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NOTESTOTHE
FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017
BAKER
TECHNOLOGY
L IMI TED
THE BE ST
I N US
25.
FINANCIALRISKMANAGEMENTOBJECTIVESANDPOLICIES
TheGroupand theCompanyareexposed to financial risksarising from itsoperationsand theuseof financial
instruments. Thekey financial risks include interest rate risk, liquidity risk, credit riskand foreigncurrency risk.
TheGroupdoesnot speculate in thecurrencymarketsorholdor issuederivatives financial instruments. The
Board reviews andagreespolicies andprocedures for themanagement of these risks. TheAuditCommittee
provides independent oversight to theeffectiveness of the riskmanagement process.
Therehasbeennochange to theGroup’sexposure to these financial risksor themanner inwhich itmanages
andmeasures the risks for financial year 2017.
Interest rate risk
Interest rate risk is the risk that the fair valueor futurecash flowsof theGroup’s and theCompany’s financial
instrumentswill fluctuatebecauseof changes inmarket interest rates.
The Group’s and the Company’s exposure to movements in market interest rates relates primarily to its
short-termdeposits.
The Group’s policy is to place excess funds with short-term tenure in order to maintain a high level of
liquidity. TheGrouphasminimal interest rate riskhenceno sensitivity analysis is prepared.
Liquidity risk
Liquidityrisk is therisk that theGroupor theCompanywillencounterdifficulty inmeeting financialobligations
due to shortage of funds. The Group’s and the Company’s exposure to liquidity risk arises primarily from
mismatches of thematurities of financial assets and liabilities. TheGroup’s and theCompany’s objective is
tomaintain sufficient level of cash and short-termdeposits tomeet itsworkingcapital requirements.
