Notes to the Consolidated Balance Sheet, Statement of Income and
Cash Flow Statement for the Financial Year 1999
General
The financial statements and annual report are
subject to Title 9, Book 2 of the Netherlands Civil
Code. Several changes took place in the consolida
tion during the financial year. The most important
changes in regard to the financial statements were
as follows. The company Zywiec, Poland, that was
consolidated as ofjune 1,1998 is now consolidated
for a full year. Brewpole, Poland, now part of the
Zywiec Group, was fully consolidated as per
January 1,1999. Effective January 1,1999 Pivara
Skopje, Macedonia (25.2%) and Shanghai Mila
Brew, China (32.4%) were proportionally (50%)
consolidated. Brasseries du Logone, Chad (100%)
was fully consolidated as of July 1,1999. In addition
a number of beverage wholesalers was taken into
consolidation. These changes resulted in an increase
in net turnover of EUR 516 million and in a goodwill
charge of EUR 106 million to shareholders' equity.
The financial data of Heineken N.V. are
incorporated in the consolidated balance sheet and
statement of income. Consequently, a simplified
presentation has been effected for the profit and
loss account of Heineken N.V., as enabled under
the provisions of Article 402, Title 9, Book 2 of the
Netherlands Civil Code.
The amounts stated in the notes are in millions of
euros, unless indicated otherwise.
Basis of consolidation
In the consolidated balance sheet and statement of
income Heineken N.V. and its subsidiaries, with
which Heineken N.V. constitutes a group, are shown
as fully consolidated. The minority interests in the
Group funds and in the Group profit are indicated
separately. Proportional consolidation takes place
in the case of participations in which the Heineken
Group has a direct interest and, in co-operation with
other shareholders, exercises control with regard
to management policy ifthe activities of the
participations concerned are closely linked with
those of the Heineken Group. Under the heading
"Changes in the consolidation" the following
statements ofthe movements ofvarious assets
and liabilities show the movements which relate
to the increase in or reduction of our interests in
consolidated participations.
Translation offoreign currencies
Amounts in foreign currency have been translated
at the rates of exchange on the balance sheet date.
Hedging transactions are concluded exclusively for
the limitation offoreign exchange risks on
receivables and debts and on cash flows in foreign
currencies which are very likely to recur on a regular
basis. Forward transactions and options are used
to this end. Before hedging, the incoming and
outgoing cash flows in given currencies are netted
centrally as far as possible. Where forward exchange
transactions are concluded to hedge positions in
foreign currency, those positions are translated
at the rate of exchange at which they were hedged.
The recognition of gains and losses arising from
the translation of transactions entered into for the
purpose of hedging future cash flows is deferred
until the time when the relevant cash flows are
accounted for. Commercial transactions in the
statement of income denominated in foreign
currencies are booked at the spot rates or forward
rates where forward contracts are closed in regard
to these transactions. Differences in value arise
as a result ofthe translation into euros ofthe
shareholders' equity ofthe foreign consolidated
participations at the beginning of the financial year
and ofthe intra Group financing furnished to these
participations. These differences are regarded as
a revaluation and are credited or debited to the
Group funds, taking into account the possible
levying of taxation.
Other differences connected with changes in rates
of exchange are incorporated in the statement of
income.
H E I N E K
F I N A N C
S T A T E M
19 9 9
49
EN N. V.
I A L
E N T S