BIMB Integrated Annual Report 2017

CORPORATE GOVERNANCE OVERVIEW STATEMENT Other Activities • Reviewed the reports of recurrent related party transactions and the Circular to Shareholders with regard to the proposed renewal of shareholders’ mandate for existing recurrent related party transactions of a revenue or trading nature; • Reviewed and endorsed the Statement of Risk Management and Internal Control for the Board’s approval and inclusion in the Annual Report; • Reviewed the Zakat Computation for the Company and its wholly owned subsidiaries for the year under review; • Considered and reviewed the proposal for interim dividends and Dividend Reinvestment Plan for recommendation to the Board; • Reviewed the report on the Company’s status of compliance with regulatory requirements namely the Listing Requirements, Islamic Financial Services Act 2013, BNM’s Guidelines, Companies Act 2016 and Capital Market and Services Act 2007. The report also highlighted any new regulatory requirements as well as consultation papers issued by the relevant regulators and the deadline for compliance. Where relevant, the Committee would review the action plan proposed by the Management in meeting the regulatory requirements and discussed the implications of any latest changes and pronouncements on the Company and the Group; • Reported to the Board any significant issues and concerns discussed during the AEC meetings together with the relevant recommendations; and • Reviewed the assurance provided by the CEO and GFCO on the scope and performance of the risk management and internal control system established by the Group prior to recommendation to the Board for acceptance. INTERNAL AUDIT ACTIVITIES REPORT The Internal Audit functions of BHB and its wholly-owned subsidiaries, namely Syarikat Al-Ijarah Sdn Bhd, BIMB Securities Sdn Bhd and BIMB Securities (Holdings) Sdn Bhd have been outsourced to the Internal Audit Division (“ IAD ”) of Bank Islam since December 2008. The IAD is led by the Acting Head of Internal Auditors, Encik Zalfitri Abd Mutalip (“ Encik Zalfitri ”). Encik Zalfitri joined Bank Islam’s IAD in October 2007 and was appointed as the Acting Head of Internal Auditors on 1 June 2017. Encik Zalfitri is a Certified Public Accountant and a Fellow member of the ACCA, he is also a Certified Internal Auditor for financial institution (CIA FIN). The Internal Audit functions report directly to the AEC and is independent of the activities of its auditees. The primary responsibilities of the IAD are to undertake regular and systemic reviews of the risk management process, internal control and governance practices of BHB and its wholly-owned subsidiaries. The reviews are done in compliance with the International Professional Practices Framework and the Internal Audit Charter to provide a reasonable assurance that the risk management process, internal controls and governance practices are operating satisfactorily and effectively, in line with the Group’s goals and objectives. The scope of the Internal audit reports covers improvement opportunities, audit findings, management responses and corrective actions in areas with significant risks and internal control deficiencies. All Internal Audit Reports on the Company and its wholly-owned subsidiaries were tabled to the AEC for deliberation. Management were present at the AEC meetings to respond and provide feedback on the progress of business process improvement opportunities identified by IAD. Minutes of the AEC meetings are subsequently tabled to the Board for notation. The AEC reviewed the adequacy and relevance of the scope, functions, resources, procedures, risk based internal audit plans and results of the internal audit processes, with the IAD. The Internal Audit would submit the Internal Audit Plan to be reviewed by the AEC. The audit plan which covers the audit scope, methodology and practices, timing and resources, assessment of risk, comparison of actual versus budgeted time spent on assignments and audit fee. During the Financial Year under review, IAD issued four (4) reports and one (1) follow-up audits on corrective actions. The areas reviewed include procurement, finance, corporate governance, human resources, operations, information technology, investments, corporate strategy, media and communication and risk management. The internal audit functions of Bank Islam and Takaful Malaysia are carried out by their respective internal audit divisions. Mission and Practices IAD is committed to provide independent, risk based and objective assurance on the areas of operations reviewed, and gives insight and advice on best practices that will enhance, protect and add value to BHB and its wholly-owned subsidiaries. 122 BIMB HOLDINGS BERHAD Integrated Annual Report 2017