Governance

Risk or Opportunity and Rationale

Risk: Business ethics risks include legal penalties from non-compliance, deterioration of financial health, damage to company's reputation, challenges in raising capital, and the loss of key employees, customers, or suppliers.

Opportunity: By implementing robust policies and the maker-checker mechanism, we create opportunities for transparency. These practices help establish clear roles and responsibilities along with strong accountability mechanisms, driving long-term stakeholder value and trust and enhanced reputation.

Mitigation measures

The Company maintains a strong adherence to Code of Conduct, providing regular training and awareness sessions for employees. We foster a culture that values and rewards ethical behaviour. Our clearly defined reporting processes, strong controls, and regular audits help assess effectiveness and identify improvement areas. We have a robust grievance mechanism for all stakeholders, including whistleblower and POSH mechanisms, ensuring timely action on any issues. Additionally, the company maintains strong data privacy controls.

Risk or Opportunity and Rationale

Risk: Inability to effectively identify and mitigate various business risks can lead to significant operational disruptions and reduced profitability. These risks can stem from market fluctuations, regulatory changes, cybersecurity threats, and internal process failures. Without proper risk management processes, the company may face increased costs, loss of revenue, and damage to its reputation, ultimately affecting its long-term sustainability and growth.

Opportunity: Proactive risk management enhances reputation, boosts stakeholder trust, and lays the groundwork for sustainable growth, paving the way for cost savings and increased innovation. Embracing resilient risk management practices equips companies for long-term success, resilience, and a competitive advantage in dynamic business landscape.

Mitigation measures

The Company has established an Enterprise Risk Management (ERM) committee which oversees a standardised ERM process designed to regularly identify and assess various risks. By implementing a structured approach, along with the Board oversight and defined management responsibility, the company ensures that potential risks are systematically evaluated and addressed, enhancing overall operational resilience and profitability. Regular reviews and updates to the ERM process help maintain its effectiveness and adaptability to emerging risks.

Risk or Opportunity and Rationale

Opportunity: Adopting sustainability in our supply chain helps mitigate operational and regulatory risks in our value chain, promotes ethical business practices, and upholds our commitment to the environment and society. This enhances our reputation, attracts sustainability-focussed stakeholders, and fosters partnerships with like-minded organisations, creating a network of sustainability-driven relationships.

Mitigation measures

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Risk or Opportunity and Rationale

Risk: Violation of regulatory requirements may lead to increased scrutiny from regulators, resulting in greater risk of penalties or restrictions on operations. Noncompliance may also result in the loss of customers and suppliers and pose risk to company's brand image, leading to significant reputational risk.

Mitigation measures

• Implemented a code of conduct that guarantees ethical behaviour and establishes clear guidelines for professional conduct
• Adherence to zero-tolerance policy regarding bribery, corruption, unethical behaviours, and violations of professional integrity
• Operating guidelines are in place to handle integral aspects like record-keeping, approval procedures, and suitable behaviour to guarantee transparency and accountability

Risk or Opportunity and Rationale

Risk: Increasing geopolitical tensions, trade barriers, and economic sanctions may disrupt cargo movement, impacting port volumes and raising operational costs due to customs delays and regulatory uncertainties. These tensions can also alter shipping routes, causing detours and fluctuations in cargo volumes.

Mitigation measures

• Broadening our cargo mix through containerisation and reducing reliance on bulk cargo
• There has been a concerted effort to diversify the customer base geographically and to widen the reach to international ports to manage geopolitical risks
• To mitigate the risk of change in trade flows, the Company has strategically placed themselves closer to key trade routes through developments in Vizhinjam and Colombo