274 NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2022 Additional Information We Are Kenanga Message From Our Leaders Our Sustainability Approach How We Are Governed Financial Statements Shareholders’ Information 50. FINANCIAL RISK MANAGEMENT The Group and the Bank adopt a proactive and continuous approach in managing risks and have established a risk management framework to ensure that adequate policies and processes are in place to identify and manage the risks within the defined policies and guidelines as approved by the Board of Directors. The Group’s and the Bank’s financial risks are centrally managed by the various committees within the delegated authority by the Board of Directors. These committees formulate, review and approve policies and limits to monitor and manage risk exposures under their respective supervision. The major policy decisions and proposals approved by these committees are subject to further review by the Group Board Risk Committee and the Board of Directors. The Group Risk Management assumes the independent oversight of risks undertaken by the Group and the Bank, and takes the lead in the formulation of risk policies, controls and processes. This is further enhanced by the periodic risk assessment audit carried out by the Group’s and the Bank’s Internal Audit. The main risk areas faced by the Group and the Bank and the guidelines and policies adopted to manage them are as follows: (a) Credit risk Credit risk or the risk of counterparties defaulting, are minimised by the application of credit approvals, limits and monitoring procedures. Balance due from clients and brokers are monitored on an ongoing basis via periodic management reporting. The Group and the Bank through its directors and management, review all significant exposures to customers and counterparties as well as any major concentration of credit risk related to any financial instrument. The Group and the Bank have risk management procedures in place to manage these risks to ensure that all the procedures and principles relating to risk management are adhered to. Credit-related commitments risks The Group and the Bank enter into various commitments which include commitments to extend credit lines and obligation under underwriting agreements. Such commitments expose the Group and the Bank to similar risks to loans and financing and are mitigated by the same processes and policies. Impairment assessment For the purpose of determining the risk of default occurring, default is defined based on the credit risk management practises. Portfolio Default Loans, advances and financing Declaration of event of default with rating “D” and below Share margin financing Margin of financing below 100% or declaration of event of default Trade receivables- stockbroking More than 30 days past due from contra losses Other receivables- asset management More than 30 days past due Other receivables- advisory fees More than 30 days past due Other receivables- factoring More than 30 days past due Debt securities at amortised cost or FVOCI Declaration of event of default with rating “D” and below
RkJQdWJsaXNoZXIy NDgzMzc=