KENANGA INVESTMENT BANK BERHAD INTEGRATED ANNUAL REPORT 2024 WE ARE KENANGA OUR SUSTAINABILITY APPROACH LEADERSHIP STATEMENT HOW WE ARE GOVERNED FINANCIAL STATEMENTS SHAREHOLDERS’ INFORMATION ADDITIONAL INFORMATION OUR VALUE CREATION APPROACH 107 106 CORPORATE GOVERNANCE OVERVIEW STATEMENT CORPORATE GOVERNANCE OVERVIEW STATEMENT Group Board Risk Committee The GBRC comprises three (3) INEDs and two (2) NINEDs and is chaired by an INED other than the Chairman of the Board. Details on the GBRC’s composition, as well as its members’ attendance at the GBRC meetings during the Financial Year Ended 31 December 2024 are provided on pages 8 and 87 of this Integrated Annual Report 2024 and in Section B of the CG Report which are available on KIBB’s website at https://www. kenanga.com.my/investor-relations/AGM2025. The GBRC was established to support the Board in meeting the expectations on risk management as set out in BNM’s Policy Document on Risk Governance. It also assists the Board in the implementation of a sound remuneration system, by examining whether incentives provided by the remuneration system take into consideration risks, capital, liquidity and the likelihood and timing of earnings, without prejudice to the tasks of the GNC. In addition, the GBRC supports the Board in carrying out the oversight governance function of sustainability risks and opportunities and its underlying ESG matters of the Group. The functions and responsibilities of the GBRC are set out in its Terms of Reference which is available on KIBB’s website at https://www.kenanga.com.my/investor-relations/corporategovernance/. During the Financial Year Ended 31 December 2024, the GBRC had deliberated, reviewed and made appropriate recommendations to the Board for approval, pertaining to key matters as stated below. • Proposed Interim Dividend for the Financial Year Ended 31 December 2023 • RTO and MTD for Critical Business Functions and Systems 2024 • 2023 Performance Appraisal of Group Chief Risk Officer (“GCRO”) of KIBB • 2024 Balanced Scorecard for GCRO of KIBB • Proposed ICAAP 2023 (with BNM Semi-Annual Stress Testing Report 31 December 2023 Embedded) • Asset and Liability Management Policy Update • Review of Financial Markets Product Framework and LCPP • Pillar 3 Disclosure as at 31 December 2023 • Submission of Leveraged Collar as Live Example for LCPP to BNM • BNM’s Net Stable Funding Ratio Thematic Review and Follow-up Status Update • SFPP • 2024 Equity Derivatives Business Plan and Market Risk Limits Review • Submission of Protected Financing as Live Example for SFPP to BNM • Revision of Technology Risk Management Framework • Proposed BNM Semi-Annual Stress Testing Report for Position as at 30 June 2024 • Independent Price Verification for Imagine System • Underlying Suitability Assessment – Master Framework • RTO and MTD for Critical Business Functions and Systems 2025 • Proposed Revision of Cyber Resilience Framework • Statement on Risk Management and Internal Control • Rollover of the Skim Perbankan Islam Structured Placement with KIB, a Wholly Owned Subsidiary of KIBB and Extension of KIB as the Designated Fund Manager to Manage This Fund via a Shariah Compliant Non-Discretionary Investment Management Mandate Besides approving the 2024 Balanced Scorecard for the Head of Independent Credit, the following updates had also been tabled to the GBRC during the Financial Year Ended 31 December 2024, for its deliberation and notation: • Risk Management Reports • Status Updates of Implementation Plan in Respect of BNM’s Policy Document on Climate Risk Management and Scenario Analysis • Ageing Report for Treasury Bonds, Held-for-Trading and Available-for-Sale Portfolios • Kenanga Research Macroeconomic Outlook Summary • Operational Risk Capital Charge Assessment for Year 2023 • Investment Portfolio Updates by Kenanga Private Equity Sdn Bhd • Review of the Loss Event Reporting Procedure • Post Approval Review of Corporate Banking Loans/ Financing • Post Approval Review of Share Margin Financing • Utilisation of Portfolio and Risk Management System (Imagine) • Lesson Learnt Report on Limit Down Incident in January 2024 • Operational Risk Scenario Analysis Assessment 2024 • Revision to the Group Operational Risk Committee’s Terms of Reference • Update on the Recovery Status of Accounts Having Concerned • ICAAP Trigger Event – Notification of Tier-1 Capital Ratio Deviation and Endorsement of the Proposed Action Plan • Updates of the Climate Change & Principle-based Taxonomy Classification Group Board Digital Innovation & Technology Committee The GBDITC comprises three (3) INEDs and two (2) NINEDs and is chaired by an INED other than the Chairman of the Board. The GBDITC was established on 29 August 2019 to support the Board in providing direction and oversight over technology related matters as set out in BNM’s Policy Document on Risk Management in Technology. In addition to providing oversight on technology-related matters, including risks, the GBDITC also reviews, evaluates and makes appropriate recommendations to the Board for approval, proposals on technology/ digital innovations put forward by Management, in line with KIBB Group’s medium and long-term business strategy which includes the digitalisation strategy for the Group. The functions and responsibilities of the GBDITC are set out in its Terms of Reference which is available on KIBB’s website at https://www.kenanga.com.my/investor-relations/corporate-governance/. Risk Management and Internal Control The Board is responsible for ensuring that KIBB has in place effective and comprehensive risk management policies, procedures and infrastructure to identify, measure, monitor and control the various types of risks undertaken by KIBB Group. In discharging this responsibility, the Board approves and periodically reviews the risk management capabilities of KIBB Group to ensure their ability to support KIBB Group’s business activities and any expansion thereof. It is important to emphasise that the ultimate responsibility for ensuring a sound internal control system and reviewing the effectiveness of the system lies with the Board. The Group’s inherent system of internal control is designed to manage, rather than eliminate, the risk of failure to achieve the Group’s corporate objectives, as well as to safeguard the Shareholders’ investments and the Group’s assets. The details of KIBB Group’s internal control system and risk management framework are set out in the SORMIC appearing on pages 126 to 130 of this Integrated Annual Report 2024. Audit Committee to Ensure Compliance with Financial Reporting Standards At the Board meetings, the Board reviews Management’s reports on the business performance of KIBB, as well as its major subsidiaries, associate and joint-venture companies and the analysis of the Group’s performance in comparison to the positions in the preceding month and quarter, as well as year to-date. The Board deliberates, and in the process, assesses the viability of business propositions and corporate proposals, and the principal risks that may have significant impact on KIBB’s business or on its financial position, as well as the related mitigating factors. PRINCIPLE C INTEGRITY IN CORPORATE REPORTING AND MEANINGFUL RELATIONSHIP WITH STAKEHOLDERS The Board aims to provide a clear, balanced and comprehensive assessment of the Group’s financial performance and prospects through the Audited Financial Statements and quarterly financial reports, as well as through material disclosures made in accordance with the MMLR of Bursa Malaysia. The AC assists the Board in overseeing the integrity of the Group’s financial reporting and part of this role involves the operation of the financial reporting processes. The processes are aimed at providing the assurance that the financial statements and related notes are completed in accordance with applicable legal requirements and accounting standards and give a true and fair view of the Group’s financial positions. In fulfilling this responsibility, the AC also reviews the accuracy and adequacy of the Chairman’s Message and corporate governance
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