Independent Auditor's Report (continued) O Q, Introduction Report of the Executive Board Report of the Supervisory Board We have performed audit procedures ourselves at corporate entities and the operations in the Netherlands. Furthermore, we performed audit procedures at group level, on areas such as consolidation, disclosures, goodwill, intangible assets, joint ventures, financial instruments, acquisitions and divestments. Specialists were involved, amongst others in the areas of treasury, information technology, tax, accounting, pensions and valuation. For selected component audit teams, the group audit team provided detailed written instructions, which, in addition to communicating the requirements of component audit teams, detailed significant audit areas and information obtained centrally relevant to the audit of individual components, including awareness for risk related to management override of controls. Furthermore, we developed a plan for overseeing each component audit team based on its relative significance to the Company and certain other risk characteristics. This included procedures such as visiting components (The Netherlands, Mexico, Brazil, United Kingdom, Spain, France, Russia, Nigeria, Vietnam, Poland, Switzerland, Malaysia, Belgium, Ethiopia and Romania) during the year, performing file reviews, holding conference calls, attending meetings and reviewing component audit team deliverables to gain sufficient understanding of the work performed. For smaller components we have performed review procedures or specific audit procedures. By performing the procedures mentioned above at group entities, together with additional procedures at group level, we have been able to obtain sufficient and appropriate audit evidence about the group's financial information to provide an opinion on the consolidated financial statements. Revenues PBT Assets 22% Full scope auditor coverage Other coverage Our key audit matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements. We have communicated the key audit matters to the Supervisory Board. The key audit matters are not a comprehensive reflection of all matters discussed. These matters were addressed in the context of our audit of the financial statements as a whole and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Heineken N.V. Annual Report 2018 Financial Statements Sustainability Review Other Information Revenue recognition Risk In our audit we have determined that promotional allowances and volume rebates are the most relevant risk areas in relation to revenue recognition. In the normal course of business the Company provides discounts, promotional allowances and volume rebates to its on-trade and off-trade clients. Unconditional discounts are recognised at the same moment as the related sales transaction. The Company also provides conditional discounts. They are recognised based on target realisation, as specified in note 6.1 to the financial statements. The target realisation requires judgement and management estimate for sales related accruals as at balance sheet date. We have also paid specific attention to the implementation of the new revenue recognition standards (IFRS 15) that became effective in the current financial year. The introduction of the new standard. This required management to reassess revenue recognition, which requires significant judgement, including the treatment and presentation of excise taxes. The changes to the accounting policies are disclosed in note 4(a) to the financial statements. Because of these risk factors, we have considered revenue recognition to be a key audit matter relevant to our audit of the financial statements. How the scope To address the risks related to promotional allowances and volume rebates, our audit of our audit procedures included, amongst others, assessing the appropriateness of the Company's responded revenue recognition accounting policy for promotional allowances and volume rebates, to the risk as detailed in note 6.1 to the financial statements. It also included evaluating controls relating to management's process for determining the value of promotional allowances and the volume rebates. In addition, at group and component level, we performed substantive testing and analytical procedures to test the accuracy and completeness of the underlying calculation of the accruals. These procedures included challenging the appropriateness of management's assumptions and estimates and agreeing input data, including pricing and allowance data, to underlying agreements with customers. With regard to the adoption of IFRS 15, we have evaluated the Company's process to identify the necessary changes in the accounting and presentation of revenues. Together with our component audit teams, we have determined whether all significant revenue streams are adequately considered. Together with an IFRS specialist, we have reviewed the outcome of the IFRS 15 adoption, including related disclosures and footnotes.

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