FIMA CORPORATION ANNUAL REPORT 2018

F i m a C o r p o r at i o n B e r h a d ( 2 1 1 8 5 - P ) •

A n n u a l R e p o r t 2 0 1 8

Broad risk area

Sub-broad risk

Key mitigation measures

Political

Investment’s returns could suffer as a result

of political changes or instability in a country.

Large and unpredictable

changes in government

policy and regulations

effecting the business.

• Proactively engage with Government bodies

and authorities to strengthen the work

relationship and to be well informed and

updated, on any changes in regulations and

policies of the country.

Pricing

Raw materials cost inflation.

Price escalation of raw

materials such as fertiliser,

chemicals and fuel due to

yearly inflation.

• Introduced Palm Oil Mill Effluent (POME)

application and composting application

as part of the fertiliser program in order to

reduce the manuring costs.

• Continuously monitoring the cost of raw

materials for competitive price.

The Group’s risk management context and accountability framework are expressed as follows:

Strategic risk

Operational risks

Financial risks

Framework

Strategic risks are primarily

risks caused by events that

are external to the Group, but

have a significant impact on its

strategic decisions or activities.

Operational risks are inherent in

the continuing activities within

the different business units or

subsidiaries of the Group.

Financial risk is an umbrella

term for multiple types of risk

associated with financing,

including financial transactions

that include the uncertainty of

a return and the potential for

financial loss.

Exposure

Compliance

regulatory

requirements from local and

abroad which affected the

Group policies and procedures.

Pricing, sourcing of raw

material, dependence on single

customers and stiff competition

are the risks facing by the Group.

The Group is exposed to

various financial risks relating

to bad debts, liquidity, interest

rates, foreign exchange and

commodity prices.

Accountabilities

Board and Managing Director.

Heads of Divisions, Departments

and Business Units.

Managing

Director,

Chief

Operating Officer and cascading

to all Heads of Business Units.

Amidst delivering growth for its stakeholders, the Group will continue its focus on sound risk assessment practices and

internal control to ensure that the Group is well equipped to manage the various challenges arising from the dynamic business

and competitive environment.

WHISTLEBLOWING POLICY

To reinforce the culture of good business ethics, the Group has also introduced a whistleblowing framework and policy to

provide an avenue for stakeholders and employees to raise genuine concerns internally or report any suspected breach or

wrongdoing, which includes fraud, misappropriation of assets, breach of any law or regulation, including the Group’s policies

and procedures, to the Managing Director and/or Chairman of Audit Committee without fear of reprisals.

Procedure

Any concerns should be raised with immediate superior. If for any reason, it is believed that this is not possible or appropriate,

then the concern should be reported to the Managing Director:

Name

: Dato’ Roslan bin Hamir

Via Email

whistleblowing@fimacorp.com

Via Mail

: Fima Corporation Berhad

Suite 4.1, Level 4, Block C, Plaza Damansara

No 45, Jalan Medan Setia 1, Bukit Damansara

50490 Kuala Lumpur

Attention: Managing Director

(to mark as “Strictly Confidential”)

STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL