Notes to the consolidated financial statements continued
32. Financial risk management and financial instruments ontinued
The movement in the allowance for impairment in respect of trade and other receivables (excluding derivatives) during the year was as follows:
2012
Balance as at 1 January
478
446
Changes in consolidation
1
-
Impairment loss recognised
104
104
Allowance used
(60)
(17)
Allowance released
(66)
(47)
Effect of movements in exchange rates
4
(8)
Balance as at 31 December
461
478
The movement in the allowance for impairment in respect of loans during the year was as follows:
2012
Balance as at 1 January
170
171
Changes in consolidation
Impairment loss recognised
38
10
Allowance used
-
(3)
Allowance released
(53)
(9)
Effect of movements in exchange rates
3
1
Balance as at 31 December
158
170
Impairment losses recognised for trade and other receivables (excluding derivatives) and loans are part of the other non-cash items in the consolidated
statement of cash flows.
The income statement impact of EUR15 million (2011: EUR1 million) in respect of loans and the income statement impact of EUR38 million
(2011: EUR57 million) in respect of trade receivables (excluding derivatives) were included in expenses for raw materials, consumables and services.
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 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 when 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.
128
Heineken N.V. Annual Report 2012
