M a t erial busines s risks T he Gr oup has an en t erprise wide risk managemen t fr ame w ork tha t is s truc tur ed t o ensur e its ma t erial busines s risks and c on tr ols ar e cap tur ed as ses sed and r egularly r e vie w ed in a c onsis t en t manner T he k e y ma t erial busines s risks and as socia t ed mitiga tion c on tr ols iden tifed include ALS is e xposed t o fnancial risks such as liquidit y risk in t er es t r a t e risk f or eign e x change risk and cr edit risk c oun t erpar t y e xposur e Gr oup tr e asury and cash man agemen t policies ar e in plac e t o mitiga t e these risks and k e y indica t ors ar e monit or ed mon thly including ge aring and le v er age r a tios in t er es t c o v er b y EBITD A minimum liquidit y r eserv es w eigh t ed a v er age deb t ma turit y and e arnings a t risk monit or ed b y the Boar d Audit and Risk C ommitt ee T he Gr oup s suc c es s is dependen t upon a ttr ac ting and r e t aining s t a f f in k e y t echnical and managemen t r oles ALS mitiga t es this risk b y s triving t o be an emplo y er o f choic e implemen ting its or ganis a tional de v elopmen t pr ogr ams monit oring and benchmarking its emplo y ee bene fts car eer pr ogr es sion and suc c es sion planning and o v ersigh t b y the Boar d P eople C ommitt ee T he C ompan y s C ommodities division oper a t es in a c y clical r esour c es sec t or with fuc tua tions in c ommodit y pric es and global demand ALS mitiga t es this risk b y ensuring the Gr oup has a div erse t es ting and inspec tion servic e o f f ering acr os s a r ange o f indus try sec t ors and geogr aphies Other c on tr ols include a busines s model tha t al lo ws f or scalabilit y o f servic es a disciplined f ocus on oper a tional c os ts and close monit oring o f ec onomic tr ends ALS has a r elianc e on IT sys t ems and in fr as truc tur e t o manage and s t or e its da t a ALS mitiga t es this risk b y ha ving back up sys t ems and r edundan t serv ers loca t ed a t o f f sit e da t a c en tr es dis as t er r ec o v ery plans and in f or ma tion managemen t policies in plac e T he Gr oup oper a t es acr os s a number o f indus tries tha t ha v e inher en t s a f e t y risks ALS mitiga t es this risk b y making S a f e t y is a priorit y a c or e v alue o f the Gr oup M anagemen t ha v e implemen t ed a r obus t s a f e t y man agemen t sys t em emplo y ed signifcan t HSE r esour c es and thr ough their s tr ong le adership ar e de v eloping a cultur e o f s a f e t y within their busines ses o v erseen b y the Boar d Sus t ainabilit y C ommitt ee ALS is a mark e t le ader in t es ting and inspec tion servic es A los s o f r eput a tion due t o poor qualit y servic e w ould er ode mark e t shar e T his risk is mitiga t ed b y imple men ting r obus t qualit y c on tr ol policies and pr oc edur es r equiring its busines ses t o ob t ain thir d par t y ac cr edit a tion t o in t erna tional qualit y s t andar ds wher e a v ailable and in v es ting in cus t om built labor a t ory in f orma tion managemen t sys t ems S t a t e o f a f f airs Changes in the s t a t e o f a f f airs o f the Gr oup during the fnancial y e ar r esult ed fr om its c on tinued s tr a t egy o f busi nes s e xpansion and div ersifca tion in the Lif e Scienc es and Indus trial t es ting servic es Specifcal ly the Gr oup e xpanded and div ersifed its t echnical servic e capabilities thr ough ac quisitions in f ood and en vir onmen t al t es ting and c ommod ities inspec tion busines ses in mainland Eur ope and Nor th and South America In the opinion o f the Dir ec t ors ther e w er e no o ther sig nifcan t changes in the s t a t e o f a f f airs o f the Gr oup tha t oc curr ed during the fnancial y e ar under r e vie w no t o ther wise disclosed in this r epor t or the c onsolida t ed fnancial s t a t emen ts 19 ALS LIMITED AND IT S SUBSIDIARIES A NNU AL F INANCIAL R EPOR T F OR THE Y EAR E NDED 31 M AR CH 2019 F INANCIAL REPOR T D IRE CT ORS REPOR T M A TERIAL BUSINES S RISKS