english - About Heraeus

Price risks within the meaning of IFRS 7 are exclusively incurred through risks from
financial instruments, which have an influence on payment flows or market valuations.
As a result of the fact that the majority of the transactions that Heraeus performs within
precious metal trading do not fall under the scope of IAS 39, because of physical delivery
or crediting to pool accounts, “own use exemption,” the transactions are not a component
of the risk reporting required by IFRS 7.
The resulting price risks from equities are secured by means of derivatives (futures).
Default risk
The default risk arising from financial assets consists of the risk of default by a contracting
party and is therefore limited maximally to the positive fair values in relation to the particular
contracting parties (see table under “Further disclosures on financial instruments”).
In the case of derivative financial instruments, the risk relates to their replacement costs
(market values), which can be found in the table showing the values of derivative financial
instruments. Counterparty-specific default risks are continuously monitored based on
credit spreads, with the counterparties being collected into various groups based on their
creditworthiness.
The creation of specific or flat-rate-specific allowances for debt defaults takes into account
risk arising from non-derivative financial instruments. Financial transactions are only
entered into with partners of unquestioned standing. Investments in interest-bearing securities
are only made in those having investment-grade standing.
Liquidity risk
Liquidity risks result mainly from short-term maturities of trade liabilities, liabilities from
derivative financial instruments, as well as other financial liabilities.
Adequate liquidity is guaranteed due to the Heraeus Group’s good credit standing, which
has been confirmed by two independent rating agencies (see also (14) Shareholders’
equity – Capital management information). This means that access to the short-term commercial
paper market, as well as the long-term capital market, is ensured at any time. In
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