Notes to the Consolidated Balance Sheet, Profit and Loss Account and Cash Flow Statement for 2003 Provisions The provision for deferred tax liabilities is formed in respect of timing differences between valuation for tax purposes and valuation according to the accounting policies for reporting purposes. A taxation provision is also formed for the withholding tax to be deducted from undistributed profits of foreign group companies. The liabilities are calculated at the standard tax rates on balance sheet date and are stated at face value. Deferred tax assets are netted off against deferred tax liabilities of the same kind over matching periods. A net deferred tax asset is not recognised unless future realisation is reasonably certain. The provisions for pension liabilities and similar schemes are calculated at net present value according to actuarial principles based on current pay levels. Full provision is made for pension liabilities in respect of accrued benefit rights. Prior-service liabilities resulting from improvements in remuneration packages and pension plans are added to the provision for pension liabilities and charged directly to the result. Provisions connected with reorganisation plans are calculated at the net present value of the benefit commitments in connection with early retirement, relocation and redundancy schemes. Where applicable, the expected degree of employee partici pation in the schemes concerned is taken into account. Long-term borrowings ong-term interest-bearing loans are included at face value aking into account any discounts or premiums and associated ransaction costs. Discounts and premiums plus costs are harged to the profit and loss account as interest expenses over he period of the loan. Other long-term borrowings are stated at ace value. urrent liabilities lurrent liabilities are stated at face value. Determination of results ncome and expenses are accounted for in the profit and loss iccount at the time of supply of the relevant goods or services, fet turnover means the proceeds from sales of products and ervices supplied to third parties, net of sales taxes direct, ustomer discounts and excise duties. Raw materials and consumables are stated at replacement ost in the profit and loss account. Depreciation charges based on replacement cost are calcu- ated on a straight-line basis according to the estimated useful ves of the assets concerned. The results of non-consolidated participating interests consist )f dividends received during the year from companies carried at cost and Heineken's share of the net profits of companies carried at net asset value. The share of the results of companies carried at net asset value is calculated as far as possible in accordance with group accounting policies for the determination of results, taking account of taxation and minority interests. Interest expenses are allocated to the periods to which they relate. Results arising from operations involving interest rate hedging instruments are also accounted for as interest. Such instruments are used to hedge the risk of a reduction in interest income on surplus funds temporarily invested in bank deposits due to falling interest rates and higher interest charges on interest-bearing liabilities due to interest rate rises. Interest rate hedging instruments are not used without a corresponding underlying position. Taxation on profits is calculated on the profit shown in the financial statements by applying the standard tax rates, taking into account tax payable by the group on profit distributions by participating interests and applicable tax facilities. Differences between the amount thus calculated and the tax actually payable for the year are accounted for in the provision for deferred tax liabilities. INANCIAl STATEMENTS 2003 57

Jaarverslagen en Personeelsbladen Heineken

Jaarverslagen | 2003 | | pagina 63