Atul Ltd 2017-18

Atul Ltd | Annual Report 2017-18 Note 29.8 Financial risk management Risk Management is an integral part of the business practices of the Group. 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 Group has developed and implemented a comprehensive Risk Management System to ensure that risks to the continued existence of the Group 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 inter-relationships. 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 Audit Committee and the Board periodic information on risk profile evolution and mitigation plans. a) Management of liquidity risk The principal sources of liquidity of the Group are cash and cash equivalents, borrowings and the cash flow that is generated from operations. The Group 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 Group based on contractually agreed undiscounted cash flows as at the Consolidated Balance Sheet date: ( ` cr) As at March 31, 2018 Note Carrying amount Less than 12 months More than 12 months Total Borrowings 17 15.91 15.91 – 15.91 Trade payables 21 459.02 459.02 – 459.02 Security and other deposits 18 22.46 22.46 – 22.46 Employee benefits payable 18 23.93 23.93 – 23.93 Creditors for capital goods 18 19.64 19.64 – 19.64 Other liabilities 18 16.86 16.86 – 16.86 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 17 167.69 162.48 5.21 167.69 Interest on non-current borrowings 0.46 – 0.46 Trade payables 21 337.49 337.49 – 337.49 Security and other deposits 18 21.92 21.92 – 21.92 Employee benefits payable 18 21.71 21.71 – 21.71 Creditors for capital goods 18 20.52 20.52 – 20.52 Other liabilities 18 11.81 11.42 0.39 11.81 Derivatives (settlement on net basis) 2.43 2.43 – 2.43 Notes to the Consolidated Financial Statements