"Currently, The Company undergoing a significant transformation by changing its focus by not only investing in the plantation business but also in various industries that have good prospects in the future"
RISK MANAGEMENT One of the important aspects in the GCG implementation practice is the implementation of a good and effective risk management. The implementation of risk management is perceived can to protect the Company from potential risks that can hinder the achievement of the Company's goals. Therefore, risk management is conducted by seeking up-to-date and comprehensive information for Board of Directors and the Management to anticipate potential risks and mitigate emerging risks. With reliable risk management and supported by resources and information technology, it is expected that the Company can map risks that can hinder the achievement of corporate targets, minimize potential losses, increase stakeholder confidence, and improve work efficiency and effectiveness that will ultimately lead to performance excellence and product competitiveness. Commodity Price Risk Indication : Fluctuations in the sales of crude palm oil (CPO) and palm kernel (PK) are controlled by the international market. Mitigation : Analyzes and provides added value in every business process to produce quality crude palm oil (CPO) and palm kernel (PK) at an efficient cost. Market and Financial Risk Indication : Interest rate risk is caused by changes in interest rates on interest bearing loans. Interest rates on short-term and longterm loans can fluctuate throughout the loan period. Financial policy Provides guidance that interest rate exposures must be identified and minimized/neutralized in a timely manner. Mitigation : Analyzes margin and interest rate movements. Legal Risk Indication :
Mitigation :
Operational Risk Indication : A risk of loss that occurs due to inadequacy or failure of internal processes, human factors and systems, or external events. This risk is inherent in all Company business processes, operational activities, systems, and products. Mitigation : Through supervisory function attaches to the operational activities and via management system, The Company conducts periodic and tiered reviews of operational activities to reduce the likelihood or frequency of operational risks and minimize the impact of events that may becme operational risks. Community Social Risk Indication : Ecosystem degradation due to Company’s operational activities affected economic and social welfare of local communities. Mitigation : Building an active communication with local communities, as well as implementing social responsibility programs that can improve the quality of community lives from a social and economic perspective. Climate and Weather Change Risk Indication : Shifts in rainfall patterns, long drought or high rainfall intensity, and tides, as well as other extreme climate events can cause a decrease in plant conditions and productivity which can ultimately affect the price and sales volume. Mitigation : Fertilizing and other agronomic treatments are adjusted to climate conditions tio achieve optimal productivity. Infrastructure development has become one of the solutions made by the Company, among others by building and strengthening a cluster system embankment to cope with flooding. Land Fire Risk Indication : Land fires caused by negligence of one party lead to negative impact on the Company as a whole. Mitigation : Carry out efforts to prevent fires by perform a regular watering, building a peatland water system, and providing training related to disaster response. Land Degradation Risk Indication : Negligence in peat management can lead to land degradation and ecosystem damage. Mitigation : Implement peatland management consistently and restore the function of riparian area as conservation areas. |
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