SANIA Power is exposed to a variety of risks through its daily trading activities. The risk strategy supports SANIA Power’s strategic objectives by appropriately balancing risk and expected returns. This balance is enforced through capital allocation. The definition and allocation of capital ensure a clear alignment of the Company’s risk appetite with the mandates allocated to its trading activities. Applied risk is monitored continually. Daily, monthly, and quarterly reporting on exposure levels, thresholds, risk measures, and available headroom in the Company’s capital ensure mature and consistent fulfilment of SANIA Power’s risk management responsibilities.
RISK MANAGEMENT IS KEY TO MANAGED BUSINESS GROWTH
Risk management is anchored in the entire organisation, from the Board of Directors to the individual trader. The Board of Directors is responsible for the risk strategy, including risk governance and risk monitoring. Governance and organisation of risk are encompassed by the Risk Management Framework, owned, and annually reviewed by the Board of Directors.
The Company has established a Risk Committee responsible for advising the Board of Directors on the risk framework. To manage the full range of risks, SANIA Power operates a system with two lines of defence and distinct responsibilities for each line, ensuring an appropriate segregation of duties. The first line consists of the colleagues of the operational team, who are responsible for managing potential risks. This is overseen by the Risk Management function, which acts as the second line of defence. In addition to the formal framework, a strong risk culture is expected of all employees.
Standardised reports on risks and opportunities are prepared monthly and presented to the Risk Committee and the Board of Directors.
The Risk Management function keeps a stern focus on day-to-day risk management of the new and complex portfolios. With higher exposure levels, more complex dynamics, and volatile markets, one of the main challenges this year is to maintain a high level of transparency in the changing valuation of the portfolios.