content_image/171430.jpg content_image/171437.jpg
<img src='content_image/171430.jpg'>

## Notes to the consolidated financial statements 

For the year ended 31 December 2012 

## 24. Segmental reporting continued 

<img src='content_image/171437.jpg'>

Revenues are allocated to countries based on the location of the shipment destination. Segmental investments and assets are allocated based on the geographic location of the asset. 

## 25. Financial risk management objects and policies 

## Vulnerability due to certain significant risk concentrations 

The Group’s future results of operations involve a number of risks and uncertainties. Factors that could affect the Group’s future operating results and cause actual results to vary materially from historical results include, but are not limited to, the highly cyclical nature of both the semiconductor and wireless communications industries, dependence on certain customers and the ability to obtain an adequate supply of sub-micron wafers. 

The Group's products are generally utilised in the wireless and automotive industries. The Group generates a substantial portion of its revenue from the Mobile Systems Segment, which accounted for 77% and 70% of its total revenue for the years ended 31 December 2012 and 2011, respectively. 

Changes in foreign currency exchange rates influence the Group’s results of operations. The Group’s sales, purchases of raw materials and manufacturing services are primarily denominated in US$. 

The Group depends on a relatively small number of customers for a substantial portion of its revenues, and the loss of one or more of these customers may result in a significant decline in future revenue. 

During 2012, one (2011; one) customer individually accounted for more than 10% of the Group's revenues. Total revenues from this customer were US$598,183,000 (2011: US$321,367,000). Net receivables from this customer at 31 December 2012 were US$69,035,306 (2011 US$28,311,000). This customer is part of the Mobile Systems Segment (for further information please see Section 2 – Principal customers). 

The Group is performing on-going credit evaluations of its customers' financial condition. 

## Financial risk management objectives and policies 

The Group’s principal financial instruments, other than derivatives, comprise cash, cash equivalents, restricted cash and short-term deposits. The main purpose of these financial instruments is to raise finance for the Group’s operations. The Group has other financial instruments which mainly comprise trade receivables and trade payables which arise directly from its operations. 

The Group also entered into derivative transactions (forward currency contracts). The purpose is to manage the currency risks arising from the Group’s operations. 

It is, and has been throughout 2012 and 2011, the Group’s policy that no trading in derivatives shall be undertaken. 

