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Risk Management Policy

Purpose and Scope of the Policy

1. 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 risks associated with the Company’s business.
2. In order to achieve the key objective, this Policy establishes a structured and disciplined approach to Risk Management, in order to guide decisions on risk related issues.
3. 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.
4. To establish a framework for the company’s risk management process and to ensure its implementation.
5. To enable compliance with appropriate regulations, wherever applicable, through the adoption of best practices.
6. To assure business growth with financial stability.


Risk Factors

The objectives of the Company are subject to both external and internal risks that are enumerated below:

External Risk Factors:
1. Revenue Concentration and liquidity aspects: Each business area of products such as ingots, MS billets, sponge iron, and power has specific aspects on profitability and liquidity. The risks are therefore associated on each business segment contributing to total revenue, profitability and liquidity. Since the projects have inherent longer time-frame and milestone payment requirements, they carry higher risks for profitability and liquidity.

2. Inflation and Cost structure: Inflation is inherent in any business and thereby there is a tendency of costs going higher.

3. Technology Obsolescence: The Company strongly believes that technological obsolescence is a practical reality. Technological obsolescence is evaluated on a continual basis and the necessary investments are made to bring in the best of the prevailing technology.

4. Legal: Legal risk is the risk in which the Company is exposed to legal action. As the Company is governed by various laws and the Company has to do its business within four walls of law, the Company is exposed to legal risk.

Internal Risk Factors:

1. Project Execution
2. Contractual Compliance
3. Operational Efficiency
4. Hurdles in optimum use of resources
5. Quality Assurance
6. Environmental Management
7. Human Resource Management
8. Culture and values

Responsibility for Risk Management

Generally every staff member of the Organization is responsible for the effective management of risk including the identification of potential risks. Management is responsible for the development of risk mitigation plans and the implementation of risk reduction strategies. Risk management processes should be integrated with other planning processes and management activities.

Compliance and Control

All the Senior Executives under the guidance of the Chairman and Board of Directors has the responsibility for over viewing management’s processes and results in identifying, assessing and monitoring risk associated with Organisation’s business operations and the implementation and maintenance of policies and control procedures to give adequate protection against key risk. In doing so, the Senior Executive considers and assesses the appropriateness and effectiveness of management information and other systems of internal control, encompassing review of any external agency in this regards and action taken or proposed resulting from those reports.

Review

This Policy shall be reviewed at least every year to ensure it meets the requirements of legislation and the needs of organization.

Amendment

This Policy can be modified at any time by the Board of Directors of the Company.

Designed by 3G Solutions.