ACC Integrated Report 2022-2023

Risk Management

Strengthening Resilience through
Proactive Risk Management

At ACC, we have implemented a robust Business Risk Management (BRM) framework that enables us to identify and manage risks and opportunities. This framework helps us anticipate and address challenges in a constantly evolving business landscape, ensuring that we stay ahead of the curve. We regularly evaluate the efficacy of our risk management strategies to ensure that we are always prepared to mitigate potential risks.

Board Risk Management (BRM) Committee

We have a comprehensive risk management framework in place that covers strategic, operational, compliance, financial, and sustainability-related risks through our BRM process. We understand the importance of effective risk and crisis management in planning, and as such, we have a formal Risk Management Policy that identifies and assesses key risk areas, monitors and reports compliance, and evaluates the effectiveness of policies and procedures in line with regulatory requirements.

To oversee the risk management process, we have constituted a Risk Management Committee chaired by Mr. Nitin Shukla, an Independent Director. The BRM exercise is an integral part of our management reporting cycle and supports strategic decision-making. We have laid down a well-defined risk management mechanism covering risk analysis, exposure, potential impact, and risk mitigation processes.

We use a 3x3 matrix of severity and probability (High, Medium, and Low) to identify potential risks. We assess the overall risk exposure from both top-down and bottom-up perspectives, which are then consolidated to provide a bird’s eye view of our risk profile.

Transition Phase Risks

		Our Endeavours
	Change Management As we have become part of the Adani Group, we have had to implement and align new policies and practices, which comes with moderate risk. These changes may temporarily disrupt our business, operations, and people, but we understand that they are necessary for us to continue to grow and succeed in the long term.	We addressed the risk of change management with utmost care and expertise, which resulted in minimal impact on our business and operations.
	IT and Cyber security As a responsible organisation, we understand the significance of information technology and cyber security in our daily operations. It is our responsibility to safeguard vital information in the cyber world to ensure the security of our business, particularly during our transition to the Adani Group. As we continue to digitise and automate, we recognise the importance of using cyber tools and utilities to fuel our growth and expansion.	We have implemented effective measures to safeguard both our hardware and software from misuse, interference, loss, unauthorised access, modification, and disclosure. Our proactive approach towards cyber security has enabled us to design a robust control mechanism that ensures we are protected from cyber threats.

Our Endeavours

Change Management

As we have become part of the Adani Group, we have had to implement and align new policies and practices, which comes with moderate risk. These changes may temporarily disrupt our business, operations, and people, but we understand that they are necessary for us to continue to grow and succeed in the long term.

We addressed the risk of change management with utmost care and expertise, which resulted in minimal impact on our business and operations.

IT and Cyber security

As a responsible organisation, we understand the significance of information technology and cyber security in our daily operations. It is our responsibility to safeguard vital information in the cyber world to ensure the security of our business, particularly during our transition to the Adani Group. As we continue to digitise and automate, we recognise the importance of using cyber tools and utilities to fuel our growth and expansion.

We have implemented effective measures to safeguard both our hardware and software from misuse, interference, loss, unauthorised access, modification, and disclosure. Our proactive approach towards cyber security has enabled us to design a robust control mechanism that ensures we are protected from cyber threats.

High Growth Phase Risks

		Our Endeavours
	Regulatory Changes We recognise the importance of adhering to environmental regulations for growth and protection. Non-compliance can result in severe financial and reputational consequences, while compliance requires investment in innovation and transformation.	We are undertaking several projects in our operations to ensure compliance with the latest environmental regulations pertaining to dust emission, as well as SOx and NOx emissions.
	Risk of Natural Resources We are highly reliant on natural resources like limestone, coal, minerals, etc. and ensuring their continuous supply and quality is essential for uninterrupted operations. However, depletion of reserves and procurement complexities are making it challenging. Securing a minimum of 50 years reserve of limestone and the volatility of coal prices are our major concerns.	We are investing in the development of products that emit less CO2. We are also exploring various options to reduce emissions by increasing the share of Green Power, through alternative fuel and waste heat recovery systems.
	Energy Security Our energy-intensive cement production processes heavily rely on the availability and cost of fuel and electricity. Fluctuations in energy prices due to market forces and regulatory changes pose a significant risk to our operations and production costs. To mitigate this risk, we are exploring alternative fuels and energy-efficient practices.	We aim to mitigate the risk of energy price inflation by diversifying our fuel sources and exploring the use of alternative fuels.

Our Endeavours

Regulatory Changes

We recognise the importance of adhering to environmental regulations for growth and protection. Non-compliance can result in severe financial and reputational consequences, while compliance requires investment in innovation and transformation.

We are undertaking several projects in our operations to ensure compliance with the latest environmental regulations pertaining to dust emission, as well as SOx and NOx emissions.

Risk of Natural Resources

We are highly reliant on natural resources like limestone, coal, minerals, etc. and ensuring their continuous supply and quality is essential for uninterrupted operations. However, depletion of reserves and procurement complexities are making it challenging. Securing a minimum of 50 years reserve of limestone and the volatility of coal prices are our major concerns.

We are investing in the development of products that emit less CO2. We are also exploring various options to reduce emissions by increasing the share of Green Power, through alternative fuel and waste heat recovery systems.

Energy Security

Our energy-intensive cement production processes heavily rely on the availability and cost of fuel and electricity. Fluctuations in energy prices due to market forces and regulatory changes pose a significant risk to our operations and production costs. To mitigate this risk, we are exploring alternative fuels and energy-efficient practices.

We aim to mitigate the risk of energy price inflation by diversifying our fuel sources and exploring the use of alternative fuels.