Gearbulk IntegratedReport 2024 Paperturn - Flipbook - Page 53
INTEGRATED REPORT 2024
OUR INPUTS
Financial Capital
Manufactured Capital
Human Capital
Social and Relationship Capital
Intellectual Capital
Natural Capital
3 LIQUIDITY AND COVENANT
BREACHES
4 POLITICAL RISK LINKED TO
FINANCE
5 LIMITED PROCESS
DOCUMENTATION
Market volatility a昀昀ects the organisation’s pro昀椀tability, and given its current
debt and obligations, such 昀氀uctuations
signi昀椀cantly impact available cash. Additionally, various covenant requirements
with 昀椀nancing institutions are directly
influenced by earnings, operational
losses, and liquidity. In the current
market conditions, the risk of a covenant
breach is heightened.
Increased political tensions in di昀昀erent
regions we operate in has increased
and could lead to market disruption or
sanctions impacting our business and
昀椀nancing.
With a cross functional organisation
spread across various countries, a
lack of documented processes and
e昀昀ective tools can lead to control
de昀椀ciencies and increased costs.
The ability to repay debt in a volatile
market increases the risk of default of
loan repayments and other operational
expenses. Should covenant breach occur
the risk of immediate repayment of debt
increased together with reputational
damages limiting access to 昀椀nancing.
Increased risk a昀昀ecting potential loss
of banking system access, early loan
repayments affecting solvency, and
reputational damage a昀昀ecting 昀椀nance
accessibility.
Lack of process documentation
a昀昀ects the organization in all areas
and has a negative impact on value
due to lack of controls, ine昀케ciencies
and increased costs due to complex
structures.
Optimal and sustainable cash break even
points to be maintained and other alternative source of funding to be concluded
on to support sustainability of the organisation.
Gearbulk adheres to an ethical business policy and the Code of Conduct of
Gearbulk. Furthermore, maintaining a
rigorous stance on selecting counterparties reducing the potential risk.
A process is currently underway
to document current controls and
mapping of processes to support
with enhancing the control environment together with identi昀椀cation of
potential areas where e昀케ciencies
can be created.
Market volatility presents an opportunity to strengthen 昀椀nancial resilience by
optimising cash 昀氀ow management, diversifying debt structures, and securing 昀氀exible 昀椀nancing arrangements. Proactive
risk management can enhance stability,
maintain compliance with covenants,
and improve stakeholder con昀椀dence.
Navigating political tensions presents
an opportunity to diversify markets and
regions we operate in, strengthen risk
management strategies, and build resilient supply chains. Proactively adapting
to geopolitical shifts can enhance
stability and create new growth avenues.
Standardising processes and implementing effective tools present
an opportunity to enhance operational e昀케ciency, reduce costs, and
strengthen internal controls. A
well-documented framework can
improve collaboration, transparency,
and overall performance across our
operations.
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