2001 2000 Notes to the Consolidated Balance Sheet Off-balance-sheet commitments Tenancy and operating leases 56 52 Capital expenditure commitments, unless already included in tangible fixed assets 84 68 Long-term raw material purchase contracts 186 32 Declarations of joint and several liability 286 261 Other off-balance-sheet commitments 12 14 Financial instruments Contract value as at 31 December Currency hedging instruments in US dollars 1,321 1,061 Currency hedging instruments in other currencies 206 246 Interest-hedging instruments 925 945 Financial instruments are used in the normal course of business to hedge the effects on results of fluctuations in exchange rates and interest rates. The most important foreign currency inflow is denominated in US dollars and is generated by export activities. The expected net cash flow in US dollars, which amounts to around USD 760 million per annum, is hedged well in advance by means of a com bination of forward contracts and options. This policy reduces the volatility of export sales proceeds and results due to short-term fluctuations in the value of the US dollar against the euro and delays the impact of long-term fluctu ations on results. As far as possible, temporary cash surpluses are held cen trally and invested in bank deposits in euros with maximum terms of one year. Approximately 60% of the risk of a reduction in interest income on these deposits due to a fall in the interest rate or an increase in interest charges due to a rise in the interest rate on interest-bearing liabilities is hedged with interest rate instruments. These interest-hedging instruments include interest rate swaps, forward rate agreements and caps and floors. Currency and interest rate risk management is governed by a stringently defined policy and strict rules. Only a limi ted number of counterparties are used, all with excellent credit ratings. The activities are closely monitored, inde pendently of implementation. FINANCIAL STATEMENTS 2001 61

Jaarverslagen en Personeelsbladen Heineken

Jaarverslagen | 2001 | | pagina 67