Kenanga Investment Bank: Malaysia's Leading Investment Bank

UNIVERSITI UTARA MALAYSIA
OTHMAN YEOP ABDULLAH GRADUATE
SCHOOL OF BUSINESS (OYAGSB)
A192 2020
CORPORATE GOVERNANCE
(BWFF5093)
KENANGA INVESTMENT BANK BERHAD
Written by:
Mohamad Haikal Bin Abd Rahim
(824424)
Muhamad Fitri Bin Shahiran
(826315)
Lecturer Name:
Dr. Hanita Bt Kadir Shahar

Company Background & Nature of business
Kenanga Investment Bank Berhad

Kenanga Investment Bank Berhad was established for more than 40 years, Kenanga is
a financial group in Malaysia with extensive experience in equity broking, investment
banking, listed derivatives, treasury, corporate advisory, Islamic banking, wealth
management and investment management. Today Kenanga Investment Bank Berhad is
the largest independent investment bank by equity trading volume and value, as well as
is one of the top three brokerage houses with the largest network of remises in the
country. Our clients also enjoy convenience through more than 30 locations throughout
Malaysia. In addition, Kenanga Futures Sdn Bhd was named Malaysia's "Best
Derivatives Trading Broker" and "Best Trading Broker - Equity Derivatives" for the
past 13 consecutive years by Bursa Malaysia Derivatives Berhad and were also voted
the "Emerging Market Broker of the Year 2015" by Futures & Options World (FOW),
a UK based leading News and Data service for the international futures and options
industry. Our investment management subsidiary, Kenanga Investors Berhad has been
recognized by the Lipper Fund Awards (Malaysia) for four consecutive years as well as
the Fundsupermart.com's Recommended Unit Trusts Awards for its consistent top
performing funds.
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History Kenanga Investment Bank Berhad
1973
Chairman, YM Tengku Dato’ Paduka Noor Zakiah Binti Tengku Ismail was granted a stock
broking license. YM Tengku Dato’ Noor Zakiah and her business partner, Tuan Haji Kamaruddin
bin Taha, incorporated K & N Kenanga Sdn Bhd, now known as Kenanga Investment Bank
Berhad with an issued and paid-up share capital of RM2 million. It became one of the first
broking houses in Malaysia. YM Tengku Dato’ Noor Zakiah is acknowledged as the first Lady
Member to be accepted by Bursa Malaysia Securities Berhad.
1989
John Hancock acquired a 30% equity interest in Kenanga Investment Bank.
1991
Deutsche Asia Pacific Holdings Pte. Ltd. became a shareholder when it acquired John Hancock
International Holdings Inc. (”John Hancock”) 30% shareholdings in Kenanga Investment Bank
1994
A holding company, K & N Kenanga Holdings Berhad was incorporated on 7 June 1994.
1995
Kenanga Holdings entered into a joint venture with Deutsche Asia Pacific Holdings Pte Ltd which
resulted in the establishment of Kenanga Deutsche Futures Sdn Bhd.
1996
Kenanga Holdings acquired the entire issued and paid-up share capital of Kenanga Investment
Bank via the issuance of new shares in Kenanga Holdings to the existing shareholders of Kenanga
Investment Bank. Kenanga Holdings was listed on Bursa Malaysia Securities Berhad on 8 October
1996.
1997
Kenanga Capital Sdn Bhd commenced its business of financing shares of companies approved for
listing and quotations on Bursa Malaysia Securities Berhad under the purview of the Moneylenders
Act 1951.
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2001
In line with the Securities Commission’s aim to consolidate the stockbroking companies in
Malaysia, K & N Kenanga Holdings Berhad (”Kenanga Holdings”) embarked on a merger exercise
which involved:
the acquisition of the subsidiaries of CMS Capital Sdn Bhd (“CMS”), Sarawak Securities Sdn Bhd
and Sarawak Securities Futures Sdn Bhd, via the issuance of shares in Kenanga Holdings to CMS;
and the acquisition of Peninsula Securities Sdn Bhd for cash.
This resulted in CMS becoming a major shareholder of Kenanga Holdings with 25.13% equity
interest.
2002
Upon completion of the merger, Kenanga Investment Bank Berhad was granted Universal Broker
status by the Securities Commission.
2007
Kenanga Investment Bank was granted an Investment Banking licence by the Ministry of Finance
and on 5 January 2007 assumed its current name, Kenanga Investment Bank Berhad.
2010
9 April 2010: the 100% acquisition equity interest in CMS Trust Management Berhad (now known
as Kenanga Investors Berhad) by Kenanga Investment Bank from CMS Capital Sdn Bhd and AGI
Asset Management Ltd was completed.
1 November 2010: the Transfer of Business and Staff of Kenanga Fund Management Berhad (now
known as Kenanga Islamic Investors Berhad) to Kenanga Investors Berhad (formerly known as
CMS Trust Management Berhad) was completed.
2012
Kenanga Investment Bank Berhad (“Kenanga Investment Bank”) completed the acquisition of the
entire issued and paid-up share capital and business (including all assets and liabilities) of ECM
Libra Investment Bank Berhad making it the largest independent investment bank in Malaysia.
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2013
Kenanga Investors Berhad completed the acquisition of 100% interest in ING Funds Berhad.
Kenanga Investors Berhad was granted approval by the Securities Commission as a Private
Retirement Scheme Provider.
ING Funds Berhad changed its name to Kenanga Funds Berhad.
2014
Bursa Malaysia Names Kenanga Investment Bank No. 1 Retail Broker. KenTrade Trading
Challenge was launched with Volkswagen Jetta as Grand Prize – An initiative supported by Bursa
Malaysia. YM Tan Sri Tengku Dato’ Paduka Noor Zakiah Binti Tengku Ismail was named Lady
Extraordinaire at the Inaugural Women of Excellence Malaysia Awards 2014.
2015
Kenanga Investment Bank Introduces Its Islamic Stockbroking Window. Kenanga Group Inks
Strategic Cooperation Agreement with Yue Xiu Securities Holdings Limited. Kenanga Group, First
Southeast Asian Organisation to Partner Global Anti-Fraud Leader ACFE. Kenanga Group Inks
Business Cooperation Agreement with Tokai Tokyo Financial Holdings. Kenanga Investment Bank
Opens Its 10th office In Johor.
2016
Kenanga Group undertook a Corporate Restructuring Exercise. Kenanga Investment Bank Signed
Joint Venture Agreement with Rakuten Securities, Inc. Kenanga launches its first Warrants Trading
Challenge – NagaWarrants Warrior Challenge 2016. Kenanga Investment Bank listed on Bursa
Malaysia Securities and completed its Corporate Restructuring Exercise. Kenanga’s Joint Venture
with Rakuten Received Approval-In-Principle from Securities Commission. Kenanga launched Its
First Loyalty Card with B Infinite – Launch of the Kenanga BCard to Reward Online Traders.
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2017
Kenanga Investors launched its first Artificial Intelligence fund, Kenanga Global Multi Asset Fund.
Kenanga launched KenTrade Trading Challenge III. The first Market Trading Challenge with real
cash – RM 1 Million Real Cash for Live Trading at Grand Challenge. Kenanga Investment Bank
signed Memorandum of Understanding with MIMOS. Kenanga Investment Bank intorduced
Islamic Margin Financing – First of tts kind in the market using the commodity Murabahah with
principal roll-over feature.
2018
Kenanga Investors Group, comprising of Kenanga Investors Berhad and Kenanga Islamic Investors
Berhad won under Transparency Award category at MARC League Manager Lead Table Awards.
Kenanga Group was Awarded Coveted CSR Award for the Investment Bank category by CSR
Malaysia. Kenanga Collaborated with Yuanta Securities to Offer ETFs. Kenanga Group is the first
company to be named Most Innovative Participating Organisation by Bursa Malaysia. Kenanga
Group was listed in The Malaysia Book of Records for organising the “First Live Stock Trading
Challenge” for KenTrade Trading Challenge III
Kenanga Investment Bank Berhad Brand Values
Agility
We are nimble and quick to respond with creative, customised solutions to meet our clients’ needs.
Collaboration
We are supported by an integrated network of colleagues and business partners. We believe in

consolidating our knowledge and working together for the best solutions.
Trustworthiness
Professionalism, integrity and transparency are values we hold dear. We are fully committed to
ethical practices and strive to always maintain credibility in all that we do.
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YM Tan Sri Dato’ Paduka Tengku Noor Zakiah Tengku Ismail (“YM Tan Sri Dato’ Paduka
Tengku Noor Zakiah”) co-founded Kenanga Investment Bank Berhad (“KIBB” or “the Company”)
in 1973 under the name K & N Kenanga Sdn Bhd and served as the Executive Chairman of the
Company until January 2007. In January 2010, she was re-designated as Non-Executive Chairman
of KIBB. Prior to this, she was a partner in a stockbroking firm, Hallam & Co., from 1964 to 1971.
She was the first lady member of the Kuala Lumpur Stock Exchange, now known as Bursa
Malaysia Securities Berhad in 1964 and has over fifty years of experience in the securities industry.
She was one of the founders of the Association of Stockbroking Companies Malaysia
(“Association”) and was appointed as President of the Association, a post she held until 1994 when
she became its Chairman. She was made a Life Adviser to the Association when she retired as
Chairman in 1997. YM Tan Sri Dato’ Paduka Tengku Noor Zakiah was conferred the “Lady
Extraordinaire Award 2014” by the Ministry of Women, Family and Community Development
Malaysia in recognition of her remarkable and exceptional contributions and achievements in the
field of stockbroking. She also received the “Ikon Peniagawati 2015” award from the Association
of Bumiputera Women in Business and Profession, Malaysia (PENIAGAWATI) in recognition of
her entrepreneurship, and for being the first Bumiputera lady in the field of stockbroking in
Malaysia, where she has served for more than five decades, since 1964. For being a pioneer in the
industry, she was recently awarded an entry to the Malaysia Book of Records as ‘The First Female
Entrepreneur to start up a Stockbroking Company’. Due to the mandatory regulatory requirement
for the Board of Directors to comprise a majority of Independent Directors, YM Tan Sri Dato’
Paduka Tengku Noor Zakiah relinquished her position as Chairman and Non-Independent Non-
9
Executive Director of KIBB on 28 January 2017. Following thereto, YM Tan Sri Dato’ Paduka
Tengku Noor Zakiah was appointed as Adviser of Kenanga Group.
CORPORATE STRUCTURE

Company No. 15678-H
100% 100% 100% 100% 100% 100% 100%
KENANGA KENANGA KENANGA KENANGA KENANGA ECML

CAPITAL PRIVATE MANAGEMENT NOMINEES NOMINEES ECML NOMINEES
SDN BHD EQUITY & SERVICES (TEMPATAN) (ASING) BERHAD (TEMPATAN)
(440102-V) SDN BHD SDN BHD SDN BHD SDN BHD (682-X) SDN BHD
(423059-P) (61262-V) (16778-M) (280043-U) (938-T)
100%
KENANGA
CAPITAL
ISLAMIC
SDN BHD
(938908-X)
10
100% 50% 100% 29.6% 100% 100% 100%
K&N RAKUTEN KENANGA AL WASATAH KENANGA AVENUE KENANGA

KENANGA TRADE FUTURES AL MALIAH INVESTORS KESTREL SINGAPORE
HOLDINGS SDN BHD SDN BHD COMPANY BERHAD SDN BHD PTE LTD
BERHAD (266701-P) (353603-X) (1010241832) (353563-P) (97150-A) (201433886E)
(302859-X)
(Incorporated in (Incorporated in
the Kingdom of Singapore)
Saudi Arabia)
100% 49% 45% 100% 100% 100% 100%
KENANGA
SSSB KENANGA KUT KUT KENANGA
VIETNAM KENANGA
MANAGEMENT INVESTMENT NOMINEES NOMINEES ISLAMIC
SECURITIES FUNDS
SERVICES CORPORATION (ASING) (TEMPATAN) INVESTORS
JOINT STOCK BERHAD
SDN BHD LTD SDN BHD SDN BHD BERHAD
CORPORATION (620077-K)
(219322-W) (PB300) (569602-K (569605-D) (451957-D)
(72/UBCK-GPHDKD)
(Incorporated (Incorporated
in Vietnam) in Sri Lanka)
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MISSION STATEMENT
“We are committed to the journey as a financial services provider, business partner, employer,
community member, environmental steward and a value creator for our shareholders”
DISCUSSION:
A mission statement developing by a company is used for ensure the employee to remain focus
on the task that has been given by a company and also function as catalyst to the employee to
find the innovative ways of moving forward and increasingly productive achievement of
company goals. This statement is generally in short paragraph, simple and concise terms.
According to the Drucker (1977) and Klemm et al. (1991) stated that the mission
statement a rather used as in development of company strategy, providing leadership and works
as performance evaluation to the employee itself.
Therefore, for Kenanga Investment Bank Berhad (KIBB) it shows that the functions for
their side as a platform to the investors to improve their wealth. Their purpose of existing in
creating investors wealth also function as financial services provider, business partner to the
company such as partnership, employer which closed to their employee, community member and
environmental caring for sake of all people. This word more likely to shows that a company is
prepare anything to their investors as long as able to improve their investor’s wealth. The
evidence for their successful mission statement is through many awards that employee and a
KIBB itself has been given such as Best Equity Manager in 2019 and many things. This many
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kinds of awards receive by employee and the company inline with findings by Alavi & Karami
(2009) which shows the existence of mission statement correlate with firm performance.
The good mission statement has significant positively impact as it will encourage the
employee to perform at highest in order to meet company objective. The KIBB has shown their
ability to create a good mission statement by showing the many achievement has been receive by
a company and employee itself.
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BOARD STRUCTURE
IZLAN IZHAB
CHAIRMAN/INDEPENDENT NON-
EXECUTIVE DIRECTOR
DATUK SYED AHMAD

ALWEE ASREE
DEPUTY CHAIRMAN/ NON-
INDEPENDENT NON-EXECUTIVE
DIRECTOR
DATO’ RICHARD LUIGI FORTUNATO ISMAIL HARITH LUK WAI HONG, JEREMY NORAZIAN AHMAD KANAGARAJ
ALEXANDER JOHN CURTIS GHIRARDELLO MERICAN WILLIAM NASRULHAQ TAJUDDIN LORENZ
NON-INDEPENDENT NON- NON-INDEPENDENT NON- NON-INDEPENDENT NON- INDEPENDENT NON- INDEPENDENT NON- INDEPENDENT NON- INDEPENDENT NON-
EXECUTIVE DIRECTOR EXECUTIVE EXECUTIVE DIRECTOR EXECUTIVE DIRECTOR EXECUTIVE DIRECTOR EXECUTIVE DIRECTOR EXECUTIVE DIRECTOR
Figure 1: Listed of board structure
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DISCUSSION:
A board of directors (BOD) is the person who has been selected by shareholder to represent their
voices. The function of BOD is as governing body which usually meet in several meetings in
order to set the policies for the corporate management and oversight. Every public listed
company must have the BOD. This inline with the Practice 1.1 as stated in Malaysian Code on
Corporate Governance (MCCG) which board has to manage and planning the best action in order
the company able to meet its objectives and at similar time to review management performance.
From the board structure as shown in Figure 1 above, its clearly shows that Kenanga
Investment Bank Berhad (KIBB) board of directors (BOD) are majority was independent
directors. Previously in 2017, the board of director (BOD) of KIBB has Datuk Chay Wai Leong
which Group Managing Director (GMD) also serve as executive director. But as the company
effort to meet regulatory requirement as imposed by BNM under their Policy Document on
Corporate Governance which stated the board members must maintaining their majority of
Independent directors for all of time. The board structure of KIBB consist two type of non-
executive directors which is Non-Independent Non-Executive Directors and Independent Non-
Executive Directors. For Non-Independent Non-Executive it shows the personnel are has a bit
related with the company whether they has family relation with the members of KIBB,
shareholders of the company or past working experience. While, for Independent Non-Executive
Directors are independent identity which not ever relate with company but they are hired to
advice and manage based on their specific expertise.
In the board structure of KIBB it show only one person is a women director representing
11 percent of the board composition. Although, this percentage are not follow the suggestion
based on Practice 4.5 written in MCCG which stated for a large company such KIBB they must
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have at least 30 percent of women directors in their board composition. By installing more
women director it could boost the company performance. The positive result of installing more
women directors in board composition was found by Adam and Ferreira (2003) which proportion
of women directors is give good impact to company value by using Tobin’s Q as the
measurement. Further, same researcher which is in their study, by increasing women directors on
board could reduce companies uncertainty (Adam & Ferreira, 2007). In addition, the
performance of women directors could give positive impact to company as they have the ability
to increasing the efforts to monitor the decision maker’s performance (Adam & Ferreira, 2009).
Based on board structure, the KIBB are still following the MCCG as their efforts to
ensure the successfulness of KIBB in their business. Only left for inserting more women director
as suggested by Malaysia ex-Prime minister, Datuk Seri Najib in order to sustain and increase
the company performance.
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INDEPENDENT BOARD
INDEPENDENT BOARD
INDEPENDENT NON-EXECUTIVE NON-INDEPENDENT NON-

DIRECTORS EXECUTIVE DIRECTORS
DATUK SYED
AHMAD ALWEE DATO’ RICHARD
IZLAN IZHAB LUK WAI HONG, JEREMY NORAZIAN AHMAD LUIGI FORTUNATO ISMAIL HARITH
KANAGARAJ LORENZ ALSREE ALEXANDER JOHN
(Chairman) WILLIAM NASRULHAQ TAJUDDIN GHIRARDELLO MERICAN
(Vice-Chairman) CURTIS
Figure 2: Listed on independent directors
17
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DISCUSSION:
An independent board of directors (BOD) consist of person which didn’t have any interests
which related to the company rather than only their directorship. According to Hermalin and
Weisbach (2003), the independent directors are using as internal governance mechanism that can
lessen the agency conflict in between shareholders and management which arise from separation
of ownership and control that directly contribute to the company performance.
Based on Figure 2 above it shows that the independent board has been divided into two
sides. The first is Independent Non-Executive and the other is Non-Independent Non-Executive
directors. This two type of independent directors are giving their opinion and expertise to the
board of directors (BOD). In the Kenanga Investment Bank Berhad, For Independent Non-
Executives directors has majority against the Non-Independent Non-Executive directors. This
type of Independent Non-Executive directors are useful to give their opinion and contribute their
own expertise without considering anything which may affect the best decision to the company.
While Non-Independent Non-Executive directors they are might slightly affect their decision
making as they also has some relation to the company although they are independent directors.
Figure 3: Appointment of Independent Directors
According to Figure 3 above it shows the method of appointment Independent director as
applied by KIBB. As refer to the Practice 4.2 which written in Malaysian Code on Corporate
19
Governance (MCCG), the independent director must not at the position by exceeding nine years.
However, after it exceed than nine years limit it will serve as non-independent directors. This
condition happen to the Datuk Syed Ahmad Alwee Alsree that works for KIBB exceed nine
years, he also serve as vice chairman to the KIBB. Then for years 10 th until 12th their
appointment must get the approval by shareholders, and for year 13 th and above they will seek
approval by shareholder through two-tier voting process.
According to Liu et al. (2015), they have found that there is positive relationship between
firm performance and independent directors as they are able to give an opinion and making a
decision based on the best interests for the development company itself.
Thus, the application of practice by KIBB with give a majority for Independent Non-
Executive directors rather than Non-Independent Non-Executive directors has gave the good
impact to the company performance and sustainability due to any suggestion and action are taken
for the best result to the company.
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OWNERSHIP STRUCTURE

(COMPANY NO. 15678-H)
(100%) (100%) (100%) (100%) (100%) (100%) (100%)

KENANGA CAPITAL KENANGA PRIVATE KENANGA KENANGA NOMINEES KENANGA ECML BERHAD ECML NOMINEES
SDN BHD EQUITY SDN BHD MANAGEMENT AND (TEMPATAN) NOMINEES (ASING) (682-X) (TEMPATAN) SDN
(440102-V) (423059-P) SERVICES SDN BHD SDN BHD SDN BHD BHD
(61262-V) (16788-M) (280043-U) (938-T)
(100%)
KENANGA ISLAMIC
CAPITAL SDN BHD
(938908-X)
(29.6%)
(100%) (100%) (100%) (100%) (50%) (100%)
AL -WASATAH
KENANGA AVENUE KESTREL KENANGA KENANGA FUTURES RAKUTEN TRADE K&N KENANGA
AL-MALIAH
SINGAPORE PTE LTD SDN BHD INVESTOR BERHAD SDN BHD SDN BHD HOLDINGS BERHAD
COMPANY
(201433886E) (971570-A) (353563-P) (353603-X) (266701-P) (302859-X)
(1010241832)
INCORPORATED INCORPORATED IN THE

IN SINGAPORE KINGDOM OF SAUDI ARABIA
(45%) (49%) (100%)

(100%) (100%) (100%) (100%)
KENANGA KENANGA VIETNAM SSSB
KENANGA FUNDS KENANGA INVESTOR KUT NOMINEES KUT NOMINEES
INVESTMENT SECURITIES JOINT MANAGEMENT
BERHAD ISLAMIC BERHAD (TEMPATAN) SDN BHD (ASING) SDN BHD
CORPORATION LTD STOCK CORPORATION SERVICES SDN BHD
(620077-K) (451957-D) (569605-D) (569602-K)
(PB300) (72/UBCK-GPHDKD) (219322-W)
INCORPORATED IN SRI INCORPORATED IN

LANKA VIETNAM
Figure 3: Ownership structure of Kenanga Investment Bank Berhad (KIBB)
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DISCUSSION:
Based on Figure 3 above it shows that Kenanga Investment Bank Berhad (KIBB) has the
pyramid type ownership structure. In can be seen the KIBB is the parent company to fourteen
company and eight other company under its subsidiaries.
The benefit of applying pyramid structure is taxation benefit, protection of limited
liability and easier for management control. As research perform by Mindzak and Zeng (2018) it
shows that pyramid type firm engage less in accrual-based and real earning management than
non-pyramid-affiliated firms. Moreover, in term of tax avoidance, Mindzak and Zeng (2019)
found that firm which applying pyramid type are better in tax avoidance. This directly will
impact with the higher net profit of the company.
Thus, pyramid – type ownership structure applying by KIBB had gave significant impact
on the company performance with reduction of tax payment and better management control.
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BOARD COMPOSITION
The composition of boards determines the board’s ability to perform its supervisory obligation.
An effective board should include the right group of people, with a suitable mix of expertise,
knowledge, experience and independent elements that match the goals and strategic objectives of
the business. The right board structure would ensure ample diversity and flexibility in the
decision takin process avert “group thinking “or “blind spots.” It also makes it possible for the
board to be better prepared to respond to problem that can emerge and add value.
Kenanga Investment Bank Berhad (KIBB) currently consists of nine member, with five member
from independent non – executive members (“INED”) and four from non – independent non –
executive directors (“NINED”), respectively.
IZLAN IZHAB
Chairman, INED
DATUK SYED AHMAD ALWEE ASREE
Deputy Chairman, NINED
LUIGI FORTUNATO GHIRADELLO
NINED
DATO’ RICHARD ALEXANDER JOHN CURTIS
NINED
ISMAIL HARITH MERICAN

NINED
LUK WAI HONG, WILLIAM

INED
JEREMY NASRULHAQ
INED
NORAZIAN AHMAD TAJUDDIN

INED
KANAGARAJ LORENZ
INED
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BOARD COMPOSITION STRUCTURE KIBB
The composition of the Board meets the minimum one – third requirement of independent
directors as set out in Bursa Securities ‘Main Market Listing Requirement (‘MMLR’) and the
majority Independent Directors Requirement set out in Bank Negara Malaysia (BNM) Corporate
Governance Policy Report.
Under Malaysia Code on Corporate Governance

Practice 4.1:
At least half of the board comprises independent directors. For large companies, the board
comprises a majority independent director. Intended outcome, Boards decision are made
objectively in the best interest of the company taking into account diverse perspectives and
insights. Board composition should support objective and independent deliberation, review and
decision-making. A board comprising a majority of Independent Directors allows for more
effective oversight of management.
Application Applied
Explanation on Kenanga Investment Bank Berhad (KIBB) currently consists of

application nine member, with five member from independent non –
executive members (“INED”) and four from non – independent
non – executive directors (“NINED”), respectively.
INED NINED
1.Izlan Izhab – Chairman 1.Datuk Syed Alwee Alsree-
2.Luk Wai Hong, William Deputy Chairman
3. Jeremy Nasrulhaq 2.Luigi Fortunato Ghirardello
4. Norazian Ahmad 3.Dato’ Richard Alexander John
Tajuddin Curtis
5. Kanagaraj Lorenz 4.Ismail Harith Merican
Based on the Board meetings held during the Financial Year
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Ended 31 December 2018, the Board displayed very good
chemistry with their healthy and robust discussion during
meetings. They were able to express their divergent view freely
and were able to gain insightful understanding and deliberations of
the transactions or proposals being tabled for approval by
engaging the Senior Management with challenging question. Due
to the Board’s diverse background and skill sets, they were able to
exercise high level review with diverse perspective drawn from
their experiences and knowledge.
Pratice 4.2:
The tenure of an independent directors does not exceed a cumulative term limit of nine years.
Upon completion of the nine years, an independents directors may continue to serve on the board
as non – independent director. If the board intends to retain an independent directors beyond nine
years, it should justify and seek annual shareholders’ approval. If the boards continues to retain
the independent directors after twelfth year, the board should seek annual shareholders’ approval
through a two – tier voting process. Intended outcome, board decision are made objectively in
the best interests of the company taking into account diverse perspectives and insights. In
considering independence, it is necessary to focus not only on whether a director’s background
and current activities qualify him or her as independent but also whether the director can act
independently of management.
Stakeholders are increasingly concerned about the potential negative impact that directors’ long
tenure may have on their independence. The long tenures of independent directors and
familiarity may erode the board’s objectivity. Due to long or close relationship with board and
management, an Independent Director may be too sympathetic to their interests or too accepting
of their work. There could also be occasions where an Independent Director may become a
‘dependent’ director due to prolonged insular recruitment processes and attractive remuneration
packages and material benefits.
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Large Companies are not encouraged to retain an independent director for a period of more than
12 years. To justify retaining an Independent Director beyond the cumulative term limit of nine
years, the board should undertake a rigorous review to determine whether the ‘independence’ of
the director has been impaired. Findings from the review should be disclosed to the shareholders
for them to make an informed decision
Application Not applicable – No independent directors (s) serving beyond

nine (9) years
Explanation on application
Two-tier Voting Process

For Practice 4.2, companies should use the two-tier voting process in seeking annual
shareholders’ approval to retain an Independent Director beyond 12 years. Under the two-tier
voting process, shareholders’ votes will be cast in the following manner at the same shareholders
meeting:
• Tier 1: Only the Large Shareholder(s) of the company votes; and
• Tier 2: Shareholders other than Large Shareholders votes.
•
For the purposes of Practice 4.2, Large Shareholder means a person who–
• is entitled to exercise, or control the exercise of, not less than 33% of the voting shares in
the company;
• is the largest shareholder of voting shares in the company;
• has the power to appoint or cause to be appointed a majority of the directors of the
company; or
• has the power to make or cause to be made, decisions in respect of the business or
administration of the company, and to give effect to such decisions or cause them to be
given effect to.
The decision for the above resolution is determined based on the vote of Tier 1 and a simple
majority of Tier 2. If there is more than one Large Shareholder, a simple majority of votes
determine the outcome of the Tier 1 vote. The resolution is deemed successful if both Tier 1 and
26
Tier 2 votes support the resolution. However, the resolution is deemed to be defeated where the
vote between the two tiers differs or where Tier 1 voter(s) abstained from voting.
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Practice 4.3 – Step Up
The board has a policy which limits the tenure of its independent directors to nine years.
Intended outcome, board decision are made objectively in the best interests of the company
taking into account diverse perspective and insights.
APPOINTMENT OF AN INDEPENDENT DIRECTOR
Year Year Year Year Year Year Year Year and
1 3 6 9 10 11 12 13 beyond...
Appointment and re-appointment

Annual Annual
of Independent Directors as Shareholders’ Shareholders’
provided in Bursa Malaysia’s approval approval
Listing Requirements through a
two-tier
voting process
After a cumulative If the board

term of 9 years, continues
an independent to retain the
director may independent
continue to serve director after
on the board as a year-12, the board
non-independent should provide
director. justification and
seek annual
However, if the board shareholders’
intends to retain an approval through
independent director a two-tier voting
beyond 9 years, it process.
should provide
justification and seek
28
annual shareholders’
approval.
29
Application Adopted
Explanation on application As embedded in Clause 3.3.1 of boards Charter, Kenanga

Investment Bank Berhad (“KIBB” or “the Company”)
adopted the policy whereby the tenure of an Independent
Directors shall not exceed a cumulative term of nine (9)
years. This is in line with recommendations of Bank Negara
Malaysia (BNM) under its Policy Document on Corporate
Governance and the Malaysian Code on Corporate
Governance.
Notwithstanding the above, upon completion of the nine (9)

years, an Independent Directors may continue to serve the
Board upon recommendation by the Group Nomination &
Remuneration Committee and the Board of Directors, for the
shareholders’ approval, that the services of the Independent
Director are still required by KIBB and further, that the
Director concerned remains free of any business or other
relationship with KIBB which could be reasonably perceived
as to materially interfere with his / her exercise of unfettered
and independent judgement.
The re – election of a long serving Independent Director who

has served in that capacity for more than nine (9) years, upon
retirement by rotation at the Annual General Meeting of
KIBB, shall be subjects to strong justification being provide
and presented to the shareholders.
Notwithstanding the above, being licensed financial

institution under the purview of BNM, KIBB’s
recommendation to retain an Independet Director who has
exceeded the nine (9) year limit, would still subject to BNM’s
30
approval
Based on the current Board composition, the tenure of all
Independent Non – Executive Directors (“INEDs”) of the
Company has not exceeded nine (9) years.
As at 31 December 2018, the tenure of KIBB’s INED are

follows:
INED Date of Tenure
Appointment
Izlan Izhab – Chariman 8 September < Three years
2016
Luk Wai Hong,William 1 November < Six years

2013
Jeremy Nasrulhaq 1 June 2017 < Two years
Norazian Ahmad 15 December < Two years

Tajuddin 2017
Kanagaraj Lorenz 26 December < Two years

2017
Practice 4.4
Appointment of board and senior management are based on objective criteria, merit and with due
regard for diversity in skills, experience, age, cultural background and gender. Intended outcome,
board decision are made objectively in the best interest of the company taking into account
diverse perspectives and insights.
Application Applied
Explanation on 1. The Board of Directors (“Board”) of Kenanga Investment

application Bank Berhad (“KIBB” or “the Company”), via the Group
Nomination & Remuneration Committee (“NRC”), has put in
31
place a formal and transparent framework governing the
appointments of new Directors wherein the NRC will
recommend the appointments of suitable candidate as Director
of the Company and its subsidiaries, to the Board for approval.
2. The procedures in relation to Board appointment which are
embedded in the Board Succession Planning Framework, starts
with the review by the NRC of the status of the Board
Composition. The NRC will then reports its findings and
recommend to the Board for approval, the appropriate action to
be taken.
If the NRC anticipates that a Directors / Board Committee
members position shall become vacant within the next twelve
months (whether by reason of an announced intent to retire or
otherwise), or if a Director / Board Committee members
position shall suddenly become vacant (whether by death or
otherwise), the NRC shall, as soon as reasonably practicable,
recommend to the Board, nominees for election as Director/
Board Committee member.
3. When identifying potential candidates for nomination as
Director, the NRC may consult whatever sources it deems
appropriate, including, but not limited to, referrals from
existing Directors, recommendations from a third-party search
firm, FIDE FORUM’s Directors Register or suggestions from
major shareholders.
4. The NRC shall make an initial assessment of each candidate. It
shall select from a pool of one (1) or more candidates for an
initial interview by at least one (1) member of the NRC.
5. When the NRC identifies an individual that it believes meet the
criteria set forth below and should be elected Director, it will
notify the Board and arrange for the individual to be
interviewed by the rest of the Board members who are not
32
members of the NRC
6. The criteria considered during the selection of new Director
include, inter alia, the following:
a. Technical know-how, diverse skills or professional
experience in thefinancial services industry or to some extent,
understanding of the nature of the business that KIBB is
involved in, to create a more conducive environment for
informed decision making;
b. Mix of skills and experiences of current Board members
whilst taking into consideration the current and future needs of
KIBB, and boardroom diversity (including gender diversity);
c. Board size and balance of executive versus non-executive
directors, as well as independent versus non-independent
directors;
d. Current composition of the Board and Board Committees,
taking into consideration the independence requirements for
Board and Board Committee membership in accordance with
the relevant regulatory requirements;
e. Probity, personal integrity and reputation, as well as personal
qualities such as honesty, integrity, diligence, independence of
mind and fairness;
f. Demonstration of competence and capability in relation to
the necessary skills, experience, ability and commitment to
carry out the role as a director;
g. Financial integrity – the candidate’s demonstration of
prudent management of his/ her debts or financial affairs; and
h. In the case of an Independent Non-Executive Director,
additionally, the fulfilment of the independence criteria as
stipulated in the Main Market Listing Requirements of Bursa
Malaysia Securities Berhad and Bank Negara Malaysia
(“BNM”)’s Policy Document on Corporate Governance.
33
7. For re-appointments of Directors, besides the results of a
performance evaluation of the Director concerned, the outcome
on the assessment of his/ her independence (for an Independent
Non-Executive Director only), as well as his/ her fitness and
propriety would be taken into consideration by the NRC during
its deliberation, prior to appropriate recommendations being
made to the Board for approval.
8. Upon the Board’s approval, the application for the proposed
appointments of Directors would then be submitted to BNM for
approval as required under the Financial Services Act 2013 and
BNM’s Policy Document on Corporate Governance.
9. 7. In addition to the appointment of new Directors, the Terms
of Reference of the NRC also requires that the NRC make
recommendations to the Board on the re-appointments and re-
elections for shareholders’ approval at the Annual General
Meeting of the Company of any Directors who are retiring by
rotation provisions as stipulated in the respective entity’s
Articles of Association, having due regard to their performance
and ability to contribute to the Board in the light of the
knowledge, skills and experience required.
10. The Directors who are due for re-election/ re-appointment at

the forthcoming Annual General Meeting have been duly
assessed by the NRC and recommended for re-election based
on their constructive contributions and valuable insights in
fulfilling their roles and responsibilities.
11. In the event a Director position should suddenly become vacant
by reason of death or other unanticipated occurrence, and if
such vacancy results in the entity concerned breaching any of
the regulatory requirements pertaining to the Board or Board
34
Committee composition, the NRC shall convene a special
meeting soonest possible to implement the process described
herein.
12. 8. In cognisant of the recommendation embedded in the
Malaysian Code on Corporate Governance to pursue gender
diversity, the Company has intensified its search for a woman
Director and found a suitable match with the appointment of
Puan Norazian Ahmad Tajuddin (“Puan Norazian”) on 15
December 2017. Puan Norazian was sourced from the FIDE
FORUM’s Directors Register which is a joint initiative by
FIDE FORUM, BNM and Perbadanan Insurans Deposit
Malaysia. Although the gender diversity only made up to 11%
as at 31 December 2018, the Board will endeavour to source
for suitable female candidate for future appointment to its
Board.
13. 9. With regard to skills and experience, processes had been put
in place whereby the NRC would undertake a rigorous
assessment of potential candidates, prior to any
recommendations to the Board for appointment of a new
Director.
14. 10. In recognition of the benefits of a diverse Board in terms of
the ability to tap into the many talents which Board members
from their different ages, cultural backgrounds, perspectives,
views and abilities bring to the Company, as well as their
abilities to respond to business opportunities more rapidly and
creatively, the Company has endeavoured and will continue to
endeavour to achieve a fair mix of members.
15. The current Board diversities in terms of age, cultural
background and gender is shown in the tables below.
Age Group 50-59 60-69 70-79
No. of 4 4 1
35
Directors
Cultural Malay Chinese India Italian British

Background n
No of 5 1 1 1 1
Directors
16. With regard to Senior Management personnel, the

appointment is implemented in a formal and transparent
process which is generally based on the minimum fit and
proper criteria such as probity, personal integrity and
reputation, competency and capability and financial integrity as
stipulated in KIBB Group Fit and Proper Criteria for
Management Key Responsible Persons and Company
Secretary.
Practice 4.5
The board discloses in its annual report the company’s policies on gender diversity, its targets
and measures to meet those targets. For Large Companies, the board must have at least 30%
women directors. Intended outcome, board decision are made objectively in the best interest of
company taking into account diverse perspectives and insights.
Application Applied
Explanation on application Pursuant to Clause 3.6 of the Board Charter of Kenanga

Investment Bank Berhad (“KIBB” or “the Company”), the
Board of Directors (“Board”), through the Group Nomination
& Remuneration Committee shall take steps to ensure that
woman candidates are sought as part of its recruitment
exercise.
In that regard, the Board shall take appropriate measures to
ensure that boardroom diversity, including gender diversity,
forms part of the criteria to be considered in the selection and
36
recruitment of new.
Towards this end, the Board had on 15 December 2017
appointed a woman Director, Puan Norazian Ahmad
Tajuddin (“Puan Norazian”) as an Independent Non-
Executive Director of KIBB.
With Puan Norazian’s appointment, the Board comprises
eight (8) male Directors and one (1) female Director (11%).
Moving forward, the Board will strive to increase the
percentage by considering more woman candidates when
appointing new Directors in the future.
A point to note and in line with the aspiration to have woman
representative on the Board, YM Tan Sri Dato’ Paduka
Tengku Noor Zakiah Tengku Ismail (“YM Tengku Noor
Zakiah”), the former Chairman and NINED of KIBB served
the Company since her appointment in 1973 until she retired
on 28 January 2017. Following thereto, YM Tengku Noor
Zakiah was appointed as KIBB Group’s Adviser, and still
plays a significant role in the Company.
Practice 4.6
In identifying candidates for appointment of directors, the board does not solely rely on
recommendations from existing board members, management or major shareholders. The board
utilises independent sources to identify suitably qualified candidates. Intended outcome, board
decision are made objectively in the best interest of the company taking into account diverse
persectives and insights.
Application Applied
Explanation on application When identifying potential candidates for nomination as a

Director, the Board of Directors (“Board”) of Kenanga
Investment Bank Berhad, via the Group Nomination &
Remuneration Committee, will consider whatever sources it
37
deems appropriate, including, but not limited to, referrals
from existing Directors, recommendations from a third-party
search firm, or suggestions from major shareholders (in the
case of a Non-Independent Non-Executive Director).
In addition, commencing from 2017, since becoming a
member of FIDE FORUM, the Board had in the past engaged
FIDE FORUM, to access FIDE FORUM’s Directors Register
to source for potential Independent Non-Executive Director
candidates. In addition to FIDE FORUM, as a member of the
Institute of Corporate Directors Malaysia (“ICDM”), the
Company also has access to ICDM’s Director Registry to
source for potential candidate for Director position.
38
Practice 4.7
The Nominatting Committee is chaired by an Independent Director or the Senior Independent
Directors
• lead the succession planning and appointment of board members, including the future
Chairman and CEO; and
• lead the annual review of board effectiveness, ensuring that the performance of each
individual director is independently assessed
Application Applied
Explanation on application The Group Nomination & Remuneration Committee

(“NRC”) of Kenanga Investment Bank Berhad (“KIBB”)
comprises five (5) members, three (3) of whom are
Independent Non-Executive Directors (“INED”) and two (2)
Non-Independent Non-Executive Directors.
The NRC is chaired by an INED, Mr. Luk Wai Hong,
William, since his appointment on 8 September 2017.
Mr. Luk Wai Hong, William’s profile can be found in the
Profiles of Directors in KIBB’s 2018 Annual Report.
Group Nomination and Remuneration Committee

The remuneration of directors, which is well organized, clearly linked to a company’s strategic
goals, and which rewards commitment to the company’s long – term success, is important in
fostering business stability and growth. Pay policies that do not properly related the remuneration
of directors to corporate strategy and result, however, many undermine the returns of
shareholders, impair corporate governance and reduce public trust in company.
1.0 Objective
Objective for Group Nominating and Remuneration Committee, supports the board of
Directors in carrying out its functions in the following matters concerning the Kenanga
Investment Bank Berhad Board, Chief Executive Officer (CEO), management Key
39
responsible persons and Company Secretary in line with the relevant regulatory and internal
requirement:
a) Appointments and removals; composition
b) Performance evaluation and development and
c) Fit and proper assessment
Support the Board in actively overseeing the design and operation of KIBB’s remuneration
system, as set out in Bank Negara Malaysia’s policy document on Corporate Governance.
2.0 Composition
The Group Nomination & Remuneration Committee (“NRC”) shall comprise only non-
executive directors with at least three (3) members of which majority should be Independent
Directors. The membership of the NRC, including the position of Chairman shall be
approved by the Board. The Chairman of the NRC shall be an Independent Non-Executive
Director and shall not be the Chairman of the Board. Members of the NRC may relinquish
their membership in the Committee with prior written notice to the Company Secretary and
may continue to serve as Directors of the Company. All members of the NRC, including the
Chairman, will hold office only so long as they serve as Directors of the Company. In the
event of any vacancy resulting in the number of members being reduced to below three (3)
the Board shall, within three (3) months fill the vacancy. A member of the NRC shall abstain
from participating in discussions and decisions on matters involving him.
Right of the NRC
The NRC shall have the resources and full and unrestricted access to the records of KIBB
and/or its subsidiaries (including the records of all Board and Management Committee
meetings), properties and officers in carrying out its duties and responsibilities. The NRC
shall also be empowered to consult independent experts, where necessary, to assist in
executing its duties at the cost of the Company.
3.0 Roles and responsibility
40
3.1 The responsibilities of the NRC with regard to the appointments and removals of
Directors, Board Committee members, CEO, Management KRPs and Company
Secretary are as follows :
a) Create and recommend to the Board minimum criteria for the Boards, i.e
required a combination of expertise, experience, credentials and other core
competencies expected of a Director and minimum requirements for the KRPs
CEO and Management
b) Suggest and determine the nominees for the Board of Directors, membership
of the Board of Directors and candidates for CEOs,KRPs of management and
Secretary of Companies, it involves evaluating re – election and re –
appointment directors before sending an application for approval to BNM (if
applicable) and ensuring that directors are replaced by rotation at the Annual
General Meeting in compliance with the Articles of Association of the
Company.
c) Supervises the boards’ overall composition, in term of acceptable size and
expertise and the alignment between executive directors, non – executive
directors and independent directors through annual review
d) Suggest to the Board the dismissal from the Board / managements of a
Directors, CEO, Management KRPs or Company Secretary where the
Manager, CEO or Management KRP or Company Secretary is inefficient,
erring and incompetent in carrying out his / her responsibilities.
e) Suggest to the Board steps to be taken in respect of disciplinary matters and
wrongdoing that is incompatible with the term of service communicated or
implied, affecting the CEO or any of the KRPs in the management
f) Establish and review the process for systematic evaluation of the Board’s
effectiveness as a whole and each Director’s contribution to the Board’s
effectiveness, the contribution of the various committees of the Boards, and
the performance of the CEO, management KRPs and company Secretary.
g) Ensure that all Directors have undergone an appropriate ongoing training and
development plan to keep up with the new industry developments.
41
h) Supervises recruitment, management succession planning and management
KRP performance assessment.
i) Assess regularly to ensure that the Directors, CEOs, KRPs and Company
Secretaries are not excluded under that 2013 Financial Services Act and the
2013 Islamic Financial Services Act.
3.2 The NRC’s duties in relation to the remuneration of directors, board members, CEO,
KRPs and secretary of the company are as follows :
i. Recommend KIBB’s remuneration policy to the Board for approval and
any adjustments needed during the annual review of such policy or if and
when substantive changes to the policy are made
ii. Review and propose to the Board the annual remuneration of Manager,
senior management and other risk – taker.
iii. Evaluate the remuneration of the Non – Executive Directors of the
Group’s subsidiaries periodically and propose remuneration of the Non –
Executive Directors for approval by the Board. Any change shall require
the approval of the Company’s directors at General Meeting
iv. Suggest to the Board new KRPs board appointments and remuneration
plan, changes and promotions and evaluate the Group’s board KRP
efficiency.
v. Obtain, if applicable, advice and information from external sources to
compare the remuneration currently received by Management KRPs with
remuneration paid to Management KRPs by other similar companies in a
comparable industry sector.
3.3 Ensure that the company’s annual report / audited financial statements contain
sufficient reports on the NRC.
3.4 The NRC should not be entrusted with decision – making authority, but should notify
the full Board of its recommendation for decision.
42
3.5 Any reference to any section of legislation, rules, circulars or instructions in this
Term of Reference shall include all changes, adjustments, consolidations or
replacements as may be provided from time to time.
4.0 Practice under Malaysia Code Corporate Governance

Intended outcome
The level and composition of remuneration of directors and senior management take into
account the company’s desire to attract and retain the right talent in the board and senior
management to drive the company’s long – term objectives.
Remuneration policies and decision are made through a transparent and independent
process.
Practice 6.1
The boards has in place policies and procedures to determine the remuneration of
directors and senior management, which take into account the demands, complexities and
performance of the company as well as skills and experience required. The policies and
procedures are periodically reviewed and made available on the company’s website
Application Applied
Explanation on application 1. The objective of Kenanga Investment Bank Berhad

(“KIBB” or “the Company”)’s remuneration policy for
Directors, as determined by the Group Nomination &
Remuneration Committee (“NRC”), is to ensure that the
remuneration package is:
a. Competitive, attractive and adequate to attract, retain and
incentivise individuals of the necessary calibre, expertise and
experience to join the Board of Directors (“Board”);
b. Reflective of the experience, expertise, time commitment,
level of responsibilities, complexity of the Company’s
business, and risks undertaken; and
43
c. Comparative with the Directors’ remuneration of other
companies which operate in similar businesses and are
comparable in size and market share.
2. The Board is cognisant of the importance of setting
remuneration levels which are sufficient to attract and retain
the Directors, as well as Senior Management to operate the
Company successfully, taking into consideration all relevant
factors including the function, workload and responsibilities
involved, but without excessively over-paying to achieve its
goal. The level of remuneration of the Group Managing
Director (“GMD”) and other Senior Management personnel is
determined by the NRC after giving due consideration to
compensation levels of comparable positions among other
similar companies in Malaysia, as well as other factors
including talent retention.
3. The NRC carries out the annual review of the overall
remuneration policy for Directors, the GMD and Senior
Management whereupon relevant recommendations would be
submitted to the Board for approval.
4. The NRC also reviews annually the performance of the
GMD and Chief Executive Officers of the subsidiaries of the
Company and submits recommendations to the Board for
approval accordingly.
5. For the Financial Year Ended 31 December 2018, the
Directors were paid the annual fees, as well as meeting
allowance for each Board or Board Committee meeting that
they attended, as shown below.
Fees Financial Year Ended 31

December 2018
Chairman of the Board RM 440,000.00
Deputy Chairman of the RM 390,000.00
44
Board
Director RM 270,000.00
Chairman of Audit
Committee (AC)/ NRC / RM 40,000.00
Group Board Risk
Committee (GBRC)
Member of AC / NRC / RM30,000.00
GBRC
Types of Meeting Chairman Member
Per Meeting
Allowance
Board meeting RM 2,000 RM 2,000
General Meeting of the RM 2,000 RM 2,000
Company
AC / NRC / GBRC /
Employees’ Share Scheme RM 2,000 RM 2,000
Committee Meeting
6. A summary of the total remuneration of the Directors, in

aggregate with categorisation into appropriate components
for the Financial Year Ended 31 December 2018 is tabulated
under Practice 7.1.
7. With regard to Senior Management’s compensation, it is
reviewed regularly and benchmarked against the market. All
matters relating to Senior Management’s compensations are
presented and deliberated at the NRC upon which relevant
recommendations shall be made to the Board of KIBB for
approval.
Practice 6.2
45
The board has a Remuneration Committee to implement its policies and procedures on
remuneration including reviewing and recommending matters relating to the
remuneration of board and senior management.
The Committee has written Terms of Reference which deals with its authority and duties
and these Terms are disclosed on the company’s websites.
Application Applied
Explanation on application 1. The Board of Directors (“Board”) of Kenanga Investment

Bank Berhad (“KIBB” or “the Company”) has established the
Group Nomination & Remuneration Committee (“NRC”)
comprising a majority of Independent Directors with specific
Terms of Reference outlining its roles and responsibilities.
The NRC is chaired by an Independent Director who is not
the Chairman of the Board.
As at 31 December 2018, the composition of the NRC was as
follows:
 Luk Wai Hong, William
Chairman, Independent Non-Executive Director
 Jeremy Nasrulhaq
Member, Independent Non-Executive Director
 Norazian Ahmad Tajuddin
 Datuk Syed Ahmad Alwee Alsree
Member, Non-Independent Non-Executive Director
 Luigi Fortunato Ghirardello
46
2. NRC’s Roles and Responsibilities
With regard to the nominations and appointments of
Directors of KIBB and its subsidiaries, Board Committee
members, the Group Managing Director (“GMD”) and Senior
Management of KIBB Group, the NRC’s responsibilities as
stipulated in its Terms of Reference include the establishment
of minimum requirements for the Boards, the GMD and
Senior Management, such as the required mix of skills,
experience, qualifications and other core competencies
required of them. The requirements and criteria shall be
approved by the Board.
In terms of the remuneration of Directors, Board Committee
members, the GMD and Senior Management, it is the
responsibility of the NRC to recommend to the Board for
approval, a remuneration framework which supports KIBB
Group’s culture, objectives and strategy and reflects the
responsibility and commitment of the Directors, Board
Committee members, the GMD and Senior Management.
Individual Directors do not participate in decisions regarding
their own remuneration packages.
In determining the bonus for the GMD and Senior
Management, the NRC reviews their performance based on
the overall performance of the Company, and a variety of
specific Key Performance Indicators depending on their
respective roles and responsibilities which are linked to
individual performance, as well as any non-compliance with
law, regulatory guidelines and internal policies and
procedures.
In accordance with the provision of Section 230 of the
Companies Act 2016, payment of Directors’ fees and benefits
47
(including compensation for loss of office) to Non-Executive
Directors shall be subject to shareholders’ approval.
3. Summary of NRC’s Activities in 2018
In discharging its responsibilities as encapsulated in its Terms
of Reference which is available on the Company’s website at
https://www.kenanga.com.my/NRC_TOR.pdf, the NRC had
carried out the following activities during the Financial Year
Ended 31 December 2018:
 Deliberated on the proposed re-designation,
appointments, re-appointments and re-elections of
Directors within the Group;
 Reviewed the overall size and composition of the
Board and the Board Committees within the Group in
line with the relevant regulatory requirements;
 Reviewed the List of Management Key Responsible
Persons of the Group as at 1 January 2018;
 Deliberated on the renewal of contract of appointment
of Senior Management personnel;
 Deliberated on the re-appointment of Adviser of
KIBB;
 Reviewed the results of the assessment on the fitness
and propriety of Directors and Senior Management;
 Reviewed the results of Board, Board Committees and
individual Directors’ performance evaluation for the
financial year ended 31 December 2017;
 Reviewed the proposal to provide financial assistance
to eligible junior employees (Senior Executive and
below) for the Employees’ Share Option Scheme
award;
 Reviewed the proposal for the implementation of
flexible work arrangements;
48
 Reviewed the Directors’ remuneration and benefits of
the Group;
 Reviewed, deliberated and recommended the annual
performance bonus and annual salary increment for
the Group;
 Deliberated on the revised Key Responsible Persons
Succession Plan;
 Reviewed the annual Balanced Scorecards for Senior
Management of KIBB;
 Reviewed the training requirements for the Directors;
 Reviewed, deliberated and recommended the re-
appointment of members of Shariah Committee of
KIBB and their remuneration;
 Deliberated on the report in relation to a disciplinary
case; and
 Deliberated on the Competency Framework – Revised
Core and Leadership Competencies of the Group.
Guidance
4.1 Fair remuneration is critical to attract, retain and motivate directors and senior
management. The remuneration package should take into account the complexity of
the company’s business and the individual’s responsibilities. In addition, the
remuneration should also be aligned with the business strategy and long-term
objectives of the company. The board should also ensure that the remuneration and
incentives for Independent Directors do not conflict with their obligation to bring
objectivity and independent judgment on matters discussed at board meetings.
4.2 Establishing a Committee to assist the board in developing and administrating a fair
and transparent procedure for setting policy on remuneration of directors and senior
49
management is important because this would ensure that remuneration packages are
determined on the basis of the directors’ and senior management’s merit, qualification
and competence, having regard to the company’s operating results, individual
performance and comparable market statistics. The Committee should only consist of
non-executive directors and a majority of them must be Independent Directors,
drawing advice from experts, if necessary. Directors who are shareholders should
abstain from voting at general meetings to approve their fees. Similarly, Executive
Directors should not be involved in deciding their own remuneration.
Intended outcome practice 7.0
Stakeholders are able to assess whether the remuneration directors and senior
management is commensurate with their individual performance, taking into
consideration the company’s performance.
Practice 7.1
There is detailed disclosure on named basis for the remuneration of individual directors.
The remuneration breakdown of individual directors includes fees, salary, bonus, benefits
in – kind and other emoluments.
Application Applied
Explanatio The breakdown of the remuneration of individual Directors of Kenanga Investment Bank
n on Berhad which includes fees, other emoluments and benefits-in-kind for the Financial Year
application Ended 31 December 2018 is set out below.
(1)
Group Fees Salarie Other Bonu Benefit- Total
Level (RM) s (RM) Emolument s in-kind (RM)
s (RM) (RM)
(RM)
Izlan 517,479.45 - 59,000 - 57,044.41(2 633,523.86
)
Izhab
Datuk 510,000 - 47,000 - 31,523.08

(3)
Syed
Ahmad
Alwee
50
Alsre
Dato’ 292,520.55 - 54,000 - - 346,520.55
Richard
Alexander
John
Curtis
Luigi 387,479.45 - 83,000 - - 470,479.45
Fortunato
Ghirardell
o
Ismail 300,000 - 54,000 - - 354,000
Harith
Merican
Luk Wai 380,000 - 84,000 - - 464,000
Hong,
William
Jeremy 347,479.45 - 70,000 - - 417,479.45
Nasrulhaq
Norazian 315,041.10 - 62,000 - - 377,041.10
Ahmad
Tajuddin
Kanagaraj 315,041.10 - 56,000 - - 371,041.10
Lorenz
Total 3,365,041.1 - 569,000 - 88,567.49 4,022,608.5
0 9
Notes
(1) Subject to shareholders’ approval at the forthcoming Annual General Meeting
(2) Benefits-in-kind for the Chairman include golf club membership, leave passage,
driver, car and other claimable benefit
(3) Benefits-in-kind for the Deputy Chairman include golf club membership, car and
other claimable benefit
Practice 7.2
51
The board discloses on a named basis the top five senior management’s remuneration
component including salary, bonus, benefit in – kind and other emoluments in bands of
RM 50,000.00
Application Departure
Explanation on departure In view of the confidentiality and security concerns, the

Board had at its meeting on 28 February 2019, agreed for
disclosure to be made on remuneration of the Group
Executive Committee (“GEXCO”) members in bands of
RM50, 000 on a no-named basis.
Remuneration of GEXCO in Band Number of
of RM 50,000 GEXCO members
From RM600,000 to RM650,000 1
From RM700,000 to RM750,000 2
From RM750,000 to RM800,000 1
From RM800,000 to RM850,000 1
From RM1,100,00 to RM1,150,000 1
From RM1,150,000 to RM1,200,000 1
From RM1,800,000 to RM1,850,000 1
From RM1,950,000 to RM2,000,000 1
From RM2,500,00 to RM2,550,000 1
From RM3,450,00 to RM3,500,000 1
Total 11
Compensation of key management personnel (Group

Managing Director and his direct reports) are disclosed in
Note 38 of the Audited Financial Statements for the Financial
Year Ended 31 December 2018 in the following format:
 Short term employee benefits; and
 Post-employment benefits: EPF.

Companies are encouraged to fully disclose the detailed remuneration of each member of
senior management on a named basis.
52
Application Not Adopted
Explanation on adopted
Guidance
7.1 The detailed disclosure allows shareholders to make an informed decision when
voting on the approval of directors’ remuneration and to consider the appropriate
remuneration package taking into account the responsibilities of the directors.
7.2 The disclosure of how the remuneration is measured allows stakeholders to

understand the link between senior management remuneration and the company’s
performance. This will also enable stakeholders to determine whether the
remuneration is fair and able to attract and retain talent.
Audit Committee
1.0 Objective
Kenanga Investment Bank Berhad Audit Committee includes a plurality of INEDs
and is headed by an INED which is not the board member, the audit committee
supports the Board in ensuring that the process of financial reporting within
Kenanga Investment Bank Berhad its subsidiaries is reliable and transparent.
2.0 Composition
2.1 The Audit Committee shall consist of only non-executive directors with at
least three members, the majority of whom should be independent
directors.
2.2 The audit committee shall be an Autonomous Non-Executive Officer, and
shall not be the Board Chairman.
2.3 The membership of the audit committee, including the position of
Chairman, shall be approved by the Board of Kenanga Investment Bank
Behad (KIBB) on the basis of a recommendation of the Group Nomination
& Remuneration Committee. The selection of the Independent(s) Non-
53
Executive Director of Kenangan Investor Berhad (KIB) as a member of
the audit committee to serve the Board of KIBB shall always be subject to
approval by the Board of KIB for the recommendations of the Nomination
Remuneration to the Board of KIBB.
2.4 At least one member of the audit committee:
2.4.1 Must be a member of the Malaysian Institute of Accountants
(MIA) or
2.4.2 If he/she is not member of the MIA, must have at least three years’
working experience and
i. He / she have passed the First Schedule of the Accountants
Act 1967 as provided in Appendix or
ii. He / she must be a member of one of the associations of
accountants specified in Part II of the First Schedule of the
Accountants Act 1967 as provided in Appendix 1 or
2.4.3 Has either one of the following qualifications and at least three
years’ post-qualification experience in accounting or finance :
i. a degree / master / doctorate in accounting of finance
ii. a member of any professional accountancy organisation
which has been admitted as a full member of the
International Federation of Accountants, or
2.4.4 Has at least seven years’ experience being a chief financial officer
of a corporation or having the function of primarily responsible for
the management of the financial affairs of a corporation, such
corporation being at least of a comparable size or scale and
preferably in the financial services sector.
2.5 Members of audit committee may surrender their membership to the
Committee by prior written notice to the Secretary of the company and
may continue to serve as Company Directors, all audit committee
including the president, can hold office only as long as they serve as the
company directors.
54
2.6 In the event of any vacancy leading to a reduction in the number of
members to below three, the Board shall fill the vacancy within three
months.
2.7 An audit committee shall abstain from engaging in debates and decision
on matters concerning him or her.
2.8 The nomination and remuneration committee shall review the term of
office and result of each of the audit committee members annually to
assess if the audit committee and its members have carried out their duties
in compliance with their term of reference.
3.0 Right of the audit committee

3.1 The audit committee shall have the capacity and full and unlimited access
to KIBB and or its subsidiaries documents (including documents of all
meetings of the Board and Management Committee), assets and officers in
the execution of their duties and responsibilities.
3.2 The audit committee shall have the power, within its term or reference to
investigate any operation of KIBB and or its subsidiaries and all
employees and external consultants concerned shall be directed to comply
as and when necessary by the audit committee.
3.3 The audit committee shall also be empowered to consult independent
consultants, if necessary, to assist in carrying out its duties at the expense
of KIBB and or its subsidiaries and shall have clear lines of contact with
the external and internal auditors.
3.4 The internal audit function shall report directly to the audit committee
4.0 Role and responsibilities

4.1 Fair and transparent reporting
a) Ensure fair and transparent reporting and prompt publication of
financial statements.
b) Review the quarterly result and year-end financial statements, before
the approval by the Board, focusing particularly on:
55
i. Changes in or implementation of major accounting policy
changes
ii. Significant matters highlighted including financial reporting
issues, significant judgments made by management, significant
and unusual event or transaction and how these matters are
addressed and
iii. Compliance with accounting standards and other legal
requirements.
4.2 Effectiveness of internal audit
a. Oversee the effectiveness of the internal audit function of KIBB
including:
i. Reviewing, approving and reporting to the Board the audit
scope, procedures and frequency
ii. Reviewing and report to the boards on key audit findings
and ensure that Senior Management take appropriate
corrective steps to fix control deficiencies, non-compliance
with regulations, regulatory requirements, policies and
other concerns found by internal audit.
iii. Noting major disputes between the Company Chief Internal
Auditor and the rest of the Senior Management Team,
regardless of whether they have been resolved with a view
to identifying and effect that the disputes could have on the
audit process or on the findings.
iv. Develop a framework for assessing the efficiency and
effectiveness of the internal audit function and
v. Review and report to the Board on the adequacy of the
internal audit function’s scope, roles, competences and
resources and that it has the authority required to carry out
its work.
b. At the request of the Group Chief Internal Auditor, designate, set
pay, review performance and decide on the transfer and dismissal
56
of the Group Chief Internal Auditor and any staff member of the
internal audit function.
4.3 External Auditors
a) Foster a quality audit of KIBB and its subsidiaries by controlling the
external auditor in line with the requirements set out in the Policy
Document on External Auditor of Bank Negara Malaysia, including
i. Taking into account the independence and objectivity of the
external auditor and the cost-effectiveness of its audit, make
recommendations to the Board on the appointment and annual
reappointment of the external auditor upon evaluation of the
audit fee.
ii. Monitoring and evaluating the independence of the external
auditor including approval by the external auditor provision of
non-audit services.
iii. Monitoring and reviewing the quality of the external audit,
including consulting with the external auditor at least annually
without the involvement of senior management.
iv. Maintain daily, prompt, transparent and truthful contact with
the external auditor and allow the external auditor to report on
important issues to the audit committee
v. Ensuring that the Senior Management takes the necessary
corrective action to address external audit findings and
recommendations in a timely manner.
4.4 Review the following and report the same to the Board
i. With the external auditor, the essence and scope of their audit
program, their evaluation of the internal control system, their audit
report and management letter and any matter which the external
auditor might wish to discuss in the absence of management,
where necessary;
ii. The assistance given by employees of KIBB and or its subsidiaries
to the external auditor and
57
iii. Any letter of resignation from the external auditor of KIBB and or
its subsidiaries and
iv. Whether there is reason (supported by grounds) to believe that the
external auditor of KIBB and or its subsidiaries is not suitable for
re-appoint.
4.5 Internal controls
i. Study the success of KIBB and its subsidiaries in developing and
enforcing internal controls, compliance program and risk
management processes and systems.
ii. Review views of third parties about the nature and efficacy of the
internal control system for KIBB and its subsidiaries.
iii. Ensure that the Senior Management takes the requisite corrective
measures in a timely manner to resolve control vulnerabilities,
non-compliance with regulations, regulatory requirements, policies
and other concerns found by control functions such as risk
management and enforcement.
4.6 Effectiveness of the Controls Established for Anti-Money Laundering and
Counter Financing of Terrorism (AML/CFT)
Assist the Board in:
a) Ensuring that independent audits are performance to review and
assess the efficacy of KIBB’s policies, procedures and controls and
the AML/CFT steps of its subsidiaries
b) Reviewing the internal control problem found by auditors and
regulatory authorities and determining the adequacy and efficacy
of the AML/CFT steps implemented by KIBB and its subsidiaries.
c) Ensuring that the AML/CFT measures comply with the relevant
regulations and guidelines and that the new AML/CFT measures in
place comply with the latest developments and improvements to
the relevant AML/CFT requirement.
d) Assessment of the reliability, completeness and timeliness of
internal and regulatory and management details.
58
4.7 Related party transaction
Review and report to the board any related party transaction and situation
of conflict of interest that may occur within KIBB and or its subsidiaries,
including any transaction, practice or course of conduct that poses
question of honesty of management.
4.8 Regulatory examinations / inspection reports / reporting obligations
a) Ensure proper compliance and prescribe effective remedial and
corrective actions with regard to findings arising from inspection /
inspections carried out on KIBB and its subsidiaries by the
regulatory authorities.
b) Ensure prompt and accurate communication / reporting to
regulators on matters concerning KIBB's and its subsidiaries
'health and soundness upon becoming aware of the same.
4.9 Internal auditors 'and AC reports are not subject to Management clearance.
4.10 Perform any other functions which the audit committee and the Board
agree with one another.
4.11 Review the consistency and appropriateness of the Chairman’s Statement
in the Report of Directors, records of corporate governance and internal
control, annual financial reports and preliminary announcements relevant
to the preparation of financial statements.
4.12 Track adherence to Group Conflict Resolution Policy with respect to real
or possible conflicts of interest with the Manager.
4.13 Where the audit committee is of the opinion that a matter submitted by the
audit committee to the KIBB Board has not been satisfactorily resolved
resulting in a violation of the listing criteria, the audit committee shall
report such matter to Bursa Malaysia Securities as soon as possible.
4.14 Any reference to any section of legislation, guidelines, circulars or
instructions in this Terms of Reference shall include any changes, updates,
consolidations or replacements as may be provided from time to time.
Intended outcome
59
There is an effective and independent Audit Committee. The board is able to
objectively review the Audit Committee’s findings and recommendations. The
company’s financial statement is a reliable source of information.
Practice 8.1
The Chairman of the Audit Committee is not the Chairman of the board.
Application Applied
Explanation on application  The Chairman of the Audit Committee (“AC”) of

Kenanga Investment Bank Berhad (“KIBB”) is Encik
Jeremy Nasrulhaq (“Encik Jeremy”), an Independent
Non-Executive Director of KIBB, who is not the
Chairman of the Board of KIBB.
 Encik Jeremy, aged 66, is a member of the Malaysian
Institute of Accountants. He was appointed to the
Board of KIBB as an Independent Non-Executive
Director on 1 June 2017. He was initially appointed as
a member of the AC on 1 June 2017 and subsequently
re-designated as the Chairman of the AC on 8
September 2017.
 The audit committee comprises a majority of
Independent Directors. The composition of the AC
and the profiles of each member and details of
meeting attendance can be found in Section B of this
CG Report.
60
Practice 8.2
The Audit Committee has a policy that requires a former key audit partner to observe a
cooling-off period of at least two years before being appointed as a member of the Audit
Committee.
Application Applied
Explanation on application  Being a financial institution, Kenanga Investment

Bank Berhad adheres to the requirement of Standard
10.5 of Bank Negara Malaysia’s Policy Document on
Corporate Governance which stipulates that where a
firm has been appointed as the external auditor of a
financial institution, any of its officers directly
involved in the engagement and any partner of the
firm must not serve or be appointed as a director of
the financial institution until at least two (2) years
after -
 he ceases to be an officer or partner of that firm; or
 The firm last served as an auditor of the financial
institution.
Practice 8.3
The Audit Committee has policies and procedures to assess the suitability, objectivity and
independence of the external auditor.
Application Applied
Explanation on application It is a policy of the Audit Committee (“AC”) of Kenanga

Investment Bank Berhad (“KIBB” or “the Company”) to
meet with the External Auditors of KIBB, at least twice a
year to discuss their audit plan, audit findings and the
Company’s financial statements. In addition, the AC also
holds separate meetings with the External Auditors without
61
the presence of Management to ensure full disclosure and
transparent report on relevant issues affecting the Company.
In relation to the re-appointment of Messrs. Ernst & Young
(“EY”) as KIBB’s External Auditors for the Financial Year
Ending 31 December 2019, the Board had at its meeting on
31 January 2019, concurred with the AC’s recommendation
for EY to be re-appointed as the Company’s External
Auditors after having been satisfied with the outcome of the
assessment conducted on EY’s performance and
independence, in accordance with Section 67(1) of the
Financial Services Act 2013.
Based on the assessment, the Board had concluded that EY
had fulfilled all the qualification criteria set out in Bank
Negara Malaysia (“BNM”)’s Policy on External Auditors in
terms of its performance and independence.
For 2019, Ms. Ng Sue Ean has been proposed as the new
Engagement Partner of EY replacing Mr. Chan Hooi Lam
who has been with KIBB Group for the past five (5) years.
BNM had on 19 March 2019 granted its approval for EY’s re-
appointment as KIBB Group’s External Auditors for the
Financial Year Ending 31 December 2019.
Practice 8.4 – Step up
The Audit Committee should comprise solely of Independent Directors.
Application Not Adopted
Explanation on application
Practice 8.5
62
Collectively, the Audit Committee should possess a wide range of necessary skills to
discharge its duties. All members should be financially literate and are able to understand
matters under the purview of the Audit Committee including the financial reporting
process.
All members of the Audit Committee should undertake continuous professional
development to keep themselves abreast of relevant developments in accounting and
auditing standards, practices and rules.
Application Applied
Explanation on application The Audit Committee (“AC”) of Kenanga Investment Bank

Berhad (“KIBB” or “the Company”) presently comprises a
majority of Independent Directors and is chaired by an
Independent Director who is not the Chairman of the Board,
in line with the requirements of Bank Negara Malaysia
(“BNM”)’s Policy Document on Corporate Governance.
As at 31 December 2018, the composition of the AC was as
follows:
1. Jeremy Nasrulhaq
2. Izlan Izhab
3. Luk Wai Hong, William
4. Kanagaraj Lorenz
5. Ismail Harith Merican
Two (2) of the AC members, namely Encik Jeremy
Nasrulhaq and Mr. Kanagaraj Lorenz, are members of the
Malaysian Institute of Accountants (“MIA”) and the
Malaysian Institute of Certified Public Accountants (formerly
known as the Malaysian Association of Certified Public
63
Accountants) respectively, in line with the requirements of
the Main Market Listing Requirements of Bursa Malaysia
Securities Berhad. This would strengthen the effectiveness of
the AC and facilitate the AC’s succession plan in terms of its
membership to ensure full compliance with the relevant
regulatory requirements.
In terms of continuous development of the Board and Board
Committees members, the Company, via the Company
Secretary’s Office facilitates the registration and attendance
of Directors at appropriate external and in-house training
programmes to ensure that the Directors are kept abreast with
new developments pertaining to the laws and regulations and
changing commercial risks, which may affect the Board
and/or the Company, as well as to ensure that they are fully
equipped with the necessary knowledge to assist them in
fulfilling their responsibilities as Directors of the Company.
In addition to external training programmes, the AC members
also attended several training programmes organised in-
house. The relevant training programmes attended by the AC
members during 2018 were as listed below.
1. Annual Audit Committee and Internal Control Seminar for
the Public and Private Sectors 2018: Guidance for an
Effective Internal Audit Function by Aram Global
2. BNM-FIDE FORUM Dialogue: Managing Cyber Risks In
Financial Institution by FIDE FORUM
3. Mandatory Accreditation Programme by The Iclif
Leadership and Governance Centre (“ICLIF”)
4. Corporate Governance Briefing Sessions: MSSG Reporting
& CG Guide by Bursa Malaysia Berhad (“Bursa Malaysia”)
5. Capital Market Director Programme ("CMDP") - Module
1: Directors as Gatekeepers of Market Participants by
64
Securities Industry Development Corporation (“SIDC”)
6. CMDP Module 2A: Business Challenges and Regulatory
Expectations - What Directors Need to Know (Equities and
Futures Broking) by SIDC
7. CMDP Module 3: Risk Oversight and Compliance - Action
Plan for Board of Directors by SIDC
8. CMDP Module 4: Current and Emerging Regulatory Issues
in the Capital Market by SIDC
9. FIDE Core Programme - Module A by ICLIF
10. FIDE Core Programme - Module B by ICLIF
11. 3rd Annual Regulatory Seminar: Sustaining Ethical
Consistency In a Disruptive Environment by Kenanga's
Group Regulatory & Corporate Service
12. 5th BNM-FIDE FORUM Annual Dialogue: Up Close
with the Deputy Governor of BNM by FIDE FORUM
13. Technical Workshop on Green Finance in Malaysia by
Bursa Malaysia/ Capital Markets Malaysia
14. Beyond Compliance "The Role of Listed Companies in
Creating A Fair and Prosperous Malaysia by Global Institute
for Tomorrow
15. Win the Innovation Race: Unlocking the Creative Power
of Asians by FIDE FORUM
16. FIDE Elective Programme - Understanding Fintech and
Its Implications for Banks by ICLIF
17. Blockchain in Financial Services Industry by IBM - FIDE
FORUM
18. FIDE Elective Programme - Emerging Risks, the Future
Board, and Return on Compliance by ICLIF
19. Malaysian Anti-Corruption Commission Amendment Act
2018 by Malaysian Institute of Corporate Governance -
(KIBB: In-House)
65
20. Corporate Directors Conference 2018 by Malaysian
Alliance of Corporate Directors
21. Focus Group Consultation Session - Revised Abridged
Prospectus Guidelines by Federation of Public Listed
Companies
22. MIA Conference 2018
23. FinTech and Its Impact to Capital Markets by MIA
24. FIDE Elective Programme - Emerging Risks, the Future
Board, and Return on Compliance by ICLIF
25. Kenanga Group's Fraud Awareness Week 2018 -
Townhall Session 2: Anti-Fraud by the Malaysian Anti-
Corruption Commission
26. 2019 Budget: What You Need to Know the Economy,
Capital Market and You by SIDC
27. IIAM Talk: Standard 1300 by Institute of Internal Audit
Malaysia (“IIAM”)
28. Fintech: Disruption to be Embraced? - Demo Day and
Dialogue with 10 Fintech Companies by FIDE FORUM
29. Board Conversations (Banks and Development Financial
Institutions / Insurance Companies & Takaful Operators) by
FIDE FORUM
30. Anti-Corruption and Anti-Bribery in Malaysia by Cahya
Mata Sarawak Berhad
31. Internal Audit for Board & Audit Committee by MIA
32. Breakfast Series: Non-Financials - Does It Matter by
ICLIF
Guidance
66
8.1 The Chairman of the Audit Committee is responsible for ensuring the overall
effectiveness and independence of the Committee. Having the positions of
Chairman of the board and Chairman of the Audit Committee assumed by the
same person may impair objectivity of the board’s review of the Audit
Committee’s findings and recommendations.
The Chairman of the Audit Committee together with other members of the Audit
Committee should ensure among others that–
• The Audit Committee is fully informed about significant matters related to the
company’s audit and its financial statements and addresses these matters;
• The Audit Committee appropriately communicates its insights, views and
concerns about relevant transactions and events to internal and external auditors;
• Audit Committee’s concerns on matters that may have an effect on the financial
or audit of the company are communicated to the external auditor; and
• There is co-ordination between internal and external auditors.
8.2 The cooling off period safeguards the independence of the audit by avoiding the
potential threats which may arise when a former key audit partner is in a position
to exert significant influence over the audit and preparation of the company’s
financial statements.
8.3 In assessing the suitability, objectivity and independence of the external auditor,
the Audit Committee establishes policies and procedures that consider among
others–
• The competence, audit quality and resource capacity of the external auditor in
relation to the audit;
• The nature and extent of the non-audit services rendered and the appropriateness
of the level of fees; and
• Obtaining written assurance from the external auditors confirming that they are,
and have been, independent throughout the conduct of the audit engagement in
accordance with the terms of all relevant professional and regulatory
requirements.
The assessment on the suitability, objectivity and independence of the external
audit firm should be conducted annually.
67
8.5 The Audit Committee members are expected to be financially literate and have
sufficient understanding of the company’s business. This would enable them to
continuously apply a critical and probing view on the company’s financial
reporting process, transactions and other financial information, and effectively
challenge management’s assertions on the company’s financials.
The Audit Committee should demonstrate an appropriate level of vigilance and
scepticism towards, among others, detection of any financial anomalies or
irregularities in the financial statements. Where there are significant matters
requiring judgement, the Audit Committee should ask probing questions to
ascertain whether the financial statements are consistent with operational and
other information known. The Audit Committee should review and provide advice
on whether the financial statements taken as a whole provide a true and fair view
of the company’s financial position and performance.
Group Board Risk Committee

1.0 Objectives
1.1 Support the Board of Directors in meeting the risk management standards set out
in the Risk Governance Policy Report for Bank Negara Malaysia.
1.2 Assist the Board in introducing a sound remuneration scheme by reviewing how
benefits offered by the remuneration scheme take account of risks, resources,
liquidity and the probability and timing of earnings, without regard to the duties
of the Group Nomination & Remuneration Committee (NRC).
2.0 Composition
2.1 The Group Risk Board (GBRC or the Committee) shall consist of only Non-
Executive Directors with at least three (3) members, the majority of whom shall
be Independent Directors.
2.2 The membership of the GBRC shall be approved by the Board of Kenanga
Investment Bank Berhad (KIBB or the Company) on the basis of the NRC's
recommendation, including the position of Chairman.
2.3 The GBRC Chairman shall be an Autonomous Non-Executive Officer, and shall
not be the Board Chairman.
68
2.4 Members of the GBRC may surrender their membership of the Committee with
prior written notice to the Secretary of the Company and may continue to serve as
Company Directors. All GBRC leaders, including the Chairman, can hold office
only as long as they serve as the Company's Directors.
2.5 In the event of any vacancy leading to a reduction in the number of members to
below three, the Board shall fill the vacancy within three months.
3.0 Right of the Group Board Risk Committee

3.1 In carrying out its duties and obligations, the GBRC shall have the tools and full
and unlimited access to the records of KIBB and or its branches (including
records of all meetings of the Board and the Management Committee), assets and
officers related to its operations.
3.2 The GBRC shall have the means and opportunity to obtain objective third-party
opinions or information on risk consequences as necessary, at the expenses of the
Client, before drawing any conclusion or making any concrete policy decision.
This will help to encourage informed and inclusive GBRC / council decision-
making in a way that complements and adds value to Senior Management’s work.
3.3 Responsibilities of the Group Board Risk Committee
3.4 Risk strategies and risk profile
a) Review and propose the company’s overall risk and the risk appetite as
suggested by the Group Risk Committee to the board for approval and
assist the board in overseeing its execution.
b) Review the execution of an effective risk plan by Management and gain
confirmation that organizational units work within the limits of KIBB’s
tolerance for different risk types.
c) Assist the board in ensuring that KIBB’s strategic priorities are guided by
a sound risk policy and an appropriate risk management system tailored to
the size scope and complexity of its activities.
d) Periodically review risk profiles report and advice from the GRC on risk
management strategies in response to changes in internal and/or external
69
economic conditions and key factors that that impact the original business
strategy of the KIBB outcome.
3.5 Risk policies and framework
a) Assist the Board in updating and supervising the risk management process
design and implementation and ensuring that the system is successful in
managing KIBB's risk-taking activities in accordance with its risk
tolerance and has taken into account changes in the business climate.
b) In doing so, the GBRC must provide Management with a proactive
question about the integrity and robustness of the system to ensure that
material deficiencies or vulnerabilities do not occur.
3.6 Risk appetite and limits setting
a) Assist the Board in periodically updating and affirming KIBB's risk
tolerance to ensure it remains important and reflects any adjustments in
KIBB's risk-taking capability, its intrinsic risk profile, as well as market
and macroeconomic conditions.
b) Regularly receive input from Senior Management on adherence to KIBB's
risk profile and the application of risk management strategies, processes
and controls within KIBB in the management of KIBB's main risks, as
well as risks.
c) Provide the Senior Management with constructive tasks and objectively
evaluate the risk information and trends impacting KIBB and/or its
subsidiaries.
3.7 Risk methodologies and infrastructure
Ensure that risk management techniques and methodologies, facilities, services
and processes are in place by ensuring that those tasks are conducted
independently of the risk-taking activities of KIBB by the staff responsible for
implementing risk management processes.
3.8 Assist the Board in ensuring that there is a stable monitoring climate within KIBB
and its subsidiaries with consistent recognition of obligations to incur and
mitigate risks allocated to business units, risk management and monitoring
functions, and internal audit.
70
3.9 The GBRC and the Group Audit Committee will need to meet on a regular basis
to ensure efficient knowledge sharing in order to allow adequate coverage of all
risks, including emerging risk issues that could affect the risk tolerance and
business plans of the Organization.
3.10 Any reference to any section of legislation, rules, circulars or orders in this Terms
of Reference shall include, as may be provided from time to time, all changes,
adjustments, consolidations or replacements.
Intended Outcome
Companies make informed decisions about the level of risk they want to take and
implement necessary controls to pursue their objectives. The board is provided with
reasonable assurance that adverse impact arising from a foreseeable future event or
situation on the company’s objectives is mitigated and managed.
Practice 9.1
The board should establish an effective risk management and internal control framework.
Application Applied
Explanation on application The Board of Directors (Board) of Kenanga Investment Bank

Berhad (KIBB) is fully committed to maintaining a sound
system of internal controls and has instituted a risk
management and internal control framework, as well as good
corporate governance measures to monitor KIBB Group’s
effectiveness in safeguarding shareholders’ investments and
KIBB Group’s assets.
The risk management and internal control systems are
designed to identify, assess and manage risks that may
impede the achievement of KIBB Group’s business
objectives and strategies rather than to eliminate these risks.
The risk management and internal control systems can only
provide reasonable and not absolute assurance against
71
material misstatement, fraud or loss, and this is achieved
through a combination of preventive, detective and corrective
measures.
Relevant information on KIBB’s risk management and
internal control framework is disclosed in the Statement on
Risk Management and Internal Control in KIBB’s 2018
Annual Report.
The Board is also supported by the Group Board Risk
Committee (GBRC) which comprises a majority of
Independent Directors and is chaired by an Independent
Director who is not the Chairman of the Board, in line with
the requirements of Bank Negara Malaysia’s Policy
Document on Corporate Governance.
In addition, the GBRC also assists the Board in ensuring that
a sound control environment exists within KIBB and its
subsidiaries with clear identification of responsibilities for
incurring and controlling risks assigned respectively to
business units, the risk management and control functions and
the internal audit function.
72
Practice 9.2
The board should disclose the features of its risk management and internal control framework,
and the adequacy and effectiveness of this framework.
Application Applied
Explanation on application It is important to emphasise that the ultimate responsibility

for ensuring a sound internal control system and reviewing
the effectiveness of the system lies with the Board of
Directors. Kenanga Investment Bank Berhad inherent system
of internal control is designed to manage, rather than
eliminate, the risk of failure to achieve the Company’s
corporate objectives and to safeguard the shareholders’
investments and the Company’s assets.
Details of KIBB’s internal control system and framework are
set out in the Statement on Risk Management and Internal
Control in KIBB’s 2018 Annual Report

The board establishes a Risk Management Committee, which comprises a majority of
independent directors, to oversee the company’s risk management framework and
policies.
Application Adopted
Explanation on adopted Kenanga Investment Bank Berhad (KIBB) has established the
Group Board Risk Committee (GBRC) to oversee its risk
management framework and policies.
The GBRC comprises a majority of Independent Directors
and is chaired by an Independent Director who is not the
Chairman of the Board, in line with the requirements of Bank
Negara Malaysia’s Policy Document on Corporate
Governance.
As at 31 December 2018, the composition of the GBRC was
73
as follows:
1. Luk Wai Hong, William
2. Norazian Ahmad Tajuddin
3. Kanagaraj Lorenz
4. Luigi Fortunato Ghirardello
5. Dato’ Richard Alexander John Curtis
The GBRC’s responsibilities cover, inter alia, the areas of
risk strategies and risk profile, risk policies and framework,
risk appetite and limits setting, as well as risk methodologies
and infrastructure.
In addition, the GBRC also assists the Board in ensuring that
a sound control environment exists within KIBB and its
subsidiaries with clear identification of responsibilities for
incurring and controlling risks assigned respectively to
business units, the risk management and control functions and
the internal audit function. Details of KIBB’s internal control
system and framework are set out in the Statement on Risk
Management and Internal Control in KIBB’s 2018 Annual
Report.
Guidance
9.1 The board should determine the company’s level of risk tolerance and actively
identify, assess and monitor key business risks to safeguard shareholders’
investments and the company’s assets. Internal controls are important for risk
management and the board should be committed to articulating, implementing
and reviewing the company’s internal control framework.
74
9.2 The board should, in its disclosure include a discussion on how key risk areas
such as finance, operations, regulatory compliance, reputation, cyber security and
sustainability were evaluated and the controls in place to mitigate or manage those
risks. In addition, it should state if the risk management framework adopted by
the company is based on an internationally recognised risk management
framework.
The board should also disclose whether it has conducted an annual review and
periodic testing of the company’s internal control and risk management
framework. This should include any insights it has gained from the review and
any changes made to its internal control and risk management framework arising
from the review. Where information is commercially sensitive and may give rise
to competitive risk, disclosure in general terms is acceptable.
Intended Outcome
Companies have an effective governance, risk management and internal control
framework and stakeholders are able to assess the effectiveness of such a
framework.
Practice 10.1
The Audit Committee should ensure that the internal audit function is effective
and able to function independently.
Application Applied
Explanation on application The Group Internal Audit Division (GIA) of Kenanga

Investment Bank Berhad (KIBB) is established by the Board
of Directors (Board) to provide independent and objective
assurance to the Board that the established internal controls,
risk management and governance processes are adequate and
operating effectively and efficiently. To ensure independence
and objectivity, GIA, which is headed by the Group Chief
Internal Auditor (GCIA), Mr. Terence Tan Kian Meng,
reports independently to the Audit Committee (AC) and has
75
no responsibilities or authority over any of the activities it
reviews.
An Annual Audit Plan based on the appropriate risk based
methodology has been developed and approved by the AC.
On a quarterly basis, audit reports and status of internal audit
activities including the sufficiency of GIA resources are
presented to the AC for review. Periodic follow up reviews
are conducted to ensure adequate and timely implementation
of Management’s action plans.
The GCIA is invited to attend the AC meetings to facilitate
the deliberation of audit reports.
The AC, pursuant to its Terms of Reference, oversees the
effectiveness of the internal audit function of KIBB
including:
 reviewing, approving and reporting to the Board the
audit scope, procedures and frequency;
 reviewing and reporting to the Board key audit reports
and ensuring that Senior Management is taking
necessary corrective actions in a timely manner to
address control weaknesses, non-compliance with
laws, regulatory requirements, policies and other
problems identified by GIA;
 noting significant disagreements between the GCIA
and the rest of the Senior Management team,
irrespective of whether these have been resolved, in
order to identify any impact the disagreements may
have on the audit process or findings;
 establishing a mechanism to assess the performance
and effectiveness of the internal audit function; 
reviewing and reporting to the Board the adequacy of
scope, functions, competency and resources of the
76
internal audit function and that it has the necessary
authority to carry out its work; and
 Appointing, setting compensation, evaluating the
performance and deciding on the transfer and
dismissal of the GCIA and of any staff member of the
internal audit function at the request of the GCIA.
Practice 10.2
The board should disclose–
 Whether internal audit personnel are free from any relationships or conflicts of interest,
which could impair their objectivity and independence;
 The number of resources in the internal audit department;
 Name and qualification of the person responsible for internal audit; and
 Whether the internal audit function is carried out in accordance with a recognised
framework.
Application Applied
Explanation on application Group Internal Audit (“GIA”) reports functionally to the

Audit Committee (“AC”) and administratively to the Group
Managing Director. It provides independent and objective
assurance to the Board and Management that the policies,
procedures and operations that Management has put in place
for risk management, control and governance are adequate,
operating effectively and efficiently, and in compliance with
prescribed laws and regulations.
In order to discharge its duties and responsibilities
independently and objectively, GIA is independent of the
activities and operations of the business and other support
units which it reviews.
GIA is led by the Group Chief Internal Auditor (“GCIA”),
Mr. Terence Tan Kian Meng, who is a Certified Internal
77
Auditor under the Institute of Internal Auditors, USA. He
holds a Bachelor of Commerce (Accounting) from the
University of New South Wales, Australia and is a Chartered
Accountant under the Malaysian Institute of Accountants, as
well as a Certified Practising Accountant (“CPA”) under the
CPA Australia. He has extensive experience in various
capacities in both local and multi-national corporations and
financial institutions which includes external and internal
auditing and compliance.
The internal audit function is guided by its Internal Audit
Charter which is approved by the AC. The Internal Audit
Charter outlines amongst others, the GIA’s objectives,
mission, scope, responsibility, accountability, authority,
independence and objectivity, as well as standards and ethics.
An Annual Audit Plan based on the appropriate risk based
methodology has been developed and approved by the AC.
On a quarterly basis, audit reports and status of internal audit
activities including the sufficiency of GIA resources are
presented to the AC for review. Periodic follow up reviews
are conducted to ensure adequate and timely implementation
of Management’s action plans.
As at 31 December 2018, GIA had a total of seventeen (17)
personnel from diverse backgrounds.
For further information on KIBB’s internal audit function,
please refer to the Corporate Governance Overview, Audit
Committee Report and Statement on Risk Management and
Internal Control disclosed in KIBB’s 2018 Annual Report.
Guidance
78
10.1 An internal audit function helps a company to accomplish its goals by bringing an
objective and disciplined approach to evaluate and improve the effectiveness of
risk management, internal control and governance processes. This function serves
as an important source of advice for the Audit Committee concerning areas of
weaknesses or deficiencies in internal processes to facilitate appropriate remedial
measures by the company.
Internal audit should be carried out objectively and is independent from the
management of the company and the functions which it audits. Thus, it is
essential that the person responsible for internal audit reports directly to the Audit
Committee.
The Audit Committee should also decide on among others the–
• Appointment and removal;
• Scope of work;
• Performance evaluation; and
• Budget; for the internal audit function. In developing the scope of the internal
audit function, the Audit Committee should satisfy itself that–
• The person responsible for internal audit has relevant experience, sufficient
standing and authority to enable him to discharge his functions effectively;
• Internal audit has sufficient resources and is able to access information to enable
it to carry out its role effectively; and
• The personnel assigned to undertake internal audit have the necessary
competency, experience and resources to carry out the function effectively. It is
expected that the role of internal auditors will evolve and expand to include
providing advisory support on strategy. This requires internal auditors to go
beyond the execution of the internal audit plan and undertake root-cause analysis
to provide proactive strategic advice and suggest meaningful business
improvements. As such, internal auditors should continuously keep abreast with
developments in the profession, relevant industry and regulations.
Discussions of Committees of the Board in Kenanga Investment Bank Berhad
79
The corporate governance practice has focused on the membership and leadership of the boards
of directors as a whole, now turn to some other contributors to sound governance practice
committees of the board in particular the audit committees independents external auditors and
company secretaries. An importance development in corporate governance was formalization of
board sub-committees. A principle requirement now under almost corporate governance codes is
for at least three board committees the remuneration committees, the nomination committees and
the audit committees.[ CITATION Tri15 \l 17417 ]. Kenanga Investment Bank Berhad (KIBB) has all
the three principle committees required by all company in other wise KIBB also have Board of
Digital Committees to control all digital marketing and all about electronic. The function of
Boards Digital Committees also new to ensure the internet security in the level of high because
they do many transaction in online and as we know now many criminal of internet. KIBB take
one of alternative to develop the Board Digital Committees to control every become smooth, and
all the banking sector also have the Board Digital Committees, other function also need to review
and ensure the corporate publish for KIBB. All the subcommittees KIBB will conduct by
Independent Non-Executive and Non-Independent Non-Executive this to make sure avoiding
executive domination of board deliberations. The remuneration committees is responsible for
recommending to the board the remuneration package of executive directors, and sometimes
other top management, including salary, fees, pensions arrangements, options to acquire shares
in the company and other benefit. In KIBB the roles of the nomination committees is to suggest
names for board membership in an attempt to introduce different experience, personalities and
diversity to the board and to avoid dominant directors. Kenangan Investment Bank Berhad also
have Board of Risk Committees, to ensure that KIBB activities conform to the risk profile
accepted by the boards in their activities, the risk of cyber-crime becomes increasingly, Board
Risk Committee and Board Digital Committees work closely in case of cyber-crime. Other
boards have an executive committee or general purpose committee able to cover to devote more
time to financial issues, or a strategic committee to address longer-term strategic matters,
arrangement contribute to board effectiveness, provided that the deliberations and decision of
any subcommittee are carefully minute and reported to main directors with opportunity for the
other directors to be informed, to question and if necessary for the board to amend the
subcommittee’s decision. KIBB Audit Committee, will doing valuation of assets whether certain
80
expenditures should be capitalized or written off to the profit and loss account. They also
concern about financial control system. Director of KIBB should be aware of significant matters
that have been raised during the audit by the independent, external auditor. KIBB appoint EY
audit, tax and assurance ass external auditor to audit all main and subsidiaries under Kenangan
Investemtn Bank Berhad during financial years ended each year and will make auditor report not
to bias and should tell the trust finding during audit period because KIBB is public listed
company in Malaysia all citizen need to know especially the investor. The audit committee a
standing committee of the main board, comprised entirely or predominantly of independent,
outsider directors it provides a bridge between the external auditor and the board. Its charted aim
to avoid any domination of the audit process by senior executives. Usually audit committee in
KIBB will meet three or four time per year to discuss the details of the audit, to consider any
contentious points that had arisen on the account and to receive the audit’s recommendations on
audit related matters such as management control. The audit committee will often negotiate the
audit fee and if appropriate the KIBB audit committee will recommended to the board if they
need to change of auditor.
The Board recognizes that they are responsible for effective Corporate Governance,
consequently, the Board aim to follow the corporate governance standards and best practices and
to ensure that KIBB complies with the various guidelines provided by Bank Negara Malaysia
(BNM), Bursa Malaysia Securities Berhad and Securities Commission Malaysia. The Board is
also committed to continually take effective steps to integrate the stated principles and guidelines
of the Malaysian Code on Corporate Governance ("MCCG") into existing policies and
procedures of the Organization. The Board is responsible for directing and guiding KIBB
effectively and responsibly. The Board sets the principles and expectations of the Company and
maintains consistent recognition and enforcement of its responsibilities towards its shareholders
and other stakeholders including regulators, corporate partners, clients, staff, suppliers and
vendors. Notwithstanding any delegation of authority to the management or committees, the
Board retains full decision-making powers on matters relating, among others, to strategies,
business plans and budgets, significant policies, conflicts of interest affecting substantial
shareholders and/or a director asset purchases or disposals of assets not in the usual course of
business; capital improvement projects; levels of authority; risk management policies; and
essential human resource concerns.
81
References
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Press.
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NY.
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Annual Report 2018, Kenangan Investment Bank Berhad
82

Kenanga Investment Bank: Malaysia's Leading Investment Bank

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Kenanga Investment Bank: Malaysia's Leading Investment Bank

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UNIVERSITI UTARA MALAYSIA

OTHMAN YEOP ABDULLAH GRADUATE

SCHOOL OF BUSINESS (OYAGSB)

KENANGA INVESTMENT BANK BERHAD

Dr. Hanita Bt Kadir Shahar

Kenanga Investment Bank Berhad

John Hancock acquired a 30% equity interest in Kenanga Investment Bank.

ING Funds Berhad changed its name to Kenanga Funds Berhad.

Kenanga Investment Bank Berhad Brand Values

We are supported by an integrated network of colleagues and business partners. We believe in

KENANGA INVESTMENT BANK BERHAD

100% 100% 100% 100% 100% 100% 100%

KENANGA KENANGA KENANGA KENANGA KENANGA ECML

K&N RAKUTEN KENANGA AL WASATAH KENANGA AVENUE KENANGA

100% 49% 45% 100% 100% 100% 100%

as performance evaluation to the employee itself.

a company and employee itself.

DATUK SYED AHMAD

Figure 1: Listed of board structure

executive directors which is Non-Independent Non-Executive Directors and Independent Non-

advice and manage based on their specific expertise.

the company performance.

INDEPENDENT NON-EXECUTIVE NON-INDEPENDENT NON-

Figure 2: Listed on independent directors

of ownership and control that directly contribute to the company performance.

Figure 3: Appointment of Independent Directors

According to Figure 3 above it shows the method of appointment Independent director as

approval by shareholder through two-tier voting process.

for the best result to the company.

KENANGA INVESTMENT BANK BERHAD

(100%) (100%) (100%) (100%) (100%) (100%) (100%)

INCORPORATED INCORPORATED IN THE

(45%) (49%) (100%)

INCORPORATED IN SRI INCORPORATED IN

Figure 3: Ownership structure of Kenanga Investment Bank Berhad (KIBB)

company and eight other company under its subsidiaries.

The benefit of applying pyramid structure is taxation benefit, protection of limited

impact with the higher net profit of the company.

ISMAIL HARITH MERICAN

LUK WAI HONG, WILLIAM

NORAZIAN AHMAD TAJUDDIN

Under Malaysia Code on Corporate Governance

Explanation on Kenanga Investment Bank Berhad (KIBB) currently consists of

Based on the Board meetings held during the Financial Year

Application Not applicable – No independent directors (s) serving beyond

Two-tier Voting Process

APPOINTMENT OF AN INDEPENDENT DIRECTOR

Year Year Year Year Year Year Year Year and

Appointment and re-appointment

provided in Bursa Malaysia’s approval approval

Listing Requirements through a

After a cumulative If the board

an independent to retain the

director may independent

continue to serve director after

on the board as a year-12, the board

non-independent should provide

director. justification and

However, if the board shareholders’

intends to retain an approval through

independent director a two-tier voting

beyond 9 years, it process.