enl commercial limited annual report 2011 - Investing In Africa

Corporate Governance Report
(continued)
Risk Management
Risk Management refers to the systematic and ongoing process used to identify, assess, prioritise and
manage risks to mitigate the exposure to business risks.
The Audit and Risk Management Committee monitors the risk-management process with the support
of ENL’s Internal Audit Department. However, the Board of Directors has overall responsibility for the
Company’s systems of risk management. Furthermore it ensures that this process is carried out by the
Group in order to attain its strategic objectives.
Management is accountable to the Board to establish processes and procedures for a logical and systematic
method of identifying, analysing, treating and monitoring the significant risks involved in the activities of
the Group. To this end, an in-house risk management framework based on proven and leading practices
is relied upon by Management for identification of the risks inherent to the Company and capture them
in a Risk Management Register. The Risk Management Register is aligned with the strategic objectives,
enterprise culture and policies and procedures in place in the business.
Given the dynamic nature of risks, Management is also responsible to continuously review and update
the Risk Management Register to reflect the ongoing risk facing the business in order to ensure a robust
system of risk management. Emerging risks recognition and the corresponding likelihood of occurrence as
well as their potential impact are identified and assessed in a timely manner as a sequel of which adequate
mitigating measures are implemented. Management also reports the most significant risks to the Board to
assist the Board in the setting of the appropriate risk mitigating strategy.
The Risk Management Register compiles, amongst others, the following information:
(i) Identification of inherent financial and non-financial risks of the various business activities;
(ii) Evaluation of risks in terms of the likelihood of occurrence and potential impact;
(iii) The actions established in order to mitigate those inherent risks;
(iv) Evaluation of the residual risks remaining after taking into consideration the mitigating actions;
(v) Associated risk owners who are members of the Senior Management within the Company who have a
hands-on approach to assess and manage the risks as a first line of defence.
The key risks are reported to the Board through the Audit and Risk Management Committee. The Board
believes that the internal control and risk management of the Company provide reasonable assurance that
control and risk issues are identified, reported on and dealt with appropriately.
The categories in which risks have been analysed for ENL Commercial are Financial, Operational, Customer,
People and System. The significant risks identified under these categories are as follows:
Financial
Financial Risk Management is analysed in Note 3 to the Financial Statements, on pages 78 to 81 and
includes a discussion of the following types of risk:
(a) Market risk which includes:
(i) currency risk
(ii) price risk
(iii) cash flow and fair value interest risk
(b) Credit risk
(c) Liquidity risk
ENL Commercial Limited
Annual Report 2011
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