KENANGA ANNUAL REPORT 2018

70 KENANGA INVESTMENT BANK BERHAD c. With a view of continuously enhancing the efficiency and productivity of the Internal Audit Department, the AC had on 26 October 2018 deliberated GIA’s proposal to implement an audit management system to assist in automating the administration and management of the internal audit process. d. For the purpose of evaluating the performance of the GCIA, the AC had at its meeting on 25 January 2018, reviewed and deliberated on the GCIA’s 2017 Performance Appraisal, as well as, 2018 Balanced Scorecard, prior to submission of the same to the Group Nomination & Remuneration Committee for its further recommendation to the Board for approval. The AC’s recommendation was subsequently approved by the Board on 30 January 2018. 3.4 Regulatory Examination/ Inspection Report a. As stipulated in its TOR, the AC also deliberates on reports issued by the regulators arising from their examinations or inspections on entities within the Group. This is to ensure proper implementation of appropriate remedial and corrective measures in respect of the findings arising from examination/ inspections conducted by the regulators. b. During the year, at its meeting on 25 January 2018 and 19 April 2018, the AC had deliberated on two (2) regulatory examination/ inspection reports issued by Bursa Malaysia Berhad and BNM respectively. In its deliberation, the AC not only discussed in detail the findings, areas for enhancement and recommendations made by the regulators, but also on the action plans identified by Management to address those findings. 3.5 Related Party Transactions During its quarterly meetings, the AC also reviewed the related party transactions and recurrent related party transactions entered into by the Company and/ or its group of companies to ensure compliance with the MMLR. 4. INTERNAL AUDIT FUNCTION 4.1 The Company has an in-house audit function within the Group. In discharging its responsibilities, GIA, which reports functionally to the AC and administratively to the Group Managing Director, provides independent and objective assurance to the Board and Management that the policies, procedures and operations that Management has put in place for risk management, control and governance are adequate, operating effectively and efficiently, and in compliance with the prescribed laws and regulations. 4.2 During the year under review, GIA carried out internal audit reviews based on its 2018 Audit Plan as approved by the AC. This Audit Plan was developed using a risk-based methodology. The audit reviews conducted by GIA included financial and operational audits, IT/ technical audits and compliance audits on regulatory requirements. In addition, GIA also conducted project reviews covering new business products/ services to ensure the adequacy of controls put in place prior to implementation. 4.3 All internal audit reports, detailing the audit findings, audit recommendations, as well as Management’s responses to those recommendations were circulated to the Group Managing Director and relevant Heads of Divisions/ Departments within the Group. Follow-up reviews were performed on the implementation status of the audit recommendations and reported to the AC accordingly. 4.4 The total costs incurred by GIA in discharging its functions and responsibilities in 2018 amounted to RM3.64 million. 4.5 As at 31 December 2018, GIA’s headcount was seventeen (17). AUDIT COMMITTEE REPORT