The Corporation and its subsidiaries are subject to credit risk. Credit risk deals with group’s
financial losses if a client or counterpart in a financial instrument fails to comply with
contractual obligations, which arise from most receivables.
The Corporation and its subsidiaries limit their exposure by analyzing credit and managing
client’s portfolio, seeking to minimize the economic exposure to a certain client and/or
market that may represent significant losses.
The Global Credit Risk Policy determines the guideline for financial credit risk management
based on the following:
• Limit of counterparty’s credit risk concentration to 15% of total current assets;
• Investments in solid and prime financial institutions, based on their financial rating;
• Balance between assets and liabilities.
Conducted evaluations are based on information flows and follow-up of the volume of
purchases in the market. The internal controls cover the assignment of credit limits.
The maximum exposure to credit risk for the Corporation and its subsidiaries are the trade
accounts receivable shown in Note 6, where the value of the effective risk of possible
losses is presented as provision for credit risk is also shown.