KENANGA ANNUAL REPORT 2017

Dear Shareholders, It is my pleasure to present to you the Annual Report of Kenanga Investment Bank Berhad (KIBB or the Company) for the financial year ended 31 December 2017. KEY HIGHLIGHTS The 2017 Malaysian economy generally picked up momentum from the previous year with Bursa Malaysia’s trading volume peaking to a ten (10)-year high, whilst fundraising in the capital market reached an all-time high of RM146.6 billion, well above the five (5)-year average of RM116 billion. Benefitting from the buoyant capital market, Kenanga Investment Bank Berhad and its Group of Companies (Kenanga Group or the Group) registered a Profit Before Tax of RM40.62 million – an increase of 25% from the previous year, while Profit After Tax stood at RM24.17 million, a growth of 20% from the previous corresponding period. I am delighted to report not just positive financial results but also a multitude of significant milestones that have brought to life our growth agenda centred on innovation and collaboration. A step in this direction was the Memorandum of Understanding signing in March 2017 with MIMOS Berhad, Malaysia’s Research and Development Centre in Information and Communications Technology, to promote and advance FinTech in Malaysia. This year, the Group will be the first (1 st ) investment bank in Malaysia to adopt MIMOS’ multi-factor authentication software to provide greater online protection to our online traders. Strategic collaborations like this accelerates knowledge sharing and allows for the partnership to mutually leverage creativity, experience and resources. To this end, 2017 also saw the launch of Rakuten Trade Sdn Bhd (Rakuten Trade), a joint venture with the highly successful Japan-based Rakuten Securities, Inc.. The momentous event was widely celebrated as it not only signalled a significant milestone for the Group but also, the start of a new way of trading for investors in Malaysia. Offering a novel fully online trading platform, Rakuten Trade aims to cater to the millennials and technologically savvy segment. It has been very exciting to witness the fruition of this joint venture. We continue to be humbled by the industry recognition and accolades that were awarded to us throughout the year. We are heartened by the encouragement and validation it renders to our businesses who work tirelessly to deliver excellence. For the 2017 Bursa Excellence Awards, the Group bagged six (6) awards that recognised brokers and market intermediaries who were stellar performers in the capital market. The six (6) awards included Most Innovative Participating Organisation (Special Award), Best Remisier (Champion), Best Trading Participant Equity & Financial Derivatives (Champion), Best Overall Derivatives Trading Participant (First (1 st ) Runner Up), Best Retail Equities Participating Organisation (First (1 st ) Runner Up) and Best Institutional Derivatives Trading Participant (Second (2 nd ) Runner Up). The full list of awards and recognition are set out on pages 10 to 11 of this annual report. Although I have had the privilege of previously serving on the Board of K & N Kenanga Holdings Berhad, this past year as Chairman of KIBB has given me the opportunity to work closely with the management team and I must say, the immense dedication and diligence exemplified by them have made a tremendous impression on me. I believe it is this commitment and focus under the leadership of Group Managing Director Datuk Chay Wai Leong that has charted the continued growth and progress of the Group and I am confident that this year will be no different. BOARD MOVEMENTS There have been a few Board Member movements in 2017. In May 2017, Datuk Kevin How Kow, stepped down as a Non-Independent Non-Executive Director of KIBB, having been a member of the Board since 15 April 2005. On behalf of the Board, we would like to thank him for his substantial contribution over the course of his tenure. In July 2017, Luigi Fortunato Ghirardello who has been a Board member since 29 July 2008 was redesignated from Independent Non- Executive Director to Non-Independent Non- Executive Director. During the same year, we welcomed on board Jeremy Nasrulhaq, Norazian Ahmad Tajuddin and Kanagaraj Lorenz as Independent Non- Executive Directors. Their diverse backgrounds and vast experiences in banking and financial services will put us in good stead. APPRECIATION Tan Sri Dato’ Paduka Tengku Noor Zakiah Tengku Ismail, Founder and Adviser continues to play an integral role in steering the organisation forward. Her immense knowledge, experience and fortitude is nothing short of extraordinary. An icon in the industry and well-known for her enterprising spirit, Tan Sri Dato’ Paduka Tengku Noor Zakiah was awarded entry to the Malaysia Book of Records in September 2017 as the ‘First Female Entrepreneur To Start Up A Stockbroking Company’. We were honoured to witness and celebrate that momentous occasion with her as she continues to inspire us all. My utmost gratitude to Tan Sri Dato’ Paduka Tengku Noor Zakiah for her insights and wisdom, which continue to help lead the Group forward. As I conclude, I take this opportunity to offer my heartfelt appreciation to my colleagues on the Board for their support and guidance. My deepest appreciation also goes out to our valued customers, business partners, suppliers and shareholders for their unwavering support, collaboration and continued confidence in the Group. To our most valued asset – the dedicated employees and management team, I offer my profound appreciation for your selfless commitment, professionalism and passion in carrying out your duties that have enabled us to achieve our objectives. On behalf of the Board of Directors, management and employees, I extend our gratitude to Bank Negara Malaysia, Securities Commission Malaysia and Bursa Malaysia for their invaluable assistance, guidance and support rendered throughout the year. Izlan Izhab Chairman 7 Annual Report 2017 message from our chairman