Notes to the Consolidated Balance Sheet,
Profit and Loss Account and Cash Flow Statement for 2002
General
The financial statements and the report of the Executive
Board have been prepared in accordance with the provi
sions of Part g, Book 2, of the Netherlands Civil Code.
There were a number of changes in the scope of the con
solidation during the year, the following being the more
significant of these with regard to the financial statements.
The 49.9% participating interest in BrauHolding
International, in Germany, has been proportionally
consolidated with effect from 1 January 2002. In 2001, this
participating interest was carried at net asset value. Bravo
International in Russia has been fully consolidated with
effect from 1 January 2002. In addition, Al Ahram in Egypt,
Almaza in Lebanon and Bard in Panama have been includ
ed in the consolidation with effect from 1 October 2002.
There was also a certain amount of expansion of existing
interests and a number of beverage wholesalers were
acquired. These changes in the consolidation led to an
increase in net turnover of €468 million. The acquisitions
also resulted in a goodwill charge to equity of €778 million.
From 2002 part of the costs of temporary point-of-sales
activities were reclassified as marketing and selling
expenses, whereas previously they were deducted from
net turnover. To facilitate comparison, both net turnover
and marketing and selling expenses in 2001 have been
increased by €170 million.
The financial information relating to Heineken N.V. has
been included in the consolidated balance sheet and profit
and loss account. The abridged presentation permitted by
Section 402, Part 9, Book 2, of the Netherlands Civil Code
has accordingly been used for the Heineken N.V. profit and
loss account.
The amounts disclosed in the notes are in millions of
euros unless otherwise indicated.
Consolidation
Heineken N.V. and the subsidiaries with which it forms a
group are fully consolidated in the consolidated balance
sheet and profit and loss account, with minority interests
in group equity and group profits shown separately.
Proportional consolidation is applied in the case of com
panies in which the Heineken group has a direct interest
and exercises a controlling influence on management
decisions in partnership with other shareholders.
In the analyses of movements in various assets and
liabilities, disclosures of'changes in the consolidation'
relate to increases or decreases in the group's interests
in consolidated companies.
Foreign currency
Hedging transactions to limit exchange risks are entered
into only in respect of actual amounts receivable and
payable and highly probable future cash flows in foreign
currencies. The instruments used are forward contracts
and options. Before such contracts are entered into,
inward and outward cash flows in a particular currency are
netted off at group level as far as possible. Where foreign
currency balance sheet positions have been hedged, they
are translated at the exchange rate of the hedge.
Recognition of results arising from hedging operations
relating to future foreign currency cash flows is deferred
until the relevant cash flows are accounted for. Other for
eign currency transactions in the profit and loss account
are recognised at spot rates unless forward contracts have
been entered into in connection with these transactions,
in which case the forward rate applies.
The financial statements of non-eurozone companies
are translated into euros. Assets and liabilities are trans
lated at exchange rates on the balance sheet date.
Profit and loss account items are translated at the average
monthly exchange rates. The difference between the net
profit based on average exchange rates and the net profit
based on the exchange rates as at balance sheet date is
accounted for in the revaluation reserve. The profit and
loss accounts of companies in hyperinflation countries are
translated at exchange rates prevailing on the balance
sheet date.
Differences in book value arise on translation into euros
of the opening balance of the shareholders' equity of the
non-eurozone consolidated companies plus intra-group
long-term loans granted to these companies. These differ
ences are treated as revaluations and are credited or deb
ited directly to group equity, with due allowance for taxa
tion. Other differences due to exchange rate movements
are accounted for directly in the profit and loss account.
Valuation of assets and liabilities
Intangible fixed assets
Goodwill, the difference between the price paid for partici
pating interests and their valuation according to Heineken
accounting policies, is charged to shareholders' equity
where the group exercises at least a significant influence
on management decisions. In the case of acquisition of
beverage wholesalers, the purchase price is almost entire
ly determined by the customer base and, that being the
case, it is treated as goodwill.
FINANCIAL STATEMENTS 2002
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