118 Notes to the Consolidated Financial Statements (continued) 30. Financial risk management and financial instruments (continued) Capital management Fair values Basis for determining fair values Fair value hierarchy - - - - - - - - - - - - - - - - - - - - - - - Heineken NV. Report of the Report of the Financial Sustainability Other Annual Report 2016 Introduction Executive Board Supervisory Board Statements Review Information There were no major changes in HEINEKEN'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). HEINEKEN 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 27. In 2015, HEINEKEN also purchased shares following the completion of the divestment of EMPAQUE in February 2015, as further explained in note 22. For bank loans and finance lease liabilities the carrying amount is a reasonable approximation of fair value. The fair value of the unsecured bond issues as at 31 December 2016 was EUR 11,292 million (2015: EUR 10,025 million) and the carrying amount was EUR 10,683 million (2015: EUR 9,669 million). The fair value of the other interest bearing liabilities as at 31 December 2016 was EUR 1,662 million (2015: EUR 1,870 million) and the carrying amount was EUR 1,597 million (2015: EUR 1,759 million). The significant methods and assumptions used in estimating the fair values of financial instruments reflected in the table above are discussed in note 4. 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, (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). as prices) or i ndirectly 31 December 2016 Level 1 Level 2 Level 3 Available-for-sale investments 342 85 Non-current derivative assets 254 Current derivative assets 48 342 302 85 Non-current derivative liabilities (10) Loans and borrowings (11,292) (1,662) Current derivative liabilities (75) (11,292) (1,747) 31 December 2015 Level 1 Level 2 Level 3 Available-for-sale investments 98 105 84 Non-current derivative assets 210 Current derivative assets 52 Investments held for trading 16 114 367 84 Non-current derivative liabilities (32) Loans and borrowings (10,025) (1,870) Current derivative liabilities (89) (10,025) (1,991)

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