Heineken N.V. — Proxy Solicitation & Information Statement 2009

Mar 24, 2010

i Key figures

• 2 The quick read
• 4 Milestones 2009

Report of the Executive Board

6 Chief Executive's Statement

I

• 9 Outlook
• 10 Executive Committee
• 12 Operational Review
• 20 Regional Review
• 22 Western Europe
• 28 Central and Eastern Europe
• 3a Africa and the Middle East
• 36 Americas
• 40 Asia Pacific
• 44 Risk Management and Control System
• 49 Financial Review
• 54 Corporate Governance Statement

Report of the Supervisory Board

• 62 To the Shareholders
• 65 Remuneration Report

Financial statements

• 71 Consolidated Income Statement 72 Consolidated Statement of
• Comprehensive Income 73 Consolidated Statement of Financial
• Position 74 Consolidated Statement of Cash Flows
• 76 Consolidated Statement of Changes in Equity
• 77 Notes to the Consolidated Rnancial Statements
• 148 Heineken N.V. Balance Sheet
• 149 Heineken N.V. Income Statement
• 150 Notes to the Heineken N.V.
• Financial Statements

Other Information

156 Statement of the Executive Board

"^fn n

• 157 Appropriation of Profit
• 158 Auditor's Report
• 160 Shareholder Information
• 164 Countries and Brands
• 172 Historical Summary
• 174 Glossary
• r76 Reference Information

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Heineken NV

for the Annual General Meeting of Shareholders of Heineken N.V., to be held at Beurs van Berlage, Damrak 243, Amsterdam on Thursday 22 April 2010 at 2:00 p.m.

Opening

• 1 a. Report for the financial year 2009.
• b. Adoption of the financial statements for the financial year 2009.
• c. Decision on the appropriation of the balance of the income statement in accordance with Article 12 paragraph 7 of the company's Articles of Association.
• d. Discharge of the members of the Executive Board.
• e. Discharge of the members of the Supervisory Board.
• 2 Proposal to approve the acquisition of 100% of the beer operations of Fomento Economico Mexicano, S.A.B. de C.V. (FEMSA) via an all share transaction
• 3 Authorisations
• a. Authorisation of the Executive Board to acquire own shares.
• b. Authorisation ofthe Executive Board to issue shares to FEMSA (and its affiliates).
• c. Authorisation ofthe Executive Board to issue (rights to) shares for other purposes.
• d. Authorisation of the Executive Board to restrict or exclude shareholders' pre-emptive rights.
• 4 Corporate Governance, 'Comply or Explain' report
• 5 Remuneration Executive Board
• a. Adjustments to the Remuneration Policy for the Executive Board.
• b. Related amendment to the Long Term incentive Plan for the Executive Board.
• 6 Composition Supervisory Board (non-binding nominations)
• a. Appointment of Mr. J.A. Fernéndez Carbajal as member of the Supervisory Board.
• b. Appointment of Mr. J.G. Astaburuaga Sanjinés as member of the Supervisory Board.
• c. Re-appointment of Mr. C.J.A. van Lede as member of the Supervisory Board.
• d. Re-appointment of Mr. J.M. de Jong as member of the Supervisory Board.
• e. Re-appointment of Mrs. A.M. Fentener van Vlissingen as member of the Supervisory Board.

Closing

• ^m

Agenda items lb to 3,5 and 6 are subject to approval of the Annual General Meeting of Shareholders.

EXPLANATORY NOTES

to the agenda for the Annual General Meeting of Shareholders of Heineken N.V., to be held on Thursday 22 April 2010

Item ic: Decision on the appropriation ofthe balance of the income statement.

In 2007 a new dividend policy came into force. The new policy reinforces the relation between dividend payment and the annual development of net profit beia and continues to support the intention of Heineken N.V. to preserve its independence, to maintain a healthy financial structure and to retain sufficient earnings in order to grow the business both organically and through acquisitions. The annual dividend payout is 30-35 per cent of net profit beia. The interim dividend is fixed at 40 per cent ofthe total dividend ofthe previous year.

Within the scope ofthe dividend policy, it is proposed to the Annual General Meeting of Shareholders to determine the dividend for the financial year 2009 at EUR 0.65 of which EUR 0.25 was paid as interim dividend on 2 September 2009. The final dividend of EUR 0.40 per share will be made payable on 29 April 2010. The total dividend will amount to EUR 318 million.

Item 2: Acquisition of 100% ofthe beer operations of Fomento Economico Mexicano, S.A.B. de C.V. (FEMSA) via an all share transaction.

On 11 January 2010 Heineken N.V. announced the acquisition ofthe beer operations of FEMSA via an all share transaction (the "transaction"). Heineken N.V. will acquire all shares of common stock in Emprex Cerveza. S.A. de C.V. (FEMSA Cerveza), comprising 100% of FEMSA's Mexican beer operations (including ils US and other export businesses) and the remaining 83% of FEMSA's Brazilian beer business that Heineken does not currently own. As a result of the transaction FEMSA (and its affiliates) will hold a 20.0% economic interest in the Heineken Group (with shareholdings both in Heineken N.V. and Heineken Holding N.V). A portion of the Heineken shares allotted to FEMSA (and its affiliates) will be delivered over a period of not more than five years (the 'Allotted Shares'). FEMSA will have the right to nominate two representatives for appointment to the Supervisory Board of Heineken N.V., one of whom will be the Vice-Chairman of the Supervisory Board of Heineken N.V. and will also be nominated for appointment to the Board of Directors of Heineken Holding N.V.

Subject to, among other things, the approval of the Annual General Meetings of Shareholders of Heineken N.V. and Heineken Holding N.V., and the meeting of priority shareholders of Heineken Holding N.V, the approval of the General Meeting of Shareholders of FEMSA and approval of certain regulatory authorities, closing of the acquisition is currently expected to occur in the second quarter of 2010. Heineken Holding N.V., as majority shareholder of Heineken N.V., and L'Arche Green N.V, as a majority shareholder of Heineken Holding N.V, have given irrevocable undertakings to FEMSA to vote in favour ofthe transaction. In addition, the Voting Trust, which controls 39% of FEMSA's voting shares entered into an undertaking to vote in favour ofthe

acquisition at the FEMSA shareholders meeting.

The acquisition represents a significant strategic step for Heineken that creates a platform for future value growth in three of the four largest beer profit pools (USA, Mexico and Brazil). Heineken believes that the acquisition has a clear strategic rationale, as it will enable Heineken to transform its presence in the Americas, offering the potential to grow the Heineken brand in Mexico and Brazil, access value and volume growth in Mexico, the world's fourth largest beer profit pool, strengthen Heineken's leading position in the import and growing Hispanic segments in the USA and provide an opportunity to build value in Brazil, the world's second largest beer profit pool. The acquisition will give Heineken better geographic diversification as well as strengthen our exposure to emerging markets. The details ofthe acquisition are described in the shareholder's circular which will be published on the Heineken website (www.heinekeninternational.com/agm) and can be obtained at the offices of Heineken N.V. in Amsterdam.

Item 3a: Authorisation ofthe Executive Board to acquire own shares.

The Annual General Meeting of Shareholders held on 23 April 2009 last gave an authorisation to the Executive Board to acquire own shares. The Annual General Meeting of Shareholders is now requested to extend the authorisation ofthe Executive Board.

It is proposed that the Executive Board be authorised by the Annual General Meeting of Shareholders, for the statutory maximum period of 18 months, starting 22 April 2010. to acquire own shares subject to the following conditions and with due observance ofthe law and the Articles of Association:

• a. the maximum number of shares which may be acquired is 10 percent of the issued share capital of the company at any time during the authorisation;
• b. transactions must be executed at a price between the nominal value of the shares and 110 per cent of the opening price quoted for the shares in the Official Price List (Officiële Prijscourant) of Euronext Amsterdam on the date ofthe transaction, or. in the absence of such a price, the latest price quoted therein;
• c. transactions may be executed on the stock exchange or otherwise.

The authorisation to acquire own shares may be used in connection with the delivery ofthe Allotted Shares to FEMSA (and its affiliates) in connection with the acquisition of the beer operations of FEMSA, as well as with the Long-Term Incentive Plan for the members ofthe Executive Board and the Long-Term Incentive Plan for senior management, but may also serve other purposes, such as other acquisitions.

Pursuant to the Articles of Association, a resolution ofthe Executive Board to acquire own shares is subject to the approval ofthe Supervisory Board. Subject to the completion ofthe acquisition ofthe beer operations of FEMSA, the Supervisory Board has given its approval for the acquisition by the company of the Allotted Shares, being 29,172,504 shares (representing 5.1 per cent ofthe issued share capital of the company after the issue of 86.028.019 new shares referred to at item 3b), which shares will be repurchased for further delivery to FEMSA (and its affiliates).

Item 3b: Authorisation ofthe Executive Board to issue shares to FEMSA (and its affiliates).

It is proposed that the Annual General Meeting of Shareholders authorises the Executive Board for a period of 18 months, starting 22 April 2010, to issue 86,028,019 shares to FEMSA (and its affiliates) in exchange for the transfer by FEMSA of its beer operations (consisting of all shares of common stock in FEMSA Cerveza held by FEMSA and its affiliates) to the company and subject to FEMSA (and its affiliates) transferring 43.018.320 of these new shares to Heineken Holding N.V. in exchange for 43,018,320 new Heineken Holding N.V. shares to be issued to FEMSA (and its affiliates).

Pursuant to the Articles of Association, a resolution ofthe Executive Board to issue (rights to) shares is subject to the approval of the Supervisory Board. The Supervisory Board has given its approval for the issue of 86,028,019 new shares to FEMSA (and its affiliates).

Item 3c: Authorisation ofthe Executive Board to issue (rights to) shares for other purposes.

The Annual General Meeting of Shareholders held on 23 April 2009 last gave a general authorisation to the Executive Board to issue (rights to) shares. The Annual General Meeting of Shareholders is now requested to extend the existing authorisation ofthe Executive Board.

It is proposed that the Annual General Meeting of Shareholders authorises the Executive Board for a period of 18 months, starting 22 April 2010, to issue shares or grant rights to subscribe for shares. The authorisation will be limited to 10 per cent of the company's issued share capital, as per the date of issue.

The authorisation may be used in connection with the Long-Term Incentive Plan for the members ofthe Executive Board and the Long-Term Incentive Plan for the senior management, but may also serve other purposes, such as the issue of those of the Allotted Shares that will not be repurchased under item 3a and other acquisitions.

• •

Pursuant to the Articles of Association, a resolution of the Executive Board to issue shares or to grant rights to subscribe for shares is subject to the approval of the Supervisory Board.

Item 3d: Authorisation ofthe Executive Board to restrict or exclude shareholders pre-emptive rights.

The Annual General Meeting of Shareholders held on 23 April 2009 last gave an authorisation to the Executive Board to restrict or exclude shareholders pre-emptive rights. The Annual General Meeting of Shareholders is now requested to extend the authorisation ofthe Executive Board.

It is proposed that the Annual General Meeting of Shareholders authorises the Executive Board for a period of 18 months, starting 22 April 2010, to restrict or exclude shareholders pre-emptive rights in relation to the issue of shares or the granting of rights to subscribe for shares.

Pursuant to the Articles of Association, a resolution of the Executive Board to restrict or exclude shareholders pre-emptive rights in relation to the issue of shares or the granting of rights to subscribe for shares is subject to the approval ofthe Supervisory Board. Pursuant to article 2:96a paragraph 1 of the Dutch Civil Code shareholders do not have a pre-emptive right in relation to the issue of 86,028,019 shares to FEMSA (and its affiliates) because the shares will be issued against contribution-in-kind.

Item 4: Corporate Governance, 'Comply or Explain' report.

In a separate section ofthe 2009 annual report (the "Comply or Explain' report), a detailed overview is given ofthe way in which Heineken applies the revised Dutch Corporate Governance Code (published on 10 December 2008). The full 'Comply or Explain' report is also available on the company website (www.heinekenintcrnational.com).

Heineken endorses the Code's principles and applies virtually all best practice provisions. However, as already stated in Heineken's previous 'Comply or Explain' report of 21 February 2005 relating to the Dutch Corporate Governance Code of 9 December 2003. in particular, the structure of the Heineken Group and specifically the relationship between Heineken Holding N.V. and Heineken N.V. prevents Heineken N.V. from applying a small number of best practice provisions.

We have included the ownership structure in this report. As stated in the Code (principle 'Compliance with and enforcement ofthe Code', paragraph I) there should be a basic recognition that corporate governance must be tailored to the company-specific situation and therefore that non-application of individual provisions by a company may be justified.

The Supervisory Board proposes to re-appoint Mr. J.M. de Jong in view of his financial expertise, both nationally and internationally. Mr. De Jong is a former member of the Managing Board of ABN AMRO Bank N.V. Mr. DeJong serves on various boards of listed and private companies. He complies with the Dutch Corporate Governance Code of 10 December 2008 (DCGC) with regard to number of board seats. Mr. DeJong is not independent, as defined in the DCGC of 10 December 2008 as he was, prior to his appointment in 2002, member ofthe Management Board of Heineken Holding N.V. for one year. Currently, Mr. De Jong owns no shares in the company. Mr. De Jong (1945) is a Dutch national.

Item 6e: Re-appointment of Mrs. A.M. Fentener van Vlissingen.

In accordance with the Articles of Association ofthe Company, the Supervisory Board has made a non-binding nomination for the re-appointment of Mrs. Fentener van Vlissingen as member ofthe Supervisory Board with effect from 22 April 2010, for the maximum period of four years (i.e. until the end ofthe Annual General Meeting of Shareholders to be held in 2014). She is a member ofthe Supervisory Board since 2006. Mrs. Fentener van Vlissingen fits the profile drawn up by the Supervisory Board, as set out on our website.

The Supervisory Board proposes to re-appoint Mrs. Fentener van Vlissingen in view of her broad strategic and financial expertise in several industries. Mrs. Fentener van Vlissingen is Chairman of SHV Holdings N.V. and serves on various boards of listed and private companies. She complies with the Dutch Corporate Governance Code of 10 December 2008 (DCGC) with regard to the number of board seats.

Mrs. Fentener van Vlissingen is independent, as defined in the Dutch Corporate Governance Code of 10 December 2008. Currently, Mrs. Fentener van Vlissingen owns no shares in the company. Mrs. Fentener van Vlissingen (1961) is a Dutch national.

Also visit www.heinekeninternational.com/agm

The meeting will be audiowebcast on www.heinekeninternational.com/webcast/investors

EXPLANATORY NOTES CONTINUED

Mr. Fernandez Carbajal co-chairs the Mexico Institute ofthe Woodrow Wilson Center, and for the last 15 years, he has been a professor ofthe course of Strategic Planning in the Industrial and Systems Engineering degree at Monterrey Tec.

Mr. Fernéndez Carbajal earned a bachelor's degree in Industrial and Systems Engineering and an MBA from Monterrey Tec.

Mr. Fernéndez Carbajal fits the profile drawn up by the Supervisory Board, as set out on our website.

He complies with the Dutch Corporate Governance Code of 10 December 2008 (DCGC) with regard to the number of board seats. Mr. Fernandez Carbajal is not independent, as defined in the Dutch Corporate Governance Code of 10 December 2008 as he is CEO of FEMSA. which company currenlly has an imporiant relationship with Heineken USA concerning the sale and distribution by Heineken USA of FEMSA Cerveza's beer brands in the United States of America. Mr. Fernéndez Carbajal (1954) is Mexican and has currently no shares in Heineken N.V.

The Supervisory Board has appointed Mr. Fernandez Carbajal as Vice-Chairman ofthe Supervisory Board on condition of his appointment as member of the Supervisory Board. He succeeds in this position Mr. J.M. de Jong. Upon his appointmenl. Mr. Fernéndez Carbajal will become Chairman of the new Americas Committee to be formed, as well as a member of the Preparatory Commitlee and the Selection & Appointment Committee.

Item 6b: Appointment of Mr. J.G. Astaburuaga Sanjinés.

In accordance wilh the Articles of Association of the Company, the Supervisory Board has made a non-binding nomination for the appointment, subject to the completion of the acquisition of the beer operations of FEMSA. of Mr. Astaburuaga Sanjinés as member of the Supervisory Board, for the maximum period of four years (i.e. until the end ofthe Annual General Meeting of Shareholders to be held in 2014).

The Supervisory Board proposes to appoint Mr. Astaburuaga Sanjinés in view of his large financial and commercial experience. Javier Gerardo Astaburuaga Sanjinés joined FEMSA in 1982. In 2006 he was named FEMSA's CFO and Vice-President of Strategic Development. Prior to that, Mr. Astaburuaga Sanjinés served as co-CEO of FEMSA Cerveza, Vice-President of Sales for Northern Mexico, CFO of FEMSA Cerveza, Vice-President of Corporate Development for FEMSA and Chief Information Officer of FEMSA Cerveza. Mr. Astaburuaga Sanjinés earned a bachelor's degree in public accounting from Monterrey Tec.

Mr. Astaburuaga Sanjinés fits the profile drawn up by the Supervisory Board, as set out on our website.

He complies wilh the Dutch Corporate Governance Code of 10 December 2008 (DCGC) wilh regard lo the number of board seats. Mr. Astaburuaga Sanjinés is not independent, as defined in the Dutch Corporate Governance Code of 10 December 2008 as he is CFO of FEMSA. which company currently has an important relationship wilh Heineken USA concerning the sale and distribution by Heineken USA of FEMSA Cerveza's beer brands in the Uniled Stales of America. Mr. Astaburuaga Sanjinés (1959) is Mexican and has currently no shares in Heineken N.V.

Upon his appointment. Mr. Astaburuaga Sanjinés will become a member ofthe Audit Committee.

Item 6c: Re-appointment of Mr. C.J.A. van Lcde.

In accordance with the Articles of Associalion of the Company, the Supervisory Board has made a non-binding nomination for the re-appointment of Mr. Van Lede as member of the Supervisory Board with effect from 22 April 2010, for the maximum period of four years (i.e. until the end ofthe Annual General Meeting of Shareholders to be held in 2014).

Mr. Van Lede was first appointed in 2002 and became Chairman in 2004. Mr. Van Lede fits the profile drawn up by the Supervisory Board, as set out on our website.

The Supervisory Board proposes lo re-appoint Mr. C.J.A. van Lede in view of his extensive knowledge and broad managemenl experience in the national and international business environment and the way Mr. Van Lede fulfils his role as Chairman of the Supervisory Board. Mr. Van Lede is a former CEO of Akzo Nobel N.V. Mr. Van Lede serves on various boards of listed and private companies. He complies with the Dutch Corporate Governance Code of 10 December 2008 (DCGC) relating to number of board seals and is independent, as defined in the DCGC. Currenlly Mr. Van Lede owns no shares In the company. Mr. Van Ledc (1942) is a Dutch national.

The Supervisory Board has re-appointed Mr. van Lede as chairman of the Supervisory Board on condilion of his re-appointmenl as member of the Supervisory Board.

Item 6d: Re-appointment of Mr. j.M. dc Jong.

In accordance wilh the Articles of Association of the Company, the Supervisory Board has made a non-binding nomination for the re-appointment of Mr. DeJong as member ofthe Supervisory Board with effeel from 22 April 2010, for the maximum period of four years (i.e. until the end ofthe Annual General Meeting of Shareholders to be held in 2014)- Mr. DeJong was first appointed in 2002 and became Vice-Chairman in 2004. Mr. De Jong fits the profile drawn up by the Supervisory Board, as set out on our website.

The following best practice provisions are not (fully) applied or applied with an explanation: ll.l.l: appointment period Executive Board members; 11.2.8: severance payment Executive Board members;

III.2.1, III.2.2 a, c and e and III.2.3: independence of Supervisory Board members;

111,3.5: appointmenl period Supervisory Board members; III.4.1 (g): contact with Cenlral Works Council; III.5.11: chairman Remuneration Commitlee;

111.6.6: delegated Supervisory Board member.

Other besl practice provisions, which are not applied, relate to the fact that these principles and/or best practice provisions are not applicable lo Heineken N.V:

II.2.4.11-2.6 and II.2.7: Heineken does not grant options on shares;

111.8: Heineken does not have a one-tier management structure;

IV.1.2 Heineken has no financing preference shares; IV.2: Heineken has no depositary receipts of shares, nor a trust office;

IV.3.11: Heineken has no anti-takeover measures; IV.4: The principle and best practice provisions relate to shareholders;

V.3.3: Heineken has an internal audit function.

The Annual General Meeting of Shareholders of 22 April 2010 will have the opportunity to discuss the way Heineken deals wilh the Code.

Item 5a: Adjustments to the Remuneration policy for the Executive Board.

The Annual General Meeting of Shareholders is invited to adopt the adjustments to the remuneration policy for the Executive Board as per 1 January 2010. The core remuneration principles of supporting the business straiegy. paying for performance and paying competitively and fairly remain unchanged. The proposed adjustments are to further strengthen the link between pay and performance and more effectively drive Heineken's long lerm success.

The adjustments relate to the Short Term Incentive (a.o. allowing to set specific financial and operational measures on an annual basis) and to the Long Term Incentive (a.o. replacing Total Shareholder Return (TSR) with key fundamental financial performance measures. The present policy and the adjustments to the policy are stated in the remuneration report in the annual report (pages 65 to 70) and are posted on the website.

Item 5b: Related amendment to the Long Term Incentive Plan for the Executive Board.

In order to align the long term incentive for the Executive Board to the principles of the current remuneration policy (remuneration at the median ofthe labour market peer group) the Supervisory Board determined that the value at target level ofthe shares that will be conditionally awarded (starting wilh award of 2010) will be 125% of base salary for the CEO and 100% of base salary for the CFO. As part of the proposed adjustment lo the remuneration policy for the Executive Board (also starting with the award of 2010) TSR will be replaced as performance measure by the following financial performance measures: Organic Gross Profit beia Growth, Organic EBIT beia Growth, Earnings per Share (EPS) beia Growth and Free Operating Cash Flow, each having equal weight. At threshold performance 50% of the performance shares will vest (which is 25% under the current TSR measure), at targel performance 100% of the performance shares will vest and at maximum performance 150% of the performance shares will vest.

The Annual General Meeting of Shareholders is invited to approve the amended level of the shares that will be conditionally awarded under the current remuneration policy and the adjustments lo the Long Term Incentive plan.

Item 6a: Appointment of Mr. J.A. Fernéndez Carbajal.

In accordance with the Articles of Association of the Company, the Supervisory Board has made a non-binding nomination for the appointment, subject to the completion of the acquisition of the beer operations of FEMSA. of Mr. Fernéndez Carbajal as member ofthe Supervisory Board, for the maximum period of four years (i.e. until the end ofthe Annual General Meeting of Shareholders to be held in 2014).

The Supervisory Board proposes to appoint Mr. Fernéndez Carbajal in view of his broad strategic and operational experience in the beer business in Latin America and specifically in Mexico.

José Antonio Fernéndez Carbajal joined FEMSA in 1987. He was named Chief Executive Officer of FEMSA in January 1995 and has served as Chairman ofthe Board of FEMSA since 2001. Before becoming CEO of FEMSA, Mr. Fernéndez Carbajal served as the Chief Executive Officer of OXXO. the largest convenience store chain of Latin America.

He also held positions in FEMSA's corporate area, as well as in the commercial department ofthe Cuauhtemoc Moctezuma Brewery. Mr. Fernéndez Carbajal is also Chairman ofthe Board of Coca-Cola FEMSA, Vice Chairman of the Board of Monterrey Tecnológico. and participates on Boards of important national and international companies, such as Grupo Financiero BBVA Bancomer. Grupo Industrial Bimbo, Televisa.

Results

In millions of EUR	2009	Z009	::h3nqp in%
Revenue	14,701	14,319	2.7
EBIP	1.757	1,080	62.7
EBIT (beia)1	2.095	1,932	8.4
Net profit	1.018	209	387.1
Net profit (beia)'	1,055	1,013	4.1
EBITDA'	2,840	2,286	24.2
EBITDA (beia)'	2,938	2,720	8.0
Dividend (proposed)	318 318	304 304	4.6
Free operating cash flow	1,741 1,741	550 550	216.5

Balance sheet

20,180	20.587	(2.0)
5,351	4.471	19.7
7.704	8.932	(13.7)
16.299	10,708	52.2

Results and balance sheet per share of EUR 1.60

Weighed average number
of shares - basic	488.666,607	488,930.340	(0.1)
Net profit	2.08 2.08	0.43 0.43	383.7
Net profil (beia)	2.16	2.07	4.3
Dividend (proposed)	0.65	0.62	4.8
Free operating cash flow	3.56	1.12	217.9
Equity attributable to equily
holders of the Company	10.95	9.14	19.8
Share priceJ	33.27	21.90	51.9

Employees

In numbers
Average number of employees	55,301	58,453	P-P
Ratios
EBIT as % of revenue	12.0%	7.5%	60.0
EBIT as % of total assets	8.7%	5.2%	67.3
Net profit as % of average equity
attributable to equily holders ofthe Company	20.7%	4.2%	392.9
Net debl/EBlTDA (beia)	2.62	3.28	(20.1)
Dividend % payout	30.1%	30.0%	0.3
Cash conversion rale	147.7%	47.8%	209.0
EBITDA/Net interest expenses	5.2	6.0

Please refer lo Ihc •Glossary" for definitions.

• Comparatives have been adjusled due lo Ihe finallsalion of the purchase price accounting of the Scottish S Newcastle acquisilion.

'I Bll. 1.Bll (beial. net profit (beia). EBITDA. EBITDA (bete) and free operating cash flow' are not financial measures calculated In accordance IFRS. Accordingly, il should not be considered as an allernalive to 'results from operating activities' or 'profit' as indicators of our performance, or as an altemalrvc to 'cash flow from operating act as a measure of our liquidity. However, wc believe lhat 'EBIT. EBIT Ibeia). net profil (beia). EBITDA. EBITDA (beia) and free operating cash flow' are measures commonly used by investors and as such useful for disclosure. The presentation on these financial measures may not be comparable lo similarly titled measures reported by olher companies due to differences in the ways the measures are calculated. Fora reconciliation of'results Irom operating activities'. 'profit' and 'cash flow from operating activities' to 'EBIT. EBIT (beia), net profit (beia), EBITDA, EBITDA (beial and free operating cash flow' we refer io the financial review on pages 49 to 53.

'As at 31 December.

History

I The Heineken story began 145 years ago in 1864 when Gerard Adriaan Heineken acquired a small brewery In the heart of Amsierdam.

Since 1886. the unique Heineken A-yeast has guaranteed the pure, premium taste of Heineken beer. After 13 years of prohibition, in 1933. Heineken set fool on American soil and in 1937 ihe first Heineken beer was brewed outside the Netherlands, in the Dutch East Indies.

Over the ensuing years, growth and acquisitions substantially expanded the Company, particularly in Europe, which created a stronger, more competitive business focused on sustainable growlh.

Four generations ofthe Heineken family have been passionately involved in the expansion ofthe Heineken brand and the Heineken Company throughoul the world. By the 21si century, the small 19th century local Amsterdam brewer has grown into a worldwide business with a global brand, employing more than 55.000 people.

For more Informalion sec page 164

Heineken today

Heineken Is one ofthe world's great brewers and is committed to growth and remaining independent. The brand lhat bears the founder's family name - Heineken is available in almost every country on the globe and is the world's most valuable international premium beer brand.

Our aim is to be a leading brewer in each ofthe markets in which we operate and to have the world's most valuable brand portfolio. Our principal International brand is Heineken", but the Group brews and sells more lhan 200 international premium, regional, local and specialty beers and ciders, including:

Amstel* Birra Moretli* Cruzcampo' Foster's* Kingfisher* Newcastle Brown Ale* Ochota*

Primus" Sagres* Star" Strongbow Tiger" Zywiec*

Where we operate

We have the widest presence of all international brewers, thanks to our global network of distribulors and over 125 breweries in more lhan 70 counlries in 2009. In Europe we are the largest brewer and we are the world's largesi cider producer.

We achieve our global coverage through a combination of wholly-owned companies, licence agreements, affiliates and strategic partnerships and alliances. Some of our wholesalers also distribute wine, spirits and soft drinks.

Our brands are well established in both profitable and mature markets, and with recenl agreemenis and proposed acquisitions in India, Asia and Lalin America, are growing in emerging beer markets.

For more Infonnailon see page I M

Priorities

Marketing excellence and innovation are key components of our growlh strategy. In everything we do. it is the consumers and their changing needs that are at the heart of our efforts.

We also play an important role in society and in the communities in which we operate. Social responsibility and sustainability underpin everything we do. As part of this, wc continue to Increase our Initiatives to combat alcohol abuse and misuse and we will work hard lo reach the highest environmental standards in the industry.

""""'"t,. natural drink natural hop^ yea» d ' ^^ ^ Most of our beers, lite HeineKen^ . contain no preservatives, additives or colourings.

• Strong organic net profit growlh of 18 per cent
• Reported net profit of EUR 1.018 m 111 ion
• Free operating cash flow EUR 1.741 million

Revenue +2.7% €14joi million

I EBIT (beia)+8.4% €2,095 million

Net profit (beia)+4.1% €1,055 million

j Consolidated beer volume (0.5)% 125.2 million hectolitres

Heineken volume in premium segment (3.1)% 25.1 million hectolitres

EBIT (beia)

Consolidated beer volume

In millions of hectolitres

2007 ^^^H^HH .'(VJS ^HBH^^ H

2009 ^^^^^^ m

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-••' . 930 • 1.119 1.013 I 1.055

For more Informalion see page 71

SAGRES I BULMERS

F T'i ones 2009

Tha CEO Wat.r MaiKiW '

7

intemational Graduate Programme

Heineken" launchesthe International Graduate Programme.This crcatcsa mulli cuitural, nuilil lunctional. innlii skillvd talent pool capable of undertaking international roles from Ihe beginning of their career. For ihc first year ofthe programme, 12 graduates are selected.

li is a iwo year programme in which graduates complete four placements specialising in Sales & Marketing. Finance. Supply Chain or Human Resources. Around 4.500 graduates applied for 12 positions on the programme.

The new recruits started the programme in September.

Heineken partners with Rugby I Worid Cup zon in New Zealand

Heineken'announces lhat ii will be worldwide partner and the official beer of Rugby World Cup 2011 In New Zealand. This will be the fourth time thai Heineken" has been a sponsor and worldwide partner ol'the Rugby World Cup, having been involved in South Africa in 1995. Australia In 2()():i and France In 2007.

The Rugby World Cup is the pinnacle of ihe sport and will be held in a nation that really knows and loves lis rugby. As the world's mosl valuable. Inlernalional premium beer brand, Heineken" has been associaied with many high profile global sporting tournaments and has been a long standing supporter ofRugby World Cup and Rugby.

Heineken endorses UN Water Mandate

Heineken' endorses Ihe United Nations CFO Waler Mandate. This United Nations-led initiative encourages companies 10 play a more active role In solving issues relaUil to wiuravailabiliiy and quality. The signing of ihr il (i VV.n.r Mandate by Jean Ira nvois van Boxmeer reconfirms Heineken' lommitment to bolh sustainability and water managemenl.

Water has long been one of Heineken's focus areas for sustainabllity. In recent years, the Company has improved Its waler efficiency by more lhan 10 per cent and in parallel, has installed wastewater irealmenl plains al vinii.ilK .ill ns breweries Ihal do not have access to municipal wastewater fadl Heineken has also consislcnlly improved the qua lily ofthe waler Ihe Company emits at the end of Ihe brewing process. Given ihe increasing challenges around waler availability and quality, ihe CEO Water Mandate provides Heineken wilh an excellem platform lo share and learn besl practice irom others in Ihis vitally importani a

Heineken launches global careers site

Heineken launches the first global careers sile. giving a focal poinl for job seekers worldwide who may be interested In .1 career wiih Heineken and who are looking for opporlunilies across the business.

The site links the Heineken corporate websile. ihe websites for our key brands and local country sites and is designed 10 inspire the visitor to explore the Heineken business and explain how rewarding a career with Heineken can be.

It provides visitors wtth informalion aboul Heineken. showing polential candidates jusl how much there is lo the business the scale, ihe geographic spread of our business, our cultural diversity, our brand pontolio and Ihe opporlunilies a career wiih Heineken can offer.

changes name to Heineken UK

Following ihr .IK in IMI iun of Scolllsh & Newcastle in 2008. Heineken's UK business marks the completion of Integration with a change in name.

The switch lo Heineken UK is ihe beginning of an exdting, new chapter in ihe history ofthe UK business and a significanl milestone for Heineken.

Heineken® launches UEFA Champions League campaign

In iis rifih year as a sponsor oflheUF-FA Champions eague, launches the new 2009/2010 season campaign liiled. Ihr Heineken Slur Experience'. Heineken" brings the UEFA Champions League even closer to football fans, offering a new viewing experience and encouraging them to share thai experience ollhe world's mosl admired club football competition.

Heineken" continues to integrate Us responsible consumption programme Inlo the sponsorship ofthe UEFA Champions League. Every stadium hosting a UEFA Champions League match will feature "hnjoy Responsibly" on one ofits three pcrimeler boards around the pilch, complementing the regular Heineken* boarding. In addition, an Enjoy Heineken Responsibly five second match bumper will be broadcast several limes during UF.FA Champions uie matches wilh an estimated audience of 150 million viewers uch week.

Heineken Africa Foundation

Heineken announced the Heineken Africa Foundation io support and enhance the Improvement of heallh for the people who live in the Sub-Saharan African communilies where Heineken operates. The Heineken Africa Foundation supports health projects and health related education. Heineken has taken this initiative lo underpin us long standing eommiiment to Africa.

One ofthe first projects to receive funding from the Heineken Africa Foundation was an agreemem for Ihe purchase and distribution of long lasiing insecllcidal nets to help control malaria infeciion by mosquitoes in Rwanda. This is oneof a number of projects supported by the Heineken Africa Foundation.

oundation

Heineken

Heineken Experience •eceivcs Thea Award

I

The Heineken Experience, one of Amsterdam's most popular tourist attractions, receives Ihe Thea Award for Oulslanding Achlevemenl In the field of Brand Experience by the Themcd Entertainment Association (THEA|. This associalion represems the world's leading creators, developers, designers and producers of compelling places and experiences. The Thea Award is the industry's highest recognition and granted to the Heineken Experience for Ils oulslanding producl.

Afler undergoing exlensive remodelling and expansion, ihe •ken Experience reopened Us doors in December 2008 with ol new allracllonssuch asa mini brcwei\ i bar and mulli media experiences. The Heineken Experience had welcomed the 250.00üth visitor by September 2009. The number of visitors throughout the year remained in line with original pvoii i lions despiie Ihe downturn in tourism, which saw a 30 per cent fall in ihe number of visitors from the US and the UK. The new Heineken Experience brings the values ofthe Heineken brand to life in an enterlalning and contemporary way.

Heineken partners for growth In India and strengthens Asia Pacific joint venture

Heineken and United Brewer us Limited [UBL)i India's leading brewer, create a sirong partnership Uiai will drive growlh in one of the world's fastest growing and most exciting beer markets.

Through ihe transaction, Heineken will gain Joint majority control of India's Number 1 brewer. UBI, and agree lerms for the brewing and dislribulion of the Heineken brand in India. As pari ofthe new agreement. Heineken acquires Asia Pacific Brewerles(APB) India and in a subsequenl transaclion imends lo Iransfer ihis inlo UBL during 2010.

Heineken will strengthen and enlarge APB, ils successful joint | venture pannership with Fraser & Neave ihrough the iransfer I ofa significanl part of its eom rolling interest in PT Mulli Binlang Indonesia and iis coni rolling inleresi in Grande Brasserie de Nouvelle-Calédonie S.A. In 2010. This creates a more profitable business and a stronger platform for growlh in South East ASM and the Pacific Islands.

ief Executive's Statement

'^n 2009 we delivered an outstanding nancial performance, transformed our platform for future growth and built a stronger, more competitive global business."

Jean-Frangois van Boxmeer Chairman of the Executive Board/CEO

Heineken N.V. Executive Board Right: Jean-Francois van Boxmeer Chairman ofthe Executive Board/CEO

Lefl: René Hooft Graafland Member ofthe Executive Board/CFG

, , we assured our stakeholders that neken would emerge a stronger business from global financial crisis. Whilst the downturn is not over, In 2009 we delivered an outstanding financial formance, transformed our platform for future growth and built a stronger, more competitive ' jbal business.

were able to do so by harnessing our core mgths: the commitment and excellence of our people, the strength of our brands and our ambition lo build profitable future growth.

An outstanding financial performance

At the start of 2009 we aligned our business behind three clear priorities: maximising free operating cash flow, improving the profitability of our newly acquired businesses and reinforcing our market positions.

During 2009, every single manager in Heineken had, and in 2010 will continue to have, a cash flow targel as Iheir priority. This rigorous. Company-wide focus drove a 21G.5 per cent increase in our free operating cash flow to EUR 1,741 million. In addition, we met our commitment to achieve a cash conversion rale greater lhan 100 per cent, achieving 147.7 per cent.

In critical markets such as the UK and Russia, we developed specific turnaround plans to increase profitabilily. In both, robust pricing, cost reduction, stock keeping unit and portfolio rationalisation played a significant role in the success. These improved performances combined wiih continued growth from all regions contributed to a 387.1 per cent growth in net profit and a growth in organic net profit of 18.2 pcr cent.

Cosl reduction across all aspects ofthe business has also been a major driver of our profitability. The Total Cost Management programme (TCM) identifies projects that allow us to significantly reduce our cost base. II follows the success of our 2005 2008 Fit2Fight programme and in its first year TCM bore fruit, with EUR 155 million of costs taken out of the business.

But it is not only the Increases in our bottom line that are notable. Our value strategy continues to be successful, despite huge recessionary pressures. This clearly demonstrates the benefii of long-term brand investment In order to build equity, relevance and resilience.

In 2009, the Heineken brand again outperformed our portfolio. To us this confirms that the trend towards premium beer continues and that it drives sales and mix Improvements.

Tt-ansformlng our platforms for future growth

It was the confidence In our people and the success of our strategy that convinced us in the second half of the year to take some bold steps lhat will transform the future of our business.

Transforming our future in the Americas

In January 2010, we announced the acquisition of FEMSA Cerveza (FEMSA) in Mexico and Brazil. Completion ofthe transaction is expected in the second quarter of 2010 and is subject to Ihe approval of the relevant regulatory authorities and the approval ofthe shareholders meetings of Heineken N.V., Heineken Holding N.V. and FEMSA. This is one ofthe most exciting and significant transactions in Heineken's history. It gives us a major new platform to grow value in three ofthe world's four biggest beer profit pools that together accounl for 35 per cent ofthe total global profil for the beer Industry.

The acquisilion will bring new people, exceplional brands and different ideas Into our business and will give FEMSA a 20 per ceni economic holding in the total Heineken Group. FEMSA will also nominate two representatives for appointmenl to our Supervisory Board. We welcome FEMSA as a significant shareholder and we look forward to Iheir valuable conlribution to Heineken's future.

Transforming our future in India

In December, we announced a strong partnership in India. one ofthe world's fastest growing and mosl exciting beer markets. Our new shareholders' agreement wilh Dr. Vijay Mallya gives us a strong role in the governance ofthe market leader, Uniled Breweries Limited (UBL), in which both Dr. Mallya and Heineken own 37.5 per cent. This will enable us to unlock the market's considerable potential and to shape the premium segmem. We are now uniquely positioned to benefit from the highly favourable demographics and strong economic fundamentals In Ihe Indian markel.

Strengthening our partnership in Asia

At the same time as our Indian transaction, we announced that we had strengthened and enlarged Asia Pacific Breweries (APB), our long-standing and successful joint venture partnership with Fraser & Neave. At the beginning of 2010, we transferred a significanl part of our controlling interesl in PT Multi Biniang Indonesia and our controlling interesl in Grande Brasserie de Nouvelle-Calédonie S.A. to APB in order to create a more profitable business and a stronger platform for growth in South East Asia and the Pacific Islands.

Chief Executive's Statement (continued)

A stronger, more competitive global business

All our aclions in 2009 were carried out wilh ihe intemion of creating a stronger more competitive global business. As a result of our decisions and actions, and without jeopardising our financial stability, we have;

• Extended our position as the most internalional brewer
• Cemented our position as the world's second largest brewer by revenue (EUR 14.7 billion) and considerably strengthened our volume position (125.2 million hectolitres)
• Increased our exposure to, and lienefil from, growth in developing markets. Following approval of all transactions, 40 per cent of our EBIT will be generated from developing markets and 60 per cent from established profiiable beer markels
• Achieved positions In three ofthe four largest beer profit pools
• Strengthened our leading international portfolio with the addilion ofthe Kingfisher brand; our portfolio will be further strengthened by the addition ofthe Dos Equis, Tecate and Sol brands (which we are already distributing in the United Stales) following the completion ofthe acquisition of FEMSA Cerveza.

Future sustainable growth

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In 2010 and beyond, we will focus systematically on growing our brands and our value share In critical markels. We will do this everywhere, bul we will particularly look to do so in Europe where we have significant markel leadership despite the intense competilion. It will not be easy given the economic, market, consumer and regulatory dynamics

across many markels. We will though aim lo leverage our leadership position and develop specific action plans to grow and strengthen our business and Ihe category. We must also accelerate our investmenl In consumer focused innovation, especially on the Heineken brand.

K will be the responsibilily of all in the business lo ensure thai our future growth is achieved sustainably, with integrily and responsibly. We will seek to maintain our industry-leading position in the SAM Dow joncs Sustainabllity Index and we will announce new targets and programmes. In our Susiainabilily Repori, we set out our renewed sustainability agenda, which will re enforce and embed our long-standing commitment lo sustainable growlh and responsible consumption.

The business agenda wc arc setting ourselves for the future is hard, ll would, though, be impossible lo meet our considerable ambition wilhout the dedication and hard work of our people. As always, I would like to thank ihem for their considerable contribution lo our continued success and lo lhank all of our stakeholders for their support through the year.

i- ,L '- S-T

jean Franpois van Boxmeer Chairman ofthe Executive Board/CEO

Amsterdam, 22 February 2010

A glass of beer contains fewer calories than a

Contrary to popular belief, beer has fewer calories than many other drinks. In fact, beer contains onty 42 calories p er KX) millilitres.

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Outlook

This outlook for 2010 provides further information on general developments in the international beer industry, their effects on Heineken's position, its profit forecast and capital investments.

Outlook 2010

The global economic environmenl will continue to lead lo lower beer consumption and down-trading in a number of regions In 2010.

Heineken is committed to utilising ils global marketing excellence to build ils key brands, including Heineken, across all markets and to maintaining, or where possible Improving, its price positioning. Price increases will be at levels well below those of 2009. However. Heineken aims lo continue passing on excise duly increases Ihrough higher sales prices.

The Company will aim to improve both markel and value share in its markets via increased brand investments.

Heineken will aggressively pursue its TCM cost reduction programme in all business areas and will conlinue 10 focus on improving the profitabilily ofits newly acquired companies. The likely fall in raw material cosls per hectolitre due lo a temporary decline In the price of brewing barley will be offset by higher energy costs, rising advertising rales and increased marketing costs.

Heineken reiterates its targel of reducing Its Net debt/EBITDA (beia) ratio lo below 2.5 times. Heineken is confident that it will achieve Its target ofa cash conversion rate in excess of 100 per cent in the remaining two years of the Hunt for Cash 2 programme.

Capital expenditures related to properly, planis and equipment will be broadly in line with 2009 at EUR700 million, and will be financed from cash flow. Heineken expects a further organic decline in the number of employees.

Excluding FEMSA Cerveza, Heineken expects an average interest rate of approximately 6 per cent and an effeclive tax rale in ihe range of 25-27 per cent.

Executive Committee

The two members of the Executive Board, the five Regional Presidents and five Group Directors together form the Executive Committee. The Executive Committee is the highest consultative body within Heineken. The Executive Committee supports the development of policies and ensures the alignment and continuous implementation of key priorities and strategies across the organisation.

L JeanFrangols van Boxmeer IBelgian; 1961) Chairmwi Lxccutive Board/CEO

In 2001, appointed member ofthe Executive Board and from 1 October 2005 Chairman ofthe Executive Board/CEO. Joined Heineken in 1984 and held various managemenl positions in Rwanda (Sales fl, Marketing Manager), DRC (General Manager), Poland (Managing Director), Italy (Managing Director). Executive Board responsibi I iu for Heineken Regions and Group deparlmenls; Human Resources, Corporate Kiln ions. Supply Chain, Commerce, Legal Affairs. Strategy, Inlernal Audil and Company Secrci

2. René Hooft Graafland (Dutch: 1955)

Member Executive Board/CEO In 2002, appointed member ofthe Executive Board. Joined Heineken in 1981 and held various management positions in DRC (Financial Director), the Netherlands (Marketing Director), Indonesia (General Manager) and i he Netheriands (Director Corporate Marketing, clor Heineken Export Groi Executive Board responsibilily for Group deparlmenls: Control & AccounliiKi. I in,nice. Business Developmenl and Business Process & Technology.

3. Didier Debrosse (French: 1956)

Regional President Western Europe Joined Heineken in France in 1997 as Sales and Marketing Manager, afler having worked wiih Nivea and Krafi Jacobs Suchard, where he had various commcrci.il positions. He was later appointed General Manager of Brasseries Heineken in France. In 2003 he became Managing Director of Heineken France and Regional Presideni in 2005.

4. Marc Gross (French; 1958) Group Supply Chain Director

Joined Heineken in Greece In 1995. In 1999 hc became Regional Technical Manager North, Cenlral and Eastern Europe. In 2002 he became Managing Director of Heineken Netherlands Supply. Prior lo joining Heineken, he held various managemenl roles with internalional food and consumer businesses. He was appointed Group Supply Chain Director in 2005.

5. Step Hiemstra (Dutch; 1955) Regional President Asia Pacific

Joined Heineken in 1978 and worked in various commercial and logistic positions. In 1989 he was appointed Country Manager of Heineken Export based in Seoul, South Korea. Subsequently, he held various management posilions in several countries Including Papua New Guinea, He de la Reunion and Singapore. In 2001 he was appointed Director of Heineken Technical Services and Regional Presideni in 2005.

6. Tom deMan (Dutch; 1948)

Regional President Africa and the Middle East Joined Heineken Technical Services in 1971. Following Ihis, he held various management posilions in Singapore, Korea, Japan, Nigeria and Italy. From 1992, he was Group Production Policy & Conirol Director. In 2003 he was appointed Managing Director of Heineken's operalions In Sub Saharan Africa and Regional Prcsidenl in 2005.

7. Alexis Nasard (Lebanese; 1966) Group Commerce Director

Joined Heineken in February 2010 as Group Commerce Direclor, afler 17 years wilh Proctor and Gamble (P&G) in senior marketing and management roles. From 2006, he was General Manager ofthe Personal Care business for Central and Eastern Europe, the Middle East and Africa. Prior to P&G, he was market analyst at Frosl & Sullivan and strategie planning analyst at Bechtel Corp, bolh In the US.

8. Michael O'Hare (Irish; 1967) Group Human Resources Director

Joined Heineken in May 2009, following 13 years at PepsiCo, ofwhich two years as Chief Personnel Officer. Between 1998 and 2004, he was based in the US bolh within Head Office and operating business units. From 2004 to 2007. he held the function of Chief Personnel Officer/VP Greater China. Prior lo this, he spent six years In banking and accounting. In 2009 he was appointed Group Human Resources Direclor.

9. John Nicolson (British; 1953) Regional President Americas

Entered the beer Industry in 1993 through Foster's Brewing Group as Group Executive Director ol'the Courage business. In 1995, Scottish & Newcastle acquired the Courage business and he look up the role of Group Marketing Director. From 2000 until April 2008, John was an Executive Board member of Scottish & Newcastle plc. In October 2008 he was appointed Regional President with Heineken.

JO. Mco Nusmeier (Dutch; 1961)

Regional President Central and Eastern Europe joined Heineken in 1985 asa management trainee and graduated as a master brewer In 1988. Since then he has held various managemenl posilions wiihin Heineken in many parts ofthe world. In 2001 he was appointed Managing Director of Grupa Zywiec in Poland and Regional President in 2005.

11. Sean O'Neill (British; 1963)

Group Corporate Relations Director Joined Heineken in 2004 followinc) eight years in senior roles within the alcoholic beverages sector. Prior lo this, he held managemenl roles wilh a global communication and corporate affairs consultancy based in the UK. Russia. Ihe Middle East and Australia. In 2005 he was appointed Group Corporate Relations Direclor.

12. Floris van Woerkom (Dutch; 1963)

Group Control and Accounting Director Joined Heineken in 2005 as Group Control & Accounting Director, afler having worked with Unilever for 18 years, where he held various international posilions including Finance Director in Mexico and regional Vice-President Finance in Latin America.

Operational Review

2009 clearly demonstrated that in times of economic pressure, strong brands are one ofthe most important pillars in enabling a consumer goods business to weather the storm.

For Heineken. 2009 has again proved there is no substitute for long-term, consumer-focused investment in brand health. II Is clearly the right strategy and has helped lo differentiate us from our competitors and deal with the major challenges wilh which we have been faced during the year.

Consumers rightly value beer brands thai are relevant, provide unique experiences and are brewed with passion and quality. They will only accepl paying more for brands that continually deliver on all these levels.

The Heineken brand

Once again, the Heineken brand was the outstanding example of this philosophy. As the jewel in our world leading portfolio of brands, we invested significantly as we have always done; outperforming Ihe rest of portfolio. This helped us reach 25.1 million hectolitres in the premium segmem of the global beer markel and 125.2 million heclolilres overall, including the Netherlands.

When a brand has the global footprint and awareness that Heineken does, il is a challenge lo drive growth. However, as we said we would, we have now used the dislribulion platform provided by the former Scottish and Newcastle businesses acquired in 2008 for a platform for growlh for the Heineken bnind.

Whilsi Heineken beer Hself remains true to ils traditional, natural recipe, we ensure that wc continuously adapt all other aspects ofthe brand lo ensure it remains relevant and contemporary. Thai's why al the beginning of 2009 we launched a new visual identity across the range of packaging and merchandising. This is being rolled out across all of our markels and brand formats and platforms.

Alongside this new identity, we also developed a new 'brand Idea' for Heineken - the cenlral thought that drives all communication planning and execulion. To support the implementation of Ihe brand Idea, we have created a new visual communication style, which belter reflects both the brand identity and idea. As we move inlo 2010, we will be developing new television and print advertisnui thai will communicate the brand Idea lo the consumer.

Heineken volume by region

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Operational Review (continued)

These steps are vital for the heallh ofthe brand, as is providing direcl consumer experiences via one ofthe world's mosl comprehensive brand sponsorship portfolios. The biggest ofthese is our sponsorship ofthe UEFA Champions League. The Hemeken brand is now in ils fourth year of sponsorship with year-on-year increases in awareness and greater numbers of consumers becoming more involved in the elements we create. In 2009, we received 2.5 million hits on the Star Final website, we took the UEFA Champions League Trophy 'on tour' to more lhan 75,000 consumers in four markels in Africa, with a total media reach of 260 million people. In addition, we provided hospitality for consumers, customers, suppliers and business partners at the Final itself in Rome and were able lo show them first-hand our new brand identity.

It is not only Europe's premier football lournamenl around which we create consumer experiences. We also sponsor Europe's second major sporting evenl. the Heineken Cup, European rugby's club championship. Now in its tenth year, the tournament gives the brand a unique and identifiable associalion wilh this major international sport. Both the UEFA Champions League and Heineken Cup rugby benefit from significant media exposure with millions of consumers exposed to one or bolh events during the year.

Consumer communication though is now much more lhan only television. For many years the Heineken brand has had a strong and engaging online presence. In 2009 we invested in a new online presence, developing a more interactive digital strategy fully integrated wilh the brand's activiiies. In November, we launched our new, significantly upgraded Heineken.com consumer sile.

Innovation

Profitable, consumer-focused innovalion across the Heineken brand and our wider portfolio continues lo be an essential pan of driving volume growlh and consumer preference. To facilitate innovation platforms, we have established a cross-functional, cross-regional leam of 40 people to drive concept Identificailon and development faster and in a more integrated way. So far, the team has developed 37 initial proposals, ofwhich seven have been chosen for progression. The innovation leam has also improved the methodology and techniques for developing consumer underslanding and insight and linked this much more closely to the innovation process.

We continued to drive the rollout of our key, recenl innovations: Heineken Exlra Cold, DraughlKcg, BeerTender and David. Extra Cold was again a driver of growlh with approximately 16,500 new installations bringing the total number worldwide lo approximately 84,900 and the total number of markels to 116 counlries. During the year five new brands were added lo ihe DraughtKeg range. In total, DraughtKeg is now available in seven brands and in 2009 accounted for 529,000 heclolilres. To supporl the righl consumer experience, new DraughlKegs now come with a buillin lemperalure indicator to Inform the consumer when the perfect temperature is reached. BeerTender sold more than 170,000 appliances during the year and after the inlroduclion imo Russia, is now available in 12 markels and 15 brands. We continued lo invest behind the David syslem, the

draught beer syslem aimed at lower volume on trade outlets, installing more lhan 5,000 machines including a major launch in Portugal. This brings the total number of markets in which the David system is now available lo nearly 100.

Capability building

Investing in brands requires a deep underslanding of consumers, customers and marketing techniques and channels. Maintaining a world leading portfolio demands that wc also continually invesi in training, development and competency building for our people.

In 2009 we successfully executed the roll out ofthe new commercial competency model along with supporting tools, and documentation. We trained 50 of our senior commercial managers in 'train ihe trainer' sessions. In turn, these trainers have now introduced the competency requirements and the personal development planning (PDP) process lo approximately 1,000 managers in commerce around the business.

As a company, we have always valued, encouraged and rewarded excellence in execution. 2009 saw us introduce a new Distributor Managemenl model, which will help us lo implement our plans better and faster Ihrough Africa's unique distributor landscape. Seven key businesses In Africa are now using this new model.

The same approach was adopted for Trade Marketing in our Central and Eastern Europe region where we launched a new Trade Marketing framework, focusing on channel segmentation and on building winning-channel strategies. We also made il clear al the end of 2008 that we would increase our performance wilh regard lo delivering more effective and efficient marketing and promotional aciivities. At the start of 2009, we ensured that more lhan half our commercial managers worldwide had pari of their personal objectives targeted on one of our key efficiency measures - GP Net - gross profit net of sales and marketing costs. Across the business, we have considerably improved our performance on this essential indicator.

Managing our world-leading portfolio

The Heineken brand is unique in ils global distribution and recognition and hence is a clear differentiator for our business. However, beer continues to be essentially a locally driven industry. Eighty-five percent of our Group Beer Volume is driven by local and sometimes regional brands such as Amstel, Zlaty Bazanl or Primus. Therefore, underslanding how to grow and manage portfolios has to be a core skill of our marketing teams around the world.

Operational Review (continued)

To supporl this, we have established some fundamental principles around the long-term growlh of our premium beers al bolh regional and domestic levels. In parallel, we have maintained our speed and focus on reviewing the portfolio sirategies and offerings in our key markels. We completed exlensive ponfolio reviews in Russia and the UK and have already begun to implement the recommendations ofthese in terms of positioning, stock keeping unil rationalisation, pricing and marketing inveslmenl levels.

In addilion, our portfolio specialists collaborated with our local consumer marketing experts in Belgium, Nigeria, Poland and the Nelherlands in order to address specific brand or portfolio issues.

Each portfolio review or intervention is carefully logged so as to provide learning and insight for future and similar situations. We have now completed a review 'history' ofthe lasl five years in order lo support future, faster and more locally driven reviews.

As part ofthe overall discussions relating lo our ponfolio. we have defined an approach on the Amstel brand in order lo accelerate the continuing improvement in the brand equity of Amslel in ils key markels. The same leam also made significant steps in clarifying the role ofthe Amstel brand in the Heineken premium portfolio and strategic direction ofits key sub brands: Beer, Lager, Pulse and Light

Cider

Following our acquisilion of Scottish & Newcastle, Heineken is the world's biggest cider maker. Once again, the cider markel in the UK was strong compared wilh the overall beer market. It Is not only the UK though where cider can play a role In our portfolio and add to our growlh. We are clear on the opportunity that exists for us to develop cider cither al a brand or caiegory level in selecled markels around our business. We have begun lo implemenl the plan behind this thinking and in 2009 launched Strongbow in the Netherlands and will introduce it in the USA and Canada.

I

Sustainability: an established philosophy for a new decade

Wc have always believed thai maintaining a long-lerm perspective across all aspects of our Company Is crucial for success and we have tried to make lhat an integral part of doing business.

To renew our commitment lo this long-held philosophy, in January 2009, our CSR Advisory Board considered and approved a proposal lo undertake a complete review of our sustainability and responsibilily agenda with the idea of building a stronger, longer-term approach for the nexl years. In addition to the implementation of our existing susiainabilily programmes, much of 2009 was spent in dialogue wilh stakeholders bolh internal and external on this major undertaking. Six work streams and more lhan 200 people were involved. The targets and action plans are contained in our 2009 Sustainability Repori.

During 2009, we accelerated our support for and inveslmenl in important global iniliatives. In March, Jean-Frampois van Boxmeer became a signatory lo the UN CEO Waler Mandate, reconfirming water management as a core pillar in Heineken's approach to sustainability. The CEO Waler Mandate provides us with an excellent platform lo share and learn best practice from others.

In Seplember, Heineken, along wilh other key industry players informed the World Health Organisation it would cofund a three-year international action programme lo combat drinking and driving, to establish effective self-regulation and lo research the impact of illicit, non-commercial alcohol in developing markets in differenl regions. This major commitment is being co ordinaled and run jointly by the Global Alcohol Producers Group (GAPG) and the Inlernalional Centre for Alcohol Policy (ICAP).

The Heineken brand also continues to spearhead our actions on responsible consumption. Our fully integrated 'Enjoy Heineken Responsibly platform is now in its iiiih vear. We apply the same approach to continual investmenl and improvement to i his .ispeel ofthe brand as we do to every other. We have maintained our levels of responsibility messaging bolh on brand packaging and commercial communication globally. At the end ofthe year we extended and improved our Know the Signs campaign through the introduction of situation and issues-based vignettes on VouTubc which make the message very 'real' for viewers. We also added addilional characters on the 'Know ihe Signs' websile and made inleracllvity easier for belter and quicker consumer underslanding. We again dedicated the most prominent 30 per cent of our pitch side advertising at all UEFA Champions League matches lo responsibilily messaging. This is in addilion lo the responsibilily broadcast messaging and the hospitalily branding around the venues.

For more informalion regarding our policies and objectives, please see our 2009 Sustainability Report lhat will be published in April 2010. This repori will also be available on our websile heinekeninternational.com

It is ihe local actions and inveslmenls lhat also mark our positive progress and 2009 saw a significant increase In these. We now have 30 markel partnerships relating to responsible consumption, our Goss Brewery in Austria Is working towards CO. neutrality, our Greek and Russian businesses undertook major initiatives to clean areas of outstanding beauty, our French business Introduced a major new sustainability strategy. And in order lo emphasise Ihe importance of loca I action and to show our commilmenl to transparency, we will be asking our 20 leading markels to publish their own Sustainability Reports for 2009.

Operational Review (continued)

•

In 2009, we further developed our reputation model that gives us a deeper insight inlo the views and opinions of our stakeholders on our sustainability agenda and performance. From 2010 onwards, we will begin lo use this model lo track and trace opinions on Heineken. We cannol improve performance or reporting withoul feedback from our stakeholders. Ifyou have any questions or remarks, we would like to hear from you. Please send your e mall lo: responsibilily@helneken.com or see our Suslainabilitv Repori for olher ways of contacting us.

Personnel and organisation

Our people are a main source of compeiilive advantage In Heineken and we remain committed to dedicate significanl amounis of lime and resources to their growth, development and well-being.

Our primary focus areas are:

• Build and embed a new philosophy on talent development
• Upgrade the global Human Resource Funclion
• Create a culture that drives performance
• Examine, align and optimise the organisation structure and work llow.

In 2009 we continued our journey towards these goals by building upon existing managemenl, leadership and reward systems in place throughout our organisation.

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The professional developmenl of our people remains a lop priority. With more than 60 Operating Companies around the world, we have the capability to develop leaders by exposing them to a wide variety of businesses, with ever-increasing responsibility. We allow them lo lake prudent risks as they enhance iheir own leadership and business capabililies. Our focus on leadership developmenl ensures smooth succession ihrough our most senior management levels.

We have begun to establish Heineken's Development philosophy and framework. This includes the developmenl of functional competency frameworks lo identify essential functional skills, knowledge and behaviours required for effective performance and developmenl of all employees. We are Introducing resource guides to support the development of functional and leadership skills, necessary to adapt to the changing internal and external environmenl.

Our talent identification and development processes are being assessed and improved. This is being done, in order to ensure we identify a diverse group of talented individuals early in Iheir careers and provide relevani, focused developmenl opportunities for ihem. II is clear that the leadership and lalenl developmenl programmes in place are beginning lo bear fruit. In 2009, we were able to identify more emerging professional and leadership talents than in previous years.

Through the use of our climate surveys and climate reporting tools, we are seeing progress on the identification and action plans required lo address the various climate needs in each of our businesses. This will be work thai will be further enhanced in 2010.

Since our business continues lo grow ihrough organic means and ihrough acquisitions, we are continuously examining, aligning and optimizing the organisation structure and workflow lo ensure efficiency and effectiveness. This is work lhat will continue actively in 2010.

In 2009, the average number of employees decreased from 58.453 lo 55.301.

Geographic distribution of personnel In numbers

Region	Revenue (EUR million)	EBIT (EUR millionl	EBIT (beia) (EUR million)	Consolidated beer volume (million HII	Consolidated beer volume as % of Group	Heineken volume in premium segment (million HL)
Western Europe		502	792	47.1
Central and Eastern Europe	3.200	347	389	46.2	36.9	2.5
Africa and the Middle East	1.8)7	485	485	19-8	15.8	2-3
The Americas	1.541	273	273	9-4	7-5	8.3
Asia Pacific	305	103	103	2.7	2.2	4.5

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Revenue

EBIT (beia) €792 million

Consolidated beer volume

Heineken volume in premium segment

CONSOLIDATED BEER VOLUME

IN MIUIONS OF HECTOLITRES

Western Europe posted a solid financial performance despite challenging market conditions. Growing revenues per hectolitre, TCM savings and the improvement of the former Scottish & Newcastle operations drove the EBIT (beia) growth.

Consolidated beer volume grew 6.6 pcr cent, due lo Ihe firsl-lime consolidation effeel of the new operations in Ihe UK. Ireland, Finland, Portugal. Belgium and Switzerland. Organically, consolidated beer volume was 5.0 per cent lower. The effect ofthe recession and the increase In excise duties on volumes outweighed the effeel of good summer weather in a number of markets. In France, consolidated beer volume increased.

Volume ofthe Heineken brand In the premium segment was 2.1 per cent lower. The growlh recorded in France and Portugal could not compensate for markel softness in Spain, Italy and Ireland.

Organically, revenue was broadly stable despite the lower volumes, especially in the on trade segment. On average, mid single digit price increases and an improvement in the sales mix played a key role. Reported revenue was 10 per cent higher.

EBIT (beia) was impacted by the negative effeel of irst time consolidations and currency depreciation. Organically, EBIT (beia) benefited from more efficient marketing spend and personnel costs and an Improved sales mix. The EUR 184 million synergies forecast for all of Scottish & Newcastle have now been realised in full. Western Europe represented 38 per cent ofthe Group's consolidaled EBIT (beia).

Western Europe (continued)

Spain

Consolidated beer volume: 10.3 million hectolitres Market share: 29,1% Market position: 1	Heineken Espana grew EBIT (beia) thanks to cost reductions, better prices and improved sales mix, which exceeded the effeel ofa 5.5 pcr cent decline in volumes. The Arano Brewery was closed during the year. The Spanish beer markel was broadly stable	beers was largely offset by the growth in private labels (+16 per cent). This affected market share adversely. In particular, volume of the Heineken brand was affected, declining double digit. The Cruzcampo and Amslel brands performed beller, thanks to resilience in their core regions.
	as the decline in mainstream and premium
Italy
Consolidated beer volume: 5-3 million hectolitres Market share: 31.3% Market position: 1	'Ihe Italian beer markel declined 6 per cent, affected by the economic conditions and price increases at the end of 2008.	Organically, revenue and EBIT were lower as TCM cost savings, better selling prices and an improved sales mix could only partly compensate for lower volumes and a decline
	Heineken Italia maintained ils market share despite a temporary retail delisting in the firsl half of 2009. The Moretli brand outperformed Its segment, whilst the Heineken brand was affected by downtrading in Ihe off-trade and a temporary delisting, leading to a 7.1 per cent lower volume.	in the wholesale unit, Pariesa. Parlesa was affected by an 11 per cent decline in the on-trade channel.
France
Consolidated beer volume: 54 million hectolitres Market share: 27.6% Market position: 2	The markel grew 1.3 per cent as exceptionally good summer weather compensated for the effeel ofthe economy on beer consumption.	brands showed healthy growth: Heineken grew 8.4 per cent and Desperados and Pelforth also increased volumes.
	Heineken France increased its value and volume share, thanks to a strong performance in the oft trade. All key	F.BIT (beia) was higher, driven by better volume and brand mix. The Fischer Brewery in Schiliigheim closed in Seplember 2009.
The Netherlands
Consolidated beer volume: 50 million hectolitres Market share: 46.9% Markel position: 1	The beer market declined 5.5 per cent, as the effect ofthe 1 January excise duly increase and lower on-trade consumption were only partially offset by good weather and growlh in private label beers in the off trade.	Volume of Heineken Nelherlands was 6.4 per cent lower. Volumes of bolh the Heineken and Amstel brand were lower. The introduction of Strongbow Gold cider and jillz cider in selecled outlets and in the off-trade in April and May 2009 was very successful, resulting in sales of more than
	EBIT (beia) was slighlly higher, as the posilive effeel of cosl savings and better prices largely offset decline in volumes.	30,000 heclolilres in the year.
		Volume at Vrumona, the sofl drinks operaiion, was also lower, mostly as a resull ofa temporary retail delisting.

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Western Europe (continued)

United Kingdom

Consolidated beer volume: 12.1 million hectolitres Markel share: 26.5% Market position: 1 Ireland Consolidated beer volume: 1.4 million hectolitres Market share: 26.7% Markel position: 2 Portugal Consolidated beer volume: 3.2 million hectolitres Markel share: 470% Market position: 2 The UK beer market declined 4.2 per cent with an improvement ofthe trend in the second half of the year. The premium segmenl recorded growth. Heineken UK outperformed the markel significantly, gaining markel share wilh beer volume only slightly down. The Foster's brand grew 2.6 per cent, benefiting from Ils new brand campaign, extended dislribulion and improved marketing. John Smith's, the UK's leading ale brand declined bul less than the markel. The elder market grew 8 per cent, driven by a stronger performance in the off trade and a broader dislribulion in the on-trade. Bulmer's success is driven by the increasing consumer response and the developmenl of bottled premium cider. Organically, revenues grew by low single digits as belter pricing and an im|iroved brand mix more than offset lower volumes, F.BIT grew organically 35 per ceni, thanks to realising cost synergies, aggressive further cost culling and lower purchasing prices. During 2009, significant steps were taken to lurlher streamline the business. In 2010, Ihc Berkshire Brewery and the Dunston Brewery will be closed. Following the acquisilion of Scottish ^ Newcastle, Heineken consolidaled the assets and liabiiilies of Globe in its balance sheet in 2008. In 2009, Heineken purchased most of the oulslanding debt al significant discounl lo the face value and book value, realising an exceplional book gain of EUR215 million. In addition, Heineken has lowered the value of iis interesls in pubs in the UK. The severe effect ofthe recession meant beer consumption declined by high single digits. On an organic basis, Heineken Ireland increased ils markel share. In addition, it benefited from the growth ofthe Beamish & Crawford and Coors Light brands. Volume of the Heineken brand declined 6.8 per cent but outperformed the market thanks lo sirong draught beer sales. Underlying revenue and EBII were lioublc digits lower due to weak volume, increased promotions and the limited scope for price increases. Heineken Ireland focused on further cosl reduction and the Beamish & Crawford Brewerv in Cork was closed. I he beer markel decreased 3.3 per cent, due lo the effeel of the economy on the on trade segmenl. Centraleer gained market share, driven by the growlh ofthe Heineken brand. The Sagres brand is now the largest selling brand in Portugal. Higher selling prices contributed lo the growth in revenue and, logethei wnh cost reductions, drove an organic increase in EBIT (beia). Volume of Ccmralcer's mineral waler business, in particular the premium brand "I uso", was affected by downtrading to private labels. Rniand Consolidated beer volume: 1.4 million hectolitres Market share: 27.9% Market position: 2 fhe total beverage market was only 1 percent lower. Private labels in ready to drink beverages and lower priced beers showed growlh. Hartwall's EBIT grew, thanks lo strong cosl control and despiie lower volume due to declines in on trade and in the premium segment. The successful repositioning of 1 he Lapin Kulta brand at the end of 2008 had a positive clTin cm volume. The Heineken brand was added to Hartwall's portfolio with good sales results. Hartwall announced that the Tornio Brewery will close in 2010.

Switzerland

Consolidated beer volume: I.I million hectolitres Market share: 247% Market position: 2

The beer markel was stable whilst the off-trade segment grew 2.5 per cent. Heineken Switzerland's revenue decreased organically as a resull of lower volume ((4.4) per cent). The Heineken brand grew ils market share in the premium segmenl, which declined double-digit.

EBIT grew significantly thanks to cosl efficiencies and the belter product mix. Heineken Switzerland completed the integration of Eichhof Beverages, acquired in August 2008.

Belgium

Consolidated beer volume: 1.0 million hectolitres Market share: n.3% Market position: 2

The beer markel remained under pressure wilh volume in the on-trade declining in excess of6 per cent.

Aiken Maes breweries increased markel share. The key Maes brand was re-launched

leading lo positive consumer reactions and a reversal ofits long decline. Underlying EBIT was broadly stable as the favourable effect of cost control and price increases offset lower volumes and the additional marketing efforts.

Central and Eastern Europe

Revenue

Consolidated beer voiume

4D* 2 million hectolitres

Heineken volume in premium segment

The impact ofthe recession, higher prices and increases in excise duties affected all key beer markets across the region, reversing the growth trend ofthe last few years.

EBIT (beia) grew organically thanks to sirong cost control especially in Russia and the Czech Republic. TCM progressed at pace, with the closure of four breweries and four malti Reported EBIT (beia) was lower, largely driven by the si ronfl devaluations ofthe zloty and the rouble. The cumulative translation and transaction effect of weaker currencies led to a EUR 119 million reduction in EBIT (ofwhich EUR39 million was translation).

Beer volume in the region was lower, also affected by the decision lo focus on profitable brands and pack types and rationalising underperforming SKUs in Russia.

Volume ot the Heineken brand was 9.3 per cent lower, due to consumers shilling toward cheaper beers and low-priced vodka. Together, Russia and Poland accounted for more than half of the region's decrease. In Auslria and Serbia, the brand grew, increasing its market share.

Organically, revenue decreased slighlly as beller prices could only partly offset sofl volumes and the unfavourable shift in sales mix towards less profitable channels and packages.

CONSOLIDATED BEER VOLUME

IN MILLIONS OF HECTOLITRES

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Central and Eastern Europe (continued)

Austria

Consolidated beer volume; 4.3 million hectolitres Market share: 47-4% Market position: 1	The beer market was 3.0 per cent lower, due 10 exlra sales in 2008 driven by the European Football Cup and softer volumes in the on-lrade during 2009. The shift towards off trade and lower margin beer in cans continued. Heineken Austria's EBIT (beia) grew mid single digil thanks to belter pricing and Ihc	posilive effects of cosl savings, despite lower volume. As the Company focused on higher margin segments, markei share declined due lo the growlh ofthe low end ofthe markel. This trend also affected volumes of mainstream brands, Zipfer, Goesser and Punligamer. The Heineken brand grew 3.7 per cent.
Poland
Consolidated beer volume: n.4 million hectolitres Market share: 35-o% Market position: 2	Afler years of sirong volume growlh, the Polish beer market fell 10 per cent, affected by the challenging economy, an excise duly increase and higher selling prices. The Zywiec Group gained markel share, thanks lo a posilive performance in the off-trade segmenl. The Warka brand, positioned in the mainstream segmenl, grew and Desperados volumes more than doubled. Both the Heineken and Zywiec brands declined, affected by above-average	declines in the International and national premium segments. Both reported revenue and EBIT (beia) in euro were substantially lower, mainly due to the average 23 per cent devaluation ofthe zloty versus the euro, which accounted for a negative translalion impaci of EUR37 millinn. Organically, EBIT (beia) declined.
Russia
Consolidated beer volume: 12.8 million hectolitres Market share: n.gX Market position: 3 Romania	The Russian beer markel decreased double digil affected by the severity ofthe recession that drove consumers lo switch from economy beers into low priced vodka. The premium beer segment performed relatively well. Heineken Russia adjusted ils commercial straiegy. The new strategy focuses on four key national brands and six regional brands, whilst commercial support for non strategic brands was reduced. Prices of Ihe key premium brands were increased ahead ofthe competition. Underperforming SKUs were rationalised.	Due to the recession and the initial effect ofthe new commercial strategy, volume of Heineken Russia decreased 17 per cent, but profitabilily increased subsianliallv. Reported EBIT was significantly up, despiie being negatively affected by the weak rouble, which accounted for a total translation Impact in excess of EUR10 million. Strong progress was made with cosl reductions. Amongst others, Heineken Russia closed the Slepan Razin Brewery in St. Petersburg and a brewery In Novotroitsk. Per January 1st, 2010, excise duty on beer tripled and Heineken Russia passed the increase on In Its prices.
Consolidated beer volume: 5.2 million hectolitres Market share: 29.5% Market position: 2	The beer markel decreased 11.3 per cent driven by the off-trade channel, which was negatively affected by declining purchasing power and less money transfers by Romanians working abroad. Heineken Romania's volume decreased In line With the markel. Goldenbrau outperformed the market, but Heineken, Ciuc and Bucegi brands declined faster than the market.	Higher selling prices could not fully offset the effect of lower volume and, therefore, revenue and EBIT declined organically. In addition, the devaluation ofthe Iei negatively affected reported EBIT in euro by more than EUR? million. Heineken Romania continues lo focus on long term brand building, sales execution and cost reduction. In 2009, three malleries were closed and in January 2010 the closure ofthe Haleg Brewery was announced.

Greece

Consolidated beer volume: 3.2 million hectolitres Market share: 71.9% Markel position: 1

The Greek beer market was driven 6 per cent lower due to the financial crisis, a 20 per cent Increase In excise duly In February, lower tourist numbers, inventories reduction by wholesalers and less favourable summer weather compared with 2008.

Market share of Athenian Breweries decreased as mlcrobrewers and private label beer grew markd share. Amstel declined substantially, but the Heineken, Fischer and Alfa brands outperformed the markel. The Heineken brand benefited from a new marketing campaign.

Revenue and EBIT were lower, as a 2 per cent net price increase was not sufficiënt lo offset the effect of lower volume.

Czech Republic

Consolidaled beer volume: 2.6 million hectolitres Market share: 12.4X Markel position: 3

The beer markel in the Czech Republic was 6 per cent lower, affected by the economic environmenl and a significant increase in excise duties. Heineken increased ils market share lo 12.4 per cent. Significant steps were

taken lo further rationalise the production footprint with the closure of two breweries in 2009. In 2010 the closure ofthe brewery in Louny was announced.

Germany

Volume of Brau Holding International (BHI), Heineken's Joint venture with the Schoerghuber Unternchmungsgruppe in Germany, was lower, mainly due to the divestment of Karlsberg in 2009. However,

markel share ofthe underlying business increased slighlly. Excluding 1 ho Impaci of one-off items (mainly of the Karlsberg impairment in 2008), BHI net profit increased.

Zlaty Bazant, the world-class Slovak beer

Founded In 1969, Zlaly Bazant is one of Slovakia's leading domestic brands and its best selling export beer, wilh important markels in Canada, the Unites Stales and most recently, Sweden, among others.

Heineken Slovakia's mosl famous beer, Zlaty Bazant, underwent an extensive rebranding in zoog lo strengthen its position as a modern premium beer brand that reflects quality and global success.

As part ofthese efforts, Zlaly Bazanl's distinctive label design was redesigned and an ambitious advertising and sponsorship campaign was rolled out. This included a television commercial lo introduce the brand's new slogan; 'Zlaty Bazant. the world dass Slovak beer'. Domestically, Ihc focus of the rebrand was lo instil national pride in a homebeer that is internationally

acclaimed. The overall success of the campaign was reflected in significant increases in the brand's markel performance score, which al the end of zoog had reached a high of 90 per cent, the highest level in all Central & Eastern European countries in which Heineken operates within the national premium segmenl.

Brand recognition has also increased Ihrough Zlaly Bazanl's sponsorship of Slovakia's international Olympic team during the February 2010 Winter Games In Vancouver. This sponsorship will also extend to Ihe Slovak squad that competes In Ihe london Summer Olympics in zoiz.

"We're delighted wilh how successfully we've been able to communicate the rebranding message," says Zuzana Pulalova, Group Brand Manager at Heineken Slovakia. "Slovaks are surrounded with things from countries all over Ihe world in Iheir everyday lives, so Ihey appreciate something that has world-class quality and character, but is overwhelmingly Slovakian. like Zlaty Bazant."

For the third consecutive year, Zlaty Bazant also brewed a special beer for the Christmas period. In zoog, it was Zlaty Bazant Porter, a 19' beer wilh a dark appearance and a strong, mally taste and aroma. II was brewed according to traditional recipes from four kinds of mall and selected hops. As a seasonal specialty, it was extremely popular in the local market, attracting a great deal of public attention and becoming the subject of much discussion on internet beer forums. By introducing limited editions of beer specialties on a regular basis, Zlaly Bazanl has confirmed ils national leadership position.

www.annualreport.heineken.com

Africa and the Middle East

Revenue

EBIT (beia) €485 million

Consolidated beer volume

19* 8 million hectolitres

Heineken volume in premium segment

CONSOLIDATED BEER VOLUME

IN MILLIONS OF HECTOLITRES

Heineken is the number two brewer in Africa and the Middle East.

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In ihe second half of the year, beer consumption in Nigeria slowed, affecting ihe region's total growth rale. In the rest of Africa, volumes continued to develop well.

Organic revenue grew 9.1 per cent, driven by higher volumes and better prices. EBIT (beia) was higher, thanks in diuible digil organic growth and despite the negative currency Iranslation effect of EUR34 million.

Volume ofthe Fleineken brand grew 12 pcr cent to 23 million hectolitres, mainly driven by strong growlh in South Africa (+29 per cent), Nigeria (+22 per cent) and Algeria (+29 per cent). With the Heineken brand growing 29 pereem, Algeria is now the brand's third largesi markei in 1 he region.

Volume of the Amslel brand grew 2'J per cent. Amstel Is now the region's third largest beer brand, after Primus and Star.

Soft drinks and other beverages volumes for the region grew by 7.5 per cent lo 7.2 million heclolilres.

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Africa and the Middle East (continued)

Nigeria

Consolidated beer volume: 10.0 million hectolitres Market share: 55-1% Market position: i	The beer market grew by low single digit, despite weaker volume In the second half of 2009 due to the effect ofa local banking crisis and public security issues in part ofthe country, which caused lower on trade traffic. Combined beer volume of Nigerian Breweries and Consolidated Breweries increased by 2.8 per cent. The Heineken (+21 per cent), Gulder, Amstel Malta and Turbo King brands continued to grow. Malt based soft drink	Revenues were lower; this was despiie higher volumes, price increases and an improved sales mix, which were offset by the negative effect ofthe weak naira. On a constant currency basis, EBIT grew substantially, despiie higher cosls of imported materials due lo the weakness ofthe naira. EBIT in euro was slighlly lower also as a result ofthe lower naira.
	Fayrouz grew substantially and cans were added lo the producl range.	The greenfield malting plant in Aba is now fully operational and produced 30,000 Ions of malt.
Egypt Consolidated beer volume: 1.2 million hectolitres	Revenue and EBIT (beia) of Al Ahram Beverages increased organically driven	The alcohol-free beers Birell and Amslel Zero, mall drink Fayrouz as well as spirits
Market share: 99-2* Market position: i	by belter prices and cosl reductions despite lower volume.	continued lo perform well. Tourist and volume trends improved in the lasl quarter compared with the previous quarters. During the year,
	The beer and wine markel was affected by a decline in tourist numbers and decline in local spending power.	AI Ahram acquired the small Luxor Brewery.
Democratic Republic of Congo (DRC)
Consolidated beer volume: 24 million hectolitres Market share: 66.o% Market position: i	Volume of Bralima grew 13 per cent and the Company increased ils market share lo 66 per cent In a markel lhat grew 7 per cent. All Bralima's beer brands, including Primus and Turbo King, grew strongly. The new brewery in Lubumbashi, commissioned al the end of 2008, is fully operational and drove volume growlh in the Katanga province. Soft drink volume grew slightly.	EBIT in euro was lower due to a 45 per cent drop in value ofthe franc Congolals, increased depreciation related lo the brewery and increased marketing spend. Revenue was also affected by the weak currency.
South Africa
Consolidated beer volume: 2.7 million hectolitres Market share: 10.1%	In South Africa, Heineken operates through joint ventures with Diageo and Namibian Breweries lhat offer a wide range of beers, ciders and ready to drink brands in the premium segment ofthe markel. Beer volume increased by 1 million heclolilres and market share grew. Volume ofthe Heineken brand grew 29 per cent due to better dislribulion and sirong marketing. Amslel, also positioned in the premium segment, grew 26 per cent.	In August, production of Amslel started al the new 3 million hectolitres brewery near Johannesburg and by the end of 2009 brewing of Heineken started. Before August, Amstel was imported from Europe; wilh the start of local product ion. it has become profitable due lo lower Iransporlalion and other costs. Strongbow was launched in October.

Other countries In the Africa and Middle East region

Consolidated beer volume: 3.5 million hectolitres

Beer volumes of Brarudi in Burundi were broadly stable, whilst Bralirwa in Rwanda increased volumes slightly. Our joint venture Brasserie du Congo reported a double digit increase in volumes.

Heineken

Sedibeng Brewery opens in South Africa

The beer market segmerr South Africa Is one ofthe largesi worldwide, with an estimated 27 million hectolitres sold annually. and an important marketplace for global premium brands such as Heineken and Amstel. South Africa's fast-growing economy is expecting an imporiant boost in 2010 Ihrough its hosting of the FIFA World Cup.

For Heineken, the completion of ils Sedibeng Brewery in 2009, in partnership wilh Diageo, will enable II to benefit from the existing and future opporlunilies in Ihe market. During 2009, Heineken and Amstel brands experienced rapid growth of more lhan 25 per cent in the year.

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The 80-hectarc Sedibeng Brewery has an annual output of 3 million

hectolitres, although this is already being increased due to growlh and expected demand. Sedibeng has had a significant impact on the South African economy due lo the sizeable number of high level, new jobs created and also as a result ofthe levels of investment In breweryrelated assesls.

"The brewery was built for one simple reason: you can't be a major player in this market based on imports alone," says Johan Doyer, General Manager ofthe Sedibeng Brewery. "Local brewing offers us the possibility to really participate in Ihis market, and expand both the Amslel and Heineken brands. Additionally, we will brew brands Ihal belong to the Windhoek Brewery and to Dlagco's portfolio".

At well as expanding Its share of the beer market, Heineken launched its popular brand Strongbow In September 2009. This will stand alongside the Brandhouse cider brand. Foundry.

"Our focus will be on the Sedibeng brewery over the coming six months as wc aim to grow our share ofthe premium beer market, while continuing to invest in the premium beer brands we proudly exhibit Ihrough Brandhouse, which markels, distributes and sells products in South Africa on behalf of Heineken. Diageo and Namibia Breweries," adds Tom de Man, Regional President lor Africa and the Middle East.

www.annualreport.heinekcn.com

Americas

EBIT million

EBTT (beia) million

Consolidated beer volume

Heineken volume in premium segment

CONSOLIDATED BEER VOLUME

IN MILLIONS OF HECTOUTRFS

The economic downturn led to lower on-trade consumption and downtrading in the off-trade, especially in the USA.

Consolidated beer volume was 8.7 pcr cent lower. Group beer volume performed relatively better, thanks to Compania Cervecerias Unicias (CCU). the joint venture in Chile and Argentina.

In the fourth quarter, volume ofthe Heineken brand showed a positive trend in Canada, the Caribbean and South America.

Revenue, in constant currencies, was lower as the efTect of better pricing only partly compensated for volume softness. Organically, EBIT (beia) grew strongly, benefitted from major TCM savings inilialives across the region.

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Americas (continued)

The USA

Consolidated beer volume: 7.1 million hectolitres Market share: 3-8%	The beer market declined slighlly. Due lo downtrading, the economy segmenl grew 4 per cent whilst the import segmenl declined 9.8 per cent. Organically, EBIT of Heineken USA improved substantially. The key drivers were the price increase across the Dutch portfolio implemented at the end of 2008, lower marketing rates and the positive effect ofthe TCM initiatives which generated significant savings in marketing, logisiics and general expenses. Reported EBIT was reduced by EUR 17 million due lo the weaker dollar.	Beer volume of Heineken USA was 10.7 per cent lower due lo the decline in the import segmenl and price compelilion. Volumes of the Dutch portfolio were 10.4 per cent lower, whilst the Mexican portfolio grew 1.0 per cent. Heineken* declined 10 pcr cent. Tecate Light and Dos Equis performed strongly, growing 14 per cent and 20 per cent respectively. Volume of Newcastle Brown Ale, imported from Heineken UK, increased by 1.7 per cent. Depletions - sales by distributors to retailers - ofthe Dutch portfolio In 2009 were in line with sales, whilst depletions ofthe Mexican portfolio were higher, at 2.4 per cent.
Canada
Consolidaled beer volume: 0.5 million hectolitres Market share: 2.1%	The markel was affected by ihe difficull economic environment and volume of imported Heineken declined by high single digits, but witnessed an improvement In the fourth quarter.
Latin America and Caribbean
Consolidated beer volume: 1.8 million hectolitres	Heineken operates in the region Ihrough: • Controlled operalions: Panama, Bahamas, St. Lucia, Martinique and Suriname • CCU, a joint venture with leading position in Chile and number two in Argentina • A minorily slake in FIFCO in Costa Rica • Exports lo a number of markels of which Puerto Rico is the mosl significanl.	Beer consumption in Chile decreased. CCU's volume was broadly stable organically. Volume of the Heineken brand increased 8.3 per cent. Despiie a challenging trading environment, volume in the Caribbean markets and in Latin America grew slighlly. The Heineken brand grew in Brazil (+52 per cent) and Panama (+4.5 per cent). F.BIT grew double digits as a resull of lower overhead cosls, and belter profitability ofthe

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FEMSA Cerveza and the Mexican market

a rising population. Mexico is of the world's largesi beer l pools and is home to some large beer brands. Its second largest brewer is pari of FEMSA Cerveza, which in addilion to its 42 per cent share of Ihe local market, has an established position in Brazil and a strong exporl business to Ihe USA and other markels globally.

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Heineken announced the acquisition of ioo per cent of FEMSA's beer operations in '"luary zoio, planning to create jor new platform for growth id international expansion. Following completion of the transaction, the acquisition will strengthen Heineken's position in ; ofthe lop four largest beer I pools. With a strong portfolio ands such as Dos Equis, Tecate Sol, Heineken will attain an wld in the Brazilian market jgh the acquisilion of the lining 83 per cent of FEMSA's ilian business, which currently 5 an g per cent share of the I markel.

Mexico's allraclive beer markel offers a unique op

expand beer segmentation, develop Ihe premium segment and strengthen Heineken's position in Ihe profitable import and growing Hispanic sector In the USA. In addilion, Heineken is one of three players competing with a number one in the highly growing and profitable Brazilian beer markel, which also offers huge polential for Ihe developmenl of Ihe premium segment.

"This is a significant development thai will transform our future in the Americas and is a natural progression lo the sirong association we have enjoyed with FEMSA," says Jean-Francois van Boxmeer. "Latin America is one of the world's most profitable and fastest-growing beer markets and Ihc acquisition of FEMSA's beer operations strengthens our position within Ihe global beer markel and expands our portfolio of leading International brands."

Through the acquisilion, Heineken expects lo achieve Important cosls synergies and savings Ihrough operating best practices.

www.annualreport.heinekcn.com

Asia Pacific

Revenue

€305 million

EBIT €l0 3 million

EBTT (beia)

Consolidated beer volume

Heineken volume in premium segment

CONSOLIDATED BEER VOLUME

IN MILLIONS OF HECTOLITRES

Despite the challenging market conditions, revenue increased 9.3 per cent, EBIT (beia) increased 59 per cent or EUR 38 million, mostly due to the strong performance in Indonesia and at Asia Pacific Breweries.

Heineken operates in the region Ihrough:

• Asia Pacific Breweries (APB), the joint venture with Fraser & Neave covering large parts of Asia and the Pacific Islands
• United Breweries Limiled (UBL), the joint venture in India
• Its own breweries in Indonesia and New Caledonia
• Exporl and licensing

Heineken' is by far Asia Pacific's most preferred inlernalional premium beer, with a lotal volume of 4.5 million hectolitres. In addilion, Heineken's joint venlures have sirong regional and local brands, including Tiger', Kingfisher, Larue, Anchor, SP and Tui, leading in the markets where they operate.

Several markels in which APB operates, suffered from weak consumer sentiment leading to lower beer consumption and a decline in Group beer volume.

Consolidaled beer volume grew 1.4 per cent as Mulli Binlang Indonesia, Grande Brasserie de Nouvelle Caledonie and Taiwan performed well.

Volume ofthe Heineken brand grew 3.4 per cent, mainly driven by strong growth in Vietnam, China, New Caledonia and Taiwan.

On 7 December 2009, Heineken announced the intended iransfer ofits controlling interest in Multi Binlang Indonesia (MBI) and Grande Brasserie de Nouvelle-Calédonie (GBNC) lo APB which transforms APB Into an even more profitable business and a stronger platform for growth in South East Asia and the Pacific Islands. The Iransfer took place in February 2010.

Did you know:

Beer contains vitamins Beer contains most of the B vitamins and several essential minerals such as potassium, calcium, magnesium and silicon.

Asia Pacific (continued)

Asia Pacific Breweries

Consolidated beer volume: 10.7 million hectolitres	Profit of APB increased subslanllally, mainly driven by strong performances in Singapore, Indo China and Papua New Guinea.	In Papua New Guinea, one of APB's most profitable beer markels. South Pacilic Brewery's revenue increased 20 pcr cent driven by a 4 per ceni higher volume and
	In Vietnam, beer consumption continued	price increases. In particular, SP lager, the
	lo grow (+10 per cent), in particular in the	country's leading beer brand, reported
	mainstream segment. APB posted volume,	strong volume growth. Profit increased
	revenue and profit gains as a result ofthe	substantially. To keep pace with volume
	growlh in Heineken and Larue volumes.	growth SPB started an inveslmenl programme lo expand and upgrade its
	In Singapore, profil of Asia Pacific Breweries	two breweries.
	(Singapore) increased 25 per cent driven by
	a 3 per cent higher domestic and exporl	In China key focus is on the premium brands
	volume, belter prices and costs savings.	Tiger and Heineken, whilst exposure lo the extremely low margin mainstream segmenl
	Volume ofthe Tiger brand increased, driven	remains intentionally limited. Operating
	by a new advertising campaign and football	profit improved substantially, thanks to
	sponsorships. The Heineken brand performed	better pricing, improved sales mix and intensified distribution. However, overall,
	well thanks lo the success ofthe Heineken Green Room, Formula One Rocks and olher	il remained slightly negative.
	music events.
		Volume of Thai APB, in which APB holds a
	The portfolio of imported brands was	minority stake, suffered from a declining
	extended wilh Bulmer's Original cider,	beer market due lo the political and
	Newcastle Brown Ale and John Smith's	economic environment, regulatory
	bitter from Heineken UK.	reslriclions and a drop in tourist numbers.
United Breweries, India
Consolidated beer volume:	Uniled Breweries Limiled (UBL) is the markei	growth in one of Ihc world's fastest growing
6.9 million hectolitres	leader in India wilh a market share of 48 per	and mosl exciting beer markets. An
Market share: 48.0X	cent and sells the leading and only national	agreement was also reached on the key
Market position: 1	beer brand Kingfisher. Heineken holds a 37.5 per cent slake in the company.	terms for brewing and distributing the Heineken brand by UBL in India. In addilion,
		Heineken acquired APB's breweries in India
	The company continued lo enjoy double-digit	in February 2010 and intends lo transfer
	volume growlh, and in the quarter ended	these lo UBL during 2010.
	31 December 2009 reached a markel share of
	53 per cent. Profitability improved as a resull	India has a population of more than 1.1 billion,
	of volume growlh and improved efficiency.	of whom 70 per cent arc younger lhan 30 years
	On 7 December 2009, Heineken signed a	of age. In 2009, the beer market totalled 14.4 million hectolitres. Beer consumption Is
	new shareholders' agreement wilh Dr. Vijay	still low at 1.3 litres per capita, but has been
	Mallya, In respect of UBL. The new agreement	growing by double digits annually.
	creates a strong partnership lhat will drive
Heineken's own operations
	Consolidaled beer volume grew bolh in	EBIT of Grande Brasserie de Nouvelle
	Indonesia and Nouvelle Caledonie. Revenue	Caledonie increased strongly due lo higher
	and EBIT of Mulli Binlang Indonesia grew	volume, a better sales mix, increased
	double digits driven by price increases	dislribulion and higher prices.
	across the entire portfolio, a better sales
	mix and cost control.

Export and licensing operations

In Taiwan, volume ofthe Heineken brand grew double digit thanks to penetration into new regional markets and expansion ofthe distribution in bolh the on- and the off-trade. The Heineken brand has very sirong brand equily in the Taiwanese beer market. In South Korea, revenue was slighlly lower organically.

In Hong Kong, revenue declined slighlly due to lower volume, which offset the price increase. The Heineken brand experienced a solid volume growlh of 9.1 per cent in Australia.

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Heineken strengthens position in indian market

With a population of 1.1 billion. India is one of Ihe lastesl growing and mosl exciting beer markets In the world. Consumption Is being driven by a rapidly emerging middle class and a gn . other beveragi

In 2009, Ihe market represented some 14.4 million hectolitres. 3 comparatively small volume given llie country's large populalicm. and has soai in recent years, with India's per capita consumption of 1.3 litres Increasing al double-digit rates year 011 •..

Building on its existing presence in Ihe markel, in December ^oog. Heineken announced a new par! niTship for growth W iiled (UBI) and Dr. Vijay Mallya. Each of Hemeken and Dr. Mallya holds a ipei • ! slake In UBL will' remaining 25 pcr ccnl held publicly. The new shareholders' agreement nil' >dd value via thegen il UBL and lm ludes Key terms for Ihe .1 ibulion ol Ihe Heineken brand in India.

UBL's flagship tu -.her, the number one beer brand in India and leading Inc In the mtemaUonal markel.

As part of the agreement. Heineken. I'B's operalions In India In Febr 2010 and, in a subsequent transaclion, Heineken will Iran these operations to UBL du 2010. At Ihe same lime, UF benelit from the strength of ! token's global distribution network lo deliver Klngtish. new markets, around 1

idouslyexi deal," says Onno Rombouls, Regional Commercial Manager Heineken A poten nand In mis largely untapped markel : Iwe have found Indian consumers to be immensely savvy about the brands they choose. We b* the combination of the Klngfisi > and Heineken brands will fortify our ability to sh»; nium nent and Ihe overall beer market In India."

Risk Management and Control System

Managing risks and protecting the business from the effects of disasters, failures and reputational damage is explicitly on the management's agenda. Continuity and sustainability ofthe business is as important to stakeholders as growing and operating the business.

Risk Management and Control System

The Heineken Risk Management and Control Systems aim lo ensure that the risks ofthe Company are identified and managed, and lhat the operational and financial objectives are mel in compliance with applicable laws and regulations al a reasonable level of assurance. A system of control that ensures adequate Rnancial reporting is in place. Heineken's internal control system is based on the COSO Internal Control Framework.

Risk appetite

The Company is recognised for Its drive for quality, consistency and financial discipline. An entrepreneurial spirit is encouraged across the Group in order lo seek opportunities that support continuous growth such as business development and innovalion, whilst taking controlled risks. The carefully balanced country portfolio and the robust balance sheel are a reflection ofthe risk appetite ofthe Company.

Risk profile

Heineken is a single-product company wilh a high level of commonality in ils worldwide business operalions, spread over many mature and emerging markets. The worldwide activities are exposed to varying degrees of risk and uncertainty. Some ofthese may result in a material impaci on a particular Operating Company if not identified and managed, but may not materially affect Ihe Group as a whole. Compared to other leading beer companies, Heineken has a significantly wider global spread ofits businesses, and does not depend on a limiled number of markels.

Risk management

Heineken strives lo be a sustainable and performance-driven company. This involves taking risks and managing risks. Structured risk assessments are integrated inlo change projects, business planning, performance monitoring processes, common processes and syslem implementations, and acquisitions and business Integration aclivilies. The Risk Management and Control Systems are considered to be in balance with Heineken's risk profile and appetite, although such systems can never provide absolute assurance. Heineken's Risk Management and Control Systems are subject to continuous review and adaptations in order to remain in balance with ils continuous growth and the changes in the risk profile.

Responsibilities

The Executive Board, under the supervision ofthe Supervisory Board, has overall responsibilily for Heineken's Risk Management and Control Systems. Regional and Operating Companies management are responsible for managing performance, identifying and managing related risks and the effectiveness of operations within the rules set by the Executive Board. This is supported and supervised by Group functions.

Heineken Company Rules

The Heineken Company Rules are a key element of the Risk Managemenl Syslem and are in place lo set the boundaries within which Operating Companies should conduct Iheir business. A governance procedure and aclivilies ensuring continuous awareness and compliance are in place. This Is managed by the Heineken Company Rules Network that meets on a semi-annual basis. The annual Assurance Letter provides additional comfort on financial reporting and selecled Company Rules and is signed by all Regional Presidents, General and Finance Managers on behalf of their management teams on an annual basis.

Business planning and performance monitoring

The main pillars of Heineken's inlernal governance activiiies are annual business planning and performance monitoring processes. Operating Companies' strategies, business plans, key risks and quarterly performance are discussed wilh Regional Management. Regional performance is discussed wilh the Executive Board. The approved business plans include clear objeclives, performance indicators and target setting lhat provide the basis for monitoring performance compared to the business plan. These plans also contain an annual assessment ofthe main risks, mitigations and financial sensitivities. This process was further improved in the year under review. Heineken Is finalising the implemenlalion of an integrated managemftii Infonnation system for reporting to Regions and Group.

Internal control in Operating Companies

Development and implementation of best practice processes are continuously being improved on a Group-wide basis, supported by common IT systems. Based on revenue at the end of 2009,65 per cent ofthe operations worked in accordance with the evolving Heineken common system. Additionally, documentation, measuremeni and performance of processes under the Business Process Managemenl Initiative are continuously being improved by Group functions.

Besl practice key control frameworks are embedded in developed common processes/systems. This ensures the integrily ofthe information processing in supporting the day-to-day transaclions and financial and management reporting. Internal Audil is strongly involved in monitoring key conlrols embedded in main business processes and assessing its effectiveness based on a common audit approach. Control monitoring by managemenl has strengthened with the implemenlalion of an integraled managemenl informalion system.

Information Technology

Heineken's worldwide operalions are highly dependent on the availability and inlegrity ofits (common) information systems. IT processes and infrastructures are lo a large extent centralised and outsourced lo professional outsourcing partners. Siruclured IT Risk monitoring processes are in place, which includes clear agreemenis on assurance from IT outsourcing partners. The harmonisation, centralisation and outsourcing of IT have a posilive impaci on the overall control environment.

Code of Business Conduct and Whistle-blowing

The Code of Business Conduci and Whistle blowing procedures are applicable to all majority owned Operating Companies, regional offices and Head Office. Compliance is supported through continuous monitoring of effectiveness and rotational audits. Employees may repori suspected cases of serious misconduct to their direct superior, the local Trusted Representative or anonymously to an independently run confidential helpline. The Inlegrity Committee oversees the functioning ofthe Whistle-blowing procedure and reports biannually to the Executive Board and Audit Commitlee on reported cases and effectiveness ofthe procedure. In the year under review, Heineken revised and relaunched the Code of Business Conduci, and brought the Whistle-blowing procedure in line wilh Data Privacy regulalions.

A new case-management syslem and e learning lool for Operating Companies will be implemented early 2010.

Supervision

The Executive Board oversees the adequacy and functioning ofthe entire syslem ofrisk managemenl and internal control, assisted by Group departments. Group Internal Audil provides independent assurance and advice on the Risk Managemenl and Inlernal Control Systems. The Assurance Meetings oversee the adequacy and operating effectiveness ofthe Risk Management and Inlernal Control Systems in their respective environments at both local and regional level. Regional Managemenl and Group Inlernal Audil participate in the local meetings in order to ensure effeclive dialogue and transparency. The outcome and effectiveness ofthe Risk Management and Internal Conirol Systems are discussed wilh the Executive Board and the Audil Commitlee.

Rnancial reporting

The risk managemenl and control systems over financial reporting contain clear accounting policies, a slandard charl of accounis and Assurance Letters signed by regional and local management. The Heineken common systems and embedded control frameworks that have been implemented in a large number ofthe Operating Companies supporl common accounting and regular financial reporting in slandard forms. Testing ofthe key controls relevant for financial reporting is part ofthe common Inlernal Audit Approach.

The worldwide exlernal audit aclivilies provide addilional assurance on true and fair presentation ofthe financial reporting at the Operating Company level. Within the scope ofthe external auditors' financial audit assignment, ihey also report on internal control issues through their managemenl letters, and ihey attend the regional and certain local assurance meetings.

In 2009, special atlenlion was given lo the continuous integration of financial reporting ofthe acquired businesses from former Scottish & Newcastle and other acquisitions, including transfer to the Heineken Accounting Policies. Almosl all acquired companies have already implemented the Heineken slandard chart of accounts.

The inlernal risk management and control systems, as described in this seclion, provide a reasonable assurance that the financial reporting does not contain any errors of material importance. The risk management and control systems worked properly in the year under review.

This statement cannol be construed as a statement in accordance with the requirements of Section 404 ofthe US Sarbanes Oxley Act, which is not applicable lo Heineken N.V.

Main risks

Under the explicit underslanding lhat this is not an exhaustive list, Heineken's main risks are described below, including the mitigation measures. Risks concerning the Heineken brand and Company reputation, economic downturn, volaiilily of input cosls, exchange and interest rates, availabilily and cost of capital and increasing legislation (such as alcohol excise duties and anli-trusl) affecting the business are considered the mosl significanl risks. The main Company risks have been discussed wilh the full Supervisory Board.

Strategic risks

Heineken brand and Company reputation

As both the Group and its most valuable brand carry the same name, reputation managemenl is of utmost importance. Heineken enjoys a positive corporate reputation and our Operating Companies are well respected in their regions. Constant management atlenlion is directed towards enhancing Heineken's social, environmental and financial reputation. The Heineken brand is, along with our people, our mosl valuable asset and one ofthe key elements In Heineken's growlh strategy wilh a portfolio that combines the power of local and inlernalional brands. Anything that adversely affects consumer or stakeholder confidence in the Heineken brand or Company could have a negative impact on the overall business.

Risk Management and Control System (continued)

Company reputation, brand image and revenue could be impacted by producl inlegrity issues. Therefore, the whole supply chain of all Heineken Operating Companies are subjected lo high quality slandards and intensive monitoring procedures to secure producl inlegrity in accordance with international certifying bodies.

Starting in 2010, Heineken will begin the roll out ofa reputation survey wilh critical stakeholders at both a global and national level. This will further mitigate reputational risk and provide a clearer view ofthe Company's reputation.

A Code of Business Conduct and Whistle blowing Procedure aim lo prevent any unethical and irresponsible behaviour ofthe Company or its employees.

During the year under review, a new practical crisis manual was developed and distributed throughout the business. Alongside Ihis, a simulation workshop is being rolled out throughout the business. All Heineken Operating Companies are required lo complete this workshop and undertake a 'refresher' exercise al least once every two years.

The Company also invests considerable resource in activiiies lhat drive sustainability and supporl the Company reputation. Heineken's Susiainabilily Report outlines Heineken's priorities, goals and achievements in these areas. The report can be viewed on www.heinekeninternalional.com.

Pressure on alcohol

An increasingly negative perception in society towards alcohol and more specifically alcohol abuse could prompt legislators to lake restrictive measures including restrictions, on such things as commercial freedom and increased government tax. This perception is fed by critical coverage in the media. Further restrictions of our commercial freedom to promote and sell our products could lead to a decrease in brand equily and potentially in sales and damage the industry in general.

Heineken actively participates in the EU Forum on Alcohol and Heallh and delivered its commitments in the area of consumer informalion, alcohol consumption al the workplace and commercial communication. In 2009, Heineken continued to work on establishing effective self-regulation in the EU together with the Brewers of Europe. We also filed our multi-market campaign "Know the signs" al the EU Forum. Our inlernal programmes CoolCPWork and Responsible Commercial Communication, which are being monitored continuously, remain important building blocks of our policy. Heineken is also actively engaged in the process ofthe World Heallh Organisation in developing a global strategy on alcohol-related harm. We have reached out in markels lo inform governmenis on what a global strategy should look like. Rather than proposing 'a one size fits all strategy'

globally, we support evidence-based and tailor made policies that truly help lo reduce alcohol related harm. Furthermore, we explain lo governments that the alcohol industry has a role lo play in helping lo reduce alcohol related harm.

Attractiveness of beer category under pressure

Heineken has many operations in mature beer markels where the attractiveness ofthe beer caiegory is being challenged by olher beverage categories. Consumers may also change behaviour following the rise of discounl brands and retailers following the recession. In these markets, especially, the on-trade channel is under pressure, which makes adjustments lo the cost base unavoidable. Heineken is relatively highly geared lo mature markels since their acquisition of Scottish & Newcastle. Managemenl focus is on product innovation, portfolio managemenl and costeffectiveness in order to secure markel position and profilabili!\

Volatility of input costs

Pricing sirategies are top priority in all of our markets. This includes assessments of cuslomer, consumer and competitor responses based on difTerent pricing scenarios, which will have differenl ouicomes markel by market. In principle, we will pass on increased input costs impacting volume. During the second half of 2008, commodity markels rapidly declined following the world economic climate and remained depressed for most of 2009. In addition, the run of several years' poor harvests in key grain and hop markets has reversed and world grain slocks arc recovering.

Group Purchasing ensures Heineken's scale is leveraged by making use of flexibility in coniracts and active hedging. This brings economies of scale, minimises the impact of increases in input cosls, and maximises the opportunities for cost reductions and other commercial terms. In 2009, a total of 83 per cent of input cosls were covered via Group managed contracts. In previous years, our hedging straiegy provided an effeclive shield against peak prices and similar strategies are now ensuring that we secure 2010 and future supply al effeclive, if not always minimum, cost. In the second half of 2009, we saw a relurn of volatility lo fluctuations in certain key commodiiy markels and we continue lo evaluate and maintain risk strategies to protect input costs from this effect. Hedging contracts for mosl ofthe 2010 aluminium requirements arc now closed.

During the year, a joint review by Finance and Purchasing functions of currency risk management resulted in the implementation of new procedures for Ihe evaluation and monitoring of currency risk as well as the commercial evaluation of purchasing conlracis involving foreign currency.

Stability of Africa and the Middle East Region

In the Africa and Middle East region, current volume growlh is driven by economic growth in Nigeria, the Middle East and In Central Africa. The region remains stable and is al peace in mosl areas. In Nigeria, the unrest in the Niger Della is largely resolved and thai region has now returned lo relalive calm.

Economic downturn

The economic crisis has impacted our regular business activities and performance, in particular in consumer spending and solvency. However, the business impact differed across our regions and operations. Local management has assessed the risk exposure following Group instructions and is taking action lo mitigate any higher than usual risks. Intensified and continuous focus is being given in the areas of customers (managing trade receivables and loans) and suppliers (financial position of critical suppliers). Also, management allenlion is given to our relationships wilh banks (see capital availability risk) and insurance companies (credit worthiness (re)insurance companies). Regional Managemenl and involved Group functions oversee the effectiveness of managemenl analysis and action, supported by input from Internal Auditors.

Operational risks

Reorganisations and change programmes

Many reorganisation projecls (amongst others, centralisation of back office aciivities, closure of breweries and other righlsizing and downsizing activities) have been realised, are under way or are in preparation. Highesl impact is in the supply chain, wholesale business and support functions in Europe and Americas. Due lo social unrest or temporarily reduced operational effectiveness, there is a risk that production quality and supply conllnuily could be affected and might negatively impact financial performance and Company reputation.

Company-wide strategic programmes are overseen by the Executive Board, whilst change projecls at regional and local level are directly managed by appropriate management teams including capacity allocation and priority setting. The Operating Companies concerned manage reorganisation projecls with care, the righl speed, alignment with relevant industrial and external relations and consistent communication to employees. Contingency plans have been put in place and clear targets are set on achieving the main change objectives. Risk Managemenl is an inlegral part of running change projects.

Business integration

In the pursuit of further expansion, Heineken seeks to strike a balance between organic and acquired growlh. Recently, Heineken has been very acquisitive with transaclions in emerging markels, the Scottish & Newcastle acquisition in 2008 and the expecied completion ofthe acquisilion of FEMSA during 2010. In most acquisitions, Heineken is faced with different cultures, business principles and political, economic and social environments. This may affect corporate values, image and quality slandards. II may also impaci the realisation of long term business plans. Including synergy objeclives, underlying the value of newly acquired companies.

In order to mitigate these risks, Heineken continuously improves ils business developmenl and Integration activiiies. This includes significant involvement of relevani Group processes, planning and departments. Operating Companies and Regional Management in carrying out effective due diligence processes and preparing 'lake charge' and integration plans. Heineken has best practice programmes in place for acquisilion and integration processes, which include siandardised acquisilion and due diligence processes.

Supply continuity

Discontinuity of supply of our products could affect revenue and markel shares. This is not considered a major risk due to the relalive size and geographical spread of operalions. However, specific allenlion is given to the supply of beer from the Nelherlands to profitable exporl markels. Heineken Nelherlands Supply is finalising the implementation ofa Business Continuity Managemenl process related lo the supply from the Nelherlands, which is integraled wilh the planning and reporting cycle. It is secured through integration with ISO certified quality management assurance systems.

Information security

Heineken's worldwide operations are increasingly reliant on information systems. The increased centralisation of IT systems allows cenlral enforcement of security measures across Operating Companies. However, it also means that the impact ofany informalion security incident will be much larger and therefore requires strict monitoring. Heineken's Operating Companies and the cenlral IT services must comply wilh a strict Information security policy to ensure the confidentiality and integrity of informalion and the availabilily of information systems. An IT risk management system is in place for all sites including IT risk Idenlificallon and monitoring, biannual policy compliance assessments, progress of improvement monitoring and independent audits.

Risk Management and Control System (continued)

Currency risk

Heineken operates internationally and reports in euros, which has proven to be a very strong currency over the past few years. Currency fluctuations, relating to the US dollar. South African rand, Polish zloty and. to a lesser extent, the British pound could materially affect overall Company results, considering the size of exports from the eurozone to mainly the USA and South Africa.

Heineken has a clear policy on hedging transactional exchange risks, which postpones the impact on financial results. Translalion exchange risks are hedged lo a limiled extent. In 2009, operating results of Operating Companies In counlries with currencies that devaluated versus the euro are translated inlo euro al lower rales. Since the Group attracts funding and pays interest in these currencies as well, the impaci of devaluations of such currencies like the Russian rouble, British pound and Polish zloly on our results is mitigated to a certain extent. In addition, Heineken strengthened its risk managemenl regarding the monitoring and managing of currency and interest positions.

Capital availability

The Company has a strong focus on cash generation to reduce ils debt levels and to improve its financing ratios. The Company has a clear focus on ensuring sufficient access lo capital markels lo refinance maturing debl obligations and to finance long-term growlh. The Company aims lo further fine-tune the maturity profile ofits long-term debts. Financing strategies are under continuous evaluation. Terms and conditions of additional refinancing may be impacted by the changing credit markel conditions. Strong cosl and cash managemenl and sirong conlrols over inveslmenl proposals are in place to ensure effeclive and efficieni allocation of financial resources.

Pension

In some ofthe countries where it operates, Heineken makes contributions to a number of defined benefit plans that provide pension benefits for employees upon retiremeni (mainly the UK and Ihe Nelherlands as per disclosure in financial stalements). The contractual and regulatory arrangements with these pension funds are such thai in case of shortfalls, no one off payments are required but the annual cash contributions would increase, thereby mitigating the potential cash outflow over a longer period of time.

Financial risks Regulatory risks

Tax

Heineken and ils Operating Companies are subject lo a variety of local excise and other tax regulations. Group Fiscal Affairs has further progressed in structuring lax risk management Ihrough the roll out ofa Tax Control Framework. Beer excise duties could have a sirong impaci on the financial results. In principle, Heineken's sales prices are adjusled to reflect changes in the rate of excise duly, but Increased rates may have a negative impaci on sales volume, respectively Ihe coverage offixed cosls.

Litigation

Due to increasing legislation there Is an increased possibility of non compliance. Additionally, more supervision by regulators and the growing claim culture may polentlallv increase the impaci of non-compliance, bolh financi.illv and on the reputation ofthe Company. Each half year, all majority-owned companies formally report outstanding claims and litigations against the Company in excess of EUR 1 million lo Group Legal Affairs, including an assessment ofthe amounts to be provided for.

There mav be current risks that do not have a significant impact on (he business but which could -at a later stage develop into a material impact on the Company's business. The Company's risk management systems are focused on timely discovery of such risks.

Did you know:

Beer glasses should be used for beer only Using beer glasses for other beverages, like fruit juice or milk, wil l leave substances behind, such as grease. This will cause the beer to go flat. A good beer needs the cleanest glass possible.

Financial Review

Results from operating activities

In millions ot EUR	zoog	2008
Revenue	14,701	14,319
Other income	41	32
Raw materials, consumables and services	9,650	9,548
Personnel expenses	2,379	2,415
Amortisalion, depreciation and impairmenis	1,083	1,206
Total expenses	13,112	13.169
Results from operating activities	1,630	1.182
Share of profit of associates, joint ventures and impairments thereof	127	(102)
EBIT	1,757	1,080

General overview

Heineken realised an organic net profit growlh of 18 per cent in 2009, driven by higher revenue per heclolilres and cost reduction. The consolidaled beer volume has decreased due to the global economic downturn.

Revenue and expenses

Revenue increased by 2.7 per cent from EUR 14.3 billion lo EUR 14.7 billion and decreased organically by 0.2 per cent. Consolidated beer volume was 0.5 per cent lower al 125.2 million heclolilres in 2009, despiie the contribution of first-time consolidations in 2008 (mainly Scottish & Newcastle, Beamish & Crawford and Eichhof Beverages). Organically, consolidated beer volume was 5.4 pcr cent lower due lo the economic environmenl and excise duly increases. Heineken volume in the premium segment decreased by 0.8 million hectolitre lo 25.1 million heclolilres in 2009 (a decrease of 3.1 per cent ofwhich 2.9 per cent organically).

Heineken was able lo pass on increased input price increases and higher excise duties. These have partly compensated for the volume decline. As a consequence, revenues have decreased organically by 0.2 per cent. The average gross profit per hectolitre increased as well as the average gross profit margin. Devaluations ofthe Nigerian naira, the Russian rouble and the Polish zloty had a negative impact on revenue.

Olher income Increased from EUR32 million in 2008 lo EUR41 million in 2009 mainly as a resull of Increased gains on the sale of property, plant and equipment.

Tolal cosl managemenl (TCM), Heineken's company-wide cost reduction programme for the period 2009-2011. delivered mainly savings in fixed cosl spending. Several restructuring programmes and brewery closures were launched and realised. An amount of EUR 140 million is included as pari of depreciation and impairments for Impairmenl of pubs and brewery closures in the UK, Russia, Finland, Spain and France. Other expenses were decreased by EUR36 million. In 2009, exceptional restructuring charges as part of personnel expenses related to TCM amounted to EUR63 million before lax.

Costs of raw materials and packaging decreased 4.4 per cent, ofwhich 3.2 per cent was organically, due lo lower volumes and lower purchasing prices for barley towards the end of 2009. Overall, the average input cosls per hectolitre have shown a slight decrease.

Marketing and selling expenses decreased organically by 3.7 per cent lo 11.3 per cent of revenue In 2009 from 11.7 per cent In 2008.

Personnel expenses were 1.0 per cent lower organically and the effeel of firsl-lime consolidations was offset by a reduction of headcount driven by efficiency improvements, mainly in Cenlral and Eastern Europe and lower restructuring cosls. The devaluation ofthe Russian rouble and the Polish zloly also contributed lo the cosl reduction.

Financial Review (continued)

Results (beia)

In millions ol EUR	2009	2008
EBIT	1,757	1,080
Amortisation of brands and customer relationships	79	63
Exceptional items	259	789
EBIT (beia)	2,095	1,932
In millions of EUR	2009	2008
Net profit	1,018	209
Amortisation of brands and customer relationships	59	47
Exceptional items	(22)	757
Net profit (beia)	1,055	1,013

EBTT (beia) and Net profit (beia)

In millions of EUR	EBIT beia	Net prolit beia
2008	1,932	1,013
Organic growth	264	186
Changes in consolidation		(118)
Effects of movements in exchange rates	J82L
2009	2,095	1.055

EBTT and net profit

In 2009 EBIT amounts to EUR1,757 million compared to EUR1,080 million in 2008, as a resull ofa belter price mix and cost reductions. Furthermore, the effect of exceplional items was much smaller in 2009 compared with 2008.

EBIT as a proportion of revenue increased lo 12 per cent in 2009 from 7.5 per cent in 2008, mainly due to Ihe aforementioned items.

Net interest expenses increased from EUR378 million to EUR543 million mainly due lo the issuance of GBP and EUR bonds and ihe overall higher average consolidated net debt as a result ofthe effect ofthe first-time consolidation ofthe financing costs of Scottish and Newcastle. On an organic basis the net interesl was also higher (EUR35 million) than in 2008.

Other net financing expenses resulled in a EUR214 million income for 2009. Of this, an amounl of EUR248 million is attributable to a book gain on the Globe restructuring, which is treated as exceptional item, offset by EUR33 million of exceplional expenses Ln other income staiement lines leading to a tolal net book gain of EUR 215 million.

The other nel financing expenses include exceptional expenses related to the write-down of derivatives for EUR 14 million.

The average tax burden decreased from 35.6 per cent in 2008 to 22 per cent in 2009. Without exceplional items, the effective lax rale would have been 25 per cent in 2009 compared lo 26 per cent in 2008. The exceptional Globe debl restructuring gain in 2009 (mainly tax exempt) resulted in the low average tax burden, whereas in 2008 the exceplional impairment on the goodwill of Russia resulted in a high average lax burden.

Basic earnings per share increased from EURO.43 to EUR2.08 as a resull of significantly higher net profil.

Cashflow

bl miKors ol EUR	joo q	•
Cash flow from operations before changes in working capital and provisions	2,876	2.329
Total change in working capital	220	(47)
Change in provisions and employee benefits	(67)	(114)
Cash flow from operations	3,029	2,168
Cash flow related to interesl, dividend and income tax	(650)	(508)
Cash flow from operating activities	2.379	1.660
Cash flow used in operational investing activities	(638)	(1,110)
Free operating cash flow	1,741	550
Cash flow used for acquisitions and disposals	(149)	(3,634)
Cash flow from/(used in) financing activities	(1.837)	3,309
Net cash flow	(245)	225

Cash flow and Investments

Free operating cash flow of EUR 1,741 million represents a EUR 1,191 million improvement over 2008's performance mainly due to:

• Cash flow from operations before changes in working capital and provisions increased by EUR547 million
• Decrease In working capital; resulting in a positive contribution lo cash flow of EUR220 million, an improvement of EUR267 million
• Decrease of EUR472 million cash flow used In operational investing aciivities as a resull of reduced CAPEX.

The cash conversion rate of 148 per cent has significantly improved compared wilh 2008's cash conversion rale of48 per cent.

Financing structure

In millions of EUR	2009	%	.'(iriK	%
Total equity	5,647	28	4,752	23
Deferred tax liabilities	786	4	661"	3
Employee benefits	634	3	688	3
Provisions	518	3	502	3
Interest-bearing loans and borrowings	8.239	41	9,644	47
Other liabilities	4,356	21	4,340	21
	20.180	100	20,587	100

• Adjusted due lo finallsalion of Ihe purchase price accaumlng ofthe S&N acqiiismcm

Financial Review (continued)

Tolal equily As a percentage of total assets 2005 2006 2007 2008 2009 38.2 42.5 47.8 28.0

Net debt/EBITDA (beia)

I

2.62

In millions ol EUR	2009	jons
EBIT	1,757	1,080
Depreciation and impairments of plant, property and equipment	931	825
Amortisalion and impairment of intangible assets (including goodwill)	152	381
EBITDA	2,840	2,286
Olher exceptional items	98	434
EBITDA Ibeia)	2,938	2,720

2009 1

Financing and liquidity

As at 31 December 2009, tolal equity increased by EUR895 million lo EUR5,647 million, whilst equily attributable to equily holders ofthe Company increased by EUR 880 million lo EUR 5,351 million. This increase is mainly due to strong profit and the positive impact of foreign currency translalion differences.

Following the credit crunch in 2008, employee benefit assels saw a significanl increase during 2009. Al the same lime inlerest rales decreased, resulting in an increase in pension obligations. The net recognised liabilily decreased slighlly, the unrecognised actuarial losses increased significantly and future contributions to pension funds may increase ifthe existing situation remains.

Net debt as at 31 December 2009 amounted to EUR7,704 million. The decrease of EUR 1,228 million was driven by strong operational cash generation during 2009 and the buyback ofthe Globe debt.

Of lotal gross interest bearing debl, approximately 90 per cent is denominated in euro. This Is including the effeel of cross-currency inlerest rate swaps on non-euro denominated debl such as the GBP bond and the US private placements al bolh Heineken N.V. and Heineken UK. The fair value ofthese swaps does not form part of net debl.

Approximately 7 per cent of gross-bearing debt (EUR550 million) is denominated in Brilish pounds. This consists both of interesl-bearing debl al the level of UK (held al several subsidiaries) as well as debl al Heineken N.V. level.

The remaining 3 per cent of gross interest debl is denominated in olher currencies. This is mostly debl al subsidiary level. This currency breakdown excludes the effect ofany derivatives, which are used lo hedge intercompany lending denominated In currencies other lhan euro.

Heineken updaled ils EMTN-programme in September 2009. This programme has been approved by the Luxembourg Commission de Surveillance du Secteur Financier which is the Luxembourg competent authority for the purpose of Directive 2003/71/EC and facilitalcs flexible access lo Debl Capital Markets going forward.

In February 2009, the Company placed 6-year Sterling Notes for a principal amounl of GBP400 million wilh a coupon of 7.25 per cent. In March 2009, the Company placed 5-year Euro Noles for a principal amounl of EUR 1 billion wilh a coupon of 7.125 per cent. In October 2009 Heineken placed 7-year Euro Notes for a principal amount of EUR400 million with a coupon of 4.625 per cent.

Our repaymeni profile shows no major repayments before HYI 2013. In February 2010 our EUR500 million Bond, issued in 2003, matured. This has been refinanced from operational cash flows and existing credit facilities.

Heineken's policy is to keep committed headroom of EUR 1 billion - EUR 1.5 billion for the next year. As at January 2010 the available headroom (including cash available at Group level) was approximately EUR2 billion, as the EUR2 billion Revolving Credit Facility 2005-2012 was undrawn.

Heineken currenlly has committed financing in place until 2012 to cover all maturing debt obligations from operational cash flows and available credit facilities.

Financing ratios

Heineken has an incurrence covenant in some ofits financing facilllies. Our incurrence covenanl is calculated by dividing net debl (calculated in accordance with the consolidation method ofthe 2007 Annual Accounts) by EBITDA (beia) (also calculated in accordance with the consolidation method ofthe 2007 Annual Accounts and including the pro forma full-year EBITDA ofany acquisitions made in 2008). As al 31 December 2009 this ratio was 2.5 (2008:3.1). Ifthe ratio would be beyond a level of 3.50, the incurrence covenanl would prevent us from conducting further significant debt-financed acquisitions.

Profit appropriation

Heineken N.V.'s profil (attributable to shareholders ofthe Company) in 2009 amounted to EUR1,018 million. In accordance wilh Article 12, paragraph 7 ofthe Articles of Associalion, the Annual General Meeting of Shareholders will be invited to appropriate an amounl of EUR318 million for distribution as dividend. This proposed appropriation corresponds lo a dividend of EURO.65 per share of EUR 1.60 nominal value, on accounl ofwhich an interim dividend of EURO.25 was paid on 2 September 2009. The final dividend thus amounts to EURO.40 per share. Netherlands withholding tax will be deducted from the final dividend al 15 per cent.

Corporate Govemance Statement

Dutch Corporate Govemance Code

On 10 December 2008 an amended Dutch Corporale Govemance Code was presented amending the Dutch Corporate Governance Code of 9 December 2003. As part of this Annual Report 2009 Heineken N.V. has prepared a Comply or Explain report on the basis ofthe Dutch Corporate Governance Code of 10 December 2008 (the 'Code').

Heineken endorses the Code's principles and applies virtually all best practice provisions. However, as already slated in Heineken's previous Comply or Explain report of 21 February 2005 relating to the Dutch Corporate Governance Code of 9 December 2003, in particular, the structure ofthe Heineken Group and specifically the relationship between Heineken Holding N.V. and Heineken N.V., prevents Heineken N.V. from applying a small number of besl practice provisions. Al the General Meeting of Shareholders of 20 April 2005. Ihis departure from the 2003 Code was put lo the vote and approved.

As slated in the Code (principle 'Compliance with and enforcement ofthe Code', paragraph I) there should be a basic recognition lhat corporate governance must be tailored lo the company-specific silualion and therefore that non-application of individual provisions by a company may be justified.

The following best practice provisions, are not (fully) applied or applied with an explanation:

• ll.l.l: appointment period Executive Board members
• 11,2.8: severance payment Executive Board members
• III.2.1,111.2.2 a, c and e and III.2.3: independence
• 111.3.5: appointment period Supervisory Board members
• 111.4.1 (g): conlacl with Central Works Council
• 01.5.11: chairman Remuneration Committee
• III.6.6: delegated Supervisory Board member.

Other best practice provision, which are not applied, relale lo the fact that these principles and/or best practice provisions are not applicable to Heineken N.V.:

• 11.2.4,11.2.6 and 11.2.7: Heineken does not grant oplions on shares
• III.8: Heineken does not have a one-tier managemenl structure
• IV.1.2 Heineken has no financing preference shares
• IV.2: Heineken has no depositary receipts of shares, nor a trust office
• IV.3.11: Heineken has no anti-takeover measures
• IV.4: The principle and besl practice provisions relate to shareholders
• V.3.3: Heineken has an internal audil function.

The General Meeting of 22 April 2010 have the opportunity lo discuss the way in which Heineken deals wilh the Code and that Heineken N.V. does not (fully) apply the above best practice provisions.

The Comply or Explain repori is also available al www.heinekeninlernational.com

The Dutch Corporate Governance Code can be downloaded aiwww.commissiecorporalegovernance.nl

Risk Management and Control System

The risk managemenl and control syslem over financial reporting contains clear accounting policies, a slandard chart of accounts and 'Assurance Letters' signed by regional and local management. The Heineken common systems and embedded control frameworks that have been Implemented in a large number ofthe Operating Companies supporl common accounting and regular financial reporting in standard forms. Testing ofthe key conlrols relevant for financial reporting is part ofthe common Inlernal Audil approach.

The worldwide external audit activiiies provide addilional assurance on true and fair presentation ofthe financial reporting at the Operating Company level. Wiihin the scope ofthe exlernal auditors' financial audil assignment, they also report on internal control issues through their management letters, and they altend the regional and certain local assurance meetings.

In 2009, special allenlion was given lo the continuous integration of financial reporting ofthe acquired business from the former Scottish & Newcastle and olher acquisitions, including transfer lo the Heineken Accounting Policies. Almosl all acquired companies have implemented the Heineken slandard charl of accounts.

The inlernal risk managemenl and control systems as described In this section provide reasonable assurance that the financial reporting does not contain any errors of material importance. The risk managemenl and control systems worked properly in the year under review.

This staiement cannol be construed as a statement in accordance with the requirements of Section 404 ofthe US Sarbanes-Oxley Acl, which is not applicable to Heineken N.V.

General Meeting of Shareholders

Annually, within six months after the end ofthe financial year, the Annual General Meeling of Shareholders shall be held, in which, inler alia, the following items shall be brought forward: (i) the discussion ofthe Annual Repori (ii) the discussion and adoption ofthe financial stalemenls, (iii) discharge ofthe members ofthe Executive Board for

their management, (iv) discharge ofthe members ofthe Supervisory Board for their supervision on the managemenl and (v) appropriation of profits.

General Meetings of Shareholders shall be held in Amsterdam.

Convocation

Pursuanl to the Articles of Association, the Executive Board or the Supervisory Board shall convene the General Meetings of Shareholders wilh a convocation period of at least fourteen (14) days (not Including the convocation dale and the date of the meeting). In practice the convocation period is usually around one monlh.

The Executive Board and the Supervisory Board are obliged to convene a General Meeting of Shareholders upon request of shareholders individually or collectively owning 25 per cent ofthe shares. Such meeting shall then be held wiihin four weeks from the request and shall deal with the subjects as staled by those who wish to hold the meeting.

Right to include items on the agenda

Ifthe Executive Board has been requested in wriling not later lhan 60 days prior lo the dale ofthe General Meeting of Shareholders to deal with a subject by one or more shareholders who solely or jointly (i) represent at least one per cent (1 per cent) ofthe issued capital or (ii) al least represent a value of EUR50 million, then the subject will be included in the convocation or announced in a similar way, unless this would be contrary to an overriding Interest of the Company.

The Dutch Corporate Governance Code of 10 December 2008 provides the following in besl practice provision IV.4.4: "A shareholder shall exercise the righl of putting an Item on the agenda only after he consulted the Executive Board aboul this. If one or more shareholders intend lo request that an Item be put on the agenda that may result in a change in the company's strategy, for example through the dismissal of one or more Executive or Supervisory Board members, the Executive Board shall be given the opportunity lo stipulate a reasonable period in which to respond (the response time). This shall also apply to an intention as referred to above for judicial leave to call a general meeting pursuant to Article 2:110 ofthe Dutch Civil Code. The shareholder shall respect the response lime stipulated by the Executive Board within the meaning of besl practice provision 11.1.9."

Ifthe Executive Board invokes a response time, such period shall not exceed 180 days from the moment the Executive Board is Informed by one or more shareholders of their intention lo put an item on the agenda lo the day ofthe general meeling al which the item is to be deall with. The Executive Board shall use the response lime for further deliberation and constructive consultation. This shall be monitored by the Supervisory Board. The response lime shall be invoked only once for any given general meeling and shall not apply to an item in respect ofwhich the response time has been previously Invoked.

Record date

For each General Meeting of Shareholders, the Company shall determine a record date for the exercise ofthe voiing rights and participation in the meeling. The record dale cannol be earlier lhan on the 30lh day prior to the date ofthe meeting. The record date shall be included in the convocation nolice, as well as the manner in which those entitled to attend and/ or vote in the meeling can be regisiered and the manner in which they may exercise their rights.

Only persons thai are shareholders on the record date may participate and vote in the General Meeling of Shareholders.

Participation by proxy or electronic communication

Each shareholder is entitled, either personally or by proxy authorised in wriling, to attend the General Meeling of Shareholders, lo address the meeting and lo exercise Iheir voiing righis.

If a shareholder wants to exercise their righis by proxy authorised in writing, the wrillen power of attorney must be received by the Company no later than on the date indicaied for lhat purpose in the convocation nolice.

The Executive Board may determine that the powers set out in the previous sentence may also be exercised by means of electronic communication. The Executive Board may subject the use of electronic communications to conditions which will then be indicated in the convocation notice.

Attendance list

Each person entitled to vote or otherwise entitled to attend a meeling or such person's representative shall have to sign the attendance list, stating the number of shares and voles represented by such person.

Chairman ofthe General Meeting

All General Meetings of Shareholders shall be presided by the Chairman or the Vice-Chairman ofthe Supervisory Board, or in his absence, by one ofthe Supervisory Board members present al the meeting, to be designated by ihem in mulual consultation. If no members ofthe Supervisory Board are present, the meeting shall appoint ils own chairman.

Voting

All resolutions ofthe General Meeting of Shareholders shall be adopted by an absolule majority ofthe votes cast, except for those cases in which the law or the Articles of Associalion prescribe a larger majority.

Each share confers the righl lo one vote. Blank votes shall be considered as not having been cast.

Corporate Govemance Statement (continued)

The Executive Board may determine in the convocation nolice that any vote cast prior lo the General Meeling of Shareholders by means of electronic communicaiion, shall be deemed lo be a vole cast in the General Meeting of Shareholders. Such a vole may not be cast prior to the record dale. A shareholder who has cast his vole prior lo the General Meeting of Shareholders by means of eleclronic communicaiion remains entitled lo, whether or not represented by a holder ofa written power of attorney, participate in the General Meeling of Shareholders. Bui, once cast, a vote cannot be revoked.

Minutes

The proceedings in the General Meeling of Shareholders shall be recorded in minutes taken by a secretary lo be designaied by the General Meeting of Shareholders, which minutes shall be signed by the chairman ofthe meeling and the secretary. In the evenl a notarial record ofthe proceedings ofthe General Meeling of Shareholders Is drawn up, the chairman ofthe meeting shall countersign the notarial record. Upon request the record ofthe proceedings ofthe General Meeling of Shareholders shall be submitted to shareholders ultimately within three months after the conclusion ofthe meeling.

Resolutions to be adopted by the General Meeting

The General Meeling of Shareholders has authority lo adopt resolutions concerning inler alia the following matters: (1) Issue of shares by the Company or rights on shares (and authorise the Executive Board lo resolve lhat the Company Issues shares or rights on shares, (il) authorise the Executive Board lo resolve lhat the Company acquires Its own shares, (lli) cancellalion of shares and reduction of share capital, (Iv) appointment of Executive Board members, (v) the remunerallon policy for Executive Board members (v) suspension and dismissal of Executive Board members (v) appointmenl of Supervisory Board members, (vi) the remuneration of Supervisory Board members, (vii) suspension and dismissal of Supervisory Board members, (viii) appointmenl ofthe Delegated Member ofthe Supervisory Board, (ix) adoplion ofthe financial stalemenls, (x) granting discharge to Executive and Supervisory Board members, (xi) the profil reservation and distribution policy, (xi) dividend distributions, (xii) a substantial change in the corporate governance structure, (xlll) appointmenl ofthe external auditor, (xiv) amendment ofthe Articles of Association and (xv) liquidalion.

Resolutions on a major change in the idenlily or character ofthe Company or enlerprise shall be subject to the approval ofthe General Meeting of Shareholders. This would al least include (a) the transfer ofthe enterprise or the transfer of practically the entire enterprise ofthe Company lo a third parly, (b) the entering inlo or the termination ofa lasting co operation ofthe Company or a subsidiary with another legal enlity or company or as fully liable partner in a limited partnership or general partnership. If such co-operation or

termination is of fundamental importance to the Company and (c) acquiring or disposing ofa parlicipation in the capital of a company by the Company or a subsidiary amounting lo al least one third of the amount of assels according to the Company's consolidaled balance sheel plus explanatory notes as laid down in the lasl adopted financial slalemenis ofthe Company.

Provision of information

The Executive Board and the Supervisory Board shall provide the General Meeling of Shareholders with all requested informalion, unless this would be contrary lo an overriding interesl ofthe Company. Ifthe Executive Board and the Supervisory Board Invoke an overriding interest, they shall give reasons.

Executive Board

Composition and role ofthe Executive Board

The Executive Board consists of two members. Chairman/ CEO jean Francois (J.F.M.L.) van Boxmeer and CFO René (D.R.) Hooft Graafland.

The Executive Board members are appointed by the General Meeting of Shareholders from a non binding nomination drawn up by the Supervisory Board. The Supervisory Board appoints one ofthe Executive Board members as Chairman/CEO.

The General Meeling of Shareholders can dismiss members ofthe Executive Board by a majority ofthe votes cast, if the subject majority at least represents one-third ofthe issued capital.

The role ofthe Executive Board is lo manage the Company, which means, amongst other things, that il is responsible for selling and achieving the operational and financial objeclives ofthe Company, the design ofthe strategy to achieve the objeclives, the parameters to be applied In relation to the strategy (for example in respect ofthe financial ratios), the associated risk profile, the developmenl of results and corporate social responsibilily Issues that are reievanl to Ihe enlerprise. The Executive Board is accountable for Ihis to the Supervisory Board and to the General Meeling. In discharging its role, the Executive Board shall be guided by the Interests ofthe Company and ils affiliated enterprises, taking into consideration Ihc interesls ofthe Company's stakeholders. The Executive Board is responsible for complying wilh all primary and secondary legislation, for managing the risks associated with the Company's activities and for financing the Company.

A member ofthe Executive Board shall not lake part in any discussion or decision making that involves a subject or transaclion in relation lo which he has a conflict ofinteresi wilh the Company.

Supervisory Board

Composition of the Supervisory Board

The Supervisory Board consists of nine members: Cees (CJ.A). van Lede (Chairman), Jan Maarten (J.M.) de Jong (Vice-Chairman), Maarten (M.) Das (delegated member), Michel (M.R.) de Carvalho, Jan Michiel (J.M.) Hessels, Annemiek (A.M.) Fentener van Vlissingen, Lord lan (l.C.) MacLaurin, Mary (M.) MInnick and Christophe (V.C.O.B.J.) Navarre.

Information on these Supervisory Board members Is provided hereunder.

Cees (CJ.A.) van Lede (1942) Dutch nationality; male.

Appointed in 2002; latest reappointment in 2006*. Chairman (2004).

Profession: Company Direclor.

Supervisory directorships Dutch slock listed companies: Royal Philips Electronics N.V.

Olher: Sara Lee Corporation, Air Liquide S.A., Air France/ KLM, Senior Advisor Europe, JP Morgan Plc, London.

Jan Maarten (J.M.) de Jong (1945)

Dutch nationality; male.

Appointed in 2002; latest reappointment in 2006'. Vice-Chairman (2004).

Profession: Banker.

Supervisory directorships Dutch slock listed companies: Nutreco Holding N.V.

Other: CRH plc, Ireland, AON Groep Nederland B.V., Kredietbank S.A. Luxembourgeoise, Luxembourg, Krediet Bank N.V., Belgium.

Maanen (M.) Das (1948)

Dutch nationality; male.

Appointed in 1994; latest reappointment in 2009'. Delegated member (1995). Profession: Advocaat (Attorney al law). Supervisory directorships Dutch slock listed companies: none. Other: Greenfee B.V. (Chairman). Olher directorships": Heineken Holding N.V. (Chairman), L'Arche Green N.V. (Chairman), Slichling Admlnislratiekanloor Priores, LAC B.V.

Michel (M.R.) de Carvalho (1944)

British nationality; male.

Appointed in 1996; latest reappointment in 2007'. Profession: Banker, Investmenl Banking, Citi Inc., UK (Vice-Chairman) and Citi Private Bank Europe, Middle East and Africa (Chairman).

No supervisory directorships Dutch slock listed companies. Olher directorships": L'Arche Green N.V.

Jan Michiel (J.M.) Hessels (1942) Dutch nationality; male.

Appointed in 2001; latest reappointment in 2009'. Profession: Company Direclor. Supervisory directorships Dutch slock listed companies: Royal Philips Electronics N.V. (Chairman). Olher: NYSE Euronexl (Chairman), S.C.Johnson Europlant N.V. (Chairman), Central Plan Committee ofthe Nelherlands Bureau for Economic Policy Analysis (CPB) (Chairman).

Annemiek (A.M.) Fentener van Vlissingen (1961)

Dutch nallonalily; female. Appointed in 2006'. Profession: Company Direclor. Supervisory directorships Dutch slock listed companies: Draka Holding N.V. Other: SHV Holdings N.V. (Chairman), De Nederlandsche Bank.

lan (LC.) MacLaurin (1937)

Brilish nationality; male. Appointed in 2006". Profession: Company Director. No supervisory directorships Dutch slock listed companies. Olher: Evolution Group Plc, Charlwell Group.

Mary (M.E.) Minnick (1959)

American nationality; female. Appointed in 2008". Profession: Partner In Lion Capital LLP, UK. No supervisory directorships Dutch slock listed companies.

Christophe (V.C.O.B.J.) Navarre (1958)

Belgian nationality; male. Appointed in 2009". Profession: President & CEO LVMH Wines & Spirits Group.

No supervisory directorships Dutch slock listed companies. If applicable, board memberships mentioned under 'Olher'

only list other key board memberships.

• For ihe maximum period offourv' i "• Where relevant lo performance ofthe duties ofthe Supervisory Board.

The Supervisory Board members are appointed by the General Meeling of Shareholders from a non binding nomination drawn up by the Supervisory Board.

The General Meeting of Shareholders can dismiss members ofthe Supervisory Board by a majority ofthe voles cast, ifthe subject majority at least represents one-third ofthe issued capital.

Corporate Govemance Statement (continued)

The composition of the Supervisory Board is such that the members are able lo acl critically and independently of one another and ofthe Executive Board and any particular interests. Three members ofthe Supervisory Board (M.R. de Carvalho, J.M. de Jong and M. Das) do not meet the applicable crileria for being 'independent' within the meaning of besl practice provision 111.2.2 ofthe Dutch Corporate Governance Code of 10 December 2008. Reference is made to the Comply or Explain Report.

A person may be appointed to the Supervisory Board for a maximum of three four-year terms. However, given the structure ofthe Heineken Group, the maximum appointment period will not be applied to members who are related by blood or marriage to Mr. A.H. Heineken family or to members who are also members ofthe Board of Directors of Heineken Holding N.V.

The Supervisory Board has drawn up a rotation schedule in order to avoid, as far as possible, a situation in which many Supervisory Board members retire at the same time. The rotation schedule is available on www.heinekeninternalional. com/corporate governance/supervisory board.

Profile

The Supervisory Board has prepared a profile ofits size and composition, taking accounl ofthe nature ofthe business, its aclivilies and the desired expertise and background ofthe Supervisory Board members. The profile deals with the aspects of diversity in the composition ofthe Supervisory Board that are relevant lo the Company and states what specific objective is pursued by the Supervisory Board in relation to diversity. Each Supervisory Board member shall be capable of assessing the broad outline ofthe overall policy. At least one member ofthe Supervisory Board shall be a financial expert with relevant knowledge and experience of financial administralion and accounting for listed companies or other large legal entities. The composition ofthe Supervisory Board shall be such that il is able lo carry out its duties properly. The profile is available on www.heinekeninternational.com/corporate governance/supervisory board.

Role

The role ofthe Supervisory Board is to supervise the managemenl ofthe Executive Board and the general affairs ofthe Company and its affilialed enterprises, as well as to assist the Executive Board by providing advice. In discharging its role, the Supervisory Board shall be guided by the interesls ofthe Company and its affilialed enterprises and shall lake into account the reievanl interest ofthe Company's stakeholders.

The supervision ofthe Executive Board by the Supervisory Board includes the achievement ofthe Company's objectives, the corporate strategy and the risks inherent in the business

aclivilies, the design and effectiveness of the inlernal risk and control systems, the financial reporting process, compliance with primary and secondary legislation, the Companyshareholder relationship and corporate social responsibility issues that are relevant lo the Company.

The Supervisory Board discusses at least once a year the corporate strategy and the main risks ofthe business, the resull ofthe assessment by the Executive Board ofthe design and effectiveness ofthe internal risk managemenl and control systems, as well as any significant changes thereto.

The division of duties wiihin the Supervisory Board and the procedure ofthe Supervisory Board is laid down in the Regulalions for the Supervisory Board, which are available on www.heinekenlnternational.com/corporale governance/ supervisory board.

A member ofthe Supervisory Board shall not take part in any discussion or decision-making that involves a subject or transaclion in relation to which he has a conflict ofinteresi wilh the Company.

The Executive Board provides the Supervisory Board with all information necessary for the exercise ofthe duties ofthe Supervisory Board.

The Supervisory Board discusses al least once a year, without the Executive Board being present, its own functioning, the functioning ofits committees and lis individual members and the conclusions thai must be drawn on the basis thereof. The Supervisory Board also discusses the desired profile, composition and competence ofthe Supervisory Board. Moreover, the Supervisory Board discusses al least once a year wilhout the Executive Board being present both the funclioning of ihe Executive Board as an organ ofthe Company and the performance ofits individual members and the conclusions thai must be drawn on the basis thereof.

Resolutions subject to Supervisory Board approval

Certain resolutions ofthe Executive Board are subject to the approval ofthe Supervisory Board. Examples are resolutions concerning the operational and financial objeclives ofthe Company, the strategy designed to achieve the objectives, the parameters to be applied in relation to the strategy (for example in respect ofthe financial ratios) and corporate social responsibilily issues that are relevant lo the Company. Also decisions lo enter into transactions under which Executive Board or Supervisory Board members would have conflicts ofinteresi that are of material significance lo the Company and/or to the relevant Executive Board member/ Supervisory Board member require the approval ofthe Supervisory Board. Further reference is made lo article 8 paragraph 6 ofthe Articles of Associalion ofthe Company, which contains a list of resolutions ofthe Executive Board that require Supervisory Board approval.

Chairman

The Supervisory Board appoints from its members a Chairman.

The Chairman ofthe Supervisory Board may not be a former member ofthe Executive Board.

The curreni Chairman is Mr. C.J.A. van Lede.

The Chairman ofthe Supervisory Board (CJ.A. van Lede) ensures the proper funclioning ofthe Supervisory Board and its committees and acts on behalf of the Supervisory Board as the main conlact for the Executive Board and for shareholders regarding the funclioning ofthe Executive and Supervisory Board members.

Vice-Chairman

The Supervisory Board appoints from its members a Vice-Chairman.

The Vice Chairman ofthe Supervisory Board (JM. de Jong) acts as deputy for the Chairman. The Vice-Chairman acts as conlacl for individual Supervisory Board members and Executive Board members concerning the functioning of the Chairman of the Supervisory Board.

Delegated Member

The General Meeting of Shareholders may appoint one of the Supervisory Board members as Delegated Member (currenlly M. Das). The delegation of powers to the Delegated Member does not exceed the duties ofthe Supervisory Board and does not comprise the management ofthe Company, ll intends to effeel a more intensive supervision and advice and more regular consultation wilh the Executive Board.

The Delegated Member has a veto-right concerning resolutions ofthe Supervisory Board to approve the resolutions ofthe Executive Board referred lo in article 8 paragraph 6 under a, b and c ofthe Articles of Association ofthe Company.

Committees

The Supervisory Board has four committees, the Preparatory Committee, the Audil Committee, the Remunerallon Commitlee, and the Selection and Appointment Committee.

The funclion ofthese committees is lo prepare the decisionmaking ofthe Supervisory Board. The Supervisory Board has drawn up regulations for each committee, which indicate the role and responsibility ofthe committee concerned. Its composition and the manner in which it discharges Ils duties. These regulallons are available on

www.heinekeninlernational.com/corporalegovernance/ supervisory board.

The repori ofthe Supervisory Board slales the composition of the committees, the number of committee meetings and the main items discussed.

Preparatory Committee

The Preparatory Committee prepares decision-making of the Supervisory Board on matters not already handled by any ofthe olher committees, such as in relation to acquisitions and inveslmenls.

Audit Committee

The Audil Committee may not be chaired by the Chairman ofthe Supervisory Board or by a former member ofthe Executive Board.

Al least one member ofthe Audit Committee shall be a financial expert with relevant knowledge and experience of financial administration and accounting for listed companies or olhcr large legal enlilies.

The Audil Commitlee focuses on supervising the activities ofthe Executive Board with respect lo (i) the operation of the internal risk management and control systems, including the enforcement ofthe relevant primary and secondary legislation and supervising the operaiion of codes of conduci, (ii) the provision of financial informalion by the Company, (iii) compliance wilh recommendations and observations of inlernal and external auditors, (iv) the role and functioning ofthe internal audit function, (v) the policy ofthe Company on lax planning, (vl) relations with the external auditor, including, in parlicular, his independence, remuneration and any non-audit services for the Company, (vii) the financing of the Company and (viii) the applicalions of informalion and communicaiion technology.

The Audit Commitlee acts as the principal contacl for the exlernal auditor if he discovers irregularities in the content ofthe financial reporting.

The Audit Committee meets with the external auditor as often as ll considers necessary, but at least once a year, without the Executive Board members being present.

Remuneration Committee

The Remuneration Committee may not be chaired by the Chairman ofthe Supervisory Board or by a former member ofthe Executive Board or by a Supervisory Board member who is a member ofthe management board of another listed company. However, given the structure ofthe Heineken Group and the character ofthe Board of Directors of Heineken Holding N.V., the Remuneration Commitlee may be chaired by a Supervisory Board member who is a member of the Board of Directors of Heineken Holding N.V. (as currently is the case wilh Mr. M. Das).

Corporate Govemance Statement (continued)

No more than one member ofthe Remuneration Committee may be a member ofthe managemenl board of another Dutch listed company.

The Remuneration Committee, inler alia, makes the proposal to the Supervisory Board for the remuneration policy to be pursued, and makes a proposal for the remuneration ofthe individual members ofthe Executive Board for adoplion by the Supervisory Board.

Selection and Appointment Committee

The Selection and Appointmenl Committee, inler alia, (1) draws up selection criteria and appointment procedures for Supervisory Board members and Executive Board members, (ii) periodically assesses the size and composition ofthe Supervisory Board and the Executive Board, and makes a proposal for a composition profile ofthe Supervisory Board, (ill) periodically assesses the functioning of individual Supervisory Board members and Executive Board members and reports on this to the Supervisory Board, (iv) makes proposals for appointments and reappointments and (v) supervises the policy ofthe Executive Board on the selection crileria and appointment procedures for senior managemenl.

Decree Article 10 Take-Over Directive

The issued share capital of Heineken N.V. amounts lo EUR783,959,350.40, consisting of 489,974,594 shares of EUR 1.60 each. Each share carries one vote. The shares are listed on Euronext Amsierdam.

All shares carry equal righis and are freely transferable (unless provided otherwise hereunder).

Pursuant to the Financial Markets Supervision Act (Wel op het financieel loezicht) and the Decree on Disclosure of Major Holdings and Capital Interests in Securities-Issuing Institutions (Besluil melding zeggenschap en kapitaalbelang in uitgevende instellingen), the Financial Markels Authority has been notified aboul the following substantial shareholding regarding Heineken N.V.:

• Mrs. C.L. de Carvalho-Heineken (indirectly 50.005 per cent; the direcl 50.005 per cent shareholder is Heineken Holding N.V.)
• Massachusetts Financial Services Company (a capital interest of 4.07 per cent, ofwhich 2.92 per cent is held directly and 1.14 per cent is held indirectly and a voiing interest of 5.03 per cent ofwhich 2.91 per cent is held directly and 2.12 per cent is held indirectly.

Upon completion ofthe acquisilion ofthe beer operalions of Fomento Economico Mexicano, S.A.B. de C.V. ('FEMSA'), as part ofwhich FEMSA and related companies will receive Heineken N.V. shares (and Heineken Holding N.V. shares), pursuant to the Corporate Governance Agreement lo be concluded between Heineken N.V, Heineken Holding N.V., L'Arche Green N.V. and FEMSA:

• subject lo certain exceptions, FEMSA (and any member ofthe FEMSA group) shall not increase its shareholding in Heineken Holding N.V. above 20 per cent and shall not Increase ils holding In the Heineken Group above a maximum of 20 per cent economic interest (such capped percentages referred lo as the 'Voting Ownership Cap');
• subject to certain exceptions, FEMSA (and any member of the FEMSA group) may not exercise any voting rights in respect ofany shares beneficially owned by il, if and to the extent such shares are in excess ofthe applicable Voting Ownership Cap;
• FEMSA (and Ils respective related companies) have agreed not to sell any shares in Heineken N.V. (and in Heineken Holding N.V.) for a five-year period, subject to certain exceptions. Including amongst others, (i) beginning in year three, the right to sell up to 1 per cent of all outstanding shares of each of Heineken N.V. and Heineken Holding N.V. in any calendar quarter (ii) beginning in year three, the righl lo sell any Heineken N.V. shares and/or any Heineken Holding N.V. shares in any private block sale outside the facilllies ofa stock exchange so long as Heineken Holding N.V. (as to Heineken N.V. shares) respectively L'Arche Green N.V. (as lo Heineken Holding N.V.-shares) is given first the opportunity lo acquire such shares al the markel price thereof;
• unless FEMSA's economic inlerest in the Heineken Group were lo fall below 14 per cent, the current FEMSA control structure were lo change or FEMSA were lo be subject to a change of control, FEMSA will be entitled lo have two representatives in the Heineken N.V. Supervisory Board, one of whom will be a Vice Chairman, who will also serve as the FEMSA representative on the Board of Directors of Heineken Holding N.V.

There are share based Long-Term Incentive Plans for bolh the Executive Board members and senior management. Eligibilily for participation is based on objective criteria.

Each year, performance shares are awarded to the participanls. Depending on the fulfilment of certain predetermined performance conditions during a three-year performance period, the performance shares will vest and the parlicipanls will receive real Heineken N.V. shares. The shares required for ihe share-based Long Term Incentive Plans will be acquired by Heineken N.V. The iransfer of shares to the participanls requires the approval ofthe Supervisory Board of Heineken N.V.

Shares received by Executive Board members upon vesting are subject to a holding period of five years as from the date of award ofthe respective performance shares, which is approximately two years from the vesting date.

As far as known to Heineken N.V., there are no other agreements involving a shareholder of Heineken N.V. that could lead to a restriction ofthe transferability of shares or of voting rights on shares.

Shares repurchased by Heineken N.V. for the share-based long-term incentive plans do not carry any voting righis and dividend rights. As regards other Heineken N.V. shares, there are no reslriclions on voting rights. Shareholders who hold shares on a predetermined record date are entitled lo attend and vole at General Meetings of Shareholders. The record dale for the Annual General Meeling of Shareholders of 22 April 2010 is 21 days before the Annual General Meeting of Shareholders, i.e. on 1 April 2010.

There are no imporiant agreements to which Heineken N.V. is a parly and that will come inlo force, be amended or be terminated under the condilion ofa change of control over Heineken N.V. as a result ofa public offer.

There are no agreemenis of Heineken N.V. with Executive Board members or olher employees that entitle Ihem to any compensation righis upon termination of their employment after completion ofa public offer on Heineken N.V. shares.

Members of the Supervisory Board and the Executive Board are appointed by the General Meeling of Shareholders on the basis ofa non-binding nomination by ihe Supervisory Board.

The General Meeting of Shareholders can dismiss members ofthe Supervisory Board and the Executive Board by a majority ofthe votes cast, ifthe subjeci majority at least represents one-third ofthe issued capital.

The Articles of Association can be amended by resolution of the General Meeling of Shareholders in which at least half of the Issued capital is represented and exclusively either at the proposal ofthe Supervisory Board or at the proposal ofthe Executive Board which has been approved by the Supervisory Board, or at the proposal of one or more shareholders representing al least half of the issued capital.

On 20 April 2005, the Annual General Meeting of Shareholders authorised the Executive Board (which authorisation was last renewed on 23 April 2009 for the statutory maximum period of 18 months), to acquire own shares subject lo the following conditions and with due observance ofthe law and the Articles of Associalion (which require the approval ofthe Supervisory Board):

• a. the maximum number of shares which may be repurchased is the statutory maximum of 10 per cent ofthe issued share capital of Heineken N.V.;
• b. transactions must be executed at a price between the nominal value ofthe shares and UO per cent ofthe

opening price quoted for the shares in the Official Price List (Officiële Prijscourant) of Euronext Amsterdam on the date ofthe transaction or, in the absence of such a price, the latest price quoted therein;

c. transactions may be executed on the slock exchange or otherwise.

The authorisation lo acquire own shares may be used mainly in connection with the share-based Long-Term Incentive Plans for both the Executive Board members and senior management, but may also serve other purposes, such as acquisitions. A new authorisation will be submitled for approval lo the Annual General Meeting of Shareholders of22 April 2010.

On 20 April 2005, the Annual General Meeting of Shareholders also authorised the Executive Board (which authorisation was lasl renewed on 23 April 2009 for a period of 18 monlhs) to issue (righis) to shares and lo restrict or exclude shareholders' pre-emption rights, wilh due observance ofthe law and Articles of Association (which require the approval ofthe Supervisory Board). The authorisation is limited to 10 per cent of Heineken N.V.'s issued share capital, as at the date of issue. The authorisation may be used in conneciion wilh the share-based Long-Term Incentive Plans for bolh the Executive Board members and senior managemenl, but may also serve other purposes, such as acquisitions. A new authorisation will be submitled for approval to the Annual General Meeting of Shareholders of 22 April 2010.

Executive Board J.F.M.L. van Boxmeer D.R. Hooft Graafland

Amsierdam, 22 February 2010

Did you know:

'Pilsener* and 'lager*

are the same

Essentially both expressions refer to the same thing. We u se these name s t o describ e a bright, pure, bottom-fermented beer, as opposed to darker and top-fermented beers (often called 'ale' or 'stout').

T

To the Shareholders

During the year under review, the Supervisory Board performed its duties in accordance with primary and secondary law and the Articles of Association of Heineken N.V. and supervised and advised the Executive Board on an ongoing basis.

Financial statements and profit appropriation

The Executive Board has submitted ils financial statements 2009 lo the Supervisory Board. The financial stalements of this Annual Report can be found on pages 71 to 155 of this Annual Repori.

KPMG Accountants N.V. audited the financial statements. Their report appears on page 158 of this Annual Report.

The Supervisory Board recommends that shareholders, in accordance with the Articles of Association, adopt these financial statements and, as proposed by the Executive Board, appropriate EUR318 million for paymenl of dividend. The underlying principle ofthe dividend policy Is lhat 30-35 per cent of net profit before exceplional items and amortisalion of brands (net profit beia) is placed al the disposal of shareholders for distribution as dividend.

The proposed dividend amounis lo EURO.65 per share of EUR 1.60 nominal value, ofwhich EURO.25 was paid as an interim dividend on 2 Seplember 2009.

Supervisory Board composition, remuneration and Independence

The Annual General Meeling of Shareholders on 23 April 2009 appointed Mr. V.C.O.B.J. Navarre as member ofthe Supervisory Board for the maximum period of four years. Messrs. Das and Hessels were reappointed as members of the Supervisory Board for the maximum period of four years. Mr. Das was also reappointed delegated member.

Following the announcement ofthe acquisilion ofthe beer operations of Fomento Economico Mexicano S.A.B. de C.V. (FEMSA) and subject lo completion ofthe transaction, it is proposed to appoint Messrs. J.A. Fernandez Carbajal and J.G. Aslaburuaga Sanjinés as members of the Supervisory Board of Heineken N.V. for the maximum period of four years. Non- binding nominations for their appointment will be submitted lo the Annual General Meeling of Shareholders on 22 April 2010.

Messrs. Van Lede and De Jong, Mrs. Fentener van Vlissingen and Lord MacLaurin will resign by rotation from the Supervisory Board at the Annual General Meeling of Shareholders on 22 April 2010.

Messrs. Van Lede and De Jong and Mrs. Fentener van Vlissingen are eligible for reappointment for the maximum period of four years. Non-binding nominations for their appointments will be submitted lo the Annual General Meeting of Shareholders. The noles lo the agenda contain further information, concerning the proposed appointments and re-appointments.

Lord MacLaurin will retire from the Supervisory Board. We would like to thank Lord MacLaurin for his contributions lo the Company and specifically for his supporl in the UK markel.

In 2009 the Supervisory Board consisted of nine members. All members ofthe Supervisory Board comply with besl practice provision 111.3.4 ofthe Dutch Corporate Governance Code (maximum number of Supervisory Board scats). The Supervisory Board has a diverse composition in terms of experience, gender and age. Two out of nine members are women and four out of nine members are non-Dutch. The average age is 61 (ranging between 48 and 72 years).

The General Meeting of Shareholders determines the remuneration ofthe members ofthe Supervisory Board. The 2005 Annual General Meeling of Shareholders resolved lo adjust the remuneration ofthe Supervisory Board effective 1 January 2006. The detailed amounis are slated on page 144 ofthe financial statements. The Supervisory Board plans to submit new proposals to the Annual General Meeling of Shareholders in 2011.

The Supervisory Board endorses the principle lhat the composition ofthe Supervisory Board shall be such that its members are able to act critically and independently of one another and ofthe Executive Board and any parlicular interesls. In a strictly formal sense Messrs. De Jong, Das and de Carvalho do not meet the applicable criteria for 'independence' as set out in the Dutch Corporate Governance Code dated 10 December 2008. In this respect, reference is made to the best practice provision 111.2.2 of the Dutch Corporate Governance Code as contained in the "Comply or Explain' report of 22 February 2010. However, the Supervisory Board has ascertained lhat Messrs. De Jong, Das and de Carvalho in fact act critically and independently.

Meetings and activities of the Supervisory Board

The Supervisory Board held nine meetings In the presence ofthe Executive Board, including meetings by lelephone conference. The agenda included subjects such as the Company's strategy, the financial position ofthe Group, Ihe results ofthe Operating Companies, acquisitions, large Inveslmenl proposals, the yearly budget, managemenl changes, the yearly managemenl review and the inlernal risk management and control systems. In parlicular the acquisition ofthe beer operations of FEMSA (Mexico) was discussed in several meetings. The Supervisory Board also discussed and approved the adjustments to the remuneration policy for the Executive Board. The exlernal auditor attended the meeting In which the annual results were discussed.

Several representatives of Senior Management presented a subject, such as the Group Supply Chain Direclor (Supply Chain highlights, Tolal Production Managemenl and sustainabllity) and the Group Legal Affairs Direclor (highlights of preventing disputes and competition law compliance). Two Regional Presidents (Western and Cenlral & Eastern Europe) presented their programme for growlh.

One meeling was held without the Executive Board present. In this meeting, the Supervisory Board discussed the funclioning ofthe Supervisory Board, ils committees and ils members as well as the funclioning of the Executive Board. The Chairman ofthe Supervisory Board prepared this meeting by having individual interviews, based on a selfassessment survey, wilh the Supervisory Board and Executive Board members.

One meeling was held al the brewery in Zoeterwoude, the Netherlands. In this meeting the Supply Chain Director for the Netherlands presented the developments within the Supply Chain of the breweries in the Nelherlands.

Yearly, the Supervisory Board has a two-day meeling with the Executive Board to discuss the long term straiegy and managemenl developmenl. In this meeling, the Managing Director of Heineken Nederland and his managemenl leam presented the highlights ofthe commercial organisation in the Nelherlands (including Vrumona).

The Chairman ofthe Supervisory Board met frequently wilh the CEO, amongst others, to prepare the Supervisory Board meetings and lo monitor progress.

None ofthe members ofthe Supervisory Board were frequently absent. An absence of twice or more is considered frequent.

Committees

The Supervisory Board has four commillees, the Preparatory Committee, the Audit Committee, the Selection & Appointment Committee and the Remuneration Committee. The terms of reference for the committees are posted on the Company's website.

Preparatory Committee

Composition: Messrs. Van Lede (Chairman), Das and de Carvalho.

The Preparatory Committee met seven limes. The committee prepares decision making by the Supervisory Board.

Audit Committee

Composition: Messrs. DeJong (Chairman), Hessels and Mrs. Fentener van Vlissingen. The Audil Commitlee mel three limes.

The members collectively have the experience and financial expertise lo supervise the financial statemenls and the risk profile of Heineken N.V. The Audit Commitlee discussed regular topics, such as the annual and interim financial statements, the effectiveness of risk managemenl, the adequacy of Internal control policies and inlernal audit programmes, the external audit scope, approach and fees, as well as reports from bolh the inlernal and exlernal audits. Specific atlenlion was paid lo the international IT programmes and the lax control framework ihrough presentations by the responsible managers.

The Audit Committee also reviewed the achievement of targets for the annual bonus for the Executive Board and Senior Managemenl.

The CEO and the CFO attended all the meetings, as well as the exlernal auditor, the Director Group Control & Accounting and the Group Inlernal Auditor.

The Annual General Meeling of Shareholders appointed in 2008 the exlernal auditor, KPMG Accountants N.V. for a fouryear period (financial statements 2008 2011).

To the Shareholders (continued)

Selection & Appointment Committee

Composition: Messrs. Van Lede (Chairman), Das, de Carvalho and Lord MacLaurin.

The Selection & Appointment Committee mel four limes. In these meetings the composition and the rotation schedule ofthe Supervisory Board were discussed.

Remuneration Committee

Composition: Messrs. Das (Chairman), Van Lede and de Carvalho.

The Remunerallon Committee mel six limes. The Remuneration Commitlee discussed the adjustments to the remuneration policy for the Executive Board. The adjustments will be submitted to the Annual General Meeling of Shareholders on 22 April 2010. They also reviewed the target setting and payout levels for the annual bonus and the Long Term Incentive Plan for the Executive Board (Heineken N.V. shares).

Remuneration Executive Board

In 2005 the Annual General Meeling of Shareholders approved the remuneration policy for the Executive Board. In 2007 the Annual General Meeling of Shareholders approved the firsl adjustments. In view ofthe financial crisis, Ihe base salaries ofthe Executive Board were frozen and in 2009 no adjustments lo the policy were made.

Delails ofthe policy and ils implementation are described on page 65.

The adjustments to the revised remuneration policy, as from 1 January 2010, will be submitted for approval to the Annual General Meeling of Shareholders on 22 April 2010. The adjustments are described on page 69.

Appreciation

2009 was not an easy year, particularly In view ofthe general economic circumslances. Much attention was given to the integration ofthe acquired businesses, lo Tolal Cosl Managemenl and lo cash flow managemenl. The Supervisory Board wishes lo express ils gratitude lo the members ofthe Executive Board and all Heineken employees for their dedication and contributions lo sirong results In 2009.

Supervisory Board Heineken N.V.

Van Lede De Jong Das de Carvalho Hessels Fentener van VUssingen MacLaurin Minnick Navarre

Amsterdam, 22 February 2010

Did you know:

The foam on top of beer protects the beer from oxygen, which can influence the taste and quality of beer.

Remuneration Report

Heineken's Executive Board remuneration policy reflects our long-standing remuneration principles of supporting the business strategy, paying for performance and paying competitively and fairly. These core principles remain unchanged as we address the challenges ofthe current external economic crisis and work to turn them into a long-term advantage for our Company and shareholders. In 2009 the Remuneration Committee reviewed the policy to ensure continuing compliance with our remuneration principles, best corporate governance practices and alignment with our business priorities. Recommended adjustments to the policy by the Supervisory Board will be submitted to the 2010 Annual General Meeting of Shareholders.

Introduction

The Remuneration Repori includes three seciions:

• Part I Describes the curreni Heineken Executive Board remuneration policy, which was adopted by the Annual General Meeting of Shareholders In 2005 and subsequently adjusted In 2007
• Part II a. Provides delails ofthe remuneration received by the Executive Board in 2009 and b. Describes the changes made lo align Ihis remuneration to the principles ofthe current policy
• Pan III Outlines the adjustments to the current policy to be submitted lo the 2010 Annual General Meeting of Shareholders.

Part I - Executive Board remuneration policy

Remuneration principles

Heineken's Executive Board remuneration policy is designed to meet four key objectives:

• Support the business strategy We align our remuneration programmes wilh business strategies focused on creating long-term growlh and shareholder value, while maintaining a tight focus on short term financial results;
• Pay for performance We set clear and measurable goals for our shorl- and long term incentives and pay higher compensation when goals are exceeded and lower compensation when goals are not met;
• Pay competitively We set target remuneration lo be competitive wilh oiher multinational corporations of similar size, value and complexity; and
• Pay fairly We set target remuneration 10 be internally consistent and fair. We regularly review inlernal pay relativities between the Executive Board and senior managers and aim lo achieve consistency and alignment where possible.

Summary overview of remuneration elements

The Executive Board remuneration policy is simple and transparent in design and consists ofthe following key elements:

^ri h

Remuneration clement	Descrlplior	Strategic role
Base salary	Fixed cash compensation based on level of responsibility and performance Target level set al the median ofthe labour markel peer group	• Attraction • Reward for performance of day-to-day activities
Short-term incentive	Variable cash payment based on achievement of annual objeclives 75% of incentive opportunity is based on financial and operational measures, 25% on individual objeclives	Drive and reward annual Heineken performance
Long-term incentive	• Variable long-term remuneration element paid in Heineken N.V. shares • Vesting of shares is based on meeting three year Heineken N.V. performance objeclives	Drive and reward long-term performance: - Increase shareholder value - Focus on long-term sustained success Executive retention Share ownership
Pension	Defined contribution plan or i Capital Creation plan	Provide for employee welfare and retirement needs

Remuneration Report (continued)

Base salary

"

Base salaries are determined by reference to the relevant peer group of companies and are targeted to be at the median level ofthe peer group. Every year base salary levels are reviewed and the Remuneration Committee proposes appropriate adjustments to the Supervisory Board for approval taking inlo account exlernal peer group data and inlernal pay relativities.

The current labour markel peer group consists primarily of Dutch multinational companies and Includes a minority of branded consumer goods companies lhat operate in Continental Europe. Individual companies comprising the curreni peer group Include:

• Akzo Nobel (NL)
• Anheuser-Busch InBev (B)
• Henkel (G)
• Ahold (NL)
• DSM(NL)
• . KPN(NL)
• Philips (NL)
• Nestle (CH)
• L'Oréal (F)
• Reed Elsevier (NL)
• TNT(NL)
• Unilever (NL).

Please note lhat Numico (NL) was also part ofthe labour market peer group unlil ils lake-over. Replacement has not yet taken place.

Each year, the Remuneration Committee evaluates the peer group lo ensure it remains reievanl and may recommend adjustments to the Supervisory Board.

Short-term incentive

The short-term incentive (STI) is designed to drive and reward the achievement of Heineken's annual performance objeclives.

The targel annual STI opportunity for the CEO is 100 per ccnl of base salary and for the CFO 75 per cent of base salary. The maximum level of payout is set al 150 per cent of payout at targel level. The threshold level of payout is set at 60 per cent of payout al target level.

75 per cent ofthe STI opportunity is based on organic net profit growlh target and an acceptable cash conversion rale. 25 per ccnl ofthe STI opportunity Is based on personal targets.

The Supervisory Board may at its sole discretion In determining the final payout, adjust the STI amount that would have been payable under the plan rules downwards or upwards ifthe payout based on plan rules would produce an unfair result due to extraordinary circumslances. The Supervisory Board can also recover from the Executive Board any STI payment made on the basis of Incorrect financial or olher data (clawback provision).

Long-term incentive

The long lerm incentive (LTI) is designed to align the Executive Board and shareholder interest and reward long-term value crealion. Each year, a target number of performance shares is conditionally awarded, the vesting of which Is contingent on Heineken's Tolal Shareholder Relurn (TSR) performance over a three year performance period relative to a performance peer group. The performance peer group consists of European branded consumer goods companies with which Heineken competes in capital markels and includes the following 11 companies:

• Anheuser Busch InBev (B)
• Cadbury(UK)
• Carisberg (DK)
• Danone (F)
• Diageo (UK)
• . Henkel (G)
• LVMH(F)
• Nestle (CH)
• L'Oréal (F)
• SABMiller (UK)
• Unilever (NL),

Each year, the Remuneration Committee evaluates the peer group to ensure il remains reievanl and may recommend adjustments lo the Supervisory Board.

The targel annual LTI opportunity for the CEO is 100 per ccnl of base salary and for the CFO 75 per cent of base salary. If Heineken's TSR is higher than that of the median ofthe performance peer group, the performance shares vest according lo the following schedule:

Heineken's TSR rank in the

performance group	% of perlormance shares vesting
1	150%
2	125%
3	100%
4	75%
5	50%
6 - Median position	25%
7-11

The Supervisory Board may al ils sole discretion adjusl the number of shares lhat would have vested under the plan rules based on the above described vesting schedule downwards or upwards ifthe vesting of shares based on plan rules would produce an unfair result due lo extraordinary circumslances. The Supervisory Board can also recover from the Executive Board any shares which vested on the basis of incorrect financial or other data (clawback provision).

The net vested performance shares are subject lo an addilional holding restriction of two years.

Pensions

The members ofthe Executive Board can either participate In the Defined Conlribution Plan or in a Capital Crealion Plan. In the Defined Contribution Plan, apart from the survivor's pension, a separate lump sum of two times base salary will be paid in the evenl of death whilst in service.

In the Capital Creation option the Executive Board member may elect lo receive as income the Defined Contribution premium amounis from the pension scheme, less an amounl equivalenl to the employee conlribution. Instead ofa survivor's pension, a lump sum of, depending on age, len, eight, six or four times base salary will be paid, in the evenl of dealh whilst in service.

The reliremeni age is 65, but individual Executive Board members may retire earlier wilh a reduced level of benefit. Contribution rales are designed lo enable the current Executive Board members lo retire from Ihe Company al the age of 62.

Part Ila - 2009 Remuneration overview

The following table gives delails ofthe remuneration received by each member ofthe Executive Board in 2009.

Realisation 2009 short-term incentive The STI awards for 2009 were subject to achievement of

organic net profit growth and cash conversion rale targets in combination wilh individual targets. The specific targets are commercially sensitive and cannot be disclosed. The Supervisory Board measured the results against the set targets and determined the STI payment for 2009 to be equal lo 150 per cent of payout al targel level for the CEO and 150 per cent of payout at target level for the CFO.

			lon£ tprm incentive
InEUR	Base salary	Short-term Incentive'	No. of performance shares vested for 2007-2009	Value of vested shares for 2007 2009	Pension cost
Van Boxmeer	750,000	1,125,000		-	379,280
Hooft Graafland	550,000	018,750			314,569

1 Short term Incentive Is based on results achieved In 2009 and therefore payable in 2010.

Remuneration Report (continued)

Realisation 2009 long-term incentive

After 2009 the conditional performance shares awarded in 2007 are subject to vesting. Vesting is based on the TSR performance of Heineken ranked against the defined performance peer group over the three-year performance period (1 January 2007 - 31 December 2009). For this period, Heineken ranked tenth in its performance peer group. This ranking is below the median ofthe peer group, and as a resull the performance shares awarded in 2007 do not vest in 2010 and no vested shares are allocated lo the members of the Executive Board.

The Supervisory Board conducted a scenario analysis with respect to possible ouicomes ofthe STI and LTI awards made in 2009 and previous awards made.

The following table provides an overview ofoutstanding LTI awards (awards made but not yet vested as of 31 December 2009):

Part lib - Changes to align remuneration to the principles ofthe current policy

Base salary

The Remuneration Committee conducted a detailed review of base salary levels ofthe Executive Board in 2009. Base salaries were benchmarked against the peer group of companies specified by the policy and the results showed that the curreni base salary levels for the Executive Board are well below the median ofthe peer group, which is the targel base salary position prescribed by the remuneration policy. In addition, the Remuneration Committee reviewed the pay differentials between the Executive Board and senior management and concluded lhat the existing pay differential is loo narrow compared lo the markel and does nol allow meaningful pay progression.

	Grant date	No. of shares conditionally awarded at target level	Value of shares conditionally awarded at the granl date in FUR	Vesting date	No. of shares vested on the vesting date Igross)	End of lock-up period	Value of unvested shares as of 31.12.2009 inEUR
Van Boxmeer
	2009	34,247	735,626	02.2012	-	2014	1,139,226
	2008	16.960	619,549	02.2011	-	2013	564,174
	2007	20,816	787,053	23.02.2010	-	-	-
Hoon Graafland
	2009	18.836	404,597	02.2012	-	2014	626,580
	2008	9.328	340,752	02.2011	-	2013	310,296
	2007	11.449	432,887	23.02.2010

' Within live business days immedialely following ihe publication ofthe annual rcsulls ofthe Company, to occur after completion ofthe performance period as determined by Ihe Supervisory Board.

The following table provides an overview of vested LTI awards lhat are currently subject to a lock-up period.

	Grant date	Vesting dale	No. of shares vested on the vesting date (gross)	No. of shares vested on the vesting date (net)	Value of shares vested on the vesting date inEUR	End of lock-up period	Value of vested shares as of 31.12.2009 1 ; ui,
Van Boxmeer
	2005	20.02.2008	14,244	9,244	337,683	2010	307,502
Hooft Graafland
	2005	20.02.2008	13,250	6,544	239,052	2010	217,686

This is caused by the fact that existing base salary levels have been in place since 2007 and the proposal for a new remuneration policy in 2009 was withdrawn. Based on these findings ofthe Remuneration Committee, the Supervisory Board decided to correct the inlernal pay equity and close the salary gap with the median ofthe peer group in 2009. The table below sels out the new base salaries for 2010.

	2009 Base salary • i		Effeclive date for 2010 base salary
Van Boxmeer	750,000	950,000	1 January 2010
Hooft Graafland	550,000	650,000	1 January 2010

Long-term incentive

In addition the Supervisory Board decided to increase the targel LTI award amounl from 100 per cent lo 125 per cent of base salary for the CEO and from 75 per cent to 100 per cent ofthe base salary for the CFO. Together wilh the adjusted base salary, this will increase the total remuneration for both members ofthe Executive Board to the median ofthe labour markel peer group. For the CFO it implies a somewhat higher total remuneration than for regular peer group CFOs, justified by the broader than normal responsibilities he holds.

The increased targel LTI award amount will also emphasise the long-term variable componenl over the short-term incentive thereby increasing the portion of overall compensation paid on the basis of Heineken's long-term success. Until 2010, there was an equal division of variable pay belwecn short- and long term incentive, which in light of market developments the Supervisory Board no longer deems appropriate.

Part III - Adjustments to the Executive Board remuneration policy as from 2010

The Supervisory Board adopted the following adjustments on the recommendation ofthe Remuneration Committee to the remuneration policy as at 1 January 2010, which are submitted to the Annual General Meeting of Shareholders for approval. Our core remuneration principles of supporting the business strategy, paying for performance and paying competitively and fairly remain unchanged and the following adjustments are proposed lo further strengthen the link between pay and performance, more effectively drive Heineken's long-term success and comply with the besl practices ofthe Dutch Corporate Governance Code.

The following adjustments lo the remuneration policy are proposed:

1. Short-term incentive - Revision of performance measures 2. Long term incentive - Revision of performance measures.

Short-term incentive

The recenl turbulent economic environment has demonstrated the need lo modify the STI measures on an annual basis to respond timely to the changing business conditions. Therefore, the Supervisory Board recommends modifying the current policy to allow setting specific financial and operational measures on an annual basis. In line wilh the current policy, the financial and operational measures will still account for 75 per cent ofthe STI payout and Individual leadership targets will accounl for 25 per cent.

At the beginning ofthe year, the Supervisory Board will then establish financial and operational performance measures and targets for the Executive Board lo achieve based on Heineken's business priorities. These are commercially sensitive and will not be disclosed al lhat momenl. Al the end ofthe year, the Supervisory Board reviews the Company's and individual performance against these set measures and targets and then approves the STI payout levels based on the achieved performance. In the Annual Report, the performance measures and their relalive weight used will be reported after the end of the year.

For threshold, target and maximum performance the following STI payout as a per cent of target applies:

• Threshold performance 50 per cent of target (reduced from 60 per cent under the current policy)
• Target performance 100 per cent of target (no change from the curreni policy)
• Maximum performance 150 per cent of target (no change from the current policy).

The target annual STI opporlunily remains 100 per cent of base salary for the CEO and 75 per cent of base salary for the CFO.

In line with the curreni policy, the Supervisory Board may al ils sole discretion in determining the final payout adjust the short-term incentive amounl lhat would have been payable under the plan rules downwards or upwards ifthe payout based on plan rules would produce an unfair result due to extraordinary circumslances. The Supervisory Board can also recover from the Executive Board any STI payment made on the basis of Incorrect financial or olher data (clawback provision).

A M

Remuneration Report (continued)

Long-term incentive

Under the curreni long-term incentive plan, the vesting of shares depends solely on one performance measure - Total Shareholder Return (TSR) relalive to the peer group. The recent unprecedented markel volatility related lo the collapse ofthe financial markels, ongoing consolidations in the fast moving consumer goods industry and Heineken's unique share profile have demonstrated a number of difficulties in using relalive TSR as a measure of underlying company performance.

The Supervisory Board therefore recommends replacing the relative TSR wilh key fundamental financial performance measures that are critical to ihe long term success of Heineken:

• Organic Gross Profit beia Growth a measure lo drive lop-line growlh - the key measure of company slrenglh
• Organic EBIT beia Growlh a measure lo drive operational efficiency
• Earnings Per Share (EPS) beia Growlh a measure of overall long-term company performance
• Free Operaling Cash Flow a measure lo drive focus on cash.

These four performance measures have equal weights to encourage sound business decisions for the long-term health of Heineken and minimise the risk thai parlicipanls overemphasise one success measure lo the detriment of others.

For each performance measure a threshold, target and maximum performance level Is set with the corresponding performance share vesting schedule:

• threshold performance 50 per cent of performance shares vest
• target performance 100 per cent of performance shares vest and
• maximum performance -150 per cent of performance shares vest.

Vesting between the performance levels is on straight-line basis. The performance levels are commercially sensitive and will not be disclosed al the beginning ofthe performance period. After the performance period, the performance on each ofthe measures will be reported in the Annual Report.

The Supervisory Board may at ils sole discretion adjusl the number of shares lhat would have vested under the plan rules based on the above described vesting schedule downwards or upwards ifthe vesting of shares based on plan rules would produce an unfair result due to extraordinary circumslances. The Supervisory Board can also recover from the Executive Board any shares which vested on the basis of incorrect financial or olher data (clawback provision). This is facilitated by the existing holding period of five years after the dale of award of performance shares, which is approximately two years from the vesting dale.

The Supervisory Board conducted a scenario analysis with respect lo possible outcomes of the adjustments made lo the remuneration policy concerning variable remuneration as from 2010.

Remark on future remuneration policy for aon and beyond

The remuneration policy proposed and withdrawn in 2009 included the adoption ofa new labour markel peer group of European and UK-based multinational companies operaling in the brewing and branded consumer products sectors. This new labour market peer group is no longer suggested in the remuneration policy for 2010 as the Supervisory Board believes that ihe curreni economical climate and public debate require a high degree of prudency.

ll is, however, very clear that the global footprint of Heineken has Increased significantly since the adoplion ofthe existing labour markel peer group in 2007 and is again likely to increase significantly In 2010, wilh the intended acquisilion ofthe beer operalions of FEMSA. Hence the current predominantly Dutch labour market peer group is still perceived lo be subopiimal for the long lerm. Therefore the Supervisory Board will propose a new labour market peer group for 2011.

~ n i

Consolidated income statement

For the year ended 31 December 2009

In millions of EUH	Note	2009	2008
Revenue	5	14,701	14,319
Other income	8	41	32
Raw materials, consumables and services	9	(9,650)	_(9,548)
Personnel expenses	10	(2,379)	(2.415)
Amortisation, depreciation and impairments	11	(1,083)	(1.206)
Total expenses		(13.112)	(13,169)
Results from operating activities		1,630	1,182
Interest income	12	90	91
Interest expenses	12	(633)	(469)
Other net finance expenses	12	214	(107)
Net finance expenses		(329)	(485)
Share of profit of associates and joint ventures
and impairments thereof (net of income tax)	16	127	(102)
Profit before income tax		1.428	595
Income tax expenses	13	(286)	(248)
Profit		1,142	347
Attributable to:
Equity holders of the Company (net profit)		1,018	209
Minority interest		124	138
Profit		1,142	347
Weighted average number of shares - basic	23	488,666,607	488,930,340
Weighted average number of shares - diluted	23	489.974,594	489,974,594
Basic earnings per share (EUR)	23	2.08	0.43
Diluted earnings per share (EUR)	23	2.08	0.43

Consolidated statement of comprehensive income

For the year ended 31 December 2009

In millions of EUR	Nole	2009	:
Profit		1,142	347
Other comprehensive income:
Foreign currency translation differences
for foreign operations	24	112	(645)
Effective portion of change in fair value of cash flow hedge	24	(90)	(105)
Effective portion of cash flow hedges transferred
to the income siatement	24	88	(59)
Net change in fair value available-for-sale investments	24	26	(12)
Net change in fair value available-for-sale investments
transferred to the income statement	24	(12)	1
Share of other comprehensive income of associates/
joint ventures	24	22	(3)
Other comprehensive income, net of tax	24	146	(823)
Total comprehensive income		1,288	(476)
Attributable to:
Equity holders ofthe Company		1.172	(570)
Minority interesl		116	94
Total comprehensive income		1,288	(476)

Consolidated statement of financial position

As at 31 December 2009

In millions ol f UH	Note	2009	2008
Assets
Properly, plant & equipment	14	6.017	6,314
Intangible assets	15	7,135	7,030'
Investments in associates and joint ventures		1,427	1,145
Other investments	17	568	641
Advances lo customers		319	346
Deferred lax assets	18	561	362'
Total non-current assets		16,027	15,838
Inventories	19	1,010	1,246
Other investments	17	15	14
Trade and other receivables	20	2.310	2,504
Prepayments and accrued income		189	231
Cash and cash equivalents	21	520	698
Assets classified as held for sale	7	109	56
Total current assets		4.153	4,749
Total assets		20,180	20,587
Equity
Share capital		784	784
Reserves		159	(74)
Retained earnings		4,408	3,761
Equity attributable to equity holders of the Company		5,351	4,471
Minority interesls		296	281
Tolal equily		5,647	4,752
Liabilities
Loans and borrowings	25	7.401	9,084
Employee benefits	28	634	688
Provisions	30	356	344
Deferred tax liabilities	18	786	661'
Total non-current liabilities		9,177	10.777
Bank overdrafts	21	156	94
Loans and borrowings	25	1,145	875
Trade and other payables	31	3.696	3,846
Tax liabiiilies		132	85
Provisions	30	162	158
Liabilities classified as held for sale	7	65	-
Total current liabilities		5,356	5,058
Tolal liabilities		14,533	15.835
Total equily and liabilities		20,180	20,587

• Comparallvrs have been adjusted due lo Ihc Dnallsation ofthe purchase price accounting ofthe Scottish & Newcastle acquisition (sec nott 6)

f

Consolidated statement of cash flows

For the year ended 31 December 2009

In millions of EUR	Note	2009	.'008
Operating activities
Profit		1,142	347
Adjustments for:
Amortisation, depreciation and impairments	11	1,083	1,206
Net interesl (income)/expenses	12	543	378
Gain on sale of property, planl & equipmenl, intangible
assets and subsidiaries, joint ventures and associates		(41)	(32)
Investment income and share of profit and impairmenis
of associates and joint ventures		(138)	108
Income lax expenses	13	286	248
Other non-cash items		1	74
Cash flow from operations before changes in working
capital and provisions		2,876	2,329
Change in inventories		202	(157)
Change in trade & other receivables		337	(184)
Change in trade and other payables		(319)	294
Total change in working capital		220	(47)
Change in provisions and employee benefits		(67)	(114)
Cash flow from operations		3,029	2,168
Interesl paid and received		(467)	(309)
Dividend received		62	52
Income taxes paid		(245)	(251)
Cash flow related to interest, dividend and income tax		(650)	(508)
Cash flow from operating activities		2,379	1,660

In millions ol EUR	Note	2009	2008
Investing activities
Proceeds from sale of property, plant & equipment
and intangible assets		180	93
Purchase of properly, plant & equipment	14	(678)	(1,102)
Purchase of intangible assets	15	(99)	(158)
Loans issued to customers and other investments		(117)	(163)
Repayment on loans to customers		76	220
Cash flow used in operational investing activities		(638)	(1.110)
free operating cashflow		1.741	550
Acquisition of subsidiaries and minority interests,
net of cash acquired		(84)	(3,580)
Acquisition of associales, joint venlures and other investments		(116)	(202)
Disposal of subsidiaries and minority interests.
net of cash disposed of	6	17	68
Disposal of associates, joint ventures and other investments		34	80
Cash flow used for acquisitions and disposals		(149)	(3.634)
Cash flow used in investing activities		(787)	(4,744)
Financing activities
Proceeds from loans and borrowings	25	2,052	6,361
Repayment of loans and borrowings		(3,411)	(2,532)
Dividends paid		(392)	(485)
Purchase own shares and shares issued		(13)	(11)
Other		(73)	(24)
Cash flow from/(used in) financing activities		(1.837)	3.309
Net cash flow		(245)	225
Cash and cash equivalents as at 1 January		604	309
Effect of movemenis in exchange rales		5	70
Cash and cash equivalents as at 31 December	21	364	604

— . 1 — 1 ; 1 • ••••-•• • 1 JXC-

Financial Statements I Consolidated statement of changes in equity

In millions of EUR	Note	capital	Share Translalion Hedging Fairvalue reserve	reserve	reserve	Other legal reserves	Reserve for own Retained		Equily attribulable to equity holders of Minority shares earnings the Company interests		Total equity
Balance as at i January 2008		784	7	44	99	571	(29)	3,928	5,404	307	5,711
Other comprehensive income	24		(602)	(166)	(ID	(44)	-	44	(779)	(44)	(823)
Profit			-			142	-	67	209	138	347
Total comprehensive income			(602)	(166)	(11)	98	-	111	(570)	94	(476)
Transfer to retained earnings			-		-	(74)		74	-
Dividends to shareholders			—	—	-	-	:	(363)	(363)		(511)
Purchase/rcissuance own/minority
shares			_	_		-	in)		(ID	(7)	(18)
Share-based paymenis			—	—	-			11	11		11
Changes in consolidation										35	35
Balance as at 31 December 2008		784	595	(122	88	595	(40)	3,761	4,471	281	4.752
Balance as al 1 January 2009		784	(595)	(122)	88	595	(40)	3,761	4,471	281	4,752
Other comprehensive income	24		144		12	6		(6)	154	(8)	146
Profit			-	(2) -		150	-	868	1,018	124	1,142
Total comprehensive income			144	(2)	12	156	-	862	1,172	116	1.288
Transfer to retained earnings			-	-	-	(75)		75
Dividends to shareholders			-	-	-	-	-	(289)	(289)	(96)	(385)
Purchase/reissuancc own/
minority shares				__	-	-	(2)	(11)	(13)	(2)	(15)
Share-based payments			—	—				10	10		10
Changes in consolidation										J3)
Balance as at 31 December 2009		784	(451)	(124)	100	676	(42)	4.408	5.351	296	5,647

Notes to the consolidated financial statements

i Reporting entity

Heineken N.V. (the "Company") is a company domiciled in the Netherlands. The address ofthe Company's regisiered office is Tweede Weteringplantsoen 21, Amsterdam. The consolidated financial statements ofthe Company as al and for the year ended 31 December 2009 comprise the Company, its subsidiaries (together referred to as 'Heineken' or the 'Group' and individually as 'Heineken' enlilies) and Heineken's interesls in joint ventures and associales.

A summary ofthe main subsidiaries, joint venlures and associales is included in note 36 and 16 respectively.

Heineken is primarily involved in brewing and selling of beer.

2. Basis of preparation

(a) Statement of compliance

The consolidated financial statemenls have been prepared in accordance with International Financial Reporting Slandards (IFRS) as endorsed by the EU and also comply wilh the financial reporting requirements Included in Part 9 of Book 2 ofthe Dutch Civil Code.

The Company presents a condensed income siatement, using the facility of Article 402 of Part 9, Book 2, ofthe Dutch Civil Code.

The consolidated financial statements have been prepared by the Executive Board ofthe Company and authorised for Issue on 22 February 2010 and will be submitted for adoption to the Annual General Meeting of Shareholders on 22 April 2010.

(b) Basis of measurement

The consolidaled financial stalements have been prepared on the historical cosl basis excepl for the following assets and liabilities that are measured at fair value:

• Available-for-sale investments
• Investments al fair value through profit and loss
• Derivative financial inslruments
• Liabilities for equity-settled share-based payment arrangements
• Long-term interest-bearing liabilities on which fair value hedge accounting is applied.

The methods used to measure fair values are discussed further in note 4.

(c) Functional and presentation currency

These consolidaled financial statemenls are presented in euro, which is the Company's functional currency. All financial information presented In euro has been rounded to the nearest million unless slated otherwise.

(d) Use of estimates and Judgements

The preparation of consolidated financial statements in conformity with IFRS requires management lo make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assels and liabilities, income and expenses. Aclual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting esiimates are recognised in the period in which the estimate is revised and in any future periods affected.

2. Basis of preparation mtinued

In parlicular, informalion aboul assumptions and estimation uncerlainlies and critical judgements in applying accounting policies lhat have the most significant effeel on the amounts recognised in the consolidaled financial statements are described in the following notes:

• Nole 6 Acquisitions and disposals of subsidiaries and minorily interesls
• Nole 15 Intangible assets
• Note 16 Investments in associales and joint ventures
• Nole 17 Olher investments
• Note 18 Deferred lax assets and liabiiilies
• Nole 28 Employee benefits
• Nole 29 Share based payments Long-Term Incentive Plan
• Note 30 Provisions
• Note 32 Financial risk managemenl and financial instruments
• Note 34 Contingencies.

3- Significant accounting policies

(a) General

The accounting policies set out below have been applied consistently lo all periods presented in these consolidaled financial statements and have been applied consistently by Heineken entities.

(b) Change in accounting policies

IAS 23 Borrowing costs

In respeci of borrowing costs relating to qualifying assets for which the commencement date forcapilalisation is on or after 1 January 2009, borrowing cosls that are direclly atlributable to the acquisilion, construction or production ofa qualifying asset, are capitalised as part ofthe cost of lhat assel. Previously all borrowing cosls were Immedialely recognised as an expense. This change in accounting policy was due lo the adoplion of IAS 23 Revised In accordance wilh the transitional provisions of that standard; comparative figures have not been restated. The change in accounting policy had no material impact on assets, profil or earnings per share for the year ended 31 December 2009.

Amendments to IAS i Presentation of inancial statements

The revised IAS 1 constitutes a change on the presentation ofthe consolidaled financial statements. The amendment introduces the siatement of changes in equity as primary siatement and introduces the term total comprehensive income, which represents changes in equity during a period other than those changes resulting from transaclions wilh owners. Heineken provides total comprehensive income in an income statement and a separate statement of comprehensive income and this has been applied in these consolidaled financial statemenls as of and for the year ended 31 December 2009. Comparative Information has been re presented in conformity with the revised slandard. Since the amendments to IAS 1 only impacts presentation aspects, there Is no impact on earnings per share.

Amendments to IFRS 7 Financial instruments - Disclosures

The amendment requires enhanced disclosures about fair value measuremeni and liquidity risk. In particular, the amendment requires disclosure of fair value measurements by level ofa fair value measurement hierarchy. This change in accounting policy only results in additional disclosures; there Is no impact on earnings per share.

Other standards and interpretations

Other standards and interpretations effeclive from 1 January 2009 did not have a significanl impact on the Company.

(c) Basis of consoHdation

(i) Subsidiaries

Subsidiaries are enlilies controlled by Heineken. Control exists when Heineken has the power, directly or indirectly, to govern the financial and operaling policies of an entiiy so as lo obtain benefits from its activities. In assessing control, polential voting rights lhat currenlly are exercisable or convertible are laken into accounl. The financial statements of subsidiaries are included in the consolidated financial stalements from the dale that control commences until the dale thai control ceases. Accounting policies have been changed where necessary lo ensure consistency wilh the policies adopted by Heineken.

(11) Special Purpose Entities (SPEs)

An SPE is consolidaled if, based on an evaluation ofthe substance ofits relationship with Heineken and the SPE's risks and rewards, Heineken concludes lhat il conlrols the SPE. SPEs controlled by Heineken were established under terms that Impose strict limitations on the decision making powers ofthe SPE's management and lhat resull in Heineken receiving the majority ofthe benefits related lo the SPE's operalions and net assets, being exposed to the majority of risks incident lo the SPE's activiiies, and retaining the majority ofthe residual or ownership risks related to the SPE or their assets.

(iii) Investments in associates

Investments in associales are those enlilies in which Heineken has significanl influence, but not control, over the financial and operating policies. Significant influence is presumed to exist when the Group holds between 20 and 50 per cent ofthe voting power of another enlily. The consolidaled financial slalemenis include Heineken's share ofthe Income and expenses and equity movemenis of equity-accounted associales, from the dale that significant influence commences unlil the dale that significanl influence ceases. When Heineken's share of losses exceeds the carrying amounl ofthe associate, the carrying amounl is reduced to nil and recognition of further losses Is discontinued excepl lo the extent lhat Heineken has an obligalion or has made a payment on behalf of the associate.

(iv) Joint ventures

Joint venlures are those enlilies over whose activities Heineken has joint control, established by contractual agreement and requiring unanimous consent for strategic financial and operaling decisions. The consolidaled financial statements include Heineken's share ofthe income and expenses and equity movemenis of equity accounted JVs, from the date that joint control commences until the date that joint control ceases. When Heineken's share of losses exceeds the carrying amount of the JV, the carrying amounl is reduced lo nil and recognition of further losses is discontinued excepl lo the extent that Heineken has an obligalion or has made a paymenl on behalf of the JV.

3. Significant accounting policies continued

(c) Basis of consolidation

(v) Transactions eliminated on consolidation

Intra-Heineken balances and transactions, and any unrealised gains and losses or income and expenses arising from intra-Heineken transactions, are eliminated in preparing the consolidaled financial statements. Unrealised gains arising from transaclions with equity accounted associales and JVs are eliminated against the investment to the extent ofthe Heineken's inlerest in the investee. Unrealised losses are eliminaled in the same way as unrealised gains, but only lo the extent lhat there is no evidence of impairmenl.

(d) Foreign currency

(i) Foreign currency transactions

Transactions in foreign currencies are Iranslated lo the respective functional currencies of Heineken entities at the exchange rates at the dales of ihe transaclions. Monetary assets and liabilities denominated In foreign currencies al the balance sheet date are retranslated to the functional currency al the exchange rate al lhat date. The foreign currency gain or loss arising on monetary items is the difference between amortised cosl in the functional currency at the beginning of the period, adjusled for effeclive inlerest and paymenis during ihe period, and Ihe amortised cosl in foreign currency translated at the exchange rale al the end ofthe reporting period.

Nonmonetary assets and liabiiilies denominated in foreign currencies that are measured at fair value are retranslated to the functional currency al the exchange rale al Ihe dale lhat ihe fair value was determined. Foreign currency differences arising on rciranslaiion are recognised in the income slalement, excepl for differences arising on the retranslation of available-for-sale (equity) investments and foreign currency differences arising on the retranslation ofa financial liability designaied as a hedge ofa net investment, which are recognised in olher comprehensive income.

Non-monetary assets and liabilities denominated in foreign currencies thai are measured at cost remain translated into the functional currency at historical exchange rates.

(ii) Foreign operations

The assets and liabiiilies of foreign operations, including goodwill and fair value adjuslmenls arising on consolidation, are translated to euro at exchange rates al ihe balance sheet date. The revenue and expenses of foreign operations are translated to euro at exchange rates approximating the exchange rates ruling al the dates ofthe Iransaetions.

Foreign currency differences are recognised in other comprehensive income and are presented within equily in the translation reserve. When a foreign operation is disposed of, in part or in full, the relevant amount in the translation reserve is transferred lo the income statement. Foreign exchange gains and losses arising from a monetary item receivable from or payable to a foreign operation, the settlement ofwhich is neither planned nor likely in the foreseeable fulure, are considered lo form pari ofa net inveslmenl in a foreign operaiion and are recognised in other comprehensive income, and are presented within equity in the translation reserve.

The following exchange rates, for mosl imporiant countries in which Heineken has operations, were used whilsi preparing these consolidaled financial statemenls:

		Year-end
InEUR	2009		2009	; 008
GBP	1.1260	1.0499	1.1224	1.2577
EGP	0.1273	0.1303	0.1292	0.1255
NGN	0.0047	0.0051	0.0048	0.0057
PLN	0.2436	0.2408	0.2311	0.2856
RUB	0.0232	0.0242	0.0227	0.0275
USD	0.6942	0.7185	0.7170	0.6832

(iii) Hedge of net investments in foreign operations

Foreign currency differences arising on the retranslation ofa financial liabilily designated as a hedge ofa net Inveslmenl in a foreign operation are recognised in other comprehensive income lo the exlenl lhat Ihe hedge is effeclive, and are presenled wiihin equity in ihe translation reserve. To the extent that the hedge is ineffective, such differences are recognised in the income statemenl. When the hedged part ofa net inveslmenl is disposed of, the relevant amount In the iranslation reserve Is transferred to the income statement as part ofthe prolil or loss on disposal.

(c) Non-derivative financial instruments

(i) General

Non-derivative financial instruments comprise Inveslmenls in equity and debl securities, trade and olher receivables, cash and cash equivalents, loans and borrowings, and trade and other payables. Non-derivative financial Inslruments are recognised initially al fair value plus, for inslruments not al fair value Ihrough profit or loss, any direclly attributable transaction costs. Subsequenl 10 Inllial recognition non-derivative financial Instruments are measured as described subsequently.

Cash and cash equivalents comprise cash balances and call deposiis. Bank overdrafts thai are repayable on demand and form an inlegral part of Heineken's cash management are included as a componenl of cash and cash equivalents for the purpose ofthe statement of cash flows.

Accounting policies for interesl income, interesl expenses and other net finance income and expenses are discussed in note 31.

3- Significant accounting policies

(e) Non-derivative financial instruments

(ii) Held-to-maturity investments

If Heineken has the positive intent and ability lo hold debt securities to maturity, Ihey are classified as hcld-tomalurily. Debt securilies are loans and long-term receivables and are measured at amortised cosl using the effeclive interesl melhod, less any impairmenl losses. Investments held lo-malurily are recognised or derecognised on the day Ihey are transferred lo or by Heineken.

(iii) Available-for-sale investments

Heineken's inveslmenls in equily securities and certain debl securilies are classified as available-for-sale. Subsequent lo initial recognition, they are measured at fair value and changes therein - other than impairment losses (see nole 3k(i)), and foreign currency differences on available-for sale moneiary Hems (see nole 3d(i)) are recognised in other comprehensive income and presented within equily in the fair value reserve. When these inveslmenls are derecognised, the relevant cumulative gain or loss in the fair value reserve is transferred to the income statement. Where these investments are interesl bearing, inlerest calculated using the effeclive inierest method is recognised in the income siatement. Available-for-sale Inveslmenls are recognised or derecognised by Heineken on the date il commils lo purchase or sell Ihe investments.

(iv) Investments at fair value through profit or loss

An inveslmenl is classified al fair value Ihrough profil or loss if il is held for trading or is designaied as such upon initial recognition. Investments are designated al fair value through profit or loss if Heineken manages such inveslmenls and makes purchase and sale decisions based on their fair value in accordance with Heineken's documented risk management or investment strategy. Upon initial recognition, attribulable transaclion cosls are recognised in the income statement when incurred.

Investments at fair value through profil or loss are measured al fair value, wilh changes therein recognised in the income slalement as part ofthe other net finance income or expenses. Investments al fair value through profil and loss are recognised or derecognised by Heineken on the date ll commits lo purchase or sell the inveslmenls.

(v) Other

Olher non-derivative financial instruments are measured al amortised cost using the effeclive interest method, less any impairmenl losses. Included in non-derivative financial instruments are advances to customers. Subsequently, the advances are amortised over the lerm ofthe contract as a reduction of revenue.

(f) Derivative financial instmments (induding hedge accounting) (1) General

Heineken uses derivatives in the ordinary course of business in order lo manage markel risks. Generally Heineken seeks to apply hedge accounting in order to minimise the effects of foreign currency fluctuations in Ihe income statemenl.

Derivatives that can be used are interest rate swaps, forward rale agreemenis, caps and floors, commodiiy swaps, spol and forward exchange coniracts and options. Transaclions are entered into with a limited number of counterparties wilh sirong credit ratings. Foreign currency; interest rate and commodiiy hedging operalions are governed by internal policies and rules approved and monitored by the Executive Board.

Derivative financial instruments are recognised initially at fairvalue, wilh attribulable transaclion cosls recognised in the income siaiemeni when incurred. Derivatives for which hedge accounting is not applied arc accounted for as instruments at fair value through profit or loss. When derivatives qualify for hedge accounting, subsequenl measuremeni is at fair value, and changes therein accounted for as described 3d(iii), 3f(ii) and 3f(iii).

The fair value ofinteresi rate swaps is the estimated amounl lhat Heineken would receive or pay lo terminate the swap al Ihe balance sheel date, taking Into account current interesl rales.

(ii) Cash flow hedges

Changes in the fair value ofthe derivative hedging instrument designated as a cash flow hedge are recognised in other comprehensive income and presented in the hedging reserve within equily to ihe exlenl lhai ihe hedge is effeclive. To Ihe extent thai the hedge is ineffective, changes in fair value are recognised in the Income siatemeni.

If the hedging instrument no longer meets the criteria for hedge accounting, expires or is sold, terminated or exercised, then hedge accounting is discontinued and the cumulative unrealised gain or loss previously recognised in olher comprehensive income and presented in the hedging reserve In equily, is recognised in the income staiement immediately, or when a hedging instrument is terminated, but the hedged Iransaction still is expected lo occur, the cumulative gain or loss at that point remains in other comprehensive income and is recognised in accordance with Ihe above-mentioned policy when the transaction occurs. When the hedged item is a non-financial assel, the amounl recognised in olher comprehensive income is transferred to the carrying amount ofthe assel when it is recognised. In other cases the amount recognised in olher comprehensive income is transferred lo the same line ofthe income siatement in the same period that the hedged ilem affects the income staiement.

(iii) Fair value hedges

Changes in the fair value ofa derlvaiive hedging instrumeni designated as a fair value hedge are recognised in the income statemenl. The hedged ilem also is staled al fair value in respect ofthe risk being hedged; Ihe gain or loss attributable to the hedged risk is recognised in the income statement and adjusts the carrying amount ofthe hedged ilem.

Ifthe hedge no longer meets the criteria for hedge accounting, the adjuslmenl to the carrying amount ofa hedged item for which the effective inlerest melhod is used is amortised lo the income statement over the period lo maturiiy.

3. Significant accounting policies :ontli

(f) Derivative financial instruments (including hedge accounting)

(iv) Separable embedded derivatives

Embedded derivatives are separaled from Ihc host contracl and accounted for separately if the economic characteristics and risks ofthe host conlract and the embedded derivative are not closely related, a separate instrument wilh the same lerms as Ihe embedded derivative would meel the definition of a derivative, and the combined inslrument is not measured al fair value Ihrough profil or loss. Changes in Ihe fair value of separable embedded derivalives are recognised immedialely in the income statement.

(g) Share capital

(i) Ordinary shares

Ordinary shares are classified as equily. Incremental cosls direclly altributable to the issue of ordinary shares are recognised as a deduction from equity, nel ofany lax effecls.

(ii) Repurchase of share capital (treasury shares)

When share capital recognised as equily is repurchased, the amount ofthe consideration paid, which includes direclly allribulable cosls, is net ofany lax effects, and is recognised as a deduction from equity. Repurchased shares are classified as treasury shares and are presenled in the reserve for own shares. When treasury shares are sold or reissued subsequently, the amounl received is recognised as an increase in equily, and Ihe resulling surplus or deficit on the transaclion is transferred to or from retained earnings.

(iii) Dividends

Dividends are recognised as a liabilily in Ihe period in which they are declared.

(h) Property, Plant and Equipment (P, P & E)

(i) Owned assets

Hems of properly, planl and equipmenl are measured al cosl less government grants received (refer (s)), accumulaled depreciation (refer (iv)) and accumulated impairmenl losses (3k(ii)).

Cost comprises the initial purchase price increased with expenditures that are direclly attributable lo the acquisition of Ihe assel (like transports and non-recoverable taxes). The cosl of self-conslrucled assets includes the cosl of materials and direct labour and any other costs directly atlributable lo bringing the assel to a working condilion for its Intended use (like an appropriate proportion of production overheads), and the cosls of dismantling and removing the items and restoring the site on which they are located. Borrowing cosls related lo the acquisilion or construction of qualifying assets are capitalised as part ofthe cost of that asset.

Spare parts thai are acquired as pari of an equipmenl purchase and only to be used In conneciion wilh this specific equipmenl are initially capiialised and amortised as part ofthe equipment.

Where an item of property, plant and equipmenl comprises major components having different useful lives, Ihey are accounted for as separate items of property, planl and equipmenl.

(il) Leased assets

Leases in terms ofwhich Heineken assumes substantially all the risks and rewards of ownership are classified as finance leases. Upon inllial recognition P, P & E acquired by way of inance lease is measured at an amounl equal lo Ihe lower of ils fair value and the presenl value of the minimum lease paymenis at inception ofthe lease. Lease payments are apportioned between the oulslanding liabilily and finance charges so as lo achieve a conslanl periodic rate ofinteresi on the remaining balance ofthe liabilily.

Olher leases are operaling leases and are nol recognised in Heineken's statemenl of inancial position. Payments made under operaling leases are charged lo Ihe income slalement on a slraight-line basis over the term ofthe lease. When an operating lease Is terminated before the lease period has expired, any payment required to be made lo Ihe lessor by way of penally is recognised as an expense in the period in which termination lakes place.

(iii) Subsequent expenditure

The cost of replacing a part of an ilem of properly, planl and equipmenl is recognised in Ihe carrying amounl of ihe ilem or recognised as a separale assel, as appropriate, if it is probable that the fulure economic benefits embodied wiihin the part will (low lo Heineken and ils cosl can be measured reliably. The carrying amounl of the replaced part is derecognised. The cosls ofthe day-to-day servicing of properly, planl and equipmenl are recognised in the income slalement when incurred.

(iv) Depreciation

Depreciation is calculated over the depreciable amounl, which is the cosl of an assel, or olher amount substituted for cosl, less its residual value.

Land is not depreciated as it is deemed lo have an infinile life. Depreciation on other P, P & E is charged to the income statemenl on a slraighl-line basis over the estimated useful lives of items of property, plant and equipment, and major components that are accounted for separately, since this mosl closely reflects Ihe expected pattern of consumption ofthe fulure economic benefits embodied in the asset. Assels under construction are not depreciated. The estimated useful lives are as follows:

Buildings	30 - 40 years
Plant and equipment	10 - 30 years
Other fixed assels	5-10 years.

Where parts of an Ilem of P, P & E have different useful lives, Ihey are accounted for as separate items of P, P & E.

The depreciation methods, residual value as well as the useful lives are reassessed, and adjusted if appropriate, al each financial year end.

(v) Gains and losses on sale

Nel gains on sale of items of P, P & E are presented in the income slalement as other income. Net losses on sale are Included in depreciation. Net gains and losses are recognised in the income statement when the significant risks and rewards of ownership have been transferred lo the buyer, recovery ofthe consideration is probable, the associated cosls can be estimated reliably, and there is no continuing managemenl involvement wilh Ihe P, P & E.

3. Significant accounting policies

(i) Intangible assets

(i) Goodwill

Goodwill arises on the acquisilion of subsidiaries, associates and joint ventures and represents the excess of Ihe cosl of Ihe acquisilion over Heineken's interesl in net fair value of Ihe net identifiable assels, liabiiilies and contingent liabilities ofthe acquiree.

Goodwill on acquisitions of subsidiaries is included in 'intangible assels'. Goodwill arising on the acquisilion of associales and joinl venlures is included in the carrying amounl ofthe associate, respectively the joint ventures.

In respeci of acquisitions prior to 1 October 2003, goodwill is included on Ihe basis of deemed cost, being the amounl recorded under previous GAAP. Goodwill on acquisitions purchased before 1 January 2003 has been deducted from equily.

Goodwill arising on the acquisilion ofa minorily interest in a subsidiary represents the excess ofthe cosl ofthe addilional inveslmenl over the carrying amount ofthe inlerest in the net assels acquired at the date of exchange.

Goodwill is measured al cosl less accumulaled impairmenl losses (referaccounting policy 3k(ii)). Goodwill is allocated to individual or groups of cash-generating unils for the purpose of impairmenl lesiing and is lested annually for Impairment.

Negative goodwill is recognised direclly in the income statement as olher income.

(ii) Brands

Brands acquired, separately or as part of a business combination, are capitalised if they meet the definition of an intangible assel and the recognition criteria are salisfied.

Brands acquired as part ofa business combination are valued at fair value based on the royally relief melhod. Brands acquired separately are measured al cosl.

Strategic brands are well-known international/local brands with a strong markel position and an esiablished brand name.

Strategic brands are amortised on an individual basis over the estimated useful life ofthe brand. Olher brands are amortised on a portfolio basis per country.

(iii) Customer-related and contract-based intangibles

Cuslomer-relaled and conlract-based intangibles are capitalised if they meet the definition of an intangible asset and the recognition criteria are satisfied. Ifthe amounts are not material these are included in the brand valuation. The relationship between brands and cuslomer related intangibles is carefully considered so lhat brands and customer-related intangibles are not bolh recognised on Ihe basis ofthe same cash flows.

Cuslomer-relaled and contract-based intangibles acquired as pari ofa business combinalion are valued al fair value. Cuslomer related and contract-based intangibles acquired separately are measured al cosl.

Customer-related and contract-based intangibles are amortised over the period ofthe contractual arrangements or the remaining useful life ofthe customer relationships.

(iv) Software, research and development and other intangible assets

Purchased sofiware is measured al cosl less accumulated amortisation (refer (vi)) and impairmenl losses (refer accounling policy 3k(ii)). Expenditure on internally developed software is capitalised when the expenditure qualifies as development activities, otherwise it is recognised in the income statement when incurred.

Expenditure on research activities, undertaken with the prospect of gaining new technical knowledge and understanding, is recognised in the income statement when incurred.

Development aclivilies involve a plan or design for the production of new or subslanllally improved products, software and processes. Developmenl expenditure is capiialised only if developmenl costs can be measured reliably, the producl or process Is technically and commercially feasible, fulure economic benefils are probable, and Heineken inlends lo and has sufficiënt resources to complete development and to use or sell the asset. The expenditure capiialised includes Ihe cosl of malerials, direcl labour and overhead cosls lhat are direclly allribulable to preparing the assel for ils intended use, and capitalised borrowing cosls. Olher development expenditure is recognised in the income statemenl when incurred.

Capitalised development expenditure is measured al cost less accumulated amortisalion (refer (vi)) and accumulated impairmenl losses (refer accounting policy 3k(ii)).

Olher intangible assels lhat are acquired by Heineken are measured al cost less accumulaled amortisation (refer (vi)) and impairmenl losses (refer accounling policy 3k(ii)). Expenditure on internally generated goodwill and brands is recognised in the income statement when incurred.

(v) Subsequent expenditure

Subsequent expenditure is capiialised only when il increases the fulure economic benefils embodied in the specific asset lo which it relates. All olher expenditure is expensed when incurred.

(vi) Amortisation

Amortisalion is calculated over the cosl ofthe asset, or other amounl substituted for cosl, less its residual value. Intangible assels wilh a finile life are amortised on a straight-line basis over their estimated useful lives from Ihe date they are available for use, since this most closely reflects the expecied pattern of consumption ofthe fulure economic benefils embodied in the asset. The estimated useful lives are as follows:

Strategic brands	40 - 50 years
Other brands	15 - 25 years
Customer-related and contract-based intangibles	5-30 years
Software	3 -5 years
Capiialised developmenl cosls	3 years.

(vii) Gains and losses on sale

Nel gains on sale of intangible assets are presenled in the income statement as olher income. Net losses on sale are included in amoriisalion. Nel gains and losses are recognised in Ihe income siatemeni when ihe significant risks and rewards of ownership have been iransferred lo the buyer, recovery ofthe consideration is probable, the associaied cosls can be estimated reliably, and there is no continuing managemenl involvement wilh the intangible assets.

3. Significant accounting policies

(J) Inventories

(i) General

Inventories are measured at the lower of cosl and net realisable value. The cosl of inventories is based on the weighted average cosl formula, and includes expenditure incurred in acquiring the inventories, production or conversion costs and other cosls incurred in bringing them lo their existing location and condilion. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.

(ii) Finished products and work in progress

Finished products and work in progress are measured al manufacturing cosl based on weighted averages and takes into accounl the production stage reached. Costs include an appropriate share of direct production overheads based on normal operating capacity.

(iii) Other inventories and spare parts

The cosl of olher inventories is based on weighted averages. Spare parls are valued al the lower of cosl and net realisable value. Value reductions and usage of parts are charged to the income statemenl. Spare parls that are acquired as part of an equipmenl purchase and only lo be used in conneciion with this specific equipment are initially capiialised and amortised as part ofthe equipment.

(k) Impairment

(i) Financial assets

A financial asset is assessed at each reponing dale lo determine whether Ihere is any objective evidence Ihal it is impaired. A financial assel is considered lo be impaired if objective evidence indicates lhat one or more events have had a negative effeel on the estimated fulure cash flows of that assel.

An impairmenl loss in respect ofa financial asset measured al amonised cost is calculated as the difference between ils carrying amount, and the presenl value ofthe estimated fulure cash flows discounted at the original effective interest rale. An impairment loss in respect of an available-for-sale financial asset is calculated by reference lo ils curreni fair value.

Individually significant financial assels are lested for impairment on an individual basis. The remaining financial assets are assessed collectively in groups that share similar credit risk characteristics.

All impairmenl losses are recognised in the income statement. Any cumulative loss in respeci of an availablefor sale financial assel recognised previously in other comprehensive income and presenled in the fair value reserve in equity is transferred to the income siatement.

An impairment loss is reversed ifthe reversal can be related objectively lo an event occurring afler Ihe impairmenl loss was recognised. For financial assets measured at amortised cost and available-for-sale financial assels that are debt securilies, the reversal is recognised in the income siatement. For available-forsale financial assets that are equily securities, the reversal is recognised in olher comprehensive Income.

(ii) Non-financial assets

The carrying amounis of Heineken's non-financial assels, olher lhan Inventories (refer accounting policy (j)) and deferred tax assets (refer accounling policy (u)), are reviewed al each reporting dale to determine whether there is any indication of impairmenl. If any such indication exists then ihe asset's recoverable amounl is estimaied. For goodwill and intangible assets that are not yet available for use, the recoverable amounl is estimated each year at the same lime.

The recoverable amount ofan asset or cash generating unil is the higher ofan asset's fair value less cosls lo sell and value In use. The recoverable amounl ofan assel or cash-generating unil is considered the value in use. In assessing value in use, the estimaied fulure cash flows are discounted lo their present value using a post tax discounl rate that reflects curreni markel assessments ofthe lime value of money and the risks specific lo the asset.

For the purpose of impairmenl testing, assets that cannol be tesled individually are grouped logelher inlo the smallest group of assets that generates cash inflows from continuing use that are largely independent ofthe cash inflows of other assets or groups of assets (the 'cash-generating unit').

For the purpose of impairmenl testing, goodwill acquired in a business combinalion, is allocated to each of the acquirer's cash-generating unils, or groups of cash generaling unils, lhat is expecied lo benefit from the synergies ofthe combinalion. Each unil or group of unils lo which the goodwill is allocated represents the lowest level wiihin the enlity at which the goodwill is monitored for internal managemenl purposes. Goodwill Is monitored on regional, subregional or counlry level depending on the characteristics ofthe acquisilion, the synergies lo be achieved and the level of integration.

An impairment loss is recognised ifthe carrying amounl ofan assel or ils cash-generating unit exceeds ils recoverable amount. A cash-generating unit is the smallesi identifiable asset group thai generates cash flows lhat largely are independent from other assels and groups, impairmenl losses are recognised in the income statement. Impairment losses recognised in respect of cash-generating unils are allocated firsl lo reduce the carrying amount ofany goodwill allocated lo the unils and then lo reduce Ihe carrying amounis ofthe olher assets in the unil (group of unils) on a pro rala basis. An impairmenl loss In respect of goodwill Is not reversed. In respect of olher assels, impairment losses recognised in prior periods are assessed al each reporting date for any indicalions that the loss has decreased or no longer exists. An impairmenl loss is reversed if there has been a change in the estimates used to determine ihe recoverable amounl. An impairment loss is reversed only to the extent that the asset's carrying amounl does not exceed the carrying amount that would have been determined, nel of depreciation or amortisation. If no impairmenl loss had been recognised.

Goodwill that forms part ofthe carrying amount ofan investmenl in an associate and joint venture is not recognised separately, and therefore is not tesled for impairmenl separately. Instead, the entire amounl ofthe investmenl in an associate and Joinl venture is lesied for impairment as a single asset when there is objective evidence that the investmenl in an associate may be impaired.

3 Significant accounting policies

(I) Non-current assets held for sale

Non-current assels (or disposal groups comprising assets and liabiiilies) that arc expected lo be recovered primarily through sale rather lhan ihrough continuing use are classified as held for sale. Immediately before classification as held for sale, the assets (or components ofa disposal group) are remeasured in accordance wilh Heineken's accounling policies. Thereafter the assets (or disposal group) are measured al Ihe lower of their carrying amount and fair value less cost lo sell. Any impairmenl loss on a disposal group is firsl allocated lo goodwill, and then to remaining assels and liabiiilies on pro rala basis, excepl that no loss is allocated to inventories, financial assels, deferred tax assels and employee benefit assets, which conlinue lo be measured in accordance with Heineken's accounling policies. Impairment losses on initial classification as held for sale and subsequent gains or losses on remeasurement are recognised in the income staiement. Gains are not recognised in excess ofany cumulative impairment loss.

(m) Employee benefits

(I) Defined contribution plans

A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separale enlily. The Group has no legal or constructive obligations to pay further contributions ifthe fund does not hold sufficiënt assets lo pay all employees Ihe benefils relaling to employee service in the current and prior periods.

Obligations for contributions lo defined contribution pension plans are recognised as an employee benefit expense in the income statement in the periods during which services are rendered by employees. Prepaid contributions are recognised as an asset lo the extent lhat a cash refund or a reduction in future payments is available.

(II) Defined benefit plans

A defined benefit plan is a pension plan that is not a defined contribution plan. Typically defined bcnefil plans define an amounl of pension benefit thai an employee will receive on reliremeni, usually dependent on one or more lactors such as age, years of service and compensation.

Heineken's net obligation in respect of defined benefit pension plans is calculated separately for each plan by estimating the amount of future benefit thai employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine ils present value. Any unrecognised pasi service cosls and the fair value ofany plan assels are deducted. The discounl rale is ihe yield ai balance sheel date on A A rated bonds that have maturity dales approximating the lerms of Heineken's obligations and lhat are denominated in the same currency in which the benefits are expected lo be paid.

The calculations are performed annually by qualified actuaries using the projected unil credit melhod. When the calculation results in a benefit lo Heineken, the recognised asset is limited to the net lotal ofany unrecognised actuarial gains and losses and any unrecognised past service cosls and the present value of economic benefits available in the form ofany future refunds from the plan or reductions in future contributions lo the plan. An economic benefit is available to the Group ifl l is realisable during the life ofthe plan, or on selllemenl ofthe plan liabiiilies.

When the benefils ofa plan are improved, the portion ofthe increased benefit relaling to past service by employees is recognised as an expense in the income statement on a straight-line basis over the average period unlil the benefils become vested. To the extent that the benefils vest immedialely, the expense is recognised immedialely In the income statemenl.

In respeci of actuarial gains and losses that arise, Heineken applies the corridor method in calculating the obligation in respect ofa plan. To the extent thai any cumulalive unrecognised actuarial gain or loss exceeds len per cent of the greater ofthe present value ofthe defined benefii obligalion and the fair value of plan assels, lhat poriion is recognised in the income statement over the expected average remaining working lives ofthe employees participating in the plan. Otherwise, the actuarial gain or loss is not recognised.

(iii) Other long-term employee benefits

Heineken's net obligalion in respect of long term employee benefits, other lhan pension plans, is the amounl of future benefit lhat employees have earned In return for their service in the curreni and prior periods; that benefit is discounted lo determine ils present value, and the fair value ofany related assels is deducted. The discount rale is the yield al balance sheel date on high-quality credit-rated bonds that have maturity dales approximating the terms of Heineken's obligations. The obligalion is calculated using the projected unil credit melhod. Any actuarial gains and losses are recognised in the Income statement in Ihe period in which they arise.

(iv) Termination benefits

Termination benefits are payable when employment is terminated by the Group before the normal retirement dale, or whenever an employee accepts voluntary redundancy in exchange for these benefils. Termination benefils are recognised as an expense when Heineken is demonstrably committed lo eilher terminating the employmenl of curreni employees according lo a detailed formal plan without possibility of withdrawal, or providing termination benefits as a resull ofan offer made lo encourage voluntary redundancy. Terminalion benefits for voluntary redundancies are recognised if Heineken has made an offer encouraging voluntary redundancy, it is probable lhat the offer will be accepted, and the number of acceptances can be estimaied reliably.

Benefits falling due more lhan 12 monlhs after the balance sheel dale are discounled lo Iheir presenl value.

3. Significant accounting policies

(m) Employee benefits

(v) Share-based payment plan (Long-Term Incentive Plan)

As from 1 January 2005 Heineken established a share plan for the Executive Board members and as from 1 January 2006 Heineken also established a share plan for senior management members (see note 29).

The granl dale fair value ofthe share righis granted is recognised as personnel expenses with a corresponding increase In equily (equity-settled), over the period that Ihe employees become unconditionally entitled to the share righis. The cosls ofthe share plan for bolh the Executive Board and senior managemenl members are spread evenly over the performance period.

At each balance sheet date, Heineken revises its estimates ofthe number of share righis thai are expecied to vest, only for the 75 per cent inlernal performance conditions ofthe share plan ofthe senior managemenl members. II recognises the impaci ofthe revision of original estimates, if any, in the income statemenl, with a corresponding adjuslmenl to equity. The fair value is measured at granl date using the Monte Carlo model taking into accounl the lerms and conditions ofthe plan.

(vi) Short-term employee benefits

Short term employee benefit obligations are measured on an undiscounted basis and are expensed as the relaied service is provided.

A liabilily is recognised for the amounl expecied to be paid under short term benefits if the Group has a presenl legal or constructive obligalion to pay this amounl as a result of past service provided by the employee and ihe obligalion can be estimaied reliably.

(n) Provisions

(i) General

A provision is recognised if, as a result ol' a past evenl, Heineken has a presenl legal or constructive obligalion that can be estimated reliably, and it is probable lhat an outflow of economic benefils will be required to settle the obligation. Provisions are measured al the presenl value ofthe expenditures lo be expecied lo be required to settle the obligation using a pre-tax rate that reflects current markel assessments ofthe time value of money and the risks specific lo the obligation. The increase in the provision due lo passage of time is recognised as part ofthe net finance expenses.

(ii) Restructuring

A provision for restructuring is recognised when Heineken has approved a detailed and formal restructuring plan, and the restructuring has either commenced or has been announced publicly. Future operaling losses arc not provided for. The provision includes the benefit commitments in conneciion with early retirement and redundancy schemes.

(iii) Onerous contracts

A provision for onerous conlracis is recognised when the expected benefits lo be derived by Heineken from a conlract are lower than the unavoidable cost of meeling Us obligations under the contract. The provision is measured al ihe present value ofthe lower ofthe expecied cosl of terminating the contract and the expected net cost of continuing wilh the conlract. Before a provision is established, Heineken recognises any impairmenl loss on the assels associated wilh that conlract.

(o) Loans and borrowings

Loans and borrowings are recognised initially al fair value, net of transaclion cosls incurred. Loans and borrowings are subsequently slated at amonised cost; any difference between the proceeds (nel of transaction cosis) and the redemption value is recognised in the income statement over the period ofthe borrowings using the effeclive interest melhod. Loans and borrowings included in a fair value hedge are slated al fair value In respect ofthe risk being hedged.

Loans and borrowings for which the Group has an unconditional righl to defer settlement ofthe liabilily for al leasi 12 months after the balance sheet date, are classified as non-currenl liabiiilies.

(p) Revenue

(i) Products sold

Revenue from the sale of products in the ordinary course of business is measured at the fair value ofthe consideralion received or receivable, net of sales lax, excise duties, relurns, cuslomer discounts and other sales-related discounts. Revenue from the sale of products is recognised in the income siatement when the amount of revenue can be measured reliably, the significanl risks and rewards of ownership have been transferred to the buyer, recovery of the consideration Is probable, the associaied cosls and possible relurn of produels can be estimaied reliably, and there is no continuing managemenl involvement with the products.

(ii) Other revenue

Olher revenues are proceeds from royallics, renlal income, pub management services and technical services to third parlies, net of sales tax. Royalties are recognised in the income statement on an accrual basis in accordance wilh Ihe substance ofthe relevant agreement. Renlal income and technical services are recognised in the income slalement when the services have been delivered.

(q) Other income

Other income are gains from sale of P, P & E, intangible assels and (interests in) subsidiaries, joinl venlures and associales, net of sales tax. They are recognised in the income slalement when ownership has been iransferred to the buyer.

3 Significant accounting policies

(r) Expenses

(i) Operating lease payments

Paymenis made under operating leases are recognised in the income slalement on a straight line basis over the term ofthe lease. Lease incentives received are recognised in the income statement as an inlegral part ofthe total lease expense, over the term ofthe lease.

(ii) Finance lease payments

Minimum lease payments under finance leases are apportioned between the finance expense and the reduction ofthe outstanding liabilily. The finance expense is allocated to each period during the lease lerm so as lo produce a constant periodic rate ofinteresi on the remaining balance ofthe liabilily. Conlingenl lease paymenis are accounted for by revising the minimum lease paymenis over the remaining lerm ofthe lease when the lease adjuslment is confirmed.

(s) Government grants

Governmenl grants are recognised at their fair value when il is reasonably assured thai Heineken will comply wilh the conditions attaching to them and the grants will be received.

Government grants relaling to P, P & E are deducted from the carrying amount ofthe assel.

Government grants relaling lo costs are deferred and recognised in the income statement over the period necessary lo match Ihem wilh the cosls thai they are intended to compensate.

(t) Interest income, interest expenses and other net finance income and expenses

Interest income and expenses are recognised as they accrue, using the effective interest method unless collectability is in doubt.

Olher net finance income comprises dividend income, gains on the disposal of available for-sale inveslmenls, changes in the fair value of inveslmenls designaied at fair value Ihrough profil or loss and held for trading inveslmenls and gains and losses on hedging insirumenis lhat are recognised in ihe income slalement. Dividend income is recognised in the income siaiemeni on Ihe date lhat Heineken's righl lo receive paymenl is established, which in the case of quoted securilies is the ex dividend date.

Olher net finance expenses comprise unwinding ofthe discounl on provisions, changes in the fair value of inveslmenls designaied at fair value through profit or loss and held for trading inveslmenls, impairment losses recognised on inveslmenls, and gains or losses on hedging instruments that are recognised in the income staiement.

Foreign currency gains and losses are reported on a net basis in the other net finance expenses.

(u) Income tax

Income lax comprises curreni and deferred tax. Curreni tax and deferred lax are recognised in the income statement except to the extent thai il relates to items recognised direclly to equity, in which case il is recognised in equily or in olher comprehensive income.

Current lax is the expecied income lax payable or receivable in respect of laxable profil or loss for Ihe year, using lax rales enacted or subslanllally enacted al the balance sheel dale, and any adjuslmenl to income tax payable in respect of profils of previous years.

Deferred lax is recognised in respect of temporary differences between the carrying amounis of assels and liabllllies for financial reporting purposes and their tax bases.

Deferred tax assets and liabiiilies are not recognised for the following temporary differences: (i) the initial recognition of goodwill, (ii) the initial recognilion of assels or liabiiilies in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss, (iii) differences relaling lo investments in subsidiaries, joint ventures and associates resulling from Iranslallon of foreign operalions and (iv) differences relaling lo Inveslmenls in subsidiaries and joint ventures to the exlenl lhat the Company is able lo control the timing ofthe reversal ofthe temporary difference and they will probably not reverse in the foreseeable future.

Deferred lax is determined using tax rates (and laws) lhat have been enacted or substantially enacted by the balance sheet dale and are expecied lo apply when the related deferred tax asset is realised or the deferred tax liability is settled.

Deferred tax assels and liabilities are offset if there is a legally enforceable right lo offsel curreni tax liabiiilies and assels, and they relale lo Income laxes levied by the same lax authoriiy on the same laxable enlily, or on different taxable enlilies which intend either to settle current lax liabilities and assets on a net basis, or to realise the assels and settle Ihe liabiiilies simultaneously.

A deferred tax asset is recognised for unused lax losses, tax credits and deductible temporary differences, to the extent that it is probable Ihal fulure laxable profils will be available against which they can be utilised. Deferred tax assets are reviewed al each balance sheet dale and are reduced to the extent lhat il is no longer probable Ihal the related tax benefit will be realised.

Deferred lax assels are recognised in respect of the carry forward of unused tax losses and lax credits. When an enlily has a history of recenl losses, the enlily recognises a deferred lax asset arising from unused lax losses or tax credits only lo the exlenl thai ihe entiiy has sufficiënt taxable temporary differences or ihere is convincing olher evidence Ihal sufficieni laxable profil will be available againsl which the unused lax losses or unused lax credits can be utilised by the enttty.

3 Significant accounting policies

(v) Earnings per share

Heineken presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the profil or loss attribulable to ordinary shareholders ofthe Company by the weighted average number of ordinary shares outstanding during the period. Diluted EPS is determined by adjusting the profit or I oss attributable to ordinary shareholders and the weighted average number of ordinary shares oulslanding for the effecls of all dilutive poteniial ordinary shares, which comprise share righis granled to employees.

(w) Cash flow statement

The cash flow statemenl is prepared using the indirect melhod. Changes in balance sheel items that have not resulted in cash flows such as translalion differences, fair value changes, equity-settled share-based paymenis and olher non-cash items, have been eliminaled for the purpose of preparing this statemenl. Assets and liabilities acquired as part ofa business combinalion are included in investing activities (net of cash acquired). Dividends paid lo ordinary shareholders are included in financing aclivilies. Dividends received are classified as operating aciivities. Inleresi paid is also included in operaling activiiies.

(x) Operating segments

Operating segments are reported in a manner consistent with the internal reporting provided to the Executive Board, who is considered to be the Group's chief operaling decision maker. An operaling segmenl is a componenl of Heineken that engages in business aciivities from which il may earn revenues and incur expenses, including revenues and expenses lhat relate lo transactions with any of Heineken's olher components. All operaling segments' operaling results are reviewed regularly by the Executive Board to make decisions about resources lo be allocated lo the segment and lo assess ils performance, and for which discrete financial informalion is available.

Intersegment transfers or transactions are entered inlo under ihe normal commercial terms and conditions that would also be available to unrelated third parlies.

Segment results, assels and liabilities that are reported lo the Executive Board include items directly attributable lo a segmenl as well as those that can be allocated on a reasonable basis. Unallocated resull items comprise net finance expenses and income lax expenses. Unallocated assels comprise current other investments and cash call deposits.

Segment capital expenditure is the total cosl incurred during the period to acquire properly, plant and equipmenl, and intangible assels other lhan goodwill.

(y) Emission rights

Emission righis are related to the emission of CO2, which relates lo the production of energy. These righis are freely tradable. Bought emission rights and liabilities due lo production of CO., are measured at cost, including any directly attributable expenditure. Emission rights received for free are also recorded al cost, i.e. with a zero value.

(z) Recently issued IFRS

• (i) Standards effective in 2009 and reflected in these consolidated financial statements
• IAS 23 Revised Borrowing cosls (effective from 1 January 2009). This amendment requires an entity to capitalise borrowing cosls directly allribulable lo the acquisition, construclion or production of a qualifying asset (one that takes a substantial period of time to gel ready for use or sale) as part ofthe cosl of that assel. The option of immedialely expensing those borrowing cosls is removed. IAS 23 revised conslilules a change in accounling policy for Heineken, refer lo 3b.
• IAS 1 Revised Presentation of Financial Statements (effeclive from 1 January 2009). The amendment introduces the lerm total comprehensive income, which represents changes in equily during a period other than those changes resulling from transaclions with owners. The revised IAS 1 conslilules a change on the presentation of Ihe consolidated financial slalemenis (refer lo 3b). Heineken provides lotal comprehensive income in an income statement and a separate statemenl of comprehensive Income.
• IFRS 7 Financial Instruments Disclosures (amendment, effeclive 1 January 2009). The amendment requires enhanced disclosures aboul fair value measurement and liquidity risk. In particular, the amendment requires disclosure of fair value measurements by level ofa fair value measurement hierarchy. This change in accounling policy only results in addilional disclosures (refer 3b).
• IFRS 8 Operaling segments (effeclive from 1 January 2009). IFRS 8 replaces IAS 14 and aligns segment reporting wilh the requirements ofthe US standard SFAS 131, 'Disclosures about segments ofan enterprise and related information'. The new standard requires a 'management approach', under which segment information is presenled on the same basis as lhat used for inlernal reporting purposes. Based on the curreni internal reporting, this standard does not have an impact on the reportable segments and as such, does nol represent a change in accounling policies.
• Olher slandards: other standards and inlerprelallons effeclive from 1 January 2009 did not have a significant impact on the Company.

(ii) New relevant standards and interpretations not yet adopted

The following new slandards and interpretations to existing slandards relevant lo Heineken arc not yet effeclive for the year ended 31 December 2009, and have not been applied in preparing these consolidaled financial stalements:

• IFRS 3 Revised Business combinations (effective from 1 July 2009). This standard continues lo apply the acquisition method to business combinations, with some significanl changes. For example, all paymenis to purchase a business are to be recorded al fair value al the acquisition date, with conlingenl payments classified as debl subsequently re measured through the income statement. There is a choice on an acquisillon-by-acquisillon basis lo measure the non-controlling interest in the acquiree either al fair value or al the non-controlling interest's proportionate share ofthe acquiree's net assels. All acquisilion relaied costs should be expensed. Furthermore, lax losses from previous acquisitions and recognised subsequent lo the Implemenlalion of IFRS 3R will be recognised through the income statements instead as adjuslmenl lo goodwill. Heineken will apply IFRS 3R prospectively to all business combinations from 1 January 2010 and will have an impact on the consolidated financial stalemenls as from then.
• IAS 27 (Amended) Consolidaled and Separate Financial Statements (effective from 1 July 2009) requires accounling for changes in ownership interesls by the Group in a subsidiary, while maintaining control, to be recognised as an equily transaction. When Ihe Group loses control ofa subsidiary, any interesl retained in the former subsidiary will be measured at fair value wilh the gain or loss recognised in the income staiement. Heineken will apply this standard prospectively as from 1 January 2010 and will have an impact on the consolidaled financial slalemenis as from Ihen.
• IFRS 9 Financial Inslruments is part ofthe lASB's wider project to replace IAS 39 'Financial Inslruments: Recognition and Measurement'. IFRS 9 retains bul simplifies the mixed measurement model and establishes two primary measuremeni categories for financial assets, amortised cost and fair value. The basis of classification depends on the entity's business model and the contractual cash flow characteristics ofthe financial assel. The slandard is effeclive for annual periods beginning on or after 1 January 2013, but has not yet been endorsed by the EU. Heineken is in the process of evaluating the impaci ofthe applicability ofthe new slandard.

4. Determination of fair values

(i) General

A number of Heineken's accounling policies and disclosures require the determination of fair value, for bolh financial and non-financial assels and liabiiilies. Fair values have been determined for measuremeni and/or disclosure purposes based on the following methods. When applicable, further informalion aboul the assumptions made in determining fair values or for the purpose of impairment lesiing is disclosed in the noles specific lo that assel or liabilily.

(ii) Property, plant and equipment

The fair value of properly, planl and equipmenl recognised as a result ofa business combinalion is based on the quoted market prices for similar Items when available and replacement cosl when appropriate.

(iii) Intangible assets

The fair value of brands acquired in a business combination is based on the 'relief of royalty' melhod. The Pair value of cuslomer relationships acquired in a business combination is determined using the multi-period excess earnings melhod, whereby the subjeci asset is valued after deducting a fair return on all other assets thai are part of creating ihe relaied cash flows. The fair value of olher iniangible assels is based on the discounted cash flows expecied to be derived from the use and eventual sale ofthe assets.

(iv) Inventories

The fair value of inventories acquired in a business combinalion is determined based on its estimated selling price in the ordinary course ofbusiness less the estimaied costs of completion and sale, and a reasonable profil margin based on the effort required to complele and sell the inventories.

(v) Investments in equity and debt securities

The fair value of financial assets at fair value ihrough profil or loss, held-lo-maturily inveslmenls and availablefor sale financial assels is determined by reference to iheir quoted closing bid price at the reporting date. The fair value of held-to-maturity inveslmenls is determined for disclosure purposes only. In case the quoted price does not exist at the dale of exchange or in case the quoted price exists al the dale of exchange but was not used as the cosl, the investments are valued Indirectly based on discounled cash flow models.

(vi) Trade and other receivables

The fair value of trade and other receivables Is estimated as the present value of future cash flows, discounted al the market rate ofinteresi at the reporting dale. This fair value is determined for disclosure purposes.

(vii) Derivative financial instruments

The fair value of forward exchange contracts is based on their listed markel price, if available. If a listed markel price is not available, then fair value is in general estimated by discounting the difference between the contractual forward price and the curreni forward price for the residual maturity ofthe contract using a risk free inlerest rate (based on inter-bank inlerest rates). The fair value of interest rale swaps is estimaied by discounting the difference between cash flows resulting from the contractual interesl rates of bolh legs ofthe transaction, taking inlo accounl current interest rales and the curreni creditworthiness of the swap counterparties.

Fair values reflect the credit risk ofthe instrument and include adjustments lo take account ofthe credit risk ofthe Group enlily and counterparty when appropriate.

(viii) Non-derivative financial inslruments

Fair value, which is determined for disclosure purposes or when fair value hedge accounting Is applied, is calculated based on the presenl value of future principal and inlerest cash flows, discounled al the market rale ofinteresi al the reporting dale. For finance leases Ihe market rate ofinteresi is determined by reference to similar lease agreemenis.

5. Operating segments

Heineken distinguishes the following six reportable segments:

• Western Europe
• Central and Eastern Europe
• The Americas
• Africa and the Middle East
• Asia Pacific
• Head Office/eliminations.

These six reportable segments are the Group's business regions. These business regions are each managed separately by a regional president. The regional president is directly accountable for the functioning ofthe segment's assets, liabiiilies and results ofthe region and maintains regular conlacl wilh the Executive Board (the chief operaling decision maker) to discuss operaling aclivilies, regional forecasts and regional results. For each ofthe six reportable segments, the Executive Board reviews internal managemenl reports on a monthly basis.

Informalion regarding the results of each reportable segment is included in the table on the nexl page. Performance is measured based on EBIT (beia), as included in the internal management reports that are reviewed by the Executive Board. EBIT (beia) is defined as earnings before interesl and laxes and nel finance expenses, before exceplional items and amortisalion of brands and cuslomer relationships. Exceplional Items are defined as Items ofincome and expense of such size, nature or incidence, that in view of management their disclosure Is relevant lo explain the performance of Heineken for the period. EBIT and EBIT (beia) are not financial measures calculated in accordance with IFRS. F.BIT (beia) is used lo measure performance as managemenl believes that this measurement is the mosl reievanl in evaluating the results ofthese regions.

Heineken has multiple distribution models lo deliver goods to end customers. There is no reliance on major clients. Deliveries to end consumers arc carried in some countries via own wholesalers or own pubs, in other markels direclly and in some olhers via third parlies. As such, distribution models are country specific and on consolidated level diverse. In addition, these various distribution models are not centrally managed or monitored. Consequently, the Executive Board is not allocating resources and assessing the performance based on business type informalion and therefore no segment informalion is provided on business type.

Intersegment pricing is determined on an arm's length basis. As net finance expenses and income tax expenses are monitored on a consolidated level (and not on an individual regional basis) and regional presidents are not accountable for that, net finance expenses and income lax expenses are not provided per reportable segmenl.

5. Operating segments Information about reportable segments

		Western Europe			Central and Eastern Europe
In millions ol EUR	Note	2009	2008	2009	2008	2009	the Americas 2008
Revenue
Third-party revenue'		7,775	6,979	3,183	3,671	1,540	1.566
Interregional revenue		657	682	17	16	1
Total revenue		8,432	7,661	3.200	3,687	1,541	1.566
Other income		28	16	11	5		1
Results from operating activities		504	505	329	98 98	204	163
Net finance expenses
Share of profit of associates and joint ventures
and impairments thereof		(2)	4	18	13	69	43
Income tax expenses
Profit
Altributable to:
Equity holders of the Company (net profit)
Minority interest
EBIT reconciliation
EBIT		502	509	347	111	273	206
eia		290	266	42	289		4
EBIT (beia)	27	792	775	389	400	273	210
Beer volumes'
Consolidated volume		47,151	44,245	46,165	50,527	9,430	10,329
Joint venlures volume				8,909	10,775	8,988	8,803
Licences		243	345			339	255
Group volume		47,394	44,590	55,074	hi. 302	18,757	19. 187
Segmenl assets		11.047	11,143'	4.826	5.066	834	1,058
Investment in associates and joint venlures		26	29	143	123	565	450
Total segment assets		11.073	11,172	4,969	5.189	1,399	1,508
Unallocated assets
Total assets
Segmenl liabilities		3,355	3,635	1,153	1,128	123	107
Unallocated liabilities
Total equity
Tolal equily and liabilities
Purchase of P, P & E		291	447	216	335	13	19
Acquisition of goodwill		16	3,395'	-	232	5	303
Purchases of intangible assets		31	10	20	18	1	108
Depreciation of P, P & E		401	365	244	259	15	17
Impairment and reversal of impairment of P, P & E		108	79	51	(1)		-
Amortisalion intangible assets		89	70	21	20	12	13

1 Includes olhcr rewnur nfHiK i:!2 million In 2009 and EUR360 million In 2008,

Fbr volume definitions see 'Glossary'. Jolm venture volume excludes India volumes.

isted due to the finaiisation nil he purchase price accounting of rhc Scoitish S Newcastle acquisition (siv n •

21

-

4

275

-

Impairment intangible assets

		Africa and the Middle East		Asia Pacilic		Head Office/ Eliminations		Consolidated
	2009	2008	2009	2008	2009	2008	2009	2008
1
	1,807	1,764	301	279	95	60	14,701	14,319
	10	10	4	-	(689)	(708)		-
	1,817	1,774	305	279	(594)	(648)	14.701	14,319
		10					41	32
	470	442	72	46	51	(72)	1,630	1,182
							(329)	(485)
	15	20	31	(182)	(4)		127	(102)
							(286)	(248)
							1,142	347
							1,018	209
							'24	138
							1,142	347
	485	462	103	(136)	47	(72)	1.757	1,080
		1	-	201	6	91	338	852
	485	463	103	65	S3	19	2.095	1,932
	19,820	18,076	2,681	2,644			- 125.247 125.821
	2,228	2,186	10,897	11,039		-	31,022 32,803
	1,413	1,316	805	949			2.800	2,865
	23,461	21,578	14,383	14,632	-	-	159,069	161.489
	1,673	1,716	185	171	(414)	(241)	18.151	18,913'
	226	164	472	379	(5)		1,427	1,145
	1,899	1,880	657	550	(419)	(241)	19.578	20.058
							602	529'
							20,180	20,587
		640	107	70	571	203	5.775	5.783
	466						8,758
							5,647	10,052' 4,752
							20,180	20,587
	139	251	10	10	9	40	678	1,102
	13	149			-	-	34	158
	1				46	18	99	741
	84	79 2	10		14	14 4	768	84
	2 2	1			2 3	2	163 127	4,079' 106 275

6. Acquisitions and disposals of subsidiaries and minority interests Acquisitions and disposals 2009

During 2009, four minor acquisitions occurred wiihin the UK, Nigeria and Egypt. Tolal goodwill on these acquisitions amounts lo EUR34 million. These acquisitions individually are deemed immaterial in respect of IFRS disclosure requirements.

Disposals during 2009 are related lo a few minor disposals In Western Europe.

Total acquisitions and disposals had the following effeel on Heineken's assels and liabiiilies on acquisition dale:

In millions of EUR	Note	Pre acquisition carrying amounts	Fair value adjustments	Total acquisitions	Total disposals
Properly, plant & equipment	14	123	9	132	(27)
Intangible assets	15	36	—	36
Investments in associates and joint ventures				1	(2)
Inventories			-	1	-
Trade and other receivables			-	1	8
Prepayments and accrued income			-	1	-
Cash and cash equivalents			-	1	(1)
Minorily interests		3	-	3	-
Loans and borrowings		(91)	-	(91)	-
Employee benefils		-	ID	(1)	1
Deferred tax liabilities	18	-	(6)	(6)	-
Provisions	30	-	(1)	(1)	-
Bank overdrafts		(1)	-	(1)	-
Current liabiiilies		(19)	(7)	(26)	3
Net identifiable assets and liabilities		56	(6)	50	(18)
Goodwill on acquisitions	15			34
Consideration paid/(received), salisfied in cash				84	(18)
Net bank overdrafts acquired/Net bank
overdrafts disposed of					1
Net cash outflow/(inflow)				84	(171

The fair values of assets and liabilities ofthe 2009 acquisitions have been determined ona provisional basis, and will be completed in 2010.

The newly acquired entity in the UK has been fully integrated in the Western European region. Goodwill on this acquisilion has been allocated to the Western European region for the purpose of impairment testing in line with the operational responsibility.

In respect ofthe newly acquired enlity in Egypt and Nigeria, the goodwill has been allocated lo the individual country. Although synergies are achieved on a regional basis these enlilies are less integrated in the region and therefore goodwill is monitored on an individual country basis.

The contribution in 2009 ofthe acquisitions lo results from operating activiiies and to revenue was immaterial. Ifthe acquisitions had occurred on 1 January 2009, management estimates lhat consolidated results from operating aciivities and consolidated revenue would nol have been materially differenl.

Provisional accounting Scottish & Newcastle ('S&N') acquisition in 2008

In the consolidaled financial statemenls as al and for the year ended 2008, the fair values of assels and liabilities ofthe acquisition of Scottish & Newcastle ('S&N') were determined on a provisional basis.

The purchase price adjustments of S&N have been finalised (excepl for agreement on the settlement ofthe net debl of S&N wilh the consortium partner Carisberg, see nole 34 Contingencies) wilh some changes compared lo the provisional values. The main change concerns an increase in the deferred lax assels of EUR 103 million and an increase of Ihe deferred lax liabilities of EUR24 million, wilh a corresponding net decrease in goodwill of EUR79 million due to the fact that S&N received certainty that part ofthe pre-acquisition losses will be available for ulilisalion in the future, which can be offsel against deferred lax liabilities already included in the opening balance. The comparatives in the siatemeni of financial position and the related notes (note 15 and 18) have been adjusted in accordance wilh IFRS 3.

Provisional accounting other acquisitions in 2008

For Ihe olher acquislllons in 2008 (Rechilsapivo, Drinks Union, Central Europe Beverages, Uniled Serbian Breweries, Bere Mures, Sierra Leone, Tango and SNBG), Ihe purchase price adjustments have been finalised wiihoui significant changes.

7. Assets (or disposal groups) classified as held for sale

On 7 December 2009 Heineken signed agreements to sell its entire shareholding in Grande Brasserie de Nouvelle Caledonie S.A. (GBNC) and a significanl part of Ils shareholding in P.T. Mulli Binlang Indonesia Tbk (MBI) lo Asia Pacific Breweries Lld (APB) as part of Heineken's strategic realignment ofits interest in the Asia Pacific region. Heineken's interest in the Binlang brand will also be transferred lo APB. The transaction was completed on 10 February 2010. These subsidiaries have been deconsolidated and are classified as a disposal group held for sale as al 31 December 2009.

Other assels classified as held for sale represent land and buildings following the commitment of Heineken to a plan to sell certain land and buildings. During 2009, part ofthe assels classified as held for sale were sold. Efforts to sell the remaining assels have commenced and are expected lo be completed during 2010.

Assets classified as held for sale

In millions of EUR	2009	^008
Current assels	39	56
Non-current assets	70	-
	109	56
In millions of EUR	2009	2008
Current liabiiilies	57
Non-current liabilities	8	-
	65	-

8. Other income

2008
32
32
2009 39 2 41

9- Raw materials, consumables and services

In millions of EUR	2009	2008
Raw materials	1,140	1,230
Non-returnable packaging	1,739	1,782
Goods for resale	2,253	2,158
Inveniory movements	(5)	(154)
Marketing and selling expenses	1,664	1,671
Transport expenses	934	988
Energy and water	319	349
Repair and maintenance	299	295
Loss on disposals of subsidiaries		16
Olher expenses	1,307	1,213
	9.650	9,548

Other expenses include rentals of EUR 184 million, consultant expenses of EUR158 million, telecom and office automation of EUR 145 million and other fixed expenses of EUR820 million.

io. Personnel expenses

In millions of EUR	Note	2009	2008
Wages and salaries		1,554	1,519
Compulsory social security contributions		287	279
Contributions to defined contribution plans		17	10
Expenses related to defined benefit plans	28	107	78
Increase in other long-term employee benefits
Equity-settled share-based payment plan	29	10	11
Other personnel expenses		397	515
		2,379	2,415

The decrease In other personnel expenses is mainly due to lower amounis paid for restructurings compared lo 2008.

The average number of employees during the year was:

In millions of EUR	2009	2008*
The Netherlands	3,938	4,176
Other Western Europe	17,557	18,598
Central and Eastern Europe	20,253	22,186
The Americas	1,698	1,778
Africa and the Middle East	10,882	10,719
Asia Pacific	973	996
Heineken N.V. and subsidiaries	55,301	58,453

• Due to a change i: ihe 2008 figures have been udjusled.

11. Amortisation, depreciation and impairments

In millions of EUR	Note	2009	2008
Property, plant & equipment		931	825
Intangible assets		152	381
		1,083	1,206

12. Net finance expenses Recognised in the income statement

In millions ot EUR	2009	2008
Interest income on unimpaired loans and held-lo-malurily investments	8	7
Interesl income on available-for-sale investments	1	1
Interest income on cash and cash equivalents	81	83
Interest income	90	91
Interest expenses	(633)	(469)
Dividend income on available-for-sale investments	1	9
Dividend income on investments held for trading	10
Net gain/(loss) on disposal of available-for-sale investments	12	(1)
Net loss on disposal of investments held for trading		(1)
Net change in fair value of derivatives	(7)	(55)
Net foreign exchange loss	(47)	(45)
Impairment losses on hcld-to-maturily inveslmenls		(1)
Unwinding discounl on provisions	(3)	(ID
Olher net financial income/(expenses)	248	(2)
Other net finance income/(expenses)	214	(107)
Net finance expenses	1329)	(485)

Recognised in other comprehensive income

In millions of EUR	2009	2008
Foreign currency translalion differences for foreign operations	112	(645)
Effective portion of changes in fair value of cash flow hedges	(90)	(105)
Effective portion of cash flow hedges transferred to the income siatement	88	(59)
Net change in fair value of available-for-sale investments	26	(12)
Net change in fair value available-for-sale investments transferred to the
income statemenl	(12)	1
Share of other comprehensive income of associates/joint ventures	22	(3)
	146	(823)
Recognised in:
Fair value reserve	12	(ID
Hedging reserve	(2)	(167)
Translalion reserve	136	(64_5)
	146	J8231

In the olher net finance expenses a total (nel) book gain of EUR248 million on Ihe purchase of Globe debl (Scoitish & Newcastle Pub Enterprises) is included. Please refer to nole 25 for a full overview ofthe effects ofthe repurchase of Globe debt.

The Increase ofthe impact of foreign currency translation differences for foreign operalions in olher comprehensive income is mainly due lo the Impaci of revaluation ofthe Brilish pound on the net assels and goodwill measured in Brilish pounds of total EUR 145 million. Remaining impact is related to devaluation ofthe Russian rouble, Belarussian rouble, Nigerian naira and US dollar, parlly offsel by the appreciation of the Chilean peso.

13- Income tax expense Recognised In the income statement

In millions of EUR	2009	2008
Current tax expense
Current year	360	352
Undercover) provided in prior years	8	(25)
	368	327
Deferred tax expense
Origination and reversal of temporary differences	(84)	1
Previously unrecognised deductible temporary differences		(1)
Changes in tax rate	-	(2)
Utilisation/(benefil) of tax losses recognised	10	(78)
Undercover) provided in prior years	(8)	1
	m	JM
Total income tax expense in the income statement	286	248

Reconciliation ofthe effective tax rate

In millions of EUR		2009		zooa
Profit before income tax		1,428		595
Share of net profit of associales and joint ventures and impairmenis thereof		(127)		102
Profit before income tax excluding share of profit of associates and joint
ventures (inclusive impairmenis thereof)		1,301		697
	%	2009	X	JHi h
Income lax using the Company's domestic tax rate	25.5	332	25.5	178
Effect of tax rates in foreign jurisdictions	1.6	21	2.3	16
Effeel of non-deductible expenses	2.8	36	16.9	118
Effect of tax incentives and exempt income	(8.2)	(107)	(9.2)	(64)
Recognition of previously unrecognised temporary differences	(0.1)	(1)	(0.1)	(1)
Utilisation or recognition of previously unrecognised lax losses	(0.5)	(7)	(0.3)	(2)
Unrecognised curreni year tax losses	0.9	12	3.3	23
Effect of changes in tax rate	-		(0.3)	(2)
Withholding taxes	1.2	16	1.9	13
Undercover) provided in prior years	-		(3.4)	(24)
Olher reconciling items	(1.2)	(16)	(1.0)	(7)
	22.0	286	35.6	248

The effective tax rate ofthe Company improved significantly in 2009. The rate dropped from 35.6 per cent lo 22.0 per cent. In 2008 the lax effect relating lo the EUR275 million Impairmenl on Ihe goodwill of Russia was included, as nondeductible expenses, whilst in 2009 the book gain on the purchase ofthe Globe Bonds (see note 12 and 25) is included, as exempt income.

Income tax recognised in other comprehensive income

In millions of EUR	Note	2009
Changes in fair value		2	4
Changes in hedging reserve		(4)	57
	18	(2)	61

14- Property, plant and equipment

In millions of EUR	Note	Land and buildings	Plant and equipment	Other fixed	Under assets construction	Total
Cost
Balance as at 1 January 2008		2,498	4,615	2,994	432	10,539
Changes in consolidation		887	333	326	86	1,632
Purchases		117	218	357	410	1,102
Transfer of completed projects under construction		74	250	101	(425)
Transfer to/from assets classified as held for sale		÷	13		(11)	$\overline{2}$
Disposals		(61)	(117)	(219)		(397)
Effect of movements in exchange rates		(134)	(143)	(100)	(35)	(412)
Balance as at 31 December 2008		3,381	5,169	3,459	457	12,466
		3,381	5,169	3,459	457	12,466
Balance as at 1 January 2009	6	15	91		3	100
Changes in consolidation Purchases		45	110	(9)
				232	291	678
Transfer of completed projects under construction		89	199	78	(366)
Transfer to/from assets classified as held for sale		19	(39)	(39)	(3)	(62)
Disposals		(94)	(122)	(204)	(68)	(488)
Effect of movements in exchange rates		5	(71)	1	1	(64)
Balance as at 31 December 2009		3,460	5,337	3,518	315	12,630
Depreciation and impairment losses
Balance as at 1 January 2008		(1, 221)	(2,619)	(2,026)	÷	(5,866)
Changes in consolidation		28	49	11		88
Depreciation charge for the year	11	(81)	(277)	(383)		(741)
Impairment losses	11	(55)	(31)	(4)		(90)
Reversal impairment losses	11	$\overline{2}$	3	1		6
Transfer to/from assets classified as held for sale		(2)	(2)			(4)
Disposals		34	101	199	$\overline{\phantom{a}}$	334
Effect of movements in exchange rates		13	56	52	-	121
Balance as at 31 December 2008		(1, 282)	(2, 720)	(2, 150)		(6, 152)
Balance as at 1 January 2009		(1, 282)	(2,720)	(2, 150)	-	(6, 152)
Changes in consolidation	6	2		3		5
Depreciation charge for the year	11	(117)	(286)	(365)		(768)
Impairment losses	11	(81)	(95)	(5)		(181)
Reversal impairment losses	11	1	16	1		18
Transfer to/from assets classified as held for sale		8	22	19		49
Disposals		62	169	166		397
Effect of movements in exchange rates		$\overline{2}$	19	(2)	-	19
Balance as at 31 December 2009		(1, 405)	(2,875)	(2, 333)	-	(6, 613)
Carrying amount
As at 1 January 2008		1,277	1,996	968	432	4,673
As at 31 December 2008		2,099	2,449	1,309	457	6,314
As at 1 January 2009		2,099	2,449	1,309	457	6,314
As at 31 December 2009		2,055	2,462	1,185	315	6,017

Impairment losses

In 2009 a tolal impairment loss of EUR 181 million (2008: EUR90 million) was charged to Ihe income statemenl. These impairmenl losses include EUR67 million of impairmenis of pubs in the UK. These impairments were triggered by a persisting market decline in the pub market and was determined by making use of market multiples. The remaining impairmenis mainly relale lo restructurings in France, Finland, Ireland, Russia and Romania.

Security to authorities

Property, plant & equipmenl totaling EUR27 million (2008: EUR70 million) has been pledged to the authorities in a number of countries as security for the paymenl of taxation, particularly excise duties on beers, non-alcoholic beverages and spirits and import duties.

Property, plant and equipment under construction

Properly, planl & equipmenl under construction mainly relates lo expansion ofthe brewing capacity in the Netherlands, UK, Russia and Poland.

During 2009 no borrowing cosls were capiialised (refer to the change in accounling policies, nole 3b).

15- Intangible assets

;• • I, , - . - - .• '	Note	Goodwill*	Brands	Customer related and contract based Intangibles	Software, research and development and other	Total*
Cosl
Balance as at i January 2008		1.896	237	-	162	2,295
Changes in consolidation		4,079	1,239	327	41	5,686
Purchases/internally developed		-	1	108	49	158
Disposals		-	ID	-	(4)	(5)
Effeel of movements in exchange rates		(371)	(144)	(16)	(23)	(554)
Balance as at 31 December 2008		5,604	1,332	419	225	7,580
Balance as at 1 January 2009		5,604	1,332	419	225	7,580
Changes in consolidation	6	34	4	31	1	70
Purchases/internally developed		-	9	19	71	99
Disposals		-	(7)	-	(47)	(54)
Transfers to assels held for sale		-			(2)	(2)
Effect of movements in exchange rates		75	44	6	11	136
Balance as at 31 December 2009		5,713	1,382	475	259	7,829
Amortisation and impairment losses
Balance as at 1 January 2008		(14)	(41)		(130)	(185)
Amortisation charge for the year	11		(30)	(42)	(34)	(106)
Impairment losses	11	(275)				(275)
Disposals		-	-	-	4	4
Effect of movemenis in exchange rales		(1)	3	2	8	12
Balance,is a! 31 December 2008		(290	68	(40)	152)	(550)
Balance as at 1 January 2009		(290)	(68)	(40)	(152)	(550)
Amortisalion charge for the year	11		(36)	(61)	(30)	(127)
Impairment losses	11	ID	(4)	(20)		(25)
Transfers to assets held for sale						2
Disposals		(1)	-	-	5	4
Effect of movements in exchange rales		12	-	(3)	(7)	2
Balance as at 31 December 2009		(280)	(108)	(124)	(182)	(694)
Carrying amount
As at 1 January 2008		1,882	196	-	32	2,110
As at 31 December 2008		5.314	1,264	379	73	7,030
As at 1 January 2009		5.314	1,264	379	73	7,030
As at 31 December 2009		5,433	1.274	351	77	7,135

1 The opi Bins I'iil-iiK-c of goodwill has been adjusted with l-:UR(7g) million due to the finallsalion of the purchase price accounllnq of ihc Scottish S NewcaMlc acquisition |sec nole itl.

15. intangible assets med

Brands and customer-related/contract-based intangibles

The main brands capitalised are the brands acquired in 2008: Fosters, Strongbow and Sagres. The main cuslomer-relaled and contract-based intangibles were acquired In 2008 and are related lo cuslomer relationships with pubs or retailers in the UK, Finland and Portugal (constituting either by way of a contractual agreement or by way of non contractual relations) and the licence agreement wilh FEMSA Cerveza (extended In 2008 for 10 years).

Ofthe total amortisation charge of EUR61 million (2008: EUR42 million) for cuslomer related and contractbased intangibles EUR43 million (2008: EUR33 million) is related lo customer-related intangibles and EUR 18 million (2008: EUR9 million) to contract based intangibles.

Capitalised borrowing costs

During 2009 no borrowing costs were capitalised (refer to the change in accounling policies, nole 3b).

Impairment tests for cash-generating units containing goodwill

The aggregate carrying amounts of goodwill allocated to each cash-generating unit are as follows:

In millions of EUR	2009	2008
Western Europe	3,282	3,141
Central and Eastern Europe (excluding Russia)	1,467	1,479
Russia	99	104
The Americas	349	356
Africa and the Middle East	236	234
	5.433	5,314

Goodwill in respect ofWestern Europe, Cenlral and Easlern Europe (excluding Russia) and ihe Americas is monilored on a regional basis for Ihe purpose of impairmenl lesiing. In respect ofoperating companies that are less integrated in the other regions and Russia, goodwill is monitored on an individual country basis. Throughout the year tolal goodwill mainly increased due lo net foreign currency gains.

Goodwill is lested for impairments annually. The recoverable amounis ofthe cash-generating unils are based on value in use calculations. Value in use was deiermined by discounting the future pre-tax cash flows generated from the continuing use ofthe unit using a pre lax discounl rale.

The key assumptions used for the value in use calculations are as follows:

• Cash flows were projected based on actual operaling results and the three-year business plan. Cash flows for a further seven-year period were extrapolated using expected annual per country volume growlh rales, which are based on exlernal sources. Management believes that this forecasted period is justified due lo Ihe long-term nature ofthe beer business and past experiences.
• The beer price growth per year after the first three year period is assumed lo be al specific per country expected annual long-term inflation, based on exlernal sources.
• Cash flows afler the firsl ten-year period were extrapolated using expected annual long-term inflation, based on external sources, in order lo calculate the terminal recoverable amount.
• A per cash-generating unit specific pre-tax Weighted Average Cosl of Capital (WACC) was applied in determining the recoverable amounl ofthe unils. The WACC's used are presenled In the table on the following page, accompanied by the expected volume growth rales and the expecied long term inflation:

	Pre-tax WACC	Expected annual long-term inflation	Expected volume growth rates 2013-2019
Western Europe	10.17%	1.7%	(0.14)%
Central and Eastern Europe (excluding Russia)	11.74%	2.4%	2.48%
Russia	16.28%	7.13%	2.9%
The Americas	10.1-11.54%	3.0-7.87%	0.84-2.85%
Africa and Middle East	14.9-20.04%	3.31-7.97%	3.57-3.96%

The values assigned lo the key assumptions represent management's assessment of future trends in the beer industry and are based on both external sources and internal sources (historical data).

A limiled change in key assumptions will not lead lo a malerially differenl oulcome.

16. Investments In associates and Joint ventures

Heineken has the following significanl investments in associales and joinl ventures:

		Ownership	Ownership
	Country	2009	2008
joint ventures
Brau Holding International GmbH & Co KgaA	Germany	49.9%	49.9%
Zagorka Brewery A.D.	Bulgaria	49.0%	49.0%
Brewinvest S.A.	Greece	50.0%	50.0%
Pivara Skopje A.D.	Macedonia	27.6%	27.6%
Brasseries du Congo S.A.	Congo	50.0%	50.0%
Asia Pacific Investmenl Pte. Ltd.	Singapore	50.0%	50.0%
Asia Pacific Breweries Ltd.	Singapore	41.9%	41.9%
Compania Cervecerias Unidas S.A.	Chile	33.1%	33.1%
Tempo Beverages Ltd.	Israel	40.0%	40.0%
Heineken Lion Australia Pty.	Australia	50.0%	50.0%
Sirocco FZCo	Dubai	50.0%	50.0%
Diageo Heineken Namibia B.V.	Namibia	50.0%	50.0%
United Breweries Limiled	India	37.5%	37.5%
Millenium Alcobev Private Limited*	India	68.8%	68.8%
DHN Drinks (Pty) Ltd.	South Africa	44.5%	44.5%
Sedibeng Brewery Pty Ltd.*	South Africa	75.0%	75.0%
Associates
Cervecerias Costa Rica S.A.	Costa Rica	25.0%	25.0%
Brasserie Nationale d'Haïli S.A.	Haiti	23.3%	23.3%
_ l : ; •• ' " . - • -. - •: :	Kazakhstan	28.0%	28.0%

• lli-mckcn has joint control as the contract and ownership details determine lhai for certain main operating and flnancial decisions unanimous approval Is required. As a result these inveslmenls arc not consolidated.

Reporting date

The reporting dale ofthe financial slalemenis of all Heineken enlilies and joinl venlures disclosed are the same as for the Company except for (i) Asia Pacific Breweries Ltd., Heineken Lion Australia Pty. and Asia Pacific Investment Pte. Ltd which have a 30 September reporling dale (the APB results are included with a three months delay in reporting), (ii) DHN Drinks (Pty) Lid. which has a 30 June reporting date, and (Iii) United Breweries Limited (UBL) and Millenium Alcobev Private Limiled (MAPL) which have a 31 March reporling dale. The results of (ii) and (iii) have been adjusted to include numbers for the full financial year ended 31 December 2009.

16. Investments In associates and Joint ventures 'ntinued Shareholdings India

In March 2008, the joinl venture partners of Heineken in UBL filed legal proceedings in India against various Scoitish & Newcastle (S&N), Heineken and Carisberg entities claiming that the righis enjoyed by Scoitish & Newcastle India Private Limited (the entity through which Heineken holds ils inveslmenl in UBL) in a shareholders' agreemcnl relaling to UBL and the Articles of Associalion of UBL are personal lo S&N and do nol survive the takeover of S&N by Sunrise Acquisitions Limited in April 2008. On 7 December 2009, Heineken and Us joinl venture partners in UBL settled their disputes and legal proceedings in India were withdrawn. Also on lhat dale, Heineken and its joint venture partners in UBI. entered inlo a new shareholders agreement pursuant lo which Heineken appointed board members and has access lo financial information relaling lo UBL. This information has been used to finalise the S&N purchase price allocation and lo adjusl the financial information reported under Indian GAAP lo comply with Heineken's accounting policies.

Share of profit of associates and joint ventures and impairments thereof

In millions of EUR	2009	2008
Income associates	7	18
Income joint ventures	120	94
Impairments		(214)
	127	(102)

In 2009 no impairmenis were recognised in respect of associates and JVs (2008: EUR 200 million related lo our Indian investments In UBL and MAPI, and EUR 14 million taken by APB).

Summary financial information for equity-accounted Joint ventures

In millions of EUR	Joint ventures 2009	Joint ventures* 2008
Non-current assets	1,375	1,197
Current assets	681	622
Non-current liabilities	(430)	(365)
Current liabilities	16311_	(659)
	995	795
Revenue	1,540	1,564
Expenses	(1.377)	(1,388)
	163	176

• Including S&N shareholdings In India.

17- Other investments

In millions of EUR	Note	2009	L'OnS
Non-currenl other investments
Loans	32	329	310
Held-to-maturity investments	32	4	10
Available-for-sale investments	32	219	221
Non-currenl derivalives used for hedge accounting	32	16	100
		568	641
Current other investments
Investments held for trading	32	15	14
		15	14

Included in loans are loans to customers wilh a carrying amounl of EUR 150 million as at 31 December 2009 (2008: EUR 190 million). Effective interest rates range from 3 to 11 per cent. EUR 145 million (2008: EUR 182 million) matures between one and five years and EUR5 million (2008: EUR8 million) after five years.

The main available-for sale-investments are Consorclo Cervecero de Nicaragua S.A., Desnoes & Geddes Ltd. and Cervejarias Kaiser Brasil S/A ('Kaiser'). As far as these investments are listed they are measured al their quoted market price. For olhers the value in use or multiples is used. Debt securities (which are interest-bearing) with a carrying amounl of EUR21 million (2008: EUR23 million) are included in available-for sale investments.

Sensitivity analysis - equity price risk

An amount of EUR57 million as al 31 December 2009 (2008: EUR47 million) of available-for-sale inveslmenls and inveslmenls held for trading is listed on slock exchanges. A 1 per cent increase in the share price al the reporting date would have increased equily by EURI million (2008: EURI million); an equal change in the opposite direction would have decreased equity by EUR 1 million (2008: EUR 1 million).

^ ^

18. Deferred tax assets and liabilities

Recognised deferred tax assets and liabilities

Deferred tax assels and liabiiilies are attribulable lo the following items:

	Assets			Liabilities		Net
In millions of EUR	2009	.'OO!-'	2009	2008"	2009	2008'
Property, plant & equipment	55	33	(385)	(371)	(330)	(338)
Intangible assets	41	43	(310)	(324)	(269)	(281)
Investments	15	2	(6)	(27)	9	(25)
Inventories	17	10	(6)	(5)	11	5
Loans and borrowings	1	1		-	1	1
Employee benefits	92	85	24	32	116	117
Provisions	92	64	-	-	92	64
Other items	111	(4)	(103)	34	8	30
Tax losses carry-forwards	137	128	-	-	137	128
Net tax assets/{liabilities)	561	362	(786)	(661)	1225)	(299)

• The closinq li.iiirn-c of deferred lax asseis has heen adjusled with EUR103 million and deferred tax liabllllies wilh EUR24 million due lo the finallsalion of ihc purchase (in.T.11 counting ol llu-ScolllshS Newcastle acquislilun r.,T noted]

Tax losses carry-forwards

Heineken has losses carry-forwards for an amounl of EUR983 million as al 31 December 2009 (2008: EUR 1,157 million), which expire in the following years:

In millions of f UR	2009	.•OOH
2009		12
2010	11	11
2011	16	16
2012	11	8
2013	18	22
2014	18
After 2014 respectively 2013 but not unlimited	91	151
Unlimited	818	937
	983	1,157
Recognised as deferred tax assets gross	(479)	(470)
Unrecognised	504	687

Movement in deferred tax on temporary differences during the year

In millions of EUR	Balance i January 2008	Changes in consolidation'	Effect of movements in foreign exchange	Recognised in Income	in equily	Balance Recognised 31 December 2008'
Property, plant & equipment	(349)	11	20	(20)	-	(338)
Intangible assets	20	(256)	-	(45)	-	(281)
Investments	1	(27)	(1)	1	1	(25)
Inventories	15	(2)	(2)	(6)	-	5
Loans and borrowings	-	1	1		(1)	1
Employee benefits	113	46	(1)	(41)		117
Provisions	49	(59)	(1)	75	-	64
Other items	26	(141)	47	37	61	30
Tax losses carry-forwards	14	42	(6)	78	-	128
Net tax assets/diabilities)	(111)	(385)	57	79	61	(299)

• 1 lu- (net) closing balance has been adjusted with F.UR(79| million due lo the finaiisation ofthe purchase price accounling nf the Soiitlsh & Newcastle acquisilion (sec nole 6)

In millions of EUR	Balance 1 January 2009	Changes In consolidation	Effect of movements in foreign exchange	Recognised In income	Recognised In equity	Transfers	Balance 3 December 2009
Property, planl & equipment	(338)	(3)	10	(3)	-	4	(330)
Intangible assets	(281)	(1)	(4)	49	-	(32)	(269)
Investments	(25)		(2)	34	2		9
Invenlories	5	-	-	6	-	-	11
Loans and borrowings	1	-	-	-	-	-	1
Employee benefits	117	1	3	(4)		(1)	116
Provisions	64	(4)	(4)	-	:	36	92
Other items	30	1	(4)	10	(4)	(25)	8
Tax losses carry-forwards	128	-	6	(10)	-	13	137
Net tax assets/(llabilitles)	(299)	(6)	5	82	(2)	(5)	(225)

19. Inventories

In millions of EUR	2009	2008
Raw materials	170	239
Work in progress	132	134
Finished products	140	245
Goods for resale	269	261
Non-returnable packaging	107	144
Other inventories	192	223
	1,010	1,246

During 2009 and 2008 no write-down of inventories to net realisable value was required.

20. Trade and other receivables

In millions of EUR	Note	2009	2008
Trade receivables due from associates and joint ventures		78	60
Trade receivables		1,730	1,890
Other receivables		453	451
Derivatives used for hedge accounting		49	103
	32	2,310	2,504

A net impairmenl loss of EUR64 million (2008: EUR21 million) in respect of trade and other receivables was Included In expenses for raw materials, consumables and services.

21. Cash and cash equivalents

In millions of EUR	Note	2009	2008
Bank balances		482	475
Call deposits		38	223
Cash and cash equivalents	32	520	698
Bank overdrafts	25	(156)	(94)
Cash and cash equivalents in the statement of cash flows		364	604

22. Capital and reserves Share capital

	Ordinary shares
In millions of EUR	2009	2008
On issue as at i January	784	784
Issued for cash	-	-
On issue as at 31 December	784	784

As at 31 December 2009 the issued share capital comprised 489,974.594 ordinary shares (2008:489,974,594). The ordinary shares have a par value of EUR 1.60. All issued shares are fully paid.

The Company's authorised capital amounts lo EUR2.5 billion, comprising of 1,562,500,000 shares.

The holders of ordinary shares are entitled lo receive dividends as declared from time lo lime and are entitled to one vote per share at meetings ofthe Company. In respect ofthe Company's shares lhat are held by Heineken N.V. (see next page), rights are suspended.

Translation reserve

The translation reserve comprises foreign currency differences arising from the translalion ofthe financial statements of foreign operations of the Group (excluding amounts attribulable to minorily interesls) as well as value changes ofthe hedging instruments in the net investment hedges. Heineken considers this a legal reserve.

Hedging reserve

This reserve comprises the effective portion ofthe cumulative net change in ihe fair value of cash flow hedging instruments where the hedged transaction has not yet occurred. Heineken considers this a legal reserve.

Fair value reserve

This reserve comprises the cumulative net change in the fair value of available-for-sale investments until the inveslmenl is derecognised or Impaired. Heineken considers this a legal reserve.

Other legal reserves

These reserves relate lo the share of profil of joinl ventures and associates over the distribution ofwhich Heineken does not have control. The movement in these reserves reflects retained earnings of joinl ventures and associates minus dividends received. In case ofa legal or other restriction which causes lhat retained earnings of subsidiaries cannol be freely dislribuled, a legal reserve is recognised for the restricted part.

Reserve for own shares

The reserve for the Company's own shares comprises the cosl ofthe Company's shares held by Heineken. As at 31 December 2009 Heineken held 1,251,201 ofthe Company's shares (2008:1,044,233).

22. Capital and reserves

Dividends

The following dividends were declared and paid by Heineken:

In millions of EUR	2009
Final dividend previous year EURO.34, respectively EURO.46
per qualifying ordinary share	167	226
Interim dividend current year EURO.25, respectively EURO.28
per qualifying ordinary share	122	137
Total dividend declared and paid	289	363

Afler the balance sheet dale the Executive Board proposed the following dividends. The dividends, taken inlo accounl the interim dividends declared and paid, have not been provided for.

In millions of EUR	2009	2008
EURO.65 per qualifying ordinary share (2008: EURO.62)	318	304

23. Earnings per share

Basic earnings per share

The calculalion of basic earnings per share as al 31 December 2009 is based on the profil allribulable lo ordinary shareholders ofthe Company (net profit) of EUR 1,018 million (2008: EUR 209 million) and a weighted average number of ordinary shares - basic outstanding during the year ended 31 December 2009 of 488,666,607 (2008:488,930,340). Basic earnings per share for the year amounts lo EUR2.08 (2008: EURO.43).

Weighted average number of shares - basic

In shares	toog
Number of shares - basic - as al 1 January	488,930,361	489,174,594
Effeel of own shares held	(263,754)	(244,254)
Weighted average number of shares - basic - as at 31 December	488,666,607	488,930,340

Diluted earnings per share

The calculalion of diluted earnings per share as al 31 December 2009 was based on the profit attributable to ordinary shareholders of the Company (net profil) of EUR 1,018 million (2008: EUR209 million) and a weighted average number of ordinary shares - basic outstanding afler adjuslment for the effecls of all dilutive poteniial ordinary shares of 489,974,594 (2008:489,974,594). Diluted earnings per share for the year amounted to EUR2.08 (2008: EURO.43).

24- Income tax on other comprehensive income

		2009			.'003
In millions of EUR	Amount before tax	Tax	Amount net of tax	Amount before tax	Tax	Amount net of tax
Other comprehensive income
Foreign currency translation differences for foreign operations	112		112	(645)		(645)
Effective portion of changes in fair value of cash flow hedge	(121)	31	(90)	(146)	41	(105)
Effective portion of cash flow hedges transferred to the income slalement	117	(29)	88	(75)	16	(59)
Net change in fair value available-for-sale inveslmenls	34	(8)	26	(16)	4	(12)
Net change in fair value available-for-sale inveslmenls transferred to the income statement	(16)		(12)
Share of olher comprehensive income of associates/joint ventures	22	_	22	(3)		(3)
lotal other comprehensive income	148	(2)	146	(884)	61	(823)

25. Loans and borrowings

This nole provides information aboul the contractual terms of Heineken's interest-bearing loans and borrowings. For more Informalion aboul Heineken's exposure lo interest rale risk and foreign currency risk, see nole 32.

Non-current liabilities

In millions of EUR	Note	2009	2008
Secured bank loans		179	381
Unsecured bank loans		2,958	6,444
Unsecured bond issues		2,445	1,104
Finance lease liabilities	26	89	82
Olher non-current interesl-bearing liabilities		1,267	664
Non-current interest-bearing liabilities		6,938	8,675
Non-currenl non-intercst-bearing liabilities		93	16
Non-current derivatives used for hedge accounling		370	393
		7,401	9,084

25. Loans and borrowings Current interest-bearing liabilities

In millions of EUR	Note	2009	.•008
Current portion of secured bank loans		96	139
Curreni poriion of unsecured bank loans		78	351
Current portion of unsecured bond issues		500	18
Current portion of finance lease liabilities	26	19	13
Curreni poriion of olher interesl-bearing liabilities		75 75	6 6
Total current portion of non-current interest-bearing liabilities		768	527
Deposits from third parlies		377	348
		1,145	875
Bank overdrafts	21	156	94
		1,301	969

Net interest-bearing debt position

In millions of EUR	Note	2009	.'OOH
Non-current interesl-bearing liabilities		6,938	8,675
Current portion of non-current interest-bearing liabilities		768	527
Deposits from third parties		377	348
		8,083	9.550
Bank overdrafts	21	156	94
		8,239	9,644
Cash, cash equivalents and curreni olher investments		(535)	(712)
Net interest-bearinq debt position		7,704	8,932

Non-current liabilities

In millions of EUR	Secured bank loans	Unsecured bank loans	Unsecured sond issues	Finance lease liabilities	Other non-current nterest-bearing liabilities	Non-current derivatives used for hedge accounting	Non-current non-interest bearing liabilities	Total
Balance as at
1 January 2009	381	6,444	1,104	82	664	393	16	9,084
Consolidation changes	-			11	-	-	-	11
Effect of movements
in exchange rates	17	124	_	4	(141)	53	19	49
Transfers	27	(611)	(498)	(3)	929	(65)	19	(202)
Charge to/from profit or loss l/r derivalives	_		_			1		1
Charge to/from equity
i/r derivatives	_	_	_	M	_	(12)	7	(5)
Proceeds	18	122	1,844	-	45	-	23	2,052
Repayments	(47)	(3,121)	(13)	(5)	(224)	-	(1)	(3,411)
Other	(217)		8		(6)	-	10	(205)
Balance as at
31 December 2009	179	2,958	2,445	89	1,267	370	93	7,401

Terms and debt repayment schedule

Terms and conditions ofoutstanding non-current and curreni loans and borrowings were as follows:

In millions of EUR	Currency	Nominal interest rate %	Hcpaymem	Carrying amount 2009	Face value .'OOQ	Carrying amount 2008	Face value 2008
Secured bank loans	GBP	1.4-6.0	2011-2017	234	234	470	485
Secured bank loans	various	various	various	41	41	50	50
Unsecured bank loans	EUR	4.4	2009	-	-	125	125
Unsecured bank loans	EUR	5.1	2010	-	-	284	284
Unsecured bank loans	EUR	3.3	2012	-	-	470	470
Unsecured bank loans	EUR	5.1	2010	-	-	860	860
Unsecured bank loans	EUR	1.6	2013	1,700	1,709	2,403	2,416
Unsecured bank loans	EUR	0.3-5.0	2010-2016	486	486	435	435
Unsecured bank loans	EUR	2.7-6.2	2017	111	111	-	-
Unsecured bank loans	EUR	2.4-6.0	2014	102	102	-	-
Unsecured bank loans	EUR	2.5-6.0	2015	207	207	418	418
Unsecured bank loans	GBP	1.0	2013	329	329	504	504
Unsecured bank loans	PLN	3.7-3.9	2011	61	61	53	53
Unsecured bank loans	USD	5.4	2012	-		118	118
Unsecured bank loans	USD	5.6	2014	-	-	485	494
Unsecured bank loans	USD	5.4	2015	-	-	242	247
Unsecured bank loans	USD	various	various	-	-	73	73
Unsecured bank loans	various	various	various	40	40	325	325
Unsecured bank issues	GBP	7.3	2015	442	450		-
Unsecured bank issues	EUR	4.3	2010	500	500	500	500
Unsecured bank issues	EUR	5.0	2013	598	600	598	600
Unsecured bond issues	EUR	7.1	2014	996	1,000	-	-
Unsecured bond issues	EUR	4.6	2016	397	400	-	-
Unsecured bond issues	various	various	various	12	12	24	24
Other interest-bearing liabilities	GBP	5.6	2033	-	-	162	204
Other interest-bearing liabilities	USD	5.4-5.6	2012-2015	778	729	-	-
Other interest-bearing liabilities	USD	5.9-6.3	2015-2018	306	307	280	280
Other interesl-bearing liabilities	USD	1.6-2.0	2010-2012	100	100		-
Other interest-bearing liabilities	various	various	various	158	158	228	251
Deposits from third parties	various	various	various	377	377	348	348
Finance lease liabilities	various	various	various	108	108	95	95
				8,083	8,061	9,550	9,659

As at 31 December 2009, no amounl was drawn on the existing revolving credit facility of EUR2 billion. This revolving credit facility matures in 2012. Interest is based on EURIBOR plus a margin.

Anninl Rptinrt —AM ^Mj a b

25. Loans and borrowings continued EMTN Programme

In February 2009, the Company placed 6-year Sterling Notes for a principal amounl of GBP400 million wilh a coupon of 7.25 per cent. In March 2009, the Company placed 5-year Euro Notes for a principal amounl of EUR 1 billion wilh a coupon of 7.125 per cent. In October 2009 Heineken has placed 7-year Euro Noles for a principal amounl of EUR400 million with a coupon of 4.625 per cent.

These Noles were issued under the Euro Medium Term Note Programme ('EMTN') and are listed on Ihe Luxembourg Slock Exchange. The proceeds ofthese noles have been used lo partially refinance bank credit facilities related to the Scoitish & Newcastle acquisilion and for general corporate purposes.

Globe

On 17 April 2009, the Company acquired 30.1 per cent of Class Al Noles Issued by Globe Pub Issuer plc ('Globe'), representing a face value of GBP60.2 million. In May 2009 the Company acquired a further 55.6 per cent of Class Al Noles representing a face value of GBP 111.2 million. As al 29 October 2009 the Company owned 92.8 per cent of Class Al Noles representing a face value of GBP175 million. In addilion, the Company acquired 31.6 per cent of Class Bl Notes issued by Globe representing a face value of GBP 18 million, a 23.9 per cent participation in the syndicated bank debl of Globe Pub Managemenl Limited ('GPM') being GBP55 million out ofan aggregate of GBP230 million, and assumed Ihe economic inlerest ofthe counterparty of GPM in an inlerest rale swap transaction. The swap was entered into in 2006 when the floating interesl rate in relation to ihe syndicated bank debt was swapped for a fixed interesl rate.

The Company purchased the Noles and syndicated bank debl at a substantial discounl to face value. As Globe Ispartof the Group as at 28 April 2008, the net debt of Globe is included in the consolidated statemenl of financial position ofthe Group and therefore, the acquisilion of debt of Globe at a discounl, results in a rcduciion ofthe Group's total net debt position and a realisation ofa net book gain as explained in nole 12. On 29 October 2009, Heineken agreed lo supply beer and managemenl services lo EBP Pub Company Limiled (EBP), a company controlled by FEOH Inveslmenls Limiled (FEOH), which acquired the tenanted pub estate (the Estate) from Globe Tenanted Pub Company (GTP). The proceeds ofthe sale lo EBP have been used principally to repay the Class Al Noles which partially funded GTP. Also on this dale, Heineken entered inlo a conditional sale agreement with FEOH pursuant lo which it is anticipated that Heineken will acquire full ownership of EBP later in 2010.

On 23 December 2009, Heineken acquired the remaining syndicated bank debl of GPM al a discounl lo the GBP 175 million (EUR 195 million) face value. As a result ofthe acquisilion, Heineken acquired all ofthe syndicated bank debl of GPM with a face value of GBP230 million (EUR256 million) and no longer has any outstanding debt relaling to Globe on ils balance sheet.

26. Finance lease liabilities

Finance lease liabilities are payable as follows:

In millions of EUR	Future minimum lease payments 2009	Interest 2009	Present value of minimum lease payments 2009	Future minimum lease paymenis 2003	Interest 2008	Presenl value of minimum lease payments 2008
Less than one year	22	(3)	19	19	(5)	14
Between one and five years	76	(9)	67	62	(12)	50
More than five years	23	(1)	22	35	(4)	31
	121	1131	108	116	(21)	95

27. EBTT and EBTT (beia)

EBIT is defined as results from operaling aclivilies plus share of profit of associates and JVs including impairments thereof. EBIT (beia) Is defined as results from operaling activiiies plus share of profil of associales and JVs including Impairmenis thereof, before exceptional items and amortisation of brands and customer relationships.

Exceptional items are defined as items ofincome and expense of such size, nature or incidence, that in view of managemenl their disclosure is reievanl to explain the performance of Heineken for the period.

Exceptional items and amortisation of brands and customer relationships for 2009 on EBIT level amounted to EUR338 million (2008: EUR852 million) and can be explained as follows. In personal expenses EUR63 million (2008: EUR 166 million) exceptional items are included relaling lo restructuring cosls due lo redundancies following brewery closures and other TCM cosl saving initiatives in Heineken UK, Heineken Spain, Finland and France. Exceptional items included in impairments of P, P & E amounl lo EUR140 million (2008: EURSlmillion) and include the impairmenl of pubs in the UK (EUR68 million) and the above brewery closures (EUR72 million). In addilion EUR36 million (2008: EUR50 million) is included in olher expenses.

The amortisation of brands and cuslomer relationships amounted lo EUR79 million (2008: EUR63 million). Impairments relaling lo conlract-based intangibles amount lo EUR20 million (2008: EUR275 million). Included In 2008 was the Impairmenl of goodwill relaling to Russia (EUR275 million).

EBIT and EBIT (beia) are not financial measures calculated in accordance with IFRS. The presentation on these financial measures may not be comparable to similarly titled measures reported by olher companies due to differences in the ways the measures are calculated.

dat e

28. Employee benefits

In millions of EUR	2009	. •;!.; -
Present value of unfunded obligations	198	266
Presenl value of funded obligations	5,738	4,697
Total present value of obligations	5,936	4,963
Fair value of plan assets	(4,858)	(4,231)
Present value of net obligations	1.078	732
Actuarial (losses)/gains not recognised	(548)	(143)
Recognised liability for defined benefit obligations	530	589
Other long-term employee benefits	104	99
	634	688

Plan assets comprise:

	4,858	4,231
Other plan assets	159	350
Properties and real estate	385	333
Government bonds	2,119	1,955
Equity securities	2,195	1,593
In millions of EUR	2009	2008

Liability for defined benefit obligations

Heineken makes contributions to a number of defined benefit plans that provide pension benefits for employees upon retirement in a number of counlries being mainly: the Nelherlands, the UK, Greece, Auslria, Italy, France, Spain and Nigeria. In olher countries the pension plans are defined contribution plans and/or similar arrangements for employees.

Other long-term employee benefits mainly relate lo long-term bonus plans, termination benefils and jubilee benefils.

Movements in the present value ofthe defined benefit obligations

In millions of EUR	2009	2008
Defined benefit obligations as al 1 January	4,963	2,858
Changes in consolidation and reclassification	(6)	2,973
Effect of movements in exchange rales	153	(494)
Benefils paid	(255)	(199)
Curreni service costs and interesl on obligation (see below)	363	333
Past service costs	12	5
Effect ofany curtailment or settlement	(16)	(18)
Actuarial (gains)/losses	722	i495[
Defined benefit obligations as at 31 December	5,936	4,963

Movements in the present value of plan assets

In millions of EUR	2009	2008
Fair value of plan assets as at 1 January	4,231	2,535
Changes in consolidation and reclassification	(5)	2,737
Effect of movemenis in exchange rates	160	(450)
Contributions paid into the plan	157	177
Benefits paid	(255)	(199)
Expected return on plan assets	252	241
Actuarial gains/(losses)	318	J810)
Fair value of plan assets as at 31 December	4.858	4,231
Actual return on plan assets	570	J569[

Expense recognised in the income statement

In millions of EUR	Note	2009	(008
Current service costs		70	75
Interesl on obligation		293	258
Expected return on plan assets		(252)	(241)
Actuarial gains and losses recognised			(1)
Past service costs		12	5
Effect of any curtailment or settlement		(16)	(18)
	10	107	78

Principal actuarial assumptions as at the balance sheet date

The defined benefit plans in The Nelherlands and the UK cover 88.8 per cent ofthe presenl value ofthe plan assets (2008:88.6 per cent), 86.3 per cent ofthe present value ofthe defined benefit obligations (2008: 83.5 per cent) and 75.1 per cent ofthe deficit in the plans as at 31 December 2009 (2008; 54.3 per cent). For the Netherlands and the UK the following actuarial assumptions apply as al 31 December 2009:

	The Netherlands	UK
	2009	2008	2009	2008
Discount rale as at 31 December	5.3	5.6	5.7	6.7
Expected relurn on plan assets as at 1 January	6.3	5.9	6.3	5.7
Future salary increases		3	4.8	4
Future pension increases	1.5	1.5	3	2.8
Medical cost trend rate				7

28. Employee benefits

Principal actuarial assumptions as at the balance sheet date

For the other defined benefit plans the following actuarial assumptions apply as at 31 December 2009:

	Other Western. Central and Eastern Europe			The Americas		Africa and the Middle East		Asia Pacilic
	2009	2008	20O9	20O8	2009	20O8	2009	2008
Discount rate as at 3' December	3.3-5.6	4.5-6.2	5.3-7	5.5-6.5	11	12	-	2.5-12
Expected return on plan assets as
at 1 January	3.5-6.6	4.5-7	6.5	6-5	11	4.6	-	2.5-8
Future salary increases	1.5-3.5	2.9-12	2.5-5.5	0.5-5.5	11	11	-	3-10
Future pension increases	1-3	1.5-5		3.5	11	—		8
Medical cosl trend rate	3.5-4.5	1.5	5	5	10		-

Assumptions regarding fulure mortality rates are based on published slatistics and mortality tables. The overall expecied long-term rale of relurn on assels is 6.1 per cent (2008:6.0 per ccnl), which is based on the assel mix and the expected rale of return on each major assel class, as managed by the pension funds.

Assumed heallhcare cost trend rales have nihil efTect on the amounts recognised in the income statement. A one percentage poinl change in assumed heallhcare cosl trend rates would not have any effect on the Income siatement neither on the statement of financial position as al 31 December 2009.

The Group expects the 2010 contributions lo be paid for the defined benefit plans to be approximately 20 per cent higher than in 2009.

Historical information

In millions of EUR	2009		2007	2006
Present value ofthe defined benefii obligation	5,936	4,963	2,858	2,984
Fair value of plan assels	(4,858)	(4,231)	(2,535) (2,397)
Deficit in the plan	1,078	732	323	587
Experience adjustments arising on plan liabiiilies, losses/(gains)	(116)	71	(4)	(159)
Experience adiuslments arisinq on plan assets, (losscsl/gains	313	(817)

2g. Share-based payments - Long-Term Incentive Plan

As from 1 January 2005 Heineken esiablished a performance-based share plan (Long-Term Incentive Plan; LTIP) for the Executive Board. As from 1 January 2006 a similar LTIP was established for senior management.

The LTIP for the Executive Board includes share righis, which are conditionally awarded lo the Executive Board each year and are subject to Heineken's Relalive Total Shareholder Return (RTSR) performance in comparison with the TSR performance ofa selected peer group.

The LTIP share rights conditionally awarded lo senior management each year are for 25 per cent subject lo Heineken's RTSR performance and for 75 per cent subject lo inlernal performance conditions.

Al target performance, 100 per cent ofthe shares will vest. At maximum performance 150 per cent ofthe shares will vest.

The performance period for share righis granled in 2007 was from 1 January 2007 lo 31 December 2009. The performance period for share rights granled in 2008 is from 1 January 2008 lo 31 December 2010. The performance period for share righis granted in 2009 is from 1 January 2009 lo 31 December 2011.

The vesting dale for the Executive Board is within five business days, and for senior management the latest of 1 April and 20 business days, afler the publication ofthe annual results of 2009,2010 and 2011 respectively.

As Heineken N.V. will withhold the lax related lo vesting on behalf of the individual employees, the amounl of Heineken N.V. shares to be received by the Executive Board and senior managemenl will be a net amounl.

The lerms and conditions ofthe share righis granted are as follows:

Grant date/employees entitled	Number*	Based on share price	Vesting conditions	Contractual life of rights
Share rights granted lo			Continued service and
Executive Board in 2007	32,265	36.03	RTSR performance	3 years
Share rights granled lo senior			Continued service, 75% internal performance
management in 2007	281,400	36.03	conditions and 25% RTSR performance	3 years
Share rights granted to			Continued service and
Executive Board in 2008	26,288	44.22	RTSR performance	3 years
Share rights granted to senior			Continued service, 75% internal performance
management in 2008	263,958	44.22	conditions and 25% RTSR performance	3 years
Share rights granled to			Continued service and
Executive Board in 2009	53,083	21.90	RTSR performance	3 years
Share rights granted to senior			Continued service, 75% internal performance
management in 2009	562,862	21.90	conditions and 25% RTSR performance	3 years
	1,219,856

• The number of shnrc : rformance.

Based on RTSR and inlernal performance, il is expected lhat approximately 253,000 shares will vest in 2010. The expenses relating lo these expected additional grants are recognised in the income statement during the performance period.

The number and weighted average share price per share is as follows:

	Weighted average share price 2009 InEUR	Number of share rights 2009	Weighted average share price 2008 " I UH	Number of share rights 2008
Outstanding as at ^ January	37.48	905,537	30.10	696,616
Granted during the year	21.90	615.945	44.22	290,246
Forfeited during the year		(74,813)		(40,581)
Vested during the year		(292,921)		(40,744)
Outstanding as at 31 December	31.17	1.153.748	37.48	905,537

The 292,921 (gross) shares vested in 2009 are related to the 2006 2008 LTIP of senior management. No vesting occurred under the 2006-2008 LTIP ofthe Executive Board.

The fair value of services received in return for share rights granled is based on the fair value of shares granled, measured using the Monte Carlo model, with following inputs:

InEUR	Executive Board 2009	Executive Board 2008	Senior Management ^009	Senior Managemenl 2008
Fair value at grant date	512,359	411,670	8,4 78,659	7,409,515
Expected volatility	22.8%	18.4%	22.8%	18.4%
Expected dividends	2.1%	1.7%	2.1%	1.7%

Personnel expenses

In millions of EUR	Note	2009	2008
Share rights granled in 2006		—	3
Share rights granted in 2007		3	4
Share rights granted in 2008		3	4
Share righis granted in 2009		4	-
Total expense recognised as personnel expenses	10	10	11

			Onerous
In millions of EUR	Note	Restructuring	contracts	Other	Total
Balance as al 1 January 2009		180	65	257	502
Changes in consolidation	6	-	-	1	1
Provisions made during the year		98	2	91	191
Provisions used during the year		(88)	(9)	(35)	(132)
Provisions reversed during the year		(18)	-	(44)	(62)
Effect of movemenis in exchange rates		(2)	(3)	20	15
Unwinding of discounts		1	-	2	3
Balance as at 31 December 2009		171	55	2 92	518
Non-current		66	47	243	356
Current		105	8	49	162
		1 71	55	292	518

Restructuring

The provision for restructuring of EUR 171 million mainly relates lo restructuring programmes in Spain and the UK. Provisions made during the year are mostly related lo TCM. These restructuring expenses have been Included in the personnel expenses (see note 10).

Other provisions

Included are, amongst olhers, surety provided EUR61 million (2008: EUR28 million), litigations and claims EUR50 million (2008: EUR59 million) and environmental provisions EUR8 million (2008: EUR 17 million).

31. Trade and other payables

In millions of EUR	Note	2009	2008
Trade payables		1,361	1,563
Returnable packaging deposits		408	427
Taxation and social security contributions		551	553
Dividend		24	76
Interest		134	104
Derivatives used for hedge accounting		94	87
Other payables		233	291
Accruals and deferred income		891	745
	32	3,696	3,846

32. Financial risk management and flnancial instruments Overview

Heineken has exposure to the following risks from its use of inancial instruments, as they arise in the normal course of Heineken's business:

• Credit risk
• Liquidity risk
• Markel risk.

This nole presents informalion aboul Heineken's exposure to each ofthe above risks, and il summarises Heineken's policies and processes that are in place for measuring and managing risk, including those related lo capital managemenl. Further quantitative disclosures are included throughout these consolidated financial statements.

Risk management framework

The Executive Board, under the supervision ofthe Supervisory Board, has overall responsibilily and sels rules for Heineken's risk managemenl and control systems. They are reviewed regularly lo reflect changes in markel conditions and the Group's activities. The Executive Board oversees the adequacy and funclioning ofthe entire system ofrisk management and inlernal control, assisted by Group departments.

The Group Treasury function focuses primarily on the managemenl of inancial risk and financial resources. Some ofthe risk management sirategies include the use of derivatives, primarily in the form of spol and forward exchange coniracts and interesl rate swaps, but oplions can be used as well. Il is the Group policy that no speculative transactions are entered into.

_ i _ 1 • - 1—j — jaf e

32. Rnancial risk management and flnancial instruments Credit risk

Credit risk Is the risk of financial loss to Heineken if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from Heineken's receivables from customers and inveslmenl securities.

As at balance sheet date there were no significanl concentrations of credit risk. The maximum exposure lo credit risk is represented by the carrying amounl of each financial instrument, including derivative financial inslruments, in the consolidaled statement of financial position.

Loans to customers

Heineken's exposure lo credit risk is mainly influenced by the individual characteristics of each cuslomer. Heineken's held-to-maturity inveslmenls includes loans to customers, issued based on a loan conlract. Loans lo customers are ideally secured by, amongst olhers, righis on property or intangible assels, such as the righl lo lake possession ofthe premises ofthe customer. Interesl rales calculated by Heineken are al least based on the risk-free rate plus a margin, which takes inlo account the risk profile ofthe cuslomer and value of security given.

Heineken establishes an allowance for impairment of loans lhat represents its estimate of Incurred losses. The main components of this allowance are a specific loss component that relates lo individually significant exposures, and a collective loss componenl established for groups of similar customers in respcel of losses that have been incurred but not yet identified. The collective loss allowance Is deiermined based on historical data of payment stalislics.

In a few counlries the issue of new loans is outsourced to third parlies. In mosl cases, Heineken issues sureties (guaranlees) lo the third parly for the risk of default ofthe cuslomer. Heineken in relurn receives a fee.

Trade and other receivables

Heineken's local management has credit policies in place and the exposure to credit risk is monilored on an ongoing basis. Under the credit policies all customers requiring credit over a certain amount are reviewed and new customers are analysed individually for creditworthiness before Heineken's slandard payment and delivery terms and conditions are offered. Heineken's review includes exlernal ratings, where available, and in some cases bank references. Purchase limits are established for each cuslomer and these limits are reviewed regularly. As a result ofthe deteriorating economic circumslances in 2008 and 2009, certain purchase limits have been redefined. Customers that fail lo meet Heineken's benchmark creditworthiness may transact wilh Heineken only on a prepayment basis.

In monitoring cuslomer credit risk, customers are, on a counlry base, grouped according lo their credit characteristics, including whether they are an individual or legal enlity, which type of dislribulion channel they represent, geographic location, industry, ageing profile, maturity and existence of previous financial difficulties. Customers that are graded as 'high risk' are placed on a restricted customer list, and future sales are made on a prepayment basis only with approval of Management.

Heineken has multiple dislribulion models lo deliver goods to end customers. Deliveries are carried out in some counlries via own wholesalers, in other markels direclly and in some others via third parlies. As such distribution models are counlry specific and on consolidaled level diverse, as such the results and the balance sheel Items cannot be split between types of customers on a consolidaled basis. The various distribution models are also not centrally managed or monilored.

Heineken establishes an allowance for impairment that represents its estimate of incurred losses in respect of trade and other receivables and investments. The components of this allowance are a specific loss componenl and a colleclive loss component.

Investments

Heineken limits ils exposure lo credit risk, excepl for held-to-maturity investments as disclosed in note 17, by only investing in liquid securities and only with counterparties that have a credit rating of al least single A or equivalenl for shorMerm transactions and AA- for long term transactions. Heineken actively monitors these credit ratings.

Guarantees

Heineken's policy is to avoid issuing guarantees where possible unless this leads to substantial savings for the Group. In cases where Heineken does provide guarantees, such as lo banks for loans (to third parties), Heineken aims to receive security from the third party.

Heineken N.V. has issued a joint and several liabilily statement to the provisions of Section 403, Part 9, Book 2 ofthe Dutch Civil Code with respect lo legal entities established In the Nelherlands.

Exposure to credit risk

The carrying amounl of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporling dale was:

In millions of EUR	Note	2009	2008
Loans	17	1	310
Held-to-maturity investments	17	I	10
Available-for-sale investments	17	1	221
Non-current derivatives used for hedge accounting	17		100
Investments held for trading	17	>	14
Trade and olhcr receivables, excluding derivatives
used for hedge accounling	20
Current derivatives used for hedge accounting	20	49	103
Cash and cash equivalents	21	520	698
		3,413	3,857

32. Financial risk management and flnancial instruments continue

The maximum exposure to credit risk for trade and olher receivables (excluding derivalives used for hedge accounling) al the reporting dale by geographic region was:

In millions of EUR	2009	2008
Western Europe	1,256	1,493
Central and Eastern Europe	554	512
The Americas	134	122
Africa and the Middle East	131	145
Asia Pacific	32	31
Head Office/eliminations	154	98
	2,261	2.401

Impairment losses

The ageing of trade and olher receivables (excluding derivatives used for hedge accounting) at the reporling dale was:

In millions of EUR	Gross 2009	Impairment 2009	Gross 2008	Impairment 2008
Not past due	1,895	(34)	1,868	(17)
Past due 0-3 0 days	202	(26)	232	(7)
Past due 31 -120 days	198	(67)	241	(56)
More than 120 days	300	(207)	340	(200)
	2,595	(334)	2,681	(280)

The movement in the allowance for impairment in respect of trade and other receivables (excluding derivalives used for hedge accounting) during the year was as follows:

In millions of EUR	2009	2008
Balance asatt January	280	194
Changes in consolidation	1	88
Impairment loss recognised	109	52
Allowance used	(26)	(13)
Allowance released	(45)	(31)
Effeel of movemenis in exchange rates	15	HO)
Balance as at 31 December	334	280

The movement in the allowance for impairmenl in respect of loans during the year was as follows:

In millions of EUR	.•Oüq	2008
Balance as at 1 January	177	108
Changes in consolidation	-	49
Impairment loss recognised	48	46
Allowance used	(27)	(26)
Allowance released	(9)	-
Effect of movements in exchange rates	(4)	-
Balance as at 31 December	185	177

Impairment losses recognised for trade and other receivables (excluding derivatives used for hedge accounting) and loans are part ofthe other non-cash items in the consolidated statemenl of cash flows.

The impairmenl loss of EUR48 million (2008: EUR46 million) in respect of loans and the impairmenl loss of EUR109 million (2008: EUR 52 million) in respect of trade receivables (excluding derivatives used for hedge accounting) were included in expenses for raw materials, consumables and services.

An impairmenl loss of EUR48 million (2008: EUR46 million) in respect of loans was recognised during the curreni year ofwhich EUR37 million (2008: EUR34 million) related lo loans to customers. Heineken has no collateral In respect ofthese Impaired investments.

The allowance accounts in respect of trade and other receivables and held-lo-malurily investments are used to record impairment losses, unless Heineken is salisfied that no recovery ofthe amounl owing is possible, at lhat point the amount considered Irrecoverable is written off against the financial asset.

Uquidity risk

Liquidity risk is the risk that Heineken will encounter difficully in meeling the obligations associaied with ils financial liabiiilies that are settled by delivering cash or another financial assel. Heineken's approach to managing liquidity Is lo ensure, as far as possible, that it will always have sufficient liquidity lo meet its liabiiilies when due, under both normal and stressed conditions, withoul incurring unacceptable losses or risking damage lo Heineken's reputation.

Recenl times have proven the credit markets silualion could be such lhat il is difficull lo generate capital lo finance long-term growlh ofthe Company. Allhough currenlly the silualion is more stable, the Company has a clear focus on ensuring sufficient access to capital markets to finance long-term growlh and lo refinance maturing debl obligations. Financing strategies are under continuous evaluation. In addition, the Company focuses on a further fine-tuning ofthe maturiiy profile of ils long-term debts with its forecasted operating cash (lows. Strong cost and cash managemenl and controls over inveslmenl proposals are in place lo ensure effeclive and efficient allocation of inancial resources.

32. Financial risk management and flnancial instruments

Contractual maturities

The following are the contractual maturities of non-derivative financial liabiiilies and derivative linancial assels and liabilities, including inlerest payments and excluding the impact of netting agreements:

							2009
In millions of EUR	Carrying amount	Contractual cash flows	6 months	or less 6-12 months	1-2 years	25 years	More than 5 years
Financial liabiiilies
Secured bank loans	275	(304)	(13)	(16)	(89)	(153)	(33)
Unsecured bank loans	3,036	(3,249)	(96)	(170)	(1.375)	(1.263)	(345)
Unsecured bond issues	2,945	(3.786)	(626)	(49)	(152)	(2,032)	(927)
Finance lease liabiiilies	108	(114)	(10)	(9)	(15)	(49)	(31)
Other inierest-bearing liabilities	1,342	(1.690)	(91)	(54)	(67)	(803)	(675)
Non-interest-bearing liabiiilies	93	(120)	(20)	(23)	(31)	(45)	(1)
Deposits from third parties	377	(377)	(368)	(9)	-	-	-
Bank overdrafts	156	(156)	(156)		-	-	-
Trade and other payables, excluding interest, dividends and derivalives used for hedge accounting	3,444	(3.444)	(3,278)	(166)
Derivative financial (assets) and liabilities
Interest rate swaps used
for hedge accounling:
Inflow	(17)	1.490	43	36	88	732	591
Outflow	438	(1.819)	(74)	(89)	(102)	(965)	(589)
Forward exchange conlracis used
for hedge accounting:
Inflow	(48)	1,015	615	282	118	-	-
Outflow	26	(996)	(608)	(268)	(120)	-	-
	12,175	(13.550)	(4,682)	(535)	(1.745)	(4,578)	(2,010)

The total carrying amounl and contractual cash llows of derivatives are included in trade and olher receivables (note 20), olher investments (note 17), trade and other payables (note 31) and non-current non interest bearing liabiiilies (note 25).

Carrying t ;ontractual 6 months In millions of EUR amount cash flows or less 612 monlhs i-2 years 2-5 years Financial liabilities	More lhan (38) (1,340) (7)
Secured bank loans 520 (600) (125) (35) (44) (358)
6,795 (7,611) (207) Unsecured bank loans (392) (2,017) (3,655)
(1,319) Unsecured bond issues 1.122 (40) (30) (552) (690)
(107) (38) Finance lease liabilities 95 (12) (13) (ID	(33)
670 Other interest-bearing liabilities (1,245) (77) (44) (129) (39)	(956)
Non-inlerest-bearlng liabilities 409 (36) (38) (78) (80) (390)	(158)
Deposiis from third parties 348 (348) (338) (10)
Bank overdrafts 94 (102) (102) - -	-
Trade and other payables, excluding (D 3,666 inlerest and dividends (3,605) (3,375) (213) (8)	(8)
Derivative financial (assets) and liabilities
Interest rate swaps used for
hedge accounting:
Inflow (89) 2,082 160 144 206 888	684
Outflow 425 (2,532) (194) (293) (1.022) (191)	(832)
Forward exchange contracts used
for hedge accounling:
Inflow (102) 2,068 1,095 670 303	-
: (677) Outflow 55 (2,028) (1.056) (295)	-
Other derivatives not used
for hedge accounting, net (12)
(15,737) 14.491) 13.996 (638) (2,8351 (5,085)	(2,688)

The tolal carrying amounl and contractual cash flows of derivalives are included in trade and other receivables (note 20) and trade and other payables (note 31) and non-currenl non-interest bearing liabiiilies (nole 25).

Market risk

Markel risk is the risk thai changes in markel prices, such as foreign exchange rales, interest rates and equity prices will affect Heineken's income or the value ofits holdings offinancial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, whilst optimising the relurn on risk.

Heineken uses derivalives In the ordinary course ofbusiness, and also incurs financial liabiiilies, in order lo manage markel risks. Generally, Heineken seeks to apply hedge accounling or make use of natural hedges in order lo minimise the effects of foreign currency fluctuations in the income staiement.

Derivatives that can be used are inlerest rale swaps, forward rale agreements, caps and floors, commodiiy swaps, spot and forward exchange conlracis and options. Transaclions are entered into with a limited number of counterparties with sirong credit ratings. Foreign currency, inlerest rale and commodiiy hedging operalions are governed by inlernal policies and rules approved and monitored by the Executive Board.

d U ^

32. Financial risk management and flnancial instruments ili nued Foreign currency risk

Heineken is exposed to foreign currency risk on sales, purchases and borrowings thai are denominated in a currency olhcr lhan the respective functional currencies of Heineken enlilies. The main currencies that give rise to this risk are the US dollar and Brilish pound.

In managing foreign currency risk, Heineken aims lo reduce the impact of short-term fluctuations on earnings. Over the longer lerm, however, permanent changes in foreign exchange rales would have an impaci on profit.

Heineken hedges up to 90 per cent of its mainly intra-Heineken US dollar cash flows on the basis of rolling cash flow forecasts in respect lo forecasted sales and purchases. Cash flows in other foreign currencies are also hedged on the basis of rolling cash flow forecasts. Heineken mainly uses forward exchange contracts to hedge its foreign currency risk. Given the limiled availability of efficiënt and effective hedging instruments hedging levels are temporarily below policy in a number of Cenlral and Easlern European counlries. The majority ofthe forward exchange contracts have maturities of less lhan one year after the balance sheel date.

The Company has a clear policy on hedging transactional exchange risks, which postpones the impact on financial results. Translation exchange risks are hedged to a limited extent, as the underlying currency posilions are generally considered to be long-term in nature. The result ofthe net investment hedging is recognised in the translalion reserve as can be seen in the consolidaled statement of comprehensive income.

It is Heineken's policy lo provide intra-Heineken financing in the functional currency of subsidiaries where possible to prevent foreign currency exposure on subsidiary level. The resulling exposure al Group level is hedged by means of forward exchange contracts. Intra-Heineken financing in foreign currencies is mainly in British pounds, US dollars, Russian roubles and Polish zloty. In some cases Heineken elects lo treat intra-Heineken financing wilh a permanent character as equily and does not hedge the foreign currency exposure.

The principal amounis of Heineken's British pound, Polish zloly and Egyptian pound bank loans and bond issues are used to hedge local operalions, which generate cash flows that have the same respective functional currencies. Corresponding interest on these borrowings is also denominated in currencies that match the cash flows generated by the underlying operalions of Heineken. This provides an economic hedge without derivalives being entered into.

In respect of other monetary assets and liabiiilies denominated in currencies other lhan the functional currencies ofthe Company and the various foreign operations, Heineken ensures that ils net exposure is kept to an acceptable level by buying or selling foreign currencies al spol rates when necessary lo address short lerm imbalances.

Exposure to foreign currency risk

Heinekens transactional exposure lo the British pound, US dollar and euro was as follows based on nolional amounts. The euro column relates lo transactional exposure lo the euro wiihin subsidiaries which are reporting in other currencies.

	2009	2009	2009	2008	2008
In millions	EUR	GBP	USD	GBP	USD
Loans and held-to-maturity
inveslmenls				480	257
Trade and other receivables	25	-	7	12	142
Cash and cash equivalents	46	-	2	24	19
Secured bank loans	-	-	(1)	-	-
Unsecured bank loans	(100)	(57)	(1.492)	(537)	(1,720)
Unsecured bond issues	-	(400)	-	-	2
Non-interest-bearing liabilities	(10)	-	(1)	-	(2)
Bank overdrafts	(63)	-	(2)	-	(13)
Trade and other payables	(88)	-	(26)	(4)	(58)
Gross balance sheet exposure	(190)	(457)	(1.513)	(25)	(1.373)
Estimated forecast sales
next year	140	1	885	2	1,000
Estimated forecast purchases next
year	(402)	(1)	(88)	1	(295)
Gross exposure	(452)	(457)	(716)	(22)	(668)
Cash flow hedge accounting
forward exchange contracts	61	427	(375)	(1)	(545)
Other hedge accounling forward
exchange contracts	(945)		1.061	57	799
Net exposure	(1,336)	(30)	(30)	34	(414)

Including in the US dollar amounts are intra-Heineken cash flows. Wiihin the olher hedge accounting forward exchange contracts, the cross-currency interest rate swaps of Heineken UK forms the largesi componenl. As a resull ofthe 2008 Scottish & Newcastle acquisilion, Heineken had assumed debt swapped back into euro which Is maintained as a net investment hedge.

The following significanl exchange rales applied during the year:

	Average rate	Year-end rate
InEUR	2009 2008	2009	2008
GBP	1.1224 1.2577	1.1260	1.0499
USD	0.7170 0.6832	0.6942	0.7185

Sensitivity analysis

A10 per ccnl strengthening ofthe euro against the Brilish pound and US dollar or in case ofthe euro a strenghlening ofthe euro againsl all olher currencies as al 31 December would have increased (decreased) equily and profil by the amounis shown below. This analysis assumes that all other variables, in particular Interest rates, remain constant. The analysis is performed on the same basis for 2008.

In millions of EUR		Equity		Pr ofit or loss
	31 December	2009	2008	2009	2008
EUR		1	-	(3)
GBP		2	(2)	2	(2)
iJSD		39	1		6

A10 per cent weakening ofthe euro against the Brilish pound and US dollar or in case ofthe euro a weakening ofthe euro againsl all other currencies as al 31 December would have had the equal but opposite effect on the basis that all olher variables remain constant.

32. Financial risk management and flnancial instruments

Interest rate risk

In managing inlerest rale risk, Heineken aims to reduce the impaci of short term fluctuations on earnings. Over the longer lerm, however, permanent changes In interesl rates would have an impact on profil.

Heineken opts for a mix offixed and variable interesl rales in ils financing operations, combined wilh the use of inlerest rate instruments. Currenlly Heineken's inlerest rale position is more weighted towards fixed raiher than floating. Interest rate instruments that can be used are interesl rate swaps, forward rate agreemenis, caps and floors.

Swap maturity follows Ihe maturity ofthe related loans and borrowings and have swap rales for the fixed leg ranging from 2.0 lo 7.3 per cent (2008: from 2.9 to 7.3 per cent).

Interest rate risk - Profile

At the reporting date the Interest rate profile of Heineken's interesl-bearing financial instruments was as follows:

In millions of EUR	2009	2008
Fixed rate instruments
Financial assels	157	121
Financial liabilities	(4,664)	(3,192)
Inlerest rale swaps floating lo fixed	(2,505)	(4,656)
	(7.012)	mn
Variable rale instruments
Financial assets	88	817
Financial liabilities	(2,947)	(6,452)
Interesl rate swaps fixed to floating	2,505	4,656
	i354l_	J979].

Fair value sensitivity analysis for fixed rate instruments

During 2009. Heineken opted lo apply fair value hedge accounting on certain fixed rate financial liabiiilies. The fair value movements on these instruments are recognised in the income statement. The change in fair value on these instruments was EUR73 million in 2009 (2008: EUR294 million), which was offset by the change in fair value ofthe hedge accounting instruments, which was EUR(73) million (2008: EUR(288) million).

A change of 100 basis points in interest rates al the reporting date would have increased (decreased) equily and profit or loss by the amounts shown below (afler tax).

	Profit or loss	Equity
In millions ol EUR	ioobp increase <	100 bp lecrease	100 bp increase	ioobp decrease
31 December 2009
Instruments designated at fair value	45	(48)	45	(48)
Interest rate swaps	(19)	21	49	(47)
Fair value sensitivitY(net)	26	(27)	94	(95)
31 December 2008
Instruments designated at fair value	30	33	30	33
Interest rate swaps	(3)	(63)	94	(159)
Fair value sensitivitv (net)	27	(30)	124	(126)

As part ofthe acquisilion of Scottish & Newcastle in 2008, Heineken took over a specific portfolio of euro floatingto fixed interest rale swaps with a notional amounl of EUR 1,290 million. Allhough interest rale risk is hedged economically. It is not possible to apply hedge accounling on this portfolio. A movement in inlerest rales will therefore lead lo a fair value movement in the income statement under the other net financing income/ (expenses). Any related non-cash income or expenses in our income statement are expected to reverse over time.

Cash flow sensitivity analysis for variable rate instruments

A change of 100 basis points in interest rates constantly applied during the reporting period would have increased (decreased) equity and profit or loss by the amounts shown below (after tax). This analysis assumes that all olher variables, in particular foreign currency rales, remain constant and excludes any possible change In fair value of derivatives al period-end because ofa change in inlerest rates. The analysis is performed on the same basis for 2008.

	Profit or loss
; •; • ,,•,,,! •	100 bp increase decrease	too bp	100 bp increase decrease	100 bp
31 December 2009
Variable rate instruments	(21)	21	(21)	21
Net inlerest rate swaps floating to fixed	19	(19)	19	(19)
Cash flow sensitivity [netj	(2)	2	(2)	2
31 December 2008
Variable rate instruments	(42)	42	(42)	42
Net interesl rale swaps floating lo fixed	35	(35)	35	(35)
Cash flow sensitivity (net)	(7)	i-	1')	7

Other market price risk

Management of Heineken monitors the mix of debt and equity securities in ils investmenl portfolio based on markel expectations. Material investments within the portfolio are managed on an Individual basis.

The primary goal of Heineken's investment straiegy is lo maximise investmenl returns in order to partially meet its unfundGd defined benefit obligations; managemenl is assisted by external advisors in this regard.

Commodity risk is the risk that changes in commodiiy price will affect Heineken's income. The objective of commodiiy risk managemenl is lo manage and control commodity risk exposures within acceptable parameters, whilst optimising the return on risk. The main commodity exposure relates to the purchase of cans, glass bottles, mall and utilities. Commodity risk is in principal addressed by negotiating fixed prices in supplier coniracts with various contract durations. So far, commodity hedging with financial counterparties by the Company is limited to the incidental sale of surplus COi emission righis and aluminium hedging, which is done in accordance with risk policies. Heineken does not enter inlo commodiiy contracts olher than to meet Heineken's expected usage and sale requirements. As at 31 December 2009, the underlying amount of aluminium swaps was EUR8 million. Off balance sheet exposure as al 31 December 2009 EUR3,564 million and in principal represent long-term supply contracts of raw materials.

32. Financial risk management and financial instruments

Cash flow hedges

The following table indicates the periods in which the cash flows associated wilh derivalives lhat are cash flow hedges, are expected to occur.

							2009
In millions ol EUR	Carrying amount	Expected cashflows	6 months	or less 6-12 months	1-2 years	2-5 years	More than 5 years
Interest rate swaps:
Assets	(17)	503	16	16	27	66	378
Liabilities	226	(740)	(65)	(78)	(80)	(163)	(354)
Forward exchange contracts:
Assels	(48)	1,015	615	282	118	-	-
Liabilities	26	(996)	(608)	(268)	(120)	-	-
	187	(218)	(42)	(48)	(55)	(97)	24
							2008
In millions of EUR	Carrying amount	Expected cash Hows	6 months	or less 6-12 months	i-2 years	2 S years	More than •• v.M l -
Interest rate swaps:
Assets	(89)	856	80	64	124	139	449
Liabilities	206	(1,097)	(100)	(97)	(212)	(214)	(474)
Forward exchange contracts:
Assets	(102)	2,068	1,095	670	303	-	-
Liabilities	55	(2,028)	(1,056)	(677)	(295)		-

The periods in which the cash flows associaied with forward exchange contracts that are cash flow hedges are expecied to impact the income statemenl is on average two monlhs earlier lhan the occurrence ofthe cash flows as in the above table.

(201)

19

(40)

(80)

(75)

(25)

70

Fair value hedges/net investment hedges

The following table indicates the periods in which the cash flows associated with derivalives thai are fair value hedges or net inveslmenl hedges are expected lo occur.

							2009
In millions of EUR	Carrying amount	Expected cash flows	6 months	or less 6-12 months	1-2 years	2 5 yea^	More than 5 years
Interest rale swaps:
Assets	-	987	27	20	61	666	213
Liabilities	(212)	(1.079)	(9)	(11)	(22)	(802)	(235)
	(212)	(92)	18	9	39	1136)	(22)
In millions of EUR	Carrying amount	Expected cash Hows	6 monlhs	or less 6-12 months	12 years	2 5 years	2008 More than S years
Interest rate swaps:
Assets	-	1,106	62	61	47	701	235
Liabilities	167	(1,316)	(76)	(76)	(45)	(761)	(358)
	167	(210)	(14)	(15)	2	(60)	(123)

Capital management

There were no major changes in Heineken's approach to capital management during the year. The Executive Board's policy is lo maintain a strong capital base so as to maintain inveslor, creditor and markel confidence and to sustain fulure development ofbusiness and acquisitions. Capital Is herein defined as equity attributable to equity holders ofthe Company (total equity minus minorily interests).

Heineken is not subject lo externally imposed capital requirements other than the legal reserves explained in nole 22. Shares are purchased to meet the requirements under the Long Term Incentive Plan as further explained in note 29.

Fair values

The fair values offinancial assels and liabiiilies, logelher wilh the carrying amounts shown in the statement of financial position, are as follows:

	Carrying	Fair	Carrying	Fair
In millions of EUR	amount 2009	value 2009	amount 2008	value 2008
Loans	329	329	310	310
Held-to-maturity investments	4	4	10	10
Available-for-sale investments	219	219	221	221
Advances to customers	319	319	346	346
Investments held for Irading	15	15	14	14
Trade and other receivables, excluding derivatives
used for hedge accounting	2,261	2,261	2,401	2,401
Cash and cash equivalents	520	520	698	698
Interest rate swaps used for hedge accounting:
Assets	17	17	89	89
Liabilities	(438)	(438)	(425)	(425)
Forward exchange contracts used for hedge accounling:
Assets	48	48	102	102
Liabilities	(26)	(26)	(55)	(55)
Other derivatives, net			12	12
Bank loans	(3,311)	(3.362)	(7,315)	(7,401)
Unsecured bond issues	(2,945)	(3,058)	(1.122)	(1,204)
Finance lease liabilities	(108)	(108)	(95)	(95)
Olher interest-bearing liabilities	(1.342)	(1.423)	(670)	(679)
Non-interest-bearing liabilities	(93)	(93)	(16)	(16)
Non-current derivatives used for hedge accounting	(370)	(370)	(393)	(393)
Deposiis from third parties and other interest-bearing liabiiilies	(377)	(377)	(348)	(348)
Trade and other payables excluding dividend,
interest and derivatives used for hedge accounting	(3.444)	(3,444)	(3,579)	(3,579)
Bank overdraft s	(156)	(156)	(94)	(94)

Basis for determining fair values

The significanl methods and assumptions used in estimating the fair values offinancial instruments reflected in the table above are discussed in nole 4.

Fair value hierarchy

Effeclive 1 January 2009, Heineken adopted the amendment lo IFRS 7 for financial instruments that are measured in the statemenl offinancial position al fair value (refer 3b). This requires disclosure of fair value measurements by level ofthe following fair value measurement hierarchy:

• Quoted prices (unadjusted) in active markets for identical assels or liabilities (level 1).
• Inputs other than quoted prices included wiihin level 1 that are observable for the assel or liability, eilher direclly (that is, as prices) or indirectly (lhat is, derived from prices) (level 2).
• Inputs for the assel or liabilily lhat are not based on observable market data (unobservable inputs) (level 3).

3 2. Financial risk managemen t an d financial instrument s

In millinnt of FUR		Level 2	Level 3
31 December 2009
Available-for-sale investments	57		162
Non-current derivative assets used for hedge accounting		16
Current derivative assets used for hedge accounting		49
Investments held for trading	15
	72	65	162
Non-current derivative liabilities used for hedge accounting		370
Current derivative liabilities used for hedge accounting		94
		464
31 December 2008
Available-for-sale investments	47		174
Non-current derivative assets used for hedge accounting		100
Current derivative assets used for hedge accounting		103
Investments held for trading	14
	61	203	174
Non-current derivative liabilities used for hedge accounling		393
Current derivative liabilities used for hedge accounling		87
		480

in millions of EUR	2009
Avallable-for-sale investments based on Level 3
Balance as at 1 January	174
Fair value adjustments recognised in other
comprehensive income	18
Disposals	(34)
Transfers	4
Balance as at 31 December	162

3 3 . Off-balance sheet commitment s

In millions of EUH	Total 2009	Less than 1 year	1-5 years	More than 5 years	Total 2008
Guarantees to banks for loans (to third parties)	371	191	146	34	408
Olher guarantees	177	116	5	56	89
Guarantees	''.48	307	151	90	497
Lease & operational lease commitments	322	47	139	136	378
Property, plant & equipment ordered	46	42	2	2	56
Raw materials purchase contracts	3,564	950	1,399	1,215	2,835
Other off-balance sheet obligations	2,199	450	1,228	521	2,325
Off-balance sheet obliqations	6,131	1,489	2,768	1,874	5,594
Undrawn committed bank facilities	2,077	77	2,000	-	1.640

Heineken leases buildings, cars and equipment

Guaranlees to banks for loans relale to loans to customers, which are given by external parlies in the ordinary course of business of Heineken.

Raw material contracts include long lerm purchase contracts with suppliers in which prices are fixed or will be agreed based upon pre-defined price formulas. These coniracts mainly relate to malt, bottles and cans

During the year ended 31 December 2009 EUR 184 million (2008: EUR177 million) was recognised as an expense In the income statemenl in respect ofoperating leases and rent.

Olher off-balance sheel obligations mainly include distribution, rental, service and sponsorship contracts.

Committed bank facilities are credit facilities on which a commitment fee is paid as compensation for the bank's requiremenl lo reserve capital. For the details ofthese committed bank facilities see note 25. The bank is legally obliged to provide the facility under the lerms and conditions ofthe agreement.

As part ofthe transaclion wilh APB in respect ofthe realignment ofits interesls In the Asia Pacific region. Heineken acquired the entire issued share capital of APB Pearl Ltd and APB Aurangabad Ltd on 10 February 2010 (refer note 37). Heineken inlends lo transfer its interests in these two companies, together wilh its interests in MAPL, lo UBL during 2010.

34. Contingencies

The Netherlands

Heineken is Involved in an antitrust case initialed by the European Commission for alleged violations ofthe European Union compelilion laws. By decision of 18 April 2007 the European Commission stated that Heineken and olher brewers operating in the Netherlands, restricted compelilion in the Dutch markel during the period 1996 1999. This decision follows an investigation by the European Commission that commenced in March 2000. Heineken fully cooperated with the authorities in this Investigation. As a resull ofits decision, the European Commission imposed a fine on Heineken of EUR219 million in April 2007.

On 4 July 2007 Heineken filed an appeal with the European Court of Firsl Instance against the decision ofthe European Commission as Heineken disagrees with the findings ofthe European Commission. Pending appeal, Heineken was obliged to pay the fine to the European Commission. This fine was paid in 2007 and was treated as an expense in the 2007 Annual Report. A final decision by the European Court of Firsl Instance Is expected in 2010 or 2011.

Carisberg

The consideralion paid (purchase price) for the acquisition of Scottish & Newcastle is subject to change as, in line with the consortium agreement, the final net debt settlement is being discussed between the consortium partners. Given that the outcome is not virtually certain there is no basis lo reliably estimate the financial effecls ofthe net debl settlement.

ft nn.n t n

35- Related parties Identification of related parties

Heineken has a related party relationship with ils associates and joint ventures [refer nole 16), Heineken Holding N.V., Heineken pension funds (refer note 28) and with ils key management personnel (Executive Board and the Supervisory Board).

Key management remuneration

In millions of EUR	zoog	2008
Executive Board	4.2	3.2
Supervisory Board	0.4	0.4
	4.6	3.6

Executive Board

The remuneration ofthe members ofthe Excculive Board comprises a fixed componenl and a variable componenl. The variable component is made up of a Short-Term Incentive Plan and a Long-Term Incentive Plan. The Short-Term Incentive Plan is based on an organic profil growlh target and specific year targets as set by the Supervisory Board. For the Long-Term Incentive Plan see note 29. The separale Remuneration Report is slated on page 65.

As at 31 December 2009. J.F.M.L. van Boxmeer held 9,244 Company's shares and D.R. Hooft Graafland 6,544 (2008: J.F.M.L. van Boxmeer 9,244 and D.R. Hooft Graafland 6,544 shares). D.R. Hooft Graafland held 3,052 shares of Heineken Holding N.V. as al 31 December 2009 (2008:3,052 shares).

Executive Board

		Fixed Salary		Short-Term Incentive Plan		Long-Term Incentive Plan*		Pension Plan		Total
In thousands of EUR	2009	2008	2009	.•ooh	2009	2008	2009	2008	2009	20O8
J.F.M.L. van Boxmeer	750	750	1,125	611	303	249	379	287	2,557	1,897
D.R. Hooft Graafland	550	550	619	336	167	149	315	247	1,651	1.282
Total	1,300	1,300	1.744	947	470	398	694	534	4,208	3,179

• The remunerallon rcporled .is part ofthe Long-Term Incentive Plan is based on IFRS accounting pollclea and dens mil relied the value sfveMed irmancesh.i

Supervisory Board

The individual members ofthe Supervisory Board received the following remuneration:

In thousands of EUR	2009	2008
C.J.A. van Lede	66	66
J.M. deJong	52	52
M.Das	52	52
M.R. de Carvalho	50	50
J.M. Hessels	50	50
l.C. MacLaurin	50	50
A.M. Fentener van Vlissingen	50	50
M. Minnick	45	32
V.C.O.B.J. Navarre	31	-
Total	446	402

Only M.R. de Carvalho held shares (8) of Heineken N.V. as al 31 December 2009 (2008: 8 shares). As at 31 December 2009 and 2008, the Supervisory Board members did not hold any ofthe Company's bonds or option rights. CJ.A. van Lede held 2,656 and M.R. de Carvalho held 8 shares of Heineken Holding N.V. as al 31 December 2009 (2008: C.J.A. van Lede 2,656 and M.R. de Carvalho 8 shares).

Other related party transactions

In millions of EUR	Transaclion value	Balance outstanding as at 31 December
	2009	2008	2009	2008
Sale of products and services
To associates and joint ventures	142	50	12	6
	142	50	12	6
Raw materials, consumables and services
	89	26	1	7
Other expenses -joint ventures	12	1	-	6
Goods for resale - joint ventures	101	27	1	13

Heineken Holding N.V.

In 2009 an amounl of EUR712,129 (2008: EUR551,000) was paid to Heineken Holding N.V. for managemenl services for the Heineken Group.

This paymenl is based on an agreement of 1977 as amended in 2001, providing that Heineken N.V. reimburses Heineken Holding N.V. for ils administration cosls. Best practice provision 111.6.4 ofthe Dutch Corporate Governance Code of 10 December 2008 has been observed in this regard.

36. Heineken entities

Control of Heineken

The shares and oplions ofthe Company are traded on Euronext Amsterdam, where the Company is included In the main AEX Index. Heineken Holding N.V. Amsierdam has an interest of 50.005 per cent in the issued capital of the Company. The financial statements ofthe Company are Included in the consolidaled financial slalemenis of Heineken Holding N.V.

A declaration of joint and several liabilily pursuanl lo the provisions of Section 403, Pari 9, Book 2, ofthe Dutch Civil Code has been issued with respect lo legal entities established in the Netherlands marked with a • overleaf.

aLBa riMA

36. Heineken entities Significant subsidiaries

			Ownership Interest
	Country of incorporation	2009	2008
• Heineken Nederlands Beheer B.V.	The Netherlands	100%	100%
• Heineken Brouwerijen B.V.	The Netherlands	100%	100%
• Heineken Nederland B.V.	The Netherlands	100%	100%
• Heineken International B.V.	The Netherlands	100%	100%
• Heineken Supply Chain B.V.	The Netherlands	100%	100%
• Amstel Brouwerij B.V.	The Nelherlands	100%	100%
• Amstel Internationaal B.V.	The Netherlands	100%	100%
• Vrumona B.V.	The Netherlands	100%	100%
• Invebra Holland B.V.	The Netherlands	100%	100%
• B.V. Beleggingsmaatschappij Limba	The Netherlands	100%	100%
• Brand Bierbrouwerij B.V.	The Netherlands	100%	100%
• Heineken CEE Holdings B.V.	The Netherlands	100%	100%
• Heineken CEE Investments B.V.	The Netherlands	100%	100%
• Brasinvest B.V.	The Netherlands	100%	100%
• Heineken Beer Systems B.V.	The Netherlands	100%	100%
Central Europe Beverages B.V.	The Netherlands	72%	72%
Heineken France S.A.S.	France	100%	100%
Heineken UK Ltd.	United Kingdom	100%	100%
Sociedade Central de Ccrvejas et Bebidas S.A.	Portugal	100%	100%
Oy Hartwell Ab.	Finland	100%	100%
Heineken Espana S.A.	Spain	98.7%	98.6%
Heineken Italia S.p.A.	Italy	100%	100%
Athenian Brewery S.A.	Greece	98.8%	98.8%
Brau Union AG	Austria	100%	100%
Brau Union Österreich AG	Austria	100%	100%
Grupa Zywiec S.A.	Poland	61.9%	62%
Heineken Ireland Ltd.'	Ireland	100%	100%
Heineken Hungaria Sorgyërak Zrt.	Hungary	100%	100%
Heineken Slovensko a.s.	Slovakia	100%	100%
Heineken Switzerland AG	Switzerland	100%	100%
Karlovacka Pivovara d.0.0.	Croatia	100%	100%
Mouterij Albert N.V.	Belgium	100%	100%
Ibecor S.A.	Belgium	100%	100%
Affligem Brouwerij BDS N.V.	Belgium	100%	100%
N.V. Brouwerijen Alken-Maes Brasseries S.A.	Belgium	99.7%	99.7%
LLC Heineken Breweries	Russia	100%	100%
Heineken USA Inc.	United States	100%	100%
Heineken Ceska republika a.s.	Czech Republic	100%	100%
Drinks Union a.s.	Czech Republic	100%	98.5%
Heineken Romania S.A.	Romania	98.5%	98.2%
FCJSC Brewing Company. Syabar'	Belarus	100%	100%
OJSC, Rechilsapivo'	Belarus	86.2%	80.8%
Commonwealth Brewery Ltd.	Bahamas	53.2%	53.2%
Windward & Leeward Brewery Ltd.	St Lucia	72.7%	72.7%
Cervecerias Baru-Panama S.A.	Panama	74.9%	74.9%
Nigerian Breweries Plc.	Nigeria	54.1%	54.1%
Al Ahram Beverages Company S.A.E.	Egypt	99.9%	99.9%
Brasserie Lorraine S.A.	Martinique	100%	83.1%
Surinaamse Brouwerij N.V.	Suriname	76.2%	76.1%
Consolidated Breweries Ltd.	Nigeria	50.4%	50.1%
Brasserie Almaza S.A.L.	Lebanon	67%	67%
Brasseries, Limonaderies et Malleries 'Bralima" S.A.R.L.	D.R. Congo	95%	95%
Brasseries et Limonaderies du Rwanda 'Bralirwa' S.A.	Rwanda	70%	70%
Brasseries et Limonaderies du Burundi 'Brarudi' S.A.	Burundi	59.3%	59.3%

			Ownership interest
	Country of incorporation	2009	2008
Brasseries de Bourbon S.A.	Reunion	85.7%	85.7%
Sierra Leone Brewery Ltd.	Sierra Leone	83.1%	83.1%
Tango s.a.r.1.	Algeria	100%	100%
Société Nouvelle des Boissons Gazeuses S.A. ('SNBG')	Tunisia	74.5%	74.5%
Société Nouvelle de Brasserie S.A. 'Sonobra'	Tunisia	49.9%	49.9%

• In accordance wilh article 17 ndhe Republic oflreland Companies (Amendmenll Acl 1986, the Company Issued an Irrevocable guarantee for the years ended 31 December 2009 and 2008 regarding the liahllltles of Heineken Ireland Ltd.. Heineken Ireland Sales Ltd.. West Cork Bottling Limited. Western Beverages Limiled and Beamish and Crawford Limited, as referred to In article 51 ofthe Republic of Ireland Companies (Amrndmentl Act 1986.

37. Subsequent events

Announcement to acquire FEMSA Beer Business

On 11 January 2010 Heineken announced the acquisition ofthe beer operations of Fomento Economico Mexicano, S.A.B. de C.V ('FEMSA') via an all share transaclion (the 'Transaction'). Heineken will acquire FEMSA Cerveza, comprising 100 per cent of FEMSA's Mexican beer operalions (including its US and olher export business) and the remaining 83 per cent of FEMSA's Brazilian beer business that Heineken does not currenlly own. The transaction is expected lo complele in the second quarter of 2010 and is subject to the customary approval ofthe relevant regulatory authorities and the approval ofthe shareholders of Heineken N.V, Heineken Holding N.V. and FEMSA.

Under the proposed lerms ofthe Acquisilion, Heineken has offered FEMSA 86,028.019 new shares in Heineken on the completion ofthe Acquisilion wilh a commilmenl to deliver an additional 29.172,504 Heineken shares lo FEMSA over a period of not more than five years. Simultaneously with the closing ofthe Acquisition, Heineken Holding will swap 43,018,320 ofthe new Heineken shares wilh FEMSA for an equal number of newly issued shares in Heineken Holding. Following delivery of all such Heineken and Heineken Holding shares, FEMSA will hold a 20 per cent economic Interest in the Heineken Group.

Based on the Heineken closing share price of EUR32.925, as al 8 January 2010, the lasl Irading day prior to entering to the Iransaction, the delivery of 115,200,523 Heineken shares values the equity of FEMSA Cerveza at approximately EUR3.8 billion. Including net debl and pension obligations to be assumed of approximately EUR 1.5 billion, the lotal Implied enterprise value for FEMSA Cerveza is approximately EUR5.3 billion.

Strategic realignment interests in Asia Pacific region

On 10 February 2010, Heineken acquired the entire issued share capital of APB Pearl Ltd and APB (Aurangabad) Ltd. Heineken intends to transfer its interests in these two companies, together with ils Interests in MAPL, to UBL during 2010.

On 10 February 2010 Heineken transferred the shares it held in GBNC in its entirety lo APB. On the same dale. Heineken transferred a controlling slake of 68.5 per cent in MBI to APB. Heineken retains a shareholding in MBI of 16.5 per cent. Both transactions will be accounted for under the revised IAS 27 slandard and Heineken expects to realise an estimated combined gross book gain of EUR 140 million net of tax.

Heineken N.V. Balance Sheet

Before appropriation of profit

As at 31 December 2009
In millions of EUR	Note	2009	2008
Fixed assets
Financial fixed assets
Investments in participaiing interests	38	11.345	10,723
Other investments	17	35	89
Deferred tax assets		38	23
Total financial fixed assets		11,418	10,835
Trade and other receivables		22	26
Cash and cash equivalents		2	8
Total current assets		24	34
Total assets		11,442	10,869
Shareholders' equity
Issued capital		784	784
Translation reserve		(451)	(595)
Hedging reserve		(124)	(122)
Fair value reserve		100	88
Other legal reserves		676	595
Reserve for own shares		(42)	(40)
Retained earnings		3,390	3,552
Net profit		1,018	209
Total shareholders' equity	39	5,351	4.471
Liabilities
Loans and borrowings	40	5,406	6.289
Total non-current liabilities		5,406	6.289
Loans and borrowings		500	-
Trade and other payables		185	99
Tax payable		-	10
Total current liabilities		685	109
Total liabilities		6.091	6,398
Total shareholders' equity and liabilities		11.442	10,869

Heineken N.V. income Statement

For the year ended 31 December 2009

In millions of EUR	Nole	2009	JIUIK
Share of profit of participaiing interests, after income lax		1,305	246
Olher profil after income tax		(287)	(37)
Net profit	39	1,018	209

Notes to the Heineken N.V. Financial Statements

Reporting entity

The financial stalements of Heineken N.V. (the 'Company') are included in the consolidaled statements of Heineken N.V.

Basis of preparation

The Company financial slalemenis have been prepared in accordance wilh the provisions of Part 9. Book 2. of the Dutch Civil Code. The Company uses the option of Article 362.8 of Part 9. Book 2. ofthe Dutch Civil Code lo prepare the Company financial statements, using the same accounting policies as in the consolidaled financial statements. Valuation is based on recognition and measuremeni requirements of accounting slandards adopted by the EU (i.e., only IFRS that is adopted for use in the EU al the dale of authorisation) as explained further in the notes lo the consolidaled financial stalemenls.

Significant accounting policies

Financial fixed assets

Participaiing interests (subsidiaries, joinl venlures and associates) are measured on the basis ofthe equily method.

Shareholders' equity

The translation reserve and other legal reserves were previously formed under and are slill recognised in accordance with the Dutch Civil Code.

Profit of participating interests

The share of profil of participating interests consists ofthe share ofthe Company in the results ofthese participating Interests. Results on transactions, where the transfer of assets and liabilities between the Company and its participating interesls and mutually between participating interests themselves, are not recognised.

38. investment s i n participatin g interests

	Participating	Loan s to participating
In millions of EUR	interesls	interests	•
Balanc e a s a t 1 January 2008	3,954	2,606	6,560
Profi t o f participatin g interests	246		246
Dividen d payment s b y participatin g interests	(1)	1	-
Effec t o f movemeni s I n exchang e rates	(602)	-	(602)
Change s i n hedgin g an d fai r valu e adjustments	(102)	-	(102)
Investments/additions	660	3,961	4,621
s al 3 1 Decembe Balanc e a r 2008	4,155	6,568	10,723
Balanc e a s a t 1 January 2009	4,155	6,568	10,723
Profil o f participatin g interests	1,305	-	1,305
Dividen d payment s b y participaiin g interests	(688)	688	-
Effec t o f movement s i n exchang e rates	144	—	144
Change s i n hedgin g an d fai r valu e adjustments	62	—	62
lnveslments/(repayments)	151	(1.040)	(889)
Balanc e a s a t 3i Decembe r 2009	5,129	6,216	11,345

39- Shareholders' equity

In millions of EUR	capita:	Issued Translation	Hedging reserve	fairvalue Other legal reserve	reserves	Reserve lor own shares	Retained earnings	Net profit	Share holders' equily
Balance as at
i January 2008	784	7	44	99	571	(29)	3,121	807	5,404
Other comprehensive income		(602)	(166)	(11)	(44)		44		(779)
Profil	-	-			142	-	(142)	209	209
Total comprehensive income	-	(602)	(166)	HD	98	-	(98)	209	(570)
Transfer to retained earnings Dividends to	_				(74)		881	(807)
shareholders		_		_			(363)		(363)
Purchase/reissuance own shares				_		(ID			(ID
Share-based payments	-	-	-		-		11	-	11
Balance as at
31 December 2008	784	(595)	(122)	88	595	(40)	3,552	209	4,471
Balance as at
1 January 2009	784	(595)	(122)	88	595	(40)	3,552	209	4,471
Other comprehensive income		144	(2)	12	6		(6)		154
Profit	-	-		-	150	-	(150)	1,018	1,018
Total comprehensive income	—	144	(2)	12	156	-	(156)	1.018	1,172
Transfer to retained earnings		-			(75)		284	(209)
Dividends to shareholders	_		_	_		_	(289)		(289)
Purchase/reissuance own	_	_	_	_	_
shares Share based payments	-	-	-	-	-	(2) -	(11) 10	-	(13) 10
Balance as at
31 December 2009	784	(451)	(124)	100	676	(42)	3,390	1.018	5,351

Por more delails on reserves, please see note 22 ofthe consolidaled financial statements. For more details on LTIP, please see nole 29 ofthe consolidaled financial statements.

40. Loans and borrowings Non-current liabilities

In mfllions ot EUR	Noir	2009	2008
Unsecured bank loans		2,448	4,655
Unsecured bond issues		2,433	1,098
Other		371	377
Non-current interesl-bearing liabilities		5,252	6,130
Non-currenl non-interest-bearing liabiiilies	25	7	-
Non-current derivatives used for hedge accounting		147	159
		5,406	6,289

Non-current liabilities

In millions of EUR	Unsecured bank loans	Unsecured bond issues	Other non-current Non-current interest- liabilities	non-inler- bearing est bearing liabilities	Non-current derivatives used for hedge accounting	Total
Balance as al 1 January 2009	4,655	1,098	377	-	159	6,289
Charge from/to profit or loss i/r derivatives	-		-	7	5	12
Effecls of movements of exchange rates	69	8	(41)	-	-	36
Proceeds	-	1,838	-	-	-	1,838
Repayments	(1,959)	(13)	-	-	-	(1.972)
Transfers	(317)	(498)	35	-	(17)	(797)
Balance as at 31 December 2003	2,448	2,433	371	7	147	5,406

Terms and debt repayment schedule

Terms and conditions ofoutstanding loans were as follows:

In millions of EUH	1 u i-l • \	Nominal mierest	Repayment	Face value 2009	Carrying amount 2009	Face value 2008	Carrying amounl 2008
Unsecured bank loans	EUR	3.3	2012	-	-	470	470
Unsecured bank loans	EUR	5.1	2010	-	-	860	860
			2014-
Unsecured bank loans	EUR	2.4-6.2	2017	213	213	_	_
Unsecured bank loans	EUR	1.6	2013	1,700	1,709	2,403	2,416
Unsecured bank loans	EUR	2.5-6.0	2015	207	207	418	418
Unsecured bank loans	GBP	2.8	2013	329	329	504	504
Unsecured bond issue	GBP	7.3	2015	442	450	-	-
Unsecured bond issue	EUR	4.3	2010	500	500	500	500
Unsecured bond issue	EUR	5.0	2013	598	600	598	600
Unsecured bond issue	EUR	7.1	2014	996	1,000	-	-
Unsecured bond issue	EUR	4.6	2016	397	400	-	-
Other interest-bearing liabilities	USD	5.9	2018	306	307	280	280
Other inierest-bearing liabilities	various	various	various	64	64	97	97
				5,752	5.779	6,130	6,145

For financial risk managemenl and financial instruments, see nole 32.

41. Audit fees

Olher expenses in the consolidaled financial stalemenls include EURll.7 million of fees in 2009 (2008: EUR14.5 million) for services provided by KPMG Accountants N.V. and its member firms and/or affiliates. Fees for audit services include the audit ofthe financial slalemenis of Heineken and ils subsidiaries. Fees for other audit services include sustainability, subsidy and other audits. Fees for tax services include lax compliance and tax advice. Fees for other non-audit services include due diligence related lo mergers and acquisitions, review of interim financial statements, agreed upon procedures and advisory services.

	KPMG Accounta	Other KPMG member firms and affiliates			Total
In millions of EUR	2009	. H I ib	2009	jno.S	2009	2008
Audit of Heineken and ils subsidiaries	2.0	2.7	5.5	6.9	7.5	9.6
Other audit services	0.4	0.1	0.4	0.5	0.8	0.6
Tax services	-	-	1.6	1.4	1.6	1.4
Other non-audit services	0.8	0.7	1.0	2.2	1.8	2.9
Total	3.2	3.5	8.5	11.0	11.7	14.5

42. Off-balance sheet commitments

In millions of EUR	Total	Less than lyear	1-5 years	More than 5 years	Total 2008
Undrawn committed bank facility	2,000	-	2,000	-	1,530
			2009		2008
		Third	Heineken parties companies	Third	Heineken parties companies
Declarations of joint and several liabilily			1,563		1,937

Fiscal unity

The Company is part ofthe fiscal unity of Heineken in the Nelherlands. Based on this the Company is liable for the lax liabilily ofthe fiscal unity in the Nelherlands.

43- Subsequent events

For subsequenl events, see nole 37.

44- Other disclosures

Remuneration

We refer lo note 35 ofthe consolidated financial statements for the remuneration and the incentives ofthe Executive Board members and the Supervisory Board. The Executive Board members are the only employees ofthe Company.

Participating interests

For the lisl of direct and indirect participating Interesls, we refer to noles 16 and 36 to the consolidaled financial stalements.

Executive and Supervisory Board Statement

The members ofthe Supervisory Board signed the financial statements in order to comply wilh their statutory obligation pursuanl to art. 2:101 paragraph 2 Civil Code.

The members ofthe Executive Board signed the financial statemenls in order lo comply wilh their statutory obligation pursuanl lo art. 2:101 paragraph 2 Civil Code and arl. 5:25c paragraph 2 sub c Financial Markets Supervision Act.

Amsterdam. 22 February 2010	Executive Board	Supervisory Board
	Van Boxmeer	Van Lede
	Hooft Graafland	DeJong
		Das
		de Carvalho
		Hessels
		Fentener van Vlissingen
		MacLaurin
		Minnick
		Navarre

Statement of the Executive Board

Statement ex Article 525c Paragraph 2 sub c Financial Markets Supervision Act ("Wet op het Financieel Toezicht")

To our knowledge,

• 1°. the Financial Stalemenls give a true and fair view ofthe assels, liabiiilies, financial position and profit of Heineken N.V. and ils consolidaled companies;
• 2°. the Report ofthe Executive Board gives a true and fair view ofthe position as at 31 December 2009 and the developments during the financial year 2009 of Heineken N.V. and its related companies included in its Financial Statements; and
• 3°. the Report ofthe Executive Board describes the material risks Heineken N.V. is facing.

Executive Board

Van Boxmeer (Chairman/CEO) Hooft Graafland (CFO)

Amsterdam, 22 February 2010

Appropriation of profit

Appropriation of profit

Article 12, paragraph 7, ofthe Articles of Associalion stipulates:

"Ofthe profils, paymenl shall first be made, if possible, ofa dividend of six percent ofthe Issued part ofthe aulhorised share capital. The amount remaining shall be at the disposal ofthe General Meeting of Shareholders."

It Is proposed to appropriate EUR318 million ofthe profit for payment of dividend and to add EUR700 million lo the retained profits.

CMI code

Heineken N.V. is not a 'structuurvennootschap' wiihin the meaning of Seciions 152-164 of the Nelherlands Civil Code. Heineken Holding N.V., a company listed on the Euronext Amsierdam, holds 50.005 per cent ofthe issued shares of Heineken N.V.

Authorised capital

The Company's aulhorised capital amounts lo EUR2.5 billion.

Auditor's Report

To: Annual General Meeting of Shareholders of Heineken N.V.

Report on the financial statements

We have audited the accompanying 2009 financial stalemenls of Heineken N.V., Amsterdam as set out on pages 71 to 155 The financial stalemenls consist ofthe consolidaled financial stalemenls and the company financial stalemenls. The consolidaled financial statements comprise the consolidated statemenl offinancial position as al 31 December 2009, the consolidated income statement, the consolidated statements of comprehensive income, changes in equily and cash fiows for the year then ended, and the noles, comprising a summary of significanl accounling policies and olher explanatory Information. The company financial statements comprise the company balance sheet as at 31 December 2009, the company profit and loss accounl for the year then ended and the noles.

Management's responsibility

The Executive Board is responsible for the preparation and fair presentation ofthe financial stalements in accordance with International Financial Reporting Standards as adopted by the European Union and wiih Part 9 of Book 2 ofthe Nelherlands Civil Code, and for the preparation ofthe report ofthe Executive Board in accordance with Part 9 of Book 2 ofthe Nelherlands Civil Code. This responsibilily includes: designing, implementing and maintaining internal control relevant lo the preparation and fair presentation of the financial stalements lhat are free from material misstatement, whether due lo fraud or error; selecting and applying appropriate accounling policies; and making accounling estimates that are reasonable in the circumstances.

Auditor's responsibility

Our responsibility is lo express an opinion on the financial stalemenls based on our audit. We conducted our audit in accordance wilh Dutch law. This law requires that we comply with ethical requirements and plan and perform the audil lo obtain reasonable assurance whether the financial statements are free from material misstatement.

An audil involves performing procedures lo obtain audit evidence aboul the amounis and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment ofthe risks of material misstatement ofthe financial slalemenis, whether due lo fraud or error. In making those risk assessments, the auditor considers inlernal control relevant lo the entity's preparation and fair presentation ofthe financial slalemenis in order to design audil procedures that are appropriate in the circumslances, but not for the purpose of expressing an opinion on the effectiveness ofthe entity's internal control. An audil also includes evaluating the appropriateness of accounling policies used and the reasonableness of accounting estimates made by managemenl, as well as evaluating the overall presentation ofthe financial statements.

We believe lhat the audit evidence we have obtained is sufficiënt and appropriate lo provide a basis for our audit opinion.

Opinion with respect to the consolidated financial statements

In our opinion, the consolidated financial statements give a true and fair view ofthe financial position of Heineken N.V. as al 31 December 2009, and ofits resull and ils cash flows for the year then ended in accordance with International Financial Reporling Standards as adopted by the European Union and with Part 9 of Book 2 ofthe Netherlands Civil Code.

Opinion with respect to the company financial statements

In our opinion, the company financial statements give a true and fair view ofthe financial position of Heineken N.V. as at 31 December 2009, and ofits resull for the year then ended In accordance with Part 9 of Book 2 of the Nelherlands Civil Code.

Report on other legal and regulatory requirements

Pursuanl lo the legal requirement under 2:393 sub 5 part f of the Nelherlands Civil Code, we report, lo the extent of our competence, that the report ofthe Executive Board, as set out on pages 6 to 61 Is consistent wilh the financial statements as required by 2:391 sub 4 ofthe Nelherlands Civil Code.

KPMG ACCOUNTANTS N.V. G.L.M. van Hengstum RA

Amsterdam, 22 February 2010

Shareholder information

Investor relations

Heineken lakes a proactive role in maintaining an open dialogue wilh shareholders and bondholders, providing accurate and complele informalion in a timely and consistent way. We do this ihrough press releases, the Annual Report, presentations, webcasts, regular briefings and open days with analysis, fund managers and shareholders.

Ownership structure

Heading the Heineken Group, Heineken Holding N.V. is no ordinary holding company. Since ils formation in 1952, the objective of Heineken Holding N.V., pursuant to its Articles of Associalion has been lo manage and/ or supervise the Heineken Group and lo provide services to the Heineken Group. The role Heineken Holding N.V. has performed for the Heineken Group since 1952 has been lo safeguard Ils continuity, independence and stability and create conditions for controlled, steady growth ofthe aclivilies of the Heineken Group. This stability has enabled the Heineken Group to rise lo Ils presenl position as the brewer wilh the widest inlernalional presence and one ofthe world's largesi brewing groups. Every Heineken N.V. share held by Heineken Holding N.V. is matched by one share Issued by Heineken Holding N.V. The net assel value of one Heineken Holding N.V. share is therefore identical to the net assel value of one Heineken N.V. share. The dividend payable on the two shares is also identical. Historically, however, Heineken Holding N.V. shares have traded al a lower price due to technical factors that are market-specific. Heineken Holding N.V. holds 50.005 per cent ofthe Heineken N.V. issued shares. L'Arche Green N.V. holds 58.78 per cent ofthe Heineken Holding N.V. shares. The Heineken family holds 88.42 per cent of L'Arche Green N.V. The remaining 11.58 per cent of L'Arche Green N.V. is held by the Hoyer family. Mrs. de Carvalho-Heineken also owns a direcl 0.03 per cent stake in Heineken Holding N.V.

Pursuanl lo the Financial Markels Supervision Act (Wel op het financieel loezichl) and the Decree on Disclosure of Major Holdings and Capiial Interesls in Securities-Issuing Institutions (Besluit melding zeggenschap en kapitaalbelang in uitgevende inslellingen), the Financial Markets Aulhoriiy has been notified about the following substantial shareholding:

As regards Heineken N.V.

• Massachusetts Financial Services Company

• a capital interest of 4.07 per cent (2.92 per cent held direclly and 1.14 per cent held indirectly)
• a voiing interesl of 5.03 per cent (2.91 per cent held directly and 2.12 per cent held indirectly).

As regards Heineken Holding N.V:

• Davis Investments, LLC
• -a capital interesl of 6.46 per cent - a voting interesl of 5.84 per cent.

Heineken N.V. shares and options

Heineken N.V. shares are traded on Euronext Amsterdam, where the Company is included in the main AEX Index. Prices for the ordinary shares may be accessed on Bloomberg under the symbols HEIA:NA and HEI0:NA and on the Reuters Equities 2000 Service under HEIA.AS and HEIO.AS. The ISIN code is NL0000009165. Oplions on Heineken N.V. shares are listed on Euronext.Liffe. Addilional Information is available on the website: www.heinekeninternalional.com

In 2009, the average daily Irading volume of Heineken N.V. shares was 1,639,752 shares.

Market capitalisation

On 31 December 2009, there were 489,974,594 shares of EUR 1.60 nominal value in issue. Al a year end price of EUR33,27 on 31 December 2009, the market capitalisation of Heineken N.V. on the balance sheet date was EUR 16.3 billion.

Year-end price	EUR33.27 31 December 2009
Highest closing price	EUR34.21 4 December 2009
Lowest closing price	EUR 19.97 19 March 2009

Share distribution comparison year-on-year Heineken N.V. shares* Based on Free float: Excluding shares of Heineken Holding N.V. in Heineken N.V.

Based on 245.0 million shares in free float

North America	28.3%
UK/Ireland	14.0%
Netherlands	3.8%
Rest of Europe (ex. Netherlands) 18,3%
Rest of the world	2.5%
Undisclosed	33.1%

• Source: Capital Precision, based on best estimate January 201O.

Heineken N.V. share price In EUR. Euronext Amsterdam after restatement for share split 2005 2006 2007 2008 2009 10 20 30 40 26.78 36.03 44.22 21.90 33.27 50

Share price mruir M^ M Yumna crier |

A^rrtgr tfacjc i" 20M I.639.7SJ Ittamperórr

Dividend per share (proposed) InEUR

Heineken N.V. share price

In EUfl. Euronext Amsterdam

Shareholder information (continued)

Heineken Holding N.V. shares

The ordinary shares of Heineken Holding N.V. are traded on Euronext Amsterdam. The shares are listed under ISIN code NL000O008977.

In 2009, the average daily Irading volume of Heineken Holding N.V. shares was 350,836 shares.

Market capitalisation

On 31 December 2009, there were 245,011,848 ordinary shares of EUR 1.60 nominal value in issue and 250 priority shares of EUR2.00 nominal value in issue.

At a year-end price of EUR29.24 on 31 December 2009, the market capitalisation of Heineken Holding N.V. on balance sheel date was EUR7.2 billion.

Year-end price Highesl closing price Lowest closing price

EUR29.24 EUR 29.55 EUR 16.69 31 December 2009 29 December 2009 9 March 2009

Financial calendar in 2010 for both Heineken N.V. and Heineken Holding N.V.

Announcement of 2009 results	23 February
Publication of An nual Report	23 March
Trading update firsl quarter 2010	21 April
Annual General Meeting of
Shareholders, Amsterdam	22 April
Quolalion ex-final dividend	26 April
Final dividend 2009 payable	29 April
Announcement of half-year results 2010 25 August
Quolalion ex-interim dividend	26 August
Interim dividend 2010 payable	3 Seplember
Trading update third quarter 2010	27 October

Contacting Heineken N.V. and Heineken HoldhigN.V.

Further informalion on Heineken N.V. is obtainable from the Group Corporate Relations and/or Investor Relations department, lelephone +31 20 523 97 77 or by email: investorste'heineken.com.

Further information on Heineken Holding N.V. is obtainable by telephone +31 20 622 11 52 or fax +31 20 625 22 13. Information is also obtainable from the Inveslor Relations department, telephone +31 20 523 97 77 or by email: InveslorsÉPheineken.com.

The website www.heinekeninlernalional.com also carries further information about bolh Heineken N.V. and Heineken Holding N.V.

Share distribution comparison yearon-year Heineken Holding N.V. shares* Based on Free float: Excluding shares ol L'Arche Green N.V. In Heineken Holding N.V.

Based on 101.0 million shares in free float

•	North America	49.3%
•	UK/Ireland	17.2%
•	Netherlands	4.6%
•	Best of Europe (ex. Netherlands) 7.5%
•	Rest of the worid	1.0%
•	Undisclosed	20.4%

" Source; Capital Precision. based on besl eslimale January 2010.

Bondholder information

On 4 November 2003, Heineken N.V. issued two bonds for a total of EUR l.l billion.

In addition, on 26 February 2009 Heineken placed six year Notes of GBP400 million (EUR450 million) wilh a coupon of 7.25 per cent, on 25 March 2009 five year Noles of EURI billion wilh a coupon of 7.125 per cent and on 1 October 2009 seven year Notes of EUR400 million with a coupon of 4.625 per ccnl. These Noles were issued under the European Medium Term Note Programme established in 2008 and updaled In Seplember 2009.

The European Medium Term Note programme allows Heineken N.V. from time to time lo issue Noles for a lotal amounl of up lo EUR3 billion. As currenlly approximately EUR1.9 billion is outstanding, Heineken still has capacity of EURI.1 million under the programme. The programme can be used for issuing up to one year after ils establishment. The Luxembourg Stock Exchange has approved the programme.

I. I.

The Heineken N.V. bonds are listed on the Luxembourg Stock Exchange.

	Heineken N.V. Bond 2010	Heineken N.V. Bond 2013	Heineken N.V. EMTN 2014	Heineken N.V. EMTN 2015	Heineken N.V. EMTN 2016
Total face value*	EUR500 million	EUR600 million	EURI billion	GBP400 million	EUR400 million
Interest rate	4.375%	5.0%	7.125%	7.25%	4.625%
Maturity	4 Feb 2010	4 Nov 2013	7 April 2014	10 March 2015	10 Oct 2016
ISIN cod e	XS0179266597	XS0179266753	XS0421464719	XS04160812g6	XS0456567055

* Note: the difTerencc versus the amounl displayed In the balance sheet Is due to the amortisalion of issw costs

Countries and brands

As at 31 December 2009

At Heineken we aim to be a leading brewer in each ofthe markets in which we operate and to have the world's most prominent brand portfolio. The tables in this section show our breweries and brands worldwide.

i. Western Europe

Heineken is Western Europe's largesi and leading beer brewer. We have markel leadership positions in the UK, the Netherlands and Spain and we are the number two player in Belgium, Finland, France, Ireland, Italy, Portugal and Switzerland. Heineken Is also brewed under licence and various Group brands are Imported into several other Western European markets.

2. Centrai and Eastern Europe

Heineken is the largesi brewing group in Cenlral Europe, leading in Greece, Austria, Slovakia, Bulgaria and FYR Macedonia. We are the number two player in Poland, Romania, Croatia and Belarus. Heineken has strong market positions in Russia, Germany, Hungary, Serbia and the Czech Republic. Heineken, and in some cases Amstel, are also brewed under licence or imported inlo several olher Central and Easlern European markels.

3. Africa and the Middie East

Heineken is also very successful in Africa and the Middle East. We have owned breweries and have enjoyed substantial markel positions in several African countries for more lhan 50 years. As well as brewing a variety of local brands, we also brew and exporl the Heineken and Amslel brands across the region. Mosl ofthe Operaling Companies also produce and market soft drinks.

4. The Americas

Heineken has buill a strong position in the Americas, with exports to the USA, Cenlral America and the Caribbean. Heineken also owns a number of breweries in the Caribbean and Central America and has interests in and licensing agreements wilh several breweries in Cenlral and South America. The agreement of Heineken USA and FEMSA of Mexico made Heineken the exclusive national importer, marketer and seller of FEMSA's brands for len years.¹ Our interest in Compania Cervecerias Unidas (CCU) provides a significant position in Chile and Argentina.

5. Asia Pacific

Underpinning our position in the region is our Singapore-based joint venture with Fraser & Neave, Asia Pacific Breweries (APB). II operates breweries in Singapore, Laos, Malaysia, Mongolia, Thailand, Vietnam, Cambodia, China, New Zealand, Papua New Guinea and Sri Lanka, and as from February 2010 also In Indonesia and New Caledonia/ Heineken is brewed al several of APB's breweries throughout the region. In India, we have a 37.5 per cent stake in Uniled Breweries Limited (UBL) and a 50/50 joint venture in Millenium Alcobev with UBL. UBL is the markel leader in India. We also import Heineken Inlo the region. Heineken beer has a strong markel position, particularly in Thailand, Vietnam, Australia, New Zealand, Singapore and Taiwan.

Geographic distribution of consolidated beer volume

In thousands of heclolilres	.'Oi ''1	Dt	%
Western Europe	47,151	44,245	6.6
Central and
Eastern Europe	46,165	50,527	(8.6)
Africa and the
Middle East	19,820	18,076	9.7
The Americas	9,430	10,329	(8.7)
Asia Pacific	2,681	2,644	1.4
Consolidated beer volume	125,247	125,821	(0.5)

1 On 11 January 2010 the acquisition of the beer business of FEMSA was announced.

1 On 10 February 2010 wc transferred a significant pan oTour nmi rolling Imeresi In PT Mulli Binlang Indonesia and Grande Brasserie de Nouvelle Caledonie to APB.

Western Europe

Country	Company	Locations	Brands
Belgium	Affligem Brouwerij BDS (100%) Alken-Maes (99-7%)	Opwijk Alken, Kobbegem	Affligem, Postel, Op-Ale Maes, Grimbergen, Mort Subite, Cristal, Ciney, Judas, Hapkin, Brugs
Finland	Hartwall (100%)	Lahti	Lapin Kulta, Karjala, Foster's, Heineken, 1836 Classic, Urho, Aura, Sininen, Newcastle Brown Ale, Krusovice, Jaffa, Pepsi, Novelle, Original, Upcider, Vichy, Strongbow
France	Heineken France (100%)	Marseille, Mons-en-Baroeul, Schiliigheim	Heineken, Adelscoll, Amstel, Buckler, Desperados, Dorelei, '33' Export. Fischer Tradition, Kriska, Murphy's Irish Stout, Pelforth
Ireland	Heineken Ireland (100%)	Cork	Heineken, Amstel, Coors Light, Murphy's Irish Stout, Beamish, Foster's, Paulaner, Desperados
Italy	Heineken Italia (100%)	Aosta, Bergamo, Cagliari, Massafra	Heineken, Amstel, Birra Messina, Birra Moretli, Classica von Wunstcr, Dreher, Ichnusa, McFarland, Murphy's Irish Stout, Foster's, Prinz, Sans Souci
Netherlands	Heineken Nederland (100%)	's-Hertogenbosch, Zoeterwoude	Heineken, Amslel, Wieckse Witte, Jillz, Strongbow, Desperados, Lingen's Blond, Murphy's Irish Red
	Brand Bierbrouwerij (100%) Vrumona (100%)	Wijlre Bunnik	Brand Crystal Clear, Royal Club, Sissi, Sourcy. Vitamin Water, Pepsi, 7-Up, Rivella
Portugal	Sociedade Cenlral de Cervejas et Bebidas (100%)	Vialonga, Luso	Sagres, Heineken, Ccrgal, Imperial, S§o Jorge, Jansen, Foster's
Spain	Heineken Espana (98.7%)	jaen, Madrid, Seville, Valencia	Heineken, Amstel, Buckler, Cruzcampo, Guinness, Kaliber, Murphy's Irish Red, Shandy, Paulaner
Switzerland	Heineken Switzerland (100%)	Chur, Lucerne	Heineken, Amstel, Eichhof, Calanda, Haldengut, Ziegelhof, Desperados, Itlinger
United Kingdom	Heineken UK (100%)	Manchester, Newcastle, Edinburgh, Hereford, Ledbury	Foster's, Strongbow, John Smith, Kronenbourg, Bulmers, Heineken, Newcastle Brown Ale, Amstel, Scrumpy Jack. Woodpecker

Countries and brands (continued)

Central and Eastern Europe

Country	Company	Locations	Brands
Austria	Brau Union Österreich (100%)	Leoben-Göss, Graz-Puntigam, Schladming, Schwechat, Wieselburg, Zipf, Linz, Hallein Kaltenhausen	Heineken, Edelweiss, Gösser, Kaiser, Punligamer, Schlossgold, Schwechater, Wieselburger, Zipfer, Schladminger, Reininghaus
Belarus	Brewing Company Syabar (100%)	Babruysk	Bobrov, Zlaty Bazant
	Rechilsapivo (86.2%)	Rechilsa	Rechilsa, Dneprovska, BergG
Bulgaria	Zagorka Brewery (4g%)	Stara Zagora	Heineken, Amstel, Ariana, Stolichno, Zagorka, Starobrno
Croatia	Karlovacka Pivovara (100%)	Karlovac	Heineken, Karlovaéko, Gösser, Edelweiss Kaiser, Golden Brau
	Czech Republic Heineken Ceské republika, a.s. (100%)	Krusovice, Brno, Znojmo,	KruSovice, Heineken, Amstel, Hostan, Starobrno, Zlaly Bazant, Cerveny Drak, Baron Trenck
	Drinks Union (100%)	Usti nad Labem	Zlatopramen, Breznak, Dacicky Louny
Germany	Paulaner Brauerei (25%)	Munich, Rosenheim	Hacker-Pschorr, Paulaner, Paulaner, Weissbier
	Kulmbacher Brauerei (31.4%) Fürstlich Fürstenbergische Brauerei (49-9%)	Chemnitz, Kulmbach, Plaucn Donaueschingen	Kulmbacher, Mönchshof, Sternquell-pils Baren Pilsner, Fürstenberg, Riegeler, QOWAZ
	Hoepfner Brauerei (49-9%)	Karlsruhe	Arncgger, Edel-Weizen, Export, Goldköpfle, Grape, Hefe Weifibier, Hoepfner Pilsner, Jubelbier, Keller Weifibier, Krausen, Leicht, Maibock, Porter, Radler
	Schmucker Brauerei (49-8%)	Mossautal, Odenwald	Schmucker, Odenwalder Zwickel
	Würzburgcr Hofbrau (31.4%)	Wiirzburg, Poppenhausen	Würzburger Hofbrau, Werner Brau, Lohrer Bier, Wachtersbacher
Greece	Athenian Brewery (98.8%)	Athens, Palras, Thessaloniki	Heineken, Alfa, Amslel, Buckler, Desperados, Fischer, McFarland, Murphy's Irish Stout, Zorbas
Hungary	Heineken Hungaria (100%)	Martfü, Sopron	Heineken, Amstel, Buckler, Gösser, Kaiser, Schlossgold, Soprani Aszok, fallcros, Zlaty Bazanl, Edelweiss, Steffi, Adambrau
Kazakhstan	Efes Karaganda (28%)	Almaty, Karaganda	Heineken, Tian Shan, Efes, Belly Medved, Stary Melnik, Sokol, Gold Mine

Central and Eastern Europe continued

Country	Company	Loi gtlom	Brands
	FYR Macedonia Pivara Skopje (27.6%)	Skopje	Heineken, Amstel, Gorsko, Skopsko
Poland	Grupa Zywiec (61.9%)	Cieszyn, Elblag, Lezajsk, Warka, Zywiec	Heineken, Kro lewskie, Kujawiak, Lezajsk, Specjal, Strong, Tatra, Warka Jasne Peine, Zywiec, Budweiser
Romania	Heineken Romania (98.5%)	Constanta, Craiova, Miercurea Ciuc, Targu Mures	Heineken, Bucegi, Ciuc, Gambrinus, Golden Brau, Gösser, Schlossgold, Silva, Neumarkt, Dracula, Sovata
Russia	Heineken Breweries (100%)	Sl. Petersburg	Heineken, Amstel, Bochkarov, Ochota, Zlaty Bazant, Kirin, Guinness, Kilkenny, Buckler, Slepan Razin, Kalinkin, Ordinar PIT, Amur-Pivo, Docter Diesel,
		Khabarovsk	Three Bears Patra, Strelets, Zhigulevskoye
		Ekaterinburg	Zhigulevskoye, Yanlarnoe, Rizhkoye,
		Irkutsk	Kumanda, Gubernatorskoye, Brandmayor
		Nizhnyi Novgorod	Okskoyc, Rusich, Volga, Heineken
		Novosibirsk	Sobol, Zhigulevskoye,
		Sterlitamak	Sedoy Ural, Shikhan, Solyanaya Pristan
		Kaliningrad	PIT, Docler Diesel, Oslmark, Three Bears, Gösser, Bitburger, Buckler
Serbia	United Serbian Breweries (72%)	Novi Sad	Heineken, Kaiser, MB, Master, Amstel
	Uniled Serbian Breweries Zajecarsko (52.5%)	Zajecar	Pils Plus, Efes, Zajecarsko, Standard, Weifert
Slovakia	Heineken Slovensko (100%)	Hurbanovo	Heineken, Amslel, Corgon, Gemer, Kelt, Martlner. Zlaty Bazant. Starobrno

Countries and brands (continued)

Africa and the Middle East

Country	Compan	Localions	Brands
Algeria	Tango 100%)	Rouiba	Tango, Samba, Fiesta, Heineken, Amslel
Burundi	Brarudi (59-3%)	Bujumbura, Gilega	Amstel, Primus, Mützig, Heineken
Cameroon	Brasseries du Cameroun (8.8%)	Bafoussam, Douala, Garoua, Yaoundé	Amstel, Dynamall, Mützig, Heineken
Congo	Brasseries du Congo (50%)	Brazzaville, Pointe Noire	Amstel, Guinness, Mallina, Mützig, Ngok, Primus, Turbo King, Heineken
Democratic		Boma, Bukavu, Kinshasa,	Amstel, Guinness, Mallina, Mützig, Primus,
Republic of	Bralima (95%)	Kisangani, Mbandaka,	Turbo King, Heineken
Congo		Lubumbashi
Egypt	Al Ahram Beverages Company (99-9%)	Badr, El Obour, Sharki	Heineken, Birell, Fayrouz, Meister, Sakara, Stella, Amstel Zero
Ghana	Guinness Ghana Breweries Ltd. (20%)	Accra, Kumasi	Amslel Mall, Guinness, Gulder, Star, Malta Guinness, Heineken
Israel	Tempo Beverages Limited (40%)	Netanya	Heineken, Gold Star, Maccabee, Mall Star, Nesher
Jordan	General Investment (10.8%)	Zerka	Amstel, Heineken
Lebanon	Almaza (67%)	Beirut	Almaza, Laziza, Amstel, Heineken
Morocco	Brasseries du Maroc (2.2%)	Casablanca, Fès, Tanger	Heineken, Fayrouz
Namibia	Namibia Breweries (14.6%)	Windhoek	Heineken, Guinness, Kilkenny, Windhoek, Amstel, Tafel
Nigeria	Nigerian Breweries (54.1%)		Aba, Ama, Ibadan, Kaduna, Lagos Heineken, Amstel Malta, Gulder, Legend,
		Jjebu Ode, Awe-Omamma	Mallina, Star, Fayrouz
	Consolidated Breweries (50.4%)		"33" Export, Hi-malt, Mailer, Turbo King
Reunion	Brasseries de Bourbon (857%)	Saint Denis	Bourbon, Dynamall, Heineken
Rwanda	Bralirwa (70%)	Gisenyi, Kigali	Amslel, Guinness. Mützig, Primus, Turbo King
Sierra Leone	Sierra Leone Brewery (83.1%)	Freetown	Heineken, Guinness, Mallina, Star
South Africa	Sedibeng Brewery (75%)	Johannesburg (Sedibeng)	Heineken, Amstel, Windhoek
Tunisia	Nouvelle de Brasserie 'Sonobra' 149-99%)	Tunis	Heineken, Golden Brau

^68.

^^^^^^^^^^^^ ^m* & ^

1

1 '

The Americas

Coiinliy	Company	locations	Brands
Argentina	Companias Cervecerias Unidas Argentina (30.7%)	Salla, Santa Fe, Lujan	Heineken. Budweiser, Cordoba, Imperial, Salla. Santa Fe, Schneider
Bahamas	Commonwealth Brewery (53.2%)	Nassau	Heineken, Guinness, Kalik, Vitamalt
Brazil	Cervejarias Kaiser (17%)	Araraquara	Kaiser, Bavaria, Sol
		Cuiabé	Kaiser, Bavaria, Sol
		Fcira de Santana	Kaiser, Bavaria, Sol, Summer Draft
		Gravatai	Kaiser, Bavaria, Sol, Gold
		Jacarei	Kaiser, Bavaria, Sol, Heineken, Kaiser Bock,
			Gold, Xingü, Summer Draft
		Manaus	Kaiser, Bavaria, Sol
		Pacaluba	Kaiser, Bavaria, Sol
		Ponta Grossa	Kaiser, Bavaria, Sol, Summer Draft, Gold
Chile	Companias Cervecerias Unidas	Antofagasta, Santiago,	Heineken. Cristal, Escudo, Royal
	(33.1%)	Temuco
Costa Rica	Cerveceria Costa Rica (25%)	San José	Heineken, Bavaria, Imperial, Pilsen, Rock Ice
Dominican	Cerveceria Nacional Dominicana	Santo Domingo	Presidente
Republic	(9-3%)
Haiti	Brasserie Nalionale d'Haïli (23.3%	) Port-au-Prince	Guinness, Malta, Prestige
Jamaica	Desnoes & Geddes (15-5%)	Kingston	Heineken, Dragon Stout, Guinness, Red Stripe
Martinique	Brasserie Lorraine (100%)	Lamentin	Heineken, Lorraine, Malta, Porter
Nicaragua	Consorclo Cervecero	Managua	Heineken, Bufalo, Tona, Victoria
	Centroamericano (12.4%)
Panama	Cervecerias Baru-Panama (74-9%)	Panama City	Heineken, Crystal, Guinness, Panama,
			Soberana, Budweiser
St. Lucia	Windward & Leeward Brewery (72.7%)	Vieux-Fort	Heineken, Guinness, Piton
Suriname	Surinaamse Brouwerij (76.2%)	Paramaribo	Heineken, Parbo
Trinidad	Carib Development Corporation 20%)	Port of Spain	Carib, Stag, Guinness

Countries and brands (continued)

Asia Pacific

Coimliy	1. ,,l ,.,!!•,	; 111 il on -	Brands
Cambodia	Cambodia Brewery (33.5%)	Phnom Penh	ABC Extra Stout, Anchor, Gold Crown, Tiger
China	Shanghai Asia Pacific Brewery (46.0%)	Shanghai	Heineken, Reeb, Tiger, Strongbow, Murphy's Irish Stout
	Hainan Asia Pacific (46%)	Haikou	Anchor, Aoke, Tiger
	Kingway Brewery (9.9%)	Shenzhen, Shantou, Dongguanjianjin, Xian, ChengdL Foshan	Kingway
	Guangzhou Asia Pacific Brewery (46%)	Guangzhou
India	Asia Pacific Breweries (Aurangabad) Chowgule, Aurangabad (41-9%)		Cannon 10000, Arlem, Baron's Strong Brew, Tiger
	Asia Pacific Breweries - Pearl Private (41-9%)	Hyderabad	Tiger
	United Breweries (37-5%)	Taloja, Cherthala, Palakkad, Hyderabad, Ponda, Kalyani, Ludhiana, Chopanki, Mangalore, Nelamangla, Khurda Rewari, Aurangabad, Srikakulam,	Kingfisher, Kalyani, UB
	Millennium Alcobev (68.8%)	Thiruvallur
Indonesia	Mulli Binlang Indonesia (85.0%)	Sampang Agung, Tangerang	Heineken, Binlang, Guinness, Binlang Zero, Green Sands
Laos	Lao Asia Pacific Breweries (28.5%)	Vientiane	Tiger. Heineken, Namkong
Malaysia	Guinness Anchor Berhad (10.7%)	Kuala Lumpur	Heineken, Anchor, Baron's, Guinness, Strongbow, Kilkenny, Tiger, Lion, Malta, Anglia
Mongolia	MCS Asia Pacific Brewery (23.1%)	Ulaan baatar	Tiger, Sengur
	New Caledonia Grande Brasserie de Nouvelle Caledonie (87.3%)	Noumea	Heineken, Number One, Desperados

Asia Pacific continued

Country	Company	Locations	Brands
New Zealand	DB Breweries (41.9^	Greymoulh, Mangatainoka,	Heineken, Amstel, DB Draught, Exporl
		Otahuhu	Gold, Exporl Dry, Tiger, Monteith's, Tui,
			Fuse, Barrel 51, Murphy's Irish Stout,
	DB South Island Brewery (27%)	Timaru	Murphy's Irish Red
			Double Brown, Bushmans Draught, DB
			Draught, Export 33, Export Dry, Export
			Gold, Flame, Monteith's, Skippers Draught,
			Tui
Papua	South Pacific Brewery (31.8%)	Lae, Port Moresby	Niugini Ice Beer, South Pacific Export
New Guinea			Lager, SP Lager, SP Gold
Singapore	Asia Pacific Breweries (Singapore)	Singapore	Heineken, ABC Extra Stout, Anchor,
	(41-9%)		Baron's, Tiger, Strongbow, Bulmers,
			Newcastle Brown Ale, John Smith
Sri Lanka	Asia Pacific Brewery (Lanka) (25.2%) Mawathagama		Archipelago, Bison, Kings Stout, Baron's
			Lager, Baron's Sirong Brew
Thailand	Thai Asia Pacific Brewery (15-4%)	Bangkok	Heineken, Tiger, Cheers
Vietnam	Vietnam Brewery (25.2%)	Ho Chi Minh City	Heineken, Bivina, Tiger, Coors Light
	Halay Brewery (41.9%)	Halay	Heineken, Anchor Draft, Tiger
	VBL Da Nang Co (25.2%)	Da Nang	Coors Light, Foster's, Bier Larue
	VBL Tien Giang (25.2%)	Tien Giang
	VBL Quang Nam (20.1%)	Guang Nam

Historical summary

	IFRS 2009	IFRS 2008	IFRS 2007	IFRS 2006	IFRS 2005
Revenue and profit
In millions of EUR
Revenue	14,701	14,319	11,245	10,556	9,672
Results from operating activities	1,630	1,182	1,364	1,637	1,125
Results from operaling activities (beia)	1,968	181	1,642	1,391	1,234
as % of revenue as % of total assets	13.4	1.3	14.6	13.2	12.8
Net profit	9.8	0.9	13.7	11.6	11.3
Net profit (beia)	1,018	209	807	1,211	761
as % of equity attributable to	1,055	1,013	1,119	930	840
equity holders ofthe Company	19.7	22.7		18.6	21.2
Dividend proposed	318		20.7	294	196
as % of net profil	31.2	304 145.5	343 42.5	24.3	25.8
Per share of EUR 1.60 In millions of EUR
Cash flow from operating activities	4.87	3.39	3.12	3.55	3.49
Net profit (beia)	2.16	2.07	2.28	1.90	1.71
Dividend proposed	0.65	0.62	0.70	0.60	0.40
Equity attributable lo equity holders of the Company	10.95	9.14	11.04	10.23	8.10
Cash flow statemenl
In millions of EUR
Cash flow from operations	3,029	2,168	1,945	2,164	2,024
Cash flow used for iniercst, dividend and income lax	(650)	(508)	(416)	(498)	(314)
Cash flow from operating activities	2,379	1,660	1,529	1,666	1,710
Cash flow from operational investing activities	(638)	(1.110)	(866)	(612)	(622)
Free operating cash flow	1,741	550	663	1,054	1,088
Cash flow used For aquisitions and disposals	(149)	(3,634)	(259)	(14)	(347)
Dividend paid	(392)	(485)	(417)	(268)	(251)
Cash flow from/(used in) financing activiiies.
excluding dividend	(1.445)	3,794	(214)	(381)	(415)
Net cash flow	(245)	225	(227)	391	75
Cash conversion ratio	147.7%	47.8%	53.4%	103.7%	119.2%
Financing ratios
Nebt debt/EBITDA (beia)	2.62	3.28	0.73	0.83	1.26
EBITDA (beia)/Net interest expense	5.41	7.2	26.2	17.1	14.6
Free operating cash flow/Net debt	23%	6%	38%	62%	44%
NH li.-b:/] iiuily	1.4	1.9	0. i	0.3	0.6

	IFRS	IfRS	IFRS	IFRS	IFRS
	2009	2008	.•on;	•	2 005
Financing
In millions of EUR
Share capital	784	784	784	784	784
Reserves and retained earnings	4,567	3,687	4,620	4,225	3.185
Equity attributable to equity holders ofthe Company	5,351	4,471	5,404	5,009	3,969
Minoritv interests	296	281	307	284	310
Total equity	5,647	4,752	5.711	5,293	4,279
Employee benefits	634	688	586	600	602
Provisions (incl. deferred tax liabilities)	1,304	1,163*	728	780	731
Non-current loans and borrowings	7,401	9,084	1,295	1,883	1,999
Other liabilities (excl. provisions	5,194	4,900	3,634	3.482	3,279
Liabilities (excl. provisions)	12.595	13,984	4,929	5.365	5,278
Total equityand liabilities	20,180	20,587	11,954	12,038	10,890
Employment of capital
In millions of EUR
P,P&E	6,017	6.314	4.673	4,248	4,354
Intangible assets	7.135	7,030'	2,110	1,976	1,984
Other non-current assets	2.875	2,494'	1,814	2,056	1,730
Total non-current assets	16,027	15,838	8,597	8,280	8,068
Inventories	1,010	1,246	883	777	759
Trade and other current assets	2,623	2,805	1,900	1,718	1,587
Cash, cash equivalents and curreni other investments	520	698	574	1,263	476
Tolal current assets	4,153	4,749	3,357	3,758	2,822
Total assets	20,180	20,587	11,954	12,038	10,890
Total equity/Total non-current assets	0.35
		0.30	0.66	0.64	0.53

* Adjusted due lu ihe flnallsatlon ofthe purchase price accounling ofthe S&N acquisition as disclosed In note 6 ofthe Noles lo ihc consolidated linancial stalemenls.

Glossary

Beia

Before exceptional items and amortisation of brands and cuslomer relationships.

Cash conversion ratio

Free operaling cash flow/Net profil (beia) before deduction of minority interests.

Depletions

Sales by distributors to the retail trade.

Dividend payout

Proposed dividend as percentage of net profit (beia).

Earnings pcr share

Basic

Net profil divided by the weighted average number of shares - basic - during the year.

Diluted

Net profit divided by the weighted average number of shares - diluted - during the year.

EBfT

Earnings before inlerest, taxes and net finance expenses.

EBITDA

Earnings before interesl, taxes and net finance expenses before deprecialion and amortisation.

Effective tax rate

Income tax expenses divided by profit before income tax excluding share of profit of associates and Joinl venlures (including impairmenis thereof).

Fit2Fight

Completed cost saving programme reduced the fixed cost base in 2008 versus 2005 by EUR469 million.

Rxed costs ratio

Fixed costs as a percentage of revenue.

Free operating cash flow

This represents the tolal of cash flow from operating aclivilies, and cash flow from operational investing activiiies.

Gearing

Net debt/total equily.

Net debt

Non curreni and curreni interest-bearing loans and borrowings and bank overdrafts less investments held for trading and cash.

Net debt/EBITDA (beia) ratio

The ratio is based on a 12-month rolling calculalion for EBITDA (beia).

Organic growth

Growth excluding the effect of foreign exchange rale movemenis, consolidation changes, exceplional items, amortisation of brands and customer relationships and changes in accounting policies.

Organic volume growth

Increase in consolidaled volume, excluding the effeel ofthe first lime consolidation of acquisitions.

Profit

Net profit

Profit afler deduction of minorily interests (profit attribulable to equily holders ofthe Company).

Operating profit

EBIT less share of profil of associates and joint ventures and impairments thereof (net ofincome lax), excluding net gain or loss on sale of subsidiaries, joint venlures and associales. Or results from operaling aciivities excluding net gain or loss on sale of subsidiaries, joinl venlures and associales.

Operating profit margin

Ralio ofOperating Profil divided by Net Revenues, usually presented as a percentage.

Profit

Total profil ofthe Group before deduction of minority interests.

®

All brand names menlioned in this Annual Report, including those brand names not marked by an ®, represent registered trade marks and are legally protected.

Region

A region Is defined as Heineken's managerial classification of counlries inlo geographical unils.

Revenue

Net realised sales proceeds in euros.

Total Cost Management Programme (TCM)

TCM is a three-year cosl reduction programme covering the period 2009-11. All initiatives are clustered in four business streams: Supply Chain, Commerce, Wholesale and Olhers.

Top-line growth

Growth in net revenue.

Volume

Amstel® volume The Group beer volume ofthe Amstel brand.

Consolidated beer volume

100 per cent of beer volume produced and sold by fully consolidaled companies excluding the beer volume brewed and sold by joinl venture companies.

Group beer volume

The part ofthe tolal Group volume lhat relates to beer.

Heineken® volume The Group beer volume ofthe Heineken brand.

Heineken® volume in premium segment

The Group beer volume ofthe Heineken brand in the premium segment (Heineken volume in the Nelherlands is excluded).

Total beer volume

The Group beer volume in a counlry.

Total Group volume

100 per cent of beer, sofl drinks and other beverages volume produced and sold by fully consolidated companies and joint-venture companies as well as the volume of Heineken's brands produced and sold under licence by third parties.

Weighted average number of shares

Basic

Weighted average number of issued shares adjusted for the weighted average of own shares purchased in the year.

Diluted

Weighted average number of basic shares afler adjuslment for the effecls of all dilutive own shares purchased.

Reference infonnation

A Heineken N.V. publication

Heineken N.V. P.O. Box 28 1000 AA Amsierdam The Netherlands

telephone +31 20 523 92 39 fax +31 20 626 35 03

Copies ofthe Annual Repori and further information are obtainable from the Group Corporate Relations department viawww.heinekeninternalional.com

Production and editing

Heineken N.V. Group Corporate Relations

Text Heineken international

Translation into Dutch

V V H Business Translations, Ulrecht, the Netherlands

Photography

Andreas Pohlmann, Munich The packshot company Lld, London Heineken Inlernalional

Graphic design and electronic publishing

Addison Corporate Marketing Ltd, London

Printing

Boom & van Ketel grafimedia, Haarlem, the Netherlands

Binding and distribution

Hexspoor, Boxtel, the Netherlands

Paper

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Disclaimer

This Ann iniauis forward looking statements wlih regard lothe Hnancial position afid results ol Heineken's BCUI Itfng statetnei MIIM,,-! to rlsksand unceruüMies thai i iLiilin'erniaieruillylrntn those expressed In the forward lookingslBlemenis..^nyofth< • uncertalni i ictors ihal -••- neken'sebimyiocontroioresUnMUepredseb'.siichasfuturcinariiei andoconomicconditions, Un- brtiavloural othi market participants, chiui9esinconsumer preferences, th^ahllll esses and achieve anticipatedsyn M tcrtais, •.tii.-intje r.iTrii H in. ns, changes In tax ratet ient regulators and weaihei ahd oiher risk I.H ken's puinniy Ried Annual Reporfe. Vnu are cautioned noi id place undue reliance OR these forward lonking staiemenlü, which an relevani .i.s ol Ihed isl report Heineken does not undertake any obHgatlon to publicly release any revisl leibrward lookins statenHmlsti evenlso Bments-Maitetshareestlmaiesconiainedinllilsannuaireportarebav lisedresearch Institutes, In combination wiih i estimates