132
Baker Technology LimitedAnnual Report 2014
27.
Financial riskmanagement objectives andpolicies (cont’d)
Credit risk (cont’d)
Financial assets that areneither past duenor impaired
Tradeandother receivables thatareneitherpastduenor impairedarecreditworthydebtorswithgoodpayment
recordwith theGroup. Cashand short-termdeposits that areneither past duenor impairedareplacedwithor
entered intowith reputablefinancial institutionswithhighcredit ratingsandnohistoryofdefault.
Financial assets that areeither past dueor impaired
Information regarding financial assets that are either past dueor impaired is disclosed inNote 19 (Trade
andother receivables).
Foreign currency risk
TheGrouphas transactional currency exposures arising from sales or purchases that aredenominated in a
currency other than SGD. The foreign currencies inwhich these transactions are denominated aremainly
USDollars (USD) andEuro. Approximately99% (2013: 99%) of theGroup’s sales aredenominated in foreign
currencieswhilst about 64% (2013: 65%) of costs aredenominated in foreign currencies. TheGroup’s trade
receivable and tradepayablebalances at theendof the reportingperiodhave similar exposures.
TheGroup alsoholds cash and short-termdeposits denominated in foreign currencies for working capital
purposes. At the end of the reporting period, such foreign currency balances (mainly in USD and Euro)
amount to approximately $65,557,000 (2013: $67,496,000) for theGroup.
Tominimise foreignexchange risks, theGrouppractises natural hedging asmuch as possible. TheGroup
alsomonitors movement in foreign exchange closely so as to capitalise on favourable exchange rates to
convert excess foreign currencies back toSGDwherepossible.
TheGroupdoes not apply hedge accounting for such foreign currencydenominated sales andpurchases.
NOTES TO THE
FINANCIAL STATEMENTS
For the financial year ended 31December 2014
