KENANGA ANNUAL REPORT 2020

77 ANNUAL REPORT 2020 // KENANGA INVESTMENT BANK BERHAD d. 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 Bank Negara Malaysia ( “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 the External Auditors. In relation to the audit of the Company’s financial statements for the Financial Year Ended 31 December 2019, 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 2019. This written assurance by the External Auditors was contained in the External Auditors’ report which was presented to the AC on 30 January 2020. Based on the assessment conducted, the AC at the same meeting, had concluded that the External Auditors had fulfilled all the qualification 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 the External Auditors be re-appointed as the Company’s External Auditors for the Financial Year Ending 31 December 2020. e. At its meeting held on 27 October 2020, the AC reviewed and recommended to the Board for approval, the External Auditors’ 2020 Audit Plan outlining their scope of work and proposed fees covering their recurring audit assignments, as well as, other regulatory-related services. During the presentation of their 2020 Audit Plan, the External Auditors had also highlighted to the AC the developments in the financial reporting as summarised below. i. Amended Malaysian Financial Reporting Standards ( “MFRS” ) and Interpretations Committee Interpretations effective for annual period beginning on or after 1 January 2020 Description Effective Date Amendments to MFRS 9, MFRS 139 and MFRS 7: Interest Rate Benchmark Reform 1 January 2020 Amendments to MFRS 101 and MFRS 108: Definition of Material 1 January 2020 Interest Rate Benchmark Reform (Amendments to MFRS 9, MFRS 139 and MFRS 7) 1 January 2020 COVID-19-Related Rent Concessions (Amendment to MFRS 16 Leases) 1 June 2020 Extension of the Temporary Exemption from Applying MFRS 9 (Amendments to MFRS 4: Insurance Contracts) Effective immediately (17 August 2020)