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## 25. Financial risk management objectives and policies continued 

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The Group’s policy is to structure its maturities of current financial assets within the Group to meet 100% of the respective maturities of the liabilities. The table below summarises the maturity profile of the Group’s financial liabilities at 31 December 2012, based on contractual undiscounted payments: 

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At 31 December 2012, the Group had unused short-term credit lines of US$35.0 million (2011: US$5 million) and a multi-currency revolving credit line facility of £10.0 million (2011: £10 million) There were no amounts outstanding under these credit lines at 31 December 2012 (2011: nil). 

## Capital management 

The primary objective of the Group’s capital management is to ensure that it maintains healthy and strong capital ratios in order to support its business and strategies for growth. The company is considering its total equity as capital. 

The Group manages its capital structure and makes adjustments to it in the light of changes in economic conditions. To maintain or adjust its capital structure, the Group may generally issue new shares. Also in 2012 the Group launched a 5 year convertible bond offering amounting to US$201 million which has a significant impact on the capital structure of the group, amongst others it led to a decrease of the equity ratio. For further information please refer to note 18. 

The Group monitors capital using an equity ratio (total equity divided by total assets). The equity ratio as of 31 December 2012 was 54.0% (2011: 75.7%). Capital includes net Shareholders’ equity. The Group’s policy is to finance operational business development and growth if at all possible with equity rather than long-term liabilities. It is, therefore, also its policy to keep a strong equity ratio. This policy will be reconsidered as soon as sustainable profits are earned in order to achieve leverage. However financing of strategic decisions focused on long term growth is ensured by long-term liabilities. 

## Hedging activities 

At 31 December 2012, the Group held Forward exchange contracts and deposits (referred to as the “hedging instruments”) designated as hedges of firm commitments and forecast transactions in Euros, Pound Sterling and Japanese Yen. 

The hedging instruments are being used to hedge the foreign currency risk of contractual cash flows, principally resulting from wages and salaries, and rental payments with the aim of eliminating the currency risk by transforming these cash flows from Euros, Pounds Sterling or Japanese Yen into US Dollars. The fair values of the hedging instruments which equal the book values are as follows: 

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The critical terms of the deposits have been set to match the terms of the hedged cash flows. 

