Table of Contents 1 252

KENANGA ANNUAL REPORT 2017

KENANGA ANNUAL REPORT 2017 1
CONTENTS 3
About Us 4
OVERVIEW OF KENANGA INVESTMENT BANK BERHAD 4
MESSAGE FROM OUR CHAIRMAN 8
CORPORATE STRUCTURE 10
AWARDS AND RECOGNITION 12
GROUP MANAGING DIRECTOR’S OVERVIEW 14
Board and Management 22
FOUNDER AND ADVISER’S PROFILE 22
DIRECTORS’ PROFILES 23
GROUP MANAGING DIRECTOR’S PROFILE 28
SENIOR MANAGEMENT TEAM’S PROFILES 29
Governance and Sustainability 38
CORPORATE GOVERNANCE OVERVIEW STATEMENT 38
ETHICS AND COMPLIANCE STATEMENT 53
STATEMENT ON RISK MANAGEMENTAND INTERNAL CONTROL 58
AUDIT COMMITTEE REPORT 61
SUSTAINABILITY STATEMENT 66
Financial Statements 75
FIVE (5)-YEAR GROUP FINANCIAL SUMMARY 76
FIVE (5)-YEAR GROUP FINANCIAL HIGHLIGHTS 77
DIRECTORS’ REPORT 78
STATEMENT BY DIRECTORS 83
STATUTORY DECLARATION 83
INDEPENDENT AUDITORS’ REPORT 84
SHARIAH COMMITTEE’S REPORT 89
CONSOLIDATED STATEMENT OF FINANCIAL POSITION 90
STATEMENT OF FINANCIAL POSITION 91
STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME 92
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 94
STATEMENT OF CHANGES IN EQUITY 96
STATEMENTS OF CASH FLOWS 97
NOTES TO THE FINANCIAL STATEMENTS 99
1. CORPORATE INFORMATION 99
2. CHANGES IN ACCOUNTING POLICIES AND REGULATORY REQUIREMENT 99
3. ACCOUNTING POLICIES 103
4. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGMENTS 121
5. CASH AND BANK BALANCES 123
6. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS 124
7. FINANCIAL INVESTMENTS AVAILABLE-FOR-SALE 125
8. FINANCIAL INVESTMENTS HELD-TO-MATURITY 125
9. DERIVATIVE FINANCIAL ASSETS 126
10. LOANS, ADVANCES AND FINANCING 126
11. BALANCES DUE FROM CLIENTS AND BROKERS 129
12. OTHER ASSETS 130
13. STATUTORY DEPOSIT WITH BANK NEGARA MALAYSIA (“BNM”) 131
14. INVESTMENT IN SUBSIDIARIES 131
15. INVESTMENT IN ASSOCIATES 135
16. INVESTMENT IN A JOINT VENTURE COMPANY 137
17. PROPERTY, PLANT AND EQUIPMENT 139
18. INTANGIBLE ASSETS 143
19. DEFERRED TAXATION 146
20. DEPOSITS FROM CUSTOMERS 149
21. DEPOSITS AND PLACEMENTS OF BANKS AND OTHER FINANCIAL INSTITUTIONS 149
22. BALANCES DUE TO CLIENTS AND BROKERS 150
23. DERIVATIVE FINANCIAL LIABILITIES 150
24. OTHER LIABILITIES 151
25. OBLIGATIONS ON SECURITIES SOLD UNDER REPURCHASE AGREEMENTS 151
26. BORROWINGS 152
27. SHARE CAPITAL 153
28. RESERVES 153
29. OPERATING REVENUE 154
30. INTEREST INCOME 154
31. INTEREST EXPENSE 155
32. OTHER OPERATING INCOME 155
33. OTHER OPERATING EXPENSES 156
34. (ALLOWANCE FOR)/WRITE BACK OF IMPAIRMENT ON LOANS, ADVANCES AND FINANCING 157
35. (ALLOWANCE FOR)/WRITE BACK OF IMPAIRMENT ON BALANCES DUE FROM CLIENTS AND BROKERS ANDOTHER RECEIVABLES 158
36. SIGNIFICANT RELATED PARTY TRANSACTIONS AND BALANCES 158
37. CREDIT TRANSACTIONS AND EXPOSURES WITH CONNECTED PARTIES 161
38. COMPENSATION OF KEY MANAGEMENT PERSONNEL 162
39. DIRECTORS’ REMUNERATION 162
40. TAXATION AND ZAKAT 164
41. BASIC AND DILUTED EARNINGS PER SHARE 165
42. COMMITMENTS AND CONTINGENCIES 166
43. CONTINGENT LIABILITIES 167
44. OPERATING LEASE ARRANGEMENTS 168
45. DIVIDEND 168
46. OFFSETTING OF FINANCIAL INSTRUMENTS 169
47. CAPITAL MANAGEMENT AND CAPITAL ADEQUACY 170
48. FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES 173
49. SEGMENTAL REPORTING 176
50. FINANCIAL RISK MANAGEMENT 180
51. FAIR VALUE OF FINANCIAL INSTRUMENTS 209
52. OPERATIONS OF ISLAMIC BANKING 214
53. SIGNIFICANT EVENTS AND SUBSEQUENT EVENTS 224
54. DIRECTORS OF SUBSIDIARIES OF THE GROUP 225
55. PRIOR YEAR RECLASSIFICATION 228
Shareholders’ Information 231
ANALYSIS OF SHAREHOLDINGS 231
SHARE CAPITAL 231
LIST OF THIRTY (30) LARGEST SHAREHOLDERS 232
SUBSTANTIAL SHAREHOLDERS AND DIRECTORS’ INTEREST IN SHARES 233
Directors’ Shareholdings 233
AGM Information 234
NOTICE OF FORTY-FOURTH (44TH) ANNUAL GENERAL MEETING 234
STATEMENT ACCOMPANYING NOTICE OF FORTY-FOURTH (44TH) ANNUAL GENERAL MEETING 243
CORPORATE INFORMATION 244
CORPORATE DIRECTORY 246
PROXY FORM 249

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