FGV Annual Report 2015

140 Felda Global Ventures Holdings Berhad Annual Integrated Report 2015 Statement on Risk Management and Internal Control Enhancing our management of risk and opportunity FGV is committed to effective risk management in pursuit of its strategic objectives, with the ultimate aim of growing Shareholder value sustainably. In recent years, we have enhanced our capability to anticipate risks and respond with agility and confidence in managing them. As we expand our business globally, we recognise that proactive risk management is both an essential element of sound corporate governance and a crucial enabler in realising opportunities. This Statement on Risk Management and Internal Control (“Statement”) outlines the Group’s risk management framework and internal control and is intended to provide our Stakeholders and users of this Annual Integrated Report with meaningful, high-level information about the adequacy and state of the Group’s system of risk management and internal control for the financial year under review. This Statement is made pursuant to Paragraph 15.26(b) of the Bursa Securities Berhad’s Main Market Listing Requirements and in accordance with The Statement on Risk Management and Internal Control: Guidelines for Directors of Listed Issuers (“Guidelines”). Governance of risk management The Board acknowledges its overall responsibility in the establishment and overseeing the Group’s risk management framework and internal control systems. It is committed to ensure the existence of an effective risk management framework and internal control systems within the FGV Group and continuously reviews and evaluates the adequacy of these systems. However, the Board recognises that such systems are designed to manage and reduce, rather than eliminate the risks identified to an acceptable level of risk appetite. As such, the risk management framework and internal controls of the Group are designed to identify the risks and manage such risks within the tolerable level of risk appetite set and approved by the Board. The internal controls implemented can only provide reasonable, but not an absolute, assurance against the risk of failure to achieve the Group’s business objectives and/or occurrence of material financial misstatement or loss. There are three (3) committees at Board level that support the Board in its risk management and internal control responsibilities: (i) Board Governance & Risk Management Committee (BGRMC) which is tasked with overseeing risk management and governance aspects of the Group; (ii) Audit Committee (AC) which is tasked with assessing the risks and control environments and overseeing financial reporting, including the external and internal audit; and (iii) Investment Committee (IC) which is tasked with ensuring investments undertaken are aligned to the Group’s vision and overall risk appetite. These Committees are empowered by clearly established and approved terms of reference in the above mentioned responsibilities. The full details of BGRMC’s, AC’s and IC’s terms of reference are published in the Company’s corporate website. As part of FGV’s continual transformation plan to achieve operational excellence, FGV appointed a Chief Risk Officer in January 2015 to head and enhance Group Risk Management Division’s (GRMD) capabilities to support the Board’s risk management responsibilities. Amongst others, GRMD undertakes the following roles: • Reviewing, assessing, enhancing and monitoring the Group’s Risk Management Framework including risk management policies and procedures; • Maintaining the Risk Register for the Group; • Providing guidance to all Group’s operations in identifying and assessing the risks, and in developing relevant and effective mitigation strategies to manage risks; • Preparing risk reports to BGRMC and Board; • Undertaking analysis on specific risks and where necessary, reporting the same to BGRMC and the Board; and • Overseeing the Group’s Business Continuity Management. RISK MANAGEMENT FRAMEWORK AND APPROACH GRMD is supported by Cluster Risk Champions and Risk Champions. These Champions are individuals nominated as representatives of the respective Clusters, corporate centres and subsidiaries, to coordinate with the Risk Owners in identifying, evaluating, managing and monitoring their respective key risks. They are also tasked with ensuring the implementation of the action plans to effectively mitigate the risks identified.