KENANGA ANNUAL REPORT 2020

78 3 1 2 4 5 6 7 HOW WE ARE GOVERNED ii. New and amended MFRS issued but not yet effective Description Effective Date Interest Rate Benchmark Reform - Phase 2 (Amendments to MFRS 9, MFRS 139, MFRS 7, MFRS 4 and MFRS 16) 1 January 2020 At the same meeting, the AC had also taken note of the Annual Inspection Report 2019 ( “AIR 2019” ) issued by the Securities Commission Malaysia ( “SC” )’s Audit Oversight Board ( “AOB” ), as presented by the External Auditors. The AIR 2019 provided insights into the observations arising from the AOB’s inspections at both audit firm and audit engagement levels in 2019. f. On 25 January 2021, the GCFOO briefed the AC that the pre-approved tax fees and non-audit fees incurred and paid by KIBB Group to the External Auditors for the Financial Year Ended 31 December 2020 were RM123,800 or 22.9% and RM168,067 or 31.1% respectively, of the audit fees for the Financial Year Ended 31 December 2019, which was in line with the Group’s Policy on Non-Audit Services by External Auditors. 3.3 Internal Audit a. At its meeting on 30 January 2020, the AC had reviewed and approved the 2020 Audit Plan tabled by Group Internal Audit ( “GIA” ) after considering the adequacy of scope and comprehensiveness of the coverage of activities within KIBB Group, as well as, the adequacy of resources in the internal audit department. Due to the COVID-19 pandemic and the imposition of Movement Control Order by the Government of Malaysia, the AC had deliberated and approved the deferment of certain audit reviews planned for 2020 at its meetings held on 29 April 2020 and 27 October 2020. Arising from the deferment, the total number of reviews had been revised from forty-seven (47) to forty-one (41). b. In 2020, the AC had reviewed and deliberated on a total of forty-one (41) internal audit reports in relation to the audits carried out by GIA, together with the audit recommendations made by GIA and 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 2020, GIA also conducted various reviews required by the relevant 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. For the purpose of evaluating the performance of the GCIA, the AC had at its meeting on 30 January 2020, reviewed and deliberated the GCIA’s 2019 Performance Appraisal and the Annual assessment on Fit and Proper, as well as, the 2020 Balanced Scorecard, prior to submission of the same to the Group Governance, Nomination & Compensation Committee ( “GNC” ) (Formerly Known as Group Nomination & Remuneration Committee) for its further recommendation to the Board of KIBB for approval. The AC’s recommendation was subsequently approved by the Board of KIBB on 31 January 2020. AUDI T COMMI TTEE REPORT