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OUR APPROACH TO RISK MANAGEMENT It also ensures that we collaborate and share our knowledge and best practices across the group. Risk identification and assessment Procedures for identifying risks are applied at department, country, regional and Group levels. Qualitative and quantitative tools deployed to manage this process effectively across the organisation include the conduct of Risk and Control Self Assessments, Key Risk Indicator Monitoring and Loss Incident Reporting. Processes for risk identification and assessment are conducted on a regular basis and supplemented with special risk reports when unexpectedly high risks are envisaged or actually become real. Risk measurement and prioritisation This requires that the consequences of potential risks or actual risk incidents are fully understood and quantified. Dangote Cement’s overall risk rating is based on the potential for damage from any specific risk, multiplied by its probability of occurrence. These consequences can be injury to staff, destruction of assets, financial losses or damage to our reputation. Ultimately, all will have some consequences for shareholder value. Risk control and reporting After risks have been identified and their potential impact quantified, mitigation strategies are recommended, implemented, monitored and reported to the Executive Committee on a monthly basis and to the Board on a quarterly basis. Where necessary, special risk reports are sent to relevant stakeholders on a need-to-know basis. The Board Audit and Risk Management Committee reviews risk reports and approves the implementation of recommended risk control measures. Risk monitoring The Risk Management team is responsible for coordinating all the risk management processes implemented across the Group and ensures that risk controls are duly implemented. Where required risk controls remain outstanding, the Risk Management team ensures timely escalation to relevant approving authorities for the required budgetary approvals or control modification. The risk monitoring process leads 38 Annual Report 2016 to the identification and assessment of new risks that are then analysed using the process flow described above. Principal risks facing Dangote Cement Risk Management As a multi-national cement manufacturing company we face diverse and extensive risks, from long-term economic conditions across an entire region to the risk of alienating a customer because of poor service. The risk types outlined below are what the Board considers to be the most significant risks facing Dangote Cement and its ability to fulfil its long-term missions through the pursuit of its corporate strategy. For each category of risk, we formulate and deploy mitigation strategies to ensure the minimum level of potential disruption. We also develop Key Risk Indicators which provide useful insights and timely leading-indications of evolving risk events developing internally within the operations of our business or emerging from external events such as macroeconomic shifts. Risk assessments and overall risk position To determine our overall risk position, we consider the potential impact of current risks materialising. This includes cross-relational impacts across risk types, Implement Identify Risk Assess & Analyse Plan Action Measure Control & Monitor

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