and coaching programs. Measures taken in this regard focus on four main themes, namely: an intensiﬁed effort to develop the knowledge and skills of the marketing, sales and customer support teams; sustained internal communications aimed at sharing the company’s strategy and challenges; the development of projects capable of unifying different themes aimed at optimizing processes, improving methods investment in information systems, focused on sales activity development and tracking strategic objectives, coupled with state-of-the-art IT infrastructures and high-performance networks the world over. The Group places a high premium on compliance with existing labor regulations wherever it operates. It regularly audits its subsidiaries to ensure they are compliant with local laws and regulations. Its active policy of transparency in the disclosure of information and in managing its labor relations is one means allowing the Group to create a positive social climate, enabling the company to underpin its development and deal constructively with economic uncertainty. Signiﬁcant efforts have been made to identify and evaluate risks, thanks to targeted action plans to ensure that all company activities are carried out safely, in particular in R&D and manufacturing activities as well as maintenance interventions. This general process is overseen by a safety committee and implemented by a safety engineer, with the active involvement of management, via accident prevention campaigns, training, and concrete means to increase safety. For example, the company has implemented computer-assisted goods handling aids in all parts of the manufacturing shop; it has banned the use of chemicals that present a cancer hazard; and it has installed automatic deﬁbrillators at its Paris and Bordeaux-Cestas (France) sites and provides training in their use. Thanks to its accident prevention policy, Lectra has achieved a very good record, with accident frequency and severity rates respectively seven and ﬁve times below national indicators in France.
in the context of the economic crisis and can negatively impact Group proﬁt. The Group has succeeded in keeping the scale of losses in connection with this risk at a historically low level, representing less than 1% of annual revenues, thanks to the terms of payment it applies, with in particular down payments required at the time of the order and upon shipment, and annual or quarterly payment in advance for recurring contracts. The Group pays close attention to the security of payment for the systems and services delivered to its customers. It notably manages this risk via a range of customer risk management procedures, which include preventively analyzing its customers’ solvency and provide for the strict and systematic application of several measures for dealing with customers in arrears. Sales to countries subject to high economic or political risks are for the most part guaranteed by irrevocable letters of credit conﬁrmed by one of the Group’s banks or by bank guarantees. Furthermore, the Group’s dependence on one or more customers with the potential signiﬁcantly to impact Group proﬁt in the event of default is limited (see paragraph 4.4 above). The Group applies a very strict policy in the recognition of impairment on accounts receivable deemed at risk.
4.8. Liquidity Risks
The risk that the Group may have to contend with a short-term cash shortage is close to zero. The Group’s balance sheet has been fundamentally transformed in recent ﬁscal years, with a positive net cash of €43.1 million (cash and cash equivalents totaled €43.5 million and ﬁnancial borrowings €0.4 million) and shareholders’ equity of €94.1 million at December 31, 2014. The Group’s free cash represents a substantial and sufﬁcient liquidity reserve.
4.9. Counterparty Risks