47 HEINEKEN N.V. ANNUAL REPORT 2008 Stability of Africa and the Middle East Region In the Africa and the Middle East Region, volume growth is driven by economic growth in Nigeria, the Middle East and in Central Africa. The Region remains stable and is at peace in most areas. In the DRC, the current unrest is restricted to the north-eastern regions. We are monitoring developments closely but believe that the conflict will remain localised and will not spill over into the remainder of the country or wider. Economic downturn from credit crunch Changes in the economic environment following the credit crunch has impact on our regular business activities and performance, in particular in the on-premise. The business impact will differ across the regions and operations. Local management assessed the risk exposure following central instructions and is taking action to mitigate higher than sual risks. Focus is being given in the areas of customers nanaging trade receivables and loans) and suppliers inancial position critical suppliers). Also management Tention is given to our relationships with banks (see apital availability risk) and insurance companies (credit orthiness (re)insurance companies). Although pension fund ;sets deteriorated in values significantly per year-end, the npact on 2008 cash premiums was limited because of mg-term financing arrangements. Regional management nd involved Group functions oversee the effectiveness of ianagement analysis and action, supported by input from ternal auditors. perational risks eorganisations any reorganisation projects (amongst others, centralisation f back office activities, closure of breweries and other ghtsizing and downsizing activities) have been realised, re underway or are in preparation. Highest impact is in the ipply chain, wholesale business and support functions in jrope and Americas. The risk is that due to social unrest, the 'oduction quality and supply continuity would be affected, hich might negatively impact financial performance and ompany reputation. The operating companies concerned ianage reorganisation projects with care; the right speed, ignment with relevant industrial and external relations and onsistent communication to employees. ontingency plans have been put in place and clear targets re set on achieving the main change objectives. Since 'locating sufficient management attention to the many ^organisation projects in addition to managing the regular usiness is considered critical, priority setting is monitored osely. Risk management structures are overall well nbedded, however, further structuring is required. Acquisitions and business integration In the pursuit of further expansion, Heineken seeks to strike a balance between organic and acquired growth. In recent years, Heineken has been very acquisitive, with smaller transactions in mostly emerging markets and the S&N acquisition. In any acquisition, Heineken is faced with different cultures, business principles and political, economic and social environments. This may affect corporate values, image and quality standards. It may also impact the realisation of long-term business plans, including synergy objectives, underlying the value of newly acquired companies. Due to the relative size of S&N, specifically any risks materialising from this transaction could have a significant impact on Heineken. In order to mitigate these risks, Heineken continuously improves its business development and integration activities, which includes significant involvement by relevant Group departments, operating companies and regional management in carrying out effective due diligence processes and preparing take charge and integration plans. Heineken has best practice programmes in place for acquisition and integration processes, which includes the adaptation to the Heineken Common Systems. Supply continuity Discontinuity of supply of our products could affect sales and market shares. This is not considered a major risk due to the relative size and spread of operations. An exception is the supply of beer products from the Netherlands to the USA, one of Heineken's most profitable markets. Heineken Netherlands Supply is in the process of implementing a more structured Business Continuity Management System focusing on the supply to the USA. Securing timely supply of raw and packaging materials is strongly coordinated by our central purchasing discipline. Securing supply of fast-growing innovations like DraughtKeg is considered critical, since we also depend on partnerships. Information security Heineken's worldwide operations are increasingly reliant on information systems. Heineken has a strict information security policy to ensure confidentiality, integrity and availability of information and to guarantee IT control. Structured compliance monitoring is in place by self- assessments and audits. The increased attention for Information Security and IT Control has a positive impact on the compliance level with the policy, the awareness of IT risks, and the measures to mitigate these risks. The increased centralisation of IT systems allows central enforcement of security measures across Operating Companies, but the impact of any security incident will also be much larger and requires strict monitoring.

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