Risk management

The directors acknowledge their responsibilities for the Group's system of risk management.  Such a system can provide reasonable, but not absolute, assurance against material misstatement or loss.  A review of the process of risk identification, evaluation and management is carried out regularly and presented to the board for discussion and approval.

The review process considers the control environment and the major business risks faced by the Group. Such risks include, but are not limited to:

  • the risks of operating in Indonesia;
  • the geographical distance between head office and area of operation;
  • the protection of the environment;
  • the relationship with local populations where the Group has operations;
  • the relationship with local partners;
  • weather and natural disasters;
  • commodity-price fluctuation; and
  • exchange-rate fluctuation.

Important control procedures, in addition to the day-to-day supervision of holding-company business, include regular executive visits to the areas of operation of the Group and of its associates, comparison of operating performance and monthly management accounts with plans and budgets, application of authorisation limits, internal audit of subsidiary undertakings and frequent communication with local management.