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ANNUAL REPORT 2015
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BAKERTECHNOLOGYlimited
RISKMANAGEMENTANDMITIGATION
OPERATIONALRISKS
Operational risks are particularly inherent in the manufacture of heavy and
oversizedoffshoreengineeringequipment.Accordingly, theGrouphasput inplace
measures that allow for pre-emptive identificationof areasof potential exposure
which canbeaddressed tominimiseadverse impact to theGroup.
The Group recognises the need to maintain operational resilience in the face
of any unforeseen disruptions. In this regard, the Group has in place business
continuity response measures for any disruption of business operations. The
Groupalsohasalternative sites for operations tominimisedowntime.
Risk assessment is also carried out before starting any production activities and
daily toolboxmeetings are conductedby supervisors to reinforce the importance
ofworkplace safety andhealth toallworkers.
All operational employees of the Group are required to undergo internal safety
briefings, external competency training, orientation programmes and fire
evacuation drills to ensure preparedness and cooperation during emergencies.
Insurancepoliciesarealsoput inplace toaddressandmitigatesomeof the risks
facedby theGroup.
Byobserving internal andexternal controls, theGroup isdetermined tomaximise
operational efficiency through any downtime and ensure continuity to fulfil
customer obligations.
FINANCIALRISKS
Like any global operations, the Group’s activities are susceptible to currency fluctuations, primarily inU.S. Dollar and Euro. Such risks
are either hedgednaturally by a sale or purchase of an asset or liability of the same currency and amount or, where possible, theGroup
undertakes spot conversionof excess foreign currencies toSingaporeDollar and vice versa.
Mostof theGroup’soperationsareproject-basedexecutedoveraprolongedperiodof time. Withpaymentsmadeprogressively, theGroup
can potentially run into credit risks and defaults. To ensure financial discipline, the Group adopts a policy to impose credit verifications
andpredominantly dealswith counterpartieswithhigh credit ratings. Inmost instances, theGroupalso collectsup-front non-refundable
depositsand closely reviewsoutstandingdebtsanddebtors.
TheGroupmanages liquidity risksbymaintainingasufficient cashbalanceandavailabilityof funding throughadequatecredit facilitiesat
all times.
