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INTRODUCTION

In ensuring our Group achieves its objectives, sustains the businesses and continues to add value to the stakeholders in the short, medium and long-term, our risk management process and approach is tailored to Group’s structure and its constantly changing environment to ensure that our Group can continuously monitor and review its risks and the effectiveness of its risk management over time.

Based on the results of monitoring and reviews, decisions are made on how the risk management programme can be improved. These decisions should lead to improvements in our Group’s Management of risks and its risk management culture. A separate risk management function also exists within our Group’s listed subsidiary with the establishment of its own RMCC to assess and evaluate the risk management process of the company on a periodic basis.

In essence, the Management of risks is treated as an interactive process. The benefits arising from effective risk management processes is the creation of awareness of risks among employees of different departments and business units. Our risk management process is consistent with the ISO 31000 Risk Management Standard.

A. STRATEGIC REVIEW: KEY RISK AND MITIGATION

TOP RISK DESCRIPTION & IMPACT

KEY MITIGATION MEASURES

1. ADVERSE IMPACT OF ECONOMY-WIDE PHENOMENA TOWARDS BUSINESS PERFORMANCE

Inflation, price levels, rate of economic growth, national income, gross domestic product (GDP), and changes in unemployment.

  • Market intelligence and being up-to-date on market conditions;
  • Hedging through a mix of spot and forward contract sales;
  • Creation of new revenue stream;
  • Enhance the productivity and efficiency through an innovative solution;
  • Cost optimization initiatives and prudent CAPEX and OPEX management;
  • Improve market opportunities through maintaining RSPO, MSPO, ISCC certifications; and
  • Constant monitoring of CPO and PK prices.

2. NEW INVESTMENT’S RISKS IN RESPECT OF THE INDUSTRY, LAWS AND REGULATIONS, POLITICS, COUNTRY AND LOCAL RISKS

Various internal and external factors that can converge to create investment risk, which will either lower the return from the investment or lead it to fail.

  • Continuously explore and secure new opportunities with innovative solutions;
  • Comprehensive due-diligence exercise and feasibility study for each new investment;
  • Putting in place workable internal control and monitoring framework including corporate and systems infrastructure;
  • Revisit and strengthen the strategy to ensure the success of the investment; and
  • Proactive engagement with business partners and local stakeholders.
  • Established the Board Investment Committee to review the significant matters relating to existing and potential investments

3. LIQUIDITY RISK ON EXISTING AND FUTURE FUNDING REQUIREMENTS IN MEETING ITS FINANCIAL OBLIGATIONS

Liquidity is the ability of a firm, company, or
even an individual to pay its debts without
suffering catastrophic losses.


A healthy liquidity risk indicates the ability of a
firm or company to pay its debt without suffering
catastrophic losses.

  • Matching of inflows and outflows of cash and maintaining ufficient credit facilities;
  • Borrowings are created in a particular currency to match payments and receipts or liabilities and assets;
  • Capital restructuring; and
  • Monitor the agreed covenants with the lenders

4. HIGH DEPENDENCY ON FOREIGN WORKERS IN PLANTATION OPERATION

The Group faces the challenge of depending on
foreign workers to carry out most of the field
works in the estates e.g. harvesting, fruit loading,
manuring, spraying, etc.

  • Reviewing the remuneration packages of workers from time to time.
  • Enhancement of mechanization, automation and technology to reduce labor usage.
  • Joint collaboration with agricultural/ labor authorities to increase the participation of local labors in the plantation sector.
  • Uplifting living conditions and amenities of workers through upgrading the quarters as well as providing crèche, mosque and medical facilities.