KENANGA ANNUAL REPORT 2019

H OW W E A R E G O V E R N E D 1 2 3 4 5 77 6 7 c. The AC was subsequently at its meeting held on 25 February 2019 updated by the External Auditors of the latest status of the statutory audits conducted on KIBB Group, wherein the AC had deliberated on audit matters which required its attention. At the same meeting, the AC was also informed by the External Auditors that they had reviewed the allotment of shares under the Employees’ Share Scheme (“ ESS ”) made to employees and Executive Directors of KIBB and its non-dormant subsidiaries during the Financial Year Ended 31 December 2018. Based on the review, the External Auditors were of the opinion that the allotment of shares under the ESS was in compliance with the criteria for allocation of shares which had been disclosed to the employees and Executive Directors of KIBB and its non-dormant subsidiaries. The AC concurred with the External Auditors’ opinion. d. In fulfilling the requirement to rotate the Engagement Partner in charge of the Company’s financial statements every five (5) years as set out in Bank Negara Malaysia (“ BNM ”)’s Policy Document on External Auditor, the AC at its meeting on 30 January 2019 had concurred with the appointment of a new Engagement Partner in charge of the financial statements of KIBB Group in place of the current Engagement Partner upon expiry of his five (5)-year tenure. e. Pursuant to Section 67(1) of the Financial Services Act 2013 (“ FSA ”), an auditor appointed by a licensed person shall meet the qualification criteria set out in BNM’s Policy Document on External Auditor and shall continue to meet the criteria throughout the audit engagement. In addition, BNM’s letter dated 3 May 2012 on “Supervisory Expectations on AC Pertaining to the Appointment/ Re-appointment of External Auditors” also sets out the areas of assessment to be performed. Being a licensed financial institution under the FSA, the Company is required to undertake an annual assessment on areas focusing on performance and independence of External Auditors. In relation to the audit of the Company’s financial statements for the Financial Year Ended 31 December 2018, the External Auditors had given a written assurance to the AC that they were not aware of any relationships or matters that, in their professional judgement, might reasonably be thought to bear on their independence; and that they were independent in accordance with the Bylaws (on Professional Ethics, Conduct and Practice) of the Malaysian Institute of Accountants, throughout their audit engagement for 2018. This written assurance by the External Auditors was contained in the External Auditors’ report which was presented to the AC on 30 January 2019. Based on the assessment conducted, the AC at the same meeting, had concluded that the External Auditors had fulfilled all the qualification criteria set out in BNM’s Policy Document on External Auditor in terms of its performance and independence and had therefore recommended to the Board that Messrs. Ernst & Young PLT be re-appointed as the Company’s External Auditors for the Financial Year Ended 31 December 2019. AUDIT COMMITTEE REPORT