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 135 134 At its meeting held on 27 February 2024, the AC was updated by the External Auditors, on the latest status of the statutory audits conducted on KIBB Group in respect of the Financial Year Ended 31 December 2023. The AC had, at the same meeting, duly deliberated on the audit matters which required its attention. During its deliberations, in addition to the relevant disclosures in the Audited Financial Statements, the AC had also considered the recommendations made by the External Auditors towards enhancing the internal controls and procedures. Pursuant to Section 67(1) of the Financial Services Act 2013, an auditor appointed by a licensed person shall meet the qualification criteria set out in BNM’s Policy Document on External Auditor and shall continue to meet the criteria throughout the audit engagement. In addition, BNM’s letter dated 3 May 2012 on “Supervisory Expectations on AC Pertaining to the Appointment/ Re- Appointment of External Auditors” also sets out the areas of assessment to be performed. Being a licensed financial institution under the Financial Services Act 2013, the Company is required to undertake an annual assessment on areas focusing on performance and independence of External Auditors. In relation to the audit of the Company’s financial statements for the Financial Year Ended 31 December 2023, the External Auditors had given a written assurance to the AC that they were independent in accordance with the By-Laws (on Professional Ethics, Conduct and Practice) of the Malaysian Institute of Accountants and the International Code of Ethics for Professional Accountants (including International Independence Standards), throughout their audit engagement for 2023. This written assurance by the External Auditors was contained in the External Auditors’ Report which was presented to the AC on 24 January 2024. Following the implementation of the requirement for Annual Transparency Reporting by the SC’s Audit Oversight Board and in line with the MCCG’s criteria to guide decisions on the appointment and re-appointment of the External Auditors, the 2023 Transparency Report issued by EY was presented to the AC on 24 January 2024. After taking into consideration the assessment carried out by Management and the 2023 Transparency Report, the AC at the same meeting, had concluded that the External Auditors had fulfilled all the qualification criteria set out in BNM’s Policy Document on External Auditor in terms of its performance and independence and had therefore, recommended the re-appointment of EY as the Company’s External Auditors for the Financial Year Ending 31 December 2024 to the Board for approval. At its meeting held on 24 October 2024, the AC reviewed and approved the External Auditors’ 2024 Audit Planning Memorandum outlining their scope of work and proposed fees covering their recurring audit assignments, as well as other regulatory-related services. During the presentation of their 2024 Audit Planning Memorandum, the External Auditors had also highlighted to the AC the National Sustainability Reporting Framework which set 2027 as the proposed year for mandatory adoption of IFRS S1 and IFRS S2 in Malaysia with first (1st)-year transition reliefs available for preparers, and the developments in the financial reporting (as at 30 June 2024) as summarised below. c d e AUDIT COMMITTEE REPORT AUDIT COMMITTEE REPORT New Malaysian Financial Reporting Standards (“MFRS”) Issued as at 30 June 2024. Description Effective Date* Classification of Liabilities as Current or Non-Current and Non-Current Liabilities with Covenants (Amendments to MFRS 101 Presentation of Financial Statements) 1 January 2024 Lease Liability in a Sale and Leaseback (Amendments to MFRS 16 Leases) 1 January 2024 Disclosures: Supplier Finance Arrangements (Amendments to MFRS 107 and MFRS 7) 1 January 2024 Lack of Exchangeability (Amendments to MFRS 121) 1 January 2025 Classification and Measurement of Financial Instruments (Amendments to MFRS 9 and MFRS 7) 1 January 2026 MFRS 18 – Presentation and Disclosure in Financial Statements 1 January 2027 MFRS 19 – Subsidiaries without Public Accountability: Disclosures 1 January 2027 Sale or Contribution of Assets between an Investor and its Associate or Joint Venture (Amendments to MFRS 10 and MFRS 128) Effective date had been postponed Note * Effective for annual periods beginning on or after this date. Internal Audit At its meeting on 24 January 2024, the AC had reviewed and approved the 2024 Internal Audit Plan tabled by Group Internal Audit (“GIA”) after considering the adequacy of scope and comprehensiveness of the coverage of activities within KIBB Group, as well as the adequacy of resources in GIA. In 2024, the AC had reviewed and deliberated on a total of forty (40) Internal Audit Reports, together with the audit recommendations made by GIA and Management’s responses to those recommendations, in relation to the audits carried out by GIA. Where appropriate, the AC had directed Management to rectify and improve the control and workflow procedures based on GIA’s recommendations. The AC, at all its quarterly meetings, also reviewed the implementation status of the corrective actions arising from the audit recommendations to ensure that the key risks and control lapses were addressed adequately and in a timely manner. With regard to long outstanding audit recommendations, where appropriate, the relevant Heads of Department were invited to the AC meeting to provide relevant explanation for the delay in implementing such audit recommendations. In ensuring timely implementation of audit recommendations, the Company, under its Performance Management Framework, had introduced a demerit system for any delay in implementing high-risk audit recommendations of more than six (6) months and medium-risk audit recommendations of more than twelve (12) months. In addition to the audit conducted on the processes and systems of Support and Business Units within KIBB Group, during the Financial Year 2024, GIA also conducted various regulatory required reviews in areas including amongst others, Anti-Money Laundering/ Counter Financing of Terrorism, Basel II (Pillar 3), Related Party Transactions, Verification of RM Marketable Securities, Staff Training Fund, Federation of Investment Managers Malaysia (“FIMM”) Annual Compliance Review Checklist for Kenanga Investors Berhad and FIMM Annual Compliance Review Checklist for KIBB. 3.3 a b c
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