Risk Management Policy
Risk Management is a key aspect of the “Corporate Governance Principles and Code of Conduct” which aims to improvise the governance practices across the Company’s activities. Risk management policy and processes will enable the Company to proactively manage uncertainty and changes in the internal and external environment to limit negative impacts and capitalize on opportunities.
OBJECTIVE & PURPOSE OF POLICY
The main objective of this policy is to ensure sustainable business growth with stability and to promote a pro-active approach in reporting, evaluating and resolving the risks which are material in nature and are associated with the business. In order to achieve the key objective, the policy establishes a structured and disciplined approach to Risk Management, in order to guide decisions on material risk related issues.
THE SPECIFIC OBJECTIVES OF THE RISK MANAGEMENT POLICY ARE:
- To ensure that all the current and future material risk exposures of the company are identified, assessed, quantified, appropriately mitigated, minimized and managed i.e to ensure adequate systems for risk management.
- To establish a framework for the company’s risk management process and to ensure its implementation.
- To enable compliance with appropriate regulations, wherever applicable, through the adoption of best practices.
- To assure business growth with financial stability.
DISCLOSURE IN BOARD'S REPORT
Board of Directors shall include a statement indicating development and implementation of a risk management policy for the company including identification therein of elements of material risks, if any, which in the opinion of the Board may threaten the existence of the company.
Every Company is prone to inherent business risks. This document is intended to formalize a risk management policy, the objective of which shall be identification, evaluation, monitoring and minimization of identifiable material risks.
This policy is in compliance with the provisions of Section 134 (n) the Companies Act, 2013 and the amended Clause 49 of the Listing Agreement which requires the Company to lay down procedure for risk assessment and procedure for risk minimization.
The Board of Directors of the Company and the Audit Committee shall periodically i.e. once in six months, review and evaluate the risk management system of the Company so that the management controls the risks through properly defined network.
Head of every Department shall be responsible for implementation of the risk management system as may be applicable to their respective areas of functioning and report to the Internal Sub-Committee of the Risk Management. The Internal Sub-Committee inturn shall report to the Risk Management Committee, the Audit Committee and the Board of Directors.
CONSTITUTION OF RISK MANAGEMENT COMMITTEE
Risk Management Committee shall be constituted by the company consisting of such number of Directors (executive or non-executive) and / or Senior Executives, as the Company thinks fit.
The Board of Directors may issue guidelines on the roles & responsibilities of the Risk Management Committee & also delegate monitoring & reviewing of the risk management plan to the Committee & such other functions as it may deem fit.
INTERNAL SUB-COMMITTEE ON RISK MANAGEMENT
An Internal Committee, called the RMC sub-committee, consisting of the MD / ED, CFO, CS, VP-O and VP-HR would analyse the various risks and mitigation measures and put up the same before the Risk Management Committee of the Board for its consideration.
This policy applies to all areas of the Company’s operations.
ROLE OF THE BOARD
The Board will undertake the following actions to ensure risk is managed appropriately:
The Board shall be responsible for framing, implementing and monitoring the material risk management plan / policy for the company.
The Board may define the roles and responsibilities of the Risk Management Committee and may delegate monitoring and reviewing of the risk management plan to the Committee and such other functions as it may deem fit.
Ensure that the appropriate systems for risk management which are material in nature are in place.
The independent directors shall help in bringing an independent judgment to bear on the Board’s deliberations on issues of material risk management and satisfy themselves that the systems of risk management are robust and defensible;
Participate in major decisions affecting the organization’s material risk profile;
Have an awareness of and continually monitor the management of strategic and material risks;
Be satisfied that processes and controls are in place for managing less significant risks;
Be satisfied that an appropriate accountability framework is working whereby any delegation of risk is documented and performance can be monitored accordingly;
Ensure risk management is integrated into board reporting and annual reporting mechanisms.
Convene any board-committees that are deemed necessary to ensure material risks are adequately managed and resolved wherever possible.
This policy may be reviewed at least once every year to ensure it meets the requirements of legislation & the needs of the organization.