FIMA CORPORATION ANNUAL REPORT 2018

c o r p o r at e G O V E R N A N C E

AUDIT COMMITTEE REPORT

The Company Secretaries act as secretary to the Audit Committee. The Company Secretaries shall cause minutes to be

entered in the books provided for purpose of recording all resolutions and proceedings of minutes and shall be kept at the

registered office of the Company for inspection of any member of the Audit Committee or the Board. Such minutes shall be

signed by the Chairman of the next succeeding meeting and if so signed, shall be conclusive evidence without any further

proof of the facts. Minutes of each meeting shall also be distributed to all attendees of the Audit Committee meetings and

presented to the members of the Board at the Board meeting for noting.

The Audit Committee, through its Chairman, shall report to the Board at the next Board meeting after each Audit Committee

meeting. When presenting any recommendation to the Board, the Audit Committee will provide such background and

supporting information as may be necessary for the Board to make an informed decision.

SUMMARY OF ACTIVITIES OF THE AUDIT COMMITTEE DURING THE FINANCIAL YEAR ENDED 31 MARCH 2018

4.1 During the financial year, the Audit Committee carried out its duties as set out in its Terms of Reference. Key focus areas

of the Audit Committee during the financial year includes:

(a) Financial Reporting:

• Reviewed the Group’s quarterly unaudited financial results and audited financial statements to ensure

compliance with the MMLR, applicable approved accounting standards and other statutory and regulatory

requirements prior to recommending to the Board for approval.

• Reviewed the impact of any changes to the accounting policies and adoption of new accounting standards

as well as accounting treatments used in the financial statements.

• Obtained assurance from the Managing Director, Chief Operating Officer and Financial Controller that:

> appropriate accounting policies had been adopted and applied consistently;

> the going concern basis applied in the audited financial statements and quarterly financial results was

appropriate;

> adequate processes and controls were in place for effective and efficient financial reporting and

disclosures under the Financial Reporting Standards and MMLR; and

the relevant financial statements for FYE2018 gave a true and fair view of the state of affairs of the

Group.

• Reviewed the recognition of impairment of property, plant and equipment and biological assets by PT

Nunukan Jaya Lestari following the dismissal of the State Administrative Court’s decision to dismiss the

Ministerial Order.

• Reviewed the revenue recognition by Manufacturing Division and provision of warranty by the Division.

(b) External Audit:

• Reviewed with the external auditors their audit plan, strategy and scope of the statutory audits of the Group

accounts for the FYE2018. The audit plan outlines their scope of work and proposed fees for the statutory

audit, assurance-related review and review of the Statement on Risk Management and Internal Control.

• Reviewed the major issues that arose during the course of the audit and their resolution.

• Reviewed the key accounting and audit judgements.

• Reviewed the recommendations made by the external auditors in their management letters and the adequacy

of management’s response.

• Assessed the effectiveness, the qualification and performance of the external auditors, the quality and the

auditors’ communication with the Audit Committee including their independence via a detailed questionnaires

completed by the Audit Committee members as well as the feedback from the business units evaluating the

performance of each assigned audit team and provided the recommendation on their re-appointment and

remuneration to the Board.