ABB India Ltd Management Discussions.

Economic and market overview

2021 was a year which could be divided into two contrasting halves. The first half witnessed the second wave of the raging pandemic with a sharp increase in cases and localized restriction of activities and lockdowns. The start of the vaccination drive in the country did initially lead to a momentary recovery, however, the resurgence of the virus across the globe brought in renewed market uncertainty and unpredictability right at the end of the year.

The second half of the year was marked by a strong recovery. The experiences of 2020 in managing the pandemic were used by various sectors. The market recovered in India with improving macro backdrop, decreasing case load and global recovery. Customer- connect was enhanced as travel and service had resumed and the movement of goods internationally made export prospects more robust. However, issues of shortage in select commodities like plastics and semi-conductors impacted global and local supply chains.

The Government continued its efforts in mitigating the impact of the pandemic. The recovery witnessed the revival of industrial production in select sectors as per various indicators. Several high frequency indicators like E-way bills, rail freight, port traffic, GST collections and power consumption demonstrated a V-shaped recovery during the year. Mining, manufacturing, and electricity sectors recorded double digit growth over significant declines during the period in 2020.

The Government had also announced the production linked incentive (PLI) scheme worth USD 26 billion for 14 key sectors. These included sectors like telecom and network products, semi-conductors, automotive and auto components. The year also witnessed the launch of the National Master Plan - Gati Shakti for multimodal connectivity infrastructure development. This would be complementing the existing push for infrastructure development by the Government with a digital platform - bringing 16 ministries including Railways and Roadways together for integrated planning and co-ordinated implementation of infrastructure connectivity projects.

Like previous year, the central bank intervened with proactive measures to maintain financial stability and fight inflation in pandemic times. The gains from Indian bourses, for most part of the year (six months plus), outpaced that of emerging market indices. The same was the story with the Indian Rupee; while it remained range-bound and performed well in the beginning of the year, the FI I sell-offs towards the end of the year, a steady dollar rebound and high moving crude prices, kept it under considerable pressure. As per the first advance estimate of GDP by the Ministry of Statistics and Program Implementation, the GDP figure is almost set to touch double digits for FY22. In the first half of the fiscal, India attracted USD31.1 billion of FDI equity inflows, up 4% year-on-year.

The company continued its focus on solid growth fundamentals whilst reinforcing highest ESG standards with resilience. The Company also took measures to take care of the health and safety of employees with a Pan-India vaccination program, navigating the second wave with all possible resources deployed for employees, partners, suppliers wellbeing, and a sharp focus on mental health. The Companys agile business model and portfolio ensured conversion of opportunities during the recovery period of the second half. This was ensured by deploying digital technologies for business continuity and strict adherence to working protocols to ensure employee health and safety. Cost efficiency programs together with strategic investments for new facilities, product launches, and launch of online business models supported our growth.

Operational overview

The contrasts and volatility of 2021 tested the agility and resilience of existing corporate business models across sectors and geographies. The advent of another wave was on the anvil from the last week of the year. The company balanced its focus on employees, partners well-being while navigating business continuity and cost and cash management.

The central and the location taskforces for Covid-19 management deployed a multi-pronged strategy under the guidance of the country management. Relevant information advisories, online repositories were created for quick access. Teams were created to facilitate access and source medical resources from hospital beds to concentrators. Employee Assistance Programs and various mental health awareness initiatives were launched to engage and comfort employees across locations. Adjustments in operations were made to ensure one complied with various local Government protocols on Covid-19 management including micro- localized lockdowns. Simultaneously, the CSR and community outreach teams also ensured ABBs support to various community initiatives across locations with funding as well as required resource addition in kind, to add to existing medical infrastructure.

ABBs portfolio of sustainable technology solutions was deployed across a wide range of sectors, rendering efficiency & productivity during the year. For instance :

• ABBs soft starters minimized water wastage in Shimla

• Our electrification solutions and water flowmeters optimized water distribution in the city of Surat

• The companys energy efficient drives were commissioned for Bharat Biotech, the pharma major and leading vaccine manufacturer; the companys HVAC drives also contributed to the Chennai Metro project

• ABBs robotics solutions will be an integral part of OLAs new mega electric scooter factory driving sustainable and efficient solutions

• ABBs electromagnetic braking system deployed for Tata Steel

• Remote commissioning of modernization project for leading paper manufacturer Bilt Graphic

• A large order won by the energy division for the second largest lube plant in the world

ABBs automation solutions continued to partner the industrial growth journey of the nation.

The focus on identified high growth segments also yielded results. Multiple data centers in Indian cities installed ABB GIS, e-houses, switchgears and other low and medium voltage equipment. In power distribution, ABB digital compact secondary substations (CSS) powered smart cities like Indore and tunnels for the Rapid Transit system. Partnering the clean energy drive of the nation, ABBs SCADA and RTU for City Gas Distribution (CGD) network for a diversified energy major is in the process of being deployed in 7 states, which will facilitate the shift to a cleaner gas-based economy. The doubly fed induction generators remain the heart of wind energy systems across the country. Another sector in focus is the Food and Beverage (F&B) sector where ABBs robotics solutions, including the end of line palletization ones, significantly contributed.

While serving our customers, the Company worked tirelessly to maintain the highest level of safety and sustainability in our processes. With our focus on safer operations, we have improved in our hazard reporting and thus have shifted focus to resolving them to the tune of 98.1 percent in 2021. To inculcate a culture of safety vigilance, Safety Observation Tours (SOTs) are encouraged as a practice by employees. The numbers of SOTs per employee more than doubled, helping us reduce our total incident rate. On the environment front, ABB India operations have been successful in recycling ~95 percent of its waste, freshwater usage has been reduced by 25 percent from previous year and we have sourced 43 percent of our power from green energy. 2021 was also the year of multiple green infrastructure projects. Walking the talk on sustainability, we shifted to a new country and business office building- Al-enabled Disha, which was upcycled from an existing building to a state-of-the-art energy efficient building. It was also the first installation of ABBs integrated building management systems potentially saving ~25percent of energy. The Nelamangala manufacturing campus in Bengaluru became water positive, certified by TERI and was also given the platinum LEED rating by IGBC. Peenya campus and Disha building also received gold LEED rating.

In 2021 despite the pandemic impact, the Company was able to leverage the rebound in the market to a large extent. The orders were at INR 7,666 crore - a growth of 29% over 2020. The Company posted a revenue of INR 6934 crore, growth of 19 percent over 2020, leveraging ABBs portfolio offerings and digital technology leadership in growth sectors like F&B, datacenters, transportation, energy efficiency, building automation, etc.

Profit after tax was at INR 532 crore in 2021 compared to INR 230 crores in 2020. Consequently, the earnings per share for 2021 stood at INR 25.13 per share as compared to INR 10.87 per share in 2020.

Operational excellence

2021 was the year when the ABB Way model of working got further consolidation with each of the our divisions taking full ownership and accountability for their respective strategies, performance and resources. Together with our common values, strong brand and governance framework, the ABB Way will continue to lead the Company to become a more focused, successful, value-creating organization.

In 2021, in a major drive towards green power enabled manufacturing, our Faridabad facility which ramped up manufacturing of low voltage motors, was powered by 100% renewable energy.

While virtual trainings and webinar sessions continued through the year, a virtual customer connect program, led by Process Automation and joined in by other business areas, was organized in the north eastern region of the country. Embedding sustainability and ABB Purpose across business areas was the guardrail while striving for excellence.

The Company during the year also completed the last leg of the demerger of the Power Grids business. Also, aligned with the global decision for a more focused portfolio, the year witnessed the completion of transaction on the divestment of Mechanical Power Transmission business and Board approval for creating a wholly owned subsidiary for turbocharger business.

Outlook

The pandemic situation continues to be uncertain, being driven by the variants of the virus. However, the large- scale vaccination programs - touching 70% of the adult Indian population with both doses, subsequent booster doses, and the start of vaccination for the younger populace would be a key factor in gaining confidence in the fight against the virus. Other significant factors to watch out for would be supply chain concerns and possible easing out, inflation, demand revival led by pandemic recession and the elections across five states.

Government initiatives like self-reliance in marketing, production linked incentives to encourage greater localization as well as stimulus packages for greater job creating sectors are likely to continue. The focus on infrastructure, transport, water and waste-water, urban planning, and affordable housing are expected to continue their multiplier effect. The resilient nature of certain segments and industries is reflected in the signs of revival witnessed in some key segments like datacenters, renewables, electronics, F&B and pharmaceuticals. Some end markets, particularly conventional power generation, mining and steel continue to witness short term stress. Global volatility in trade balances, easing of monetary policy pressures, capital expenditure specially to improve supply chains, with its impact on inflationary pressures, currency and commodity price movements will be closely monitored.

The Company has identified and worked on these areas of high growth mentioned earlier, which has paid dividends. ABB India will continue its value-based engagements with the customers, focus on order wins and seamless execution across projects while looking at modernization of existing capacities and adopting digitalization.

Electrification Summarized performance:

(Rs in crore)

Particulars* 2021 2020
Orders 2,725 2,325
Order backlog 1,316 1,316
Revenue 2,752 2,222
Results (Profit before interest & tax) 306 234

Segment performance

Electrification business continued to enforce segment strategy with dedicated resources to capture opportunities in the changing market dynamics. Despite the impact of Covid-19, segments continued to provide a consistent pipeline of prospects and growth. Segment application- specific webinars helped the Company in greater customer engagement and follow-up on the customer-centric activities. Strong growth in segments like railways, buildings, datacenters, e-mobility amongst others, only reinforces our commitment to address and invest further in these high growth segments.

The businesss digital sales also saw a deeper penetration in segments like O&G, utility, and industry in general. ABBs eMart, an online marketplace is evolving with more features to enable customers from B2B and B2C environments to get access to our products and technology remotely. We continue to invest in an end-to-end approach with customers and focus on bringing the latest in electrification technology and innovation to the entire customer value chain.

Major orders booked during the year:

• New Product ConVac supplied to various panel builders, introduced vacuum circuit breakers with HCEP insulators

• Breakthrough order for supply & installation of 33kV GIS Substation (E Houses) including associated Civil works for Hyperscale Data Center in Noida

• First order of New product ‘Prime Gear 11kV GIS for 33/11 KV Substation in Varanasi (Honorable Prime Ministers Constituency)

• Order for IS Limiter from Indias largest car manufacturer

• Bagged various orders for home charging solutions luxury Car OEMs and AC & DC EV charger orders from the biggest Charge Point network operators in India

• Order for LV panel up-gradation from NTECL (NTPC Tamil Nadu Energy Company Limited)

• First order for the supply of 25kV GIS for first Semi High Speed Rail project in India

• First order for state-of-the- art MNS LV Switchboards for Metro segment (Kolkata Metro)

• Bagged significant orders for AIS, MV & LV Service from one of the leading Mining companies (Vedanta) in Odisha

Major orders successfully commissioned/supplied during the year:

• Successfully commissioned AIS for Kanpur Metro inaugurated by Honorable Prime Minister in DecRs.21

• Proud to be associated with Indore Smart City Development to support Indore Smart City with our next-generation digital technology of Compact Secondary substations (CSS), enabling continuous electricity supply to 2300+ homes and businesses

• ABB supplied Soft starters helped Shimla to get access to uninterrupted water supply

• Successfully retrofitted & commissioned LV Switchgears in South Indias Glass Manufacturing Plant

• Successfully installed AC & DC Electric Vehicle Chargers by our Charge Point operators from Leh in the north to Madurai in the south and from Surat in the west to Arunachal Pradesh in the east

• Successfully installed & commissioned MV AIS, RMU and Transformers catering to the first phase of a data center development in Hyderabad

Segment outlook

Reinforcing segment strategy with dedicated resources to capture opportunities in the changing market dynamics. Strong focus will continue in high growth segments viz. Datacenter, F&B, Renewables, Rail, Buildings & e-mobility. The dedicated end user focus & continued emphasis on customer proximity through eMart and customized webinars will help the business grow.

Motion

Summarized performance:

(Rs in crore)

Particulars 2021 2020
Orders 2,878 2,314
Order backlog 1,785 1,505
Revenue 2,592 2,238
Results (Profits before interest and tax) 324 242

Segment performance

In 2021, the Motion business area witnessed a period of resilient growth, marked by several key opportunities and milestone projects that set the business on the road to recovery. There was a strong turnaround in the major industrial sectors as the economy showed signs of revival, aided by significant progress in vaccination, targeted fiscal relief, and monetary policy. However, challenges persisted, due to the volatility of the pandemic situation and the Motion business was prepared to successfully navigate through the ups and downs last year. Robust growth in Channel Partner business and export orders improved the topline. Motions Channel Partner business surpassed the 1,000-crore milestone for the first time in 2021. Exports were at an all-time high with a record growth of 114 percent over the previous year. Package orders booked till the end of December 2021, formed 12 percent of the total third-party orders.

Sustainability continued to remain a key priority for the business. Last year, the Motion business area launched its global flagship Energy Efficiency Movement in India, a multi-stakeholder initiative to raise awareness and initiate action to combat climate change.

Major orders booked during the year

• Bagged a major order for delivering 149 units of wind generators

• Won an order worth from a steel major for a blast furnace project

• Delivered all in one drive solution to Stelis Biopharma in Bangalore, to ensure safe and reliable vaccine manufacturing

• Received an order for 33 sets of Propulsion Equipment from Chittaranjan Locomotive Works

• Supplied active front-end variable speed drives (VSDs) to support the ventilation system of the Chennai metro line, Indias fourth-largest metro system

• Major order from Knorr-Bremse Group to supply 200 units of ACS560 drives for Pune metro line

• Received an order from Megha Engineering for a water project

• Won a strategic order from a cement major for greenfield cement projects

• Received the first major order for 1000 motors from Bangladesh

Key project commissioning, milestones, and product launch during the year

• Commissioned ACS560 drives at Bharat Biotechs facility in Hyderabad, for the safe manufacturing of Covaxin

• Sharpened portfolio focus with the expansion of Faridabad facility, adding two new products - the flameproof and M3BP motors

• Rolled out the first high voltage pressurized motors for explosive areas for chemical and oil and gas segments from the Vadodara factory

• eMart marked its first-year anniversary, by recording 26X growth in organic users since its launch.

Segment outlook

Metals, cement, water and wastewater, food and beverage, and pharmaceutical segments outperformed, but oil and gas faced a challenging period. In 2022, material availability might take time to ease out, but the markets are expected to stay robust. With a clear focus on growth, quality, and sustainable product offerings, the Motion business area is well-poised to meet its business KPIs.

Process Automation

Summarized performance:

(Rs in crore)

Particulars 2021 2020
Orders 1,933 1,208
Order backlog 1,744 1,219
Revenue 1,403 1,285
Results (Profits before interest and tax) 128 57

Segment performance

With the slowdown in economy, the businesses were required to scale up their efforts to leverage the limited potential and make up for the demand slump. While the concerns around the third wave looms, there was a pickup in the business demand with the receding second wave and relaxations for businesses. Sustainability continues to be a key focus area for Governments, companies, communities, and individuals. Companies like ABB have committed to reduce carbon emissions consistent with the UN Sustainability Development Goals (SDGs).

Digital became the new normal with teams offering remote support to customers, commissioning projects remotely, and even conducting FATs remotely. Travel restrictions also had an impact on service performance while to some extent exports contributed to revenue conversion.

Investments gained traction in Cement, Mining and Mineral Processing industries. Planned projects continue to move ahead, with some delays owing to the pandemic. Steel, a vibrant sector historically, witnessed a 25 percent rise in production in the first eight months of 2021. Cement sector, though, faced headwinds registering a negative growth in Q2 but gradually picked up ending the year on a strong note. The year was marked by order growth of Energy division in key segments like oil & gas, specialty chemicals, life sciences and gas/liquid transportation and distribution. The division also won a large order for the worlds second largest lube plant.

Major Orders won

• Secured an order from a leading paint maker for Control & Instrumentation Package helping the company achieve higher efficiency and productivity improvements

• Bagged a large order from oil and gas major for an Integrated DCS & ESD System enabling seamless control and monitoring for the assets

• Major automation order from a leading pharmaceutical company for setting Pharma 4.0 systems in a greenfield project, supporting the customer in meeting strict FDA norms for manufacturing of API and drugs

• Secured Turbo Marine Care service agreement contract for 5 years with Bernhard Schulte Ship management company

• Secured service agreement contract with Vedanta Limited (Cairn Oil & Gas) for turbochargers installed at their facilities

• Electricals package for a leading minerals processing player at Lanjigarh, Alumina Refinery expansion project

• Motors, Drives and Automation package for market leaders of stainless steel in India for their Annealing and Pickling line

• The company completed melt shop digitalization project with JSW Steel at their Dolvi works plant boosting productivity and profitability

• The Company commissioned digital platform integration for Sunflag Steel to enable better metals plant decision making

Segment outlook

As the economy slowly opens, businesses are expected to recover gradually, even though initially at a slow pace, with some segments are picking up faster than others. Government of Indias push on infrastructure projects like Smart Cities, Housing for All, Highways and Airports is driving the demand for steel and cement. The manufacturing sector looks promising especially with Government-led initiatives for steel sector and other policy reforms. Policy support like 100 percent FDI in select sectors, National Steel Policy, and favorable equipment and machinery import policies are likely to boost domestic production in steel and mineral processing industry. Data center industry is expected to grow at a CAGR of 12 percent due to Digital India initiative and Investments from colocation service providers for BFSI, ecommerce, transportation sector, and mobile service providers.

Industries are slowly opening up to investments in digitalization with focus on improving productivity, reliability, energy efficiency and safety. Digital solutions therefore is also expected to play a larger role in demand recovery. Industries are also looking at digital transformation to prepare well for such unexpected disruptions and bring more modularity and agility to operations. In the utilities segment, energy transition, management and energy stability are likely to continue as the key drivers of growth.

Robotics and Discrete Automation Summarized performance:

(Rs in crore)

Particulars 2021 2020
Orders 259 147
Order backlog 132 128
Revenue 255 155
Results 20 5

Segment performance

The demand for flexible robotic automation solutions remained strong during the year. Customers invested both in new manufacturing programs and the ones that were suspended due to the pandemic. Many customers also invested in capacity and productivity enhancement measures involving industrial robots.

Automotive manufacturers and component suppliers who account for the major share of the business showed an increase in demand. Food and Beverage, consumer segments and pharmaceutical customers continued their investments during this period towards modernization of capacities for productivity and efficiency.

Consumer electronics segment is showing strong growth potential with customers investing in robotic automation and creation of new opportunities due to relocation of manufacturing to India.

Major orders booked during the year:

• Welding and Painting systems from 2-Wheeler OEM

• Capacity increase and refurbishment of existing production line of a major Auto OEM

• Robotic automation of production sites of a major multinational consumer goods company

Segment outlook

Automotive demand from Electric Vehicle will continue to remain strong. Food and Beverage, Consumer goods and Electronics segments are showing strong signs of growth. Manufacturing activity in metals and plastics segment are expected to remain stable.

Human Resources

First quarter of 2021 witnessed the second of wave affecting people pan India. The company was required to put in concerted efforts, very quickly, to prioritize employee wellness and safety. Tie-ups were created with hospitals at a local level to facilitate medical attention, medical infrastructure was ramped up to provide immediate attention to employees or their families in case of any urgent need. Enough resources were mobilized to ensure that there were oxygen concentrators, cylinders, medical vans/ taxis to provide emergency support to the employees. Employee volunteer groups were created at each location as an additional layer of support for impacted employees and their families.

In parallel, the company focused on running pan India vaccination drives, to safeguard its employees and their families. As on date, more than 97 percent of our employees are vaccinated with both doses.

The Human Resource function also supported the families who lost their loved ones to the pandemic, through a comprehensive support package. Besides ensuring support to continue operations safely during the lockdown, the function also ensured continued enhancement of flexible options for employees to work from home or remote locations while keeping safe.

The company continued its D&I journey with increased participation of women in the work force. In 2021, we also expanded the focus from Gender diversity to include LGBTQI+, special abilities, generational diversity, and ethnicity. We continued to focus on running ‘Interrupting Unconscious Bias workshops for our managers and initiated the awareness on LGBTQI+ for senior leaders. The team also conducted multiple ‘Disability Awareness Workshops for its leaders. As a part of its commitment to further foster an atmosphere of Diversity and Inclusion, the team also designed a unique mentoring program called "With her beside her" by collaborating with the CSR team and Lila Poonawalla Foundation team. The program aims to provide ABB mentors an opportunity to support meritorious, underprivileged young students to better navigate the business landscape, the social challenges, develop and leverage their talents, and step into roles of greater influence. The year also saw the preparation for the eventual launch of a gender-neutral parental leave policy, that additionally provides the option for paid leave to the secondary care giver too, to take time off and take care of the young ones.

The company continued its focus on the development of employees through multiple programs ensuring around 2.4 man-days training per person. Right from soft skills program to specific leadership program for our top talent, the Learning and Development focus continued alongside. E-enabled learning ensured continued learning, providing employees with the option to opt for the relevant program at the time/day of their choice. One of the key initiatives for the year was the "Manager as Coaches" program, which aims to create an inclusive leadership mindset.

We continued to attract and hire top talent from the market. Multiple engagement activities were run virtually for employees through the year, and it was reflected in the positive score on the annual global engagement survey. More than 88 percent of the employees participated in the survey and ABB India engagement score moved up to 80 percent, 6 percent ahead of the global average. Employees rate ABB India very high in the areas of integrity, safety, pride, role clarity, customer focus, its response to pandemic and how ABB genuinely cares for its employees.

Finance

The prolonged second wave of pandemic did have its impact on the financial situation in the market. Leveraging our very strong and relevant portfolio, brand image & robust operations, the Companys reputation in the market and long-term goodwill with leading banks ensured advantageous arrangements of various finance facilities. During all the months, the company was able to manage a positive cash position to fund its operations as well as meet the capex and carve out costs of Power Grid business segment. Also, during the current year, taking into cognizance the healthy cash situation, the Company reviewed its current investment practice and entered into better yield options for longer tenor from the most secured options that were approved by the Board. In 2021, the interest cost borne by the Company was INR 10.7 crores compared to INR 16.9 crores in 2020. As of December 31, 2021, the Company had the net cash balance of INR 2,688 crores. In terms of foreign currency exposure - for imports and exports - the Company continued to conservatively hedge at the point of commitment to protecting the contract margins.

Key Financial Ratios 2021 2020
(i) Debtors Turnover 3.88 3.20
(ii) Inventory Turnover 7.50 6.84
(iii) Interest Coverage Ratio - -
(iv) Current Ratio 1.63 1.55
(v) Debt Equity Ratio - -
(vi) Operating Profit Margin (%) (Note - 1) 10.35% 5.26%
(vii) Net Profit Margin (%) (Note - 1) 7.50% 3.77%

(i) Debtors Turnover

It is calculated by dividing turnover by average trade receivables.

(ii) Inventory Turnover

It is calculated by dividing turnover by average inventory

(iii) Interest Coverage Ratio

Not Applicable, as the Company did not have any borrowings in the current and previous year.

(iv) Current Ratio

It is calculated by dividing the current assets by current liabilities

(v) Debt Equity Ratio

Not Applicable, as the Company did not have any debt in the current and previous year.

(vi) Operating Profit Margin (%)

It is calculated by dividing the PBIT by turnover.

(vii) Net Profit Margin (%)

It is calculated by dividing the profit for the year by turnover.

Note - 1

Higher in 2021 mainly on account of exceptional and one-off items as explained in the notes to the financial statements. Also, 2020 performance was impacted by pandemic.

Internal control systems and Integrity

internal Controls has been a key focus area of the company during the year. internal Controls in the Company has been designed to further the interest of all its stakeholders by providing an environment, which is conducive to conduct its operations and at the same time putting in the appropriate checks & balances. In doing so, the Companys Internal Control environment has evolved over a decade to take care of, inter alia, financial and operational risks. The organization has a holistic Internal Control framework comprising of elements like Country Management Committee, Corporate, Business & Local authorization tables, Local Management instructions, Process and Entity- Level Controls, Enterprise Risk Management, Local Direct Management Testing Programs, and a strong emphasis on integrity and ethics as a part of work culture. Aligning with the global reporting structure, the Company has implemented a related Assurance process for every business which establishes the ownership & accountability of the financial statements at every business level. An independent service provider, having expertise in the field, has performed current years Internal Financial Control effectiveness testing. Effective Statutory & Legal Compliance System is in place in the Company.

A well-organized Group level tool (GRCM) is available to handle testing, internal audit issues, deficiency tracking, etc. Further, the in-house independent internal Audit team acts as a pillar to support our control objectives. ABB India also has a well-functioning Whistle Blower Policy in place to report any misdoing. internal Control framework of ABB India is aligned with one of the most matured IC frameworks - COSO 1992 and then transitioned to COSO 2013. The current framework is also in line with the Internal Finance Control (IFC) requirement of The Companies Act, 2013.

Risk management

The Company has a robust Risk Management Charter and Policy, which provides an overall framework for Risk Management (RM) in the Company. The key elements of the companys risk management framework have been captured in the risk management policy, which details the process for identifying, escalating, prioritizing, mitigating, and monitoring key risk events and action plans. The assessment of the risks covers areas of Strategy, Technology, Finance, Operations and Systems, Legal & Regulatory and Human Resources. There are appropriate assurance and monitoring mechanisms in place to monitor the effectiveness of the risk management framework including the mitigation plans identified by the management for key risks identified through the risk management exercise. In addition, the company also has a Risk Management Committee which reviews the analysis of ERM (Enterprise Risk Management) exercise done by the Company and provides necessary guidance on its implementation and monitoring.

The Companys existing framework provides for risk reviews at various levels based on companys organizational structure matrix. Periodic assessment of risks, potential impact relating to business growth, profitability, talent engagement, and market position are conducted. Response to key operational risks, based on inputs received from the internal and external assessment, internal audit, performance review etc. are done on a regular basis.