NEW OROPERU RESOURCES INC.  Loans and receivables arenon-derivative financial assets with fixed or determinable payments that are  not quoted in an active market. They are classified as current assets or non -current assets based on their  maturity date. Loans and receivables are carried at amortized cost less  any impairment. Loans and  receivables comprise accounts receivable and advances to joint venture partner. Borrowings and other financial liabilities are non -derivatives and are recognized initially at fair value , net  of transaction costs incurred, and are subsequently stated at amortized cost. Any difference between the  amounts originally received, net of transaction costs, and the redemption value is recognized in the  statement of lossover the period to maturit y using the effective interest method. Borrowings and other financial liabilities are classified as current or non -current based on their maturity  date. Financial liabilities include trade payables and accrued liabilities. The carrying values of cash and trade payable s and accrued liabilities approximate their fair values due to  the short-term maturity of these financial instruments. The Company’s risk exposure and the impact on the Company’s financial instruments are as follows:  Credit risk is the risk of financial loss to the Company if a customer or counter party to a  financial instrument fails to meet its contractual obligations. The Company is exposed to concentration of credit risk with respect to its cash ; however, the  risk is minimized as cashis placed with major Canadian financial institution s.  Liquidity risk is the risk that the Company will encounter difficulty in satisfying financial  obligations as they become due. The Company's approach to mana ging liquidity risk is to  ensure that it will have sufficient assets to meet liabilities when due. As at  December 31,  2012, the Company has working capitaldeficiencyof $16,551. As at December 31, 2012, the  Company has trade payables and accrued liabili ties of$68,013 which are due in the first and  second quarters of 2013.  Market risk is the risk that the fair value of or future cash flows from the Company’s financial  instruments will significantly fluctuate due to changes in market prices.  The value of financial  instruments can be affected by changes in interest rates, foreign currency rates and equity  prices. Management closely monitors individual interes t rate and foreign currency movements  to determine the appropriate course of action to  be taken by the Company.  7  a) Credit Risk b) Liquidity Risk  c)  Market Risk  Fair value  Borrowings and other financial liabilities Loans and receivables  MANAGEMENT DISCUSSION & ANALYSIS  For the yearended December31, 2012  (Expressed in US dollars) 