RISK Management Framework:

A risk management framework is constructed to ensure appropriate and robust management of risks, with particular focus on:

• Delegation of Authority & Transaction Limits. To control the level of authority and risk taking that the commercial personnel operate.

• Segregation of Duties between commercial staff who take positions and back-office functions that identify, monitor, manage and report risk.

• Audit, Stress-testing & Benchmarking to ensure that risks are correctly reported and are representative against the wider market.

The key risk categories managed and processes for mitigation are:

1. Price risk: By identifying the mixture of pricing methodologies used (fixed, floating, short and long term) measured against third party forward curves to produce daily MTM.
2. Performance risk: By identifying and contracting with financially strong counterparties on both fixed and floating pricing to ensure on-going performance should significant market moves occur.
3. Credit risk: Through independent credit reviews, management of tenor and value for individual counterparties and reporting of MTM for each counterparty.
4. Hedging risk: Through the implementation of individual limits measured daily and use of cleared trades when financial instruments are employed.
5. Operational risks: Through strong vetting processes applied and contracting with creditworthy owners or Charterers.
6. Sanction/corruption risk: Through regular staff training, vetting and access to updated sanction information and legal requirements.