Indofood Agri Resources Limited - Annual Report 2015 - page 62

INDOFOOD AGRI RESOURCES LTD
ANNUAL REPORT 2015
60.
C
O
R
P
O
R
A
T
E
G
O
V
E
R
N
A
N
C
E
1.
Strategic Risks
Planning – Inadequate planning and forecasting may limit the Group’s ability to anticipate and respond to
internal and external changes, threatening its ability to make good decisions and take advantage of growth
opportunities.
Sustainable Palm Oil – Changing of industry trends and requirements threaten the Group’s ability to ensure a
sustainable business operations resulting in an unfavourable perception amongst the stakeholders and loss of
competitive advantage of the Group.
Land Expansion – Land is a major resource for the Group’s core business, hence, the unavailability or limitation
on availability of land threatens the Group’s ability to grow and achieve its strategic objectives.
2.
Operational Risks
Pest and Plant Diseases – Infestation of pests and plant diseases could result in lowered crop productivity and
potential death of trees.
Health and Safety – Failure to implement a system of occupational health and safety to protect the employees and
workers from accidents and improve their health conditions may expose the Group to excess costs associated
with compensation liabilities, financial loss, negative business reputation, and possible loss of life.
Resource Availability – Inadequate sources of raw materials, fertilisers, equipment, tools, component parts, etc.
may threaten the Group’s ability to produce quality products on time and at competitive prices.
Social Conflict – Existing conflict with the local communities could affect the Group’s operations, resulting in
limited or controlled access to critical areas, higher operational costs due to the inability to operate efficiently,
and thereby, threatening the safety of our workers.
Natural Disasters – Disasters such as flooding, drought, earthquake and fire, etc. may result in property damage,
stoppage or delays in operations, lower productivity, higher operating costs, and failure to provide products to
the Group’s customers.
3.
Compliance Risks
Permits, Licenses and Land Ownership – The Group is exposed to the risk of loss of land rights due to failure
in obtaining the appropriate land permits and licenses on time, overlapping ownership issues and third party
claims.
Tax Compliance and Tax Authority Examination Management – This includes the risk of failure to identify
and prevent legal risks posed by non-compliance with local jurisdictional and national government rules and
regulations for tax compliance and dealings with jurisdictional tax authorities.
Environmental – Non-compliance to environmental laws may expose the Group to regulatory sanctions, public
protests, security problems and imposition of fines and penalties by the government.
4.
Financial Risks
Credit – The Group is exposed to potential financial loss that may occur as a result of the possible credit default
by smallholders.
Liquidity – Insufficient access to available capital threatens the Group’s capacity to grow, execute its business
model and generate future returns.
Commodity Price and Foreign Exchange – Fluctuation in CPO price and depreciation of the Rupiah against
foreign currencies may have an adverse impact on the Group’s financial condition.
WHISTLE-BLOWING POLICY
The Group has put in place a whistle-blowing policy and procedure (“
Policy
”). This Policy provides employees with clearly
defined processes through which they may raise their concerns in good faith and in strict confidence, with respect to suspected
fraud, corruption, dishonest practices or other malpractices that do not comply with the Group’s standard operating procedures,
to the Head of IAD, the Exco or the AC & RMC.
The Policy aims to encourage the reporting of discrepancies and suspicious behaviours with the confidence that employees
making such reports will be treated fairly and, to the extent possible, protected from reprisal.
The AC & RMC reviewed and approved the Policy and was satisfied that independent investigation would be conducted for all
whistle-blowing reports and the appropriate follow-up actions would be taken to resolve the issues.
1...,52,53,54,55,56,57,58,59,60,61 63,64,65,66,67,68,69,70,71,72,...164
Powered by FlippingBook