BIMB Integrated Annual Report 2019

48 FINANCIAL RISK MANAGEMENT POLICIES (CONTINUED) 48.5 Liquidity risk (continued) (c) Company (continued) Maturity analysis (continued) Contractual maturity of financial liabilities on an undiscounted basis The table below present the cash flows payable by the Company under financial liabilities by remaining contractual maturities at the end of the reporting period. The amount disclosed in the table are the contractual undiscounted cash flows: Up to >1 to 3 >3 to 6 >6 to 12 Over 1 month months months months 1 year Total As at 31 December 2019 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 Financial liabilities Sukuk liabilities – – – 15,880 1,097,225 1,113,105 – – – 15,880 1,097,225 1,113,105 As at 31 December 2018 Financial liabilities Sukuk liabilities – – – 15,751 1,113,105 1,128,856 – – – 15,751 1,113,105 1,128,856 48.6 Operational risk Banking Overview Operational risk is defined as the risk of loss arising from inadequate or failed internal processes, people and systems and external events, which includes legal risk and Shariah compliance risk but excludes strategic and reputational risk. Management of operational risk The Bank recognises and emphasises the importance of operational risk management (“ORM”) and manages this risk through a control-based environment where processes are documented, authorisation is independent, transactions are reconciled and monitored and business activities are carried out within the established guidelines, procedures and limits. The Bank’s overall governance approach in managing operational risk is premised on the Three Lines of Defence Approach: • 1st line of defence – The risk owner or risk taking unit i.e. Business or Support Unit is accountable for putting in place a robust control environment within their respective units. They are responsible for the day to day management of operational risk. To reinforce accountability and ownership of risk and control, a Risk Controller for each risk taking unit is appointed to assist in driving the risk and control programme for the Bank. In addition, an Embedded Risk & Compliance Unit (“ERU”) has been established within the significant business and support units (“BU/SU”). The ERU would assist in implementing and monitoring the ORM activities within the BU/ SU. The ERU’s relationship and knowledge of the business allow for a more focused implementation and effective oversight of ORM within the BU/SU. NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019 (CONTINUED) 301 BIMB HOLDINGS BERHAD 199701008362 (423858-X) Shareholders’ Information Financial Statements Additional Information Disclosure Summary