Managing our risks

Risk management deals with risks and opportunities affecting value creation or value preservation. Managing risks is an important part of achieving our objectives as an investment company.

Business risks

East Capital Explorer’s business involves different types of risk. In addition to the risks that we take in our investments with the intent to create value for our shareholders, there are also a number of business risks and financial risks with possible impact on our business. Examples of such risks are political risks, country risks, investment strategy risks, company specific risks and operational risks and related party risks.

Financial risks

The Group is exposed to various types of financial risks through its business activities. The term “financial risks” refers to fluctuations in the Company’s earnings and cash flow as a result of changes in exchange rates, interest rates, refinancing and credit risks. The Group’s finance policy for the management of financial risk has been prepared by the Board and is a framework of guidelines and regulations in the form of risk mandates and limits for financial activites. The Parent Company’s finance function is responsible for central management of the Group’s financial transactions and risks.