BAKERTECHNOLOGYLIMITED
ANNUALREPORT2013
126
Notes to the
Financial Statements
for the financial year ended 31December 2013
30. Financial riskmanagementobjectivesandpolicies
The Group and the Company are exposed to financial risks arising from its operations and the use of financial instruments. The
key financial risks include interest rate risk, liquidity risk, credit risk and foreign currency risk. The Group does not speculate in the
currency markets or hold or issue derivatives financial instruments. The Board reviews and agrees policies and procedures for the
management of these risks. TheAC provides independent oversight to the effectiveness of the riskmanagement process.
Therehas beenno change to theGroup’s exposure to thesefinancial risks or themanner inwhich itmanages andmeasures the risks
for financial year 2013.
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of the Group’s and the Company’s financial instruments will
fluctuate because of changes inmarket interest rates.
TheGroup’s and theCompany’s exposure tomovements inmarket interest rates relates primarily to its short term deposits.
TheGroup’spolicy is toplaceexcess fundswith short-term tenure inorder tomaintainahigh level of liquidity. TheGrouphasminimal
interest rate risk hence no sensitivity analysis is prepared.
Liquidity risk
Liquidity risk is the risk that theGroup or theCompanywill encounter difficulty inmeeting financial obligations due to shortage of
funds. TheGroup’s and theCompany’s exposure to liquidity riskarises primarily frommismatches of thematurities of financial assets
and liabilities. The Group’s and the Company’s objective is tomaintain sufficient level of cash and short-term deposits tomeet its
working capital requirements.
Analysis of financial instruments by remaining contractualmaturities
The table below summarises thematurity profile of theGroup’s and the Company’s financial assets and liabilities at the end of the
reportingperiod based on contractual undiscounted repayment obligations.
