The Company has in place a robust risk management framework which is aligned with ISO 31000. The Enterprise Risk Management (ERM) system of the Company supports the organisation’s objectives by addressing the full spectrum of its risks and managing the impact of those risks individually or combined, as an inter-related risk portfolio. The ERM system aims to develop a ‘Risk Intelligent Culture’ within the Company to encourage risk-informed business decision-making, as well as resilience to adverse environment. It also seeks to create awareness of opportunities in order to enhance the long-term stakeholder value.
The Risk Management Policy is the core of the ERM system, and is reviewed and approved by the Board. The risk management culture has grown and been developed in line with the Company’s core objectives, and also reflects its level of awareness and cautious approach on opportunities and threats. This Policy provides guidance for the management of various business risks, encompassing strategic risks, emerging risks and operational risks across the organisation. It focusses on ensuring that the risks are identified, evaluated and treated within a given time-frame on a regular basis, covering all the key functions of the Company.
The Risk Management Policy lays down the guiding principles and policies, as well as a risk organisation structure for implementation and review. Pursuant to its Risk Management Policy, the Company presents an enterprise-wide approach to ensure that key aspects of risks that have an enterprisewide impact are considered and contained in its conduct of business. This Policy document also serves as a guideline for respective components of risks which resonate uniformly across the Company.
The sudden outbreak of Covid-19 has bought unprecedented threat to human life and lockdown of economic activity across the world. The Company has implemented a short-term continuity plan, taking into consideration regulatory guidelines and employee safety with sustainability of operations. Being in the capital goods market, and supporting various core industrial segments both in domestic and international space, market risks are well diversified and thus mitigated even amid the current economic disruption resulting from the pandemic.
In addition, the Company is responsible for design and implementation of sound Internal Financial Controls over Financial Reporting. The Company has laid down the necessary procedure for the same, and periodically assesses its operational effectiveness by conducting reviews of various Risk Control Matrices. The Control System, and review thereof, provides reasonable assurance that the business is operating in an orderly and efficient manner, including adherence to the Company’s policies, safeguarding assets, and prevention and detection of frauds and errors, if any, along with accuracy and completeness of accounting records and timely preparation of financial information. These are achieved through Delegation of Authority, Policies and Procedures, and other specifically designed controls, and their effectiveness is tested regularly as per the well laid out mechanism and through external agencies.