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## Notes to the consolidated financial statements 

For the year ended 31 December 2012 

25. Financial risk management objects and policies continued 

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[1] Categories according to IAS 39 

A risk analysis for the Group’s securities was done separately, based on the inherent historic volatility of the specific securities, see below. 

## Credit risk 

The Group is exposed to credit risk from its operating activities and certain financing activities. The Group trades only with recognised, creditworthy third parties. It is the Group’s policy that all customers who wish to trade on credit terms are subject to credit verification procedures. In addition, receivable balances are monitored on an on-going basis, with the result that the Group’s exposure to bad debts is not significant. Regarding the risk concentration please see above, “vulnerability due to certain significant considerations”. 

In order to finance its growth the Group entered into two factoring agreements with reputable financial institutions. The maximum amount of cash that can be received under these agreements is US$60,000,000 (2011: US$42,000,000). The agreements, which comprise receivables from selective customers, significantly reduce the underlying credit risk because the financial institutions assume all credit risks associated with the collection of the receivables financed under the programmes. 

The Group’s exposure to credit risk arising from other financial assets of the Group, which comprise cash, cash equivalents and restricted, would arise from default by counterparty. 

## Liquidity risk 

The Group uses quarterly cash flow forecasts to monitor its liquidity risk. It takes financial investments and financial assets (e.g. trade accounts receivable and other financial assets) into consideration, as well as projected cash flows from operations. The Group’s objective is to minimise interest expense by avoiding the use of short-term bank liabilities or bank overdrafts within the Group. 

At 31 December 2012, the Group had cash and cash equivalents of US$312,435,000 (2011: US$113,590,000). 

