LITASCO SA

Support functions

Operations

LITASCO Operations effectively executes all crude and product trading agreements through a globally dispersed network of commercially astute operators.

Operational teams operate with a direct reporting line to the CEO, maintaining independence from the trading function. These teams are strategically stationed in our primary trading hubs located in Geneva, Rotterdam, and Houston.

Operators play a central role in the execution process at LITASCO. They oversee the implementation of negotiated commercial agreements for physical hydrocarbons, manage vessel, rail, barge, and terminal operations, and serve as guardians of financial security, operational safety, and legal compliance. They collaborate closely with expert departments within the company to address any legal, tax, or safety concerns.

LITASCO Operations ensures the seamless execution of deals, maintaining continuous engagement with customers, service providers, and trading teams throughout the process.

Furthermore, our operations add value through blend and logistical optimization efforts, strategically minimizing costs and risks within contractual boundaries and in alignment with existing storage agreements.

Global Risk Management

LITASCO places a paramount emphasis on its global approach to risk and risk assessment to ensure the successful execution of its business operations. The company diligently oversees risks across various domains including trading, operations & logistics, geopolitics, finance, IT systems, and HR, among others, while adhering to relevant regulations.

Under Swiss Federal regulation, LITASCO is required to maintain and operate Internal Control Systems, and the company complies with this mandate rigorously. External auditors certify LITASCO's adherence to this regulation, validating its commitment to robust internal controls.

Within the spectrum of existing and perceived risks, LITASCO prioritizes the management of price risk and credit risk, recognizing their significant impact on the company's operations and financial stability.

Price Risk Management

LITASCO operates within an environment where market price risk is inherent, a characteristic inherent to the oil trading industry.

To manage this risk effectively, LITASCO has implemented robust risk management policies designed to systematically monitor and control trading activities, aiming to maintain price risk at acceptable levels.

Mitigation efforts involve meticulous structuring of physical deals and the active transfer of risk to third parties. Utilizing hedging strategies, typical of trading companies, allows us to manage exposure to price fluctuations effectively. These strategies involve employing a combination of exchange-traded and over-the-counter energy financial derivatives.

At LITASCO, we maintain a comprehensive risk management department dedicated to conducting daily controls and analyses to identify and measure price risk. All transactions undergo stringent internal controls and adhere to predefined trading limits. The responsibility for risk mitigation lies with our Trading Department, ensuring proactive management of market price risk.

Credit Risk Management

A robust Credit Risk Management policy is uniformly applied throughout the LITASCO Group, reflecting a conservative philosophy towards credit risk.

At the heart of this approach is the Credit Risk Management team, situated within the Risk Management Department at the main LITASCO office in Geneva. This team is entrusted with the meticulous analysis of counterparty risk and the establishment of acceptable risk thresholds.

Decisions regarding the company's risk appetite are made by the Credit Risk Management Committee, comprising top management personnel. With a keen focus on risk mitigation, every transaction across the LITASCO Group undergoes thorough monitoring to minimize credit risk exposure. Additionally, the team remains vigilant regarding global events, promptly taking measures to mitigate credit risk amidst geopolitical instability.

Furthermore, the Credit Risk Management team collaborates closely with our trading counterparts to negotiate open credit lines for LITASCO, ensuring a proactive approach to managing credit risk.

Treasury Management and Source of Funding

The Treasury department plays a pivotal role in managing a spectrum of financial risks and securing adequate funding for the Company's short and long-term activities, achieved through the optimization of both internal and external financing channels.

Centralized in Geneva, the Treasury oversees financing and risk monitoring for the Group's subsidiaries through four distinct departments: Cash Operations, Trade and Structured Finance, Documentary Credit, and Credit Control.

To mitigate exposure to various treasury and financial risks encompassing FX, operational, compliance, and documentary aspects, the Company employs a diverse range of techniques and innovative instruments.

In support of key business activities and strategic development opportunities, the Company adopts flexible and cost-efficient funding solutions. These solutions encompass intra-group financing, credit lines from banks, structured finance arrangements, and utilization of its own liquidity resources. This multifaceted approach ensures the Company remains well-positioned to capitalize on growth prospects while effectively managing financial risks.

Systems and Reporting

LITASCO has made significant investments in developing and operating its own cutting-edge Energy Trading and Risk Management (ETRM) system, built on the SAP platform and deployed across the entire LITASCO Group.

This ETRM system offers comprehensive functionality for both front and middle offices, enabling close monitoring of trading positions and real-time risk management functions.

Fully integrated with back-office operations, treasury functions, and accounting processes, the ETRM system facilitates efficient management and reporting in accordance with US GAAP standards. Its seamless integration ensures streamlined operations and accurate reporting across the organization.

Support functions

Operations

Global Risk Management

Price Risk Management

Credit Risk Management

Treasury Management and Source of Funding

Systems and Reporting

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