Notes to the Consolidated Balance Sheet and Statement of Income
for the financial year 1985
General
The provisions of Title 8, Book 2 of the Netherlands Civil
Code, are applicable to the annual accounts and the
annual report.
The amounts stated in the notes are in thousands of
guilders, unless indicated otherwise.
Basis of consolidation
In the Consolidated Balance Sheet and Statement of
Income Heineken NVand its interests 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.
Proportionate 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 equal to that of the other partners combined.
Under the heading 'Changes in the extent of the consoli
dation' the following statements of the movements of
various assets and liabilities show those movements which
relate to the increase or reduction of our interests in
consolidated participations.
Accounting policies for the valuation of assets and the
determination of income
Tangible fixed assets have been valued on the basis of
replacement cost and, with the exception of sites, after
deduction of depreciation. The replacement cost is based
on valuations by internal and external experts, taking
technical and economic developments into account. They
are supported by the experience gained in the construction
of new establishments all over the world.
The valuation of Non-consolidated participations is at the
cost of acquisition, after deduction of provisions con
sidered necessary.
The Other financial fixed assets are shown at par value,
less a provision for doubtful items.
Depending on the customary method of price determina
tion, the stocks obtained from third parties are valued on
the basis of current contracts, market prices or purchase
prices applicable on the balance sheet date.
Finished products and products in process are valued at
manufacturing cost, based on replacement cost and taking
into account the stage of processing.
Stocks of returnable packing materials and spare parts are
depreciated on a straight-line basis in view of the reduction
of the possibility of use.
Provisions on stocks are made up to the recoverable
amount or net realizable value, respectively, if this is lower
than the replacement cost.
Prepayments on stocks are stated at par value, if neces
sary after deduction of a provision.
Accounts receivable are shown at par value, after deduc
tion of a provision for bad debts and less the amount of
deposits due on account of the obligation to take back own
packing materials.
Securities have been valued at the cost of acquisition,
unless the market price or the estimated value of unlisted
securities is lower.
Bank, cash and clearing balances, as well as the short-
term cash deposits, are stated at par value.
The purpose of the Investment facilities equalization
account is to apportion the amounts received in virtue of the
arrangements existing in a number of countries with regard
to investments over the estimated life of the assets
concerned.
The Provision for deferred tax liabilities is calculated on the
differences in valuation between the balance sheet and the
statement of financial condition for fiscal purposes, in so far
as these differences will be taken into account in the
levying of taxation. Calculation takes place at the nominal
rates of the taxes on profit in the various countries and the
taxes on profit distributions which are borne by the
Group.
The Provision for pension liabilities is determined on the
basis of present value.
The Provision for other personnel schemes is calculated on
the basis of the present value of the benefit commitments
on account of retirement, transfer, retaining pay and
disability, taking into account where necessary the expec
ted degree of participation.
Long-term debts and Current liabilities are shown at par
value.
In the Statement of Income proceeds and expenses are in
principle accounted for at the time when the relevant goods
or services are supplied.
Net turnover means the proceeds of products supplied and
services rendered to third parties, after deduction of
turnover taxes and discounts.
The consumption of raw materials and other materials is
stated at replacement cost in the Statement of Income.
Excise duties are stated at the actual amount incurred.
The depreciation based on replacement cost is applied on
a straight-line basis, in accordance with the estimated life
of each asset; the withdrawal from the Investment facilities
equalization account is allowed for in this calculation.
Dividend from non-consolidated participations relates to
the dividends received in the financial year.
Taxation on profit, which also includes the taxes on profit
distributions which are borne by the Group, is calculated
on the profit according to the annual accounts, on the basis
of the nominal rates and the facilities applicable. The
differences from the taxes actually payable in respect of
the financial year are offset against the Provision for
deferred tax liabilities.
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