73 Financial Review of the Carlsberg Group The company pursues a policy of monitoring and managing this exposure centrally through fi- nancial transactions, and net debt is an important element in the companyGLYPH<213>s hedging of exchange rate risks. The currency composition of net debt is based on considerations regarding the compositi- on of assets and liabilities and the currencies. The principles governing the management of exchange risks stipulate that this function is car- ried out by the companyGLYPH<213>s Corporate Treasury de- partment. The currency exposure in the individual Group companies is eliminated through intra- Group financial transactions and exposure is thus aggregated and managed centrally. In 2001, only minor fluctuations were registered in the primary currencies involving exchange rate risks for the company. To the extent deemed expedient, the company pursues a policy of managing funding and placement of liquid funds centrally. Funding takes place based on the subsidiariesGLYPH<213> investment and operational liquidity requirements. The subsidiari- esGLYPH<213> excess liquidity is equalised internally through intra-Group accounts. Local conditions may mean that subsidiariesGLYPH<213> borrowing is not handled centrally. The company monitors credit risks from central quarters. Guidelines stipulate that contracts can only be entered into with financial institutions with high debtor ratings. Cash at bank and in hand is deposited with banks with high credit rating and the companyGLYPH<213>s trade debtors are distributed in such a manner that the GroupGLYPH<213>s credit risk is not considered exceptional. The most significant interest rate exposure relates to interest-bearing debt, as the company did not hold any significant long-term, interest-bearing assets as at 31 December 2001. The companyGLYPH<213>s loan portfolio consists of listed bond loans (GBP 200m matures in 2013, GBP 250m matures in 2011 and CHF 100m matures in 2004), bilateral loan agreements and syndicated credit facilities primarily raised in currencies in which the company holds assets. The manage- ment of the interest rate exposure involves the use of interest rate instruments such as interest rate swaps and options as well as fixed and floating rate debt. Carlsberg Breweries advances loans to the on- trade, particularly in the United Kingdom through Carlsberg-Tetley. These loans amounted to ap- prox. DKK 1.4bn. The loans are subject to conti- nuous control and supervision, and it is estimated that provisions made are sufficient to cover any loss. The long-term debt primarily consists of floa- ting rate loans (67% in 2001 against 19% in 2000). As at 31 December 2001, the average term to maturity of the GroupGLYPH<213>s loans was approxi- mately 1.96 years. The DKK duration is DKK 225m, corresponding to the change in market va- lue of external debt that a 1% change in interest rates would cause. Credit risks Interest rate risks Liquidity risks