(c Basis of consolidation
(i Subsidiaries
Subsidiaries are those entities controlled by the Company. Control exists when the Company has the power,
directly or indirectly, to govern the financial and operating policies of an enterprise so as to obtain benefits
from its activities. In assessing control, potential voting rights that presently are exercisable or convertible
are taken into account. The financial statements of subsidiaries are included in the consolidated financial
statements from the date that control commences until the date that control ceases.
Associates
Associates are those entities in which Heineken has significant influence, but not control, over the
financial and operating policies. The consolidated financial statements include Heineken's share of the
total recognised gains and losses of associates on an equity accounted basis, from the date that significant
fluence commences until the date that significant influence ceases. When Heineken's share of losses
ceeds the carrying amount of the associate, the carrying amount is reduced to nil and recognition
oi further losses is discontinued except to the extent that Heineken has incurred obligations in respect
0 the associate.
1 1 Joint ventures
J nt ventures are those entities over whose activities Heineken has joint control, established by contractual
i - eement. The consolidated financial statements include Heineken's proportionate share of the entities'
sets, liabilities, revenue and expenses with items of a similar nature on a line-by-line basis, from the date
f at joint control commences until the date that joint control ceases.
Investments
I /estments are investments in entities and are classified either as non-current assets or current assets
id are, depending on the fact if they are strategic investments or not, stated at amortised cost or at fair
v lue (refer accounting policy i).
Transactions eliminated on consolidation
tra-Group balances and transactions, and any unrealised gains arising from intra-Group transactions,
e eliminated in preparing the consolidated financial statements. Unrealised gains arising from
nsactions with associates and joint ventures are eliminated to the extent of Heineken's interest
the enterprise. Unrealised gains arising from transactions with associates are eliminated against
e investment in the associate. Unrealised losses are eliminated in the same way as unrealised gains,
it only to the extent that there is no evidence of impairment.
Foreign currency
Foreign currency transactions
ansactions in foreign currencies are translated at the foreign exchange rate ruling at the date of the
insaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date
e translated to the functional currency at the foreign exchange rate ruling at that date. Foreign exchange
ferences arising on translation are recognised in the income statement. Non-monetary assets and liabilities
nominated in foreign currencies that are stated at fair value are translated to the functional currency at
eign exchange rates ruling at the dates the values were determined. Non-monetary assets and liabilities
nominated in foreign currencies that are stated at cost remain translated into the functional currency at
f storical foreign exchange rates.
ie following exchange rates, for most important countries in which we have operations, were used while
eparing these financial statements:
Heineken N.V. - Annual Report 2005