OPERATIONS & MAINTENANCE REVIEW SD Laemchabang Power / SDOMT

Key Areas and Checklist Key Areas A. PLANT OPERATIONS Obtain a schedule of all material licenses, permits, registration, certifications and governmental approvals and clearances obtained for the purpose of business operations and continuity. Review the Legal Register established to ensure adherence to local laws and regulations. Review the Ownership Title Register to substantiate FAR. Review all reports, notices or correspondences relating to any violations or infringement by the entities concerned. Review copies of letters from lawyers on the concerning litigation or other legal proceedings. Obtain a schedule or list of contracts and agreements executed. Review contracts and agreements which have a remaining term in excess of one (1) year. rd Review logistic contracts and O&M service providers i.e. 3 party contracts. Review any guarantee and /or obligations stipulated by contracted parties. Review any professional service agreements in place. Review contracts relating to any sale of significant assets or property (other than inventory) in the ordinary course of business. Focus Points for Audit Check Audit Observation Comments

Shift Rounds

Alarm Logs

Reporting

B. MAINTENANCE Preventive Maintenance Obtain the schedule of FAR to verify to the financial statements FY2012/13. Obtain the endorsed physical assets verifications conducted for FY2012/13. Determine the CAPEX made for FY2012/13 compared to the approved budget. Consider the depreciation policies adopted. Review the most recent FAR list to verify for the asset tagging and existence. 1. FAR for SD Power and SD LCP Power were generated from SAP into Physical Fixed Asset Count Sheet (PFACS) (for asset verification exercise). On 12 Nov 2012, the respective Finance Teams have conducted FA count for both the SDPC and SDLP by documenting the exercise into PFACS.

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Each PFACS was classified with the asset type & code (e.g. Office Equipment - 7160110) and signed off by the Technician and verified by Finance. Based on the PFACS, noted all assets were in order. Obtained the e-CAPEX FY2013 list for both the SDP and SLP. Total approved CAPEX budget was recorded at THB185 million (SDP THB138 million; SLP THB46 million). Hence, total utilized at THB147 million (79%) out of the approved budget. Depreciation is calculated on the straight-line basis to write-off the cost of each asset to its residual value over the estimated useful life as follows: a. Building 25 years b. Building improvement 10 years c. Power plant, transmission system and equipment 5, 10, 14,20 and 25 years d. Office equipment 3 and 5 years e. Furniture and fixtures 5 years f. Motor vehicle 5 years A sample of FAR (SAP generated print-out) quoted the assigned asset custodians. Asset tagged number sighted for most of the office assets. FINDING: Absence of any form of reports to reflect the final outcome of the physical asset verification exercise. Hence, there is no visibility of information to Management action for the following: a. Discrepancy noted as compared to the FAR (SAP) b. Summary of asset conditions mainly for addressing the impaired asset verified that subsequently warrants for disposal / write-off activities. Also found that the Fixed Asset Count Sheet Control Form (Control Form) could not cross referenced to the Physical Fixed Asset Count Sheet (Asset Count Sheet) i.e. the reference

numbers stated in the Control Form not duly reflected in the Asset Count Sheet. Disturbance Reports Familiarise with the Cash and Bank functions. Obtain a list of bank accounts (CA, FA,OD, Loans, Forex etc.) Review the bank signatories groupings and its LOA. Review the bank reconciliations to verify with the financial statements FY2012/13. Understand and assess the cash management controls and practices related to the cash receipts and handling of petty cash. 1. The cash and bank accounts operations are properly segregated for SDP and SLP, where 2 Accounts staff assigned for each company. Based on the List of bank accounts provided, noted that there are dedicated bank accounts been kept and maintained for 2 Companies i.e. Sime Darby Power Co. Ltd and Sime Darby LCP Power Co. Ltd. 5 bank accounts for SDP and 6 bank accounts for SDLCP. Generally, the bank signatories groupings were established in to 3 groups i.e. Group A, B, and C. Group A representing members are by the Divisional Management unlike for Group B by the MD and Group C by the local Finance Managers. Sighted the bank reconciliation statements from June13 to October13. In order, noted no materially unreconciled amounts and long non cleared payments nor uncredited lodgments.

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6. Corrective Maintenance Activities Obtain an understanding of the receivables system and controls by performing a walk through assessment of the sales, billing accounts receivables and collection cycles. Examine the aged receivables in relation to the allowance for doubtful accounts and the bad debt history. Analyse the AR ratios at for corresponding FYs 2011/12 and 2012/13.