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About Us OUR APPROACH TO RISK MANAGEMENT Risk Type Business & Strategy Risk Description Cost growth from increased energy cost; pressure of competition and impact on market share; oversupplied market; price wars; concentration risk; reputational risk; governance and risk oversight; environmental sustainability. Operational risk Operational inefficiencies; human resources mismanagement; information technology issues; litigations against the Group; compliance risk; reporting risk; health & safety malpractices; quality control risk; technical failures; theft and fraud. Risk Mitigation Investment in energy infrastructures to guarantee reduced energy cost; close monitoring of strategic initiatives and milestone achievements; formulation and review of strategy. Reporting and escalation of key risks identified for effective and efficient treatment of identified risks. Key Risk Indicator Energy mix ratio; concentration limits, EBITDA margin targets, dust and gas emission compared to limit; ratio cement production variance; production cost targets; and price optimisation targets. LTIFR trends; overall equipment efficiency targets; percentage of trucks delivering within turnaround time; no. of unreconciled items; no. of unresolved customer complaints, no. of pending litigations; no. of key roles without back-ups; cumulative hours of SAP down time and no. of outstanding HSE audits. Financial risk Insurance risk; credit risk; tax risk; market risk including interest rate risk and foreign exchange risk; liquidity and funding risk. Business continuity Major disruptions from social sabotage, unrests, political crisis, terrorism; floods; epidemics; geological damage such as earthquakes, landslides. Risk analytics and modeling Risk from inappropriate estimation of financial losses and translation of impact of non-financial risks. Reporting of breaches to approved limits, unauthorised transactions, long-outstanding claims. Concentration limits; percentage of past-due to total exposure; percentage of FX requirements available; no. of outstanding claims; loss ratio and mark-to-market profit/loss. Effective business continuity management and contingency planning. Percentage of trucks available to total no. of trucks; no. of unplanned critical equipment stoppages and actual recovery time compared to recovery time objective. Extensive portfolio reporting mechanisms highlighting correlations and combined views of key risks. Scenario analysis. 1, 2, 4 Mission Statement 1, 2, 3, 4 1, 4 1 1 Principal risk categorisation and management thereof, with relationship to corporate mission statements which we then aggregate for proper risk analysis and prioritisation. An example of this is reputational risk which has a number of dependencies should other risks materialise. Current risk profile We regularly perform comprehensive risk assessments across our businesses and building projects. The outcome of each risk assessment determines the number of risk assessments to be carried out in the year at each site. In 2016, risk assessments were conducted at all operational plants to ensure a comprehensive risk profile could be drawn up. Dangote Cement’s risk profile is illustrated in the chart. Exogenous risk factors, such as currency exposure, are the largest element of the risk profile at 33%. Operational risk Current risks 10% 12% 33% 17% 28% Exogenous factors Operational risk Financial risk Industry /competitive risk Strategic risk accounts for 28%, followed by Annual Report 2016 39

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