BIMB Integrated Annual Report 2019

• Evaluated the independence and objectivity of the external auditor by reviewing the fees and the list of non-audit services provided by the external auditor to BHB and the Group. The BAEC requested that justification is to be provided by the Management on the external auditor’s audit fee. The BAEC was informed that the audit fees were justified with an additional value added-services to BHB Group, at no additional cost. The value added services are as follows: (1) Sustainability workshop A workshop to understand Bank Islam’s strategy in adopting Value Based Intermediary (“ VBI ”). With the support of the external auditor’s Sustainability team, the external auditor will be able to provide insight from other financial institutions that have embarked in its sustainable journey and recommend key areas that the Bank Islam could focus on. (2) Red teaming exercise for Cybercrime To incorporate a value-added initiative to undertake a Red Team Exercise for the Group with the objective to provide recommendations to help improve the Group’s cyber resilience. A Red Team consist of a team of skilled and specialist ethical hackers. (3) Business Continuity Management (“ BCM ”) To conduct a high level BCM review to ensure the programme remains resilient and is aligned to the Bank Negara Malaysia Guidelines and ISO 22301 – Business Continuity Management. • The BAEC exercised its right as stipulated in its Terms of Reference, to hold meetings with the external auditor without the presence of the Management to enable open discussion with the BAEC. During the financial year under review, three (3) meetings were held without the Management’s presence, namely on 31 January 2019, 26 July 2019 and 31 October 2019. • Assessed the performance of the external auditor by reviewing the timeless of service deliverables. The external auditor was able to complete the audits for BHB and the Group within the timelines sets as evidenced below: (1) The audited financial statement for the financial year ended 31 December 2018 were signed off by the external auditor on 27 March 2019; (2) Report on limited review for the financial period 30 September 2019 was signed off by the external auditor on 31 October 2019; and (3) No past audit lapses were observed on the external auditor in the past assurance engagements. Financial Reporting • On 31 January 2019, the BAEC endorsed and recommended to the Board the audited financial statements of BHB Group for the financial year ended 31 December 2018 for approval. The review of the consolidated audited financial statements of BHB Group were based on the following: (1) Assurance from the Management and the External Auditors that the financial statements disclosures were in compliance with relevant statutory requirements and the Malaysian Financial Reporting Standards; (2) Reasonableness of accounting policies and estimates applied; (3) Reporting on-going concerns; (4) Highlight on key accounting development including MFRS 16 and MFRS 17; and (5) Pertinent audit matters highlighted by the External Auditors. • Reviewed the unaudited quarterly financial result of BHB Group and the draft announcement before recommending them for the Board’s approval for submission to Bank Negara Malaysia, Bursa Securities as well as Securities Commission. The recommendations were made upon deliberation comprising the following: (1) Key audit matters; and (2) The condensed consolidated interim financial statement has been prepared in accordance with the Malaysian Reporting Standard 134, Paragraph 9.22 of the MMLR and International Accounting Standard 34. • Recommended the proposed interim single tier dividend for the financial year ending 31 December 2019. The BAEC reviewed and received assurance from the Management, based on the solvency test conducted, that the distribution of interim single tier dividend was in accordance with the provisions made under the CA, 2016. 143 BIMB HOLDINGS BERHAD 199701008362 (423858-X) Shareholders’ Information Financial Statements Additional Information Disclosure Summary