Notes to Heineken N.V. financial statements
Reporting entity
The financial statements of Heineken N.V. (the ‘Company’) are included in the consolidated statements of Heineken.
Basis of preparation
The Company financial statements have been prepared in accordance with the provisions of Part 9, Book 2, of the Netherlands Civil Code. The Company uses the option of Article 362.8 of Part 9, Book 2, of the Netherlands Civil Code to prepare the Company financial statements, using the same accounting policies as in the consolidated financial statements. Valuation is based on recognition and measurement requirements of accounting standards adopted by the EU (i.e., only IFRSs that are adopted for use in the EU at the date of authorisation) as explained further in the notes to the consolidated financial statements).
The Company presents a condensed income statement, using the facility of Article 402 of Part 9, Book 2, of the Netherlands Civil Code.
Significant accounting policies
Financial fixed assets
Participating interests (subsidiaries, joint ventures and associates) are measured on the basis of the equity method.
Shareholders’ equity
The translation reserve and other legal reserves are previously formed under and still recognised and measured in accordance with the Netherlands Civil Code.
Profit of participating interests
The share of profit of participating interests consists of the share of the Company in the results of these participating interests. Results on transactions, where the transfer of assets and liabilities between the Company and its participating interests and mutually between participating interests themselves, are not recognised.
37. Financial fixed assets
| In millions of EUR | Participating interest |
Loans to participating interest |
Total |
| Balance at 1 January 2005 | 950 | 3,422 | 4,372 |
| Change in accounting policies IAS 32/39 | 44 | – | 44 |
| Profit of participating interests | 743 | – | 743 |
| Dividend payments by participating interests | (244) | 244 | – |
| Effect of movements in exchange rates | 143 | – | 143 |
| Changes in hedging and fair value adjustments | (38) | – | (38) |
| Other movements | 55 | 55 | |
| Balance as at 31 December 2005 | 1,598 | 3,721 | 5,319 |
| Balance at 1 January 2006 | 1,598 | 3,721 | 5,319 |
| Loans converted into share capital | 815 | (815) | – |
| Profit of participating interests | 1,190 | – | 1,190 |
| Dividend payments by participating interests | (232) | 232 | – |
| Effect of movements in exchange rates | (52) | – | (52) |
| Changes in hedging and fair value adjustments | 97 | – | 97 |
| Other movements | (1) | (393) | (394) |
| Balance as at 31 December 2006 | 3,415 | 2,745 | 6,160 |
38. Shareholders’ equity
Capital and reserves
| Issued capital |
Translation services |
Other legal services |
Hedging reserve |
Fair value reserve |
Reserve for own shares |
Retained earnings |
Net profit | Total equity | |
| Balance at 1 January 2005 |
784 | 5 | 349 | – | – | – | 1,476 | 642 | 3,256 |
| Net income recognised directly in equity 7,8 |
– | 143 | 25 | (21) | 49 | – | (48) | – | 148 |
| Profit | – | – | 80 | – | – | – | (80) | 761 | 761 |
| Transfer to retained earnings |
– | – | (62) | – | – | – | 704 | (642) | – |
| Dividends to shareholders |
– | – | – | – | – | – | (196) | – | (196) |
| Balance at 31 December 2005 |
784 | 148 | 392 | (21) | 49 | – | 1,856 | 761 | 3,969 |
| Balance at 1 January 2006 |
784 | 148 | 392 | (21) | 49 | – | 1,856 | 761 | 3,969 |
| Net income recognised directly in equity 7 |
– | (52) | (6) | 49 | 48 | – | (4) | – | 35 |
| Profit | – | – | 110 | – | – | – | (110) | 1,211 | 1,211 |
| Transfer to retained earnings |
– | – | (37) | – | – | – | 798 | (761) | – |
| Dividends to shareholders |
– | – | – | – | – | – | (196) | – | (196) |
| Purchase own shares | – | – | – | – | – | (14) | – | – | (14) |
| Share based payments |
– | – | – | – | – | – | 4 | – | 4 |
| Balance at 31 December 2006 |
784 | 96 | 459 | 28 | 97 | (14) | 2,348 | 1,211 | 5,009 |
7 Net income recognised directly in equity is explained in the consolidated statement of income and expense.
8 Included is the effect of the change in accounting policy due to the application of IAS 32/39 amounting to €44 million.
For more details on reserves, please refer to note 22 of the consolidated financial statements.
For more details on LTIP, please refer to note 27 of the consolidated financial statements.
39. Loans and borrowings
Terms and debt repayment schedule
| In millions of EUR | Average effective interest rate |
Total | 1 year or less |
1-2 years |
2-5 years |
More than 5 years |
2005 |
| Bond loan in EUR | 4.47% | 499 | – | – | 499 | – | 498 |
| Bond loan in EUR | 5.10% | 597 | – | – | – | 597 | 596 |
| Loans from banks in EUR | 2.41% | – | – | – | – | – | 160 |
| 1,096 | – | – | 499 | 597 | 1,254 | ||
40. Off-balance-sheet commitments
| In millions of EUR | Total | 1 year | Less than 1 year | 5 years | More than 2005 |
| Committed bank facility | 2,000 | – | – | 2,000 | 2,000 |
| Third parties |
2006 Heineken companies |
Third parties |
2005 Heineken companies |
||
| Declarations of joint and several liability | – | 1,364 | – | 920 | |
Fiscal unity
The Company is part of the fiscal unity of Heineken in the Netherlands. Based on this the Company is liable for the tax liability of the fiscal unity in the Netherlands.
41. Other disclosures
Remuneration
We refer to note 33 of the Consolidated Financial Statements for the remuneration and the incentives of the Executive Board members and the Supervisory Board. The Executive Board members are the only employees of the Company.
Participating interests
For the list of direct and indirect participating interests, we refer to notes 15, 34 and 35 to the consolidated financial statements.
| Amsterdam, 20 February 2006 | Executive Board | Supervisory Board |
| Van Boxmeer | Van Lede | |
| Hooft Graafland | De Jong | |
| Das | ||
| de Carvalho | ||
| Risseeuw | ||
| Hessels | ||
| Fentener van Vlissingen | ||
| MacLaurin | ||
