KEY RISKS & MITIGATIONS Risk Category Category Description Mitigation Volatility in foreign currency exchange (FOREX) movements Economic Exposure to volatility in movement of the global currency markets i. Monitor the currency market Freight Charges (CIF) Economic Increased global freight 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 i. Monitor global freight charges Competitive sales Economic Competitive sales will lead to a reduction in market share and lower profit margins i. Engage with government to curb and monitor the number of sugar import AP issuances ii. Improve customer relationships iii. Monitor market demands and competitors’ activities iv. Ensure reliable supply and convenient delivery of good quality sugar Market Risk Rising energy prices (Crude Oil & Natural Gas) Environment (renewable energy) Oil prices have been trending higher surpassing the mark i. Hedging of Oil prices Non-compliance of Covenant will trigger an Event of Default (EOD) Economic EOD under General Facility Agreement (GFA) will result in financier, accelerating repayment and may trigger cross-default on the other loans i. Refinancing Poor generation cash flow from operations Economic A low utilisation factor will result in high refining cost i. Restructure loan with bank Financial Risk SUSTAINABILITY JOURNEY HOWWE ARE GOVERNED FINANCIAL STATEMENTS ADDITIONAL INFORMATION 257
RkJQdWJsaXNoZXIy NDgzMzc=