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OUR APPROACH TO RISK MANAGEMENT Dangote Cement Board Audit, Compliance and Risk Management Committee Overall risk supervision RISK REPORTING, ESCALATION AND TREATMENT Group Chief Risk Officer • Identification, analysis and mitigation of risk • Development of risk policies, framework and standards • Organisation of day to day risk management Risk Management Function Specialised Risk Sub-Committees Ad-hoc committees set up to tackle specific risk issues Regional Risk Management Nigeria Regional Risk Management Pan-Africa • Approves risk management framework and applicable policies • Approves methodologies for the management strategy risk • Approves the DCP risk management strategy and risk appetite • Approves critical risk acceptance • Supervises and monitors DCP risk appetite RISK STRATEGY, APPETITE SETTING AND DECISION MAKING The Committee meets on a quarterly basis and may occasionally be supported by specialised risk subcommittees. Its Chairman reports to the Board on any significant risk-related matters that might affect the operation, profitability or reputation of the business. Our appetite for risk The BACRMC operates within the scope of a clearly defined appetite for risk across the group. This is articulated through “Risk Appetite Statements” that are high-level principles governing the maximum level of risk that we are prepared to accept in order to achieve our goals. They have been defined and approved by the Board to ensure that risk is proactively managed at a desired level across the organisation. The Committee regularly reviews our Risk Appetite Statements to ensure consistency with our strategy, business environment and stakeholder requirements. They enable us to pursue our corporate strategy in a way that is mindful of our appetite for different types of risk, drive us to set clear thresholds of risk tolerance and remind us of the constant need to monitor all forms of risk as we conduct our daily business. These five simple statements can be applied across all aspects of the business and cover all the major risk categories that we might face. Using Dangote Cement’s Risk Appetite Statements, tolerance levels, thresholds and targets are set at different trigger levels, with clearly defined escalation requirements that enable appropriate actions to be considered and implemented as required to manage the identified risks appropriately. Dangote Cement’s Risk Appetite Statements are given below: Profitability Solvency Reputation Health & Safety Environmental Sustainability 36 Annual Report 2016 Dangote Cement should always have the ability, but not be required, to pay a dividend even under a severe downturn in the economy or in key markets Dangote Cement will manage its financial resources such that it can withstand severe financial stress Dangote Cement will maintain a strong reputation for integrity, openness and assisting the communities in which it operates Dangote Cement aims to have a world class approach to health and safety Dangote Cement will ensure that the adverse impact of its operations is minimal on the environment

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