1. Definition

This Risk Management Policy outlines the framework for managing risks arising from the balance sheet, including asset-liability mismatches of SSK Finance.

The objective is to ensure sustained growth, profitability, and solvency while maintaining financial stability.

2. Purpose

• Define scope and responsibilities of Risk Management Committee and ALCO
• Ensure consistent risk measurement and monitoring
• Ensure compliance with regulatory requirements including :contentReference[oaicite:0]{index=0} guidelines
• Align risk practices with lending and operational policies

3. Responsibility

The Board of Directors has ultimate responsibility for risk management. The Risk Management Committee is responsible for execution and monitoring.

• Balance sheet planning from risk-return perspective
• Development of ALM processes
• Monitoring and reporting systems
• Quarterly reporting to Board

4. Implementation

• Annual policy review by management
• Quarterly review of liquidity and interest rate risks
• Monitoring of financial performance vs budget
• Adherence to defined risk limits

5. Primary Objectives

6. Scope

• Liquidity Risk Management
• Interest Rate Risk Management
• Funding and Capital Planning
• Profitability and Growth Projections

7. Liquidity Risk Management

Liquidity is monitored using maturity ladder and cash flow projections as per regulatory guidelines.

Short-term liquidity is monitored dynamically to ensure obligations are met.

8. Currency Risk

Currently, the Company does not have exposure to currency risk. The policy will be updated if such exposure arises in future.

9. Interest Rate Risk

Interest rate risk affects earnings and economic value of assets and liabilities.

• Earnings Perspective: Measured using Net Interest Income (NII) and Net Interest Margin (NIM)
• Economic Value Perspective: Impact on long-term asset values
• Tools used: Gap Analysis, Duration Analysis, Simulation