Atul Ltd 2019-20

Corporate Overview Statutory Reports Financial Statements 01-21 22-91 92-228 148 Atul Ltd | Annual Report 2019-20 Note 28.8 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, it has developed and implemented a comprehensive risk management system to ensure that risks to its continued existence 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: Focuses 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: Focuses 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 clear understanding of risk interrelationships. iii) Risk assessment and prioritisation: Focuses 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: Focuses 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: Focuses 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, investment in mutual funds, borrowings and the cash flow that is generated from operations. It 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 Standalone Balance Sheet date: ( ` cr) As at March 31, 2020 Note Carrying amount Less than 12 months More than 12 months Total Trade payables 18 478.46 478.46 - 478.46 Security and other deposits 15 27.53 27.53 - 27.53 Employee benefits payable 15 57.93 57.93 - 57.93 Creditors for capital goods 15 32.48 32.48 - 32.48 Other liabilities 15 7.63 4.91 2.72 7.63 Derivatives (settlement on net basis) 15 1.62 1.62 - 1.62 As at March 31, 2019 Note Carrying amount Less than 12 months More than 12 months Total Trade payables 18 418.10 418.10 - 418.10 Security and other deposits 15 22.39 - 22.39 22.39 Employee benefits payable 15 47.70 47.70 - 47.70 Creditors for capital goods 15 16.45 16.45 - 16.45 Other liabilities 15 6.55 3.94 2.61 6.55