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.

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 including the key managerial personnel by taking Insurance Polices.

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.

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.  

Periodical forex exposure is reviewed and the conscious decisions are taken to what extent forex transactions are to be covered are kept open. Further all such forex exposures through various instruments like forward contracts, derivatives, etc. are approved by Board and quarterly status are presented to the Board. All such transactions are authorized either by Chairman-cum-Managing Director or Managing Director of the Company.     

The risk management policy covers the extent of risk exposure, measurement and control of risk. It also provides detailed guidelines as to accounting policy and disclosure norms to be complied and the same are highlighted in the Annual Report of the Company. All such outstanding forex exposures are marked to market as per the accounting guidelines issued by the Institute of Chartered Accountants of India and treated as Hedge Reserve and the same are reported to Board periodically. All such transactions are verified by the Statutory Auditors of the Company and duly certified.

In addition to the above referred measures, the Company has set us 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.