KENANGA ANNUAL REPORT 2019

S U S TA I N A B I L I T Y S TAT E M E N T 1 2 3 4 87 5 6 7 RESPONSIBLE INVESTMENT We believe that the continuous delivery of consistent top performance stems from the premise of an effective stewardship and active ownership approach throughout the investment value chain. In search of long term value accretive investments, we aim to influence investee companies as shareholders through the promotion of responsible and sustainable practices. As a sign of our intent and commitment, through Kenanga Investors Berhad, our asset management subsidiary, we had in 2017 became a signatory to the Malaysian Code for Institutional Investors. In adhering to our obligation as a signatory, we have developed practices to support the Code and internalise the principles throughout the entire investment value chain. Identification In our bottom up stock picking efforts, our fund managers meet with the management as part of identifying investment targets. Aside from analyzing companies based on fundamentals and value creation matrices, we also incorporate business sustainability and its corporate governance practices as part of the selection criteria. Active Ownership Post investment, an active ownership approach is adopted to closely monitor business and financial performance, corporate governance, strategy, capital structure and risk management. Close contact is maintained through private engagements with the investee companies. Voting We view voting at shareholder meetings as an integral part of the investment process. We consider the long term sustainable impact in exercising our voting rights on substantially held investee companies and material resolutions. INDUSTRIAL ADVANCEMENT Established in Malaysia for more than 45 years, we are a financial group with extensive experience in equity broking, investment banking, listed derivatives, treasury, corporate advisory, Islamic banking, wealth management and investment management. Today, we are the largest independent investment bank* in Malaysia and also one of the top three (3) brokerage houses with the largest network of remisiers in the country. In keeping with changing customer behaviour and increasing expectations, underscored by the advancement in Fintech over recent years, we have been homing in on innovation and digitalisation to deliver augmented products and redefine customer experience through faster speed-to-market and greater convenience. We were one of the first movers in the domestic Fintech landscape with the setting up of Rakuten Trade Sdn Bhd (“ Rakuten Trade ”) three (3) years ago — a joint-venture with Japan-based Rakuten Securities, Inc. A novel platform which enables a fully online trading experience, Rakuten Trade has registered 47,500 accounts as at the end of 2019 and has handled transactions amounting to almost RM8 billion in trading value on Bursa Malaysia. The COVID-19 outbreak has spurred new momentum in the online stock trading landscape. Having invested in our digital platforms over the last few years, including the rollout of Rakuten Trade, we are in a prime position to meet the shift towards online trading and continue growing the business through this challenging time. In 2019, we streamlined and formalised our digital programmes under a comprehensive framework that outlines our approach to (i) digital business ventures, (ii) transformation of traditional business operations, and (iii) strategic collaboration with technology enablers. The scope of this roadmap also covers workflow automation, data analytics and importantly, enhanced cyber security. In terms of product innovation, we launched our Securities Borrowing & Lending (“ SBL ”) product in 2019, which completes our equity broking products suite of offerings. This category of product is tailored to more sophisticated investors who are interested in short- selling, hedging or arbitraging. At the start of the year, through our asset management subsidiary, Kenanga Investors Berhad, we launched Malaysia’s first leveraged and inverse exchange-traded funds (“ ETFs ”). ETFs are diversified investment instruments that provide hedging against market downturns, at a relatively cost-effective entry point. Through continuous digital enhancements, as well as the roll-out of new investment tools, we hope to further accelerate the development of innovative products to broaden the diversification of investment options for our investors, contributing to a more vibrant investment landscape. RESPONSIBLE LENDING We support the corporate and retail community by providing them with access to appropriate credit facilities such as corporate loans, factoring and share margin financing, after taking into consideration their business and credit profiles via detailed assessment and approval processes. The existing lending principles and guidelines adopted by KIBB require that the lending is to businesses with good fundamentals that comply with general regulatory requirements and government initiatives, particularly with regard to compliance with environmental laws and regulations. * Based on Bursa Malaysia’s Trading Volume and Value. SUSTAINABILITY STATEMENT