BIMB Integrated Annual Report 2017

STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL INTRODUCTION Pursuant to Paragraph 15.26(b) of the Listing Requirements of Bursa Malaysia Securities Berhad, the Board of Directors (“ Board ”) is pleased to provide the following Risk Management and Internal Control Statement (the “ Statement ”) which outlines the nature and scope of risk management and internal controls of the Group during the financial year ended 31 December 2017. For the purpose of disclosure, this Statement is guided by the Statement on Risk Management & Internal Control: Guidelines for Directors of Listed Issuers. The Board is committed and acknowledges its responsibility to oversee the system of risk management and internal controls within the Group including reviewing its adequacy, integrity and effectiveness to safeguard shareholders’ investments and the Group’s assets. The Board has received assurance from BHB’s CEO and the Group Chief Financial Officer that the Group’s risk management and internal control systems are operating adequately and effectively, in all material aspects, during the financial year under review and up to the date of this Statement. Taking into consideration the assurance from the Management and the input from the relevant assurance providers, the Board is of the view that the systems of risk management and internal control are performing satisfactorily and are adequate to safeguard the shareholders’ investments, customers’ interest and the Group’s assets. The Group will continue to implement new measures to strengthen the internal control and risk management environment. BOARD RESPONSIBILITY The Board recognises that a sound system of internal control and risk management practices are essential in ensuring good corporate governance. Such a system is designed to manage an acceptable risk profile rather than eliminate the risk of failure to achieve the business objectives of the BHB Group; and can only provide reasonable and not absolute assurance against material misstatement, fraud or loss. As a financial holding company (“ FHC ”), continuous enhancements are being made to the system of internal control in line with the Board’s commitment to improve the Group’s governance, risk management and internal control framework and control culture. The environment for the proper control of the Group’s business operations is also in line with Bank Negara Malaysia’s (“ BNM ”) regulatory framework. At BHB level, the internal control oversight responsibilities were initially carried out by the following committees:- • Audit & Examination Committee (“AEC”) The main responsibility of the AEC is to assist the Board in assessing the effectiveness of the Group’s internal control systems and overseeing the accounting system’s internal control. This is to ensure that appropriate methods and procedures are in place to obtain the level of assurance required by the Board. The AEC also review the quarterly reports relating to regulatory developments, compliance and operational deficiencies identified within the Company. The AEC also assists the Board to review the adequacy and effectiveness of the accounting system’s internal control and ensures that appropriate methods and procedures are in place to obtain the level of assurance required by the Board. The minutes of the AEC is escalated to the Board for information. The Terms of Reference is available on the Company’s website www.bimbholdings.com; About us – Corporate Governance – Board Committees – Audit & Examination Committee – Terms of Reference 139 Overview Value Creation Accountability Financial Statements Sustainability Performance Data Shareholders Information 21 st AGM Information Management Discussion & Analysis l