49 GROUP OVERVIEW OPERATION AND FINANCIAL REVIEW SUSTAINABILITY & GOVERNANCE FINANCIALS OTHER INFORMATION Annual Report 2023 Corporate Governance All whistle-blowing complaints are independently investigated by the IAD and the result of each investigation is reported to the AC & RMC quarterly. In 2023, the Company received 12 whistleblowing reports. Three of these reports were fully investigated, with one case related to misconduct while the other two reports were closed as unproven cases. The remaining nine reports are still under investigation. The AC & RMC is responsible for the oversight and monitoring of the whistle-blowing channels and processes and ensuring that appropriate follow-up actions are carried out. Enterprise Risk Management As an agribusiness, the Company operates in a VUCA (volatile, uncertain, complex and ambiguous) environment. Its performance is constantly influenced by external variables, such as unpredictable weather conditions, volatile commodity prices, fluctuating exchange rates, shifting consumer needs, economic uncertainties, security threats, international competition, disruptive technologies, geopolitical conflicts and market dynamics. To mitigate the vagaries of the external environment, the Company has established an integrated ERM framework to proactively manage risks and uncertainties across its operations through a system of “lines of defence”. The ERM framework enables the Company to stay vigilant and actively monitor its operations for the timely and accurate identification, assessment, mitigation, and reporting of risks and exposures that could have adverse impacts on business operations and results. In so doing, the ERM framework enhances the competitiveness and sustainability of the Company’s operations. At the start of each financial year, the Board and Management set out both the long-term and annual business strategies to address industry issues and market cycles. The corresponding risks and exposures are identified, along with mitigation measures across the value chain. These are documented in the ERM Report that is managed at different levels by the Board, the Management, the AC and various ERM Steering Committees. The process is also audited to ensure compliance and transparency. The Company has put in place a Business Continuity Management (“BCM”) framework to assure all stakeholders of the availability of products and services during periods of emergency. The BCM focuses on minimising the impacts of emergencies on the operations and establishing a high level of resilience within the organisation to carry on its business as usual during times of distress. Under the BCM, several potential emergency scenarios have been identified, with the appropriate control measures put in place to mitigate and minimise foreseeable operational impacts. Besides the routine control and monitoring of floods, daily tracking of hotspots using satellite data and observations of fire incidents by fire patrol teams, the Company conducts regular fire prevention training and fire drills in high-risk estates. This is in addition to the proper upkeep of fire-fighting equipment, construction of fire-monitoring towers, mapping of water sources, and regular communication with key stakeholders on the Company’s Zero Burn and Fire Safety policies. To further improve fire control and monitoring, a new hotspot mobile application for our estates was implemented. This application promptly alerts field workers whenever a hotspot is detected, thereby expediting the response time for ground checking and appropriate action. A risk governance structure outlines the roles and responsibilities of the Directors, Management, Heads of Department and Operating Units in supporting the ERM policy and programmes and mitigating risks in business strategies and operations. Regular communications and close collaboration with employees on the ERM framework have also helped to heighten awareness of risks and exposures and foster a resilient corporate culture. The ERM framework and system are maintained by the ERM team, who works closely with the risk owners and the managers to conduct quarterly risk assessments on the overall effectiveness of risk control measures. The ERM team monitors the progress of the ERM Action Plan, which contains the risk mitigation measures, and reports significant risks and exposures to the AC & RMC and the Board for action. In 2023, the following risks were identified, managed and monitored: • Strategic Risks – Strategic Planning, Sustainable Palm Oil and Land Expansion • Operational Risks – Pests and Plant Diseases, Pandemic Risk, Occupational Health and Safety, Resource Availability, Social Conflicts, Natural Disasters and Secured Communications • Compliance Risks – Land Ownership, Tax Compliance and Environmental Compliance • Financial Risks – Credit Defaults, Capital Liquidity and Economic Uncertainty
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