Notes to the Consolidated Balance Sheet,
Profit and Loss Account and Cash Flow Statement for 2003
General
The financial statements and the report of the Executive Board
have been prepared in accordance with the provisions of Part g,
Book 2, of the Netherlands Civil Code.
There were a number of changes in the scope of the
consolidation during the year. The most significant changes with
regard to the financial statements are mentioned below.
Consolidated from
Karlsberg International Brand GmbH, Germany 1 January 2003
Dinal LLP, Kazakhstan 1 January 2003
Compania de Cervecerias Unidas S.A. (CCU), Chile 1 April 2003
Karlovacka Pivovara, Croatia 1 April 2003
Brau-Beteiligungs-Aktiengesellschaft (BBAG),
Austria, with operations in Austria, Poland,
Romania, Hungary and the Czech Republic 1 October 2003
These changes in the consolidation led to an increase in net
turnover of €686 million.
The financial information relating to Heineken N.V. has been
included in the consolidated balance sheet and profit and loss
account. Accordingly, the abridged presentation permitted by
Section 402, Part 9, Book 2, of the Netherlands Civil Code has
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.
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 foreign curren
cy 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-euro zone companies are
translated into euros. Assets and liabilities are translated 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 shareholders' equity.
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 from translation into euros of
the opening balance of the shareholders' equity of the non-
euro zone consolidated companies plus intra-group long-term
loans granted to these companies. These differences are treated
as revaluations and are credited or debited directly to group
equity, with due allowance for taxation. Other differences due to
exchange rate movements are accounted for directly in the
profit and loss account.
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. Minority interests in group equity and
group profits are presented separately.
Proportional consolidation is applied in the case of companies
n which the Heineken group has a direct interest and exercises
a controlling influence on management decisions in partnership
with other shareholders.
;n 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
n a particular currency are netted off at group level as far as
possible. Where foreign currency balance sheet positions have
Changes in accounting policies
With effect from the beginning of the 2003 financial year,
goodwill is capitalised and amortised. Goodwill paid up to
31 December 2002 has been charged directly to shareholders'
equity. If the goodwill had been charged to shareholders' equity
in 2003 as in previous years, it would have been €1,124 million
lower as at 31 December 2003 and the net profit would have
been €31 million higher.
With effect from the beginning of the 2003 financial year,
the consolidated balance sheet is presented before profit
appropriation, following changes in the Dutch reporting rules.
Only the dividends paid during the year are charged to share
holders' equity. In 2003, the final dividend for 2002 and the
interim dividend for the current year were charged to
shareholders' equity.
With effect from the beginning of the 2003 financial year,
following changes in the Dutch reporting rules concerning the
determination of net turnover, all discounts and excise duties
directly attributable to the turnover are deducted from net
turnover.
financial statements 2003
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