REPORTING CONTEXT ABOUT US OUR OPERATING CONTEXT OUR PERFORMANCE OUR LEADERSHIP GOVERNANCE OUR FINANCIAL STATEMENTS SHAREHOLDERS' CORNER Potential impacts • Increased risk of non-compliance due to unexpected changes in local and/ or international legal and regulatory environment. • Fines, claims and reputational damage in the event of noncompliance. • Management time diverted to resolving legal issues. • Restrictions on marketing certain products through traditional channels. Associated opportunities • Strengthening our reputation as a reputable operator in all markets. • Identify new ways of growing brand awareness using social media, online communities, etc. • Legal compliance is fully entrenched in our risk and controls system. • Processes and governance are in place to support ongoing compliance with the Mauritius Companies Act 2001 and the National Code of Corporate Governance for Mauritius (2016). Risk Impacts and opportunities Mitigation TREND Potential impacts • Margin contraction from increased promotional activity and discounts, resulting in cost growth exceeding sales growth. • Negative operating leverage due to uncontained cost growth. • Liquidity issues. • Decline in demand for some of our products. • Erosion of competitive advantage. • Lower return on invested capital. Associated opportunities • Build resilience to survive the financial and economic risks, based on past track record and sustainable development initiatives in place. • Identify new products and potential acquisitions arising from current conditions. • Ability to leverage group systems, processes and structures to enhance margins. • Diverse products and markets, with the opportunity for further diversification. • Strengthen agility and responsiveness to changes in local demand. • Prudent financial risk management processes are in place. • Maintain an appropriate mix between fixed and floating interest rates on borrowings. • Maintain tight control over credit exposure. • Optimise the foreign exchange management. Risk Impacts and opportunities Mitigation TREND 12. Compliance (External and Internal) • Ensuring ongoing compliance with current and proposed local and international laws and regulations. • Need to understand, interpret and apply differing regulatory requirements in multiple jurisdictions. 11. Sustainable financial performance (External and Internal) • Promoting sustainable financial performance in a tough trading environment. • International economic and political environment causing economic recession, inflation, social upheaval, trade restrictions and unstable exchange rates. • Size and duration of the impact of the Covid-19 pandemic and Ukraine conflict on the global economy remains unclear. TREND Increase Decrease Stable CONTINUED RISK RISK REPORT 45 Phoenix Beverages Limited Integrated Report 2022 44 Phoenix Beverages Limited Integrated Report 2022
RkJQdWJsaXNoZXIy MTcyNjcwMw==