140
141
BAKER TECHNOLOGY LIMITED ANNUAL REPORT 2012
BAKER TECHNOLOGY LIMITED ANNUAL REPORT 2012
30. Financial riskmanagementobjectivesand policies (cont’d)
Credit risk (cont’d)
Financial assets that are neither past due nor impaired
Tradeandother receivables that are neither past due nor impairedare creditworthydebtorswithgoodpayment
recordwith theGroup. Cash and short-term deposits that are neither past due nor impaired are placedwith or
entered intowith reputable financial institutions with high credit ratings and no history of default.
Financial assets that are either past due or impaired
Information regarding financial assets that are either past due or impaired is disclosed inNote 19 (Trade and
other receivables).
Foreign currency risk
The Group has transactional currency exposures arising from sales or purchases that are denominated in a
currency other than SGD. The foreign currencies in which these transactions are denominated are mainly US
Dollars (USD) and Euro. Approximately 99% (2011: 99%) of the Group’s sales are denominated in foreign
currencies whilst about 61% (2011: 67%) of costs are denominated in foreign currencies. The Group’s trade
receivable and trade payable balances at the end of the reporting period have similar exposures.
The Group also holds cash and short-term deposits denominated in foreign currencies for working capital
purposes. At the end of the reporting period, such foreign currency balances (mainly inUSD and Euro) amount
to approximately $4,247,000 (2011: $20,573,000) for theGroup.
Tominimise foreign exchange risks, theGroup practises natural hedging as much as possible. TheGroup also
monitors movement in foreign exchange closely so as to capitalise on favourable exchange rates to convert
excess foreign currencies back to SGDwhere possible.
30. Financial riskmanagementobjectivesand policies (cont’d)
Foreign currency risk (cont’d)
Sensitivity analysis for foreign currency risk
The following table demonstrates the sensitivity of theGroup’s profit net of tax to a reasonably possible change
in the USD and Euro exchange rates against SGD, with all other variables held constant.
Group
2012
2011
$’000
$’000
Net profit
Net profit
USD/SGD – strengthened 3% (2011: 3%)
+457
+279
– weakened 3% (2011: 3%)
–457
–279
Euro/SGD – strengthened 3% (2011: 3%)
+333
+284
– weakened 3% (2011: 3%)
–333
–284
31. Fairvalueof financial instruments
Fair value of financial instruments by classes that are not carried at fair value andwhose carrying amounts are
reasonable approximation of fair value
The carryingamounts of the trade receivables, deposits, amount due from/(to) subsidiaries, and tradeandother
payables are reasonable approximation of fair values, due to their short-term nature.
32. Capitalmanagement
The primary objective of the Group’s capital management is to ensure that it maintains a strong credit rating,
healthy cash flows and loans and borrowings at an acceptable level in order to support its business and
maximise shareholder value.
The information related to the cash and loans and borrowings is disclosed inNote 22 and 23 respectively.
for the financial year ended 31december 2012
for the financial year ended 31december 2012
notestothe
financialstatements
notestothe
financialstatements
