Risk Management Report of the Executive Board This section presents an overview of HEINEKEN's Risk Management and Control Systems including a description of the most important risks, HEINEKEN's exposure and its main mitigation efforts. Managing risks is explicitly on the management's agenda and embedded in the HEINEKEN Company Rules. Our aim with the Risk Management and Control Systems is to meet our strategic objectives whilst effectively protecting the Company and its brands against reputational and financial damage. Continuity and sustainability of the business are as important to the stakeholders as growing and operating the business. As a business, we balance our financial sustainability with playing a role in society. Social responsibility and sustainability underpin everything we do. Risk Management and Control Systems The HEINEKEN Risk Management and Control Systems aim to ensure that the risks of the Company are identified and managed, and that the strategic objectives are met whilst complying with applicable laws and regulations at a reasonable level of assurance. A system of controls that ensures adequate financial reporting is in place. HEINEKEN's internal control system is based on the COSO Internal Control Framework. Risk appetite The Company is recognised for its drive for quality, consistency and financial discipline. An entrepreneurial spirit is encouraged across the Group in order to seek opportunities that support continuous growth through business development and brand building, whilst taking controlled risks. The international spread of the country portfolio, the robust balance sheet and strong cash flow form the context of the risk appetite of the Company. Risk profile HEINEKEN is a single-product company operating in the alcohol-producing business with a high level of commonality in its worldwide business operations, which are spread over many developed and emerging markets. The worldwide activities are exposed to varying degrees of risk and uncertainty. Some of these may result in a material impact at the level of a particular Operating Company if not identified or effectively managed, but may not have material impact on Group level. As both the Group and its most valuable brand carry the same name, reputation management is of utmost importance. The image of our sector and products is of key importance to maintain our licence to operate and to grow the beer category in a responsible manner. This is especially relevant in markets where beer has a less favourable image. Compared to other leading beer companies, H EINEKEN has a significantly wider geographical spread of its businesses and therefore does not depend on the performance in a limited number of markets. Latin America, Africa and Asia Pacific are important developing regions for HEINEKEN as its global organic volume growth is largely driven by growth in these regions. Political instability in parts of these regions could adversely affect earnings and cash flow. A significant part of the Company's results is realised by joint ventures and via licence agreements. HEINEKEN may face the risk that joint ventures are not always acting in the best interests of the Company. Risk management HEINEKEN strives to be a sustainable and performance-driven company. This is achieved by doing business, which by nature involves taking risks and managing those risks. Structured risk assessments are integrated in change projects, business planning, performance monitoring processes, common processes and system implementations and acquisitions and business integration activities. The Risk Management and Control Systems are considered to be in balance with HEINEKEN's risk profile and appetite, although such systems can never provide absolute assurance. HEINEKEN's Risk Management and Control Systems are subject to continuous review and adaptations in order to remain in balance with its growing business size and changes in its risk profile. 34 Heineken N.V. Annual Report 2011

Jaarverslagen en Personeelsbladen Heineken

Jaarverslagen | 2011 | | pagina 36