RISK MANAGEMENT POLICY

Background

Section134 (3) of the Companies Act, 2013 requires a statement to be included in the report of the board of directors (“Board”) of Narayani Gems and Ornaments Private Limited (the “Company”), indicating the development and implementation of a risk management policy for the Company, including identification therein of elements of risk, if any, which, in the opinion of the Board, may threaten the existence of the Company.

Furthermore, requires that the Company set out procedures to inform the Board of risk assessment and minimization procedures and makes the Board responsible for framing, implementing and monitoring the risk management plan of the Company.

Objective and Purpose

In line with the Company’s objective towards increasing stakeholder value, a risk management policy has been framed, which attempts to identify the key events/risks impacting the business objectives of the Company and attempts to develop risk policies and strategies to ensure timely evaluation, reporting and monitoring of key business risks.

Policy

Our risk management approach is composed primarily of three components:

 

    • Risk Governance

    • Risk Identification

    • Risk Assessment and Control

Risk Governance:

 

    • The functional heads of the Company are responsible for managing risk on various parameters and ensuring the implementation of appropriate risk mitigation measures.

 

    • The Risk Management Committee provides oversight and reviews the risk management policy from time to time.

Risk Identification:

External and internal risk factors that must be managed are identified in the context of business objectives.

Risk Assessment and Control:

This comprises the following:

 

    • Risk assessment and reporting

    • Risk Control

    • Capability development

On a periodic basis risk, external and internal risk factors are assessed by responsible managers across the organization. The risks are identified and formally reported through mechanisms such as operation reviews and committee meetings. Internal control is exercised through policies and systems to ensure the timely availability of information that facilitates proactive risk management. Examples of certain of these identified risks are as follows:

 

    • Broad market trends and other factors beyond the Company’s control significantly reduce demand for its services and harm its business, financial condition and results of operations

    • Failure in implementing its current and future strategic plans

    • Significant and rapid technological change

    • Damage to its reputation

    • Its products losing market appeal and the Company not being able to expand into new product lines or attract new types of investors

    • Its risk management methods and insurance policies not being effective or adequate

    • Fluctuations in trading activities

    • Changes in interest rates

    • Changes in government policies

    • Security risks and cyber-attacks

    • Insufficient systems capacity and system failures

Risk Management Committee

The Company has a committee of the Board, namely, the Risk Management Committee, which was constituted with the overall responsibility of overseeing and reviewing risk management across the Company. The terms referenced by the Risk Management Committee are as follows:

 

    • Review of strategic risks arising out of adverse business decisions and lack of responsiveness to changes;

 

    • Review of  operational risks;

 

    • Review of financial and reporting risks;

 

    • Review of compliance risks;

 

    • Review or discuss the Company’s risk philosophy and the quantum of risk, on a broad level that the Company, as an organization, is willing to accept in pursuit of stakeholder value

 

    • Review the extent to which management has established effective enterprise risk management at the Company;

 

    • inquiring about existing risk management processes and reviewing the effectiveness of those processes in identifying, assessing and managing the Company’s most significant enterprise-wide risk exposures;

 

    • review the Company’s portfolio of risk and consider it against its risk appetite by reviewing the integration of strategy and operational initiatives with enterprise-wide risk exposures to ensure risk exposures are consistent with the overall appetite for risk; and

 

    • review periodically key risk indicators and management response thereto

CONSTITUTION OF RISK MANAGEMENT COMMITTEE  

The Chairman informed the Board that in accordance with Section 134 (3) of the Companies Act, 2013 as amended, the Company is required to constitute a Risk Management Committee. 

It was further informed that the Risk Management Committee should consist of Directors and officers of the Company with the majority being the Directors. The Board was also informed that the objective of the Risk Management Committee is to identify assess and mitigate the risks in the organization.

The Board members deliberated on the matter and resolved as under:

“RESOLVED THAT the Risk Management Committee of the Company be constituted to include the following Directors;

Mr. Vipin Kumar Agarwal- Chairman

Mr. Amit Agarwal- Member

Mrs. Sheetal Agarwal- Member

The Company Secretary 

“RESOLVED FURTHER THAT Mr Vipin Kumar Agarwal, Director be appointed as the Chairman of the Committee.”

“RESOLVED FURTHER THAT Mr. Lokesh Kanja will act as the Secretary of the Committee.”