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 131 130 Internal Audit GIA provides independent and objective assurance to the Board that the established internal controls, risk management and governance processes are adequate and are operating effectively and efficiently. To ensure independence and objectivity, GIA reports independently to the AC of KIBB and has no responsibilities or authority over any of the activities it reviews. GIA’s scope of work and activities are guided by the Internal Audit Charter, mandatory elements of The Institute of Internal Auditors’ International Professional Practices Framework and relevant regulatory guidelines. An Annual Audit Plan based on the appropriate risk-based methodology has been developed and approved by the AC. On a quarterly basis, audit reports and status of internal audit activities including the sufficiency of GIA resources are presented to the AC for review. Periodic follow-up reviews are conducted to ensure adequate and timely implementation of Management’s action plans. Associate and Joint Venture Companies The Board does not regularly review the internal control systems of associate and joint venture companies as the Board does not have any direct control over their operations. Notwithstanding this, the Group’s interests are served through representation on the Boards of the respective companies via receipt and review of management accounts, periodical reports as well as deliberation on proposals related to these companies. Such representation also provides the Board with information for decision-making on the continuity of the Group’s investments based on the performance of these associate and joint venture companies. CONCLUSION The Board, through the AC and GBRC, confirms that it has reviewed and considered the effectiveness of the Group’s risk management and internal control system as adequate during the financial year and has taken into consideration any material developments up to the date of approval of the Annual Report and Audited Financial Statements for the Financial Year Ended 31 December 2024. The main financial risk areas faced by the Group and the guidelines and policies adopted to manage them are provided in detail under Note 51 of the Audited Financial Statements of KIBB for the Financial Year Ended 31 December 2024. The Board is satisfied that there is an effective on-going process for identification, evaluation and management of risks and there are regular reviews to ensure controls are efficient and effective. Review of the Statement by External Auditors As required by Paragraph 15.23 of the MMLR of Bursa Malaysia, the external auditors have reviewed this Statement on Risk Management and Internal Control. Their review was performed in accordance with the Audit and Assurance Practice Guides (“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. Based on the review, the external auditors have reported to the Board that nothing has come to their attention that causes them to believe that this Statement is inconsistent with their understanding of the process that the Board has adopted in the review of the adequacy and integrity of the internal controls of the Group. AAPG 3 does not require the external auditors to, and they did not, consider whether this Statement covers all risks and controls, or to form an opinion on the effectiveness of the Group’s risk and control procedures. This Statement on Risk Management and Internal Control is made in accordance with the resolution of the Board dated 27 January 2025. STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL AUDIT COMMITTEE REPORT 1. COMPOSITION The Audit Committee (“AC”) of Kenanga Investment Bank Berhad (“KIBB” or “the Company”) presently comprises solely Independent Non-Executive Directors as follows: The composition of the AC is in line with Paragraphs 15.09(1)(a) and 15.09(1)(b) of the Main Market Listing Requirements (“MMLR”) of Bursa Malaysia Securities Berhad (“Bursa Malaysia”), as well as Standard 12.3 of Bank Negara Malaysia (“BNM”)’s Policy Document on Corporate Governance, which require the AC to comprise no fewer than three (3) members, all of whom must be Non-Executive Directors, with a majority of them being Independent Directors. The AC currently comprises solely Independent Directors, which is in line with Step-Up Practice 9.4 of the Malaysian Code on Corporate Governance (“MCCG”) issued by the Securities Commission Malaysia (“SC”). Adopting Practice 1.4 of the MCCG, the Chairman of the Board of Directors (“Board”) is not a member of the AC. Two (2) of the AC members, namely Encik Jeremy Nasrulhaq, currently the Chairman of the AC and Mr. Kanagaraj Lorenz, are members of the Malaysian Institute of Accountants and the Malaysian Institute of Certified Public Accountants respectively, in line with the requirements of the MMLR of Bursa Malaysia. This strengthens the effectiveness of the AC and facilitates the AC’s succession plan in terms of its membership to ensure full compliance with the relevant regulatory requirements. The effectiveness of the AC as a whole, as well as its members individually, is assessed annually in accordance with the Board Effectiveness Evaluation Framework based on a set of criteria covering the areas of composition, processes and procedures, interaction with Management, as well as roles and responsibilities. Based on the assessment conducted for 2024, the Board is satisfied with the performance of the AC and with the manner in which the AC has discharged its roles and responsibilities as stipulated in its Terms of Reference (“TOR”), which is available at the Company’s corporate website at https://www.kenanga.com.my. 2. AC MEETINGS HELD DURING THE FINANCIAL YEAR ENDED 31 DECEMBER 2024 During the Financial Year Ended 31 December 2024, the AC had convened six (6) meetings. The meetings were appropriately structured where members were given the agenda and sufficient notification. The AC meetings were of adequate length to allow the AC to accomplish its agenda with sufficient time to discuss the emerging issues. Other than the regular meetings of the AC scheduled throughout 2024, one (1) joint meeting between the AC and the Group Board Risk Committee (“GBRC”) was held on 18 October 2024 to deliberate on matters that were considered common for both committees. The AC conducted its meeting in an open and constructive communication mode and encouraged focused discussion, questioning and expressions of differing opinions. 1.1 1.2 1.3 2.1 ENCIK JEREMY NASRULHAQ Chairman, Senior Independent Non-Executive Director (“INED”) MR. KANAGARAJ LORENZ Member, INED PUAN NORAZIAN AHMAD TAJUDDIN Member, INED
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