Financial statements Notes to the consolidated financial statements
32. Financial risk management and financial instruments
The total carrying amount and contractual cash flows of derivatives are included in trade and other receivables (note 20) and tradi
and other payables (note 31) and non-current non-interest bearing liabilities (note 25).
Carrying Contractual 6 months or More than
Secured bank loans
Unsecured bank loans
Unsecured bond issues
Finance lease liabilities
Other interest-bearing liabilities
Deposits from third parties
Trade and other payables, excluding interest,
dividends and derivatives
Derivative financial (assets) and liabilities
Interest rate swaps used for hedge accounting
Forward exchange contracts used for
12,175 (13,550) (4,682) (535) (1,745) (4,578) (2,OK
The total carrying amount and contractual cash flows of derivatives are included in trade and other receivables (note 20), other
investments (note 17), trade and other payables (note 31) and non-current non-interest bearing liabilities (note 25).
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates, commodity prices and equity
prices will affect Heineken's income or the value of its holdings of financial instruments. The objective of market risk management
is to manage and control market risk exposures within acceptable parameters, whilst optimising the return on risk.
Heineken uses derivatives in the ordinary course of business, and also incurs financial liabilities, in order to manage market risks.
Generally, Heineken seeks to apply hedge accounting or make use of natural hedges in order to minimise the effects of foreign
currency fluctuations in profit or loss.
Derivatives that can be used are interest rate swaps, forward rate agreements, caps and floors, commodity swaps, spot and forwar
exchange contracts and options. Transactions are entered into with a limited number of counterparties with strong credit ratings.
Foreign currency, interest rate and commodity hedging operations are governed by internal policies and rules approved and
monitored by the Executive Board.
Foreign currency risk
Heineken is exposed to foreign currency risk on sales, purchases and borrowings that are denominated in a currency other than
the respective functional currencies of Heineken entities. The main currencies that give rise to this risk are the US dollar and
In managing foreign currency risk, Heineken aims to reduce the impact of short-term fluctuations on earnings. Over the longer terrr
however, permanent changes in foreign exchange rates would have an impact on profit.