FGV Annual Report 2016

FELDA GLOBAL VENTURES HOLDINGS BERHAD 126 HOW WE ARE GOVERNED The Cluster Boards assume the following responsibilities: 1 2 3 Strategic Direction, Strategic Plan and Annual Business Plan Business conduct of the Business Cluster Principal risks, internal controls and mitigation measures The Cluster Boards shall review Assigned Companies' proposals on the Annual Business Plan, including budget, taking into account the sustainability of the Assigned Companies' business, including consideration given to the environmental, social and governance aspects of the business.TheClusterBoardsshallrecommend to the Board the strategic direction, Strategic Plan and the Annual Business Plan of the respective Business Cluster, for the approval of the Board. Upon approval by the Board, the Cluster Boards shall adopt the strategic direction, Strategic Plan andAnnual Business Plan for its Assigned Companies. The Cluster Boards shall alsomonitor the implementation of the strategic direction, Strategic Plan and the Annual Business Plan of its respective Business Cluster. The Cluster Boards shall oversee the conduct of the Business Cluster as a whole, to ensure that the business is properly managed. This includes the financial and non-financial conduct of the Business Cluster. The Cluster Boards shall ensure that there are measures (e.g. key performance indicators, key risk indicators) in place against which Business Cluster's conduct can be assessed. In relation to the monitoring of the Business Cluster's financial conduct, the Cluster Boards are responsible for the following: 1. Monitor financial performance against approved budget; 2. Review the Business Cluster's funding requirements on a continuing basis, including significant treasury matters and its recommendations for financing requirements; and 3. Ensure proper procedures are in place and that the Financial Statements of the Business Cluster are reviewed for integrity and approved for timely lodgement to FGV Group. The Cluster Boards shall identify principal risks of all aspects of the Business Cluster and ensure the implementation of the internal controls as well as mitigation measures to manage the risks, consistent with the risk appetite of FGV Board. The Cluster Boards shall be responsible for the following: 1. Continuously appraise the Business Cluster's major, current and emerging risks and oversee that appropriate risk management procedures are in place; 2. Ensure proper implementation of internal control policies and procedures for Business Cluster, to effectively monitor and manage those risks, in line with FGV policies on related matters; and 3. Ensure compliance of the Business Cluster's conduct to the regulatory requirements. The Cluster Head shall be responsible to seek advice from the Cluster Boards on any compliance issues. In 2017, with the introduction of a new organisation structure which introduces sector groupings, the role of Cluster Boards shall be undertaken by Sector Boards. CORPORATE GOVERNANCE STATEMENT