KENANGA ANNUAL REPORT 2019

H OW W E A R E G O V E R N E D 1 2 3 4 5 79 6 7 b. In 2019, the AC had reviewed and deliberated on a total of 43 internal audit reports in relation to the audits carried out by GIA, together with the audit recommendations made by GIA and the Management’s responses to those recommendations. Where appropriate, the AC had directed Management to rectify and improve control and workflow procedures based on GIA’s recommendations. The AC, at all its quarterly meetings, also reviewed the implementation status of the corrective actions arising from the audit recommendations to ensure that the key risks and control lapses were addressed in a timely manner. With regard to long outstanding audit recommendations, where appropriate, the relevant Heads of Department were invited to the AC meeting to provide relevant explanation for the delay in implementing such audit recommendations. c. In addition to the audit conducted on the processes and systems of Support and Business Units within KIBB Group, during Financial Year Ended 31 December 2019, GIA also conducted various reviews required by the regulators in areas including amongst others, Anti-Money Laundering/ Counter Financing of Terrorism, Basel II (Pillar 3), Related Party Transactions, verification of RM Marketable Securities, Staff Training Fund, Cyber Security, and Business Continuity Plan/ Disaster Recovery Plan Testing. d. With a view of supporting proper design and effective functioning of internal audit operations, the AC had, at its meeting on 30 January 2019, deliberated the results of GIA’s self-assessment on the function’s policies and practices for conformance with the International Standards for the Professional Practice of Internal Auditing (“ IIA Standards ”) which took effect on 1 January 2017. Based on the results of the self-assessment, GIA would, in consultation with the AC where applicable, formulate the relevant action plans to address the gaps identified. As part of the initiatives undertaken by GIA, an exercise would be conducted to identify and select an external consultant to conduct the Quality Assurance Review on GIA within the second (2 nd ) half of 2020. e. For the purpose of evaluating the performance of the GCIA, the AC had at its meeting on 30 January 2019, reviewed and deliberated the GCIA’s 2018 Performance Appraisal, as well as 2019 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 31 January 2019. f. The AC at its meeting on 24 October 2019 had deliberated the revised Internal Audit Charter, benchmarked against the IPPF with the objectives to: i. reflect the mandatory elements of The Institute of Internal Auditors’ International Professional Practices Framework (“ IPPF ”) 1 (IPPF - 2017 edition)’s requirements; and ii. enhance the ‘Scope’ and ‘Responsibility’ for better clarity to reflect the actual work being performed by GIA. 1 The IPPF consisted of the Core Principles for Professional Practice of Internal Auditing, the Code of Ethics, the IIA Standards, and the Definition of Internal Auditing. AUDIT COMMITTEE REPORT