Nokia 2014 Annual Report Download - page 183

181
Financial statements
NOKIA IN 2014
Financial credit risk
Financial instruments contain an element of risk resulting from changes in the market price due to counterparties becoming less creditworthy
orrisk of loss due to counterparties being unable to meet their obligations. Financial credit risk is measured and monitored centrally by
Group Treasury. Financial credit risk is managed actively by limiting counterparties to a sucient number of major banks and nancial
institutions, and by monitoring the creditworthiness and the size of exposure continuously. Additionally, the Group enters into netting
arrangements with all major counterparties, which give the Group the right to oset in the event that the counterparty would not be able to
fulll its obligations. TheGroup enters into collateral agreements with certain counterparties, which require counterparties to post collateral
against derivative receivables.
Investment decisions are based on strict creditworthiness and maturity criteria as dened in the Treasury-related policies and procedures.
As a result of this investment policy approach and active management of outstanding investment exposures, the Group has not been subject
to any material credit losses in its nancial investments in the years presented.
Here is a breakdown of outstanding xed income and money market investments by sector and credit rating grades ranked as per Moody’s
rating categories at December 31:
EURm Rating(1)
Due within
3 months
Due between 3
and 12 months
Due between
1 and 3 years
Due between
3 and 5 years
Due beyond
5 years Total(2)(3)
2014
Banks Aaa 1 227 1 227
Aa1-Aa3 162 162
A1-A3 587 330 917
Baa1-Baa3 332 325 1658
Non-rated 108 2110
Governments Aaa 130 556 423 26 385 1 520
Aa1-Aa3 50 421 25 88 584
Other Baa1-Baa3 11 11
Total 2 596 881 1 174 51 487 5 189
2013
Banks Aaa 795 795
Aa1-Aa3 738 738
A1-A3 1 281 1 281
Baa1-Baa3 826 2828
Non-rated 159 159
Governments Aaa 405 193 202 111 911
Aa1-Aa3 176 39 357 572
Other A1-A3 11 11
Total 4 380 243 561 –111 5 295
(1) Bank Parent Company ratings are used here for bank groups. In some emerging markets countries, actual bank subsidiary ratings may dier from the Parent Company rating.
(2) Fixed income and money-market investments include term deposits, structured deposits, investments in liquidity funds and investments in xed income instruments classied as available-for-sale
investments and investments at fair value through prot and loss. Liquidity funds invested solely in government securities are included under Governments. Other liquidity funds are included
under Banks.
(3) Includes EUR 11 million of restricted investments (EUR 39 million in 2013) within xed income and money-market investments. These are restricted nancial assets under various contractual
or legal obligations.
98% (98% in 2013) of the Group’s cash at bank is held with banks of investment grade credit rating.