244 Annual Report 2023-24 Atul Ltd c) Valuation processes The Finance department of the Group includes a team that performs the valuations of financial assets and liabilities with assistance from independent external experts when required, for financial reporting purposes, including level 3 fair values. d) Fair value of financial assets and liabilities measured at amortised cost (` cr) Particulars As at March 31, 2024 As at March 31, 2023 Carrying amount | Fair value Carrying amount | Fair value Financial assets Investments: Government securities 0.01 0.01 Security deposits for utilities and premises 6.06 4.30 Finance lease receivables 5.98 6.55 Total financial assets 12.05 10.86 Financial liabilities Borrowings 231.85 46.98 Lease liabilities 4.70 5.26 Other liabilities 8.20 8.04 Total financial liabilities 244.75 60.28 The carrying amounts of trade receivables, cash and cash equivalents, loan, other bank balances, dividend receivables, other receivables, trade payables, capital creditors, employee benefit payables, other liabilities are considered to be the same as their fair values due to the current and short-term nature of such balances. The fair values of non-current borrowings are based on discounted cash flows using a current borrowing rate. They are classified as level 3 fair values in the fair value hierarchy due to the use of unobservable inputs, including own credit risk. Note 30.8 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 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 Board and the Audit Committee periodic information on risk profile evolution and mitigation plans. Note 30.7 Fair value measurements (continued)
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