111 This note explains the risks which the Company is exposed to and how the Company manages the risks in the Standalone Financial Statements. Risk Exposure arising from Measurement Management Credit risk Cash and cash equivalents, trade receivables, financial assets measured at amortised cost Aging analysis and credit rating Diversification of investments in mutual fund and credit limits Liquidity risk Borrowings and other liabilities Rolling cash flow forecasts Availability of committed credit lines and borrowing facilities a) Credit risk Credit risk is the risk of financial loss to the Company if a customer or counterparty fails to meet its contractual obligations. Credit risk arises from cash and cash equivalents, financial assets measured at amortised cost or fair value through profit and loss and deposits with banks and financial institutions, as well as credit exposures to trade | non-trade customers including outstanding receivables. i) Credit risk management Credit risk is managed through the policy surrounding Credit Risk Management. ii) Provision for expected credit losses The Company provides for expected credit loss based on the following: Trade receivables Trade receivables consist of few customers, for which ongoing credit evaluation is performed on the financial condition of the account receivables. Historical experience of collecting receivables of the Company is supported by low level of past default and hence the credit risk is perceived to be low. b) Liquidity risk Ultimate responsibility for liquidity risk management rests with the Board of Directors, who has approved an appropriate liquidity risk management framework for short, medium and long-term funding and liquidity management requirements of the Company. The Management monitors rolling forecasts of the liquidity position of the Company and cash and cash equivalents on the basis of expected cash flows and manages liquidity risk by continuously monitoring forecast and actual cash flows and by matching the maturity profiles of financial assets and liabilities. Note 27.7 Financial risk management (continued)
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