Financial credit risks
KONE has substantial amounts of cash and short-term investments. In order to diversify the financial credit risk, KONE deposits its funds into several banks and invests a part of its liquidity into highly liquid money market funds. Global counterparty limits that set the framework for choosing investment counterparties are approved by the Board of Directors. All open exposures such as cash on bank accounts, investments, deposits and other financial transactions, for example derivatives contracts, are included when measuring the financial credit risk exposure. The management follows the utilization of the limits regularly. When selecting counterparty banks and other investment targets only counterparties with high credit worthiness are approved. The size of each limit reflects the credit worthiness of the counterparty. Counterparty credit worthiness is evaluated constantly and the required actions are considered case by case if it is assessed that a significant change in the credit worthiness has occurred.