ANNUAL%20REPORT%202015%20eng

Directors’ Report
Risk Management, Key Risks and Uncertainties
A description of possible risks and uncertainties that the Group may be facing is provided in the Management
Discussion and Analysis section on pages 43 to 44 of this annual report.
The Group’s management is responsible for establishing and maintaining an effective risk management system.
The management team aims at efficient and effective operations, reliable financial reporting and compliance with
regulations. The Group’s operations, financial condition and prospects may be affected by a number of risks and
uncertainties. Key risks and uncertainties relating to our business and industry are categorized into (i) routine
operational and technical risks; (ii) corporate risks; and (iii) external risks.
Operational risks are risks arising within the organization, that are controllable and ought to be minimized with
its consequences mitigated. Operational risks include, but not limited to, risks related to mining, processing,
transportation activities; technical compliance risks; health, safety and environmental risks; project related risks;
and procurement and contract management risks. The objective of our risk management is to avoid or minimize
occurrence through a compliance based approach and active prevention by monitoring operational processes
and guiding people’s behaviors and decisions toward desired norms. This is implemented via the establishment of
standard operating procedures and internal controls, and extensive training of personnel.
Corporate risks that arise within the organization mainly include legal compliance risks; financial compliance
risks; financial risks such as liquidity, credit risks, financial planning and reporting risks; sales and trading related
risks, such as customer, brand, reputation and supply chain risk; and public relations and communications risks.
Our risk management’s objective is to reduce the likelihood and impact of such risks, through implementation of
appropriate procedures and internal control processes that protect the Company from fraud, negligence, legal
and other potential regulatory liabilities. Moreover, the management shall identify the major plausible risks inherent
in the decision making process, and will endeavor to mitigate and manage those risks, with the subsequent
continuous monitoring of the accepted risk exposures.
External risks arising from events outside the Company and are beyond our influence and control, include,
but not limited to, industry related risks; and macroeconomic risks, such as foreign currency exposure risks,
inflation, economical shifts; political risks; natural disaster risks and others. These types of risks can be the most
devastating should they occur and ought to be projected through risk assessment, stress testing and scenario
planning tools.
Corporate and external risks require distinct risk management processes that encourage the management to
identify, openly discuss and find cost effective ways to reduce the likelihood of occurrence of such risk events and
to mitigate the consequences should they occur.
A notable achievement in 2015 is the stabilization of part of our taxation exposure. On 13 August 2015, the
Stabilization Certificate was issued by the Investment Agency to ER. Consequently, ER now has four main taxes
namely, corporate income tax, customs tax, VAT and royalty, stabilized for the period until 17 April 2033 in
accordance with the Law on Investment.
Furthermore, with the purpose of liquidity and balance sheet management in light of the current adverse market
conditions, and to better protect the interests of all the stakeholders of the Company, the Company started a
dialogue with its lenders, and the financial and legal advisors of the steering committee of its noteholders about
a possible restructuring arrangement in relation to its debt facilities. The Company is committed to transparent
communication with broader investment community with ultimate goal to achieve outcomes acceptable and in the
long term beneficial to all its stakeholders.
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Annual Report 2015