Notes to the consolidated financial statements continued
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Report of the
Report of the
Financial
Other
Contents
Overview
Executive Board
Supervisory Board
statements
information
32. Financial risk management and financial instruments
Net investment hedges
HEINEKEN hedges its investments in certain subsidiaries by entering local currency denominated borrowings, which mitigate the foreign
currency translation risk arising from the subsidiaries net assets. These borrowings are designated as a net investment hedge. The fair value
of these borrowings at 31 December 2014 was EUR520 million (2013: EUR273 million), and no ineffectiveness was recognised in profit and
loss in 2014 (2013: nil).
Capital management
There were no major changes in ElEINEKEN's approach to capital management during the year. The Executive Board's policy is to maintain
a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business and
acquisitions. Capital is herein defined as equity attributable to equity holders of the Company (total equity minus non-controlling interests).
EIEINEKEN is not subject to externally imposed capital requirements other than the legal reserves explained in note 22. Shares are purchased
to meet the requirements of the share-based payment awards, as further explained in note 29.
Fair values
The fair values of financial assets and liabilities that differ from the carrying amounts shown in the statement of financial position are as follows:
In millions of EUR
Carrying
amount
2014
Fair value
2014
Carrying
amount
2013
Fair value
2013
Bank loans
(540)
(540)
(711)
(711)
Unsecured bond issues
(8,769)
(9,296)
(8,987)
(8,951)
Finance lease liabilities
(15)
(15)
(9)
(9)
Other interest-bearing liabilities
(1,275)
(1,275)
(1,742)
(1,742)
Basis for determining fair values
The significant methods and assumptions used
in note 4.
in estimating the fair values of financial instruments reflected in the table above are discussed
Fair value hierarchy
The tables below present the financial instruments accounted for at fair value and amortised cost by level of the following fair value
measurement hierarchy:
Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1)
Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices)
or indirectly (that is, derived from prices) (level 2)
Inputs for the asset or liability that are not based on observable market data (unobservable inputs) (level 3)
31 December 2014
Level 1
Level 2
Level 3
Available-for-sale investments
99
86
68
Non-current derivative assets
97
Current derivative assets
122
Investments held for trading
13
112
305
68
Non-current derivative liabilities
(8)
Loans and borrowings
(9,296)
(1,829)
Current derivative liabilities
(104)
(9,296)
(1,941)
122
Eleineken N.V. Annual Report 2014