Explanatory notes to the Consolidated Balance Sheet and Statement of Income
for the financial year 1977/1978
General
The amounts stated in the notes are in thousands
of guilders, unless indicated otherwise; the figures
for the financial year 1976/1977 are shown for com
parative purposes.
Basis of consolidation
In the consolidated annual accounts the participa
tions in which Heineken NV has a direct or indi
rect interest of more than 50% are shown as fully
consolidated. The minority interests in the group
funds and in the group profit are indicated separa
tely.
Partial consolidation has taken place in the case of
those participations in which an interest of 50% or
less is held, if the influence exerted by Heineken
on management policy is at least equal to that of
the other partners combined. The amounts of as
sets and liabilities and of items in the statement of
income, respectively, have been stated in pro
portion to our interest in the total issued capital.
The other interests are stated under Participations.
A survey of the participations, giving the percent
age of the holding, is included on page 30 of this
Report.
Accounting policies
Property, plant and equipment as well as stocks are
stated in the annual accounts at replacement cost.
Differences in valuation resulting from revaluation
are credited or debited to the Revaluation reserve,
after deduction of an amount on account of defer
red tax liabilities. These differences in valuation are
offset against the other provisions, however, if the
revaluation relates to parts of the Group in which
the risks involved in the exercise of the business
are significantly greater than normal.
The items in foreign currency in the annual ac
counts have been converted at the official rates of
exchange on the balance sheet date.
Differences on exchange arise as a result of the
conversion of the balance sheets of the foreign
consolidated participations at the beginning of the
financial year at the rates of exchange which have
altered at the end of the year. In so far as they
relate to the fixed assets of these participations, the
differences on exchange are offset against the re
valuation of the said assets. The differences on the
other balance sheet items are included in other
provisions.
Other differences on exchange are incorporated in
the statement of income.
Goodwill upon the acquisition or sale of enterprises
is debited or credited, respectively, to the General
reserve.
Plants and installations as well as Other real estate
have been valued on the basis of replacement
cost, after deduction of depreciation. The replace
ment cost is based on valuations by internal and
external experts, taking technical developments
into account. They are supported by the ex
perience gained in the construction of new establish
ments all over the world.
The non-consolidated interests, which are shown
in the balance sheet under Participations, are
stated at the net asset value according to the latest
balance sheet adopted. Changes in the net asset
value as a result of retained profits, revaluation and
differences on exchange are offset against the
other provisions.
Miscellaneous and non-current assets are shown at
par value, less a provision for doubtful items.
Stocks are stated at replacement cost, if necessary
after deduction of an amount for depreciation.
Accounts receivable are shown at par value, after
deduction of a provision for bad debts and less the
amount of deposits due on account of the obli
gation to take back own packing materials.
As regards Cash and securities, cash and balances
at banks as well as the short-term cash deposits are
stated at par value. The securities have been
valued at the market price on the balance sheet
date.
The purpose of the Fund for equalization of in
vestment facilities is to apportion the amounts re
ceived in virtue of the arrangements existing in a
number of countries with regard to investments
over the estimated life of the assets concerned.
The provisions for deferred tax liabilities and for
pensions are stated at the present value of these
liabilities. The other provisions which are not as
sociated with specific assets are related to possible
risks involved in the exercise of the business.
These risks include the giving of sureties, the fact
of operating in many scattered markets with the
associated risks as regards the sometimes very
restrictive local regulations in respect of transfer
possibilities, and risks of nationalization of parts of
the Group.
Long-term debts and Current liabilities are shown
at par value.
Sales proceeds mean the proceeds from products
delivered to third parties.
Miscellaneous income arises from the rendering of
services to third parties.
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