Risk Management Policy

 
The Company's primary business activities are investment activities comprising of long term investment activities i.e. Long Term capital and Strategic Investments and Short Term Investment activities i.e. Trading Investment. Besides, the Company's business activities also include lending activities. The Company makes investments in Primary and Secondary Market directly as well as through, Mutual Funds and Portfolio Management Services etc. The Company is also into real estate development activity directly as well as through local developers, which includes the development of land, construction of building for commercial and residential purpose, development of business centers, townships, and infrastructure facilities etc. Investment business is always prone to various risks i.e. risk of capital market fluctuations, global developments, competition risk, interest rate volatility, economic cycle and political risks which can affect the fortunes of investment companies in both ways.

To manage the risk associated with investment, Lending and Real Estate Activity, the Company is following a sound and prudent risk management policy. The aim of the policy is to minimize risk and maximize the returns.

  • The Company shall hold its existing investment for Long Term in the Promoter Stake of Group companies which provide the right of management of the Group Companies, irrespective of volatility in the capital markets. In respect of investments other than group companies, the Company is following medium risks and medium returns policy
  • The Company shall be making investments in an optimum blend of securities consisting of Equity Shares, Preference Shares, and Debt Instruments like Corporate Bonds, Mutual Funds, and Debt Securities etc. However, the actual composition of securities will depend upon the prevailing market conditions, opportunity available and risk factors associated with those securities.
  • The Company shall be making investments in Mutual Fund Schemes of different maturity periods ranging from one to five years. Before making the investment whether short term or long term, the scheme is duly scrutinized by the Investment Committee considering all the pros and cons of the scheme and only after its approval the investment is made
  • he company shall extend Loans, secured as well as unsecured, mainly to individuals and entities associated with Nahar Group. Interest rate and security will be main considerations, while extending such loans.
  • The company shall also be doing Real Estate Business, with long term perspective as well as for property trading. Company will follow very stringent and high safety norms for selecting the property besides higher profit margin and lease rentals available.
  • The Company shall employ Senior Management Key personnel of top caliber and educated and experienced staff to conduct its various day to day NBFC activities and will continue employing the same in future also as per the requirements of the Company. The Company will encourage its managerial personnel to attend various training and educational seminars to have themselves updated with the knowledge of latest developments in the market.
  • The Company will try to diversify its investment in different regions within India and also out of    India to have better returns with lesser risk, as per the opportunities available in the market.
 
Risk Mitigation Measures
For risk management to be effective, all operations must apply the following measures to the Context of their particular business and its objectives:

Risk response is a process by which the management evaluates and adopts mitigation measures. This should also involve assessment of costs versus benefits of the proposed measures and degree to which the response will reduce impact and/or likelihood of risk events.

  • Control activities are the policies and procedures in place to ensure that risk mitigation measures agreed are implemented.
  • Information & communication activities ensure that all staff are familiar with risks Identified and mitigation measures and plans. This helps in successful implementation of risk responses.
  • Monitoring helps determine the effectiveness of the processes, technologies and personnel executing risk management. To the extent, monitoring should be in-built to on-going monitoring activities, operational, procurement and financial. Where required, separate evaluations of the risk management process could be carried out to address any special
 
Sectoral Limits
Company has a disciplinary approach for sectoral investments/lending having the exposure to (i) Real Estate, housing sector other than for own use and/or business activity Up to 15% of Owned Funds, (ii) unquoted shares Up to 5% of Owned Funds, (iii) Lending Activities up to 20% of Owned Funds and (iv) any other sectoral limit prescribed by Reserve Bank of India for our company.

After identifying the hazards and the factors contributing to their occurrence, prioritizing your goals, to either reduce the probability of the risk occurring and/or to limit the impact of the risk is the first of a two-part process. The second part is to determine what steps will accomplish the above priorities and implement a realistic plan that keeps your personnel and property safe. The experts at Risk Management Committee can add the crucial local intelligence that can significantly reduce the risks associated with operating a global business in less than ideal environments

This policy is a statement of the overall approach to risk management for investment, Lending and real estate business. The overriding purpose of risk management is the responsible achievement of the company’s objectives.

The policies may be changed or altered keeping in mind the new developments and market conditions.