Page 246 - Tata_Chemicals_yearly-reports-2021-22

Integrated Annual Report 2021-22

Financial instruments and cash deposits
Credit risk from balances/investments with banks and financial institutions is managed in accordance with the Company’s treasury
risk management policy. Investments of surplus funds are made only with approved counterparties and within limits assigned to each
counterparty. The limits are assigned based on corpus of investable surplus and corpus of the investment avenue. The limits are set to
minimize the concentration of risks and therefore mitigate financial loss through counterparty’s potential failure to make payments.
Financial guarantees
Financial guarantees disclosed in note 41.1(b) have been provided as corporate guarantees to financial institutions and banks that
have extended credit facilities to the Company's subsidiaries. In this regard, the Company does not foresee any significant credit risk
exposure.
Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The objective of
liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as and when required.
The Treasury Risk Management Policy includes an appropriate liquidity risk management framework for the management of the
short-term, medium-term and long term funding and cash management requirements. The Company manages the liquidity risk
by maintaining adequate cash reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and
actual Cash Flows, and by matching the maturity profiles of financial assets and liabilities. The Company invests its surplus funds in
bank fixed deposit and liquid schemes of mutual funds, which carry no/negligible mark to market risks.
The below table analyses the Company’s non-derivative financial liabilities as at the reporting date, into relevant maturity groupings
based on the remaining period (as at that date) to the contractual maturity date. The amounts disclosed in the below table are the
contractual undiscounted Cash Flows.
` in crore
Carrying Above
Particulars Up-to 1 year 1-5 years Total
amount 5 years
As at March 31, 2022
Lease liability 3.25 3.37 - - 3.37
Trade and other payables 737.35 737.28 0.07 - 737.35
Total 740.60 740.65 0.07 - 740.72
As at March 31, 2021
Lease liability 8.95 4.92 5.02 - 9.94
Trade and other payables 646.44 646.33 0.11 - 646.44
Total 655.39 651.25 5.13 - 656.38
The below table analyses the Company’s derivative financial liabilities into relevant maturity groupings based on the remaining
period (as at the reporting date) to the contractual maturity date.
` in crore
As at As at
Particulars
March 31, 2022 March 31, 2021
Current portion 4.37 1.09
Total 4.37 1.09
All the derivative financial liabilities are included in the above analysis, as their contractual maturity dates are essential for the
understanding of the timing of the under-lying Cash Flows.

38. Capital management
The capital structure of the Company consists of net debt and total equity of the Company. The Company manages its capital
to ensure that the Company will be able to continue as going concern while maximising the return to stakeholders through an
optimum mix of debt and equity within the overall capital structure. The Company's risk management committee reviews the capital
structure of the Company considering the cost of capital and the risks associated with each class of capital.
The Company monitors capital using the metric of Net Debt to Equity. Net Debt is defined as borrowings less cash and cash
equivalents, fixed deposits and readily redeemable investments. As on balance sheet date there is no net debt.

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