Heineken N.V. (AMS:HEIA)

AGM 2015

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Apr 23, 2015

Good afternoon, ladies and gentlemen. I hereby declare the Annual General Meeting of Shareholders of Heineken NV open at 01:30 precise this afternoon and a very warm welcome to the De La Mar Theatre I also welcome the Heineken Holding shareholders who are with us here today as observers. As you've seen the meeting is taking place today in the Dela Mar Theatre. That's for the first time. It's a new location. We chose this because the bus from Bellagar from a stock exchange building, which we normally use is currently undergoing redevelopment. We think that this building is also very suitable to the Heineken image. It was also decided to start the meeting half an hour earlier than usual because the meeting is used for theatrical purposes this evening. If any of you have any spare time, the Sunshine Boys with Andre van Daun and Case Host will be doing their show today at 08:30. You can't just sit in the room. You have to go and buy tickets. Now a couple of practicalities. First of all, would you please make absolutely sure that your mobile phones are switched off or on silent? We have simultaneous interpretation today between Dutch and English. We have our headsets available for you and you can hear. English use channel two. Questions asked in English will be answered in Dutch and that will be interpreted also. Anyone with hearing difficulties can also use headsets Dutch on channel one and English on channel two. As you know, we also have a live audio webcast of today's meeting and I'd like to welcome everyone following us online. Heineken Holding NV meeting will begin at 04:00 or later if this meeting runs beyond 04:00. I'd now like to move on to the formalities. I note that the meeting was convened on the 03/10/2015 through a complication on the Heineken website. 03/26/2015 is the registration date for today's meeting, which means that at this meeting those shareholders who were on the register on that date are entitled to attend today's meeting and cast their vote. You were told at the mergers convening meeting how to register. The agenda was also appended and you're also informed that the fully annotated agenda, the annual report, the financial statements, etcetera as required by the Dutch Civil Code were all available for inspection at the corporate website and the corporate headquarters. All formalities for today's meeting have therefore been duly observed in accordance with law and the Articles of Association, which means that legally valid decisions can be made on all relevant agenda items today. Shareholders have informed us duly that they are owning shares and number of shareholders have taken the opportunity to cast their vote by proxy online. I'll be informing you of the number of shareholders and the number of shares represented in today's meeting in due course once the calculations have been carried out. Today's meeting is attended by Mr. Meppling, the accountant the auditor from Lehmann and Louth Elvie. They are responsible for monitoring today's voting. And the vote results will be placed on the corporate website within a couple of days. The report of today's meeting can also be requested from the company and the minutes will be available within three months and placed on the company website also. We will come on to discuss the financial statements for 2014 at the Executive Board. Mr. Van Loehrer and Mr. Van Dyke from Capien J auditors will attend the meeting. As you know, Deloitte Accountants BV was nominated as our new Corporate External Auditor of last year's meeting. That was in effect from the January 1 year. Mr. Dalhousen and Mr. Landenburg are with us from tonight today. In addition, we have members of the press at today's meeting. I would like to extend a warm welcome to all those persons. If you wish to speak at any point during the meeting, please use one of the microphones dotted around the room. Please state your name as soon as I give you the floor. If you're speaking on behalf of a shareholder, please also inform us whose behalf you are speaking on. And I reserve the right to restrict each individual's speaking time if that is required in order to enable the meeting to run smoothly. Please address your questions to me and I will then decide who is to ask you. Finally, this year once again we will be using voting handsets. Heineken NV shareholders will have a voting card without any dot and convert at this meeting. Heineken Holdings shareholders have a card with a yellow dot and can only vote in Heineken Holdings meetings. There are some people with two yellow dots on their voting card. They are shareholders of both Heineken NV and Heineken Holding NV and they are entitled to vote of course at both meetings. Well, ladies and gentlemen, I'd now like to move on to the report over the 2014 events agenda item 1A. And before we move on to that, I'm delighted to give the floor to Jean Francois Van Boxevere to take us through. Thank you very much, Chairman. Well, and gentlemen, you've all had a chance to read through today's annual report. So I will restrict myself to a brief report today. We were delighted with the results of 2014. As you've seen, the sales went up by 3.3% organic growth and that's very, very good development. The Heineken brand has also developed very positively up by 5.1% with growth in all regions. In addition, our strategy of having extending our international portfolio has also worked out with Desperados, Afflegram and Sol and all of these have shown double digit growth in 2014. An important point here is stressing that we've invested a great deal of innovation. Innovation is 7.7 of sales and that is no less than CHF1.5 billion in sales, which is very impressive indeed. That's gone extremely well over the last year. Now all of this means that our operational profit growth has gone up by 8.7% and that net profit per share has gone up by 11% and that our proposed dividend in accordance with our proposed dividend policy is to increase to 30% to 40% ratio rather than 30% to 35% this year. The proposal is to increase the dividend payment to 36 percent of net profit, which means we'd end up with 24% year on year increase. Well, those were the highlights of the year's results. If we now move on to the next slide and have a quick glance at each region in term, you can see that I'm starting off with Africa and The Middle East. Here sales went up by 6.7% in volumes and in turnover terms 4.4%. This is because our sales prices have slightly gone down. This is because of market developments in Nigeria where the lower price sector of the market is growing very fast, which of course has an impact on our prices. Nevertheless, it's worked out very well for us because we have operate we've managed to show 8.8% operational profit growth. The next region I'd like to turn to is The Americas. In The Americas everything is looking very solid I must say. We've increased our market share in a great many countries virtually all the countries where we operate in fact U. A, Mexico and Brazil. Excellent Heineken brand performance in Brazil. We've extended our market share in Mexico with some very good financial results coming out of the country which is our biggest Heineken country indeed. And Dorsakis and Tecate Light the two Mexican brands have also done very well in the American market, largely thanks to exports from Mexico. I'd now like to move on to Asia Pacific. Asia Pacific again things looking very good. Sales up by 5%, 5.3% increase in revenues and a slight increase in revenue per hectoliter and consolidated revenue growth also up by 5.4%. We have achieved very good results with the Heineken brand except in Vietnam where there's been a slight downturn. But elsewhere well everywhere else in Asia the Heineken brand has been growing strongly. And as for the Tiger brand, which we got in 2012 Lloyd EPP acquisition that has developed in excellent way particularly in Vietnam, which means that although the downturn in Heineken sales in Vietnam had an impact, we nevertheless grew market share there with the other brand. Let's move on now to Central And Eastern Europe. This is probably our most difficult market. The economy is under great pressure there. I'm sure you all know about what things are looking like in Russia. But in Central Europe as a whole, we have a reduction in sale prices. We've got very tough competition year on year. Nevertheless, in many countries, we did manage to increase our market share to some extent. It remains however a pressured area 4.2 downturn in volumes revenues 3.7%, which means that our price level is improving in Central Europe in particular because we're investing very heavily in the premium segment in that part of the world. And we've rounded the year off with a consolidated operational profit of 4.5 down. However, if you accept from this the nonrecurring item of profit, which we gathered by the sale of an Austrian company producing fruit drinks, PACCO, we ended up then with a profit after all, which means that we were able to come up with a 1.4 growth in operational earnings. So we're very happy with performance in that very difficult part of the world. Finally, Western Europe. Well here, our strategy has been not an inch back. What that means is that we are fighting on every front in order to win market share, not just by having more advertising, but in particular by focusing on innovation and the top premium end of our product range. In 2014, in almost all West European countries, we did increase our market share, while maintaining our sales margins. We are very pleased with the way in which that has gone in Western Europe. Western Europe has been under pressure for years now for demographic reasons. And this is the case in Western Europe and Eastern Europe in fact. Demographic trends are not conducive to increased consumption. So you have to look at increasing your market share in an overall shrinking market and the market will continue to shrink until the demographic trends reverse about ten years down the road. Europe remains an important region for Heineken. A great deal of our profit comes from here and we continue to invest in it. And a few years of investment in Western Europe and innovation have really borne fruit in 2014. My next slide is the balance of our portfolio between the emerging markets and the developed or completed markets. And here you can see how the ratio goes. And you can see from day to day that growth and also profits and the future the volumes is all really in the developing markets for the obvious reason that they are developing and that they're often countries with very promising demographic trends. Urbanization is also proceeding very rapidly in places like Africa. I'd like to quote the example. When Renee and I were working in Africa, which is more than twenty years ago now isn't it? But in those days, I think there were eight towns with more than 1,000,000 people in Africa. Now there's 52 of them. So you can see how rapidly urbanization is developing in Africa, which makes it into an important continent for Heineken into the future. And we can expect a great deal of further growth from that part of the world. So these figures show you how things have changed. Now an old bit of statistics to tell you ten to twelve years ago, we got 80% of our business in saturated markets in those that meant Western Europe and North America. So you can see how quickly things have changed in the last ten years or ten, twelve, fourteen years. Our whole footprint in Heineken as a concern has changed and developed. And in the coming fifteen or twenty years that's where we expect our growth to take place. Now moving on to Heineken brand in itself. This of course is the jewel in our crown. This is what we really proud of most. It's the glue that sticks us all together with each acquisition. And we're always going to integrate new companies that have their own culture and their own brands. And the Heineken brand if you like is the cement. It's the glue that holds us all together because we sell Heineken in every country where we're active. And indeed even in countries where we don't have a brewery. We sell Heineken brand in 179 countries. So as I said earlier, the brand has grown well. It remains good driving force behind our company. It's a premium brand and we are able to charge a premium price for it. And I think that premium price is the first sign of good quality. We're continuing to invest in that. We also invest a lot in international sponsorship deals, international campaigns. I think you're aware of this. And I'm afraid I keep telling you the same story year after year, but you have to remember that if Heineken were a business division within Heineken, would represent 14% of volumes about 30% of profit. So it's our biggest profit brand. There's no country which can account for 30% of Heineken profit itself. So the Heineken brand is our number one growth asset into the future as well. And in past years we've seen excellent growth in Brazil, but also China, France, United Kingdom, Mexico. Those are our main growth countries, but also Spain, Taiwan, a great many countries where you can see the Heineken brand doing well. Exceptions would be The U. A. Where things are leveled off pretty much and Greece where things are lagging behind a bit. But in most of our countries the Heineken brand is growing and we're very pleased about that. Now I don't want to round off talking about Heineken brand without telling you that in 2040 it was announced in 2014. It's happening in 2015. We won the Marketer of the Year award for our advertising and marketing work. This is in the Lions of Cannes and there are two festivals in Cannes. One is the film festival. The other is the advertising festival, if I can express it in those concise terms. It is a great honor to get a prize of this kind. It really is something we can all pat ourselves on the back for. And it's not just for Heineken brand, it's also an award for other international brands in our portfolio. And I really wanted to tell you that. I'd now just like to take a little break while we watch a film. Well, ladies and gentlemen, as you hear it's been organized by the financial community not the marketing community. I think you could tell because it was a bit on the quiet side wasn't it? Here we are in the Delamar Theatre. I think you might expect a bit more stereo. Anyway next year I promise you we will deafen your ears. The next slide is talking about innovation. I said at the beginning innovation is extremely important. There's nothing in the world more traditional than beer. And for some years now, we've invested a great deal in innovation, which really means surprising the consumer with novel ideas. It might be a line extension where you have an existing brand. I'm thinking for example of Radler, which has been a huge success. Radler is a very traditional product in Germany and Austria. It's basically a shandy made of beer and lemonade. And our Austrian team came up with a recipe with real lemon juice. Surprisingly refreshing. It's really very tasty I can show you. And we put that on the market in Austria. And the next year it went on to Hungary and Romania and is gradually spreading. And now there are 65 countries around the world where you can get Radler. And this kind of approach is being applied to all the mainstream brands in our various countries. It's a tremendous success. You must bear in mind that it's not just additional sales, but sometimes it's sales with a higher margin, which is very good news for the bottom line as well. We put a great deal into no alcohol and low alcohol beers. We've got a new non alcoholic beer on the market. It's called Max. And by using wheat in your beer, you can reduce the excessive malty taste you often have with non alcoholic beer. So that's something we think is good promising to the future. We've got now SUB, a new draft system, which we're launching in a number of European countries. You can see it at the bottom right hand corner of the slide. So basically, we're continuing to invest in existing brands in new markets, new line extensions, new packaging designs and formats and new systems such as the sub draft system and that's how we came up with the 7.7% of sales increase in the past year. And you can see here how it's gone across the years going up to 7.7% stepwise across the year. We set ourselves the target of 6% in 2020. And of course, we more than reached that in 2014. So our aim is to continue this trend into the future. So much for innovation. Now of course, we don't lose sight of the cost aspect of things. Rather earlier than expected at the end of the first half of twenty fourteen, we completed the TCM2 program. This had accumulated savings of €625,000,000 We then went on to announce that cost saving projects and productivity projects would continue, but we would no longer proactively communicate into the outside world. The approach would instead be giving guidance notes of the market telling it that we wish the operational margin to grow or increase by 0.4% year on year. In 2014, we improved it by 0.9%, so well in excess of target. And of course productivity programs and cost cutting programs contribute to improving margins. But we also look in house to see how we should reinvest those savings. Some goes on improving the margins and others go other parts of the money go to innovation etcetera. So this is the TCM programs. That's what I wanted to tell you about there. Looking into the future, there's more to it than just productivity in our breweries. We're also talking about productivity in our distribution systems, how we sell, how we purchase and how our administrative centers work. So this is a real end to end focus on productivity in the company as we look to the future. Finally, I'd like to touch on our sustainability program. It's an important pillar of our policy. We wish to be as sustainable in business as possible. You know that. Iberia is a natural product. So obviously, we're very keen to stay natural. Our sustainability report has been published. And once again, We are ahead of schedule, ahead of target in reducing our water consumption. You can see the figures on the screen also carbon dioxide emissions are down. We're continuing to invest and it's always striking a balance. You've got best practice on the one hand and new investments on another. So every time we invest in something new, we always look to see what is the best technology to minimize our carbon dioxide emissions. So that is certainly relevant in overhauling existing breweries, building new breweries. Do bear in mind that we are building two or three new breweries a year and each time we try to keep things as sustainable as we can. Then what about sustainable use of raw materials? This is particularly relevant in Africa where our aim is for 60% of our supplies in Africa to be sourced in Africa. Well actually we've now got to 48%. So we're making step by step progress in the right direction. But you do have to bear in mind that these programs are scheduled to run over decades at a time. There's an awful lot of countries still laboring with rudimentary infrastructure. A great deal of investment is required, but we are committed to working on this because the fact is that if you contribute to the local economy, we ourselves will reap the benefits of that. So sustainability doesn't just mean being virtuous, it's also good for our own bottom line. Another important part of our corporate policy is our campaign for responsible drinking, because we can't do everything in the world. We want to do what we can against irresponsible drinking. One of the initiatives we took in the last years was a Heineken branded campaign with the slogan Dance More Drink Slow. We're working on this together with the DJ, Armin Van Buren, the pride and joy of The Netherlands. Here we're talking about setting up role models. How shall I put it? Alcohol is absolutely not cool. I think that if I tell people not to drink too much then I don't think I'm going to be convincing them very much not only because I'm in a brewery but also because I'm not the youngest whereas if I'm in Van Buren says it I think that could make an impact. So we're looking at finding role models to spread our message people who really believe in this idea. And I think that Heineken is really at the forefront of activities in this field. This is just one example of what we're doing in order to promote responsible drinking habits. Well that brings me to the end of what I wanted to say on sustainability. And we've now got a little video about opening our new brewery, our latest brewery in Ethiopia. It was opened back in January. Mr. Cavallo went off to Addis Ababa together with the Ethiopian Prime Minister to open this bright shiny new brewery. Now, following. There you could see the fun aspect of our line of business. Traveling around the world cutting ribbons and opening new breweries. The next one is in Myanmar this July. Maybe we should launch a tourist company. Anyway, Ethiopia things are going very well. I can assure you of that. And in fact it's going so well that this is one point five hectoliter brewery and we've decided this is going say well we need another one. We need another 1,000,000 hectoliters. So Ethiopia is looking very promising for us indeed. Now very briefly, yesterday we came out with our first quarter figures. We're only here talking about revenues and volumes not financial results. And we told you that our revenue was up by 2.2% organically and the price per hectoliter was up by 0.3%. So that's on top of the 2.2% organic growth in revenue. The Heineken brand has grown by 6.2%. And I'm sure you've all seen in the press that it's rather difficult. Things are going things are tough in Indonesia. But nevertheless, we've got very good results from the first quarter. This means that our outlook for 2015 as a whole does not need to be revised. We think we can keep our outlook for 2015 unchanged. Well, that's what we informed you of yesterday. And if the Chairman allows me, I'd like to avail myself of this opportunity when I've got the floor to thank our Chairman for I think it's the last time he'll be chairing us today. I'd like to thank him for the excellent work we've done. We've working together very successfully. So Mr. Hof Grafland, we've been the two co pilots if you like in this wonderful aircraft. So I just want to thank you briefly. Thank you very much and all the best for your future. Thank you very much Jean Francois. Renee will have to keep up the good work for just now because we're going to open the discussion on the annual report for 2014. That's on pages three through 44 of the annual report the financial statements. Please note that the remuneration policy of the Executive Board is on pages 53 through 56 and will be discussed in Agenda Item 1B in the financial statements on pages 58 and beyond. That's Item 1C. Now I'm going to open the floor for questions about the reporting year 2014. Please state your name and the institution you represent for the minutes of the meeting. And I'm going to speculate here because I believe that Mr. Stafflander would like to take the floor first. My name is Beatriz. I'm Ursula Beatriz Staatlander. I hope that everybody can hear me. Am I clear? Yes, keeps improving. If that gentleman keeps tinkering with the microphone settings. Thank you. I'm Ursula Beatrice Staatlander. I'm a shareholder and I represent the interest of U. S. Shareholders in Arizona. And I'm in charge of the I'm a Board member of the Foundation for Legal Protection for Investors. Mr. Chairman, I'm delighted that after the difficult years from 2009 through 2013, we shareholders will derive greater benefit from our investments for 2014 and perhaps this will be a very good year for us. Heineken NV has published an annual report with very encouraging undertones. I'd like to thank all those in charge and all the employees in other positions for their dedication and commitment toward achieving these fantastic results. Net profit increased to €760,000,000 representing 11% growth. My questions are as follows Mr. Chairman. Following the presentation of the annual figures, the following was published in the final shade of Dagbrot. I quote, Chairman of the Board, JF Van Buxmeer, takes into consideration that Heineken is headed for storm ACs in emerging markets and additional deflation pressure in 2015. Can you elaborate on that? Mr. Chairman, in Indonesia additional government pressure is expected on the sale of alcohol with the consequence that it is restricted or even entirely prohibited. How will Heineken react to the situation? And what information do you have about this? Yesterday, the NRC Homeless Blood Daily featured a lengthy article on this subject. Thousands of small shops are said no longer to be allowed to sell beer. Indonesia has turned into promising growth market for Heineken in recent years, so there's much to be lost. Mr. Chairman, last year you sold some of your British pubs and now have only 1,100 pubs in the country. And these are being transformed into gastro pubs. Heineken is one of the largest owners in The U. K. Of these gastro pubs, but does not have any food and beverage centers elsewhere in the world. Have you thought about selling these gastro pubs because you sold your beer factory as well? And perhaps those pubs are scheduled for sale as well. Mr. Chairman, in recent months, the media has devoted considerable attention to the share package amounting to 20% of shares in issue and still held by the Mexican FEMSA that accounts for 20%. From April 30, these shares may be offered for sale. Speculations about the future of this package of shares are flying back and forth. They're very extreme. And I'm interested in the wonderful advertisement that you featured last year in all dailies on September 20, of course, were for sale at over 10,000 sites in The Netherlands depicting a glass of Heineken beer. Mr. Chairman, would you please comment on that with respect to all the media hype about this package of shares? Mr. Chairman, I was delighted during my stay this spring in The U. S. That the economic progress and improvement is clearly noticeable. And Americans are once again optimistic about the future and therefore once again enjoy drinking large quantities of Heineken. And I'm so light. I saw that with my own eyes. Mr. Chairman, November, each year in New York, the Peter Stuyvesant ball is held, which is a useful event for business contacts. Contact is ideal. For many years, Heineken representative attended. But in recent years, based on the reports I've heard, the Heineken Group has not been represented there. Mr. Chairman, can you tell me the reasons why you do not attend this important event? I do understand that in The USA, Heineken is offering a EUR 15,000 grant. That sounds like a wonderful plan. Mr. Chairman? Sorry, Mr. Lena, can I ask you please to repeat your last question? It wasn't clear. I've heard that Heineken is plans to fund a €15,000 scholarship in The U. S. A. And that sounds like a wonderful intention. I read that report in last week's Telegraph Daily that was a meeting of the Dutch branch of the Steibesenbull. And at the very last minute, a lot of money was raised. And somebody from Heineken rang and said, we will also be donating EUR 15,000 for a scholarship for somebody in The United States. Did you understand me this time around? Mr. Chairman, please allow me to wrap up with a message for Mr. DeHoeft Raflant, who in the foreseeable future will step down as CFO. Dear Mr. DeHoeft Raflant, as a loyal participant in these shareholders' meetings for many years. I've had several opportunities to see you and speak with you. In addition, many of my questions at this shareholders meeting were meticulously answered by you. In my view, in all those years, you've been Heineken's financial figurehead. And it's unfortunate to have to manage without one of those financial geniuses. So I was somewhat disappointed to see that after this meeting you will have to bid farewell to us shareholders and in the foreseeable future also Heineken NV Executive Board. Please let me express my gratitude for your wonderful performance at these shareholders meetings. I greatly admire your dedication and commitment and involvement and wisdom in your thirty years with Heineken. And before I bid you farewell, I'd like to wish you a wonderful future in good health. And I hope that you'll enjoy life. I sincerely hope that many shareholders in this auditorium will join me and that we can hear a big round of applause for Mr. DeHoeft Grafland and his great merits for Heineken NV. You very much Mr. Dandander. Thank you. And thank you for all the questions. Now, I'll invite members of the Executive Board to answer many of your questions in just a moment. But first, as I said, I would be telling you about how many shares and shareholders are represented here today. There are 87 shareholders here today. 62 are represented online. Ten fifty eight shareholders have cast their vote. Just for a moment. Just one moment. I'm just there's some someone talking in the back of the room. Heineken Cullors. Could we have a round of applause for Mr. Stadlander? Now, I was just coming on to tell you that we've got a total of twelve oh seven shareholders at today's meeting, which brings us to 503,880,270 shares entitled to cast a vote. This is 87.68% of share at issue. In addition, we have 55 Heineken Holding, NV shareholders with us today who are attending the meeting as observers. I hope that's given you all time to think of the answers to the questions. Thank you, Chairman. Well, let's stand under. You okay there? We'd like to respond to your various questions. And the first one, well the point you referred to the point that we said there was a degree of turbulence in the emerging markets and deflation in the saturated markets and this is going have an impact on our business. If that's the case and it's ain't going to change. It's going to remain the case. I often say you can't break the wave you have to surf on the wave. And that's the way it is. You can't change the weather. You can't predict everything in the world. And you've seen this in Indonesia at the mercy of events that are fully outside our control. We have to respond to what happens. That's what I mean when I say surfing on the wave. The fact is that our company is active in so many countries in the world. There's always some problem happening somewhere in one of our countries. However, there's many things going very well in our various countries. And so that's the way I would invite you to look at things. But yes indeed developments are happening and the deflationary pressure does exist in Europe. And I think that it's going to continue to pertain for some time yet and it's going to have an impact on our business, which is why innovation is such an important part of our agenda. Now of course, we can't simply wander into a supermarket and say let's put our prices up by 3% because our shareholders want higher markets. That's not the way it works of course. But if you have innovations, which can stimulate the consumer's curiosity and then he's willing to pay more because he likes the product, enjoys the product that is a way of enabling us to respond to deflationary pressure and continue to grow. Now regarding Indonesia here, I'd like to give the floor to our Indonesia Minister, Rene. Rene was once at the top of the Indonesian business, so he is an absolute in house expert in all things Indonesian. Yes, you were asking about recent events in Indonesia. It is indeed the case that as of mid April legislation has been introduced banning beer from what they call mini marts. Mini marts are little shops selling all kinds of things little corner shops if you like. They account for about 15% of our volumes. We're no longer allowed to sell there. And the problem really is though that the legislation isn't terribly clear. So an awful lot of people with running little roadside stalls think that they are hit by this legislation as well. What we see at the moment is a radical downturn in revenue. We've entered into talks of course with the Indonesian government at local level in order to clarify what the legislation does and does not allow. At the end of the day, no one is going to benefit if beer is eradicated in Indonesia. Indonesia is an open economy. It's interested in attracting foreign investment. It's very tourism dependent. And Bintang is one of the best known Indonesian brands. It's good stuff and not just for beer and other things too. So we have every confidence that things will settle even if it may be with some restrictions on the retail side of things. Then you had a question regarding our strategy for U. K. Pubs. It is an integral part of our business portfolio in The U. K. We wish to continue running pubs. So basically we have a tentative system. We let them out and we have a contract whereby we have an almost total monopoly of the beer sold there. Legislation in The U. K. May change, but we don't know yet. But so far it's proved itself to be a very profitable kind of business and we've invested a lot in it. But part of the business model is that we always have to look at where businesses are growing. And of course a country is not a static thing. So we are selling pubs where we can see there's no prospect for the future and then we invest in other pubs where we can see potential for the future. We have carried out a major pub renovation program for the ones we're keeping. And what we've seen is if you enhance the interior and you improve the food on offer then you can attract more people into the pub. That is what we've been investing in The U. K. It's a very good margin business and it dovetails nicely with our other businesses there. Now pubs are at the core of our U. K. Business, but pubs are not at the core of other countries. It's a very special situation in The U. K. And if legislation continues to smile upon us then we will continue to invest in U. K. Pubs. Then you made two comments or questions regarding the FEMSA situation and the fact that we said of course you can buy us in 10,000 places in The Netherlands. That was referring to the offer which SAB made last year. And acknowledging the FEMSA holding, FEMSA has an economic stake in Heineken like it's no less than 20% if you like. We were then given to understand. As you correctly pointed out, there is speculation about the possibility well about the fact that FENSE is about to come to the end of its lockup period with Heineken and will indeed be free to deal in its Heineken shares if it wishes to do so. We have not received any information about this, but of course it's a matter for FEMSA to decide. I'd say that we're working with FEMSA very constructively. We've got overlaps with them in Brazil and in Mexico. The FEMSA Group, how shall I put it, well it's pretty much our biggest customer in Mexico. In addition, FEMSA works with bottling Coca Cola in Brazil and they make it easier for us to distribute our beer around Brazil. So we've got a great deal of operational overlap with FEMSA. So far, I must say things have gone extremely well. Now back quickly to the SAB bid. There's really nothing more I can say at this stage. We were very frank in the past saying that a major shareholder did not wish to sell and they're entitled to decide that because they have 51% of the shares. So that was the end of that. As a member of the Board, I would say that if a company is smaller in scale that doesn't necessarily mean it's a weaker company. No. We think that Heineken is a very robust company with a very broad global footprint and also with very strong brands. And the Heineken brand of course can expect decades of successful growth in the future. So just because we're a bit client smaller, it doesn't mean that we're weaker. No, we are very at ease with being number three in the world. This is our strategic point and we're very happy with our current range of countries. Moving on. You were talking about the Peter Stuyvesant business. Yes, I actually can't remember last time I was there, but our local management team in Heineken, U. S. A. Normally has a table on the boat. And if they're not there I can assure you it's just because they're too busy. We've got too much work. It doesn't mean anything more than that. And you're quite right that well, I'm delighted that you noticed that we are getting involved in the Fulbright scholarship this year. We were very happy to do that. It's a very good initiative. Thank you for that. Thank you. Who would like to take the floor next? A lady there. Go ahead please. Good afternoon. I'm Caroline von Liedrop. I work for MN, the asset manager of two major pension funds in The Netherlands, PME and PMT. And today I'm also speaking on behalf of Centus Achmeya. Can you hear me better now? Karleen von Lerop on behalf of MN representing two major pension funds PME and PMT. I'm also representing Centrus Akhmey at Asset Management, Delta Lloyd, Robego, Mensis and MN Investment Partners used to be known as ING Asset Management. Thank you for elaborating on the results and strategy. Your discourse was clear as a bell. It's wonderful that Heineken has posted robust figures for 2014. And I believe that this ratio of 7.7 for innovation and that the that shows that the marketing and cost savings programs are bearing fruit and you're on the right track. The Q1 figures reveal likewise. At the same time on the European markets, we face many struggles and some of the emerging countries are also facing difficult times. So we hope that you'll manage to retain those Q1 figures throughout the year. I have three questions. Mrs. Ducklander introduced one of them. This my question also concerns the trends in Indonesia and the alcohol prohibition there. I think part of that question has been answered concerning the impact on revenue. I'd like to broaden the scope of that question by asking how you view or how you reflect back on the acquisition of Asian Pacific Breweries that gave you major access to the market in Southeast Asia, which is one of the most rapidly growing beer markets. How do you feel about the market in Southeast Asia now? And in what measure does it deviate from your expectations when you purchased Asia Pacific breweries given the present developments? And along those lines, I'm curious whether there's some marks that you didn't have some blind spots where you might consider acquisitions. My two subsequent questions relate to sustainability. My compliments for your progress in that respect, especially in water consumption. Water is of course essential for your operations. So the fact that you've achieved your own sustainability targets and water merits complements that the 3.9 hectoliters of water per hectoliter beer is an impressive result. And we're also looking forward to your partnership with UNIDO. We applaud that step. Human rights policy is the next topic. Implementing human rights policy. I'd like you to elaborate on the status quo in implementation of human rights because the sense is that perhaps that has stagnated in the opcos and we have limited insight into the actual state of play there. And can you tell us whether your policy is adequately implemented especially because in countries such as Burma and Nigeria that is very that might affect your operations? And if I understand you correctly, you're opening a new factory in Burma midway this year. So we're wondering whether you have the right policies in place to operate responsibly in that situation as well as in Nigeria where there's a lot of political turmoil and there's the Boko Haram. Have you carefully ensured that you can observe human rights and guarantee safety and hedge the risks of your own employees? Those were my questions for now. Thank you. Okay. Off you go. We're very happy about the takeover as we were back then as well. If you look at 2014 and 2015 where you can see once again the greatest revenue growth is taking place in Asia, we are very happy to see that we're now in full possession in that region. As you've always said, the full acquisition we had half already, but now we own the whole thing and a ship is better with one captain than with two. We can see this is already beginning to show through and we've been able to already take some steps to address as you said some blind spots. We're getting more involved in Myanmar and we will continue to be active there in order to see where opportunities arise. And because we are exclusively focused on beer, whereas our partner was a conglomerate who had to choose between beer and property and a number of other lines of business. For that reason you can see that the whole business development is much more focused. Now we also want to move on to realigning our product range. We've got the Tiger brand, which is a very good one thanks to the acquisition. And in recent years, well ever since the takeover indeed has been growing at a tremendous rate, because we have allowed it to have its own place in the product range. So I'd say so far we really are very, very pleased with things. Now human rights policy, where we have a clear policy. You are aware of course that things are more difficult in some countries than in others. You named two quite correctly. And of course, the point is to see how you can act in practice. Now one of the issues which we have introduced in all our company is a speak up policy. This means that people are entitled to tell us here at a head office in The Netherlands what's happening back in their own country. They're allowed to talk to the press of course if they want and sometimes they do, but they can come to the company internally if they wish. There is a procedure in place whereby people here at head office will look at what's happening in the individual countries. That really is the best we can do. Now of course there's a number of cases every year and more and more every year in fact more and more reports come in every year as you would expect because people are more and more confident that the procedure will work. It doesn't necessarily mean that there are more and more problem cases. It's just that people are more used to using the system. And we see this as a positive trend over recent years. It's reported on in 2014. We had three twenty four reports then. The year before it was 177. So just to give you an idea that people trust the system. Of course it does give us additional work to do, but we follow everything up. I will not seek to hide the fact that rolling out human rights policy in the end can run up to the buffers of what an individual sovereign state can do. We haven't yet encountered barriers of this kind. We have run into civil wars. Some of our companies are based in war zones from time to time. That's been the case many times in our long history. And we have to do what we can with the highest moral principles and best practice. We've done this in the past, but we can't prevent those situations arising. Then there's a question of the speak up policy where we try to make sure as far as we can that human rights are applied. Now the fact is that in any company, in any brewery, of course, you can have human rights. People are people and things can go wrong. And that's why the speak up policies are in place. That's completely different from the questions of safety. Human rights and safety are not one of the same thing. You were referring to Nigeria, Boko Haram. And well, yes, some companies are located further north and may be more impacted Kaduna for example, we've got two breweries there. That's a matter of safety measures. And we do have training places. We do have training activities for this. Think of the other countries we're active in. We've got a lot of practical experience in Africa. So we know the best way of keeping your company safe and keeping your workforce safe. Of course, zero risk does not exist, but it is something that we are very aware of when we are running all our companies around the world. Thank you. A gentleman over there and then the other gentleman over there. Good afternoon, Mr. Chairman and Mr. Dickson. I don't have any questions for Heineken about the report. I do have a question about the presentation. It's very disturbing that the audio and video had not been synchronized. Could you please ask the control room to adjust that? It's probably a broadcasting issue, but modern technology can avert that and it's extremely disturbing. I'm afraid all I can do is ask the technicians if they could do something. Or perhaps you could switch off the video because it really bothers me. We're going to try that out with You, Mr. Jorn. I'm Andre Jorn. I'm speaking on behalf of the Association of Stockholders, the VEB. Mr. Hoflund, you've been thanked at length. And don't worry, I won't ask the people present to sing for you, because in the South we say we've never had it so good. So I won't ask them to break out in a song. But also on behalf of the VEB, thank you very much for all you've done for us. I don't have a bouquet of flowers. But I do have a fascinating question for you, especially tailored for you. Year after year you've achieved good results. 2013 was a bit of an odd one out, but never mind. I've looked at the past ten years. And in those past ten years, you have returned nearly half the profits back to the shareholders, thank you, through dividends and share repurchases. But if you analyze the other half, you'd be looking at return on invested equity. And what I noticed there is that in recent years that return on investing equity is declining by leaps and bounds. And if you look at the last five years, you're about 13%. Before that, you were at 18%. So then you try to assess the cause. That's my question to you. Why are you declining by leaps and bounds in your return on invested invested equity? And if you compare 02/2008, for example, the profits were 80% higher, but the capital base has tripled. So that leads me to ask perhaps you're spending too much on what you purchase. And Mr. Van Voxmere mentioned this that those huge costly acquisitions including Asia and you may be optimist about this, but it may not be such a great investment because if you look at the return on equity at the sites you identified then Asia with its return on investment equity scores just as poorly at 9.6 as Eastern Europe. And that was a real eye opener for me. And on pages eighty four and eighty five, there are plenty of numbers to crunch if you understand the distribution. So Asia is not really that profitable despite everybody thinking it is. What is very profitable with the ROE is Africa at 23%. Eastern Europe is at 9%. So I don't understand why you're purchasing two new factories in Eastern Europe, but I'm glad you're investing a lot in Africa because there's a lot of money to be made there. Are you also worried about that steep decline in the return on invested equity? Is it because of the costly acquisitions? Or are there other reasons? And what level of return on equity do you target? Or will the new CFO be instructed to pursue? As for SAP, I saw the humor of the finger raised in the form of a glass. But I wonder in what measure your sense of justice as executive and supervisory boards would go if you see that a shareholder with a 25% interest in this multi tiered structure is basically calling the shots. It's an ingenious structure, but they are in charge. I'm not familiar with the bid, but investors use terms such as Dutch heritage and they care about the return on their investment. And I believe that the Supervisory Board should take should give more consideration to these other investors not necessarily the Heineken family and their interest. You're still seeing a lot of growth, but what about the latitude from the Heineken family that has invested €100,000,000 and wants to retain the majority. Perhaps you have very little latitude to keep up in the struggle against the competition or you might need to change course. As for FEMSA, I was going to add a bit about that. Thank you already for your answer. Do you see any part that Heineken Holding could play in that? Are you going to take that share package because are you going to perhaps purchase that package of shares yourself because it's making shareholders nervous? Or would you mediate that sale because FEMSA clearly intends to invest in chemists and supermarkets if I'm to believe the Mexican media reports? You have changed your top structure twice in two years now. So you're mentioning that this is due to advancing insights and the market was surprised to see that Mr. Alexis Nassar left Heineken. Is this related to the reshuffling of the positions? And we're also seeing Mr. Hauptrevlant retire. Will the replacement be from your own network? We consider that important. As for the pubs you mentioned, you have a conflict with Weatherspoon. They decided to sell the pint for £3 for £3 instead of your price of £5, you ask for a guarantee. And he became irate and said, I'm not going to sell Heineken's products in my pubs and you estimate the damage is at 60,000,000. Can you tell me the state of play there? Did you settle that? Or is the conflict ongoing? You have another conflict in Greece now. Nearly everybody has some conflict with Greece. So my question is whether you've made any progress in resolving that? And the third most serious concern in mind is the conflict with the Brazilian authorities at the acquisition of FEMSA. As we read on page 124 of the annual report, you were charged €126,000,000 and FEMSA agreed to cover half of that if the ruling persists. But the Brazilian government wants a guarantee of nearly €400,000,000 And I understand that you're not taking provisions there. You probably feel very confident. But nonetheless, there's a surety that's been put up of €400,000,000 Where will that take you? Next, the report of the Supervisory Board that's not on the agenda, but I'm going to ask a question about that. One of the Supervisory Board members skipped three meetings. Is that to be an isolated instance? Was it ongoing? Did you cut his feet? Or did he were there other reasons? Did he miss his flight? I don't know. I took the train today and my train was in good time. Now finally, as the Chairman of IX in the South, we have a football club that's looking for a sponsor. Yes. I can respond to that. The answer is no. The presence of members of the Supervisory Board, we're delighted that Supervisory Board members are available. Occasionally unexpected circumstances can arise unexpected calls on individuals' time dealing with takeovers or other unforeseeable circumstances. And you might find that someone is stuck in a plane or someone is located somewhere where they don't have access to modern telecommunications. Other than that we're delighted say to that all members of the Supervisory Board are with us today. Now a comment regarding what you said on FEMSA. Please bear in mind that FEMSA is a publicly quoted company, which means it would be quite inappropriate for us to say what they might or might not do. That is a matter for them to discuss at their shareholders meeting. We can't say anything there. Beyond that there's nothing to add to what Mr. Boxmer said a moment ago. I didn't ask what FEMSA is doing. We'll see that when the time comes. I asked what Heineken expects to do within that package. Perhaps they'd like to buy it or mediate the sale of that package of shares. Well, I'm sure you understand we're not able to respond to points like that. Then SAB, well, please rest assured that Heineken NV's Supervisory Board always takes your account of all shareholders' interest in any decision it makes. But there's no point in burdening a company with and approaching them if it's clear in advance that it's not actionable that it won't get anywhere. And that's the reason why we behaved in the way that we did. Now for your other questions, I'll give Mr. Van Bokspierre the floor. Yes, perhaps I could just deal with your first question regarding return on invested equity. Now yes indeed this is something which we keep an eagle eye on. It's an important part of our corporate behavior. We look at growth. We look at operational margins. And we look at return on equity. And yes indeed, there is a downward trend. But as you yourself said, this is only because of the large number of acquisitions that we've undertaken in recent years. And they are of great importance for the longer term future of the business. As Jean Francois said a moment ago, we have changed our corporate footprint from 80% mature markets or saturated markets as we call them to now two thirds of our footprint in emerging markets. Now if you undertake an acquisition of that kind then your return on equity will be significantly pressured downwards in the first years. But thanks to synergies that occur and thanks to growth in the market and thanks to our best practices, you can gradually get your ROE back up again. If we look therefore at the businesses that we already possess, we can see year on year our return on equity is growing. But every time we carry out an acquisition there is a downturn. Now of course this has an impact partly because of the price you pay for an acquisition, but the industry is consolidating and you can therefore see that prices are high. You can't buy anything cheaply out there and it will be quite unrealistic. People aren't going to sell their property for a low price. So you have to say okay, we are willing to pay this price. How can we make sure that this investment can eventually produce satisfactory return? Well as you saw the picture given of our figures could be rather distorted because we've had to increase our figure for Asia to reflect the price that we paid. So there's almost CHF2 billion paper profit if you like. That's in 2012. It was accounted for as profit, but it's on the balance sheet as goodwill. Hence the graphic that we have, but I can assure you that both the operational yield and the return on equity in Asia are positive. Then you made a comment on Slovenia. Why Central And Eastern Europe? Well, we are market leaders in Central And Eastern Europe. Slovenia is right at the heart of a number of our very important positions Northern Italy, Austria, Croatia. We can see synergies between the various markets. What we have purchased is the Slovenian market leader. They've got two very nice brands giving them 70% market share. And we can see a good return is promised there. Once again things are slow when you start, but in the course of time you can see an upswing. Perhaps if you say, let's assume we don't do any more acquisitions, what is your target return? What would make you happy? Well, of course, you always have to look at the cost of capital. And this of course has been declining rapidly over the recent years you've been talking about. So that's really what you have to look at. But if you want to make a profit then you've got to have a yield which is above the weighted average cost of capital. And then there was a question about the upper echelons of the company. There is a revision being carried out in the light of two things. Firstly, people move around and secondly, the needs of the business from time to time. So you have to adapt your board structure to respond to those factors. Now I think this is an important moment. Rene is going to be retiring and we're getting a new CFO on board. And this is an opportunity for us to cast a fresh eye over our corporate structure. And the two changes we've made firstly is merging the two parts of Europe Central And Eastern Europe and Western Europe only having a single Europe region which will not include Russia. Russia will be put in together with Africa. That is a structural change we made. The second point is marketing and sales. Now from time to time we tease them apart and then we put them together again and this is a sort of natural oscillation if you like. We've now got marketing and sales under a single roof at a central location. And then of course there are times when individuals go into retirement or individuals seek opportunities elsewhere. And some people come up for promotion. Of course, is the normal course of things in a big business. And this has made us decide to have a sound structure at the top of the corporation, which will respond to situations and which will see us through into the future. So that explains our recent publications on the subject. Then Wetherspoons pubs, yes indeed there was a dispute and it got into the press and we have found a solution to the problem. It's now all done and dusted. I'm afraid that when it comes to Greece, can't say anything. We've got to wait and see what happens in future. Cases can be very protracted in Greece. And yes, that's the way it is. We just have to wait and see what happens. I'll give Mr. Hov Grafland the floor in a moment to deal with Brazil and fiscal claims. Yes indeed there are tax claims in Brazil which is far from unusual there. They date back to the days when we were not yet full proprietors of the Brazilian company. FEMSA had 83% holding in those days And they therefore handle 83% of the claims if they do eventually come through. It's also quite normal in Brazil to pay a guarantee in cases of this kind. But that again is shared with FEMSA. Thank you. Were there any further questions? I'm going to give someone else the floor now because with all due respect for you we mustn't allow you to monopolize. Oh go ahead please. The claims from the The claims of the Brazilian authorities do they relate to bribery or some such like? No absolutely not. Absolutely not. Please don't worry about that. I can see a very promising young shareholder in the room who'd like to take the floor. Good afternoon, ladies and gentlemen, Mr. Chairman. I'm Mr. Bartolt. I hope everybody can hear me. My question concerns the massive growth that The United States experienced in the past few years in small specialty beer brewers. And my question was whether you envisage the same growth for Western Europe and especially The Netherlands? And what impact that will have on Heineken sales and their market weight? That's a question from Mr. Hope Crawford. His field of expertise? He used be in charge of marketing that's why the question is for him. Yes, you can see in America and also in Europe as well there's all kinds of microbreweries starting up. And really it's good news for all of us, because it means that the beer industry is again the focus of attention. People are talking about beer and the consumers are willing to pay more for their beer. And so we are responding to this by greatly varying our product range ourselves. Jean Francois was talking about our big rate of high rate of innovation coming up with new ideas all the time. And this is partly a way of responding to trends of this kind out there in the market. So, yes, it on the one hand, microbrew has put you under pressure. On the other hand, it's good news for the beer industry as a whole. And our marketing team have the job of coming up to responses to it and coming up with all kinds of good variations. An example recently in The Netherlands would be African, but also our brand IPA. I don't know whether you've tasted it yet, but I can assure you it's well worth trying. It's delicious. But only if you're over 18. Well, I think that's exactly the kind of answer we could expect here. Another lady over there please. Thank you very much. I'm Rachel Heine of the VBDO, the Association of Investors for Sustainable Development. First, we're delighted with your focus on sustainability in your Doing a Better World strategy. Thank you also for mentioning sustainability during your presentation. We're also delighted that the entire senior management has a sustainability target, my compliments. I have several questions relating to the themes that we featured this year. First, circular economy. The circular economy addresses recycling raw materials and products in minimizing erosion. We're delighted that the Executive Board participated in the World Economic Forum in Davao and shared ideas about the circular economy concept. We have not yet seen specific actions or targets in terms of this circularity concept. My question is whether Heineken envisages a vision for the relevance of circularity? And have you already formulated targets and a time frame? Are those data public? And will you be reporting them? The OECD guidelines set an international standard for multinationals in corporate social responsibility. In your supplier code of conduct, you referred to international human rights. But we wonder whether you have explicitly committed to these OECD guidelines. And if so, when did you? And if not, why not? As for the complaints recovery procedures, they were just mentioned. Mr. Van Bucs made crystal clear that the number of complaints is up and he explained why. So I have no more questions about that. But I am very curious what happens when a complaint is registered. Does Heineken enter a dialogue with the relevant stakeholders to reach a solution. We also wonder whether there are external third parties supervising the complaints and recovery mechanisms at Heineken. Finally, I have two questions about your environmental targets for water and carbon dioxide. One of the previous speakers mentioned your water targets and complemented you at the target you achieved. I'd like to second that. But we have a question because in the sustainability report we read that in some places order consumption is up or does not yet meet the target. We're very curious how you're going to gain a grip on the areas where the water consumption does not yet meet targets. And finally about carbon dioxide, you have ambitious targets there and you're making excellent progress. Overall, however, dioxide emissions are up. And you mentioned that this is mainly because of the distribution on two major markets, namely Brazil and Mexico. That's why we wonder whether this increase in overall emissions does that jeopardize your chance of achieving your targets? And have you taken additional measures to mitigate carbon dioxide emissions on these two markets? Those were my questions. Thank you. I'll give the floor to the Executive Board. Okay. Starting off circular economy. No, we have no explicit objectives here, but we've been doing it for a long time. Half of the beer we sell is already in a closed loop system, the bottles, the vats and what have you. The secular economy basically was invented by brewers and dairymen. It's not a new idea at all. But more done to us, we use waste products from brewing as cattle fodder around the world and it's in fact more and more valuable on the market. The surplus of yeast production, what happens is every time you initiate fermentation you actually get five times as much yeast out as you put in because yeast breeds. And so you multiply your yeast and that goes into the pharmaceutical and cosmetics industry. So we've got a lot of examples of this in the way we work. Now of course recycling systems are being set up for waste glass in a number of countries. Glass is being 100% recycled and our plan is to purchase as much recycled glass as possibly. Aluminum is almost 100% recyclable. So there's a great deal of applications where we're already active. In administrative terms, it would cost us a great deal of effort to get all of these things completely into place in all 80 countries who are active and report on them all in detail. We can give you an overview of course, but if you want to produce a report you've got to report in extreme detail. You've got to get everything audited and re audited and it all costs money. So I do rather tend to think that the circular economy is something where we're certainly not behind the curve. But you've got to think about where it's happening and where new ideas are emerging whereby we can fit in with it better. Things that we hadn't thought of before. That's essentially where we stand on the circular economy. From you all today, I certainly understand Nonetheless, I'd like to challenge you to become a front runner in circular economy as well. Well, yes. I repeat, I'm not on the defensive here. I think that we are doing pretty well on that front. Fine. But that's not really visualized and that's a shame. Well, there we are. Think that the practices are in place. Perhaps we should be telling the world more about it. But at the moment to be quite honest it's not our main priority. The other two points you mentioned water consumption and carbon dioxide emissions that's what we've been focusing on because that's where we can make more progress. We've taken a lot of action on water consumption in the last ten years. Of course, we carry out takeovers and they might not be doing so well when it comes to water consumption. But we've got 143 breweries around the world just off the top of my head and you do sometimes have the odd one that lags behind the rest or one that's so much better than the others. But at the end of the day, think we can still do a great deal on this front. We're particularly focusing on operations in water stressed areas. But you've got to really minimize your water consumption in places like that. It's basically a new frontier for us. We've identified the regions. We're investing and investigating what kind of good processes we could introduce in that part of the world in order to really grapple with this issue of the water balance in those companies. Think of Mexico for example Monterrey that's the water stress area. It's a very big operation there. So our priority is focusing on those large items to get improvements there. Moving on to carbon dioxide. Well again, distribution comes through a great deal of that. Brazil and Mexico are two countries where we could say our footprint has deteriorated if I can use that word. The rest of the world has improved by several percentage points. But in Brazil, we've got extremely rapid sales growth, but we still got far too much distribution. We need to build a couple more breweries because we've got too many lorries driving all over the place. And fundamentally the same applies in Mexico. We've got very rapid increase in growth in exports to The United States. And this has an impact on our CO2 footprint just because of lorries driving the goods. And we're talking about large quantities. A couple of weeks ago, we said that we would be building a new brewery in Chihuahua in the North Of Mexico and it's much closer to The U. S. Border. And once that brewery is up and running, of course, it will mean a massive reduction in our carbon dioxide emissions, because we're currently driving large amounts of beer right from the South Of Mexico up to The United States. So those are the things that we are currently grappling with. And of course solutions can be found, but it takes a couple of years for them to work through. Then you had another question about the OECD, OECD supply codes. Obviously, whether you have committed to those guidelines? Yes. Well, yes, we've committed ourselves as set out in our report. But then the question back is we will then say, that's not enough. There you go. Yes, that's it. Well, okay. At this stage, I would unless anyone really needs to take the floor. Anyone need to take the floor over there? Go ahead please. Just on the last to flag date. Yes. That will be the last one for now. Please state your name. I'm Robert Fraeker from We Connect U. Public Affairs and Investor Relations. I'm delighted with the excellent results of Heineken, 3% additional growth, 7% profit growth that is compatible with the 3% growth in The Netherlands overall. As for Bintang, that's a wonderful opportunity because Heineken together with Bixevete and Radler are making enormous progress in non alcoholic beer. And we have 1,500,000,000 Muslims globally that according to their religion are not supposed to consume alcoholic beverages. So perhaps Heineken could become the global market leader with Heineken Zero. Last year I asked you to disclose in your annual report how rapidly the consumption of alcoholic and non alcoholic beer was increasing. I haven't seen it yet, but I assume you're working on it. You also sell soft drinks. But powdered milk is probably another growth market that is sold at a high profit margin. It would be especially good for Heineken's image and you could expand in China in powdered milk. Next, Vixivite is manufactured at factories running on solar and energy and it would be nice to enhance this with solar panels on all Heineken factories and offices. You will probably investing another million in the new James Bond movie Spectre and it would be nice if that would epitomize innovation in The Netherlands, very high-tech, very sustainable. And that would be a wonderful posthumous tribute. And Mr. Heineken would probably appreciate being associated with Mr. Ochols. Yes. Thank you. Many of the points you made are more ideas for the suggestions box and actual questions for the meaning of shareholders. Please could you address the subject at hand? Okay. As for getting to the point all of this will relate to the bottom line. You have an excellent flow in dense more drink flow, but it would make for a nice commercial to feature play more during slow at Champions League games. And last but not least cybercrime, many companies do not have a grip on that. We don't overall. How does Heineken deal with it? And the same holds true for electricity. Thank you very much. I'll give the Cybercrime question to the CFO. Thank you very much. Yes, it's not particularly easy to answer when you say is it under control. Well, we are doing a very great deal to keep it under control and we can see that we are responding very rapidly. But the question isn't so much can you prevent it? No. The question is more when it happens are you able to pounce and leap into action? Yes. And this is what we're focusing our efforts on. So far things have been going well. But of course, with each new day people come up with new ideas. So I don't think you can ever eradicate it. But if you keep a good eye on monitoring things you can have a rapid response. Then your other question a serious one I think was the potential for growth in non alcoholic beer in parts of the world. Well, good news is it's growing in Europe. Very long way away from the what was happening twenty five years ago. Society is changing and people are more willing to drink non alcoholic beer than they used to be. Spain was one of the first countries in Europe where non alcoholic beer became a big seller and they can respond to that sometimes because of cultural factors. The Spaniards like to go to the tapas bar and have a beer with their tapas, but then they have to drive home. So the idea that beer goes well with tapas and so we started making non alcoholic beer. Bakla is a very good example of that in Spain. Much better than what happened in The Netherlands in fact back then. Anyway, if you move further south, yes indeed, we sell significant amounts of non alcoholic beer in a country like Egypt where we're active. We have alcohol beer and non alcoholic beer in Egypt. There's a number of other countries where we export non alcoholic beer. The new suggestion we could have Heineken Zero and then sell it specifically to Muslim countries. Well, we have looked into this, but please do bear in mind that the name Heineken is associated with a product and there's one Heineken and Heineken had alcohol in. So people may wish to be seen holding a product which is known as being non alcoholic, so no like Butler or Birel as it's called in Egypt or Fairooz that's a malted drink with fruit juices. These are products that are known to be non alcoholic. And they have more support as a base for developing our business in countries of that kind. We're already active in a country like Indonesia. We don't try to sell exclusively alcoholic products. We are trying to hedge our risks. But there is potential there, yes. Okay. Well, ladies and gentlemen, I suggest that this brings us to the end of this part of our meeting and that we adopt the annual report. We can now move on to agenda item 1b, which is remuneration policy for the Executive Board. Agenda item 1b, you can see the remuneration policy set out on pages 53 to 56 in the annual report. Who would like to take the floor on this? Mr. Jorner please. Thank you very much Mr. Chairman. I'm Yorna on behalf of the VEP. Mr. Chairman on page 54, the short term incentive I see free operating cash flow and that achieved the highest score. Further down on the page, you see the long term variable remuneration and you see the same pre operating cash flow where the score was between threshold and median off the top of my head. It scored less well. The difference if I look at 2013 and 2014, one is twenty eighteen, fifteen, seventeen and the other is twenty fifteen, fourteen, seventeen. First I thought it was because 2013 was not a good year, but that didn't answer my question. Can you explain that? And you're also upholding tradition as we just saw, but there's also a tradition of complaining about remuneration. So let's do right by that tradition as well. You're thinking about a new bonus, but I'm sure Das will argue long and hard that that's not the case. And then you came up with the retirement bonus because Mr. Hofstrafgromf will be leaving two years and five months before his retirement age. He's 62. And what are we doing? We're simply going to give him a golden handshake to the tune of million euros So he's basically being paid his salary until his retirement. And I'm not sure whether all Heineken employees stating that they'd like to retire early are nonetheless paid out as normal until their retirement date. This may be an exception from the standard policy, but I'm sure you've covered that in past remuneration policy. I remember that at the debate with Mr. Von Bocksmir we had the same debate, but it was not specifically about Mr. Hof Grafland. I think at that point we were talking about Mr. Bochsmeer and you know the position of the VEB as well as that of many others that a sign on bonus is inappropriate from our perspective. You need to perform and that should be remunerated, but you don't pay somebody to leave another company because that would erode the long term variable pay for employee loyalty. If everybody is going to simply buy each other out then we should abolish that. Thank you very much for your contribution to this final tradition. I'll pass your question on. I will try to address these questions starting off with Mr. Johne's question on Mr. O'Grafton's leaving bonus. Now this is a sum of €2,000,000 and that's in euros That amount of money was agreed on. It's in accordance with Dutch law. Is owed. It is derived from applying the legal formula. It would originally have come up with a much higher sum of severance payment than GBP 2,000,000, but there is a cap on the amount that the formula can yield as of a person to tie it to person over from the moment they leave until they reach pensionable age. So it's not a pension bonus. It is simply application of Dutch law in a capped amount. Next the Could you please explain what you mean by that? I thought that bonus was capped at €70,000 and the redundancy compensation you get. I'm not familiar with that arrangement. But if you're saying that we can please record it in the minutes and we can read it at our leisure later on. But you're saying that million euros I know the old district court formula about one point five months per year of service over 50. But that's a redundancy fee. And I don't know about any retirement compensation according to the district court formula. Okay. The district court formula will take up with a much higher amount than €2,000,000 But part of the formula is that you have a cap on the figure. It's kept according to the fixed income component and pension contributions for the period from leaving to retirement age. That's what happened here. Do you mean to say that you have dismissed Mr. Hof Grafloat? Because you keep mentioning the district court formula and that does not relate to retirement. I'm sorry. No. Mr. Hofgrafland's departure is thanks to mutual agreement between himself and the company in the context of a smooth transition of the top positions in the corporation. Okay. But that's a new situation. And you're simply deploying that as a retirement. And Mr. Chairman, you're saying that we agreed mutually to part ways. I respect that if there are good reasons for example if you want somebody younger or have other ambitions, but Mr. Das' story about the district court formula that doesn't hold water. Well, the lawyers that we consulted don't agree with you on that. The Supervisory Board and Mr. Herb Kraftland got together and agreed that the termination of his current term office in the Executive Board would be a satisfactory time for his service in the company to come to an end. The district court formula applies in those situations. With due respect, you're confusing everything. If I look at page 54, it reads crystal clear what you're doing. And I read that you basically cashed out the remaining two years and five months. And I'm not it has nothing to do with a cap or a bonus. We're just paying him his salary through his retirement. And why are we doing that? Let me explain it one more time. In situations of this kind fundamentally the district court formula applies. That then comes up with a much higher payment than CHF2 billion. However, the formula also says I think that's understand the is it Sorry, Mr. Yola. I'm sorry, but otherwise we're getting bogged down in legalities here. Want to get involved in that. Hear the expression one more time. The district court formula would normally come with a much higher amount than 2,000,000. However, the formula also includes a maximum cap, which is the maximum that what an individual would have earned as part of their fixed income between leaving the company and reaching retirement age. That is in this particular case a two year and five month period and that's where the two million figure comes from. Well then check the notes on page 54 because they simply read that. Okay. That subject is now closed. I will now give the floor to Mr. Hof Grafland who is going to talk about the figures. Could I quickly just deal with Mr. Jana's other question first? He was saying that Heineken now is introducing a wholly new phenomenon a sign on bonus. It's not new. Now when you start employment with a new employer, you do receive remuneration to compensate you for the bonuses you missed out on your previous employer. That's what we're doing on here. The sign on bonus is to offset options which a person is renouncing because of leaving their previous company. We understood that and I didn't call this a new bonus. You really need to do a better job listening to me. I didn't say it was a new bonus. I just said that the PED objects to bonuses not linked to performance. You're not introducing a new bonus. It's general common sense in Dutch corporate industry now, but the VEP the VEP objects to that. I have one final question. At the time, we'll deal with your other questions first. Otherwise, we're to get all modeled up. You were asking about the free cash flow. Renee? Well, yes, one is a three year plan and the other is a one year plan. You are seeking to take the third year of the three year plan and compare that with the one year itself? You're saying 2014 was not higher than 2013. So how can you then come up with a higher score in the long term and bring a problem lower score on the long term and high score on the short term. No, it's because in 2014, when the target was set, there was a significant large investment plan, a new brewery in Ethiopia and Myanmar, extension in Indonesia, Cambodia, Vietnam all of that is reflected in the annual target. So it's not the case necessarily that a cash flow must always be higher than it was the year before. You want to have better performance so your operating capital and so on must be improved. Then you had one further question. The discussion from four SEI relates to last year's debate. The €1,500,000 retention bonus allocated to Mr. Van Bocksmere. Fortunately, we have Mr. Hof Grafland here who is certain to know. If you look at the remuneration report, it doesn't say anything about 750,000. But if you look on page 126 off the top of my head, I see there that Mr. Van Boksmir received 750,000. The shares that are good for 1,500,000.0 were allocated in 2013. What I would imagine is that you would take that loss in 2013 or I could also imagine taking the loss when those shares are that's after two years. They become unconditional. I don't understand why we're taking 750,000 now and get to pay another 750,000 in a couple of years. Why is that the bookkeeping solution you opted for? Interesting question. I think this is a question on the financial statements and not a question regarding 2014 remuneration. Then I'll reformulate my question. Yes. It's spread out across the period that's in question. I certainly understand that. But I'm sure that's the reason why it worked out this way. However, I'm looking across the room to catch the auditors' eyes. I'm sure it's all correct. Almost. I suggest that we come to that in a moment. Let the relevant people look the details up. As for remuneration, I don't see how this relates to the long term variable pay schemes, because they vest when the term expires. Why don't you include part of those? Why do you include this? I'm new at this. I've never seen it before. Okay. Look at this stage, we'll come back to this point. I don't think that we should get bogged down in IFRS accountancy rules at this point. We will get back to you with the answer. Who else has a question on remuneration? Go ahead please. Over remuneration? Yes. My understanding was that when Mr. Hovstgrafelum joined in 02/2005, the net profit was €700,000,000 and now it's 1,700,000,000 That means if I crunch the numbers quickly that you've increased the profits by an average of 7% a year. Is that correct Mr. Hochgraflo? Thank you. Ask Hochgraflo. Dumb, dumb. You said look it's talking about remuneration. You see Well then I think generous compensation is very much in order. But what does bother me is that legal affairs might be going by the book. But image wise, the way you present things sounds like a witch hunt and all kinds of strange behavior by all major firms in The Netherlands. Perhaps you should professionalize things and ensure greater transparency. But my question concerns the huge contribution by Mr. Hofthrafland to Heineken's profit growth in recent years. I think that's an excellent comment. It's not a question we absolutely agree with you. Now someone at the back of the room there's a familiar face. Yes. I'm a familiar face. I'm Mr. Span here. In the earlier debate with Mr. Jornet, Mr. Das kept invoking the district court. But don't you invoke district court only if there's a dispute. Because when you keep repeating district court formula, district court formula, it almost sounds as if Mr. Hofthraflamt is not leaving you on good terms. But I think you are on good terms with each other. So why do you keep referring to the district court formula? Does Mr. Das simply like the sound of it? Mr. You have hit the nail on its head. What we mean is that the district court formula has been used as a reference for calculation. It's a very good comment from you. Okay. Can I now conclude that remuneration policy for 2014 has now been noted and that we can move on to the financial statements? This is agenda item 1C. This is pages 58 to 138 of the annual report. KPMG accountants have audited this and you can see the auditor statement on page 140 to 142. Who would like to take the floor on the financial statements? It is a stair operator. Well, look it's an all star cast. I could rehash the previous question, but I won't. Mr. Hofthrafland, most companies have defined contribution system for pensions. If I read this correctly, then you still have the defined benefit, which adds a risk element in most cases because you don't know where you stand. Saw this with post and with KPN. Why do you still use that old system? Most companies have switched to the defined contribution system. You had to take an impairment loss on a brewery in Tunisia. Was there a specific reason for that? As for your debt ratio that's 2.5. That's an excellent ratio. Expected to reduce it. You didn't succeed between 2013 and 2014 in reducing it, but that's probably due to your investments. And on the carry forwards, you impaired million dollars in taxes that cannot be offset through profits and you referred to an acquisition. Which acquisition was this? And in the chart on '93 about goodwill, I see an explicit statement that this concerns Russia. Have we impaired all of Russian operations in terms of goodwill? Let's take your last point first. Last year, we wrote off this for Russia. And I think that we discussed that here in the meeting. Then the defined contribution versus defined benefit. Well, in many countries you can see that we have changed over to defined benefit. The U. K. Is one country. Your partner slip of the tongue. Thank you very much. I meant we moved over to defined contribution particularly in The U. K. Where we've got a major fund. In The Netherlands, we haven't managed to do that yet. You can't do it unilaterally. You have to negotiate with the participants and the trade unions. In The Netherlands, the situation is that we have a maximized premium, which means that it is less high risk than a fully defined benefit pension scheme, because in the end we are only bound to a particular level of payment. Then the debt ratio well this has indeed come down. It's not come down as sharply than we wanted it to, but this is because of the euro exchange rate. When the dollar strengthens against the euro that's very good for our exports to The U. S. A, but it's bad for our balance sheet where we have a number of debts which are denominated in dollars. Now the dollar has been strengthening rapidly towards particularly at the end of the year that happened whereby it was not possible to get our debt levels down as far as we expected. Now impairment Tunisia. Bearing in mind the situation in Tunisia, the earning potential of the company didn't really justify the goodwill figure attached to it, which means that we had to reduce the goodwill level. A very small adjustment, but it had to be done. Thank you very much. Did that answer your questions? No? No. What about the carry forward here? You've got the CHF350 million acquisition. We're just thinking about that. We'll look that up for you. Could you shed some more questions? Page 93. I beg your pardon Page 96. This gentleman has the floor. It's as a result of results entered into in Brazil and the acquisition referred to this Afemza transaction which goes back a few years. Okay. Right. Well, we entered into an agreement in Brazil whereby tax claims could be bought out, but you also had to give up a number of your fiscal assets in return for that. That's the exchange that took place. It was very, very favorable. Brazil gives you you could call it an amnesty if you like every X number of years. You can avail yourself of this, but you have to trade something in against it. The lady from the VBDO next please. Yes, I'm from the VBDO. Tax is often seen as an unfortunate expense reducing a company's profit. The DVDO however sees tax payments as many other organizations do as being an integrated part of socially responsible business practice and a way in which you can contribute to a country's development. You have some finely worded paragraphs on the subject in your sustainability report. And against that background, we would like to ask whether you are going to introduce a country by country report, so that we can see what you're contributing to each country through tax. Well, firstly, tax policy as you see, we pay almost 30% of tax across the corporation. I think that indicates that we are seeking to every possible rule. I'm sure you wouldn't wish to question that. Our policy is open. We pay where we have activities. We are in line with regulations. We deal with tax authorities in an open and constructive manner and we don't make use of tax havens. Now our figures never show the quantities paid for each individual country. It's also not required. And in fact we don't wish to do that for competition reasons. If you were to do it to give figures for one individual issue I. E. Tax for each country then people would be able to derive the other figures from that. And in the absence of any universally binding regulations that are forcing us to do this we will not do it. I've understood your point of view if I regret it. You're talking about being in line with all rules and laws but could you also tell us whether you act in the spirit of the law not only according to the letter of the law? Well of course there's a major debate about this because what is the spirit of the law? What we mean with this is that you don't always look for loopholes in law. That's why I'm saying we abide by the law, but at the same time concomitant with that is that we are completely frank and transparent in our dealings with tax authorities in each country. And this combination together means that de facto you're actually operating in accordance with the spirit of the law. However, if someone says go and do it in the spirit of the law well different people have different ideas of what the spirit of the law is. Thank you very much. If there are no further questions oh there's a question from Mr. Espana. Well, Mr. Chairman, I'm Mr. Espana. I think it's most unfortunate that you did not give the auditor the opportunity to explain his view orally because I have a question about the 750,000 that Mr. Jornin mentioned. I want to know how the auditor dealt with that. But I did not have the opportunity to ask that directly to the auditor by you. Well, you can ask the auditor via me. Questions going via me, but I'll pass the question on to the auditor if you wish. You've asked a good question once again. Mr. Van Leven. Before answering your question, I'm going to take this opportunity to describe our operations as Heineken's external auditors. I'm Mr. Erik von Leuven. I've been the external auditor for several years. Unfortunately, this will be my last year as such. The financial statements were compiled by the Executive Board and were signed by the Supervisory Board and have been submitted to you for adoption as shareholders. And it was my assignment to perform an independent audit and you'll have read that in the financial statements and the auditor statement appears on page 140. And the audit is intended to ascertain the accuracy of the financial statements. So in our audit, we try to assess whether we can determine with a reasonable degree of certainty that there are no inaccuracies in the financial statement. That's in the independent auditor's report. And we check all important items in the financial statements and we review the underlying processes and systems that lead to determining the results and the asset position and the cash flow. I determined that the information and the report by the Executive Board does not conflict with the financial statements. And I'll get back to your question about what Mr. Said in a moment. We determined that the financial statements meet all accepted standards for financial reporting and that the Executive Board compiled the financial statements according to the law. And I observed the law by reporting on my duties for the Executive and Supervisory Boards. And as stated, I issued an independent auditor's report about my findings, which the gist of which is that I have an unqualified approval. And this is based on the Dutch Board of Auditors, which means that in planning our audit, we consider risk factors that might impact the financial statements and we examine internal management and internal control at the firm. And at the start of our audit and throughout the year, we also determine what will be most critical in the audit over the course of the year. So this year, we specifically considered activated goodwill accounting for the returns and the tax positions. And our audit of internal management and internal control consisted of performing duties throughout the year. At the year end, we consider mainly the announced and explanatory notes in the financial statements. Heineken operates internationally and has many subsidiaries domestically and abroad. The majority of these subsidiaries are also examined in our audit. And KPMG is involved with nearly all the subsidiaries and the group auditors send instructions to the auditors of those firms to state the expectations. We also visit them and perform quality reviews to determine the quality and speak with local management. And in that context, we visited Mexico, Nigeria, Singapore, Poland, Spain, Vietnam and The Congo this year. Our audit targets identifying mistakes of material importance. It's not a comprehensive audit because that would not be efficient business operations. The materiality for the financial statements as a whole is €95,000,000 That doesn't mean that we simply check for €95,000,000 items because they're attributed to individual balance sheet items and the subsidiaries so that we audit with a very low level of materiality and with many of those firms. And often those subsidiaries have a statutory audit obligation, which requires a far more detailed audits. Any audit errors identified by auditors globally that exceed million are reported to me. I discuss them with Mr. Hofth Grafland and Mr. Van Boksmir and report on those to the Audit Committee and the Supervisory Board. In addition, to wrap up, in compiling the financial statements, the Executive Board makes estimates and assumptions, which we assess and we examine whether they've been elaborated sufficiently in the financial statements. As per the audit approach and findings, they're discussed continuously in the course of the year with the executive and supervisory boards. We attended all audit committee meetings. And in the Supervisory Board meeting where the financial statements were discussed, we reported on our duties and conveyed our findings. And I thought it would be a good idea to tell you as shareholders what we did within this audit. And I also explained our interaction as external auditors with the Executive and Supervisory Boards. Now to answer the questions from the two preceding individuals about the 750,000 in the board remuneration. The remuneration report from last year in the financial statements of 2013 mentioned this allocation, which has a two year vesting period and the period runs from April off the top of my head 2013 to April 2015. The amount allocated is to be attributed to that two year period. So you saw a part of this in the financial statements for 2013. There's 750,000 in the 2014 financial statements and you'll see another little bit in the 2015 financial statements. Svenja there we are. We've given you a very forceful answer to your question. Isn't that fine? Do you have any further question? I have one question. Has the auditor heard of any errors exceeding €3,000,000 or has that never occurred within the Heineken organization? This another question you're asking the auditor. Said, mean you can ask it if you wish, but I don't think it's something which The auditor has to tell you about it. That's what he just told us. Your question is could you repeat your question please? In the entire hand that I just got and I really liked what the auditor told us, he said if I see something exceeding 3,000,000 I have to report that to the Board. My question is whether that happened? Mr. Chairman, I'll be happy to answer that. That is correct. We mentioned that in our statement that any discrepancies in the audit exceeding million will be reported by me to the Executive Board. Then the Executive Board assesses whether in their view those audit differences are material and need to be processed. We discussed this. And let me tell you that the quality of Heineken's financial records and audit is such that in both quantity and quality, the audit discrepancies are minimal and don't come anywhere near our materiality threshold. So we reported them to the Board and we discussed them with the audit committee and reported them to the Supervisory Board. But in quantity and quality, they were very limited in scope. But I'm sure you can understand that in a global group such as Heineken something will always happen somewhere that is not fully accurate, but nothing for you to worry about. I'd like to thank you very much. Thank you. Thank you very much. Thank you for your conference. Well, and gentlemen, I would like to draw the debate to a close at this point and I suggest that we decide. Chairman, I had a question for the auditor about this. One of his Okay. Questions go through me remember. Can I ask the question or you'll have to give me the answer yourself? Feel free to Ask your question. Understand that I'm in the wrong line of business because that gentleman saw half the world in the course of business. But that aside, one of his key audit matters was auditing revenue. You're huge. You operate. We're present in 170 countries or more. Some countries are larger than others. And I'm still thinking of those revenue problems that Ahold had. My specific question to the auditor is how did he treat the revenue that we would say was carried over. How can he know that no fraudulent revenue wound up in the books? Because what I'd like to know whether the input was timely accurate and complete. How did he check that? Could you respond that to us? Could you do that without Crossing borders? Yes. It's true that reporting revenue was one of our key audit matters. Its revenue is billion yen at Heineken. That's the biggest item on the books. Heineken is a firm that as you shareholders appreciate, it's result driven. So management has set targets in the assorted subsidiaries and the different opcos. So it's an inherent risk that local management would do everything possible to achieve those revenue targets. And it's our job to ensure that that revenue that's reported is accurate, complete and in fact has been realized. So at year end, we check whether we have the underlying documents substantiating those transactions and see that the products have been supplied and invoiced. And we also ensure that the amounts involved have been received. And we also tried to ensure that the revenue has not been shuffled around, but is simply listed. So we look at the subsequent years for January, February and March whether any credit notes are sent to the sellers to reverse revenues. So with the large items in the financial statements, we instruct our auditors to verify realization, which is based on underlying documentation about receipts and reviewing any credit notes after the end of the reporting year. Thank you. And now ladies and gentlemen, we will proceed to adopt the financial statements for 2014. At long last, we're going to cast our votes. We will be using our voting handsets. If there is any difficulty with the voting handsets, will vote by a show of hands. But I would like to invite the technicians to turn the voting system on. And now, I will ask you please to insert the Heineken NV card, the card without the yellow dot, the card without the yellow dot inserted into your handset with the chip facing towards you. You insert it at the top of your handset. After this, you will see a menu on your handset screen. If you have any difficulty, if you don't see the menu, please raise your hand and one of the hostesses in the room will come to help you out. You can leave your voting card inside the handset throughout the whole meeting. Just looking around the room to see if anyone is having difficulty. Is everyone's handset working? No one's having any difficulty? No one's put their hand up. So if you wish to vote in favor press 1 to vote against, vote two and to abstain vote three. Okay. I think that's sufficient time for everyone to cast their vote. And indeed you've all had chance to savor the aftertaste of your vote. Voting is now closed. And I conclude that this agenda item has been approved of five zero three million plus votes, which is 99.99% approval. Well, I think we can call that a success beyond reasonable doubt. So the decision to adopt the financial statements for 2014 has therefore been approved by 99.99% of the votes. Ladies and gentlemen, Mr. Van Noove mentioned this a moment ago. As of the January 1, Deloitte will be or has become our new auditors. That means that today we are bidding farewell to our external auditors. KPMG. KPMG have been our auditor for more than seventy years and they've seen the company growing from a local brewery to a global corporation. We've always had very good working relations with KPMG. We have been very much appreciative of their highly professional standards at work. Mr. Van Der Werne and Mr. Van Dyke in particular, I would like to thank for their input and for the very constructive and pleasant working atmosphere. Could we please have a round of applause for KPMG? Right. We'll now move on to agenda item 1D, discussion of the dividend policy. The Executive Board and the Supervisory Board have decided that for 2014 onwards the policy should be that the annual dividend payments represent 30% to 40% of net profit not including depreciation of brands or non recurring items Bayer this is known as. It has since been adapted to 30% to 35% of the Bayer net profit. Because the cash flow has been so healthy in Heineken and on the basis of the company's principles of maintaining its independence and healthy balance sheet and making sure that sufficient quantities of profits are reserved. We wish to be able to grow autonomously and through acquisitions. As usual the annual dividend will take the form of interim dividend and a final dividend. And the interim dividend will be decided on at 40% of the total dividend for the previous year. Who would like to take the floor on this subject? Nobody? Okay. No questions. In that case, I suggest that the new dividend policy has been announced and noted and that is the agenda of that agenda item. This brings us on to agenda item 1E. This is decision on the appropriation of the balance of the income statement in accordance with Article twelve-seven of the company's Articles of Association. For 2012, the proposal is to pay a dividend of €1.1 per share. This is approximately 36% of Bayer net profit. Of this €0.36 was paid out on the 09/02/2014 as an interim dividend. The final dividend will be €0.74 per share, which will be payable as of the 05/06/2015 at the ABN AMRO Bank in Amsterdam. As of the April 27, the shares will be tradable on Euronext Amsterdam Stock Exchange ex dividend. Who would like to take the floor on this subject? Thank you. In that case, I propose that we adopt the dividend at €1.1 per share. We will now proceed to vote. Operator, please switch the system on. And please now cast your votes. The step voting is closed. And I see that votes in favor were 99.77% of the votes. I therefore conclude that the dividend proposal has been approved by 99.77% of the votes. Thank you very much. This brings us on to agenda item 1F. The proposal is to discharge the members of the Executive Board for liability of the performance of their duties in financial year 2014 as set out in the financial statements. Who wishes to take the floor on this agenda item? Nobody. In that case, I propose that we vote on this decision to discharge the members of the Board. Operator, please switch the system on. And ladies and gentlemen, please cast your vote. Voting is closed. And on Sterexvostov Med I see that 99.97% of votes have granted discharge to members of the Executive Board for the performance of their duties as set out in the financial statements for 2014. Agenda Item one g, proposal to discharge members of the Supervisory Board. It is proposed to discharge the members of the Supervisory Board from liability for their performance of their duties in the financial year 2014 as set out in the financial statements for the year. Who wishes to take the floor? I'm Karleen from Lyrup. I stated my name earlier. I would just like to say a bit about the departure of Mr. Hooft Grafland. That's a rather unusual thing to take the floor about because we're now talking about the discharge of the Executive Board. I will give you the floor at a later stage. But let's keep this in suspense. I'll give you the floor at a later stage. So who would like to take the floor on this agenda item? Okay. I propose that we vote on the discharge. Let's vote on this agenda item. Operator, please switch the system on. Ladies and gentlemen, please cast your vote now. And I see that 99.97% of the votes have granted discharge to members of the Supervisory Board from liability in the performance of their duties in the financial year 2014 as it's out in the financial statements. Let us move on to agenda item 2A ladies and gentlemen. Authorization of the Executive Board to acquire their own shares. This is to apply the proposal is to authorize the Board to issue a maximum for a statutory period of eighteen months starting the 04/23/2015 to acquire own shares subject to the following conditions and with due observers of the laws and articles of association. Any such action would require prior authorization from the Supervisory Board. You have granted such authorization in the past. Who would like to take the floor? Pena please. Mrs. Pena. Pena? Yes. Mr. Chairman, I have a brief question. How many shares did you repurchase? 555,000 own shares repurchased last year. So if that lady is hired as CFO then you've got the shares ready and waiting for her? Okay. There are more shares on the board for the long term incentive. But no, I think no I'm just have we purchased them all? Tomorrow, think. Tomorrow. Tomorrow. Tomorrow. They'll be there ready and waiting tomorrow. Okay. Any further questions? No. In that case, let us propose let us proceed to the vote on authorizing members of the Executive Board to acquire own shares as set out in the annotated agenda and with due regard for the law and articles of association, let us proceed to the vote. Operator, please switch the system on. Ladies and gentlemen, please cast your vote now. I conclude that 99.98% of the votes were in favor of this authorization. This brings us to agenda item 2b. It is proposed that the Annual General Meeting of Shareholders authorizes the Executive Board for a period of eighteen months starting on the 04/23/2015 to issue shares or grant rights to subscribe for shares. The authorization will be limited to 10% of the company's issued share capital as per the date of issue. A resolution of Executive Board to issue shares or to grant rights as described for shares is subject to the approval of the Supervisory Board. You have granted this authorization in past years. Who would like to take the floor on this? Nobody. Let us proceed to the vote. Let us vote on authorizing the Executive Board to issue shares and rights to shares. Operator, please switch the system on. Ladies and gentlemen, please cast your vote now. Enough to make you thirsty, isn't it? Voting is closed. And I'm disappointed to see that only 99.29% of votes were in favor of granting this authorization. Let's move on to agenda item 2C. It is proposed that the Annual General Meeting of Shareholders authorize the Executive Board for a period of eighteen months starting from the twenty third of twenty fifteen to restrict or exclude shareholders' preemptive rights in relation to the issue of shares or the granting of rights to subscribe for shares. A resolution of this kind again will be subject to the rules as you've voted on in past years. Who would like to take the floor? Nobody. In that case, I propose that we authorize the Executive Board under this agenda item. Let's proceed to the vote. Operator, please switch the system on. Ladies and gentlemen, please cast your vote now. The vote is closed. I'm sure you'll be pleased to know that this proposal has been adopted with 98.95% of the votes. That takes us to item three on our agenda ladies and gentlemen, which is the appointment of Mrs. Laurence Debroux as a member of the Executive Board. She is present here in the auditorium. Laurence? Thank you very much, Laurence. In Auverenstamming, in accordance with the Articles of Association of the company, the Supervisory Board has made a nonbinding nomination for the appointment of Mrs. Laurence de Poulis as a member of the Executive Board with effect from '20 through April 2015 for the maximum period of four years through the end of the Annual General Meeting of Shareholders in 2019. Mr. Duplu will serve as Chief Financial Officer. The Supervisory Board considers Mrs. De Bru to be an extremely suitable candidate given her all around and experienced international CFO track record at Board level who has a significant business expertise in great many areas. Additionally, she brings to bear experience in banking petroleum health care and outdoor advertising industries. Furthermore, Mrs. Has extensive experience at driving organizational change and implementing transformational programs. Mrs. Dupuis is a French national and 45 years old. Prior to joining Heineken, she served as Chief Financial and Administrative Officer and member of the Executive Board at J. C. Dupuis for nearly five years. Prior to this, she worked for fourteen years in various managerial functions at the global healthcare company Sanofi, including senior management positions such as Group CFO and Chief Strategic Officer. Mrs. De Blou started her career in banking and has previously lived in both The U. K. And The U. S. C. And she's also worked there. The remuneration of Mrs. De Blou will be determined in keeping with the remuneration policy for executive board members. For additional information about the envisaged remuneration please see page 57 of the annual report. To compensate her for losing rights under share option plan upon leaving her previous employer Mrs. De Ploux will receive 2,000 shares in the company as of her appointment date as well as another thousand later on. And these shares are subject to a holding period of five and four years respectively. 1,000 on the date of the appointment and $1,000 one year after the appointment date to be specific. This share allocation figures integrally in the proposal to nominate Mrs. De Bru as Member of the Executive Board. Caroline from Lyroupe, I'd like to welcome Mrs. De Bru. We wholeheartedly support her appointment and wish her all the very best. I'd just like to say a bit about the remuneration for Mr. Hof Trafland who will be leaving us. And I wanted to raise this in the discharge item, but perhaps it would have been wiser. No, I do want to talk about this and I probably should have raised this at the remuneration, but I thought it would be better to talk about it at the discharge item. Can I say a bit about it anyway? Yes, go ahead. I'd like to thank Mr. Hort Grafond for his many years of dedication and loyal input for this fine firm. But I'd also like to say something about the remuneration for the departing CFO, because although there are separate components that have been properly substantiated, we think that the total amount sends an unfortunate message to society. And as Mr. Mentioned previously, as well we think it's undesirable and illogical for Mr. Haute Grafland to continue to have a claim to performance shares for the periods 2013 through 2015 and 2014 through 2016 when he's no longer employed at Heineken. Wanted to make that known. Okay. Point taken. Mr. Jornay, you're next. Yes, Mr. Chairman. Thank you very much. I'm Jornay from the VEB. Mr. Chairman, you stipulated that Mrs. Dubro has an extensive track record in transformational processes. And does that specifically mean that you chose Mrs. Dubu for that experience? My second point is that if you look at that wonderful figure in your annual report depicting all executive and supervisory Board members nearly all have worked at Heineken for a great many years and end up in the on the Board. But this is a new trend. You're bringing in an outsider. I understand you'll have refreshing views. But why didn't you have any successors who might have been suitable because then you know who you're dealing with, but that could also be a negative assessment. Now the reference to experience with transformational programs will benefit all companies in this rapidly changing world. And you'll see that that's the outcome of regular debates here. If you want to survive in this world, have to keep adapting and survival depends on adaptation abilities. That's well known. So in that sense, it's especially important for somebody at a large company to have experience with transformational program, because you have to constantly adapt to all these changes and it's far from simple. That's important. Second, we operated with immense care in seeking a successor. We also considered internal candidates. And ultimately, we concluded that this candidate, the individual from outside would best be able to meet the challenges that our firm faces and also offers some refreshing new perspectives. Are there any other questions? Yes, Chairman. I would like to wish Madhuan a very successful and happy future in your company. I have no doubt that she will be very happy working Heineken. Of course, I've been fighting for the position of women in big corporations for twenty years now Unilever, Dutch Royal Oil and elsewhere. And I'm delighted to see that you have decided to take a lady on in the Executive Board and I would like to wish her a very future very happy future. And I have no doubt she'll be very happy. Are you going to say something nice? Yes, sir. I don't know about that. You're waiting to see what I say first. First of all, what kind of contract is Mr. Pruitt going to get? What kind of contract is it going to be? I think that we need to know what otherwise you might find yourself in a building which you don't wish to go to and you also don't wish to go to. What kind of contract does the lady get to get? She'll receive the contract that most executive board members receive in Dutch company. She'll no longer be an employee. Thank you very much. That answers my question. Does anybody else have questions or comments? If not, I would like to conclude this debate. And I propose appointing Laurent De Brux to the Executive Board for a four year period through the end of the AGM in 2019 with the remuneration listed in the annual report plus a one off allocation of 2,000 shares. And we will now vote. Would the voting operator please activate the system? Please cast your vote. The vote is closed. I'm delighted that 99.97% of the votes has been cast in favor of appointing Laurent de Brux and 2,000 shares have been allocated. Welcome Laurent. It takes us to item four on the agenda, which is the reappointment of Mr. De Carvalho as a member of the Supervisory Board in accordance with the Articles of Association and the schedule for reappointment of the Supervisory Board has made a non binding nomination for the reappointment of Michel de Carvalho as member of the Supervisory Board with effect from twenty three April twenty fifteen for the maximum four year period once again through the end of the AGM in 2019. Mr. De Carvalho was first appointed in 1996 and he fits the profile drafted by the Supervisory Board, which has also been posted on the website according to Best Practice 322E of the Dutch Corporate Governance Code dated 10/2008. Mr. De Caravaggio who's married to Charlene De Caravaggio Heineken who indirectly holds over 10% of the Heineken shares does not qualify as independent. With regard to best practice provision Roman numeral three thirty five, Heineken does not apply the maximum appointment period to members who are related by blood or marriage to Mr. Freddy Heineken. The Supervisory Board therefore proposes reappointing Mr. De Caravaggio in view of his broad international and financial experience and his contribution to the Americas Committee as well as the Selection Committee and the Remuneration Committee. Mr. Decaturvalho is a banker at Citigroup Europe as Vice Chairman of Investment Banking and Chairman of Citigroup Private Bank who would like the floor on this. Madam? Ladies and gentlemen, sorry, I'll take the floor again from Lerop. I just very briefly like to say something about this. You choose to be very transparent here. We're glad of that in your reporting. And I'm sure you won't be surprised to see us voting against this decision. This is because we are very attached to independence for members of the Supervisory Board. Mr. Cavallo has already been on the Supervisory Board for twelve years and cannot be deemed to be independent. It does not mean to say that we question his integrity, knowledge and his international experience. It is simply our voting policy and we think it is fair and right to be open in explaining our vote. Thank you very much. I think it's very transparent and much appreciated that you tell us this. Mr. Johanna has the floor. Yes, of course. Yes, Chairman. We will not vote against, but we do agree with the arguments you've just heard. And I would call upon you and the De Carvalho family to have a look at this provision to see whether it is still appropriate in this day and age. Of course, the values are underpinned by the family, but Mr. Das and Mr. Carvalho will already be doing this in the holding. And the holding is actually has the power over the NV company. So I don't think it is appropriate to put this position we are therefore against. In addition, it's best practice to stipulate that a person over 70. Now Mr. Dirk Waller you don't look as if you're over 70. Don't worry about that. So please don't be hurt for what I say. But best practice say that when you're aged over 70 should only be appointed for two years. So I actually agree with the previous speaker. This runs contrary to best practice rules and I think it would be appropriate for the Heineken family to enter into talks to decide how they should act in the future. This one occasion therefore we will vote in favor Decavaggio's skills. Well, that's an immense compliment to Mr. Decavaggio that Mr. Jornay is setting his principles aside and voting in favor nonetheless. You have the floor. Yes. You always need to look at the whole picture in each case. When Mr. DeCovelli entered this advisory board, well since then we've gone seen profits go from €500,000,000 to €1,700,000,000 if I'm not mistaken. And I think that is a tremendous achievement. And I think that his father-in-law would have been very proud of him. So I think bearing in mind the role he has played and his fully active role in 03/1931, I think he is a real asset to Heineken. Thank you. Yes, we couldn't have said it better ourselves. Ladies and gentlemen, if these were your contributions then I propose reappointing Mr. De Caravaggio as the Supervisory Board Member for a four year period. We will now proceed to the vote with the voting. Operator, please activate the system. Please cast your votes. Okay. Well, the vote is now closed. This is the last time you're hearing this only on audio. You'll experience the real thing next time. We have ascertained that the proposal has been carried with 97.54% of the votes to reappoint Mr. Carvalho. Ladies and gentlemen that takes us to the conclusion and it's been mentioned a few times today, but it is true that Rene Hortrafraand will be stepping down from the Executive Board. He started his career with firm thirty four years ago. He started as a management trainee in 1981 and subsequently served as Brand Manager of Ramona, Export Manager Central and West Africa, Financial Director of Bralima in Congo, Marketing Director of Heineken Netherlands General Director of MultiBintang Indonesia Director of Corporate Marketing and Director of Heineken Export Group. In 02/2002, he then joined the Executive Board and was appointed Chief Financial Officer in 02/2005. Since 02/2006, he and Jean Francois from Boxmer have been an unbeatable couple on the Executive Board. Rene on behalf of the Supervisory Board and Jean Francois my great thanks for your contribution to the firm with your unabated Zelle energy humor critical view and tenaciousness. You've been essential in bringing about the growth and success of Heineken in the past decade. We will miss you, but wish you and Ingeborg all the best. Thank you very much. And I'd like to hear another round of applause from Mr. Hof Grafland. Chairman, may I just say a couple of words? Thank you very much to you for your kind words and thanks to you ladies and gentlemen for your applause. But in particular, I would like to thank you all for your thirteen years of confidence in me while I've been on the Executive Board. And I must say that I've always really enjoyed contact with you and I'm looking forward to a good chat with you at the reception in a moment. Heineken is a magnificent company, a wonderful corporate culture and the Heineken family is very active in all that. I hope very sincerely that it will continue to be the case for many years into the future. Now Jean Francois, I already miss working with you. I think that we've been a perfect duo the last few years. You personally have led the company in a wonderful way, very modest, but very active and inspiring. And I think that Heineken may be most pleased to have someone like you as CEO. Now I'm handing the baton over to Laurence. Over the last couple of months, we've been working hand in glove. And I now know that she's not only extremely skilled and motivated financial professional, she's also a really good team speaker. And she's someone who really is very much suited to Heineken's corporate culture. To hand over to you and I wish you and the company all success in the future. I'm going to miss this company. Don't be in any doubt about that. That's the way it is with members of the Supervisory Board. But anyway, please rest assured that I will continue to be a very committed and enthusiastic shareholder. And who knows maybe we'll meet in my new capacity at future meetings. My very warm thanks to you all for your support and your confidence in me. Thank you very much, Rene. Ladies and gentlemen, I'm closing this meeting at six at 04:22 p. M. AGM of Heineken Holding N. V. Will start in ten minutes in this auditorium. I'd like the shareholders of and V to leave the room and in their voting handsets and chip cards. The Heineken Holdings shareholders can stay in their seats. We'll be starting in a few minutes And the hostesses will check the headsets and cards for Heineken Holding in a few moments. I'd like to thank you and the listeners at the audio webcast. Our Heineken Holding meeting will be audio webcast as well. Good afternoon ladies and gentlemen. Welcome. I am opening the Annual General Meeting of Shareholders of Heineken Holding N. V. A very warm welcome to everybody. A couple of practicalities to deal with. Firstly, smoking is not allowed in this room. Secondly, would you please check one more time that your mobile phone has switched off and remains switched off throughout the whole meeting. We have simultaneous interpretation today Dutch and English. We can do English on channel two. If you ask any questions in English they will be answered in Dutch. If you have any difficulty with your hearing, you can hear Dutch over your headphones on channel one. As you know, we have a live video webcast of today's meeting and I'd like to welcome all our online viewers as well. Let's move now on to the formalities of today's meeting. Today's meeting was convened on the 03/10/2015 by invitation on the Heineken website. 03/26/2015 is the registration date for today's meeting. This means that you are entitled to attend the meeting and cast your vote if you are registered as a shareholder on the March 26. Also that the agenda included today's agenda, you are also informed that the fully annotated agenda, the annual report on the financial statements for 2014 and all other data as set out in Article three ninety two Section one of Book two of the Dutch Civil Code were made available for your inspection at the company's offices in Amsterdam and were also on the Heineken website. I therefore conclude that all formalities for today's meeting as required by law and the articles of association have been observed and that we can therefore make valid decisions on all voting items at today's meeting. Shareholders have filed a notification for whom they represent today and the company has given the shareholders the opportunity to issue an online voting instruction if they wish and some have chosen to do so. It turns out that today we have 29 shareholders present today and 34 shareholders are representative. Votes have been cast online by six forty seven shareholders, which means that today we have representation for seven ten shareholders holding. A total quantity of shares amounted 257,200,500 shares, which is 89.3% of the capital issued. Decisions made today and voting results will be displayed on the Heineken website in a few days. Minutes of today's meeting will be available on request from the company head office. The minutes will be available all three months and then placed on the Heineken website. We have Lloyd Lloofs, Notary Public Mr. Meppelin today who will be supervising the voting system. Mr. Vanneuve and Mr. Van Dijk from KPMG accountants are present. They are our auditors for this year. Last year, as you know, we decided that KPMG accountants will be finishing their auditing work for us. We would like to thank KPMG most sincerely for the work they have done for the company over the years. We repeat those thanks today. As of the first January twenty fifteen, Deloitte Accountants BV have become our new external auditors. Mr. Delhausen and Mr. Van den Broek from Deloitte are with us at today's meeting. In addition, we have members of the press with us and all these participants are sincerely welcome at today's meeting. If you wish to take the floor during the course of today, please use one of the microphones dotted around the room. Please tell us your name as soon as I give you the floor. If you are speaking on behalf of another shareholder, please also tell us who you are representing. I reserve the right to restrict speaking time for an individual if necessary in order to enable the meeting to run smoothly. I've never had to do that in the past. I know too much I'll have to do that today. Today once again we will be using voting handsets and we will explain how the voting handsets work in due course. Right. So this brings us then to the report on 2014. I'd just like to make a couple of comments. It is normal at these meetings that we spend a couple of moments looking at the Heineken and Heineken Holding share prices. This year, once again, I would like to talk about what we call the discount. I will be brief. You can see on page 10 of the Executive Board's report that the there was a slight upturn in the share price in the course of the year. The difference between the Heineken NV and the Heineken Holding NV is they've been moving more or less in parallel going from 6% at the beginning of the year to 12% at the December. Yesterday, the discount was approximately 10%. And over the past years, it has been an average of 12.6% and we are therefore fully in line with historical norms. And I can now move on to discuss the Board of Directors report. Who would like to take the floor on this subject? Yes. Thank you, Mr. Das. Last year we spoke about the AFM and a penalty that was about to be issued. The amount wasn't known yet. Off the top of my head, was 375,000 because Mr. Trappaglio registered share transactions too late. And you said, well there's nothing in the media so that's why they capitalized on this. It sounds like the AFM took it very seriously considering the penalty that they issued. And my question is who paid that penalty? Ms. Cavalho paid the penalty. Any further questions or comments on the annual report? If not Good afternoon, ladies and gentlemen. This is my first time as a speaker at this shareholders meeting and I'm delighted to be speaking here because I love family owned businesses, especially when they're well run. And what's so lovely is that this has been going on for a long time and I think it's been accelerating for about twelve years. The profits are up from €500,000,000 to €1,700,000 says the speaker. It's very sustainable. I'm delighted. Bixabita is a zero alcohol beer and the factory operates on solar panels and it's extremely cost efficient to place solar panels on all your factories. And if you can't afford it then companies of the owner can do that because they're looking for roofs. So it's expensive for consumers, but that's it's good for solar panel companies and Heineken can contribute to further this because in The Netherlands we're fairly slow. So you can also serve as a role model by driving smart cars, BMW hybrids or the Teslas. And what I mentioned at that powdered milk might be something you'd like to consider. Just interrupt you here. Two reasons if I may. Firstly, all shareholders here today were present at last year's meeting as well. So they were able to note your very positive remarks last year. In addition, it is the first time you've been present at the holding meeting. In addition, today our policy is that all comments and questions regarding the company are to be made at the NV meeting. You did that. In fact you did take the floor then. I don't think there's much reason to raise such questions at this meeting. That's why I'm interrupting you. Unless you have a question which is specifically relevant to the holding and please to the annual report REPRESENTATIVE:] of the holding. Confusing to me, but oh well. What's the long term strategy of the holding? All the long term holding strategy is to maintain independence, stability and continuity of Heineken. Very noble objective. Thank very much. If there are no further questions on the annual report for 2014 then I note that we have noted the report and we can now move on to agenda item two, which is the implementation of the remuneration policy for the members of the Board of Directors. In 02/2005, the Annual General Meeting of Shareholders approved the remuneration policy for the Board of Directors. This includes saying that members of the Board of Directors both executive and non executive should be the same as that for the supervisory board members of Heineken NV. This means that the remuneration of €60,000 per year is paid for executive members of the Board of Directors. That's been the case ever since 02/2005. For information regarding the implementation of this policy in 2014, I would refer you to the English language consolidated financial statements in particular footnote 35. Here you can see that the Executive Director did indeed receive €60,000 for 2014. As you know Ms. Carvalho is Member of the Board of Directors and the others are non executive. The law determines that this is an agenda item for information and discussion, but not for a vote. Does anyone wish to take the floor this subject? Mr. Jorner. I have nothing against the amount as such. But my question is who is actually paying it? Because you don't have a product, so you don't have any revenue or income and the dividend goes to Mrs. De Caravaggio as the holder of the shares. But I also understand that the NV is giving you 750,000 to do business. Is that paid from the 750,000 that you received from the NVP? Yes indeed. The holding has NV shares, but has no cash of its own. All dividends received by the holding are passed on immediately to the shareholders. It has been decided together with Heineken NV that all holding expenses taking off for example the cost of the stock exchange operations, the auditing costs, the Chamber of Commerce costs and the Board of Directors costs are paid by HandicaNNV to HandicaN Holding. This agreement is many years old. As part of the group objective, HandicaNNV is also pleased to make sure that we have independence, stability, etcetera guaranteed by the holding. And that's why Heineken NV is willing to pay the expenses of the holding. Each year I learn more about all the ingenious structures devised by the late Mr. Heineken. But looking at you, I'll include this in my comments. Don't you think that you're having the best of both worlds because you receive money here and you receive money from the NV and then you have the NV pay you again here. I simply think that's inappropriate. I disagree with you. I have two different roles. Each receives a remuneration that is therefore no idea of me being paid twice over for one job. No, I have two jobs each of which I'm paid for. You're entirely right. But if you had to read different documents, but you serve on the NB Supervisory Board. So you've attended all the debates. You serve on various NB committees. And here it's simply I know everything. I've read all the documents. So that's done and dusted. No. Think that you are not doing justice to the work of the Board of Directors in what you say. I would say though that I think this discussion on remuneration has now come to a close because it is not the agenda item we're talking about. We're talking here about the operation of the remuneration policy of the executive member of the Board of Directors. I'm not one I'm not the Executive Director. Anyone have any questions regarding the remuneration policy of the Executive Director? Well, I'm learning every day too. That's wonderful. You're never too old to learn. But that agreement about the 750,000 that you received from Heineken NV, you're saying that's a few years ago, but does that have an expiration date? Or is it simply a blank check until the year 03/1935? Longer I think. As long as the group exists in its current form that is to say with a holding company, which keeps a guard over the Heineken shares, I think this structure will remain in place. Thank you very much. Note therefore that this agenda item has now been fully discussed and we can move on to agenda item three. This is adopting the financial statements for 2014. Supervisory Board has compiled the financial report financial statements you can find on page 22 and following the English language annual report. It has been audited by KPMG accountants. You can see the auditor declaration on page one to four and following. Who would like to take the floor on the financial statements? Mr. Chairman, at the previous meeting, we were told that the next auditors will they once again be the same auditors as those of Heineken NV. Why is that the case? Why can't we as a holding use a different auditor than the NV does? It can be done, but it's not what we choose to do. It has been discussed extensively at last year's meeting when the new auditor appointment of the new auditor is being discussed. We took the view that KPMG as we heard a moment ago has been auditing Heineken for more than seventy years. That's for the NV company, but not so long with the holding company. It used to be Ernst and Young auditing the holding company. But it was decided at one point that it was a shame and a waste of money to have two separate auditing companies in the group when the Heineken when the holding financial statements essentially are derived from the NV financial statements. So at that point it was decided that the NV company's auditor should be the same as the holding company's auditor and that policy has remained in place. Last year it was decided that Deloitte should be appointed as the new auditor for both companies. Okay. That was a question on the auditor. Let's come back now to the agenda item in question. This is the financial statements for 2014. Has anyone got a comment or question on this? If not, then I propose that we vote on adopting the financial statements. We vote using our voting handsets. Voting operator please would you switch the system on? I assume the system is now switched on. So please insert your voting pass into the handset with the gold chip facing towards you. You insert it at the top of your voting handset. You will see your name appearing on the screen and you see the voting options on the screen. If anything's gone wrong, please raise your hand and we can see what we can do. I think everything seems to be working fine. So if you wish to vote in favor, press 1. If you wish to vote against, vote press 2. And if you wish to abstain, press 3. Voting is now open. Please cast your vote now by pressing the button of your choice. Okay. The computer services on agenda item three. We haven't had the voting results on number two yet. Well, at the vote you need to say that it's closed so that we can close it and then you'll get the results. Voting is closed. Okay. There we go. Okay. So we note that the financial statements have been adopted by a majority of votes, but 99.89% of the votes 99.87% of the votes. Agenda item four, this is an information item on the appropriation of the profits. This is of course derived from Article 10 Section six of the company's articles of association. You will buy it. We don't need to vote on this issue. The dividend for 2014 is €1.1 per ordinary share with a nominal value of 1.6036 of this was already paid on the 09/02/2014 as an interim dividend and the final dividend of €0.74 per share will be available for payment of the ABN AMRO Bank in Amsterdam with effect on the 05/06/2015. And as of the 04/27/2015, the shares will be traded on the euro and the exception of the stock exchange ex dividend. We now move on to agenda item five, discharge of members of the Board of Directors for the policy carried out in 2014 as set out in the financial statements for the year. Who wishes to take the floor on this subject? Ms. Johanna. I'm Mr. Johanna from the VEB. Mr. Chairman, yes. I don't want to repeat myself since the previous meeting, but there I appealed to consider structures concerning the appointment of Mr. Decaravaglio and the holding and the two hats that the Heineken family is wearing there especially in the holding. Please see whether I know that if you stitch it twice it holds better, but I think that this is really triple stitching. Thank you very much. We'll bear your comments in mind. If no one else wishes to take the floor on this agenda item, no one has any further comments then the debate comes to an end and we can now vote on issuing a discharge. Please cast your vote now by pressing the button of your choice on your handset. Voting is open. And the stemming is voting is closed. And the proposal of discharge from liability has been approved with majority of 99.85% of the votes. Moving on to agenda item 6A, B and C. These are the normal authorizations. Firstly, authorizing the Board of Directors to purchase the company's own shares. You granted you've always given this authorization in the past. Does anyone wish to take the floor on this? Mr. Chairman, how many shares have you purchased? None. Well, why does this always fit you on the agenda? It's standard practice. You never know what might happen in the coming year and it might be appropriate to purchase companies own shares. Indeed, it's never happened in the past indeed, but you never know what the future holds in store. And it is standard practice to have this agenda item for all publicly traded companies. Just in case, if there are no further comments then we can proceed to the vote. The proposal is to authorize the Board of Directors to purchase companies' own shares. Voting is open. And stemming is slaughter. Voting is closed. And for sale. The proposal has been carried with a majority of 99.89% of the votes. This brings us to agenda item 6b, authorizing the Board of Directors to issue shares and rights to shares. Does anyone wish to take the floor on this agenda item? If not, then we can proceed to the vote on this agenda item. Please cast your vote now. Voting is open. The has been carried with a majority of 98.37%. This brings us on to agenda item 6C, authorization of the Board of Directors to restrict or exclude shareholders' preemptive rights. This again is an authorization you've always granted in past years. Does anyone wish to take the floor on this item? If not, then let us proceed to the vote on this authorization. The voting is open. Please cast your vote. The majority in favor is 98.34% of the votes. This brings us on to a number of agenda items regarding members of the Board of Directors. Agenda item 7a to start with the proposal to renominate Ms. C. L. DiCavalho Heineken as Executive Member of the Board of Directors. Priority is a non binding proposal for a renomination of Ms. Cavallo for a four year period in the light of her performance in past years. Does anyone wish to take the floor on this subject? If not then we can proceed to the vote on the renomination of Ms. Carvalho for a four year period. Voting is open. The proposal has been carried by 92.96% of the vote. And I would like to congratulate Ms. Caballo Hanigan most sincerely on her renomination. Next, the renomination of Ms. C. M. Quist as non executive member of the Board of Directors. Priority is the non binding proposal to renominate Ms. Quist for a period of four years in the light of her performance in recent years. Who would like to take the floor on this subject? Let us then proceed to the vote. Voting is open. Selling is closed. And the proposal has been carried by 90.3% of the votes. Very warm congratulations Ms. Crist. Finally, agenda item 7C nomination of Mr. M. R. DeCavallo as Executive Member of the Board of Directors. Priority is given to a non binding proposal to nominate Mr. Cavallo for a four year period in the light of his position as Member of the Supervisory Board of Handica N. V. D. A. By 1926, which will of course be nominated to for a four year period today. And in light of his position of Lush Green NV, the company we wish the Heineken and Heuer families together have a shareholding of 51.7% of Heineken Holding NV and also his banking experience. Mr. Les Cavallo is Vice Chairman of Investment Banking at Citi Inc. In The U. K. And is Chairman of Citi Private Bank of Europe, Middle East and Africa. He is a U. K. National and is resident in London. The proposal is that generally speaking there is a maximum age of 70 years, but this would not be applied in the case of Mr. Carvalho because of his current position as member of the Supervisory Board, has just been extended to Anika LNV and because of his continued activities as a banker. The proposed nomination of Mr. Decavaggio, who is the husband of Merci Elder Komali Heineken as an Executive Member of the Board of Directors is in accordance with the tradition of personal involvement of Heineken family members in the Heineken Group. Does anyone wish to take the floor on this proposal to nominate Mr. Dicavallo? Mr. Jolla? Thank you very much, Mr. Chairman. Mr. Chairman, just from my own understanding, I had also read that if you serve on the Supervisory Board and on the holding then you're entitled to protect those interests on the NV as well. So if we appoint Mr. De Caravaggio to the holding then from that vantage point he's also entitled to appointment at the NV and does not need to comply with all the rules applicable. So that's conditional. Because in every family including mine something will arise. And if Mr. Decaravaglio were to divorce Mrs. Decaravaglio he'll no longer be a relative by marriage and he'll no longer have any input. So we could appoint him, but we certainly couldn't reappoint him because he was no longer married if he were to divorce her. But on the other hand, I don't think it's wise if mom, pop and son because how can the son thrive if mom and dad keep watching his every step. So I think it would be wise if Mr. De Caravallo were to decline this appointment however honorable it is. And second, there's no vacancy. So you're basically expanding the Board with another position. So it's an additional expense. Can you cover that with the 750,000? Well, see, it wouldn't work. Yes, we'll have to increase the amount, because the agreement says that the NV company bears the expenses of the holding company. And it's not exactly £750,000 every year. In the past years, it's been approximately 750,000. And now if this nomination goes ahead there'll be another €60,000 on top. I understand that Caravallos had five children. And recently in an interview they mentioned that they have scrutinized the career options of their children with some outside advice. Do we anticipate more children joining the holding? There are currently no proposals to take other members of the Heineken family as candidates for nomination to the Board of Directors. You asked another question as well. This is the dual function. It is not the case that every member of the Board of Directors is also a member of the Supervisory Board of the NV company. Mr. Vega Valeo has already been a member of the Supervisory Board of the NV company and he's been there and also Executive Board of Directors, we've now got two Executive Directors Mr. And Mrs. Decavalho and the holding companies articles of association allow this option to take place. And this is now being implemented because it is handy if you have two Executive Directors who can send in for one another. Mr. Cavallo and Ms. De Cavallo are in Amsterdam extremely often at the Heineken Holding office and they can combine their various roles very successfully. Regarding all the other points you made, I have no response because they're talking about situations which do not currently pertain and cannot be foreseen in the future. Well are you a matchmaker in the sense that you know that it's not relevant? No I'm not and it's not required anyway because such circumstances are not arising. Ms. Espana. Well, I have another fan here. I'm Mr. Espana. I have a tiny question or rather several tiny questions. Because first, if we appoint Mr. De Carvalho, what type of contract would he be given next? Why does the Heineken Holding have two people who also serve on the Heineken NV? Third, why is this necessary? Why do we have to expand? And fourth, regarding Mr. Paul Grafland, who's the money person at the NV, have you already asked him Renee give me some more money because I need an additional €60,000 Have you reached an agreement? Or will he tell you at the end of the year sorry you're not going to get the money Mr. Das? Well, I think that we can boil what you said down to three questions. Firstly, type of contract will Mr. Get? All members of the Board of Directors have contracts setting up their duties. Second question from you, why do we need Mr. Cavalho to be nominated? I've already explained the reasons for that at some length. It is handy and useful to have two executive members of the Board of Directors. That is the thinking behind this nomination. And your third question, finance you've already discussed and I want to repeat what we said a moment ago. Firstly, there is an agreement between the NV company and the holding company, which says that the costs incurred by running the holding company are met by Heineken NV. It is not the case that Heineken Holding has to go back to the NV company every time it incurs an expense to keep the holding company going and say please would you meet this cost? No. There is an agreement in place whereby all expenses incurred by running and maintaining the holding company are met by the NV company. And it is up to the Board of Directors to decide what costs are incurred. And that's priority in this particular case. If the priority and by the way the Board of Directors agrees, but if the priority deems it necessary to add one additional member to the Board of Directors at the expense of €60,000 then Heineken NV is more than willing to meet those costs and no decision making is needed for that. And for final blank check? Well then it sounds more like a blank check. No. Because it must be costs that are incurred by in order to run and maintain the holding company, not for anything else. The way in which this wording is interpreted is a matter for the Board of Directors. But of course, if the Board of Directors were to interpret it in an absurd way then I imagine a situation might arise whereby the envy company said that they were not willing to pay but that is not the case in this circumstance. Does anyone else wish to take the floor? Ms. Yona. I have one more question not on this topic, but will you have in any other business round because I have an essential point that also relates to you. So if you have any other business I can ask it then otherwise you'll conclude. Under any other business then because I don't want to dwell on this agenda item. Let's now proceed to the vote. The vote is on nominating Mr. De Carvalho as Executive Member of the Board of Directors. Please cast your vote now. The stemming is closed. And the voting in favor of the nomination is 92.91% in favor of nominating Mr. De Carvalho. And I would therefore like to congratulate Mr. Carvalho most sincerely on his nomination to the Board of Directors. Good afternoon. Now, I would now like to give the floor to Mr. Yohna for his question. Mr. Chairman, at the previous meeting, we had a difference of opinion of that what I'll call the retirement bonus. So you know what I'm talking about. If you review your own report, Page 117 and I understand your confusion. I'm also looking at the auditor, because this reads entirely differently from the Heineken ND report about the EUR2 million bonus because in your own report it says that the EUR2 million derives from carrying the fixed pay forward that still needs to vest fixed remuneration that has yet to vest. And you write in the last sentence that the impact of this acceleration for Mr. Hofthrafland is approximately €2,000,000 So you're not relating the €2,000,000 to the fixed salary he still had coming. No, you're relating that to his long term incentive. You're referring to footnote 35? Page 117. Yes. Page 117 that is second page of note 35. Here's note 35. You will also see the same thing more or less in Note 35 to the Heineken NV company. And there is indeed a distant difference between the remuneration report which talks about the severance payment where you have the fixed pay over a two year period. And here it doesn't say quite the same thing, but I understand that the auditors of course can explain this better than I can. But this is the way in which the situation must be described within the rules of the IFRS. But perhaps Mr. Van Leven can say something about this. I'll be happy to make some remarks. There may be some confusion because the phrase that Mr. Jornack is referring to on page 117 does not mention €2,000,000 but €200,000 so €200,000 That's something entirely different. I read euros. No, it says 0.2. So that O is a zero. Okay. The zero was omitted. Now this is entirely different. This is abstracting from the long term variable pay. It's entirely different from €2,000,000 It reads €200,000 I'd say in that case it's a misprint then isn't it? Because it says euro and the last O of euro is an O it's not a zero. And I can't see any space between the euro and the dot two. There should be a zero there. Okay. So it's zero. Okay. Well now I think that's I can now see what's happened. I disagree with it being worded unfortunately because it's consistent with the statement of figures in the financial statements, but the subjects are entirely different. I understand the cause for confusion, but this is a different subject than the CHF2 million. Okay. If you look slightly further up the page, you can see also the says severance payment of CHF2 million. Okay. Was that your question? Okay. Traditionally, we don't have any other business item at these meetings. I therefore conclude the meeting. The meeting is closed. Thank you all very much for coming. Thank you for your contributions. Please remember to hand your voting handsets and cards in as you leave the room.

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