KENANGA ANNUAL REPORT 2020

332 5 1 2 3 4 6 7 FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS 31 December 2020 56. SIGNIFICANT AND SUBSEQUENT EVENTS (CONT’D.) (a) There was no significant event during the financial year ended 31 December 2020 other than the following (cont’d.): Coronavirus pandemic (COVID-19) (cont’d.) As the Group’s businesses are considered essential services, we have continued to operate during the restricted period. The following paragraphs provide an analysis of the impact to the Group: (i) Impact on business operation As mentioned above, the Group’s businesses continued to operate during these restricted periods. There were no material contracts being suspended or terms that have been waived, modified or newly imposed to the Group’s activities. The disruption on the supply chain and distribution networks of our services arising from the COVID-19 pandemic was also minimal despite closure of certain branches as we were able to provide our services digitally. The Group’s digital journey that started a few years ago which focused not only on customer-centric technologies but also automation of operational processes had allowed us to capitalise on the sudden customer shift to online broking as well as the increase in trading volume during this period. (ii) Impact on cash flows, liquidity, financial performance and position The Group’s financial performance for the current financial period was not significantly affected by the COVID-19 pandemic. Although there may be higher impaired loans as macroeconomic conditions weaken and consequently some increase in credit costs, these are largely due to market volatility and is not expected to be permanent. Our overall asset quality remains intact. In addition, moratoriums granted to customers will have minimal impact on the Group’s cash flow, operations and financial performance. The Group also continues to maintain healthy capital adequacy and liquidity ratios throughout the period under review. (iii) Strategy and steps taken to address the impact of the COVID-19 In response to this “new normal” environment, appropriate and effective measures were put in place by the Group. For our employees, we have split our operations into separate locations for critical departments and enforced work-from-home arrangements to ensure our essential services continue with minimal disruptions. To protect our employees who have to work from office, daily sanitisation of areas, temperature checking and social distancing are adopted. We are in compliance with the recommendations from the Ministry of Health that are issued from time to time. We will continue to monitor and assess our credit, operational and liquidity risks on regular basis through the various policies and procedures that are in place to safeguard the financial position, performance and cash flows of the Group. We have and will continue our efforts to use digital tools to enable business and operational activities to be managed efficiently and effectively in a post-COVID-19 environment. (b) There was no significant event subsequent to the financial year ended 31 December 2020 other than the following: On 2 February 2021, the Bank had announced that KIB had acquired entire issued share capital of i-VCAP Management Sdn Bhd (“i-VCAP”) comprising 11,000,000 ordinary shares in i-VCAP following approval by the Securities Commission of Malaysia. Subsequent to the acquisition, i-VCAP became a wholly owned subsidiary of KIB.