50 FGV HOLDINGS BERHAD ABOUT FGV MANAGEMENT DISCUSSION & ANALYSIS VALUE CREATION FINANCIAL RISKS & MITIGATION The Group is exposed to various market risks, including foreign currencies risk, commodity price risk, and credit risk arising from its business activities. Relevant derivative financial instruments are used to hedge the risk of such financial exposures. As for credit risk, the Group deals with customers with appropriate credit history, obtaining sufficient security where appropriate including payment in advance. Receivables are closely monitored by Group Credit Committee. These are governed by the Group’s LOA and Finance Policies and Procedures, under the purview of the Board Governance & Risk Management Committee. Group Financial Review OUTLOOK Moving forward, we are maintaining steadfast commitment to deliver better results, operationally and financially to create more value for our shareholders. These include initiatives toward environmental protection, net-zero emission and good labour practices. We also anticipate the conclusion of our RSPO certification suspension and WRO issues in due course, having initiated all the necessary steps to address the matter. Adhering to strategy, all Sectors are advancing towards greater competitiveness and diversifications. Continued focus on profit maximisation and stricter financial discipline should improve operational performance. Supported by a recovering economy, improved performance is likely in the coming year. We also anticipate revenue contributions from new businesses to start streaming in the next few years. CPO price is forecasted to reign high in 2022 as the production volume remains hampered, we are optimistic that despite the prolonged labour shortage and COVID-19 pandemic related operational disruptions, we will be able to sustain profitability in the coming year. FINANCIAL OPERATIONAL HIGHLIGHTS During the year, FGV’s Group Finance implemented several initiatives to improve the Group’s financial operational performance. • The Group’s Finance Policies and Procedures were updated to ensure the consistency of finance practices throughout FGV Group and to be in line with the latest approved FGV Group’s Limit of Authority (LOA) and changes in Accounting Standards. • The Group has initiated the implementation of a Group Financial Consolidation System to increase the effectiveness and shorten the time cycle to consolidate and validate financial data from all subsidiaries. This is to support financial management and statutory consolidation report preparation and is expected to be completed in 2022. • Implementation of Robotic Automation Process in FGV Shared Services Centre Sdn Bhd to increase business operation capabilities and create a more efficient workflow. It processes tasks that are repetitive, and those that require long manual processing and standardised data for the Shared Services Centre Helpdesk, Account Receivables and Bank Reconciliation. • In December 2021, FGV made the first issuance of Sukuk Murabahah of RM500 million in nominal value pursuant to the Sukuk Murabahah Programme. The proceeds from the Sukuk Murabahah Programme is utilised to refinance our existing financing and borrowings. From left • Mohd Izam Pariz – Group Accountant, Logistics & Others Sector • Haslinda Abdul Rahim – Group Accountant, Finance Policy & Governance and Company Account • Sri Anita Mashat – General Manager, FGV Shared Service Centre Sdn Bhd • Aznur Kama Azmir – Group Financial Controller • Hisham Bakar – General Manager, FGV Capital Sdn Bhd • Dato’ Mohd Hairul Abdul Hamid – Group Chief Financial Officer • Sumarni Zubir – General Manager, Group Financial Reporting & Consolidation • Shahril Ibrahim – Group Accountant, Plantation Sector • Pang Poh Ling – Group Accountant, Financial Reporting & Budgeting • Noor Azimah Abdul Aziz – Group Accountant, Downstream and R&D Division • Rahayu Alias – Group Accountant, Upstream Division
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