Page 29 - Beeks Financial Cloud Group Annual Report 2021

Beeks Financial Cloud Group PLC
Directors’ Report For the year ended 30 June 2021

CREDIT RISK foreseeable needs and to invest there has been a limited impact
Credit risk is managed on a cash assets safely and profitably. on Beeks’ trading from Covid-19.
Group basis. Credit risks arise from We take great comfort from the
cash and cash equivalents and EXCHANGE RATE RISK resilience of our business model
deposits with banks and financial The Group monitors its exposure to and are fortunate that we are
institutions, as well as credit exchange rate risk on an ongoing not significantly exposed to the
exposures to customers, including basis. The Group has minimal industries that are suffering the
outstanding receivables and exposure to foreign exchange risk worst effects. The level of customer
committed transactions. as a result of natural hedges arising churn across our business has
between sales and cost transactions. remained low and cash collection GOVERNANCE
The Group’s credit risk is primarily Details of exchange rate exposure has been in line with our typical
attributable to its trade receivables. balances are disclosed in note 15 of profile. We do however remain
It is the policy of The Group to The Group accounts. vigilant to the economic impact
present the amounts in the the ongoing situation may create,
balance sheet net of allowances INTEREST RATE RISK particularly on the SME segment
for doubtful receivables, estimated The Group has limited exposure of the market.
by The Group’s management to interest rate risk in respect of
based on prior experience and the cash balances and long-term Note 1 to the financial statements
current economic environment. borrowings held with banks and includes The Group’s objectives,
The Group reviews the reliability other highly rated counterparties. policies and processes for
of its customers on a regular All loans and leases are at fixed managing its capital; its financial
basis; such a review takes into rates of interest therefore The risk management objectives;
account the nature of The Group’s Group does not have exposure to details of its financial instruments
trading history with the customer. interest rate risk. and hedging activities; and its
The credit risk on liquid funds is exposures to credit risk and
limited because the majority of GOING CONCERN liquidity risk.
funds are held with two banks with The Group’s business activities,
high credit ratings assigned by together with the factors likely
international credit-rating agencies. to affect its future development,
performance and position are set
Management does not expect out in the Strategic report on pages
any losses from non-performance 4 to 23 including the potential impact
of these counterparties. None of of Covid-19. The financial position
the Group’s financial assets are of The Group, its cash flows, liquidity
secured by collateral or other position and borrowing facilities
credit enhancements. are described in the Chief Financial
Officer’s Report on pages 13-16.
LIQUIDITY RISK
The Group seeks to manage In the seventeen months since
financial risk by ensuring sufficient the response to the Covid-19
liquidity is available to meet pandemic was initiated in the UK,
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