Notes to the Consolidated Financial Statements (continued)
13.2 Off-balance sheet commitments
-
-
13.3 Related parties
Key management remuneration
O Q,
Introduction Report of the Executive Board Report of the Supervisory Board
HEINEKEN leases offices, warehouses, pubs, cars and other equipment in the ordinary course of business.
The raw materials purchase contracts mainly relate to malt, bottles and cans which are used in the
production and sale of finished products.
Total
Less than
1-5
More than
In millions of
2018
1 year
years
5 years
2017
Operating lease commitments
2,013
307
767
939
1,704
Property, plant and equipment ordered
305
287
18
329
Raw materials purchase contracts
7,571
2,717
3,583
1,271
6,153
Marketing and merchandising commitments
635
273
358
4
647
Other off-balance sheet obligations
4,375
3,005
590
780
2,092
Off-balance sheet obligations
14,899
6,589
5,316
2,994
10,925
Undrawn committed bank facilities
3,845
166
3,679
3,929
During the year ended 31 December 2018, €375 million (2017: €364 million) was recognised as an
expense in profit or loss in respect of operating leases and rent.
Other off-balance sheet obligations in 2018 include HKD24.3 billion (€2.7 billion as per 31 December
2018) as the committed amount by HEINEKEN for acquiring a shareholding of 40% in CRH (Beer) Limited,
which is expected to close in 2019. Other off-balance sheet obligations also include energy, distribution
and service contracts.
Committed bank facilities are credit facilities on which a commitment fee is paid as compensation for the
bank's requirement to reserve capital. The bank is legally obliged to provide the facility under the terms and
conditions of the agreement.
Accounting policies
Off-balance sheet commitments are not discounted.
Operating lease commitments
Operating leases are not recognised in HEINEKEN's statement of financial position. Payments made under
operating leases are charged to profit or loss on a straight-line basis over the term of the lease. When an
operating lease is terminated before the lease period has expired, any payment required to be made to the
lessor by way of penalty is recognised as an expense in the period in which termination takes place.
The lease commitments contain the lease payments for the non-cancellable period of a lease and the
period for extension options that are reasonably certain to be exercised.
Heineken N.V. Annual Report 2018! 10
Financial Statements
Sustainability Review
Other Information
Raw materials purchase contracts
Raw material contracts include long-term purchase contracts with suppliers in which prices are fixed or will
be agreed based upon predefined price formulas.
Identification of related parties
The following parties are considered to be related to Heineken N.V.:
- Key management personnel: the Executive Board and the Supervisory Board
- Parent company Heineken Holding N.V. and ultimate controlling party Mrs. Carvalho-Heineken (refer to
'Shareholder Information')
- Associates and Joint ventures of Heineken N.V.
- Shareholder with significant influence Fomento Económico Mexicano, S.A.B. de CV (FEMSA)
- HEINEKEN pension funds (refer to note 9.1)
- Employees of HEINEKEN (refer to note 6.4)
In millions of
2018
2017
Executive Board
12.0
13.3
Supervisory Board
1.0
1.0
Total
13.0
14.3
Executive Board
The remuneration of the members of the Executive Board consists of a fixed component and a variable
component. The variable component is made up of a Short-term Incentive (STI) and a Long-term
Incentive (LTI). The STI is based on financial and operational measures (75%) and on individual leadership
measures (25%) as set by the Supervisory Board at the beginning of the year. For the LTI we refer to
note 6.5. The separate Remuneration Report is stated on pages 52-60.
