SOFTWARE AG | ANNUAL REPORT 2012 222 c) Market risk In line with Group policy, assets are controlled in terms of maturity, interest type and rating such that the Company does not expect any significant fluctuations in value. d) Credit risk Software AG is exposed to default risk in its operating business and in connection with certain financial transactions if contracting parties fail to meet their obligations. All cash investments have terms of up to three months except those that relate to employee benefits (i.e. time credit and long-term time accounts). Major cash investments as well as derivative financial instruments are entered into with banks with credit ratings of at least investment grade and whose CDS rates are monitored continuously. The theoretical maximum default risk exposure is indicated by the carrying amounts. The guidelines defined by management ensure that the credit risk from financial instruments is spread across various banks. In the operating business, receivables are continuously monitored and default risk is taken into account via specific and portfolio-based bad debt allowances. As of December 31, 2012, there was no indication of the existence of any risk beyond that taken into account through bad debt allowances. There is no concentration of credit risks with respect to single customers as a result of the size of our customer base or due to the distribution of our revenues across various sectors and countries. The theoretical maximum exposure to credit risk is reflected in the carrying amounts of the receivables, without taking any collateral into account. e) Liquidity risk A liquidity risk arises from the possibility that the Company may not be able to satisfy existing financial lia- bilities, for example, arising from loan agreements, lease agreements or trade accounts payable. The risk is limited by active working capital management and Group-wide liquidity control and is, if necessary, balanced by available cash and bilateral lines of credit. Under credit agreements having a total volume of €5.4 million (2011: €9.1 million), the Company is required to limit net debt within the Group to a maximum of 3-times EBITDA. As of year-end 2012, the Company’s figures were significantly below these limits. The table below shows the contractually fixed payments arising from financial liabilities. The values listed here show the undiscounted liabilities. Variable interest payments are based on the level of interest at the reporting date. Liabilities in foreign currency are calculated at the exchange rate as of December 31, 2012.