Atul Ltd 2017-18

141 Note 27.8 Financial Risk Management Risk Management is an integral part of the business practices of the Company. The framework of Risk Management concentrates on formalising a system to deal with the most relevant risks, building on existing Management practices, knowledge and structures. With the help of a reputed international consultancy firm, the Company has developed and implemented a comprehensive Risk Management System to ensure that risks to the continued existence of the Company as a going concern and to its growth are identified and remedied on a timely basis. While defining and developing the formalised Risk Management System, leading standards and practices have been considered. The Risk Management System is relevant to business reality, pragmatic and simple and involves the following: i) Risk identification and definition: Focused on identifying relevant risks, creating | updating clear definitions to ensure undisputed understanding along with details of the underlying root causes | contributing factors. ii) Risk classification: Focused on understanding the various impacts of risks and the level of influence on its root causes. This involves identifying various processes generating the root causes and a clear understanding of risk interrelationships. iii) Risk assessment and prioritisation: Focused on determining risk priority and risk ownership for critical risks. This involves assessment of the various impacts taking into consideration risk appetite and existing mitigation controls. iv) Risk mitigation: Focused on addressing critical risks to restrict their impact(s) to an acceptable level (within the defined risk appetite). This involves a clear definition of actions, responsibilities and milestones. v) Risk reporting and monitoring: Focused on providing to the Board and the Audit Committee periodic information on risk profile evolution and mitigation plans. a) Management of liquidity risk The principal sources of liquidity of the Company are cash and cash equivalents, borrowings and the cash flow that is generated from operations. The Company believes that current cash and cash equivalents, tied up borrowing lines and cash flow that is generated from operations is sufficient to meet requirements. Accordingly, liquidity risk is perceived to be low. The following table shows the maturity analysis of financial liabilities of the Company based on contractually agreed undiscounted cash flows as at the Balance Sheet date: ( ` cr) As at March 31, 2018 Note Carrying amount Less than 12 months More than 12 months Total Borrowings 15 0.01 0.01 – 0.01 Trade payables 19 470.46 470.46 – 470.46 Security and other deposits 16 19.80 19.80 – 19.80 Employee benefits payable 16 24.28 24.28 – 24.28 Creditors for capital goods 16 18.81 18.81 – 18.81 Other liabilities 16 14.86 14.86 – 14.86 Derivatives (settlement on net basis) 0.02 0.02 – 0.02 As at March 31, 2017 Note Carrying amount Less than 12 months More than 12 months Total Borrowings 15 155.23 155.23 – 155.23 Interest on non-current borrowings 0.46 – 0.46 Trade payables 19 329.06 329.06 – 329.06 Security and other deposits 16 19.30 19.30 – 19.30 Employee benefits payable 16 22.56 22.56 – 22.56 Creditors for capital goods 16 18.38 17.99 0.39 18.38 Other liabilities 16 8.79 8.40 0.39 8.79 Derivatives (settlement on net basis) 2.43 2.43 – 2.43 Notes to the Financial Statements