Is Risk Management Policy mandatory for private companies? What are the advantages of Risk management ?

The Companies Act, 2013 does not seem to mandate framing of a Risk Management Policy for Private Companies. However, Section 134(3) of the Companies Act, 2013 which provides disclosures to be made in the Board's Report of company, interalia provides that the Board's Report must include a statement indicating 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. As per the above statement, it may be inferred that Companies, including Private Companies are required to develop and implement a Risk management Policy. Advantages of Risk Management: Risk management in the long run always results in significant cost savings and prevents wastage of time and effort in firefighting. It develops robust contingency planning. It can help plan and prepare for the opportunities that unravel during the course of a project or business. Risk management improves strategic and business planning. It reduces cost by limiting legal action or preventing breakages. It establishes improved reliability among the stakeholders leading to an enhanced reputation. Sound risk management practices reassure key stakeholders throughout the organisation.