Describe the definition of Adjusted Net Worth (ANW) and Risk Management as per the revised Guidelines issued by the RBI in August, 2020 for Core Investment Companies.

Adjusted Net Worth (ANW) While computing Adjusted Net Worth (ANW), the amount representing any direct or indirect capital contribution made by one Core Investment Company (CIC) in another CIC to the extent such amount exceeds ten per cent (10%) of Owned Funds of the investing CIC shall be deducted. All other terms and conditions for computation of ANW remain the same. The deduction requirement shall take immediate effect for any investment made by a CIC in another CIC after date of issue of RBI circular. In cases where the investment by a CIC in another CIC is already in excess of 10 per cent as on the date of RBI circular, the CIC need not deduct the excess investment as on the date of RBI circular from owned funds for computation of its ANW till March 31, 2023. Risk Management The parent CIC in the group or the CIC with the largest asset size, in case there is no identifiable parent CIC in the group, shall constitute a Group Risk Management Committee (GRMC). The GRMC shall report to the Board of the CIC that constitutes it and shall meet at least once in a quarter. The composition of GRMC shall be as under: The GRMC shall comprise minimum of five members, including executive members. At least two members shall be independent directors, one of whom shall be the Chairperson of the GRMC. Members shall have adequate and commensurate experience in risk management practices. The GRMC will have the following responsibilities: Analyse the material risks to which the group, its businesses and subsidiaries are exposed. It must discuss all risk strategies both at an aggregated level and by type of risk and make recommendations to the Board in accordance with the group's overall risk appetite. Identify potential intra-group conflicts of interest. Assess whether there are effective systems in place to facilitate exchange of information for effective risk oversight of the group. Assess whether the corporate governance framework addresses risk management across the group. Carry out periodic independent formal review of the group structure and internal controls. Articulate the leverage of the Group and monitor the same. Based on the analyses and recommendations of the GRMC, CICs shall initiate corrective action, where necessary. Chief Risk Officers (CROs), appointed in CICs shall initiate such corrective action. All CICs with asset size of more than ₹5,000 crore shall appoint a CRO with clearly specified roles and responsibilities. CICs shall submit to the Board, a quarterly statement of deviation certified by the Chief Executive Officer/Chief Financial Officer, indicating deviations in the use of proceeds of any funding obtained by the CIC from creditors and investors from the objects/ purpose stated in the application, sanction letter or offer document for such funding.