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The Board believes that the identification and management of risk is central to achieving the corporate objective of delivering long-term value to shareholders.

The Group has established a risk register which the Board reviews and considers on an annual basis. Risks are defined as the possibility that an action or inaction would adversely affect the achievement of corporate goals.

The Board has delegated the oversight of risk management to the Audit Committee. In addition, it has delegated to the CEO the responsibility for the effective and efficient implementation and maintenance of the risk management system. The Directors, through the Audit Committee, review the systems that have been established for this purpose and regularly review their effectiveness.

The Board has adopted a Risk Management Policy that provides a consistent framework for the identification, assessment and management of risks. Globaltrans bases its risk management activity on a series of well-defined risk management principles, derived from experience, best practice and in accordance with corporate governance principles. The Group’s risk management principles consist of nine interdependent components:

  • Enterprise-wide: Risks that the Group faces should be managed on an enterprise-wide basis as a continuous and developing process that runs throughout the Group’s strategy and the implementation of that strategy;
  • Systematic and structured: Risk management should involve recognised processes and activities in a systematic, methodical way that ensures the results of risk management activities are reliable, robust and comparable;
  • Based on top-down and bottom-up approach: Risk management should evaluate the potential upside and downside of all risks that could affect the Group. It should increase the probability of success and reduce both the probability of failure and the uncertainty of achieving the Group’s overall objectives. Risk management activity should include the development and implementation of risk response actions to remove or mitigate all risks the Group faces, transfer them to a third party or accept them;
  • Forward-thinking approach: Risk management should be forward thinking. It should involve identifying and preparing for what might happen rather than always managing retrospectively. Risk management should encourage the Group to manage proactively rather than reactively;
  • Aligned with the Group’s objectives: Risk management should be aligned with the Group’s objectives and provide reasonable assurance regarding the achievement of those objectives;
  • Integrated into the Group’s business: Risk management should be embedded in all the Group’s practices and business processes so that it is relevant, effective, efficient and sustained. In particular, risk management should be embedded in key business processes, including business and strategic planning, budgeting and decision-making. All Group staff should be responsible and accountable for managing the risks in their activities;
  • Integrated into corporate culture: Risk management should be a part of the Group’s corporate culture. All employees should be aware of the relevance of risk to the achievement of their objectives;
  • Clear and understandable: Risk management principles, methods and tools should be clear and easily understood for the Group’s employees; and
  • Evolving: The Group’s risk management system should be continually evolving. The management of risk is an ongoing process and it is recognised that the level and extent of the risk management system will evolve as the Group evolves.

Globaltrans uses a portfolio approach to the management of its risks, in a holistic, enterprise-wide manner. This approach analyses and aggregates risks by type and tries to achieve an overall balance of risk and return. Globaltrans defines four types of risks: strategic, operational, compliance and financial.

Last updated: 24.05.2019