Liquidity risk
The movement in the allowance for impairment in respect of trade and other receivables (excluding derivatives
used for hedge accounting) during the year was as follows:
millions of EUR20092008
Balance as at 1 January 280 194
Changes in consolidation 1 88
Impairment loss recognised 109 52
Allowance used (26) (13)
Allowance released (45) (31)
Effect of movements in exchange rates15(10)
Balance as at 31 December 334 280
The movement in the allowance for impairment in respect of loans during the year was as follows:
millions of EUR 2009 2008
Balance as at 1 January 177 108
Changes in consolidation 49^
mpairment loss recognised 48 46
\llowance used (27) (26)
Jlowance released (9)
Effect of movements in exchange rates[4]
Balance as at 31 December 185177
Impairment losses recognised for trade and other receivables (excluding derivatives used for hedge accounting)
and loans are part of the other non-cash items in the consolidated statement of cash flows.
The impairment loss of EUR48 million (2008: EUR46 million) in respect of loans and the impairment loss of
EUR 109 million (2008: EUR 52 million) in respect of trade receivables (excluding derivatives used for hedge
accounting) were included in expenses for raw materials, consumables and services.
An impairment loss of EUR48 million (2008: EUR46 million) in respect of loans was recognised during the
current year of which EUR 37 million (2008: EUR 34 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
ecord impairment losses, unless Heineken is satisfied that no recovery of the amount owing is possible, at that
mint the amount considered irrecoverable is written off against the financial asset.
Jquidity risk is the risk that Heineken will encounter difficulty in meeting the obligations associated with its
financial liabilities that are settled by delivering cash or another financial asset. Heineken's approach to
managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities
.vhen due, under both normal and stressed conditions, without incurring unacceptable losses or risking
damage to Heineken's reputation.
Recent times have proven the credit markets situation could be such that it is difficult to generate capital to
finance long-term growth of the Company. Although currently the situation is more stable, the Company has
a clear focus on ensuring sufficient access to capital markets to finance long-term growth and to refinance
maturing debt obligations. Financing strategies are under continuous evaluation. In addition, the Company
focuses on a further fine-tuning of the maturity profile of its long-term debts with its forecasted operating cash
flows. Strong cost and cash management and controls over investment proposals are in place to ensure
effective and efficient allocation of financial resources.
Annual Report 2009 - Heineken N.V.
