Notes to the consolidated financial statements continued
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33. Off-balance sheet commitments
In millions of EUR
Total 2014
Less than
1 year
1-5 years
More than
5 years
Total 2013
Lease and operational lease commitments
993
155
319
519
701
Property, plant and equipment ordered
158
154
4
160
Raw materials purchase contracts
3,400
1,396
1,766
238
4,526
Other off-balance sheet obligations
2,008
530
913
565
2,279
Off-balance sheet obligations
6,559
2,235
3,002
1,322
7,666
Undrawn committed bank facilities
2,871
5
2,866
2,397
HEINEKEN leases buildings, cars and equipment in the ordinary course of business.
Raw material contracts include long-term purchase contracts with suppliers in which prices are fixed or will be agreed based upon predefined
price formulas. These contracts mainly relate to malt, bottles and cans.
During the year ended 31 December 2014, EUR291 million (2013: EUR282 million) was recognised as an expense in profit or loss in respect
of operating leases and rent.
Other off-balance sheet obligations mainly include distribution, rental, service and sponsorship contracts.
Committed bank facilities are credit facilities on which a commitment fee is paid as compensation for the bank's requirement to reserve capital.
The bank is legally obliged to provide the facility under the terms and conditions of the agreement.
34. Contingencies
As part of the acquisition of the beer operations of FEMSA in 2010, HEINEKEN inherited existing legal proceedings with labour unions, tax
authorities and other parties of its, now wholly-owned, subsidiaries Cervejarias Kaiser Brasil and Cervejarias Kaiser Nordeste (jointly, Heineken
Brasil). The proceedings have arisen in the ordinary course of business and are common to the current economic and legal environment
of Brazil. The proceedings have partly been provided for (refer to note 30). The contingent amount being claimed against Heineken Brasil
resulting from such proceedings as at 31 December 2014 is EUR620 million. Such contingencies were classified by legal counsel as less than
probable of being settled against Heineken Brasil, but more than remote. However, HEINEKEN believes that the ultimate resolution of such
legal proceedings will not have a material adverse effect on its consolidated financial position or result of operations. HEINEKEN does not
expect any significant liability to arise from these contingencies. A significant part of the aforementioned contingencies (EUR355 million)
is tax-related and qualifies for indemnification by FEMSA (refer to note 17).
As is customary in Brazil, Heineken Brasil has been requested by the tax authorities to collateralise tax contingencies currently in litigation
amounting to EUR399 million by either pledging fixed assets or entering into available lines of credit which cover such contingencies.
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Heineken N.V. Annual Report 2014