Risk Factor

The Company's activities expose it to a variety of financial risks as follows:

• Market risk
• Liquidity Risk
• Credit Risk

The Company's overall risk management programme focuses on the predictability of financial markets and seeks to minimise potential adverse effects on the company's financial performance.

A description of the significant risk factors is given below together with the risk management policies applicable.

(a) Market Risk

(i) Currency Risk

The company operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respcet to EURO, USD and GBP. Foreign Exchange risk arises from future commercial transactions, recognised assets and liabilities and net investments in foreign entities.

(ii) Price Risk

The company is exposed to equity securities price risk arising from uncertainties about future prices of the investments. The comoany's market price is managed through diversification of its investment portfolio.

(iii) Cash flow and fair value interest rate risk

The company is exposed to risk associated with the effect of fluctuations in the prevailing level of market interest rates on its financial position and cash flows.

(b) Liquidity Risk

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of funding through adequate amount of cash balance.

The Fund has entered into a liquidity contract with the State Investment Corporation Ltd to ensure that the Fund has enough cash to maintain flexibility in funding.

(c) Credit Risk

Credit risk is the risk that an issuer or counterparty will be unable or unwilling to meet a commitment that it has just entered into with the company. The company's credit risk concentration is spread between interest rate and equity securities. All transactions in listed securities are settled/paid for upon delivery using approved brokers. The risk of default is considered minimal since delivery of securities sold is only made once the broker has received payment. On a purchase, payment is made once the securities have been received by the broker, If either party fails to meet their obligations, the trade will fail.