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BAKERTECHNOLOGYLIMITED
ANNUALREPORT2013
RiskManagement
andMitigation
RISKMANAGEMENTANDMITIGATION
As a listed company, Baker Tech is committed to safeguarding
stakeholders’ interests, the Group’s assets and to deliver
sustainable value to shareholders.
The Group has in place an Enterprise Risk Management
framework to effectively mitigate and minimise significant
exposures to industry-related, financial and operational
risks to ensure overall health of the Group’s activities and
businesses.
The framework and implementation actions are regularly
assessed and evaluated by the Board to ensure alignment
with theGroup’s strategicobjectives and consistencywith the
Group’s risk appetite.
INDUSTRY-RELATEDRISKS
As a manufacturer and provider of specialised engineering
components for the offshore marine oil and gas industry,
the Group is exposed to challenges facing the oil and gas
industry today. Global economic sentiment and price swings
from demand and supply are key factors driving offshore
explorations and drilling activities.
Volatile commodity prices – particularly steel, can also
potentiallyweighon theGroup’s financial performance.With
steel being the main element in the Group’s products, the
Group is predisposed to fluctuations in steel prices stemming
from cyclical demand. Delayed delivery of raw materials
could result in extended completion time, which could have
a negative implication on theGroup’s financial performance.
To mitigate this, the Group accounts for steel price volatility
within its contracts with customers to better manage price
fluctuations in the market, while maintaining close working
relationships with its long-term suppliers to ensure timely
delivery of raw materials for the smooth completion of
projects.
Baker Techexplores business opportunities todiversify its core
activities and actively engages in research and development
to stay current with technological developments and
product innovations in order to fortify its existing range
of products and to develop new products to extend its
market reach.
nurture
