FIMA CORPORATION ANNUAL REPORT 2016

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FIMA CORPORATION BERHAD

(21185-P) |

Annual Report

2016

Through the Audit Committee, the Company has maintained a transparent and professional relationship

with the external auditors. During the year, the Audit Committee undertook an assessment of the

quality of the external auditors which encompassed the quality of services, sufficiency of resources,

communication and interaction, audit planning, independence, objectivity and professionalism.

The Audit Committee was satisfied with the suitability of Hanafiah Raslan & Mohamad (“HRM”) based

on the quality of services and sufficiency of resources that they have provided to the Group. The Audit

Committee was also satisfied that the provision of non-audit services during the year by HRM did not

in any way impair their objectivity and independence as external auditors of the Group. Non-audit fees

incurred during the financial year was RM8,000 (2015: RM8,000).

HRM had provided written assurance to the Audit Committee that they are independent in accordance

with the By-laws (on Professional Ethics, Conduct and Practice) of theMalaysian Institute of Accountants.

Having regard to the assessment of external auditors, the Board was satisfied with the suitability and

independence of HRM and had in February 2016 approved the Audit Committee’s recommendation

for the shareholders’ approval to be sought at the forthcoming AGM on the re-appointment of HRM as

external auditors of the Company.

5.3 Related Party Transactions

All related party transactions are reviewed by the Audit Committee on a quarterly basis. Details of the

proposed renewal of shareholders’ mandate for recurrent related party transactions is set out in the

Circular to Shareholders dated 29 July 2016.

RECOGNIZE AND MANAGE RISKS

6.1 Risk Management Framework

The Directors acknowledge their responsibilities for the Group’s system of internal controls covering not

only financial controls but also operational and compliance controls as well as risk management. The

Audit Committee provides advice and assistance to the Board in meeting these responsibilities and the

role of the former in relation thereto is described in the Statement on Risk Management and Internal

Control of this Annual Report.

The system of internal controls is designed to manage and provide reasonable and not absolute

assurance against the risk of material errors, frauds or losses occurring. The Board however, recognizes

that the system must continually evolve to support the type of business and size of operations of the

Group. As such, the Board will, when necessary, put in place the appropriate action plans to further

enhance the Group’s system of internal control.

6.2 Internal Audit Function

Internal audit functions of the Group is carried out by the Group Internal Audit Department (“GIA”) of the

penultimate holding company, Kumpulan Fima Berhad, which reports directly to the Audit Committee

on its activities based on an internal audit plan that is approved by the Audit Committee.

STATEMENT OF

CORPORATE GOVERNANCE

(contd.)