Risk Management Policy    
Business risk
Commodity risk

We operate in a market in which commodity /raw materials/ finished goods prices are fluctuating. We shall try to mitigate the risk by covering our position through hedging at commodities exchanges like CBOT, REFCO, NCDEX, NMCEX and such other commodity exchange.
Concentration risk

In order to mitigate risk of putting all eggs in one basket, we derive our revenues from multiple products, various customers across geographic regions and industry domains. Thus we shall endeavor to remain diversified while still remaining focused on the Agro processing
Competition risk

We operate in a highly competitive market and expect competition to increase further in the future. We always strive meet the challenges by satisfying our customers by offering wide range of products with the right quality at right time and with better services and after sales services.
International operations risk

The inherent risks in conducting business internationally include:
- country-risk or the risk of the region that we operate in, changes in politico-economic conditions, laws, or regulatory requirements.
-Country-specific tax obligations.
-Trade barriers and import/export licensing requirements.

For meeting such risk we shall avoid high-risk countries and even if we do business with such countries we shall reduce / hedge our risk by taking third country LC
Insurance

In order to reduce and mitigate identifiable risks, we shall have various insurance covers from reputed insurance companies and shall keep the company’s properties and insurable interests insured. Besides wherever it is cost-effective we shall also hedge against the loss of profit by taking appropriate Insurance cover.

We shall also cover risk of our Human resources includingthe key managerial personnel by taking Insurance Policies.
 
Financial risk
Credit risk

We shall have laid down extensive norms related to credit period and payment terms and device a credit approval process. In addition to continuously appraising our existing and new customers, we shall have an internal rating mechanism, which seeks to rate/classify existing and new customers.

The mechanism shall assign respective grading on the basis of which credit period, payment and other terms shall be decided.
Treasury/foreign exchange risk

We continue to expand our business globally. A significant percentage of our total revenue approx. 40-45% comes in foreign exchange, which makes it crucial to monitor movements in the forex market.

Managing the risks from foreign currency rate fluctuations is the prime function of our finance and treasury department. We shall always keep a close watch on forex market and its trend and do daily review and analysis and take positions accordingly.
System of risk management and internal control

In addition to the above referred measures, the Company has set up a policy, which includes a review and assessment of the risk management system and risk profile for both financial and non financial risks.

We have set up an effective internal audit function, independent of the external auditors, to review the effectiveness of the risk management system.

Audit Committee of the Board oversees the risk management and internal control systems. This system is designed to identify, assess, monitor and manage risks and inform investors of any material changes to the Company's risk profile from time to time.
 
 
 
 
Home |About Us | Contact Us | Site Map
Copyright © 2006 Gujarat Ambuja Exports Limited.