Notestothefinancialstatements
For the financial year ended31December 2015
25.
Financial riskmanagement objectivesandpolicies
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 riskand foreigncurrency risk. TheGroupdoesnot speculate in thecurrencymarketsorholdor issuederivatives financial
instruments.TheBoardreviewsandagreespoliciesandprocedures forthemanagementoftheserisks.TheACprovides independentoversighttotheeffectiveness
of the riskmanagement process.
Therehasbeenno change to theGroup’sexposure to these financial risksor themanner inwhich itmanagesandmeasures the risks for financial year 2015.
Interest rate risk
Interest rate risk is the risk that the fair valueor future cash flowsof theGroup’sand theCompany’s financial instrumentswill fluctuatebecauseof changes in
market interest rates.
TheGroup’sand theCompany’sexposure tomovements inmarket interest rates relatesprimarily to its short termdeposits.
TheGroup’s policy is toplace excess fundswith short-term tenure in order tomaintain ahigh level of liquidity. TheGrouphasminimal interest rate riskhence
no sensitivity analysis isprepared.
Liquidity risk
Liquidity risk is the risk that theGroup or theCompanywill encounter difficulty inmeeting financial obligations due to shortage of funds. TheGroup’s and the
Company’s exposure to liquidity risk arises primarily frommismatches of the maturities of financial assets and liabilities. The Group’s and the Company’s
objective is tomaintain sufficient level of cashand short-termdeposits tomeet itsworking capital requirements.
25.
Financial riskmanagement objectivesandpolicies (cont’d)
Liquidity risk (cont’d)
Analysisof financial instrumentsby remainingcontractualmaturities
The table below summarises thematurity profile of theGroup’s and the Company’s financial assets and liabilities at the end of the reporting period based on
contractual undiscounted repayment obligations.
2015
2014
Group
Oneyearor less
One year or less
$’000
$’000
Financial assets:
Tradeandother receivables (excludingGST recoverableanddownpayment for capital expenditure)
8,616
6,327
Cashand short-termdeposits
140,070
168,685
Total undiscounted financial assets
148,686
175,012
Financial liabilities:
Tradeandother payables (excludingprovision forwarranty)
11,206
8,289
Total undiscounted financial liabilities
11,206
8,289
Total net undiscounted financial assets
137,480
166,723
2015
2014
Company
Oneyearor less
One year or less
$’000
$’000
Financial assets:
Tradeandother receivables
117
111
Amount due from subsidiaries
67,166
6,011
Cashand short-termdeposits
128,265
136,570
Total undiscounted financial assets
195,548
142,692
Financial liabilities:
Tradeandother payables
604
625
Amount due to subsidiaries
38,696
–
Total undiscounted financial liabilities
39,300
625
Total net undiscounted financial assets
156,248
142,067
122
123
BAKERTECHNOLOGYlimited
ANNUAL REPORT 2015
