Notes to the consolidated financial statements 116 Financial statements 30. Financial risk management and financial instruments The movement in the allowance for impairment in respect of trade and other receivables during the year was as follows: In millions of EUR 2007 2006 Balance as at 1 January 208 215 Impairment loss recognised 49 39 Allowance used (12) (10) Allowance released (30) (36) Effect of movements in exchange rates (7) Balance as at 31 December 208 208 The movement in the allowance for impairment in respect of held-to-maturity investments during the year was as follows: In millions of EUR 2007 2006 Balance as at 1 January 90 Changes in consolidation 2 Impairment loss recognised 38 37 Allowance used (19) (2) Balance as at 31 December 109 90 Impairment losses recognised for trade and other receivables and held-to-maturity investments are part of the other non-cash items in the consolidated statement of cash flows. The impairment loss of €38 million in respect of held-to-maturity investments and the impairment loss of €49 million in respect of trade receivables were included in expenses for raw materials, consumables and services. An impairment loss of €38 million in respect of held-to-maturity investments was recognised during the current year of which €25 million related to loans to customers. Heineken has no collateral in respect of these impaired investments. The allowance accounts in respect of trade and other receivables and held-to-maturity investments are used to record impairment losses, unless Heineken is satisfied that no recovery of the amount owing is possible, at that point the amount considered irrecoverable is written off against the financial asset. Liquidity risk Liquidity risk is the risk that Heineken will not be able to meet its financial obligations as they fall due. Heineken's approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to Heineken's reputation. Strong cash flow generation and sufficient access to capital is ensured to finance long-term growth and to keep pace with the consolidation of the global beer market. Financing strategies are under continuous evaluation. Strong cost and cash management and controls over investment proposals are in place to ensure effective and efficient allocation of financial resources. In addition, the Heineken N.V. €2 billion Revolving Credit Facility 2005-2012 was not utilised as at 31 December 2007 (31 December 2006: not utilised). Heineken N.V. Annual Report 2007

Jaarverslagen en Personeelsbladen Heineken

Jaarverslagen | 2007 | | pagina 114