THE PERFORMANCE
MATERIAL RISKS AND OPPORTUNITIES
Risk Methodology
Waiting and managing are contrasting words and we
know that these uncertain times will present both risk
and opportunity, with the potential to erode or enhance
value.
Senwes chooses to actively manage its risk by fol-
lowing an Enterprise-wide Risk Management (ERM)
framework which provides a platform for management
to effectively deal with uncertainty and associated risks
and opportunities, thereby enhancing our capacity to
build value.
No entity operates in a risk-free environment and ERM
does not create such an environment. Rather, ERM
enables management to operate more effectively in
environments filled with risks. It cannot and does not
operate in isolation in Senwes, but rather as an enabler
of the management process.
All risks are residually quantified and this heatmap provides an overview of the risk rating in terms of impact and proba-
bility, considering the existing mitigating control measures.
ERM is intertwined with corporate governance by providing informa-
tion on the most significant risks and how they are being managed
to the board of directors, through the Risk Committee. It is therefore
crucial that we utilise and optimise our risk resources which include
our employees, risk management technology and liaison network.
Enhancing the risk culture
Risk management is deeply rooted in the culture of Senwes and its
strategic and tactical intent. The responsibility and accountability for
risk management reside at all levels of the organisation, from its board
down to each business manager and employee.
Being risk aware requires that management considers information
about internal and external environments, deploys precious resour
ces and recalibrates enterprise activities to changing circumstances.
Risk strategy
Management considers the entity’s risk appetite first in evaluating stra-
tegic alternatives, then in setting objectives aligned with the selected
strategy and in developing mechanisms to manage the related risks.
Risk appetite therefore guides resource allocation and assists us in
aligning the organisation, people and processes in designing the infra
structure necessary to effectively respond to and monitor risks.
Seasonal rainfall until the end of December saw some
of the lowest rainfall totals of the past 100 years. This
was followed by the wettest April of the past 100 years,
highlighting extreme weather events.
Senwes deems its risk management practices to be practical and fully acknowledges the volatile agricultural industry and
our need to be agile, smarter and more effective, proactive and forward-looking, and, at the same time, being appropria
tely responsive.
2
10
1
1 Weather and climate risk;
2 Political uncertainty – land expropriation and
currency risk;
5 7
SENWES
Ensuring risk governance
SENWES’ TOP RISKS
8 9
13
4
3
6
11 12
The latest World Economic Forum’s (WEF) global risk
report of 2019 showed that environmental risks con-
tinue to dominate the report. This year, they accounted
for three of the top five risks by likelihood and four by
impact. Extreme weather was the risk of greatest con-
cern for the WEF and more so to Senwes.
OUR ERM
FRAMEWORK IS
BASED UPON FOUR
CRITICAL RISK ACTIVITIES
WAITING FOR RAIN: MANAGING
RISK IN THE AGRICULTURAL
SECTOR
Low
Medium
Likelihood
High
3 Market size and market share risk;
4 Credit, liquidity and market risk;
5 Commodity price risk;
6 Urbanisation, scarcity and retention of skills risk;
7 Transition and customer risk;
8 Diversification and agricultural industry risk;
9 Unique competitor risk;
10 Regulation and compliance risk;
11 Systems risk;
12 Theft and fraud risk; and
13 Environment, health and safety risk.
evaluation range
Low - Medium
Medium
Medium - High
Managing risk process
The group has a formal risk assessment process in place, through
which risks and mitigating management actions are identified, as-
sessed, monitored and reported on.
Our core strategic focus area, as part of the risk management pro-
cess, remains the ability to respond to risks by ensuring multiple re-
sponse plans per risk category.
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SENWES INTEGRATED REPORT 2019
SENWES INTEGRATED REPORT 2019
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