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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