Risk Management

South Ocean Holdings is committed to proactive enterprise risk management, which it applies as a business discipline to create value, secure assets, protect stakeholder interests, and promote long-term sustainability. Risk management policy is therefore founded on the ethical values of responsibility, accountability, fairness, and transparency, and is designed to facilitate uniform application.

The Board has committed the Group to a process of risk management that is aligned to the principles of good corporate governance as set out in King IV and the Companies Act. This is defined as a structured, systematic and comprehensive process designed to:

- identify potential risks that may affect the Group;

- prioritise and effectively manage these risks within clearly defined risk appetite parameters; and

- provide reasonable assurance regarding the achievement of organisational objectives.

Although the Board is ultimately accountable for enterprise risk management, the Audit and Risk Management Committee assists with oversight. All employees are also required to be fully conversant with risk management policy and processes, as well as to maintain the integrity of these policies and processes throughout the organisation. Risk management processes are implemented within the context of the approved risk management framework and the structures that have been put into place to allow for the Group's unique needs, circumstances, and operating activities.

The identification, assessment, mitigation, and monitoring of risk in all areas of the business is an ongoing and evolving process, and is an integral part of daily decision-making. Quarterly risk reports provide the management information necessary to conduct a regular and balanced assessment of the risks the Group faces as well as of the internal processes that are in place to manage them.

Risk Management Framework

The Board has approved the Risk Management Framework, which includes a comprehensive implementation plan, and delegates the responsibility for this implementation to the Chief Financial Officer. The Board reviews the risk policy, framework and implementation plan annually.

South Ocean Holdings adheres to ISO 31000: 2009 Risk Management principles and guidelines as the standard for the Group and to ISO 73: 2009 Risk Management principles to define risk-related terms.

Risk Appetite

South Ocean Holdings has a low appetite for risk. The Board therefore prioritises organisational resilience over aggressive risk-taking in order to achieve long-term sustainability. As a result, management does not seek out exposure to risk in order to drive short-term financial performance or growth. Management must ensure that decision-making and risk exposure is maintained within the parameters approved by the Board.