67
Notes to the Consolidated Financial Statements (continued)
(c) Non-derivative financial instruments
Report of the
Report of the
Financial
Sustainability
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Introduction
Executive Board
Supervisory Board
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Information
Heineken N.V. Annual Report 2017
The following exchange rates, forthe most important countries in which HEINEKEN has operations, were used while preparing these consolidated
financial statements:
Year-end
Year-end
Average
Average
In
2017
2016
2017
2016
Brazilian Real (BRL)
0.2517
0.2915
0.2774
0.2592
Great Britain Pound (GBP)
1.1271
1.1680
1.1410
1.2209
Mexican Peso (MXN)
0.0425
0.0463
0.0469
0.0484
Nigerian Naira (NGN)
0.0025
0.0030
0.0027
0.0036
Polish Zloty (PLN)
0.2398
0.2260
0.2349
0.2292
Russian Ruble (RUB)
0.0144
0.0156
0.0152
0.0135
Singapore Dollar (SGD)
0.6241
0.6564
0.6417
0.6547
United States Dollar (USD)
0.8338
0.9487
0.8854
0.9036
Vietnamese Dollar in 1,000 (VND)
0.0367
0.0417
0.0389
0.0404
(iii) Hedge of net investments in foreign operations
Foreign currency differences arising on the translation of a financial liability designated as a hedge of a net investment in a foreign operation are
recognised in other comprehensive income to the extent that the hedge is effective and regardless of whether the net investment is held directly or
through an intermediate parent. These differences are presented within equity in the translation reserve. To the extent that the hedge is ineffective,
such differences are recognised in profit or loss. When the hedged part of a net investment is disposed of, the relevant amount in the translation
reserve istransferred to profit or loss as part of the profit or loss on disposal.
(i) General
Non-derivative financial instruments comprise investments in equity and debt securities, trade and other receivables, cash and cash equivalents,
loans and borrowings, and trade and other payables.
Non-derivative financial instruments are recognised initially at fair value plus, for instruments not at fair value through profit or loss, any directly
attributable transaction costs. Subsequent to initial recognition, non-derivative financial instruments are measured as described below.
If HEINEKEN has a legal right to offset financial assets with financial liabilities and if HEINEKEN intends either to settle on a net basis or to realise
the asset and settle the liability simultaneously, financial assets and liabilities are presented in the statement of financial position as a net amount
The right of set-off is available today and not contingent on a future event and it is also legally enforceable for all counterparties in a normal course
of business, as well as in the event of default, insolvency or bankruptcy.
Cash and cash equivalents comprise cash balances and call deposits. Bank overdrafts and commercial papers form an integral part of HEINEKEN's
cash management and are included as a component of cash and cash equivalents forthe purpose of the statement of cash flows.
Accounting policies for interest income, interest expenses and other net finance income and expenses are discussed in note 3(r).
(ii) Held-to-maturity investments
If HEINEKEN has the positive intent and ability to hold debt securities to maturity, they are classified as held-to-maturity. Debt securities are loans
and long-term receivables and are measured at amortised cost using the effective interest method, less any impairment losses. Investments held-
to-maturity are recognised or derecognised on the day they are transferred to or by HEINEKEN.
(iii) Available-for-sale investments
HEINEKEN's investments in equity securities and certain debt securities are classified as available-for-sale. Subsequent to initial recognition, they are
measured at fair value and changes therein - other than impairment losses (see note 3i(i)) and foreign currency differences on available-for-sale
monetary items (see note 3b(i)) - are recognised in other comprehensive income and presented within equity in the fair value reserve. When these
investments are derecognised, the relevant cumulative gain or loss in the fair value reserve is transferred to profit or loss.
Where these investments are interest-bearing, interest calculated using the effective interest method is recognised in profit or loss. Available-for-sale
investments are recognised or derecognised by HEINEKEN on the date it commits to purchase or sell the investments.
(iv) Other
Other non-derivative financial instruments are measured at amortised cost using the effective interest method, less any impairment losses.