KENANGA ANNUAL REPORT 2017

ETHICAL AND COMPLIANCE BUSINESS CONDUCT Taking cognisance of the increased focus by regulators on ethical and compliance matters, particularly involving treatment to clients and conduct of employees internally, the Group has placed a greater emphasis in promoting orderly and transparent conduct of business. Irrespective of the initiative for refinement of the compliance risk management structure, we continue to ensure enhancement of existing and introduction of new governance measures within the Group. We believe that ethics and values should not be consigned to the back burner. • Anti-Money Laundering and Counter Financing of Terrorism (“AML/CFT”) The Group AML/CFT Policy & Procedure has already established a strong and robust AML/CFT compliance framework for KIBB Group. It sets the foundation for introduction of the required control measures towards detection and minimisation of money laundering and terrorism financing risks. Nevertheless, to keep pace with the growing markets and complex business structure, it is important for us to further intensify the AML/CFT control measures. Thus, we have embarked on the implementation of the AML/CFT System for a timely and regular detection, monitoring and reporting of suspicious activities, which would eventually introduce a more unified and systematic approach throughout the Group. This would also ensure that we accede to BNM and Securities Commission Malaysia’s (“ SC ”) expectations on the Risk-Based Approach and Management Information System for AML/CFT purposes. • Whistleblowing Policy We promote a culture of constructive challenge by instilling a sense of belonging in an individual employee with the end objective of collectively safeguarding interest of the Group and our clients. To this effect, the Group Whistleblowing Policy & Guidance Notes provides a formal framework and multiple channels for all employees to raise concerns and report illegal or unethical practices encountered within their workplace. As part of continuous advancements, the whistleblowing mechanism has been enhanced covering all vendors’ request for proposals (“ RFP ”), letter of awards as well as our eprocurement website. In addition, to instil greater governance, the Chairman of Audit Committee is the Designated Director for the oversight of the Group’s Whistleblowing Framework and is notified on all pertinent decisions falling within the subject matter. • Conflict Management We also ensure that the clients are adequately informed about any conflict of interest that may affect our provision of a financial service. The Group Conflict Management Policy requires appropriate disclosures to be made by providing sufficient details in a clear, concise and effective manner so as to allow clients to make an informed decision taking into consideration instances where a particular conflict may affect the service offered or provided to them. • Personal Data Protection We have adopted the Personal Data Protection Framework and Personal Data Protection Act (“ PDPA ”) Data Access and Retention Procedure to ensure that controls, procedures and processes are implemented at each business and operational functions in order to comply with the data protection requirements. The Personal Data Protection Notice is also published in the Group’s corporate website for public viewing. • Chinese Wall and Insider Trading As an Investment Bank, we play a pivotal role not only in the protection of our clients’ interests but also in maintaining integrity of the capital market industry at large. Towards this, we have implemented the Group Chinese Wall Policy as an effort to control the flow of confidential information and material non-public price-sensitive information of the Group. This also serves to avoid the risk of possible breach of insider trading provisions, protect client confidentiality and manage conflict of interest. Effective implementation of the Policy will minimise the risk of a conflict between the Group’s interests and duties to our clients, and avoid any party from gaining an unfair advantage over the rest of the market. • Anti-Fraud Policy It is our aim to prevent and deter any unlawful or irregular behaviours, conducts, practices, deeds and omissions amounting to actual and or attempted fraud, corruption or bribery from occurring in the Group. We have introduced the Group Anti-Fraud, Bribery and Corruption Policy as an effort to provide a reference point for the employees to combat fraud, bribery and corruption or prevent situations in which fraudulent, bribery and corrupt practices may take root. This Policy helps the identification of various forms and illustrations of fraud, understanding of respective roles and responsibilities, and dealing with improper solicitation, fraud, corrupt and bribery instances that may arise in the course of work. Annual Report 2017 53 ethics and compliance statement