Report of the
Report of the
Contents
Overview
Executive Board
Supervisory Board
Financial
statements
Other
information
32. Financial risk management and financial instruments
Overview
HEIN EKEN has exposure to the following risks from its use of financial instruments, as they arise in the normal course of HEINEKEN's business:
Credit risk
Liquidity risk
Market risk
This note presents information about HEINEKEN's exposure to each of the above risks, and it summarises HEINEKEN's policies and processes
that are in place for measuring and managing risk, including those related to capital management. Further quantitative disclosures are
included throughout these consolidated financial statements.
Risk management framework
The Executive Board, under the supervision of the Supervisory Board, has overall responsibility and sets rules for HEINEKEN's risk management
and control systems. They are reviewed regularly to reflect changes in market conditions and HEINEKEN's activities. The Executive Board oversees
the adequacy and functioning of the entire system of risk management and internal control, assisted by Group departments.
The Global Treasury function focuses primarily on the management of financial risk and financial resources. Some of the risk management
strategies include the use of derivatives, primarily in the form of spot and forward exchange contracts and interest rate swaps, but options
can be used as well. It is HEIN EKEN policy that no speculative transactions are entered into.
Credit risk
Credit risk is the risk of financial loss to HEINEKEN if a customer or counterparty to a financial instrument fails to meet its contractual obligations,
and it arises principally from HEINEKEN's receivables from customers and investment securities.
Following the economic crisis, HEINEKEN placed particular focus on strengthening credit management and a Global Credit Policy was
implemented. All local operations are required to comply with the principles contained within the Global Credit Policy and develop local credit
management procedures accordingly. We annually review compliance with these procedures and continuous focus is placed on ensuring that
adequate controls are in place to mitigate any identified risks in respect of both customer and supplier risk.
As at the balance sheet date, there were no significant concentrations of credit risk. The maximum exposure to credit risk is represented by the
carrying amount of each financial instrument, including derivative financial instruments, in the consolidated statement of financial position.
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Heineken N.V. Annual Report 2014