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Risk Management Structure
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GTL’s risk management structure conforms to the requirement of Clause 49 of Securities
and Exchange Board of India’s circulars.
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An integrated risk management system continuously identifies monitors and manages
GTL’s risks. The audit committee of the Board provides the overall policy guidelines.
This committee also conducts periodic reviews of GTL’s risk management policy, while
the Board monitors GTL’s risk management through quarterly risk reports.
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Risk Management Framework
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GTL benchmarks its risk management practices to global best practices, as laid down
by COSO, The Committee of Sponsoring Organizations of the Treadway Commission (www.coso.org).
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GTL has an internal risk reporting and control system for each of its business segments
and subsidiaries, to ensure continual and transparent monitoring.
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Click on the links below to know more...
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Credit risk |
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GTL has in place an extensive credit evaluation and appraisal process. An internal rating mechanism grades and sorts existing and new customers that helps to decide the payment terms with various customers. |
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Treasury/foreign exchange risk |
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An increasing proportion of GTL’s business is in currencies other than Indian rupees. A significant percentage of GTL’s total revenue is linked to foreign exchange fluctuations. If the rupee becomes stronger relative to other currencies, GTL may lose the competitive advantage of low cost of delivery, affecting its revenues and margins. As a policy, GTL takes positions in foreign currency markets only to hedge its receivables. Wherever applicable, high cost borrowings are swapped with lower interest loans. |
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GTL’s cash reserves comprise of substantial assets in foreign currencies and thus it faces risks associated with exchange rate fluctuations and translation. |
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GTL has investments in liquid mutual funds, money market and other interest bearing instruments, which are subject to fluctuations in interest rates and consequent changes in the yield. It also has invested in equities and equity related instruments which are subject to volatility in the stock markets. |
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Liquidity and leverage risk |
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GTL’s large cash reserve balance and capital gearing imply low liquidity and leverage risk. |
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