Notes to the Consolidated Financial Statements continued
Reportofthe Reportofthe Financial Other
Contents Overview Executive Board Supervisory Board Statements Information
32. Financial risk management and financial instruments
Overview
HEINEKEN 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 ElEINEKEN's exposure to each of the above risks, and it summarises EHEINEKEN'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 HEINEKEN 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
HEINEKEN's 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. HEINEKEN annually reviews 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.
115 Helneken N.V. Annual Report 2015