Risk Management

Listed as Company in Novo Mercado of the Stock Market, Camil has high levels of Corporate Governance and values ethics and transparency, as well as full compliance with applicable laws and regulations.

In order to ensure the maintenance of the company’s ethical principles and compliance with legal requirements, the Company has a Board of Directors composed of independent members, Fiscal Council, Management Committees in the areas of Finance, Ethics, Internal Audit and Human Development Organizational, in addition to the External Audit, which complements the list of actions that maintain good practices and governance suitability.

The Risk Management area has as its pillars the measurement and monitoring of the probability of occurrence, prevention, mitigation and treatment of internal and external factors that may impact the achievement of the Company’s objectives and the opportunity to leverage results that guarantee the strategy´s execution.

On January 10th , 2019, Camil´s board of directors approved the company´s Risk Management Policy. This formalization intended to establish and confirm the importance of the concepts, principles, guidelines and responsibilities within the process of Camil’s Risk Management. This normative instrument emphasizes the importance of measuring, monitoring mitigating and treating the internal and external factors which that could impact the achievement of our objectives, as well as the opportunities of leveraging results guaranteeing Camil´s strategy´s execution.

The premises for Risk Management are based on COSO (Committee of Sponsoring Organizations of the Treadway Commission) ERM – and to guarantee it´s implementation, Camil uses the Corporate Governance Structure to involve the business divisions, sector managers, employees, local committees and administrators.

In accordance with our Reference Form, we treat the main Risk groups: Strategic Risk, Operational, Regulatory, Market Risk, Liquidity, Credit, Image, Socioenvironmental, and Cybernetic, which comprise in their totality the risks observed by Camil.

Risks relating to the Company

    The Company may not be able to implemente successfully its expansion strategy through organic growth and strategic acquisitions, which may adversely affect its results and the value of the shares issued by it; therefore, we are exposed to a number of risk factors, which does not are limited to: unexpected costs changes, opposition of creditors and shareholders, integration of companies, business lines, different cultures, new brands, besides product integrations, vendors, raw materials, suppliers and customers.

  • Protecting and strengthening the identity, credibility and reputation of our brands;
  • Maintaining its debt strategy with observance of contractual restrictions specified; financial capacity to honor obligations under loans, financing, securities; as well as the need to incur additional debts to execute the business expansion strategy;
  • The possibility of interruption of the operation of own or third-party industrial plants that guarantee the processing, processing and packaging of products due to, but not limited to: natural disasters, industrial accidents, interruptions in logistics, information security, supply of electric power, requirement of specific licenses or any other regulatory factors, strikes and stoppages;
  • The ability to retain members of Top Management and other employees with solid experience and know-how, as well as the attraction of qualified professionals that can significantly affect their operational and financial performance;
  • Exposure to regulatory risk arising from civil, tax, labor, tax and other regulatory actions in the sector in which the company operates;
  • Exposure to sanitary risks related to the food sector that may adversely affect sales of the Company’s products, including risks caused by contamination, adulteration or deterioration of food;
  • The possibility of interruption or failure in the operation of computer systems, infrastructure, networks and / or devices for the purpose of violating data security, stealing, altering, destroying or hacking the Company’s system;
  • The possibility of occurrence of events not covered by the insurance policies contracted by the Company or that exceed the limits of indemnities contracted;
  • The Impossibility of payment of dividends or interest on equity to the holders of shares issued by it, due to adverse financial situation or contractual restrictions that may exist in financial contracts;
  • The possibility of dilution of the participation of its shareholders in the Company’s capital stock through the issuance of shares or other securities convertible or exchangeable in shares due to the need to raise additional funds;
  • The Divergencing of interests between the controlling shareholders of the Company and the other shareholders;
  • The Exposure to volatility and lack of liquidity of the Brazilian capital market that may limit the ability of shareholders to trade their shares at the desired price and moment;
  • The dependence on the business performance and consequent financial situation and operating results of the subsidiaries, which in turn are subject to the economic, political and social conditions in the countries that operate;
  • The dependence of sugar suppliers and scarcity of supply of sugar may harm the business of the Company;
  • The occurrence of fluctuations in prices of raw materials and other events related to inputs;
  • The relevance of the participation of large retail chains in the composition of revenue, which, once increased, may mean greater pressure to reduce the Company’s margins;
  • The loss of key customers or their inability to meet the counterparty in credit sale transactions may have a material impact on the company’s cash flow, operating and financial results;
  • The possibility of a competitiveness increasement in the food industry which is highly competitive and fragmented;
  • Transport and logistics services disruptions, or insufficient investment in public infrastructure;
  • The possibility of suspension, cancellation or non-renewal of the tax benefits that the Company holds, negatively affecting its profitability and liquidity.
  • The risks presented here are not exhaustive; for more information click here and access our Reference Form.

Market Risks

The Company is exposed to market risks derived from our activities and businesses, as described below. These risks involve changes in prices of raw materials, risk of purchase of sugar, fluctuations in interest rates and exchange rates, risk of inflation, credit default risk and liquidity risk, which may adversely affect the value of financial liabilities or future cash flow and our results of operations. Our financial condition and results of operations may be adversely affected by these market risks. In order to mitigate the market, credit and liquidity risks to which we are exposed, we adopt specific control risk practices, as described below.:

  • Risk of Prices of Raw Materials;
  • Risk of Purchase of Sugar;
  • Risk of Inflation;
  • Interest Rate Risk;
  • Exchange Rate Risk;
  • Credit Risk;
  • Liquidity Risk.
Risks relating to Brazil
  • The Brazilian government has exercised, and continues to exercise, significant influence over the Brazilian economy. This influence, as well as Brazilian political and economic conditions, may materially adversely affect us;
  • Ongoing political instability has adversely affected the Brazilian economy and us;
  • Brazilian government efforts to curb inflation may slow down the Brazilian economy, which could adversely affect us;
  • Exchange rate instability may adversely affect the Brazilian economy, and, consequently, us;
  • Any further downgrading of Brazil’s credit rating may adversely affect us;
  • Developments and the perception of risk in other countries, particularly in the United States, Europe and emerging markets, may adversely affect the Brazilian economy and the market price of Brazilian securities, including ours.

Updated at 07/16/2019 at 07:36 pm

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