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for the period ended 31 December 2015


Risk management


TheRCSGrouphas exposure to risks fromits useof financial instruments. This notepresents informationabout thegroup’s exposure to these

risks and the RCS Group’s objectives, policies and processes for measuring andmanaging risk. Further quantitative disclosures are included

throughout the financial statements.

The RCS Group business model focuses primarily on providing unsecured credit risk whilst trying to minimise or avoid all other risk types.

The RCS Group views risks as an inherent part of running a successful business. Risks are not only mitigated but are also analysed and

investigated for opportunities. Successful riskmanagement therefore entails understanding which risks can enhance shareholder value and

which risks are incidental and potentially value destroying.

RCS Group’s risk management policies are established to identify and analyse the risks faced by the group to set appropriate risk limits and

controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes

in market conditions and the group’s activities. The RCS Group, through its training and management standards and procedures, aims to

develop a disciplined and constructive control environment in which all employees understand their roles and obligations.

The RCS Group board of directors has overall responsibility for the establishment and oversight of the RCS Group’s risk management

framework. The board has established the Board Audit Committee (BAC), the Asset and Liability Committee (ALCO), the RCS Internal Risk

and Audit Forum, the Credit Risk Committee and the Social and Ethics Committee. The BAC is responsible for monitoring the internal and

external audit functions and regulatory compliance for theRCSGroup. TheALCOCommittee is responsible for developing andmonitoring all

affairs pertaining to liquidity risk, interest rate risk, foreign currency risk and capital adequacy risk. The RCS Internal Risk and Audit Forum

is responsible for developing andmonitoring the company’s riskmanagement policies, as well as the audit, accounting, internal control and

financial reporting practices. TheCredit Risk Committee is responsible for developing andmonitoring credit riskwithin the group. The Social

and Ethics Committee is responsible for monitoring the RCS Group’s social and economic development. These committees report quarterly

to the board of directors on its activities. The risk management process established by the RCS Group continues and feeds into the risk

management process established by its holding company. The holding company’s risk management process is in turn managed by the RCS

Board Audit Committee.

The following subcommittees comprising executives and senior management have been established to deal with the following risks facing

the company:

(a) Assets and Liability Committee (ALCO) - liquidity, interest rate, foreign currency, and capital adequacy risk

(b) RCS Internal Risk and Audit Forum - technology, operational and reputational risk

(c) Compliance Forum - legal and compliance risk

(d) Credit Risk Committee - credit risk

(e) Social and Ethics Committee