Description of risk
Credit risk refers to situations such as when a counterpart in a financial transaction cannot meet commitments. If measures taken by Billerud to minimise credit risk are not sufficient, Billerud’s financial position and results may be adversely affected.
Risk management
To avoid this, Billerud’s finance policy defines clearly how any excess liquidity may be invested.
When calculating credit risks, the positive effects on earnings of derivative contracts with counterparts are also taken into account. Billerud’s maximum credit risk exposure is equal to the fair value of financial assets, disclosed in note 23 in the 2010 Annual Report.
Comments on 2010
At year-end, total credit exposure was SEK 1 000 million (818).