Heritage Foods Limited

Heritage Foods Limited 260 B. Liquidity risk Liquidity risk refers to the risk that the Group cannot meet its fi nancial obligations as and when they become due. The objective of liquidity risk management is to maintain su ffi cient liquidity and to ensure that funds are available for meeting due obligations of the Group. The Group manages liquidity risk by maintaining adequate reserves, banking facilities, continuously monitoring forecast and actual cash fl ows, and by matching the maturity pro fi les of the fi nancial assets and fi nancial liabilities. The table below summarises the maturity pro fi le of the Group’s fi nancial liabilities based on contractual undiscounted payments: As at 31 March 2021 On demand Up to 1 year More than 1 year Total Financial guarantees 149.54 - - 149.54 Borrowings 19.36 263.58 302.92 585.86 Deferred payment liabilities - 15.99 37.48 53.47 Trade payables - 354.59 - 354.59 Other fi nancial liabilities - 1,218.51 27.03 1,245.54 168.90 1,852.67 367.43 2,389.00 As at 31 March 2020 On demand Up to 1 year More than 1 year Total Financial guarantees 56.52 - - 56.52 Borrowings 884.41 438.36 1,668.79 2,991.56 Deferred payment liabilities - 12.87 53.46 66.33 Trade payables - 599.48 - 599.48 Other fi nancial liabilities - 1,069.41 38.01 1,107.42 940.93 2,120.12 1,760.36 4,821.31 C. Market risk Market risk is the risk of loss of future earnings, fair values or future cash fl ows that may result from adverse changes in the market rates and prices. Market risk is attributable to all market risk-sensitive fi nancial instruments, all foreign currency receivables and payables and all short-term and long-term borrowings. Market risk comprises three types of risk: interest rate risk, currency risk and other price risks such as equity price risk. i. Interest risk: Interest rate risk is the risk that the fair value or future cash fl ows of a fi nancial instrument shall fl uctuate because of changes in the market interest rates. The Group’s exposure to the risk of changes in market interest rates relates primarily to the Group’s long-term obligations with fl oating interest rates. For the years ended 31 March 2021 and 31 March 2020, every 50 basis point decrease in the fl oating interest rate component appli- cable to the Group’s long-term borrowings would have increase/(decrease) the pro fi t/(loss) before tax by approximately ₹ 5.63 and ₹ 6.50 respectively. A 50 basis point increase in fl oating interest rate would have led to an equal but opposite e ff ect. ii. Foreign currency risk: Foreign currency risk is the risk that the fair value or future cash fl ows of an exposure shall fl uctuate because of changes in foreign exchange rates. The Group’s exposure to the risk of changes in foreign exchange rates relates primarily to the Group’s operating and investing activities (when revenue or expense including capital expenditure is denominated in a foreign currency). The exposure of foreign currency risk to the Group is low as it enters very limited transactions in foreign currencies. The carrying amounts of the Group’s unhedged foreign currency denominated monetary items in ₹ terms as at 31 March 2021 and 31 March 2020 are as follows: Summary of the signi fi cant accounting policies and other explanatory information (All amounts in ₹ millions, except share data and where otherwise stated)