Nokia 2004 Annual Report Download - page 175

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Notes to the Consolidated Financial Statements (Continued)
35. Risk management (Continued)
The term customer financing portfolio at December 31, 2004 was:
Financing
Outstanding commitments Total
EURm EURm EURm
Total Portfolio ........................................ 35659
The term customer financing portfolio at December 31, 2004 mainly consists of committed
customer financing to wireless operator Astelit LLC in Ukraine, of which none was outstanding.
Financial credit risk
Financial instruments contain an element of risk of the counterparties being unable to meet their
obligations. This risk is measured and monitored by the Treasury function. The Group minimizes
financial credit risk by limiting its counterparties to a sufficient number of major banks and
financial institutions, as well as through entering into netting arrangements, which gives the
Company the right to offset in the case that the counterparty would not be able to fulfill the
obligations.
Direct credit risk represents the risk of loss resulting from counterparty default in relation to
on-balance sheet products. The fixed income and money market investment decisions are based on
strict creditworthiness criteria. The outstanding investments are also constantly monitored by the
Treasury. Nokia does not expect the counterparties to default given their high credit quality.
F-50