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Investor Presentaiton

Risk management The Company devotes significant resources to identifying, assessing and accounting of risks in business decisions making. To reach stable and sustainable business development, achieve strategic goals and ensure the safety of the Company's assets, the Company puts specific focus on establishing an efficient risk management system, which main elements involve: identification and assessment of risks, development and implementation of measures to eliminate risks, risk management reporting and evaluating the risk management system efficiency. The risk management system has always been one of the key priorities of the Company's management, however, it has become even more important due to the increased level of uncertainty and instability in world markets. their sufficiency and performance, monitors the Company's management compliance with policies and procedures in risk management activities. It further assesses how the risk management system corresponds to the risks faced by the Company. In the reporting period, the Audit Committee of the Board of Directors has twice reviewed the risk management system in place in the Company. The efficiency of the system was considered satisfactory by the Audit Committee. In order to further improve the system, appropriate recommendations were given to management. Pathogenic risks, epizootic outbreaks Risk description Pathogenic risks, epizootic outbreaks Biological risks Risk mitigation Complying with generally recommended volumes of cultivation; locating areas at a sufficient distance from one another; concentrating big biomass volumes in large depth areas • Conducting regular internal and external veterinary inspections of the farms • Stocking volumes and densities are justified by research institutions • Neighbouring farms have fish from the same generation Farm resting after killing each generation of the fish • Insuring fish Risk management The Audit Committee of the Board of Directors reviews the Company's risk management and internal control systems on a regular basis, analyses and evaluates Operational risks The Company identifies nine main types of risks that have the greatest impact on its performance. • Risk description Risk of disease transmission from wildlife fish Risk of intrusion of foreign pathogenic organisms Risk of genetic modifications in fish populations naturally inhabiting the water due to aquaculture salmon leaking out of cages Risk mitigation Performing ongoing production control • Analysing standard indicators of water quality and the amount of natural waste • Installing an innovative purification system Using special protection nets and anti-seal ultrasound repelling devices Risk description Poor planning Poor design Risk of failure to reach the target capacity and low production efficiency Risk of predation Risk of potential spoilage or failure of main equipment that may significantly affect the production process Risk mitigation • Analysing and considering past experience when planning • Working out alternatives during the planning stage . Carefully considering all possible project options; identifying both the upsides and downsides • Allowing for project adjustment . Training of personnel at the cage farms in Norway Focusing on process optimisation using the best practices Procedures and regulations for core production processes • Bidding procedures for all major purchases • Planning the scope of production with regard to all factors that influence the result; timely revising plans; informing customers on changes in production volumes. Installing anti-seal equipment • Only trained staff members can have work permit • Insuring equipment; purchasing equipment with long-term warranty periods only • The availability of a spare parts kit, especially of components of bearing structures and fasteners, is mandatory 96 PJSC Russian Aquaculture | Annual Report 2021 Environmental risks Risk description • Risk of abnormal weather phenomena in winter or summer Risk of change in oceanic currents Risk mitigation Risk occurrence is very low. The existing changes in climatic conditions and oceanic currents present no threat. In case of significant changes in water temperature and routes of undercurrents, the existence of not only the Company's farm, but of the whole fishery industry of the region will be unlikely www.russaquaculture.ru 97 97
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