained and good governance
The decision to appoint Warren William Wilder is put into practice. Key functions such as legal,
and Dr. Zafar Abdulmajid Momin was made after finance, human resources and internal audit have
a rigorous selection process undertaken by the also been empowered to promote, embed and
Nomination and Remuneration Committee. integrate good standards of ethical behaviour
and corporate governance across the Group.
Ching Yew Chye, who is due for re-election at the The success of our business is dependent upon a
next annual general meeting, has chosen to call strategy which benefits our investors, employees,
time on his tenure and opted not to submit himself clients, suppliers and the wider stakeholder
for re-election. We thank him for his services to community. We have invested time and resources
the Group and invaluable inputs throughout his in communicating with employees and designed
tenure in PCG. training and development programmes to educate
and encourage high standards of conduct that
Understanding our Risks reflect our vision to be a world-class provider of
A strong system of governance, with effective and petrochemicals, renowned for our great people,
prudent controls to assess and manage risk, is great service, and great results. These efforts
central to helping any organisation to anticipate are underpinned by our Code of Conduct and
and adapt to changing external circumstances. In Business Ethics (CoBE).
order to allow our Board Audit Committee to be
more focused with internal control and financial The Year Ahead
reporting functions, the Board has established We are committed to doing things in the right way
a Board Risk Committee (BRC) on 25 February and will continue to strengthen our governance
2019 to focus on risk management. The role of processes to ensure that we are aligned with best
the BRC is to review the policy and plans for risk practices and that our approach to disclosure
management and its effectiveness. remains timely and transparent.
Datuk Md Arif Mahmood

Chairman
03
Corporate Governance
Overview Statement
Board Composition, Profiles, Structures
As at 25 February 2019
LEADERSHIP
Datuk Md Arif Mahmood Datuk Sazali Hamzah

Chairman, Non-Independent Non-Executive Director Managing Director/Chief Executive Officer (MD/CEO),
Non-Independent Executive Director
Nationality: Malaysian Age: 56 Nationality: Malaysian Age: 52

Gender: Male Gender: Male
DATE APPOINTED TO BOARD LENGTH OF SERVICE DATE APPOINTED TO BOARD LENGTH OF SERVICE
1 May 2015 3 years and 10 months 8 May 2014 4 years and 2 months
BOARD COMMITTEE PRESENT DIRECTORSHIPS BOARD COMMITTEE PRESENT DIRECTORSHIPS
Nil Listed Entities: Nil Listed Entities:

• PETRONAS Chemicals • PETRONAS Chemicals
Group Berhad Group Berhad
• PETRONAS Dagangan Berhad Other Public Company:
Other Public Company: • Nil
• Nil
ACADEMIC/PROFESSIONAL QUALIFICATIONS ACADEMIC/PROFESSIONAL QUALIFICATIONS
• Masters of Business Administration, Massachusetts Institute of • Chartered Fellow of the Institution of Chemical Engineers (IChemE)
Technology, United States of America (USA) • Bachelor of Chemicals Engineering, Lamar University, USA
• Bachelor of Science in Electrical Engineering (summa cum laude), • Advanced Management Programme, The Wharton School, University of
Boston University, USA Pennsylvania, USA
• Senior Management Program, London Business School, London, United
Kingdom (UK)
WORKING EXPERIENCE WORKING EXPERIENCE
Present Appointments: Present Appointments:

• Chairman of PETRONAS Chemicals Group Berhad • VP, Downstream Business, PETRONAS
• Chairman of PETRONAS Dagangan Berhad • Board member of Institution of Chemical Engineers UK, Malaysian
• Executive Vice President and Chief Executive Officer, Downstream Branch
Business, PETRONAS • Chairman/Director of various companies within PETRONAS
• Member of Executive Leadership Team, PETRONAS
• Member of People Development Committee, PETRONAS Past Experiences:
• Member of Talent Council, PETRONAS • MD/CEO, PETRONAS Penapisan (Melaka) Sdn Bhd
• Member of Industry Advisory Panel, Universiti Teknologi PETRONAS
• Senior General Manager of Group Technology Solutions, PETRONAS
• Director, Johor Petroleum Development Corporation
• Head of Project Management and Delivery, PETRONAS
• Chairman/Director of various companies within PETRONAS
• Various senior management positions through roles in the refinery and
Past Experiences: petrochemical business within PETRONAS
• Director, PETRONAS
• Senior Vice President of Corporate Strategy, PETRONAS
• Vice President (VP) of Oil Business, PETRONAS
• Managing Director/Chief Executive Officer (MD/CEO),
ASEAN Bintulu Fertilizer Sdn Bhd
• Senior General Manager of Retail Business Division,
PETRONAS Dagangan Berhad
• General Manager (Gas Processing Plant B), PETRONAS Gas Berhad
BOARD SKILLS MATRIX: INDUSTRY EXPERIENCE: BOARD SKILLS MATRIX: INDUSTRY EXPERIENCE:
• Engineering • Oil and Gas • Engineering • Oil and Gas
• Corporate Planning and • Shipping/Logistics • Operations • Shipping/Logistics
Development • Regional/International • Commercial/Marketing • Regional/International
• Operations
• Commercial/Marketing
04
LEADERSHIP
Vimala V.R. Menon Datuk William Toh Ah Wah

Senior Independent Director Independent Non-Executive Director
Nationality: Malaysian Age: 64 Nationality: Malaysian Age: 61

Gender: Female Gender: Male
13 August 2010 8 years and 6 months 13 June 2014 4 years and 8 months
• Chairman of Board Audit Listed Entities: • Chairman of NRC Listed Entities:

Committee (BAC) • PETRONAS Chemicals Group • Member of BAC • PETRONAS Chemicals Group
• Member of Nomination & Berhad Berhad
Remuneration Committee (NRC) • PETRONAS Dagangan Berhad • Carlsberg Brewery Malaysia
• Member of Board Risk • DiGi.Com Berhad Berhad (Carlsberg Malaysia)
Committee (BRC) Other Public Company: Other Public Company:
• Nil • Nil
• Fellow of the Institute of Chartered Accountants in England and Wales • Bachelor of Commerce, Concordia University, Canada
• Member of the Malaysian Institute of Accountants

• Chairman of BAC, PETRONAS Dagangan Berhad • Chairman of Carlsberg Malaysia
• Member of NRC, PETRONAS Dagangan Berhad • Member of Board Audit & Risk Management Committee, Carlsberg Malaysia
• Member of Audit and Risk Committee, DiGi.Com Berhad • Chairman of Board Nomination Committee, Carlsberg Malaysia
• Director, Jardine Cycle & Carriage, Singapore • Chairman of Board Remuneration Committee, Carlsberg Malaysia
• Chairman of Audit Committee, Jardine Cycle & Carriage, Singapore • Trustee of CHOICE Foundation
• Director, CTBAT International Company Limited (Hong Kong)
Past Experiences:
• Director, Cycle & Carriage Bintang Berhad Past Experiences:
• Director of Finance and Corporate Affairs, PROTON Holdings Berhad • Independent Non-Executive Director, Tien Wah Press Holdings Berhad
• Executive Director, Finance and Corporate Services, Edaran Otomobil • MD, British American Tobacco (Malaysia) Berhad
Nasional Berhad • Area Director of the Indonesian Cluster and the Regional Project Manager of
British American Tobacco Asia Pacific Region Limited, Hong Kong
• Director, EON Bank Berhad
• MD/CEO, Pakistan Tobacco and Area Director, South Asia Area (covering
• Director, Jardine Cycle & Carriage Limited
Pakistan, Bangladesh and Sri Lanka)
• Director, PT Astra International Tbk, Indonesia
• MD, British American Tobacco New Zealand
• Business Development Director China for British American Tobacco
Asia Pacific North
• Various senior management positions with Rothmans and Pall Malls (Malaysia)
Berhad (Now known as British American Tobacco (Malaysia) Berhad)
• Finance/Audit • Banking and Finance • Commercial/Marketing • Regional/International
• Corporate Planning and • Regional/International • Corporate Planning and
Development Development
• Commercial/Marketing • Finance/Audit
• Information Technology • Economics
05
Overview Statement
LEADERSHIP
Warren William Wilder Ching Yew Chye

Independent Non-Executive Director Independent Non-Executive Director
Nationality: United States of America Age: 61 Nationality: Malaysian Age: 65

1 July 2018 7 months 13 August 2010 8 years and 6 months
• Chairman of BRC Listed Entities: • Member of NRC Listed Entities:

• PETRONAS Chemicals Group • Member of BAC • PETRONAS Chemicals Group
Berhad Berhad
Other Public Company: • Genting Plantations Berhad
• Nil Other Public Company:
• AIA Berhad
• United Overseas Bank (Malaysia)
Berhad
• AIA General Berhad
• Masters of Business Administration (MBA) Finance, University of Chicago, • Bachelor of Science (Honours), University of London, UK
USA
• Bachelors of Chemical Engineering (Honours), University of Washington,
Seattle, USA

• Nil • Director, YTL Starhill Global REIT Management Limited
• Chairman, AIA Berhad
Past Experiences: • Chairman, AIA General Berhad
• VP of Chemicals, Saudi Aramco Shell Refinery Company
• President and CEO, Polymer, Crackers of Reliance Industries Ltd Past Experiences:
• MD/CEO of Titan Chemicals • Managing Partner for the South Asia Region, Accenture PLC
• Senior Vice President of Olefins, Polyethylene of Westlake Chemical • Geographic Council Chairman-Asia, Accenture PLC
• VP of Koch Industries • Managing Partner of the Financial Services Industry Group-Asia,
• Manager of Planning and Analysis of Union Pacific Corporation Accenture PLC
• Refinery Process Engineer, Marine Fuels and Marine Lubricant Sales • Scicon Consultancy, UK
Coordination, Ship Chartering, Crude Oil Coordinator in Exxon
Corporation
• Global Petrochemical Consultancy • Oil and Gas • Information Technology • Banking and Finance
• Corporate Planning and • Banking and Finance • Human Resource • Regional/International
Development • Regional/International • Corporate Planning and
• Operations Development
• Commercial/Marketing • Commercial/Marketing
• Engineering • Finance/Audit
06
LEADERSHIP
Dr. Zafar Abdulmajid Momin Zakaria Kasah

Independent Non-Executive Director Non-Independent Non-Executive Director
Nationality: Singaporean Age: 60 Nationality: Malaysian Age: 54

1 July 2018 7 months 31 July 2015 3 years and 7 months
• Member of BRC Listed Entities: • Member of BRC Listed Entities:

• PETRONAS Chemicals Group • PETRONAS Chemicals Group
Berhad Berhad
Other Public Company: Other Public Company:
• Nil • Nil
• Doctor of Philosophy in Business (General Management), Singapore • Bachelor of Mechanical Engineering, George Washington University, USA
Management University, Singapore • Leadership Management, Henley Business School, UK
• Master of Business Administration, Kellogg School of Management,
Northwestern University, Chicago, USA
• Master of Science in Mechanical Engineering, Purdue University, USA
• Bachelor of Mechanical Engineering, College of Engineering, Pune
University, India

• Adjunct Associate Professor, College of Business, Nanyang Technological • VP of PETRONAS Group Delivery, Project Delivery & Technology
University (Singapore) • Member of Student Development Advisory Council for Universiti
Teknologi PETRONAS
Past Experiences:
• Director of various companies within PETRONAS
• Independent Non-Executive Director, Mapletree Logistics Trust
Management (Singapore)
• Board Director, Center for Non-Profit Leadership (Singapore) Past Experiences:
• Senior Partner & MD of L.E.K Consulting (Singapore); Head of Southeast • VP of PETRONAS Technology & Engineering, Downstream Business
Asia • VP of PETRONAS Upstream Business
• Executive Vice-President, Alghanim Industries (Kuwait); Several CXO roles • CEO of Malaysia LNG Group of Companies
• Partner and MD of The Boston Consulting Group (Singapore, Dubai); Head • Various senior management positions in PETRONAS Gas Berhad,
of Asia Pacific Industrial Goods Practice, pioneering Partner of Dubai/Abu Egyptian LNG and Malaysia LNG Group of Companies
Dhabi offices
• Partner & MD, A.T. Kearney (Singapore); Head of Asia Pacific Automotive
Practice
• Various general management positions in United Technologies
Corporation, Otis Southeast Asia and Asia Pacific (Singapore)
• Various roles with General Motors (United States of America)
BOARD SKILLS MATRIX: • Engineering BOARD SKILLS MATRIX: INDUSTRY EXPERIENCE:

• Information Technology • Economics • Engineering • Oil and Gas
• Human Resource • Finance/Audit • Operations • Regional/International
• Corporate Planning and • Corporate Planning and
Development INDUSTRY EXPERIENCE: Development
• Operations • Shipping/Logistics • Commercial/Marketing
• Commercial/Marketing • Regional/International
07
Overview Statement
LEADERSHIP
Company Secretaries:
Freida Amat
Non-Independent Non-Executive Director
Hasnizaini Mohd Zain
Company Secretary
Nationality: Malaysian Age: 50
Gender: Female
Further details about Hasnizaini Mohd Zain, can be found on

DATE APPOINTED TO BOARD LENGTH OF SERVICE page 10
31 July 2015 3 years and 7 months
BOARD COMMITTEE PRESENT DIRECTORSHIPS
• Member of BAC Listed Entities:

• PETRONAS Chemicals Group
Berhad
Other Public Company:
• Nil
ACADEMIC/PROFESSIONAL QUALIFICATIONS
• Fellow of the Association of Chartered Certified Accountants (FCCA)

• Member of the Malaysian Institute of Accountants Kang Shew Meng
• Bachelor of Science in Economics majoring in Accounting and Finance
from the London School of Economics and Political Science, University
Company Secretary
of London, UK
Nationality: Malaysian Age: 58

Gender: Male
WORKING EXPERIENCE
QUALIFICATIONS
Present Appointments:
• Head of Finance Group and Corporate Services Department, PETRONAS
• Director, various companies within PETRONAS • Fellow of the Institute of Chartered Secretaries and Administrators (ICSA)
• Masters in Law (International Business Law) from Staffordshire University
Past Experiences: (UIC)
• Head of Finance and Accounts Services Department, PETRONAS • Diploma in Commerce (Business Management)
• General Manager of Corporate Finance Department, PETRONAS
• General Manager of Finance & Accounts Services, Malaysian International
Trading Corporation Sdn Bhd
• Various senior management positions within PETRONAS
Additional Information of the Board of Directors:

• Family Relationship : Save as disclosed, none of the Directors
has any family relationship with any Director and/or major
shareholder of PCG.
• Conflict of Interests : Save as disclosed, none of the Directors
has any conflict of interests with PCG.
• Conviction for Offences : None of the Directors has any
BOARD SKILLS MATRIX: INDUSTRY EXPERIENCE:
conviction for offences, other than traffic offences, if any, for
• Finance/Audit • Oil and Gas
• Commercial/Marketing • Regional/International the past 5 years.
• Economics • Public Sanction or Penalty : None of the Directors has any
• Corporate Planning and
Development sanction or penalty imposed on them by any regulatory
bodies during the financial year ended 31 December 2018.
08
Management Committee
LEADERSHIP
Managing Director/Chief Executive Officer
Description of roles:
• Responsible for the overall operational, financial and sustainable management of PCG and its
subsidiaries
• Sits on the Board of PCG and several PETRONAS Companies
Experience Matrix:
1990: Joined PETRONAS as process 2010: Led a highly specialised team,
technologist and progressed through providing technical services and
Datuk Sazali Hamzah various roles in the refinery and support to all operating plants in
petrochemical business. Held several PETRONAS, subsequently heading
Age: 52 senior management positions at Project Management Delivery
PETRONAS Penapisan (Terengganu) Division and overseeing PETRONAS
Nationality: Malaysian Sdn Bhd, PETRONAS Penapisan downstream projects of high capital
Gender: Male (Melaka) Sdn Bhd, PETRONAS Group value.
Technology Solutions, and Project 2012: Appointed as PETRONAS Penapisan
Management of Technology & (Melaka) Sdn Bhd – MD/CEO
Qualification: Engineering Division of PETRONAS. 2014: Appointed as President/CEO of PCG
• Bachelor of Chemicals Engineering, Lamar Involved in the implementation and 2015: Appointed as Result Manager for the
University, USA commercial operation of several Technology Workstream of PETRONAS’
• Chartered Fellow of the Institution of major PETRONAS projects such as special initiative, Project CACTUS
Chemicals Engineers (IChemE) UK Kertih Aromatics Project, Melaka Base 2016: Appointed as PETRONAS VP and
• Board member of IChemE (Malaysian Branch) Oil Plant, Melaka Refinery Revamp, remained as MD/CEO PCG
• Senior Management Program, London and Co-Generation Power Plant
Business School, London, UK 2003: Selected as member of PETRONAS
• Advanced Management Program, The Corporate Strategic Study and
Wharton School, University of Pennsylvania, Implementation, and led a change
USA programme that enhanced plant
performance and operational
excellence
Chief Financial Officer
• Responsible for the management of all financial and fiscal aspects of PCG and its subsidiaries
as well as risk management, supply chain management, investor relations and information
systems
• Sits on the Board of several PETRONAS companies
Experience Matrix:
1994: Arthur Andersen – Audit & advisory 2010: PETRONAS – Senior General Manager,
Rashidah Alias 1998: PETRONAS – Various posts in areas Finance & Accounts Services
of corporate planning, accounting 2013: PETRONAS – Senior General Manager,
Age: 46 and shared services; and managing Group Treasury
specialised assignments involving 2015: Appointed as PCG Chief Financial
Nationality: Malaysian initial public offerings, corporate Officer
Gender: Female bond issuance, corporate strategy
implementation and groupwide
process transformation
Qualification:
• Bachelor of Commerce in Accounting,
University of New South Wales, Australia
• Fellow of the Chartered Accountants Australia
and New Zealand
• Advanced Management Program, Harvard
Business School
• Member of the Malaysian Institute of
Accountants
09
Overview Statement
LEADERSHIP
Head of Commercial
• Responsible for PCG's overall commercial excellence
• CEO of PETRONAS Chemicals Marketing Sdn Bhd
• CEO of PETRONAS Chemicals Marketing (Labuan) Ltd
• Sits on the Board of several PETRONAS Companies
Experience Matrix:
Shamsairi Mohd Ibrahim 1991: Malaysia LNG Sdn Bhd – Marketing
Executive
2008: Optimal Group of Companies – Held
various commercial positions including
1999: Malaysian International Trading Business – Olefins/Derivatives
Age: 52 Corporation (Japan) Sdn Bhd – Held Department
various positions including Executive 2011: PETRONAS – Head (Commercial
Nationality: Malaysian
Marketing, Executive Materials and – Olefins & Derivatives) and later
Gender: Male Supply and Manager for Japan Head (Marketing & Sales – Olefins &
Operations Centre Derivatives)
2004: Malaysia LNG Sdn Bhd – Held 2017: PCG – Head of Commercial
Qualification: various managerial role including
• Associate Degree in Mechanical Engineering, Manager (Japan Operations – Sales
Tokyo National College of Technology, Japan & Marketing Department), and Senior
• Master of Business Administration (Exec) Manager of Marketing & Trading
Royal Melbourne Institute of Technology Sector 2
Head of Manufacturing
• Responsible for PCG’s overall operational excellence
Experience Matrix:
1991: PETRONAS Penapisan (Terengganu) 2005: PETRONAS Penapisan (Terengganu)
Sdn Bhd – Executive (Instrument) Sdn Bhd – Senior Manager
1995: PETRONAS Penapisan (Terengganu) (Maintenance)
Mahadzir Rani Sdn Bhd – Executive (System & 2007: PETRONAS Penapisan (Terengganu)
Control) Sdn Bhd – Senior Manager (HSE)
Age: 51 1997: Aromatics Malaysia Sdn Bhd – Senior 2009: MTBE Asset Department – Senior
Project Engineer Manager (MTBE Asset)
Nationality: Malaysian 2000: PETRONAS Penapisan (Terengganu) 2011: PETRONAS Chemicals Fertiliser Kedah
Gender: Male Sdn Bhd – Manager (Instrument Sdn Bhd – Head of Plant
Engineering) 2014: PETRONAS Chemicals Methanol Sdn
2004: PETRONAS Penapisan (Terengganu) Bhd – Head of Plant
Qualification: Sdn Bhd – Manager (Aromatics 2017: PCG – Head of Manufacturing
• Bachelor of Science in Electrical Engineering Maintenance)
in Polytechnic University, New York, USA.
Head of Strategic Planning & Ventures
• Responsible for PCG’s overall strategic planning, business development and ventures
management
Experience Matrix:
1987: PETRONAS – Various project 2010: PETRONAS Downstream Business –
engineering and corporate planning Head of Office of the Executive Vice
Akbar Md Thayoob roles President
1999: Phu My Plastic & Chemicals Co Ltd 2012: PETRONAS Dagangan Berhad – Head
Age: 55 (PMPC), Vietnam – Deputy - General of Retail Business
Director/CEO 2014: PCG – Head of Commercial –
Nationality: Malaysian 2004: PMPC – General Director/CEO responsible for Marketing and Sales
Gender: Male 2008: PETRONAS Chemicals LDPE Sdn Bhd Excellence
– CEO 2017: PCG – Head of Strategic Planning &
Ventures
Qualification:
• Bachelor of Science in Civil Engineering,
University of West Virginia, USA
• Premier Business Management Program,
Harvard Business School, USA
10
LEADERSHIP
Head of Human Resource Management
• Responsible for PCG’s people strategies, talent development and management, as well as
human resource services
Experience Matrix:
1992: PETRONAS Dagangan Berhad – 2008: PETRONAS – Senior Manager of
System Analyst People Strategy Design and Pilot
2000: PETRONAS Dagangan Berhad – 2009: PETRONAS Carigali Sdn Bhd – Head of
Datin Zarina Zakaria @ Mohamad Executive People Development (HRM) People Strategy and Planning
2005: PETRONAS Dagangan Berhad – 2012: PETRONAS Carigali Sdn Bhd – Head
Age: 51 Manager People Development (HRM) of Human Resource Management
2007: PETRONAS – Manager of People (Malaysia Operation)
Strategy Design and Pilot 2014: PCG – Head of Human Resource
Gender: Female Management
Qualification:
• Bachelor of Science in Business Administration,
University of Southern California, USA
Chief Innovation & Technology Officer
• Responsible for PCG’s product development, customer application co-development,
technical support, product stewardship functions to deliver innovative customer solutions
Experience Matrix:
1994: Polyethylene Malaysia Sdn Bhd 2010: PETRONAS, Downstream Business
(PEMSB) – Held various position – Head Strategic Planning & Brand,
including Polymer Technologist, Office of VP Downstream Marketing
Ch'ng Guan How Technical Service Engineer, 2013: PETRONAS Lubricant International
Compound Application Technologist Group – MD/CEO PLI China and Head,
Age: 49 and Export Sales Manager Greater China Region (PLI Group
2002: Petlin (Malaysia) Sdn Bhd – Product Global Leadership Team)
Nationality: Malaysian Manager and Senior Commercial 2017: PCG – Chief Innovation & Technology
Gender: Male Manager Officer
2008: PETRONAS – Head Strategy &
Portfolio, Oil & Petchem Business,
Qualification: Group Strategy Planning
• Bachelor of Industrial Technology (Hons), Major
in Polymer Technology, Universiti Sains Malaysia
• Senior Management Development Program
INSEAD
Head of Legal and Corporate Secretariat
• Responsible for PCG's legal affairs and company secretarial services
Experience Matrix:
2000: Messrs. Badri Kuhan Yeoh & Ghani – 2011: PETRONAS Group Legal – Legal
Advocate & Solicitor Counsel, Downstream Marketing &
2000: Bank Islam – Deputy Manager, Special Project
Hasnizaini Mohd Zain Industrial Relations 2013: PETRONAS Group Legal – Senior Legal
2006: PETRONAS Group Legal – Legal Counsel, Refining & Trading
Age: 44 Officer, Corporate Services & 2014: PETRONAS Group Legal – Head, Legal
Technology & Corporate Secretariat for PETRONAS
Nationality: Malaysian 2010: PETRONAS Group Legal – Legal Dagangan Berhad
Gender: Female Counsel, Corporate Services & 2018: PETRONAS Group Legal – Head, Legal
Technology & Corporate Secretariat for PCG
Qualification:
• Bachelor of Laws, University of Leeds, UK
• Certificate of Legal Practice , Malaysia
• Masters of Comparative Laws, International
Islamic University, Malaysia
11
Overview Statement
LEADERSHIP
Head of Health, Safety & Environment
• Responsible for PCG’s overall HSE performance, process safety and sustainable development
Experience Matrix:
1997: PETRONAS Second Ethylene Cracker 2012: PETRONAS Chemicals Glycols Sdn Bhd
Project – Electrical Maintenance – Head of Ethylene Oxide Glycols
Engineer 2014: PCG – Head of Operation Work Process
2001: PETRONAS Chemicals Derivatives Sdn 2015: PCG – Head of HSE
Ahmad Zaki Daud Bhd – Electrical Production Engineer
2009: PETRONAS Chemicals Derivatives Sdn
Age: 46 Bhd – Utilities Manager
Gender: Male
Qualification:
• Bachelor of Science (Hons) in Electrical
Engineering, University of Brighton, UK
Head of Corporate Affairs & Administration
• Responsible for planning, development and implementation of all PCG’s corporate branding,
stakeholder and media management, communication and reputation management
Experience Matrix:
1997: PETRONAS Dagangan Berhad 2013: PCG – Head of Corporate
– Finance and accounts, Communications & Administration
complementary business, retail sales 2016: PCG – Head of Corporate Affairs &
Siti Azlina Abd Latif and brand communications Administration
2007: PETRONAS Dagangan Berhad – Head
Age: 47 of Brand Communications
Gender: Female
Qualification:
• Bachelor of Arts in Accounting, University of
Portsmouth, UK
• Masters of Business Administration, Cardiff
University, UK
Head of Project Directorate
• Responsible for the delivery and execution of PCG’s key projects
Experience Matrix:
1993: PETRONAS Methanol (Labuan) 2009: PCG – Head of SAMUR Project
Sdn Bhd – Shift Superintendent 2012: PETRONAS Chemicals Fertiliser
2000: PETRONAS – Project Engineer, Sabah Sdn Bhd – Head of Project
Second Ethylene Cracker Project Management
Mohd Zakir Jaafar 2003: OPTIMAL Group of Companies – 2014: PCG – Held various positions in
Held various positions including EOG Project Directorate including Head of
Age: 48 Utilities Specialist and Improvement Project Services and Head of Front-End
Leader Engineering
Nationality: Malaysian 2006: PETRONAS Methanol (Labuan) Sdn 2019: PCG – Head of Project Directorate
Gender: Male Bhd – Head of Project Management
and Senior Manager of Technical
Services
Qualification:
• Bachelor Of Chemical & Bio Process
Engineering, University Of Bath, UK
12
Our Governance Structure
LEADERSHIP
Board of Directors
Senior Independent Director

Non-Independent
(SID)
Chairman Non-Executive Directors Independent Non-Executive
Acts as the point of
Responsible for the orderly (NINEDs) Directors (INEDs)
contact between Non-
conduct and function of Provide in-depth Provides independent
Executive Directors (NEDs)
the Board knowledge and insight from judgement and views
and Chairman as well as
PETRONAS' perspective
shareholders
Strategic KPIs, progress and implementation
• Financial Reporting • Board Performance

• Risk Management
• Internal Reporting & Remuneration
Board Audit Nomination and Board Risk Committee

Committee (BAC) Remuneration (BRC)
Committee (NRC)
3 INEDs 3 INEDs
1 NINED 3 INEDs 1 NINED
Internal Audit
Department
Senior Management's Performance &

Remuneration
Quarterly Financial Reporting
MD/CEO
Responsible for the overall operations of the business, organisational
effectiveness and implementation of the Group's strategies and policies
Monthly reporting,
performance & strategic
KPIs
Project Steering Management Risk Management

Committee Committee Committee
Regular reporting/progress
updates
Working Group
Business Leadership Team, Manufacturing Leadership Team,
HSE Committee, Sustainable Development Working Committee
Decision-making process
13
Overview Statement
LEADERSHIP
The Board Charter assigns responsibility for strategic direction and control of the Group to
the Board.
The Board exercises this control by way of the Group's governance framework, which includes detailed reporting to the Board and its
Committees, and a system of assurances on internal controls.
The Board’s Responsibilities and Duties During the year, the Board saw changes to its composition, where Warren
William Wilder and Dr. Zafar Abdulmajid Momin were appointed as INEDs
The Board is entrusted with the responsibility to promote the success in July 2018, while Dong Soo Kim resigned in August 2018.
of the Group by directing and supervising the Group’s affairs in a
responsible and effective manner. Each Director has a duty to act in In considering new appointments to the Board, the Board through NRC,
good faith and in the best interest of the Company. The Directors takes into account corporate leadership skills, experience and expertise
are aware of their collective and individual responsibilities to all required to advance the strategic direction of the Company. The NRC
shareholders for the manner in which the affairs of the Company are ensures that it has the right balance of skills, experience, independence
managed, controlled and operated. and business knowledge necessary to discharge its responsibilities
in keeping with the highest standards of governance. In the Board’s
The Board Charter assessment, all Directors have the knowledge, skills and experience to
make a meaningful contribution to the business of the Company. None
The Board Charter sets out the practices and processes adopted of the Independent Directors have appointed alternate directors.
to enable the Board to discharge its responsibilities. The Board
Charter is available on the Company’s official corporate website, Separate roles of Chairman and MD/CEO
www.petronaschemicals.com together with the Terms of References
(TOR) of all its Committees. The Board is satisfied that it fulfilled these The positions of Chairman and MD/CEO are held separately by
duties and obligations during the year under review. Datuk Md Arif Mahmood and Datuk Sazali Hamzah respectively.
This segregation ensures a clear distinction between the Chairman’s
Board Balance and Composition responsibility to manage the Board and the MD/CEO’s responsibility
to manage the Company’s business. The respective roles and
The Board comprises nine Directors as at the date of this responsibilities of the Chairman and MD/CEO can be viewed under
report, of whom one is an Executive Director and eight the Board Charter in the Company's official corporate website,
are NEDs. 22% of the directors are women. The Board has determined www.petronaschemicals.com. The MD/CEO is assisted by the
that five of the INEDs are independent in accordance with the MMLR Management Committee in managing the business on a day-to-day
of Bursa Malaysia. The Board is also of the view that all INEDs exercise basis, which he consults regularly. The Management Committee ensures
independent judgement at all times. effective systems, controls and resources are in place to execute business
strategies and decisions taken by the Board and/or the MD/CEO.
Right balance of skills and experience to make a meaningful

BOARD OF DIRECTORS contribution to the business of the Company
NINEDs Board Skills and Diversity

• Datuk Md Arif Mahmood The Board consists of Directors with a diverse range of experience including oil
• Zakaria Kasah and gas, engineering, finance and commercial.
• Freida Amat
Skills
Executive Director
• Datuk Sazali Hamzah • Industry Experience • Operations
• Finance/Audit • Corporate Planning and Development
INEDs • Economics • Human Resource
• Vimala V.R. Menon (SID) • Engineering • Information Technology
• Datuk William Toh Ah Wah • Commercial/Marketing • Global Petrochemical Consultancy
• Warren William Wilder
• Ching Yew Chye
• Dr. Zafar Abdulmajid Momin Tenure
0 to 2 2 to 4 4 to 7 7 to 9
YEARS YEARS YEARS YEARS
2 Directors 3 Directors 2 Directors 2 Directors
14
LEADERSHIP
Independence perspective, knowledge, skill, regional and and financial performance reviews, major
industry experience, cultural and gender in investments and financial decisions,
Our Board recognises the important order to ensure that the Company retains management performance assessment,
contributions that INEDs make to good its competitive advantage. The Board also changes to the Management and control
corporate governance. All Directors, supports the country's aspirational target of structure within the Group, including key
regardless of their independent status, are 30% representation of women directors. policies & procedures and limits of authority.
required to act in the best interests of the
Company and to exercise unfettered and In this regard, the NRC is empowered to A total of seven Board meetings were
independent judgment. To date, all five INEDs review and evaluate the composition and held during the year. In addition to that,
satisfy the following criteria: performance of the Board annually, as well the Company conducted Board Strategic
as assessing qualified candidates to occupy Conversation with the Management
a) independent from Management Board positions. Committee of PCG on 24 - 25 September
and free from any business or other 2018. The purpose of the conversation is to
relationship which could interfere The NRC will continue to focus on diversity provide the Board with updates on market
with independent judgement or the when assessing new candidates for Board outlook, external environment analysis and
ability to act in the best interests of the memberships, as well as evaluating the the Group’s strategic and growth plans.
Company. performance of the Board and its individual Aside from Board meetings, urgent matters
members. In connection with its effort to were also decided via Directors' Circular
b) not involved in the day-to-day create and maintain a diverse Board, the NRC Resolutions.
operations of the Company other will:
than when collective Board approval In discharging their responsibilities, during
is required. This mitigates the risk of a) adhere to the recruitment and sourcing each Board and Committee meeting, the
undue influence from third parties process that seeks to include diverse INEDs were inquisitive in the quest for better
and allows INEDs to exercise fair candidates, including women in any understanding of items being discussed,
judgement. director search. vocal during discussions and judicious in
b) assess the appropriate mix of diversity the decision-making process. They were
c) declare their interest or any possible including gender, ethnicity, age, skills, impartial in their views, with the Company’s
conflict of interest in any matter experience and expertise required on and stakeholders’ best interest at the
tabled prior to the commencement the Board and address gaps, if any. forefront of every major decision.
of Board meetings. Directors are able c) make recommendations to the Board
to ascertain their involvement in any in relation to the appointments and The respective Chairmen of the BAC and NRC
proposal as the papers are disseminated maintain an appropriate mix of diversity, also update the Board on the proceedings of
to them at least five days before each skills, experience and expertise on the their respective Committee meetings. The
meeting. In the case of conflict of Board. minutes of each Board meeting are circulated
interest, Directors are required to d) periodically review and report to the in a timely manner. All proceedings of Board
recuse themselves and abstain from Board on requirements in relation to meetings are duly recorded in the minutes
deliberation to allow unbiased and free diversity of the Board, if any. of each meeting and signed minutes of
discussion and decision making. This each board meeting are properly kept by the
also holds true for NINEDs. A copy of the Board Diversity policy is available Company Secretary. Minutes of the Board
at the Company's official corporate website, meeting are tabled for confirmation at the
In line with the exemplary practice as www.petronaschemicals.com. next Board meeting.
recommended by the MCCG2017, the
Company has adopted a tenure policy Board Meetings and Attendance All Directors complied with the minimum
whereby the INED's total tenure is capped at attendance requirement of at least 50% of
nine years. The meetings of the Board and its Board meetings held during the financial year
Committees for the financial year 2018 pursuant to the MMLR.
Board Diversity were pre-scheduled in November 2017 to
facilitate the Directors in planning ahead
PCG has a diversity policy to ensure that and incorporate the meeting dates into their
the mix and profiles of our Board members, respective schedules. This also serves to
in terms of age, ethnicity and gender, provide the members with ample notice of
provide the necessary range of perspectives, the meetings.
experience and expertise required to achieve
effective stewardship and management. We The Board has a formal schedule of matters
believe that a truly diverse and inclusive reserved at Board meetings which includes
Board will leverage differences in thought, corporate plans, annual budgets, operational
15
Overview Statement
The Board 2018 Activities & Priorities
LEADERSHIP
Details of attendance of each Director on the Board, Board Committees and 20th Annual General Meeting for the financial year ended
31 December 2018 are as follows:
Meeting Attended/Held
Name of Directors BOARD BAC NRC AGM
Non-Independent Non-Executive Director (Chairman)

Datuk Md Arif Mahmood 5/7 - - 1/1
Executive Director
Datuk Sazali Hamzah 7/7 - - 1/1
Independent Non-Executive Directors

Vimala V.R. Menon (SID) 7/7 5/5 3/3 1/1
Datuk William Toh Ah Wah 7/7 5/5 3/3 1/1
Warren William Wilder 3/3 - - -
Ching Yew Chye 7/7 5/5 3/3 1/1
Dr Zafar Abdulmajid Momin 3/3 - - -
Non-Independent Non-Executive Directors

Zakaria Kasah 7/7 - - 1/1
Freida Amat 7/7 5/5 - 1/1
Independent Non-Executive Director who has resigned since the last report
Dong Soo Kim (resigned on 16 August 2018) 4/4 5/5 2/2 1/1
The average meeting attendance is calculated based on the attendance from the date of appointment to the date of resignation. Warren William Wilder and
Dr Zafar Abdulmajid Momin were appointed as directors on 1 July 2018.
Board Committees
To assist the Board in discharging its duties, the Board has established three Board Committees, namely, the NRC, the BAC and a newly
established committee i.e the BRC which was established on 25 February 2019. The BRC consists of 3 INEDs and 1 NINED namely Warren
William Wilder (Chairman), Vimala V.R. Menon, Dr Zafar Abdulmajid Momin and Zakaria Kasah. The reports of the NRC and BAC are set out on
pages 19 – 28 of this ACG.
Supply and Access to Information
Prior to each board meeting, the agenda and a set of Board papers encompassing qualitative and quantitative information relevant to the
business of the meeting are circulated to all Directors five days prior to the meeting dates. This enables the Directors to have sufficient time
to peruse the Board papers and seek clarification or further details from the Management or the Company Secretary before each meeting to
ensure preparedness for the meeting. Any Director may request any matters to be included in the agenda. Urgent papers may be presented and
tabled at a meeting under the item “Any Other Business”, upon endorsement by the MD/CEO and approval by the Chairman. The content of the
Board papers prepared are comprehensive and include objectives, background, critical issues, implications, risks, strategic fit, recommendations
and other pertinent information to enable informed decision making by the Board.
Presentations and briefings by the Management and relevant external advisors, where applicable, were also held at board meetings to advise the
Board. In this regard, relevant information was furnished and clarification was given to assist the Board in making a decision.
The Directors can access the Board papers online through a secured collaborative software and collaborate with other Board members and the
Company Secretary electronically. The online accessibility facilitates the Directors to read and review documents or communicate with other
Board members at any time.
The Directors have direct access to the Management and have unrestricted access to any information relating to the Group to enable them to
discharge their duties. The Directors also have direct access to the advice and services of the Company Secretary and are regularly updated on
new statutory and regulatory requirements relating to the duties and responsibilities of the Directors. The Directors, whether as a full Board or
in their individual capacity, may seek independent professional advice at the Company’s expense in furtherance of their duties.
16
LEADERSHIP
The diagram illustrated below shows the key areas of focus for the Board which appear as items on the Board’s agenda at respective meetings
throughout the year. Concentrated discussion of these items assists the Board in making the right decisions taking into account the long-term
implications to the business and its stakeholders.
OVERVIEW OF VARIOUS AGENDA ITEMS ON THE BOARD AND BOARD COMMITTEES MEETINGS 2018
• Q4 2017 Business Performance and Audited • FY2018 Performance planning R • Q1 2018 Corporate Risk Profile Monitoring Update
F Financial Statements and KPIs for MD/CEO and his • Updates on various PCG Projects/Agreements
direct reports S • Funding strategy on CAPEX for PCG Subsidiaries
• Second Interim Dividend for FY2017
• Q4 2017 Corporate Risk-Profile Monitoring • Revision to the Tenure of INED • PCG Group Shariah Compliance Review
R C and Amendment on Board F
Update • Q1 2018 Business Performance and Quarterly Report
Selection Criteria
S • Update/Approval on various PCG Projects • Directors’ Service Contracts for • Resignation and Appointment of Company Secretary
• FY2017 Annual Report Statements Services as Directors for PCG • Relief from requirement to Form and Content of
• Litigation/Arbitration Report • Companies Act: Indemnity and C Financial Statements and Directors’ Report Pursuant
• Board Evaluation Effectiveness FY2017 Directors & officers Liability to Section 225(1) of the CA 2016
C Insurance for PCG Group
• Directors’ Remuneration Framework and • Directors' shareholding, directorship and movement
• Directors' shareholding,
Revision to the Remuneration Package for NEDs directorship and movement in in substantial shareholding
• Directors' Training substantial shareholding • Nomination of INED
Jan Feb Mar Apr May Jun
F Financial S Strategy R Risk C Corporate Governance and Compliance
• Q2 2018 Business Performance and Quarterly • Updates on various F • Q3 2018 Business Performance and Quarterly Results
F Results S PCG Projects/ • Q3 2018 Corporate Risk Profile Monitoring Update
R
• Interim Dividend for the FYE 2018 Agreements • Corporate Risk Appetite Review for FY2019
R • Q2 2018 Corporate Risk Profile Monitoring Update • PETRONAS • Business Plans and Budget FY2019 - 2023
• Update/Approval on various PCG Projects/ Chemicals Group S • Update/Approval on various PCG Projects Agreements/RRPTs
S C
Agreements/RRPTs Corporate Privacy • Group Positioning on the Application of MCCG 2017
• Update on new Companies Act 2016 Policy • Review of potential candidates for INED position
• Litigation/Arbitration report C • Board and key management Succession Plan
C • Resignation of INED and cessation as a member • Employee’s Remuneration Package Benchmark
of BAC & NRC • Directors' shareholding, directorship and movement in
• Directors' shareholding, directorship and substantial shareholding
movement in substantial shareholding
Jul Aug Sep Oct Nov Dec
Board Board Audit Committee Nomination and Remuneration Committee
Directors’ Indemnity
PCG maintained a Directors’ and Officers’ Liability Insurance throughout the financial year. Directors and Officers are indemnified against any
liability incurred by them in the discharge of their duties while holding office as Directors and Officers of the Company.
17
Overview Statement
LEADERSHIP
Board Induction
All new Directors appointed to the Board receive a comprehensive induction programme. This includes briefings from members of the Management
Committee covering key areas of the business, an overview of the Group’s financial risk management processes, the internal audit function,
innovation and technology, and the corporate governance framework within the Group. The induction programme helps the new Directors to
familiarise themselves with the Group’s businesses. In addition, Directors were also updated on ongoing and potential projects.
Continuing Development Programme for Directors
The two newly appointed Directors have attended the Mandatory Accreditation Programme as required under the MMLR of Bursa Malaysia.
In line with Paragraph 15.08 of the MMLR, the Directors recognise the importance and value of attending conferences, training programmes
and seminars in order to keep themselves abreast with the development and changes in the industry in which the Group operates, as well as to
update themselves on new statutory and regulatory requirements. During the year under review, the Directors have attended and participated in
programmes, conferences and forums that covered the areas of corporate governance, financial, relevant industry updates and global business
developments which they considered as useful in contributing to the effective discharge of their duties as Directors. In addition, the Directors
also participated in the plant visit at the Pengerang Integrated Complex in Johor.
The Directors' participation in seminars and training programmes in various capacities such as delegates and/or speakers are specified in more
detailed below:
No. Director Programmes attended in 2018

1. Datuk Md Arif Mahmood • World Economic Forum, Davos
• 3rd Offshore Technology Conference (OTC) Asia 2018, Kuala Lumpur
• As speaker at the Asia Petrochemical Industry Conference (APIC) 2018, Kuala Lumpur
• As speaker at the Abu Dhabi International Petroleum Exhibition & Conference (ADIPEC) 2018,
Abu Dhabi
2. Datuk Sazali Hamzah • As speaker at Invest Malaysia 2018
• As Keynote Speaker at Platts 7th Asian Petrochemicals Market 2018, Singapore
• Asia Petrochemical Industry Conference (APIC) 2018, Kuala Lumpur
• World Economic Forum – Annual Meeting of the Champion, Tianjin, China
• As speaker at the Abu Dhabi International Petroleum Exhibition & Conference (ADIPEC) 2018
3. Vimala V.R. Menon • Understanding Fintech and Its Implication for Banks
• Asia Petrochemical Industry Conference (APIC) 2018
• Introduction to Corporate Liability Provision
• Malaysian Financial Reporting Standards (MFRS 9, 15 & 16) updates by KPMG
• Plant visit to Pengerang Integrated Complex, Johor
4. Ching Yew Chye • Singapore Institute of Directors Master Class – Anticipating Risk and Precaution at Board Level
• MFRS 17 updates by AIA
• Financial Institutions Directors’ Education (FIDE) Programme – Briefing on Differential Levy
System Framework to Board of Directors
• Financial Institutions Directors’ Education (FIDE) Programme – Fintech Disruption to be
Embraced
• Financial Institutions Directors’ Education (FIDE) Programme – Board Conversations: Dialogues
with Senior Officials of Bank Negara Malaysia (Insurance Companies & Takaful Operators)
5. Datuk William • Audit Committee Conference 2018 by Malaysian Institute of Accountants
Toh Ah Wah • Advocacy Programme on Corporate Governance (CG) Assessment using the revised ASEAN CG
Scorecard methodology
• Independent Directors’ Programme: The Essence of Independence – The Iclif Leadership and
Governance Centre
18
LEADERSHIP
No. Director Programmes attended in 2018

6. Warren William Wilder • Plant visit to Pengerang Integrated Complex, Johor
• Mandatory Accreditation Programme (MAP) – The Iclif Leadership and Governance Centre
7. Dr Zafar Abdulmajid • Asia Petrochemical Industry Conference (APIC) 2018
Momin • Plant visit to Pengerang Integrated Complex, Johor
• Mandatory Accreditation Programme (MAP) – The Iclif Leadership and Governance Centre
• The 8th Asian Surfactants Conference & Surfactants Business Essentials Training Course
8. Zakaria Kasah • As panelist at PETRONAS Tactical Excellence C4 W3
• 3rd Offshore Technology Conference (OTC) Asia 2018
• HSE SPE (Abu Dhabi) Panel Session No. 5 – Leadership and Collaboration/Governance/HSE
across the value chain
• Corporate Integrity Advocacy Program (CIAP)
• PETRONAS Top Leaders Dialogue
• As a speaker and participant at Upstream Industry Benchmarking (UIBC) 2018
9. Freida Amat • Audit Committee Conference 2018 by Malaysian Institute of Accountants
• Malaysian Financial Reporting Standards Updates for CFOs by KPMG
• Ernst & Young C-Suite Forum 2018
Qualified and Competent Company Secretaries
The Company has two company secretaries who are qualified to act as company secretary in accordance with Section 235 of
the Companies Act 2016. During the year under review, Noor Lily Zuriati Abdullah vacated her position as company secretary
effective 22 May 2018 and was replaced by Hasnizaini Mohd Zain, a lawyer by profession. With this appointment, the secretaries
of the company are Hasnizaini Mohd Zain and Kang Shew Meng. Both act as advisors to the Board, particularly with regard to
the Company's Constitution, policies and procedures and its compliance with regulatory requirements, codes, guideline and
legislations. The Company Secretaries ensure that discussions and deliberations at the Board and Board Committee meetings
are well documented and subsequently communicated to the relevant Management for appropriate actions.
The Company Secretaries constantly keep abreast with the evolving regulatory changes and developments in corporate
governance through continuous training. During the year under review, Hasnizaini has attended the following trainings:
• Related Party Transaction Workshop • Legally Speaking: The Malaysian Anti-Corruption

• Advocacy Programme on CG Assessment Using the Commission (Amendment) Act 2018 – The Corporate
Revised ASEAN Corporate Governance Scorecard Liability Provision
Methodology • PETRONAS’ Inaugural Company Secretaries Conference
• Asia Petrochemical Industry Conference (APIC) 2018 2018
• Legally Speaking: Risk Management and Protection • Duke Leadership Program at Duke University Fuqua
Against Officer and Director Liability School of Business, North Carolina, USA
Whilst Kang Shew Meng is a Company Secretarial practitioner and he is often invited as a speaker at company secretarial
conferences. In this regard, both the Company Secretaries are qualified and competent in their roles.
19
Overview Statement
Nomination and Remuneration Committee Report
EFFECTIVENESS
Nomination and Remuneration

Committee Report
Terms of Reference
The Nomination and Remuneration Committee (NRC) is governed

by its Terms of Reference (TOR), which are consistent with the
requirements of the MMLR and MCCG 2017. The TOR of the NRC
is accessible to the public on PCG’s official corporate website at
www.petronaschemicals.com.
Composition
The NRC comprises exclusively Independent Non-Executive

Director (INED), in compliance with the requirement of
the MMLR, which provides that the NRC must comprise
exclusively non-executive directors, a majority of whom must
be independent. The composition also observed MCCG 2017
where the NRC is chaired by a Senior Independent Director or
an Independent Director. In the case of PCG, the NRC is chaired
by an Independent Director.
Datuk William Toh Ah Wah During the year, the NRC’s composition was reduced to three
Chairman members due to the resignation of Dong Soo Kim as Director
on 16 August 2018.
Members and their attendance
The NRC was established to enhance the efficiency and
transparency of the Company’s governance process and
Datuk William Toh Ah Wah
to assist the Board in matters regarding, among others, the
Chairman, Independent Non-Executive Director
nomination and appointment of Directors and key management
personnel. In view of the same composition of members, PCG
No. of Meetings Attended: 3/3 opts to combine its NRC for practical purposes.
Vimala V.R. Menon
In carrying out its duties and responsibilities, the NRC has the
following authority:
No. of Meetings Attended: 3/3 • To seek any information it requires from the Company's
employees, officers and/or for external parties;
Ching Yew Chye
• To engage external consultants and other advisers or
Independent Non-Executive Director
otherwise obtain independent legal or other professional
services it requires, at the expense of the Company; and
No. of Meetings Attended: 3/3 • To request sufficient resources to undertake its duties
including access to the Company Secretary.
Dong Soo Kim
(resigned as director on 16 August 2018 and ceased as a
member of NRC on the same date)
Role and Philosophy
No. of Meetings Attended: 2/2 The NRC is responsible for regularly reviewing and making
recommendations to the Board on the structure, size and
composition of the Board. The Committee furthermore ensures that
an appropriate balance exists between Executive, Non-Executive
and Independent Directors. It assists with the identification and
nomination of new directors and appointment by the Board and/or
shareholders and oversees the training of directors.
20
EFFECTIVENESS
Meetings and Attendance
NRC convened three meetings during the financial year 2018.

PROCESS FLOW FOR APPOINTMENT OF A DIRECTOR
In addition, urgent decisions were approved via two NRC
Circular Resolutions. The attendance of the members are
depicted on pages 15 and 19 of this ACG. MD/CEO, Company Circumstances giving rise to the
Secretary, Head of Human Resource Management Division
1 appointment of Directors
and any other persons deemed necessary by the NRC are
invited to attend and present for deliberations which require
their input or advice. The Company Secretary acts as Secretary The NRC deliberates selection criteria
to the NRC. 2 combining competencies and attributes
required
The NRC meetings for the financial year 2018 were

pre-scheduled in November 2017, to facilitate the members
in planning ahead and incorporating the NRC meeting dates 3 Search for candidates
into their respective schedules. This also serves to provide the
members with ample notice of the meetings.
The agenda and a set of meeting papers encompassing 4 Assess and shortlist the potential candidates
information relevant to the business of the meeting are

distributed to the NRC Members no less than five days from
the meeting date via a secured collaborative software for
deliberation at the respective NRC meetings. The online
5 Interview shortlisted candidates
accessibility facilitates the NRC members to read and review

documents or communicate with other NRC members at any
time. The NRC’s Circular Resolutions were also circulated via Deliberation by the NRC on the suitability
6 of the candidate
the secured collaborative software to the members of NRC
for approval.
All proceedings of the NRC meetings are duly recorded in the 7 PCG Board's Approval
minutes of each meeting and the signed minutes of each NRC
meeting are properly kept by the Company Secretary. Minutes
of the NRC meeting are tabled for confirmation at the next
NRC meeting, after which they are presented to the Board for 8 Orientation/Induction
notation.
Board Appointment Process Continuous training and annual

9 performance assessment
The Company maintains a formal and transparent procedure
for the appointment of new directors. Nomination of NINEDs
is made by PETRONAS, being the majority shareholder
of the Company. Search for potentials INEDs is made
through engagement of a professional recruitment firm or Directors’ Re-Election and Re-Appointment
recommendations from existing Board members in identifying
suitable qualified candidates to fill the vacant positions. The NRC is responsible for recommending to the Board,
directors who are standing for re-election at the AGM pursuant
In its selection of suitable candidates, the NRC adheres to to Article 93 and Article 99 of PCG’s Constitution.
the guidelines stipulated in the Board Selection Criteria.
All potential candidates are first considered by the NRC, Directors’ rotation list was presented to NRC for endorsement
taking into account mix of skills, competencies, experience, prior to recommendation to the Board and thereafter to the
integrity, personal attributes and time commitment required shareholders for approval. In assessing the candidates, the NRC
to effectively discharge his or her role as a director. Diversity takes into consideration their contribution and performance
in terms of age, gender and ethnicity are also considered based on the Board Effectiveness Evaluation (BEE).
during the selection process.
21
Overview Statement
EFFECTIVENESS
Article 93 of the Company’s Constitution provides that re-election at the forthcoming 21st AGM, pursuant to Article
one-third of the Directors of the Company for the time 99 of the Company’s Constitution:
being shall retire by rotation at an AGM at least once in i) Warren William Wilder
three years but shall be eligible for re-election at the AGM. ii) Dr Zafar Abdulmajid Momin
At the forthcoming 21st AGM, three directors will be retiring
in accordance with Article 93, namely Datuk Sazali Hamzah, Board Effectiveness Evaluation
Freida Amat and Ching Yew Chye. Datuk Sazali Hamzah and
Freida Amat, being eligible for re-election, have given their Every year, a formal evaluation is undertaken to assess the
consent for re-election at the AGM whilst Ching Yew Chye effectiveness of the following:
has expressed his decision to retire at close of the AGM. In a) The Board as a whole and the Board Committees.
view thereof, Ching Yew Chye will retire from office upon the b) Contribution of each individual Director (Peer and
conclusion of the 21st AGM of the Company. Self-evaluation).
c) Independence of Independent Directors.
The Board at its meeting held on 25 February 2019, approved
the NRC's recommendation for the following directors For the year under review, the BEE process was internally
who are due for re-election at the forthcoming 21st AGM, conducted.
be considered for re-election pursuant to Article 93 of the
Company’s Constitution: The questionnaires on the BEE incorporated applicable
i) Datuk Sazali Hamzah best practices, whereby the indicators used for the Board
ii) Freida Amat to provide their ratings include among others, the Board
composition, planning process, conduct, communication
There were two new appointments of Directors during the with the Management and stakeholders as well as strategy and
year under review, whom shall be retiring and considered for planning for the Group.
BOARD EFFECTIVENESS EVALUATION
DISTRIBUTION OF QUESTIONNAIRES
AREAS OF ASSESSMENT
Group Dynamics and Effectiveness Structure and Composition Communication
SUMMARY OBSERVATIONS AND CONCLUSIONS
NRC DISCUSSION
BOARD DISCUSSION
ACTION PLAN INITIATIVES
Areas for Board Evaluation Assessment Self-Peer Assessment
Group Dynamics and Effectiveness Knowledge and Understanding

• Overall Impressions of the Board • PCG's vision, strategic needs and development, market,
• Overall Board Effectiveness performance, international business, financial discussions, legal and
• Board Involvement and Engagement compliance duties, risk managements and effectiveness
Structure and Composition Skills and Experience

• Organisation/Composition of the Board • Analytical skills
• Overall Committee Organisation
• Board Audit Committee Deep Dive
• Nomination and Remuneration Committee Deep Dive Board Preparedness
• Roles and Duties of Board members • Commitment of time
• Forward looking, including strategy, succession planning and • Constructive contributions
development • Open Communications
• Cordial relations with Directors
• Attentiveness
Communication
• Communication with Shareholders
22
EFFECTIVENESS
Board Effectiveness Evaluation 2018 At the 20th AGM held on 2 May 2018, the shareholders approved
the revised Directors’ remuneration to reflect the increase in
NRC reviewed the outcome of the 2018 BEE and noted responsibilities of the Chairman and NEDs, which include the
that the Board is committed to the highest standards of directors’ fees and allowances for the Non-Executive Chairman
good governance and continues to be seen as an excellent of RM288,000, Non-Executive Directors of RM144,000 and
Board with outstanding support from the Management. Key Fuel Allowance of RM6,000 for Independent Directors.
take-aways included the need to focus more on growth
strategies implementated by the Group. Directors’ Fees
The approach to Directors’ fees which is aligned to our strategic
The BEE 2018 revealed that the current composition of the objectives, allows us to attract, motivate and retain high
Board is well-balanced, effective and is equipped with the caliber talent. The design of our fees architecture complies
relevant skills and areas of expertise to steer PCG especially with regulatory requirements, embraces market practices and
in its growth strategy. trends, and provides attractive and balanced rewards.
NRC's Effectiveness Review and Performance The fees structure of Non-Executive Directors of the Company
is as follows:
Based on the 2018 BEE findings, the Board believes that the Attendance Fee (per
Director’s
current NRC’s composition provides the appropriate balance Fee (per
meeting)
Fuel (per
in terms of skills, knowledge and experience to promote annum) BOD Committee annum)
the interests of all stakeholders and to meet the needs of (RM) (RM) (RM) (RM)
the Group. The Board is satisfied with the performance and Chairman 288,000 3,500 3,500 n/a
effectiveness of the NRC in providing sound advice and NINED 144,000 3,500 3,500 n/a
recommendations to the Board, particularly on succession
INED 144,000 3,500 3,500 6,000
planning and directors’ development.
INED 144,000 3,500 3,500 6,000
(Special Skill) + [Special
Succession Plan Fee =
Between 1
The Board has established a Board Succession Plan Framework to 5 times
multiple of
in November 2018. The Framework assists the Board in
meeting
particular, the NRC, in ensuring the orderly identification and attendance
selection of new Non-Executive Directors in the event of an fee]
opening on the Board, whether such opening exists by reason
of an anticipated retirement, an unanticipated departure, Notes: Only Malaysia and Singapore Residents INEDs are entitled to fuel
allowance.
the expansion of the size of the Board, or otherwise. Such
structured succession plan addressed the composition and
The fees and allowances for NEDs will remain until further
effectiveness of the Board.
review by the Board and are subject to the approval of the
shareholders of PCG.
In addition to the Succession Plan for Directors, the NRC also
reviewed the succession plan for the Senior Management of
The Director’s fees and meeting allowances for NINEDs
the Company.
who are also employees of PETRONAS are paid directly to
PETRONAS.
Remuneration
The Company also reimburses all expenses incurred by the

Our approach to remuneration is based on reward principles
Directors, where relevant, in the course of carrying out their
which aims to provide remuneration packages that fairly
duties as Directors.
reward the Executive Director and Senior Management for
the contribution they make to the Group, having regard to
The breakdown of the detailed Directors’ remuneration is
the size and complexity of the Group’s business operations
disclosed in the Corporate Governance Report 2018 which is
and the need to attract, retain and motivate executives of the
accessible to the public at PCG’s official corporate website,
highest quality.
www.petronaschemicals.com.
The Board has established a formal and transparent Directors’

Remuneration Framework which comprises retainer fees,
meeting allowances and benefits in-kind.
23
Overview Statement
EFFECTIVENESS
Datuk Sazali Hamzah, the MD/CEO and Executive Director The Senior Management are employees of PETRONAS and
of the Company is not entitled to receive directors’ fee or seconded to the Company. Their remuneration has been
meeting allowances. He is an employee of PETRONAS, who benchmarked with the industry and is aligned with the market.
is seconded to the Company. The Company pays PETRONAS
the payroll cost and benefits of RM1,013,352. Summary of Activities of the NRC
The following activities were carried out in 2018:
Management Team’s Remuneration
a) Reviewed the Performance Planning and Key Performance
The remuneration philosophy reflects the Group’s
Indicators for MD/CEO and his direct reports;
commitment to be compliant with best practices in the b) Reviewed Directors’ Remuneration Framework and
areas of remuneration, retention and reward to ensure Proposed Revision to the Remuneration Package for
that the Group attracts and retains exceptional talent. The Non-Executive Directors;
remuneration packages and incentives are regularly evaluated c) Reviewed the tenure of INEDs;
against market-related surveys. The interests of shareholders d) Reviewed the Directors’ Service Contracts for Services as
and the financial and commercial well-being of the group are Directors;
taken into account by the Committee. e) Reviewed the NRC Report for inclusion in the 2017 Annual
Report;
f) Assessment on the effectiveness of the Board as a whole,
PETRONAS Remuneration Philosophy and Guiding Principles
the Committees of the Board, as well as the contribution
Competitive and differentiated remuneration to attract & retain of each individual Director through a BEE exercise;
talents to drive business needs g) Reviewed the Directors’ Training requirements;
h) Reviewed the Board Selection Criteria;
i) Reviewed the Board’s Skills and Experience Matrix;
PAY FOR JOB & PERFORMANCE j) Reviewed the succession planning for INEDs;
k) Recommend the appointment of Warren William Wilder and
Dr Zafar Abdulmajid Momin as Directors of the Company;
COMPETITIVE WITHIN THE RELEVANT INDUSTRY l) Reviewed the performance planning and Key Performance
Indicators and development plans for PCG’s Senior
Management;
INTERNAL EQUITY m) Endorsed the Board Succession Plan Framework;
n) Reviewed the BEE Questionnaires;
o) Reviewed potential candidates for INED; and
CONFORMANCE TO STATUTORY REQUIREMENTS p) Reviewed Performance of MD/CEO and Senior
Management.
AFFORDABILITY OF THE COMPANY
Datuk William Toh Ah Wah

Chairman,
Nomination and Remuneration Committee
24
Board Audit Committee Report
ACCOUNTABILITY
Board Audit
Committee Report
Terms of Reference
The TOR of the Board Audit Committee (BAC) sets out the authority,
duties and responsibilities of the BAC and are accessible on PCG’s
official corporate website at www.petronaschemicals.com.
Pursuant to Practice 8.2 of the MCCG 2017, the Board in February

2018 has agreed to include in the BAC Selection Criteria on the
requirement for any former key audit partner to observe a two-year
cooling-off period before being appointed as a member of the BAC.
Composition
The Chairman of the BAC, Vimala V.R. Menon and Freida Amat
are both qualified accountants. Vimala is currently a Fellow
of the Institute of Chartered Accountants in England and
Vimala V.R. Menon
Wales (ICAEW) and a member of the Malaysian Institute of
Chairman
Accountants (MIA), whilst Freida is a Fellow of the Association
of Chartered Certified Accountants (ACCA) and also a member
Members and their attendance of the MIA. In this regard, the Company is in compliance with
the MMLR which requires at least one member of the BAC to
Vimala V.R. Menon be a qualified accountant.
Chairman, Senior Independent Director
During the year, the BAC’s composition was reduced
to four members due to the resignation of Dong Soo
No. of Meetings Attended: 5/5
Kim as Director on 16 August 2018. However, the
Datuk William Toh Ah Wah composition remain in compliance with the MMLR
Independent Non-Executive Director and the MCCG 2017, where all four BAC members are
Non-Executive Directors including three Independent
Directors, who fulfil the criteria of independence as defined
in the MMLR.
Ching Yew Chye
Meetings and Attendance
No. of Meetings Attended: 5/5 BAC conducted five meetings during the financial year 2018. Aside
from the said meetings, urgent decisions were also approved via
Freida Amat
three BAC circular resolutions.
Non-Independent Non-Executive Director
The BAC meetings for the financial year 2018 were

No. of Meetings Attended: 5/5 pre-scheduled in November 2017 to allow the Directors to plan
ahead and incorporate the meeting dates into their respective
Dong Soo Kim schedules. This also serves to provide the members ample notice
Independent Non-Executive Director of the meetings. The BAC meets at least quarterly with additional
(resigned as director on 16 August 2018 and ceased as a meetings convened as and when necessary. During the year,
member of BAC on the same date) attendance at all BAC meetings met the requisite quorum as
stipulated in the BAC TOR.
By invitation, the MD/CEO, Chief Financial Officer and Head of
Internal Audit Division (IAD) attend the BAC meetings to provide
input and advice, appropriate information as well as clarification
to relevant items on the agenda.
25
Overview Statement
ACCOUNTABILITY
The Head of IAD presents the internal audit reports to the BAC. In Deliberations during the BAC meetings include performance
this regard, relevant members of the Management are invited to review of the Company, interim financial reporting to Bursa
apprise the BAC on specific issues arising from the audit findings. Malaysia, year-end statutory audits, assessment of Related Party
The external auditors also attend the BAC meeting to present the Transactions (RPTs) and Recurrent Related Party Transactions
external audit plan for the year as well as the outcome of the (RRPTs) proposed to be entered into by the Company, status of
statutory audit conducted on the Company and its subsidiaries. In open audit findings together with the agreed corrective actions
addition, the BAC met with the external auditors twice during the and risk management activities.
financial year without the presence of the Management.
Minutes of the BAC meeting are tabled for confirmation at the
The agenda and a set of meeting papers encompassing qualitative next BAC meeting, after which they are presented to the Board
and quantitative information relevant to the business of the for notation. In addition to communicating to the Board on
meetings are distributed to the BAC members five days prior to matters deliberated during the BAC meeting, the BAC Chairman
the meeting dates. also recommends to the Board the approval of annual financial
statements and quarterly financial results.
COMMITTEE'S ACTIVITIES IN 2018
Financial Reporting
a) Reviewed the quarterly results for announcements to Bursa Malaysia before recommending the same for approval by the Board
upon being satisfied that it had complied with applicable approved MFRS issued by the Malaysian Accounting Standards Board
(MASB), MMLR and other relevant regulatory requirements.
b) Reviewed the Company’s annual and quarterly management accounts.
c) Reviewed the audited financial statements of the Company prior to submission to the Board for the Board’s consideration and
approval, upon the BAC being satisfified that, inter alia, the audited financial statements were drawn up in accordance with the
provisions of the Companies Act 2016 and the applicable approved MFRS issued by the MASB.
d) Reviewed specific key areas affecting the Group’s financial results, and endorsed recommendations made by the Management. The
key areas deliberated include assessments on the following areas:
• Impairment indicators on property, plant and equipment and detailed impairment testing
• Recognition of deferred tax assets and the probability of future utilisation
• Implementation of new MFRS and its impact
• Foreign exchange exposures management
• Compliance with Shariah requirements of Security Commissions
• Carrying value of inventories and any write-off thereon
• Revenue and expenses recognition
• Divestment of 50% equity and shareholder loans by the Company in a subsidiary
• Acquisition of Non-Controlling Interest in two subsidiaries
• Financing requirements for a joint-operation company
• New legislations and regulations impact
Internal Control Corporate Governance Risk Management
a) Reviewed the effectiveness of a) Reviewed the Finance COE a) Reviewed the corporate risk
the system of internal controls, revised Service Agreement. profile for the Group.
taking into account the findings b) Reviewed and approved the b) Reviewed the progress of
from internal and external audit proposed changes to PCG Group ongoing risk management
reports. LOA in relation to outsourcing of activities to identify, evaluate,
transactional finance function to monitor and manage critical
Finance COE. risks.
c) Reviewed 2017 Annual Report c) Reviewed emerging risks and
Statements. their mitigations.
d) Reviewed risk appetite for the
financial year 2019.
26
ACCOUNTABILITY
Internal Audit Related Party Transactions and Conflict of Interest
a) Reviewed and deliberated on reports of audits, The BAC reviewed all RPTs/RRPTs in accordance with the
recommendations and the relevant action plans to PCG Policies and Procedures on RPT/RRPT, to ensure the
strengthen PCG's overall system of governance, risks transactions are at all times carried out at arms-length basis
and internal controls. The BAC also put forward some and are not to the detriment of minority shareholders.
suggestions for improvement to reinforce the oversight
role and to ensure that Management holds individuals During the financial year under review, the BAC reviewed the
accountable for their internal control, risks and following:
governance responsibilities. a) The status of the Company’s RPTs and RRPTs.
b) Monitored the implementation of Agreed Corrective
b) The Independent Advisor Report for RRPT Phase 1 and
Actions on audit findings until duly resolved on quarterly
Phase 2 in respect of the Company’s project in Pengerang
basis.
Integrated Complex.
c) Reviewed and approved the risk-based FY2019 Annual
c) The performance of RPT/RRPT vendors.
Audit Plan and budget to ensure comprehensiveness of
audit coverage, resource and competencies to execute
the internal audit functions effectively.
d) Assessed the performance of IAD with regard to their
ability to provide independent and objective assurance
on the effectiveness of governance, risk and controls and
to be in conformance with the recognised international
standards.
e) Reviewed the Internal Audit Charter.
External Audit
a) Reviewed with the external auditors, audit strategies and scope for the statutory audit of the Company and Group’s financial
statements for the financial year ended 31 December 2018.
b) Reviewed with the external auditors the results of the statutory audit and the audit report.
c) Reviewed the proposed fees for the statutory audits.
d) Reviewed certain non-audit engagements provided by the external auditors and monitored the fees of total non-audit work carried
out by the external auditors with the main objective of ensuring no impairment of independency or objectivity. In relation to this,
the BAC noted the assurance provided by the external auditors confirming their independence throughout the financial year under
review.
e) During the year, PCG engaged the external auditors for certain non-audit services. Total fees paid to the external auditors are as follows:
2018 2017
Group Company Group Company

Particulars RM‘000 RM‘000 RM‘000 RM‘000
Audit Fees
• Statutory audit 1,565 *166 1,506 150
Total Statutory Audit 1,565 166 1,506 150
Non-audit Fees
• Half-yearly Limited Review 181 181 180 180
• Review of the quarterly Consolidated Results Report 15 15 - -
for announcement to Bursa Malaysia
• Tax Services 66 - 45 -
• Review of Statement on Risk Management and 26 26 25 25
Internal Control
• Review of MFRS 15 - - 304 -
• Review of Transfer Pricing - - 85 -
Total Non-audit Fees 288 222 639 205
Percentage of Non-audit Fees over Statutory Audit 18% >100% 42% >100%
* The statutory audit fee for the Company includes the audit fees for Pengerang Petrochemical Company Sdn Bhd (PPC) of RM10,000.
27
Overview Statement
ACCOUNTABILITY
Annual Reporting performed to the BAC as well as reports on IAD’s performance

against the approved internal audit plan on a quarterly basis.
The BAC reviewed its report and the Statement on Risk
Management and Internal Control for the financial year The IAD adopts the Institute of Internal Auditors’ International
ended 31 December 2018 to ensure that they were prepared Professional Practices Framework and the Committee of
in compliance with the relevant regulatory requirements and Sponsoring Organisation of the Treadway Commission’s
guidelines. internal control framework, in its processes and activities.
In performing the audit engagements, the internal auditors
Internal Audit Function adhere to the IAD’s established procedures and guidelines,
as well as relevant policies and procedures adopted by the
The BAC is supported by an in-house internal audit function, Group. In maintaining independence and objectivity, internal
the IAD, in discharging its governance responsibilities stated auditors will not be assigned audit scope that would lead to a
in the BAC’s TOR. The IAD undertakes a systematic and conflict of interest.
disciplined approach to evaluate and improve the effectiveness
of governance, risk management and control processes within The IAD continues to adopt a risk-based approach to ensure
the Group. that the audit plans are prioritised based on the Group’s key
risks. In deriving the audit plan, the IAD gathers input from
During the year under review, the internal audit function was various sources including the risk profile of the Group,
headed by Mohd Effendi Mohd Nawi; who reports to the BAC. business plans and strategies, past audit issues and feedback
Mohd Effendi is a qualified chartered accountant, who is a from external auditors, BAC and the Management.
member of Chartered Accountant Australia and New Zealand
(CA ANZ) and MIA. He holds a Bachelor of Commerce from In the year under review, the IAD performed reviews on various
the University of New South Wales, Australia. key business and risk areas of the Group as per the approved
internal audit plan and presented the reports for the following
The BAC approves the internal audit plan and the key audits to the BAC.
performance indicators of the Head of IAD and reviews IAD’s
annual budget and resource requirements. The Head of IAD
communicates the results of internal audit engagements
No. Audits conducted in 2018
1. Audit on PC Methanol plant turnaround activities
2. Audit on ASEAN Bintulu Fertilizer Sdn Bhd
3. Audit on capital expenditure management
4. Audit on related party transactions/recurrent related party transactions
5. Shareholder’s audit on management of selected projects and overall Project Management

at BASF PETRONAS Chemicals Sdn Bhd
6. Audit on PCG overseas subsidiaries and representative offices
7. Audit on operational excellence and health safety environment
8. Audit on PCG Commercial Division, in relation to Commercial Excellence and Business Development Activities
9. Audit on Joint Venture Management Department of PCG
10. Audit on Transition of PCG's engineering centralised service function to PETRONAS
11. Follow up review on 2017 audit on supply and distribution activities & Kertih Terminals Sdn Bhd
12. Audit on operations readiness of Pengerang Refinery and Petrochemical Complex (PRPC)
13. Audit on project execution and interfacing of PRPC

28
ACCOUNTABILITY
The internal audit highlights to the BAC the key control issues, risks, positive observations and relevant
recommendations for improvement, along with the agreed corrective actions.
Subsequent to the BAC review, the internal audit reports are forwarded to the Management for the implementation of Agreed
Corrective Actions within stipulated time frame. The status of implementation was tracked on monthly basis until duly resolved. All
agreed corrective actions status were assessed and verified by IAD prior to submission and presentation to BAC on quarterly basis.
The Group continues its commitment to equip the internal auditors with adequate knowledge to discharge their duties and
responsibilities.
Annually, internal auditors will be assessed via individual competency assessment to determine the learning and development
needs to further enhance their competencies. The functional competencies assessment is part of PETRONAS capability
development programme for internal auditors, which takes into considerations of the core competencies as stipulated by
Internal Audit Competency Framework issued by The Institute of Internal Auditors (IIA). The core competencies include:
INTERNAL INTERNAL
PERSONAL TECHNICAL PROFESSIONAL
AUDIT AUDIT
SKILLS EXPERTISE ETHICS
DELIVERY MANAGEMENT
There are a total of 18 internal auditors across the Group as at 31 December 2018. The internal auditors have sufficient mix of
knowledge, skills and competencies to execute the audit plan. The composition of the internal auditors and the corresponding
professional status are as follows:
Professional Status Percentage(%) No. of staff

Professional accounting (MICPA, CA ANZ, ACCA) or Certified Internal Auditor (CIA) 33 6
Professional technical certification from regulatory bodies (DOSH, DOE) 17 3
Graduate pursuing professional accounting or CIA 33 6
Graduate (Bachelor’s Degree) 17 3
Total no. of staff 100 18
The total costs incurred by the internal audit function of the Company and the Group for the financial year was RM7,100,988.
BAC Effectiveness Review and Performance
During the financial year under review, the Board assessed the performance of the BAC through an annual BEE. The Board agreed
that BAC is well structured and represented, thereby contributed to the overall effectiveness of the Company and the Group. PCG
Board is satisfied that the BAC has discharged its functions, duties and responsibilities in accordance with the BAC TOR.
Reporting to The Exchange
For the financial year under review, the BAC is of the view that the Company is in compliance with the MMLR and as such, the
reporting to Bursa Malaysia under Paragraph 15.16 of the MMLR is not required.
Vimala V.R. Menon

Chairman
Board Audit Committee
29
Overview Statement
Integrity and Ethics
ACCOUNTABILITY
The Board is committed to a corporate culture that encompasses and embraces ethical conduct within the Group. The Board adopts numerous
policies which serve to achieve this commitment.
Code of Conduct and Business Ethics

The Group adopts and practises the PETRONAS Code of Conduct and Business Ethics (CoBE) which emphasises and advances the principles
of discipline, good conduct, professionalism, loyalty, integrity and cohesiveness that are critical to the success and well-being of the Group.
The CoBE contains detailed policy statements on the standards of behaviour and ethical conduct expected of each individual of the Group.
The Group also requires that contractors, sub-contractors, consultants, agents and representatives, and others performing work or services
for or on behalf of the Group to comply with the relevant parts of the CoBE when performing such work or services. The CoBE expressly
prohibits improper solicitation, bribery and other corrupt activities not only by employees and directors but also by third parties performing
work or services for or on behalf of companies in the Group. The CoBE is accessible to the public on the Company’s official corporate
website at www.petronaschemicals.com.
Whistleblowing Policy
The Company has adopted the PETRONAS Whistleblowing Policy which provides an avenue for the Group's employees and members of the
public to disclose any improper conduct in accordance with the procedures as provided under the policy. The policy and procedures are
accessible to the public on the Company's official corporate website at www.petronaschemicals.com. Further details on the Whistleblowing
Policy can be found on page 40.
Corporate Disclosure Guide

The Company has in place an internal corporate disclosure guide to facilitate the disclosure and conduct on the dissemination of
information. This guide is based on the requirements as set out in the MMLR and the Corporate Disclosure Guide [3rd Edition] by Bursa
Malaysia which promotes transparency and accountability in the communication and dissemination of material information to the public.
Trading on Insider Information

The Board and principal officers of PCG are prohibited from trading in securities based on price sensitive information and knowledge
acquired by virtue of their positions, which has not been publicly announced. Notices on the closed period for trading in PCG’s shares are
sent to the Directors and principal officers on a quarterly basis as a reminder on the prohibition to trade during the identified timeframe.
Directors and principal officers are also reminded not to deal in the Company’s shares when price sensitive information is shared with them
in proposal papers.
During the year under review, neither the Board nor the principal officers have breached the above ruling.
Selection of Vendors
The Group has adopted the PETRONAS Tendering process and governing principles that are embedded in the PETRONAS Tenders &
Contracts Administrative Manual for vendors’ selection. Generally, the main selection criteria is based on technically acceptable and
commercially attractive bid.
Tender Committees have been established to carry out independent review on evaluation of bidders’ proposals and to ensure tendering
activities are carried out in accordance with the established guidelines and procedures. Only with the endorsement of the Tender Committee
will the award recommendation be forwarded to the Approving Authority for consideration and approval.
Financial Reporting
The Board is committed to provide a fair and objective assessment of the financial position and prospects of the Group in the
quarterly financial results, annual financial statements, Annual Reports and all other reports or statements to shareholders, investors
and relevant regulatory authorities.
The Statement of Responsibility by Directors in respect of preparation of the annual audited financial statements is set out on
page 31 of this ACG and page 4 of the standalone Audited Financial Statements.
30
Communication with Stakeholders
ACCOUNTABILITY
Related Party Transactions and Conflict of Interest Situations Risk Management and Internal Control
All RPTs including RRPTs entered into by the Company or its subsidiaries The Board continues to maintain and review its risk management
are reviewed by the BAC. processes and internal control procedures to ensure a sound system
of risk management and internal control to safeguard shareholders’
The Statement on Risk Management and Internal Control provides a investments and the assets of the Company and the Group.
comprehensive overview of the Group’s policies and procedures on
RPTs and RRPTs. Further details can be found on pages 40 – 41. The Statement on Risk Management and Internal Control provides
an overview of the risk management and internal controls within the
Group and further details can be found on pages 32 – 42.
COMMUNICATION WITH STAKEHOLDERS
Communicating Effectively with Stakeholders and Investors
The Board recognises the importance of effective dialogue with shareholders and investors. We believe that communication with our
shareholders is a two-way process. We take into consideration views and feedback that we received from all of our shareholders. In the past
year, the MD/CEO, Chief Financial Officer and other members of Senior Management together with the Company’s Investor Relations Unit,
conducted regular dialogues with both its local and foreign shareholders and analysts. This resulted in better understanding of the Group’s
financial performance and operations. Visits to the Group’s facilities or plants are also organised periodically to facilitate better appreciation of
the Group’s businesses and operations.
The Board believes its practices in this area are consistent with both the MCCG 2017’s provisions concerning dialogue with shareholders and
with good governance.
Investor Relations Calendar 2018 Reporting events
Investment Conferences and Roadshows Analyst Briefings
• CIMB Corporate Day 2018, Kuala Lumpur 4 January

• Invest Malaysia Kuala Lumpur, Kuala Lumpur 23 January
• CLSA PETRO/CHEMS Day, Kuala Lumpur 30 January • Quarterly Financial Results: 4th Quarter 2017 20 February
• Nomura Investment Forum 2018, Singapore 4–7 June • Quarterly Financial Results: 1st Quarter 2018 21 May
• CITI ASEAN Investor Conference 2018, Singapore 26–27 June • Quarterly Financial Results: 2nd Quarter 2018 15 August
• Malaysia Corporate Day, HK 2018 - Bursa Malaysia, Hong Kong • Quarterly Financial Results: 3rd Quarter 2018 16 November
10 July
• JP Morgan Asian Yield, Japan 11–12 October
Retail Shareholders Visit to Our Plant Institutional Shareholders Visit to Our Plants
• PETRONAS Chemicals Fertiliser Sabah Sdn Bhd, Sipitang, Sabah

15 March
• PETRONAS Chemicals MTBE Sdn Bhd, Gebeng, Kuantan • Pengerang Integrated Complex, Pengerang, Johor 11 July
19 September • Pengerang Integrated Complex, Pengerang, Johor 10 October
• PETRONAS Chemicals Methanol Sdn Bhd, W.P. Labuan
16 October
During the year under review, the Investor Relations (IR) department was headed by Zaida Alia Shaari, who joined the group in July 2017. She
started her career in IR in 2012 when she headed the IR function for FGV Holding Berhad during its Initial Public Offering exercise. Prior to
joining PCG, she was the Head of IR for Malakoff Corporation Berhad. The IR department provides the communication channel through which
the management team and the investment community interact. The Head of IR is the focal person for analysts, fund managers, potential
investors as well as other stakeholders refer to when seeking information and updates on PCG.
In addition, the Company actively updates its official corporate website, www.petronaschemicals.com with the latest information on the
corporate and business aspects of the Group. Press releases, announcements to Bursa Malaysia, media conference post AGM, analyst briefings
and quarterly results of the Group are also made available on the website and this serves to promote accessibility of information to the
31
Overview Statement
Communication with Stakeholders
COMMUNICATION WITH STAKEHOLDERS
Company’s shareholders and all other market participants. Communication and feedback from investors can also be directed to email address
[email protected] or alternatively, it can be addressed to:
ZAIDA ALIA SHAARI

Head of Investor Relations
Tel : 03-2392 3699 Email : [email protected]
PETRONAS CHEMICALS GROUP BERHAD

Tower 1, PETRONAS Twin Towers, Kuala Lumpur City Centre, 50088 Kuala Lumpur
In addition, matters of concern to the Group from shareholders or other stakeholders can be addressed to Senior Independent Director, who is
also the Chairman of the BAC directly to the following address:
VIMALA V.R. MENON

Email : [email protected]
PETRONAS CHEMICALS GROUP BERHAD

Tower 1, PETRONAS Twin Towers, Kuala Lumpur City Centre, 50088 Kuala Lumpur
Annual General Meeting (AGM) twice during the financial year under review without the presence of the
Management. At the meeting, the external auditors highlighted to both
The AGM is the principal forum of open dialogue with shareholders. the BAC and the Board on matters that warrant their attention.
The notice and agenda of AGM together with Forms of Proxy are
given to shareholders at least 28 days before the AGM, which gives Directors' Responsibility Statement
shareholders sufficient time to prepare themselves to attend the AGM
or to appoint proxies to attend and vote on their behalf. Each item of The Directors have provided assurance that the financial statements
special business included in the notice of the AGM will be accompanied prepared for each financial year give a true and fair view of the state
by an explanatory statement on the effects of the proposed resolution. of affairs of the Company and the Group as at the end of financial year
and of the results and cash flow of the Group for the financial year as
During the AGM, the MD/CEO presents a comprehensive review of the required by the CA2016. The Statement of Responsibility by Directors
Group’s performance initiatives and value created for shareholders. This for the audited financial statements of the Company and Group is as
review is supported by a visual and graphical presentation of the key outlined on page 4 of the standalone Audited Financial Statements.
points and financial figures. Details of the Company and the Group's financial statements for the
financial year ended 31 December 2018 can be found in our standalone
At each AGM, shareholders are encouraged and given sufficient Audited Financial Statements online at www.petronaschemicals.com.
opportunity as well as time by the Board to raise questions pertaining
to the Annual Report, resolutions being proposed and the business Statement by the Board on Compliance
of the Company or the Group in general prior to seeking approval
from members and proxies on the resolutions. The Board, Senior The Board has deliberated, reviewed and approved this Statement and
Management, external auditors and other advisors, are present at the is satisfied that the Group has fulfilled its obligations under the relevant
AGM to provide answers and clarification to shareholders. Pursuant to paragraphs of the MMLR of Bursa Malaysia, MCCG 2017, Corporate
Paragraph 8.29A of the MMLR, each resolution to be tabled at an AGM Governance Guide - 3rd edition issued by Bursa Malaysia Berhad and
is to be voted by poll. Since 2017, PCG has engaged an independent other applicable laws and regulations throughout the financial year
scrutineer to validate the voting at the AGM for each proposal ended 31 December 2018.
presented to shareholders. The Board encourages active participation
by the shareholders and investors during the AGM. Attendance at the Additional Compliance Information - Material Contracts
Company’s AGM continues to be high as evidenced by the registration
of 2,519 shareholders at the 20th AGM of the Company held on There were no material contracts or loans entered into by the Company
2 May 2018, representing an increase of 10.0% from the attendance at or its subsidiaries involving Directors’ or major shareholders’ interests,
the 19th AGM in 2017. either still subsisting at the end of the year ended 31 December 2018 or
entered into since the end of the previous period, except as disclosed in
The minutes of the AGM are accessible to the public on PCG’s official the audited financial statements.
corporate website at www.petronaschemicals.com.
This statement is made in accordance with the resolution of the Board
Relationship with External Auditors of Directors dated 25 February 2019.
Through the BAC, the Company maintains a professional and transparent

relationship with its external auditors, KPMG PLT. The BAC met the
external auditors twice during the financial year to review the scope and
adequacy of the Group’s audit process, financial results, annual financial
statements and audit findings. The BAC also met the external auditors Datuk Md Arif Mahmood
Chairman
32
Proactive Approach to
Risk Management and Internal Control
Statement on Risk Management and

Internal Control
PCG has a risk management framework and internal control systems in place to ensure the
smooth running of our business.
We aim to manage our risks and control our business and financial affairs economically, efficiently and effectively to be able to seize value adding
business opportunities in a disciplined way, while avoiding or mitigating risks that could cause loss, reputational damage or business failure.
This statement on risk management and internal control is made in accordance with paragraph 15.26(B) of Bursa Malaysia’s Main Market
Listing Requirements (MMLR) which requires the Board of Directors of public listed companies to publish a statement about the state of risk
management and internal control of the listed issuer as a Group.
We believe our control systems are appropriate for the Group given the size, diversity and complexity of our operations. Our Board Audit
Committee regularly reviews and monitors the adequacy and integrity of these controls to ensure the Group’s compliance with applicable laws,
regulations and guidelines.
Our Board of Directors recognise that such systems can only provide a reasonable and not absolute assurance that significant risks which
impact the Group’s strategies and objectives are within levels appropriate to the Group’s business as approved by the Board. Key elements of
the risk management and systems of internal control are set out below.
Board Accountability Management Responsibility
The Board acknowledges the importance of maintaining a sound The Management is accountable to the Board to ensure effective
internal control system and a robust risk management practice for implementation of the risk management and controls. Its
good corporate governance with the objective of safeguarding the responsibilities in respect of risk management include:
shareholders’ investment and the Group’s assets. It further affirms its
overall responsibility for reviewing the adequacy and integrity of the • Formulate and endorse the risk management policy, frameworks
Group’s risk management and internal control systems. and guidelines including their implementation across the Group;
• Review of PCG’s risks and recommend additional course of
The Group has established a process for identifying, evaluating, action to mitigate the identified risks;
treating, monitoring and managing critical risks that may materially • Assign accountabilities and responsibilities at appropriate levels
affect the achievement of our corporate objectives. The Board within PCG as well as to ensure all the necessary resources are
monitors the critical risks regularly. efficiently allocated to manage risks.
Risk Management
The business environment in which we operate are volatile, uncertain, complex and ambiguous. Our challenge is to identify all potential risks
and either minimise, accept, transfer or avoid them. This demands a proactive Risk Management Framework, which is implemented throughout
PCG Group wide.
We continue to strengthen our risk management approach to safeguard our business and ensure the ability to respond to a crisis.
PCG has adopted the PETRONAS Resiliency Model in managing risk with three key focus areas namely, Enterprise Risk Management
(ERM), Crisis Management (CM) and Business Continuity Management (BCM).
ENTERPRISE RISK MANAGEMENT BUSINESS CONTINUITY

CRISIS MANAGEMENT (CM)
(ERM) MANAGEMENT (BCM)
While the Board oversees our overall effectiveness of risk management as part of robust corporate governance, we recognise that risk
management is the responsibility of everyone in PCG. Risk management is integrated into our business planning, capital allocation, investment
decisions, internal control and day-to-day operations to enhance ownership and agility in managing risk.
33
PCG Risk Policy
All entities across PCG shall adopt and communicate the PCG Risk Policy:
PETRONAS Chemicals Group shall adopt and implement risk management best practices by identifying, assessing, treating and monitoring risks
as well as effectively responding to crises. In the event of prolonged disruption, business continuity practices shall be adopted to restore and
ensure continuity of PETRONAS Chemicals Group’s key business activities.
Risk Governance and Oversight
Our risk governance structure facilitates risk identification and escalation whilst providing assurance to the Board. It assigns clear roles and
responsibilities, facilitates implementation with guidelines and tools as well as consists of different layers of responsibilities explained below:
RISK OVERSIGHT MODEL
BOARD OF DIRECTORS
Responsible for the overall oversight of PCG Group’s risk management system and activities
BOARD BOARD AUDIT COMMITTEE

COMMITTEE
LEVEL Responsible for guidance and oversight of PCG Group Risk Management activities
Reviews the PCG Group’s risk profile and risk management implementation status
MANAGEMENT RISK MANAGEMENT COMMITTEE (RMC)

LEVEL
Responsible for ensuring the implementation and effectiveness of PCG Group Risk Management activities
OPERATIONAL MANUFACTURING COMMERCIAL

LEVEL
Responsible for the manufacturing risk management Responsible for the commercial risk management
Risk Oversight deliberation conducted regularly to ensure risk independent directors, with greater emphasis to deliberate on risk
management is integrated into key business activities. Management and opportunities for high impact business decision papers such as
committees of the Group’s subsidiaries are responsible for risk Merger and Acquisition, divestment and capital project.
management and internal control at the respective companies.
In addition to our risk governance and oversight structure, our risk
In line with PCG growth strategy, PCG has established a dedicated management is supported by Three Lines of Defence model that
Board Risk Committee on 25 February 2019 comprising majority of distinguishes the three groups which are involved in effective risk
management.
1ST LINE OF DEFENCE 2ND LINE OF DEFENCE 3RD LINE OF DEFENCE
Business Line (Risk Owner) Risk Management Department Internal Audit
• To establish the identification, • To establish, implement and • To provide independent and

assessment, treatment and review risk management and objective assurance on the
monitoring of risks control systems overall adequacy, integrity
and effectiveness of risk
management and internal
control system
34
Risk Management Framework
Our ERM framework and relevant guidelines are generally aligned with ISO 31000:2009, and standardised throughout PCG.
ERM FRAMEWORK
1 2 3 4 5 6
RISK MONITORING AND REVIEW
CONTINUAL IMPROVEMENT
CONTEXT SETTING
RISK ASSESSMENT
RISK TREATMENT
GOVERNANCE
• Risk Policy • External • Risk • Risk Treatment • Risk Reporting • Assurance

• Risk Context Identification Strategy and Monitoring • System
Organisation • Internal • Risk Analysis • Risk Treatment • Risk Monitoring
and Structure Context • Risk Evaluation Plan Information and
• Roles and • Risk Appetite System Review
Responsibilities • Risk Criteria • Capability
Building
Risk Appetite
Financial Sustaining PCG’s strong profitability,

The Group also establishes risk appetite which is defined as
Sustainability liquidity and capital including monitoring
the amount and type of risk that PCG is willing to take or retain
in pursuing its business objectives. minimum cash balance, maximum
indebtedness level, profit after tax and
PCG Risk Appetite is guided and operationalised as follows: minimum credit rating.
Reputation Maintaining good reputation will
Development distinguish PCG from competitors and
created opportunities for growth and
business survival in the long run.
Compliance Adhering to relevant laws of the land where
PCG operates and does not tolerate any
breach of laws and regulations governing
Operationalisation the conduct of the business in the pursuit
of Risk Appetite of PCG's business objective.
To support the PCG Risk Appetite Focus Areas, Risk Appetite

Statement, Risk Tolerance and Risk Threshold were established
to ensure risks undertaken in pursuit of business objectives
Monitoring and Review Implementation are consistently within acceptable level.
Development Element Definition

PCG Risk Appetite was developed by aligning to PCG business
Risk Appetite The statement articulates acceptable
strategies, with four Risk Appetite Focus Areas to be closely
Statement and unacceptable risks related to the
controlled and monitored.
stakeholder expectations
Operational Controlling on operational risks such as Risk Risk boundaries that the organization
Health, Safety, Security and Environment Tolerance is willing to take for each relevant risk
(HSSE), Operational Excellence (OE) exposure
and Project Delivery to maintain good Risk Structured monitoring to translate risk
HSSE performance, optimise operation Threshold appetite tolerance into a measurable
reliability and production capacity as well threshold to trigger actions to be
as explore opportunity for growth. undertaken
35
Implementation
Clear roles and responsibilities of relevant parties in implementing risk appetite was established to ensure clear accountability.
The risk appetite shall be communicated to the respective risk owners to ensure strong understanding and strict adherence. In
addition, risk appetite will be integrated in the discussion on risk assessment for decision making.
Monitoring and Review

Monitoring and review are pivotal to ensure that PCG does not breach the established risk appetite. Regular monitoring and
reporting shall be conducted in 2019 to ensure any breach of the Risk Threshold is escalated to risk owner, management and
Board, if required, on timely basis to trigger deliberation for specific action or decision.
Risk Management Process
Our structured risk profiling process, which is in line with the approved PCG Enterprise Risk Management Framework (ERMF)
and Enterprise Risk Management Process Guideline (ERMPG), is set out as below.
RISK MANAGEMENT PROCESS
Co n tex t Settin g
Internal E x t er nal
Ri sk Id ent i f i c at i on
Ri s k A nal y s i s
Ri s k E v al u at i on
Ris k Tr e at m e nt
R i sk M onit or ing a nd Re v ie w
Our Corporate Risk Profile (CRP) is based on the Enterprise Risk Management Process Guideline (ERMPG), and is reviewed
regularly. The identification of risks takes into account PCG’s strategic objectives. Inputs are assessed and analysed based on
both internal factors and external factors that may impact our business and operations prior to the risk profiling activities.
The identified risks are analysed, evaluated and mapped onto a matrix which specifies their likelihood of its happening and its
impact to PCG. Subsequently, risk mitigation plans are determined depending on risk mitigation strategies to reduce the risks to
acceptable levels. Key Risk Indicators (KRIs) are identified to facilitate the monitoring of risks and provide early warning signals
on potential risk escalation.
36
The status of key risk indicators and mitigation of critical risks are deliberated at the Risk Management Committee and presented
to the Board Audit Committee as well as the Board of Directors during quarterly meetings. Each critical risk has a dedicated
owner responsible for the implementation of control measures, monitoring and tracking of key risk indicators, as well as
identifying and implementing additional risk mitigation measures. The risks and mitigation measures are communicated to the
line on a timely basis to ensure awareness at all levels.
To support the implementation of risk management at operational level, we apply the following PETRONAS structured risk
management assessment approach and tools:
PETRONAS Counterparty Project Risk Contractor Risk Turnaround Supplier Risk

Health Safety Risk Assessment Assessment (PRA) Assessment Risk Assessment Assessment
Environment To ensure the To ensure the (CoRA) (TaRA) To ensure the
Management systematic systematic To ensure the To ensure the systematic
System (HSEMS) identification, identification, systematic systematic identification,
To manage HSE assessment and assessment and identification, identification, assessment and
risks and ensure mitigation of mitigation of assessment assessment and mitigation of
our operations are risks associated risks associated and mitigation mitigation of risks risks associated
in tandem with with credit and with projects, of risks critical for turnaround with supplier
HSE regulatory performance, in line with to contractors’ activities performance with
requirements in line with PETRONAS Project performance. each supplier
and industry best PETRONAS Management CoRA is is assigned risk
practices Corporate System (PPMS) undertaken ratings to facilitate
Financial Policy requirements as part of the the business
and PETRONAS procurement decision-making
Credit Guidelines. process prior
Each counterparty to contractor
is assigned credit selection
ratings which
eventually facilitate
the business
decision-making
Risk in Strategic Planning and Decision Making Crisis Management
The Board's primary responsibilities are to embed risk PCG is exposed to potential crisis events of varying severity
management in all aspects of companies’ activities, to approve due to the nature of its business operations. To respond to
risk appetite and review the effectiveness of risk management any crisis that may manifest, PCG has established a Crisis
and internal controls. Management Plan (CMP) that prescribes the organisation
of the Crisis Management Team (CMT), comprising key
Acknowledging risk and strategy are intertwined and do not Management personnel in order to provide strategic support
exist in vacuum, we continued our focus to integrate risk to control and mitigate the crisis.
management into our strategic planning and business decision
makings. We conducted risk assessment during PCG Annual The CMP has also outlined a three-tiered response system
Plans and Budget to ensure that our key strategies are robust based on severity of the crisis that provides clear demarcation
and any business assumptions made are better understood, of response control and required capability of emergency
with associated risks are well identified and managed. or crisis team members in order to protect and save people,
environment, asset and reputation.
We also mandated that all Board and Management decision
papers are equipped with risk assessment to ensure that Further details on crisis management can be found on pages
decision makers make fully informed decision making, 37 – 38 of our standalone Sustainability Report, which is available
online at www.petronaschemicals.com.
considering the level of risks they want to take and implement
necessary controls to achieve the desired business objectives.
As we strive on to grow our capacity and diversify our product

portfolio, risk assessments have become more critical than
ever in the selection of business opportunities and project
executions to ensure we achieve the targeted returns that we
desired.
37
Business Continuity Management
In the event of prolonged business disruption, we have a Business Continuity Management (BCM) Framework and Guidelines
that provides a systematic approach to ensure continuous delivery of products or services to customers.
BCM FRAMEWORK
1 2 3 4 5 6
BUSINESS RECOVERY STRATEGY
BUSINESS IMPACT ANALYSIS
CONTINUAL IMPROVEMENT
TESTING & EXERCISE
RISK ASSESSMENT
GOVERNANCE
• Risk Policy • Risk • Critical • Business • Type of • Assurance

• Risk Identification Business Continuity Plan validation • System
Organisation • Risk Analysis Functions • Business • Frequency Monitoring
and Structure • Risk Evaluation • Recovery Time Recovery Plan and
• Roles and Objective Review
Responsibilities • Minimum • Capability
Resources Building
Requirements
PCG has established a BCM organisational structure to

Compliance Under Our Risk Management Framework
provide guidance and direction in the implementation and
institutionalization of BCM practices. Risk assessment is
The inculcation of a compliance culture is key aspect of an
undertaken to identify, analyse and evaluate risks that could
effective risk management. In supporting a risk compliance
cause business disruptions justifying the need for recovery
culture, PCG acknowledges the importance of risk assurance
plans. Subsequently, a Business Impact Analysis (BIA) is
programmes to provide assurance to stakeholders that
conducted to identify critical business functions and products.
the systems of risk management and internal controls are
It further assesses the impact of unavailability over time,
implemented and complied with. For the year under review,
setting minimum timeframes and resources to recover or
PCG established its risk assurance programmes based on an
resume operations. The BIA determines our Business Recovery
annual risk assurance plan that was endorsed by our RMC.
Strategy (BRS) to resume or recover business activities.
PCG conducted two self-assessments (Tier 1) per year whereby

The Business Continuity Plan (BCP) and Business Recovery
all subsidiaries are required to perform self-assessment and
Plan (BRP) describe the organisation structure, roles and
validation on their compliance to the requirement stipulated
responsibilities of each party, required resources and specific
under ERM Framework and proposes gap closure actions, if
recovery strategies. PCG has established BCP for products
any. PCG Risk Management Department also performed Tier 2
supply to address abrupt and prolonged outage of the products
risk assurance to validate the ERM systems and effectiveness of
supply, that could affect products delivery to customers.
agreed risk mitigations at PCG subsidiaries. The RMC reviewed
Additionally, the Group has developed BCP for PETRONAS
the risk assurance reports and monitors the appropriate
Twin Towers to cater for inaccessibility of workplace, failure
corrective actions for timely closure. In addition, the status of
of critical ICT systems and prolonged unavailability of key
our risk assurance progress and gap closures are reported to
personnel.
the Risk Management Committee on quarterly basis.
BRPs for PCG plants and facilities and BCPs for overseas
subsidiaries were also tested and the reports presented to
management for tracking and monitoring. Findings and
feedback gathered post-testing were analysed for continual
improvement. The reports were also presented to the
respective risk oversight committees.
Tests and drills are regularly conducted to ensure readiness

of PCG and our Management team in managing crisis and
business continuity, as well as the robustness of our plans.
38
Internal Control
Management is primarily responsible for the design, implementation and maintenance of internal controls, while the Board and
the Board Audit Committee oversee the actions of management and monitor the effectiveness of the controls that have put in
place. The Group refers to the 17 principles of Committee of Sponsoring Organisations of The Treadway Commission (COSO)
Internal Control Integrated Framework, as a guide for effective internal control as illustrated below:
CONTROL ENVIRONMENT
• Demonstrates a commitment to integrity and ethical values
• Board of Directors demonstrates independence from the management and exercises oversight of internal control performance
• Establishes structures, reporting lines and appropriate authorities and responsibilities
• Demonstrates commitment to attract, develop and retain competent workforce
• Holds individual accountable for their internal control responsibilities
RISK ASSESSMENT CONTROL ACTIVITIES

• Specifies objectives with sufficient clarity for risk • Selects and develops control activities to mitigate risks
identification and assessment • Selects and develops control activities through technology
• Identifies and analyses risks relating to objectives for • Deploys control activities through policies and procedures
determining how the risks to be managed
• Evaluates and considers potential for fraud in assessing
risks
• Identifies and assesses changes that could significantly
impact the internal controls system
MONITORING ACTIVITIES INFORMATION AND COMMUNICATION

• Selects, develops and performs ongoing and/or separate • Obtains or generates and uses relevant, quality information
evaluations of internal controls components to support the internal control functions
• Evaluates and communicates internal control deficiencies • Communicates internal control information internally
in timely manner • Communicates internal control information externally
Assessment on the adequacy, efficiency and effectiveness of joint ventures, joint operation and associate companies' internal
control are performed under the preview of their respective established governing procedures. The interests of the Group are
safeguarded through Group representatives to the respective Boards of joint venture and associate companies, in addition to
the regular review of management accounts and joint shareholders’ audit.
Internal Audit
Internal audits are undertaken to provide independent assessments and objective assurance on the adequacy, efficiency and
effectiveness of the Group’s internal controls. The Group has its own dedicated internal audit function that provides a systematic
and disciplined approach to evaluate and improve the effectiveness of control and governance processes within the Group. It
maintains its impartiality, proficiency and due professional care and reports directly to the BAC.
The internal audit function reviews the internal controls of selected key activities of the Group’s businesses based upon an
annual internal audit plan which is presented to the BAC for approval. The annual audit plan is established primarily on a risk
based approach. The BAC reviews audit reports and the necessary corrective actions as advised by the Management. The
Management is responsible for ensuring that corrective actions are implemented accordingly. In addition, the status of the
closures of audit issues are reported to the BAC on a quarterly basis.
The internal audit processes and activities are guided by the approved Internal Audit Charter and aligned with internal audit
industry standards (i.e. The International Professional Practices Framework (IPPF) issued by the Institute of Internal Auditors (IIA)
and COSO Internal Control Integrated Framework principles.
39
Audit Competencies The BAC meets at least quarterly and has full and
unimpeded access to the internal and external auditors as
In 2018, all internal audit activities were performed by a team well as all employees of the Group.
of 18 internal audit personnel from diverse work experiences
and competencies, as follows: Further details on the BAC activities can be found on
pages 25 – 26.
Main Work Experience and No. of Internal Audit

%
Competency Personnel
Accounting & Finance 11 61 • Organisation Structure and Management Committee
An organisational structure, which is aligned to the
Plant Operations 3 16
business and operational requirements, and with clearly
Sales & Marketing 2 11 defined lines of responsibility, accountability and levels of
Supply Distribution Operations 1 6 authority, is in place to assist in implementing the Group’s
Procurement 1 6 strategies and day-to-day business activities.
To date, 9 of our internal audit personnel have received The Company has a Management Committee which
professional certification from various professional bodies, serves in an advisory capacity to the Managing Director/
such as accounting professional bodies, Institute of Internal CEO in accomplishing the vision, strategies and objectives
Auditors and Malaysian Department of Safety and Health set for the Group.
(DOSH).
Various functional committees have also been established
Other Key Elements of Internal Control Systems across the Group to ensure the Group’s activities and
operations are properly aligned towards achieving the
In furtherance to the Board’s commitment to maintain a sound organisational goals and objectives.
system of internal control, the Board continues to maintain
and implement a strong control structure and environment • Financial Control Framework
for the proper conduct of the Group’s business operations as The Group has implemented a Financial Control
follows: Framework to ensure key internal control systems are
adequate and effective at all times. The framework
• Board of Directors mandates strict processes to be adhered to ensure the
The Board meets at least quarterly and has set a schedule reliability of financial reporting and disclosure so as to
of matters, which is required to be brought to its attention protect stakeholders from the possibility of inaccurate
for discussion, thus ensuring that it maintains full and accounting. Key components of the Financial Control
effective supervision over appropriate controls. The Framework requirements are:
MD/CEO leads the Management in the presentation of
Board papers and ensures Management provides detailed
REASONABLE ASSURANCE ON THE RELIABILITY
explanation of pertinent issues. In arriving at any decision
OF THE REPORTED FINANCIAL STATEMENT BY
requiring Board’s approval, as set out in the Limits of
SENIOR MANAGEMENT.
Authority manual, thorough deliberation and discussion
by the Board is a prerequisite. In addition, the Board is
kept updated on the Group’s activities and its operations
on a regular basis. ESTABLISHMENT OF ADEQUATE INTERNAL
CONTROLS AND REPORTING METHODS AS WELL AS
• Board Audit Committee PROPER DOCUMENTATION OF ALL PROCESSES.
The Board has delegated the duty of reviewing and
monitoring the effectiveness of the Group’s system of
internal controls to the BAC.
MANDATORY SELF AND INTERDEPARTMENTAL
The BAC assumes the overall duties of reviewing with TEST OF CONTROLS.
the external auditors their audit plan, audit report, as
well as their findings and recommendations pursuant to
the year end audit. The BAC also evaluates the adequacy
and effectiveness of the Group’s risk management and IDENTIFICATION OF THE CONTROL GAPS AND
internal control systems through reviews of internal THE REQUIRED MITIGATION ACTION.
control issues identified by internal auditors and
Management. Throughout the year, the BAC was updated
on developments in MMLR of Bursa Malaysia, MFRS as
well as new legal and regulatory requirements.
40
• Limits of Authority capital expenditure requirements are Under the Whistleblowing Policy, a
The Group has established Limits of tabled to the Board for approval prior to whistleblower will be accorded with
Authority which define the appropriate the commencement of a new financial protection of confidentiality of identity,
approving authority to govern and year. The Group’s performances are to the extent reasonably practicable. An
manage business decision process. reported internally on a monthly basis employee who whistleblows internally
The Limits of Authority sets out a clear to the Management Committee. The will also be protected against any adverse
line of accountability and responsibility Group’s quarterly performances are also and detrimental actions for disclosing
which serves as a reference in presented to the Board with comparison any improper conduct committed or
identifying the approving authority to approved plans as well as against prior about to be committed within the Group,
for various transactions including periods. The Group’s strategic direction to the extent reasonably practicable,
matters that require Board’s approval. is also reviewed through a rigorous provided that the disclosure is made in
It provides a framework of authority assessment process taking into account good faith. Such protection is accorded
and accountability within the Group changes in market conditions and even if the investigation later reveals that
and facilitates decision making at significant business risks. the whistleblower is mistaken as to the
the appropriate level in the Group’s facts, rules and procedures involved. The
hierarchy. • Information and Communications process is undertaken by PETRONAS’
Technology Whistleblowing Committee. The
• Group Policies Information and communications policy and procedures are accessible
The Group has in place policies which technology is extensively deployed in to the public for reference on the
govern the day-to-day workings of the the Group to automate work processes, Company’s official corporate website at
business such as HSE, plant operations where possible and to efficiently collect www.petronaschemicals.com.
and human resource management. The key business information. The Group
Group has also adopted PETRONAS continues to enhance its information Related Party Transactions (RPTs)/
Corporate Financial Policy which and communication systems in Recurrent Related Party Transactions
sets forth the policy for financial ensuring that it can act as an enabler to (RRPTs) and Conflict of Interest (COI)
management activities embedding the improve business processes including
principles of financial risk management. adherence to the Group’s business The Group has established policies and
The Corporate Financial Policy governs objectives, policies and procedures procedures with regards to RPT (including
financial risk management practices whilst enhancing work productivity and RRPT), and COI to ensure full compliance to
across the Group. It prescribes a decision making throughout the Group. the MMLR of Bursa Malaysia.
framework in which financial risk
exposure is identified and managed. • Tender Committee The policies and standard operating
Tender committee structure procedures require the use of various
• Operating Procedures and Guidelines which comprises cross functional methods to ensure that RPTs/RRPTs are
The Group has developed operating representatives has been established conducted on normal commercial terms,
procedures and guidelines which to review all major purchases and which are consistent with the Group’s normal
covers business planning, capital contracts. The tender committees business practices and policies, and will not
expenditure, financial operation, provide the oversight function on be to the detriment of the Group’s minority
performance reporting, HSE, plant tendering matters prior to approval by shareholders. Such methods include the
operations, marketing and sales, the relevant approving authorities as set review and disclosure procedures are listed
supply chain management, human out by the Limits of Authority. as follows and in the following page:
resource management, corporate
affairs, innovation & technology and • Employees Performance Management
information system. These define the The Group selects talents for 1
procedures for day-to-day operations employment through a structured
Directors and officers of the Company and
and act as guidelines to the proper recruitment process. The professionalism its Group shall not enter into transactions
measures to be undertaken in a given set and competency of staff are continuously with related parties unless these transactions
of circumstances. The procedures and enhanced through a structured training are carried out on normal commercial terms
guidelines are also reviewed on a regular and development programme. A and are not to the detriment of the Group’s
basis to ensure continuing relevance and performance management system is in minority shareholders.
effectiveness. place which measures staff performance
against agreed KPIs on a periodic basis.
• Business Plan and Budget 2
The Group undertakes an annual • Whistleblowing Policy
budgeting and forecasting exercise The Group has adopted the PETRONAS All sourcing and sales of PCG’s products,
which includes development of business Whistleblowing Policy which provides general merchandise shared facilities shall
be based on market negotiated pricing
strategies for the next five years and an avenue for the Group employees and
terms and conditions and/or pricing
the establishment of KPIs against which members of the public to disclose any
formulas quoted against international price
the overall performance of the Group, improper conduct in accordance with
benchmarks.
including the respective performance the procedures as provided under the
of business segments and companies policy.
within the Group, can be measured
and evaluated. Detailed operating and
41
PCG forms part of the integrated oil and gas value chain of the PETRONAS Group.
3
The transactions such as the supply of raw materials are vital to PCG’s operations,
Whenever practicable, at least two and alternative supplies will not be readily available as PETRONAS Group is a major
other quotations should be sought, with
supplier and at times, the sole supplier of such raw materials. Due to the integrated
organisations of similar standing.
nature of PCG’s business operations with the PETRONAS Group, the waiver is of
particular significance to ensure PCG does not experience any disruption to its
4 operations.
All RPTs/RRPTs will be reviewed by the Board
Audit Committee prior to the approval by Recurrent Related Party Transactions that were waived by Bursa Malaysia from
either the Board or the shareholders. complying with the requirement of Paragraph 10.09 of the MMLR are as follows:
5 For Year Ended

Transacting 31 December 2018
The BAC is responsible to ensure that the
Parties Nature of transactions RM ‘000
policies and procedures relating to RPTs/
RRPTs and COI situations are sufficient to
ensure that RPTs/RRPTs are carried out INTEGRATED OPERATIONS OF OUR GROUP
on normal commercial terms and not
to the detriment of the Group’s minority PCG Group and (i) Supply of fuel and feedstock (such 7,298,231
shareholders. PETRONAS and as ethane, propane , butane, dry gas,
its subsidiaries naphtha, natural gas) by PETRONAS
(PETRONAS Group
6 Group)
On an annual basis, all Directors and any

(ii) Supply of utilities, electricity and water by 869,147
related party of the Group will declare in PETRONAS Group
writing an annual declaration form, designed to
elicit information about potential relationships (iii) Upgrading and pipeline works on the Nil
and/or COI situations, involving their interest, Labuan Gas Terminal by PETRONAS
either directly or indirectly. All Directors and Chemicals Methanol (Labuan) Sdn Bhd
any related party of the Group shall also notify
in writing of any interest in RPT/RRPT or COI
situation when it becomes known to them.
(iv) Grant to PETRONAS Group for the right 539
of usage of facilities and passage of
commodities to facilitate the receipt
7 and distribution of petrochemicals and
related products
The Group’s Legal and Corporate Secretariat
performs reviews on all commercial (v) Provision of operating and maintenance 5,968
contracts. System based records are
services by PETRONAS Group
maintained to capture the RPTs/RRPTs
which have been entered into. Processes
concerning negotiations, tendering and (vi) Purchase of marine diesel oil from 10,926
analysis carried out for transactions between PETRONAS Group
related parties are appropriately documented
and retained to support and evidence SERVICES RENDERED WITHIN THE PETRONAS
that such transactions have been carried GROUP
out on normal commercial terms and are
not detrimental to the Group’s minority
shareholders. (vii) Provision of vessel screening services by 45
PETRONAS Maritime Sdn Bhd
(viii) Provision of freight, transportation and 20,773

The Company has been granted a waiver warehousing services by MISC Berhad
from complying with the requirement and its subsidiaries (MISC Group)
of Paragraph 10.09 of the MMLR of
Bursa Malaysia including having to seek OTHERS
shareholders’ approval in relation to the
(ix) Sales of petrochemical products and 1,017,175
supply, sale, purchase, provision and
other related products to PETRONAS
usage of certain goods, services and Group
facilities which form part of PETRONAS
Group integrated operations.
42
Management’s Accountability
Management is accountable to the Board for the implementation of the processes in identifying, evaluating, monitoring and
reporting of risks and internal control as prescribed above. The MD/CEO and CFO have provided the Board with assurance that
the Group risk management and internal control system is operating adequately and effectively, in all material aspects, to ensure
achievement of corporate objectives. In providing the above assurance by MD/CEO and CFO, similar assurances have also been
obtained from Management Committee members confirming the adequacy and effectiveness of risk management practice and
internal control system within their respective areas.
Conclusion
Based on the above, the Board is of the view that the system of internal control instituted throughout PCG is sound and provides
a level of confidence on which the Board relies for assurance. In the year under review, there was no significant control failure
or weakness that would result in material losses, contingencies or uncertainties requiring separate disclosure in this Integrated
Report.
The Board and Management will continue to review and strengthen the Group’s risk management and internal control system
to ensure ongoing adequacy and effectiveness of the system of internal control and risk management practices to meet the
changing and challenging operating environment.
Review of the Statement by External Auditors
The external auditors have reviewed this Statement on Risk Management and Internal Control pursuant to the scope set out
in Audit and Assurance Practice Guide (AAPG 3), Guidance for Auditors on Engagements to Report on the Statement on Risk
Management and Internal Control included in the Annual Report issued by the Malaysian Institute of Accountants (MIA) for
inclusion in the integrated report of the Group for the year ended 31 December 2018, and reported to the Board that nothing
has come to their attention that cause them to believe that the statement intended to be included in the integrated report of
the Group, in all material respects:
(a) has not been prepared in accordance with the disclosures required by paragraphs 41 and 42 of the Statement on Risk
Management and Internal Control: Guidelines for Directors of Listed Issuers, or
(b) is factually inaccurate.
AAPG 3 does not require the external auditors to consider whether the Directors’ Statement on Risk Management and Internal
Control covers all risks and controls, or to form an opinion on the adequacy and effectiveness of the Group’s risk management
and internal control system including the assessment and opinion by the Board of Directors and management thereon. The
auditors are also not required to consider whether the processes described to deal with material internal control aspects of any
significant problems disclosed in the annual report will, in fact, remedy the problems.
This Statement on Risk Management and Internal Control is made in accordance with the resolution of the Board dated
25 February 2019.
Vimala V.R. Menon

Chairman
Board Audit Committee
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www.petronaschemicals.com
PETRONAS Chemicals Group Berhad

Tower 1, PETRONAS Twin Towers
Kuala Lumpur City Centre
50088 Kuala Lumpur Malaysia
Tel : +603 2051 5000

Fax : +603 2051 3888

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LEADING.

Table of Contents Co v er Ratio n al e

LEADING. FUTURE FOCUSED

Th e fo l l o win g ico n s are u s ed th ro u gh out thi s

Tells you where you can find more information online

01 About This Report

Statement 02 Chairman's Corporate Governance Overview

For more information, please log on to our website: www.petronaschemicals.com

Scope and Boundary Reporting Framework

CHAIRMAN’S Creating and Maintaining the

OVERVIEW complements the talents of our executive team.

Datuk Md Arif Mahmood

Datuk Md Arif Mahmood Datuk Sazali Hamzah

Nationality: Malaysian Age: 56 Nationality: Malaysian Age: 52

BOARD COMMITTEE PRESENT DIRECTORSHIPS BOARD COMMITTEE PRESENT DIRECTORSHIPS

Nil Listed Entities: Nil Listed Entities:

ACADEMIC/PROFESSIONAL QUALIFICATIONS ACADEMIC/PROFESSIONAL QUALIFICATIONS

WORKING EXPERIENCE WORKING EXPERIENCE

Present Appointments: Present Appointments:

Vimala V.R. Menon Datuk William Toh Ah Wah

Nationality: Malaysian Age: 64 Nationality: Malaysian Age: 61

BOARD COMMITTEE PRESENT DIRECTORSHIPS BOARD COMMITTEE PRESENT DIRECTORSHIPS

• Chairman of Board Audit Listed Entities: • Chairman of NRC Listed Entities:

ACADEMIC/PROFESSIONAL QUALIFICATIONS ACADEMIC/PROFESSIONAL QUALIFICATIONS

WORKING EXPERIENCE WORKING EXPERIENCE

Present Appointments: Present Appointments:

Warren William Wilder Ching Yew Chye

Nationality: United States of America Age: 61 Nationality: Malaysian Age: 65

1 July 2018 7 months 13 August 2010 8 years and 6 months

BOARD COMMITTEE PRESENT DIRECTORSHIPS BOARD COMMITTEE PRESENT DIRECTORSHIPS

• Chairman of BRC Listed Entities: • Member of NRC Listed Entities:

ACADEMIC/PROFESSIONAL QUALIFICATIONS ACADEMIC/PROFESSIONAL QUALIFICATIONS

WORKING EXPERIENCE WORKING EXPERIENCE

Present Appointments: Present Appointments:

Dr. Zafar Abdulmajid Momin Zakaria Kasah

Nationality: Singaporean Age: 60 Nationality: Malaysian Age: 54

1 July 2018 7 months 31 July 2015 3 years and 7 months

BOARD COMMITTEE PRESENT DIRECTORSHIPS BOARD COMMITTEE PRESENT DIRECTORSHIPS

• Member of BRC Listed Entities: • Member of BRC Listed Entities:

ACADEMIC/PROFESSIONAL QUALIFICATIONS ACADEMIC/PROFESSIONAL QUALIFICATIONS

WORKING EXPERIENCE WORKING EXPERIENCE

Present Appointments: Present Appointments:

BOARD SKILLS MATRIX: • Engineering BOARD SKILLS MATRIX: INDUSTRY EXPERIENCE:

Further details about Hasnizaini Mohd Zain, can be found on

31 July 2015 3 years and 7 months

BOARD COMMITTEE PRESENT DIRECTORSHIPS

• Member of BAC Listed Entities:

• Fellow of the Association of Chartered Certified Accountants (FCCA)

Nationality: Malaysian Age: 58

Additional Information of the Board of Directors:

Managing Director/Chief Executive Officer

Chief Financial Officer

Head of Strategic Planning & Ventures

Head of Human Resource Management

Chief Innovation & Technology Officer

Head of Legal and Corporate Secretariat

Head of Health, Safety & Environment

Head of Corporate Affairs & Administration

Head of Project Directorate