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SUSTAINABILITY JOURNEY HOW WE ARE GOVERNED FINANCIAL STATEMENTS ADDITIONAL INFORMATION 257

KEY RISKS & MITIGATIONS

Risk Category Category Description Mitigation

Market Risk

Volatility in Economic Exposure to volatility in i. Monitor the currency market
foreign currency movement of the global
exchange (FOREX) currency markets
movements
Freight Charges Economic Increased global freight i. Monitor global freight charges
(CIF) costs worldwide due to
limited availability of vessels
plying routes, new vessels
in the market, due to slower
production of vessels as a
result of worldwide shipyard
closures amid the recent
Pandemic
Competitive sales Economic Competitive sales will lead to a i. Engage with government to curb and
reduction in market share and monitor the number of sugar import AP
lower profit margins issuances
ii. Improve customer relationships
iii. Monitor market demands and
competitors’ activities
iv. Ensure reliable supply and convenient
delivery of good quality sugar

Financial Risk

Rising energy prices Environment Oil prices have been trending i. Hedging of Oil prices
(Crude Oil & Natural (renewable energy) higher surpassing the mark
Gas)

Non-compliance Economic EOD under General Facility i. Refinancing
of Covenant will Agreement (GFA) will result
trigger an Event of in financier, accelerating
Default (EOD) repayment and may trigger
cross-default on the other loans
Poor generation Economic A low utilisation factor will i. Restructure loan with bank
cash flow from result in high refining cost
operations