Independent Auditor's Report (continued)
Report on other legal and regulatory requirements
O Q,
Introduction Report of the Executive Board Report of the Supervisory Board
Taxes - provisions for uncertain tax positions and valuation of deferred tax assets
How the scope We obtained a detailed understanding of the Company's tax exposures including
of our audit current transfer pricing arrangements. Using our own tax specialist, we assessed tax
responded risks, legislative developments and the status of ongoing local tax authority audits. We
to the risk evaluated and challenged the Company's judgements in respect of estimates of tax
exposures, recoverable amounts and contingencies. We considered correspondence with
tax authorities and relevant historical and recent judgements and assessed opinions
from third party tax advisors. With regards to recorded deferred tax assets, we evaluated
the Company's assumptions and estimates in relation to the likelihood of generating
sufficient future taxable income based on budgets and business plans. Finally, we
considered the adequacy of the Company's disclosures in notes 12.1 12.2, 12.3 and 9.3
regarding uncertain tax positions and recognised deferred tax assets.
Observation We have evaluated the provisions for uncertain tax positions and the valuation of
deferred tax assets as well as the related disclosure in notes 12.1, 12.2, 12.3 and 9.3.
We have no reportable findings.
Internal controls over financial reporting
Risk The Company operates various processes and procedures that are important for reliable
financial reporting. These processes are operated both centrally and locally.
We identified the Company's internal controls over financial reporting as an area of
focus, as we consider internal controls over financial reporting as a basis for designing our
procedures for the audit. In those instances where accounting procedures, associated IT
and process level controls are not designed and/or operating effectively, there are risks
associated with financial reporting to which we need to tailor our audit procedures.
We performed audit procedures on both the centrally and locally established process
level controls of the Company, including the diverse information technology landscape.
We performed walkthroughs to gain an understanding of the entity and to identify
relevant controls. We tested the design of those controls and, where effective for the
audit, we also tested their operating effectiveness. In cases of deficiencies, we evaluated
the compensating controls and measures of the Company and/or tailored procedures
our procedures to address the risk.
We are, however, neither required nor engaged to perform an audit of internal controls
over financial reporting. Accordingly, we do not express an opinion on the effectiveness
of the Company's internal controls over financial reporting.
Observation We communicated our observations on internal controls over financial reporting to
the Company's Audit Committee. Where deemed necessary, we mitigated the effect
of internal control observations by testing alternative controls or by extending our
substantive audit procedures. Overall, we obtained sufficient and appropriate evidence
in response to the related financial reporting risks.
How the scope
of our audit
responded
to the risk
Heineken N.V. Annual Report 2018
Financial Statements
Sustainability Review
Other Information
Our previous year's auditor's report included Acquisition accounting: identification and valuation of
intangible assets and valuation of liabilities' as a key audit matter. During 2018, no significant acquisitions
or disposals took place. Consequently, we did not include this as a key audit matter in current year's
auditor's report.
Report on the other information included in the Annual Report 2018
In addition to the financial statements and our auditor's report thereon, the Annual Report 2018 contains
other information that consists of:
- Report of the Executive Board;
- Report of the Supervisory Board;
- Other Information pursuant to Part 9 of Book 2 of the Dutch Civil Code; and
- Other information included in the Annual Report.
Based on the following procedures performed, we conclude that the other information:
- Is consistent with the financial statements and does not contain material misstatements; and
- Contains the information as required by Part 9 of Book 2 of the Dutch Civil Code.
We have read the other information. Based on our knowledge and understanding obtained through our
audit of the financial statements or otherwise, we have considered whether the other information contains
material misstatements.
By performing these procedures, we comply with the requirements of Part 9 of Book 2 of the Dutch Civil
Code and the Dutch Standard 720. The scope of the procedures performed is substantially less than the
scope of those performed in our audit of the financial statements.
The Executive Board is responsible for the preparation of the other information, including the Report of
the Executive Board in accordance with Part 9 of Book 2 of the Dutch Civil Code and other information
pursuant to Part 9 of Book 2 of the Dutch Civil Code.
Engagement
We were engaged by the Supervisory Board as auditor of Heineken NV on April 24, 2014 as of and for the
year ending 31 December 2015 and have operated as statutory auditor ever since that financial year.
No prohibited non-audit services
We have not provided prohibited non-audit services as referred to in Article 5(1) of the EU Regulation
on specific requirements regarding statutory audit of public-interest entities.
