Shaped By High Standards Of Governance ANNUAL INTEGRATED REPORT 2022 169 Statement on Risk Management and Internal Control ADEQUACY AND EFFECTIVENESS In 2022, the Board’s assessment of the adequacy and effectiveness of the risk management and internal control system was based on the quarterly reports and specific Board papers from the BGRMC, the AC and other Board Committees. The Board, through the AC, relies on the Group Internal Audit function to independently assess the adequacy and effectiveness of governance, risk management and controls implemented by Management. Recommendations arising from the internal audits are implemented by the Management as an ongoing improvement of the risk management process and internal controls. The Board has taken cognisance of the report by an independent consultant engaged to review FGV’s risk management processes and Group Internal Audit’s reviews of the internal controls in 2022 in accordance with the annual internal audit plan. The Board has also been updated on the remedial actions and their progress. MATERIAL JOINT VENTURES AND ASSOCIATES The disclosures in this statement do not include the risk management and internal control practices of FGV’s material joint ventures and associates. FGV’s interests in these entities are safeguarded through the appointment of representatives to the respective Boards of Directors or through nominated representatives. Additionally, where necessary, key financial and other appropriate information on the performance of these entities is obtained and reviewed by the Board. RISK MANAGEMENT APPROACH FOR FGV’S LISTED SUBSIDIARY MSM Malaysia Holdings Berhad (MSM), as a listed subsidiary of FGV, undertakes its risk management and internal control responsibilities through its Investment Tender Committee and Board Audit, Governance and Risk Committee for subsequent deliberation by MSM’s Board. Any risks identified as having a significant impact on FGV Group are reported to FGV’s BGRMC and where they have a direct impact on the financial performance of the Group, are reported directly to FGV’s AC, and subsequently to FGV’s Board. REVIEW OF THIS STATEMENT BY THE EXTERNAL AUDITORS As required by Paragraph 15.23 of the Bursa Malaysia Securities Berhad Main Market Listing Requirements, the external auditors have reviewed this Statement on Risk Management and Internal Control. Their limited assurance review was performed in accordance with Audit and Assurance Practice Guide No. 3 (AAPG3) issued by the Malaysian Institute of Accountants (MIA). AAPG3 does not require the external auditors to form an opinion on the adequacy and effectiveness of the risk management and internal control systems of the Group. THE BOARD’S CONCLUSION The Board is pleased to report that the state of the Group’s risk management and internal control framework enables the Group to manage its risks while achieving its strategic plans and business objectives. The Board has also received assurance from the Group Chief Executive Officer and Group Chief Financial Officer that the Group’s risk management and internal control framework is operating adequately and effectively in all material aspects. Continuous focus on measures to protect and enhance shareholder value and business sustainability will remain a priority for the Group. This statement was made in accordance with a resolution of the Board approved on 29 March 2023. INTERNAL CONTROL FRAMEWORK CONTROL SELF-ASSESSMENT A Control Self-Assessment mechanism was implemented in 2020 as an initiative to inculcate a better risk management and compliance culture. In 2022, Group Internal Audit conducted a Control Self-Assessment exercise on all FGV Plantation (Malaysia) Sdn Bhd estates through a questionnaire mechanism for selected processes. The questionnaires completed by the estates were validated by Group Internal Audit and feedback on the level of compliance was provided to the Audit Committee (AC). PERFORMANCE MONITORING Management reports are deliberated monthly at the GMC level to review the financial and operational performance of the various businesses of the Group. The reviews encompass financial and non-financial key performance indicators and variances between budget and operational results. The financial and operational performance is reviewed quarterly by the Board to monitor FGV’s business progress against established strategies and the Management’s performance against budgets and targets set annually. Through these platforms, actions and initiatives are implemented to close any gaps in the achievement of strategies and budgets. CAPABILITY BUILDING FGV places emphasis on the identification and development of high-potential candidates for succession planning and to support the Group’s growth strategies. This exercise is a necessity to build a strong succession pipeline and a healthy talent bench strength by investing in competency development programmes to build the skills required for business operations.
RkJQdWJsaXNoZXIy NDgzMzc=