BIMB Integrated Annual Report 2017

PRINCIPLE B: EFFECTIVE AUDIT AND RISK MANAGEMENT Audit and Examination Committee The AEC of BHB comprises three (3) Independent Non- Executive Director. The AEC is chaired by an Independent Non- Executive Director, Puan Noraini Che Dan, who is a member of the Malaysian Institute of Accountant (“ MIA ”) as well as the Malaysian Institute of Certified Public Accountants (MICPA). This is in line with the requirements under paragraph 15.09(1)(c) of the Listing Requirements and BNM CG Policy that at least one member of the Committee must be a member of the MIA or equivalent expertise or experience in the field of finance. The composition of the AEC is reviewed by the NRC and recommendedtotheBoardforitsapproval.Withtheviewtomaintain an independent and effective AEC, the NRC ensures that only an Independent Non-Executive Director who possess the appropriate level of expertise and experience, and has strong understanding of the Company’s business would be considered for AEC’s membership. The AEC also separately assessed KPMG as BHB’s External Auditors. The AEC is guided by the factors as prescribed under Paragraph 15.21 of the Listing Requirements as well as the Auditor Independence guided by BNM CG Policy, in the annual assessment on the suitability, objectivity and independence of the External Auditors. The composition of the AEC, its duties and responsibilities as well as details of meetings attended by each member can be found in pages 114 to 123 of this Integrated Annual Report and Section B of the CG Report. Risk Management and Internal Control Framework The Board has established an organisation structure and charter with clear defined lines of responsibility, authority limits and accountability in association with BHB’s Group business and operational requirements in order to maintain a sound control environment. The effectiveness of risk management and internal controls is ensured by the establishment of the BRC and the Group Risk Management Committee (“ GRMC ”). The BRC regularly evaluates the adequacy and effectiveness of the Group’s risk management by reviewing the actions taken on lapses/deficiencies identified in reports presented by the respective subsidiaries at the GRMC. Board Risk Committee The BRC consists exclusively of Independent Non-Executive Director and is chaired by Encik Mohd Tarmidzi Ahmad Nordin who is an Associate member of the Chartered Insurance Institute (UK) and Fellow of Malaysian Insurance Institute. The composition of the BRC, its duties and responsibilities as well as details of meetings attended by each member can be found in pages 135 to 138 of this Integrated Annual Report and Section B of the CG Report. The BRC assists the Board in ensuring that the risk exposures and outcomes affecting BHB and the Group are effectively managed and addressed by the Board. Specifically, the BRC is responsible for formulating policies and frameworks to identify, monitor, manage and control material risks impacting the Group. The BRC is supported by the GRMC where the members consist of the Group Chief Strategy Officer and GCFO of BHB together with the Risk Officer of each major key operating subsidiary. The GRMC assists the BRC to oversee the risk management matters relating to the activities of the Group. 111 Overview Value Creation Accountability Financial Statements Sustainability Performance Data Shareholders Information 21 st AGM Information Management Discussion & Analysis