The 23^rd meeting of the first term BAC was held on March 23^rd at Fulian Building in Quanzhou. Mr. Warren Wilder, chairman of the Board of Audit Committee, Mr. Chen Xiaobo, Mr. Xu Jianping and Mr. Gan Seow Kee, all members of the Committee attended the meeting, and withMr. William Keillor, member of the BOD and Mr. Yang Hongbin, Supervisor of BOD as well.

The Chief Auditor Madam Liu Cuixia reported key activities completed since last BAC meeting, policy violations and 2016 JV overall control status. She also pointed out that great importance shall be given by shareholders and the management to long-term outstanding audit issues (e.g. the crude oil procurement service agreement has not been signed yet) and the high-risk items such as compliance of laws & regulations that have significant impacts on business operation; Mr. Ignatius Lee, General Manager of Finance Department as management representative, and a KPMG representative reported respectively on internal controls progress and external audit plan.

All BAC members engaged into full review and discussion on above reporting. They recognized the work performed by the Internal Auditing (IA) and the Company management in areas such as risk management and internal controls. In particular, they thanked the Chief Auditor Madam Liu Cuixia for her contributions to the establishment and development of FREP’s IA over the past ten years. Under her leadership, IA has drawn on shareholders’ advanced conceptions and practices, and constantly innovated around FREP key focus areas, making satisfactory accomplishments, which were recognized by shareholders.

The 2016 Audit Report issued by KPMG and recommendation of external audit organization for 2017-2019 were reviewed at the meeting, and a unanimous agreement was reached to submit the report and recommendation to the BOD for approval. (by Xu Juan)