in a Dynamic Environment - Domain-b

The Company’s ability to bid for largevalue, complex global engagementsrequiring IT partners that are capable ofserving the customer 24x7 from differentparts of the world Consolidation of vendors by largecorporations to fewer Tier I players withglobal scale as they drive greater valuefrom their IT investments Increased focus on cost reductions andoptimizing operations among globalcorporations creating greateropportunities for the Company’s ‘FullServices Offerings’ leveraging ourGNDM TM Opportunities in emerging areas like‘Green technologies’, Analytics, SecuritySolutions.2. Risks and Risk MitigationThe Company has put in place an EnterprisewideRisk Management (ERM) process andreports are put up to the Board of Directors atregular intervals. The Company believes that ithas robust and “fit for purpose” riskmanagement processes in place. Some of themajor risks and concerns and risk mitigationplans the Company has identified are as follows:2.1 Macro-Economic Risks During the last financial year, the globaleconomy was subject to great turmoil.The crisis in the financial sector led to alower confidence in financial marketsleading to a global credit crunch. The pastyear has seen some of the fastest andsharpest falls in both the financialmarketplace as well as the industrialeconomy. According to InternationalMonetary Fund (IMF) World EconomicOutlook 2009, the advanced economiesdeclined by 7.5 percent in real GrossDomestic Product during the thirdquarter of the last financial year.Although the U.S. economy was amongthe hardest hit, the crisis also had itscascading effect on economies in bothWestern Europe and Asia. The cascadingeffect on the emerging economies waspartially driven by low confidence onthese economies resulting in capital flightfrom these economies to developedeconomies and contraction of globaltrade. The uncertainties in the marketsled to significant volatility in exchangerates as well as commodity prices These events led to a set of rapid fiscaland monetary policy responses fromgovernments across the globe. Responsesincluded fiscal stimulus packages acrossvarious economies, coordinated efforts bycentral banks worldwide to lower interestrates, injection of liquidity into financialmarkets including quantitative easing IMF indicates that overall world economicgrowth is likely to decline by 1.3% in 2009and would recover in 2010. However, thegrowth and revival process is expected tobe slow. However, the Indian and Chineseeconomies are expected to grow at 5%and 7% respectively during 2009 As a result of the global recession, marketrelated business and credit risks withclients in some industries and countrieswhere we conduct business operationsare expected to rise There has also been a rise in protectionistsentiment in many countries which arelooking to impose tariff and non-tariffbarriers affecting companies in the IndianIT industry. Some initiatives to curbmobility of IT professionals have beenintroduced in the US. The Company isfollowing the events closely to determinethe impact, if any, on its operations.To address these risks, the Company whichalready has a wide presence both in developedworld and in emerging markets has taken thefollowing steps: Increasing the breadth and depth ofservice offerings and penetration of newcustomer accounts and markets tocombat slowdown in some customersegments To counter possible protectionisttendencies by other countries, theCompany is refining the business modelto reduce the amount of work atcustomer locations and move work toother remote locations and hiring of morelocal nationals in key markets to ensurecontinuity for customers.2.2 Financial Risks2.2.1 Currency Fluctuations related risks Volatility of the Indian Rupee has had bothpositive and negative impact on the ITindustry in fiscal 2009. This trend maycontinue in fiscal 201061