KENANGA ANNUAL REPORT 2019

K E N A N G A I N V E S T M E N T B A N K B E R H A D A n n u a l R e p o r t 2 0 1 9 54 An Annual Audit Plan based on the appropriate risk based methodology has been developed and approved by the AC. On a quarterly basis, audit reports and status of internal audit activities including the sufficiency of GIA’s resources are presented to the AC for review. Periodic follow up reviews are conducted to ensure adequate and timely implementation of Management’s action plans. The GCIA is invited to attend the AC meetings to facilitate the deliberation of audit reports. The AC, pursuant to its Terms of Reference, oversees the effectiveness of the internal audit function of KIBB by: • reviewing, approving and reporting to the Board the audit scope, procedures and frequency; • reviewing and reporting to the Board key audit reports and ensuring that Senior Management is taking necessary corrective actions in a timely manner to address control weaknesses, non-compliance with laws, regulatory requirements, policies and other problems identified by GIA; • noting significant disagreements between the GCIA and the rest of the Senior Management team, irrespective of whether these have been resolved, in order to identify any impact the disagreements may have on the audit process or findings; • establishing a mechanism to assess the performance and effectiveness of the internal audit function; • reviewing and reporting to the Board the adequacy of scope, functions, competency and resources of the internal audit function and that it has the necessary authority to carry out its work; and • appointing, setting compensation, evaluating the performance and deciding on the transfer and dismissal of the GCIA and of any staff member of the internal audit function at the request of the GCIA. Group Board Risk Committee The GBRC comprises a majority of INEDs and is chaired by an INED who is not the Chairman of the Board. Details on the GBRC’s composition, as well as, its members’ attendance at the GBRC meetings during the Financial Year Ended 31 December 2019 are provided in Section B of the CG Report which is available on KIBB’s website at https://kenanga.com.my/investor-relations/AGM2020. The GBRC was established to support the Board in meeting the expectations on risk management as set out in BNM’s Policy Document on Risk Governance. It also assists the Board in the implementation of a sound remuneration system, by examining whether incentives provided by the remuneration system take into consideration risks, capital, liquidity and the likelihood and timing of earnings, without prejudice to the tasks of the NRC. The functions and responsibilities of the GBRC are set out in its Terms of Reference which is available on KIBB’s website at https://kenanga.com.my/investor-relations. Employees’ Share Scheme Committee The ESS Committee comprises a majority of INEDs and chaired by an INED who is not the Chairman of the Board. The ESS Committee was established to assist the Board to administer the Employees’ Share Scheme (“ ESS ” or “ Scheme ”) in accordance with the By-Laws governing the Scheme as approved by shareholders of KIBB. The main objective of the ESS, as approved by the shareholders of KIBB on 25 May 2017, is to align the employees’ interests with the long-term objectives of KIBB Group to create sustainable value enhancement for its shareholders through a high performance culture. The roles and responsibilities of the ESS Committee which are outlined in its Terms of Reference include the determination of all questions of policy and expediency that may arise in the administration of the ESS including, amongst others, the terms of eligibility of the employees of the Company and its non-dormant subsidiaries (“ Eligible Employees ”), the method or manner in which the grants CORPORATE GOVERNANCE OVERVIEW STATEMENT