24.2.3 Strategic risks
Sustainability and reputational risk
The possibility exists that certain events or perceptions could lead to uncertainty among certain stakeholders.
This could, in turn, impact negatively on the business done with the group or the share value.
The risk management process considers all relevant actions, events and circumstances that could have an
impact on the reputation of the company. The process also endeavours to measure the impact of possible
reputation risks. Appropriate measures and structures are in place to deal with this timeously and effectively.
The risk process also identifies events which place pressure on the sustainability of the group. The process
identifies areas for action that lead to the implementation of action plans to ensure sustained profitability.
24.2.4 System risks
The group relies heavily on technology. The main risks relate to archiving, capacity, data integrity, relevance,
integration and adaptability. An IT-Strategy and Management Committee is in place and formal change,
project and integration management is applied.
24.3 ENVIRONMENTAL RISKS
24.3.1 Weather and climate risks
The group is indirectly subjected to income volatility as a result of adverse weather and climate events.
These events influence the volume of grain produced in the the group’s area of operation, subsequently
reducing storage income and producer profitability. The income volatility of a catastrophic climate event is
mitigated by using weather derivative products.
24.3.2 Political risks
The group utilises agricultural land owned by producers to secure credit extension to these clients.
In the event of agricultural land being nationalised or expropriated without compensation, the value
of agricultural land will diminish and nullify the value of the security that the group holds against
outstanding funds. This risk can only be accepted and cannot be mitigated.
24.4 SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE
The group follows an Enterprise Wide Risk Management (ERM) framework, and as such very stringent reporting standards
are placed on its subsidiaries, joint ventures and associates to comply with the ERM-methodology. The risk
appetite levels of these entities differ and are governed by the group risk appetite level established for these types of
investments.
Senwesbel Limited Reg no: 1996/017629/06 SENWESBEL ANNUAL FINANCIAL STATEMENTS 2020 68