To the Shareholders (continued)
Report of the
Report of the
Annual Report 2016
The Committee supervises the activities of the Executive Board with respect to the publication of financial information. The Committee reviews,
in the presence of the Executive Board and the external auditor, the appropriateness of the half-year reporting and the annual financial statements,
- The decisions made on the selection and application of accounting policies.
- The reliability and completeness of disclosures.
- Compliance with financial and other reporting requirements.
- Significant judgements, estimates and assumptions used in preparing the reports in respect of, among others, accounting for acquisitions
and divestments, the annual impairment test and determining the level of provisions.
- Any correspondence from regulators in relation to our financial reporting.
At the beginning of the year, the Committee reviews the audit plan of the external auditor as well as the internal audit plan. The Committee focuses
mainly on the scoping, key risks, staffing and budget. During the year, the Committee reviews the reports of the external and the internal auditor
in respect of these items.
Furthermore, the Committee in 2016 discussed recurring topics, such as:
- The effectiveness and the outcome of the internal control and risk management systems, as well as changes made and improvements planned
to these systems.
- Functional updates in respect of Global Procurement, Financial Shared Services Internal Control over Financial Reporting, Global Treasury
and Tax, Pensions, Litigation and Risk Management.
- Update on new IFRS Standards: IFRS 15 (Revenue from contracts with customers) and IFRS 16 (Leases).
- HEINEKEN's governance, risk and compliance (GRC) activities, including the HEINEKEN Company Rules and the HEINEKEN Code
of Business Conduct.
- Post Audit Reviews of large investments.
- The outcome of the annual Letter of Representation process and the report from the Integrity Committee related to fraud reporting
and Speak Up policy.
- The evaluation of the external auditor, Deloitte Accountants B.V., and his proposed re-appointment for a further three-year term.
The Chairman of the Audit Committee informed the Supervisory Board of the discussions held in the Audit Committee in respect of these
Selection Appointment Committee
Composition: Messrs. Wijers (Chairman), de Carvalho, Das, Fernandez Carbajal, and Mrs. Fentener van Vlissingen. The Selection Appointment
Committee met three times.
In 2016, the following subjects were discussed:
- The composition and rotation schedule of the Supervisory Board.
- Female representation on the Supervisory Board, including a list of potential female candidates.
- The re-appointment of Mr. Jean-Franqois van Boxmeer as member of the Executive Board.
Composition: Messrs. Das (Chairman), de Carvalho, Wijers, and Huët, and Ms. Brunini. The Remuneration Committee met three times in 2016.
The Committee made recommendations to the Supervisory Board on 2016 target setting and 2015 payout levels for the STV pay and LTV awards
to the Executive Board, and the replacement of "Organic EBIT beia Growth" performance measure by "Organic Operating Profit beia Growth"
performance measure in the LTV plans of the Executive Board as from 2017, all of which were endorsed by the Supervisory Board. The Committee
also reviewed the composition of the global labour market peer group, including a list of potential peer companies to replace SABMiller and Philips
within this peer group.
The Remuneration Committee received a report on status and trends in executive remuneration and executive remuneration governance in order
to fulfil its remuneration governance responsibilities. The report aimed to review, among other things, alignment of HEINEKEN's remuneration
practices with its remuneration principles, to provide an overview of HEINEKEN's competitive remuneration positioning versus the market, to assess
the relation between actual remuneration and performance and to update the Committee on executive compensation trends and regulatory
developments. A copy of the report was also submitted to the full Supervisory Board.