Page 4 - Demo

RAKMHSUPOLICIES&PROCEDURESMANUALPolicy Code:9.8PolicyOwner:COOVersion& Date:Apr 2026(V 7.0)Page No.:Page 1of 89.8 FINANCIAL RISK MANAGEMENT POLICYDefinitionThis policy serves as a comprehensive framework that identifies, evaluates, and mitigates the negative impact of different sources of financial risks, which may expose the University to potential losses of financial resources or fluctuation of financial performance. Therefore, a structured methodology is established and adopted by the University to regularly identify such risks, evaluate the negative financial impact of certain events, decide their significance,and adopt the best risk mitigation options todeal with such risks.Risk IdentificationCredit RiskCredit risk is the risk that an external party to a financial instrument will fail to meet an obligation, causing the University to incur a financial loss.Liquidity RiskLiquidity risk is the risk that the University will encounter difficulties raising funds to meet its liabilities when they become due.Interest Rate RiskThe University is exposed to interest rate risk on its interest-bearingassets and liabilities, namely fixed deposits, term loans,and borrowings.Accounts Receivable RiskWhile the University balances between the interests of all stakeholders, certain special situations faced by some students can justify granting them credit facilities by postponing the payment of due balances or accepting settlements by post-dated cheques or scheduled installments. The accounts and cheques receivable risk areidentified by the overdue customer balances, cheques receivable,and scheduled installments with the probability that such amounts become uncollectible.Business RiskBusiness Risk involves the risk of declining revenues due to a decrease in the number of students or prices or the uncontrolled increases in expenditures during the normal course of business activities, which will ultimately affect the financial performance and the ability to meet certain requirements to ensure the smooth running of operations.