110 Kenanga Investment Bank Berhad Annual Report 2021 Our Sustainability Approach About This Report We Are Kenanga Message From Chairman and GMD CONTINUOUS INITIATIVES TO STRENGHTEN INTERNAL CONTROLS Various initiatives have been initiated by GRCS in 2021 to further improve internal controls of Kenanga Group and as it was in the previous years, our Board and Senior Management remain supportive and encouraging of the undertakings. All the proposal for new and updates to the existing initiatives were properly deliberated and where necessary, were challenged, to ensure adoption and implementation of appropriate initiatives. • Assessment on Compliance with SC’s Letter on Observations and Good Practices Relating to Compliance with the Corporate Liability Provision (“Observations Letter”) The SC had issued the Observations Letter pursuant to their thematic review on the state of compliance of the capital market intermediaries to Section 17A of the Malaysian Anti-Corruption Commission Act 2009 (“MACCA”). The Observations Letter dated 16 March 2021 specifies the state of compliance as well as the good practices adopted by capital market intermediaries based on the T.R.U.S.T principles of the Guidelines on Adequate Procedures. In this regard, GRCS had identified a total forty-one (41) recommendations in the Observations Letter and is pleased to update that Kenanga Group had achieved 90.2% compliance level to the recommendations: Item T.R.U.S.T Principles No. of SC’s Recommendations Kenanga Group No. Complied % Complied 1. Top Level Commitment 8 8 100% 2. Risk Assessment 8 4 50% 3. Undertake Control Measures 9 9 100% 4. Systematic Review, Monitoring and Enforcement 5 5 100% 5. Training and Communication 11 11 100% TOTAL 41 37 90.2% The remaining four (4) outstanding items which were observed as ‘Partially Compliant’ were in relation to conducting Corruption Risk Assessment (“CRA”) on the specific business activities of the Group. While GRCS had undertaken assessments on the overall activities of the Group on two (2) separate occasions, CRA on the specific business activities are currently ongoing with priority given to the activities identified as carrying a higher risk. • Fraud and Corruption Risk Assessment (“FCRA”) In furtherance to the assessment conducted by GRCS pursuant to the SC’s Observations Letter, GRCS has developed the FCRA Guidance which serves as a guide to conducting FCRA on the specific business activities of Kenanga Group. Development of the Guidance takes into account recommendations of the Malaysian Anti-Corruption Commission (“MACC”) as well as other local and international standards. Outcome from the FCRA also serves as a tool to identify possible gaps and implement appropriate processes, systems and controls to close such gaps. This would also assist GRCS to propose or undertake the appropriate review and monitoring in relation to the identified fraud and corruption risks. In ensuring applicability and feasibility of the FCRA Guidance, GRCS also completed the FCRA on our Group Procurement activities and the same has been endorsed by the Group Governance, Nomination & Compensation Committee (“GNC”) and the KIBB Board at their meeting on 28 July 2021 and 29 July 2021 respectively. Moving forward, FCRA will be conducted on other business activities of the Group, prioritising the higher risk activities, with the aim of closing the gaps and achieving full compliance with the SC’s recommendations.
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