Heineken N.V. (AMS:HEIA)

AGM 2016

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Apr 21, 2016

Ladies and gentlemen, at exactly half past one, I am opening the public shareholders meeting Welcome to the lovely De La Marte Ater. I'm also pleased to welcome the shareholders of Heineken Holding NV present as auditors, observers. Let me start with a few general remarks. First, please switch off your mobile telephones or at least switch them to silent mode. We have provided simultaneous interpretation from Dutch into English and from English into Dutch at this meeting. Please feel free to use the available headsets at channel one for English. Next, anybody who is hard of hearing may also obtain a headset. Please tune in to channel zero. As stated on the website, this meeting will be audiocast live, and I'm pleased to welcome all listeners all over the world. The Heineken Holding meeting and the will begin at four p. M. Or as much later as it takes to wrap up this meeting. Now on to the formalities. On 09/2016, this meeting was convened through posting the convening notice on the Heineken website. Twenty four March twenty sixteen has been determined as the record date for this meeting, which means that, the people entitled to attend the meeting and, vote are shareholders registered on that record date. The registration procedure also appears in the convening notice on the website. In the convening notice, you'll find the agenda for the meeting, and it also states that the agenda, including explanatory notes, financial statements, annual report and the data meant in Article three ninety two-one, book two of the civil code have been made available on the website and at the corporate offices. All formalities for convening this meeting as prescribed by the law or the articles of associations have been observed. Therefore, legally valid decisions may be taken about all items announced. And the shareholders present or represented have submitted the, receipt from the institute that manages their shares, and the company has given shareholders the opportunity to vote via Internet or issue voting instructions, and this opportunity has been used as well. Later on, I will tell you the number of shareholders and the number of votes as soon as the count has been completed. This meeting is attended by civil law notary, Metblink, on behalf of Lohensen Loofenvi, who will supervise the voting procedure. Decisions taken today and voting results will be posted on the company website within a few days, and shareholders may obtain the report from the meeting from the firm, which will be made available within three months and posted on the website. In connection with the discussion of the financial statements for 2015 by the Executive Board, the meeting will also be attended by our auditors, Messrs. Dalhousen and Vanden Bergh of Deloitte, Cantus BV, and we also have press representatives attending this meeting. Welcome to all these people who are present as well. A few other points of order. Anybody who would like the floor during the meeting, please use one of the microphones positioned in the room, and please state your name as soon as I give you the floor. Anybody speaking as the representative of a shareholder, please state which shareholder you represent. I reserve the right to limit speaking time for each speaker if the course of the meeting gives cause to do such or the conduct of that speaker. Please direct questions to me, and I will indicate who seated at this table will be answering the question. And once again, very important, we will be using voting boxes again this year. Heineken NV shareholders have received unmarked voting cards. So without any doubt and are free to vote at this meeting, Heineken Holding NV present as at the Heineken NV meeting as observers have received voting cards with a yellow dot, which can be used only at the Heineken Holding NV meeting. So there are very special people in this room with voting cards marked with two yellow dots, and they are shareholders both in Heineken NV and Heineken Holding NV and may vote at both meetings. So those were the introductory remarks. Now we can move on to 1a in the meeting, which is the report for the 2015 financial year. Before we discuss the annual report, I'm pleased to hand you over to the Chairman of the Executive Board, Mr. Jean Francois Van Boeksmere. Thank you very much, Mr. Chairman of the Supervisory Board. I'm sure that you've read our annual report from cover to cover. And I'll sum up the year 2015 very briefly. The slide projected in front of you depicts our results in a nutshell. We had a good year, 3.5% organic revenue growth based on a volume that was up by 2.3% in the course of the year. And I'll get back to the regional breakdown in a moment. The Heineken brand did very well at 3.5% growth in all regions worldwide. One very good achievement in the previous year was our innovation agenda, which has ensured that we obtained nearly 2,000,000,000 in revenue from innovative propositions, 9.2%, that's a substantial innovation rate. And our operating profit was up by 6.9%. We disclose prospects to the market about our margins, and we expect an average of 0.4% growth on the medium term. Last year, our expansion was 23 basis points, in keeping with our guidance. Earnings per share was up by 17% at €3.57 per share. And we are going to propose a dividend payment to you at this meeting, equaling 1.3 euros per share, which is 18% up from the year before. And the next slide depicts our performance according to a regional breakdown. Arbitrarily, I'm going to start with an underperforming region that's Africa, Middle East and Eastern Europe. That's clearly the region that performed less well at Heineken during the year under review. And please see this in the context of this region having been the firm's growth vector for over decade, especially in Africa and The Middle East as well as in Russia. We've been coping with currency decreases and changes in oil prices, the decline in oil prices and in that obviously impacts purchasing power in, countries such as Nigeria that produce a lot of oil and then the terrorist attacks impacted business in Egypt. So we're facing political and economic trends that are, bearing on our performance on that continent. That has nothing to do with our market positions because they remain good. As for The Americas, very good results overall. We were able to gain a bit more market share in The U. S. A, especially our Mexican brand portfolio is thriving there. And the Heineken brand, after many difficult years, is back on track to improvement and growth. Our performance in Mexico was, nothing less than excellent. And in Brazil, we also did well despite the second half of the year when the Brazilian economy, was clearly, in difficulty. As for Asia Pacific, that's a growth region par excellence. We grew everywhere there except in Indonesia. That was exceptional because of the regulatory authorities curtailed distribution of our products. So that made for a difficult year in Indonesia. But in Vietnam, we had another excellent year with huge growth, as they say in English, double digit growth of the Tiger brand in Vietnam. So excellent performance in Asia Pacific. And last but not least, of course, Europe. Europe has always been a bit of a problem child because the European beer market is not growing in general due to the aging demographics and no population growth in the majority of countries. The Netherlands, The UK and France are exceptions, but it does this is impacting growth in all volumes. And our agenda focusing on those issues have has enabled us to restore growth in Europe. So you see that we had a volume growth of 1.3%. That doesn't seem like a lot, but after years of volume decline, we're certainly proud of that. And the operating profit was up by 7.3%, which also relates to our relentless productivity improvements and our cost conscious approaching Europe. So overall, good performance by the regions. Let's not forget our acquisition agenda. Last year, we sold a package manufacturer in Mexico, and we invested the proceeds in a Slovenian brewery, where we have a market share of nearly 80%, which is a wonderful acquisition in Central Europe, and that basically complements our patchwork of countries where we're operational. And we closed a deal with Diageo so that we are now in control of our joint venture in South Africa and have increased our share in Namibia. As for the 20% share we held in a venture in Ghana, we sold that to Diageo. But we also have purchased a brewery in Jamaica, where we had a share of 15%. And we bought out Diageo as a joint venture partner in Malaysia. That said, we're working very closely with Diageo because we still have the brewing operations at Guinness throughout these operations and have worked for a long time together. And last but not least, we have acquired a 50% share in craft brewery Lagunitas in California. There are two breweries, one in Petaluma, California and the other in Chicago, Illinois. And that's new terrain for us in The United States. Thus far, it's been successful. That's one of the top 10 breweries in The United States. That's what I had to report about acquisitions. Now I'm going to talk more about the Heineken brand. As you know, Heineken is the Rock Of Gibraltar in our business. Once again, if Heineken were an independent region, it would account for 15% only 15% of the group's total volume, but 30% of the group's profit. Heineken's growth is faster than average in our beer portfolio less in recent years. We made a lot of new acquisitions. Based on those acquisitions, we've managed to expand the Heineken brand as well. So in the future, we expect Heineken to remain an important growth foundation for us. We performed well nearly everywhere. On the slides, you'll see some countries where we performed well. There were some other countries where the results were disappointing, such as Nigeria and Cameroon. In Greece, business was sluggish generally because of the economic circumstance. But overall, the Heineken brand is doing well on average. We're developing Heineken as a global brand. And one of our ways of doing this is through major sponsorships such as the Champions League in Europe. We've been doing that for twenty years, ten years with the Amstel brand and now another ten years with the Heineken brand. And we also did the Rugby World Cup activation. And of course, we're very active in all kinds of campaigns. Traditionally, I share a few commercials with you. I'm going to do the same this year. We're going to broadcast four commercials consecutively. And we are featuring famous actors, and we've asked them to say a bit about Heineken. One is Benicio Del Toro. He's world famous. And similarly, world famous, Willem van Wassbergen, who is our master brewer at Heineken. Ingredients. Only three ingredients? Come on. That's a typo. No. It's not a typo. Just water, barley, and hops. Come on, Willie. Water doesn't count as an ingredient. Water is water. No. No. 93 of beer is water, so you better make it as pure as possible. How about you throw in a dash of lemon zest? No. Ginger root? No way. What about wasabi? No way. William, Ray, there's more behind the story. A perfectly Santiago. From Cape Town to Chicago. From Kilimanjaro to Kalamazoo. From Tokyo to Toronto. From Panama City to New York City. Here you go, mate. From Tokyo to Toronto. We've said that already. There's no more behind the story. Okay. Those are the latest commercials, and we're broadcasting them in The U. S. And in other countries, and we're delighted to feature movie stars from our own company. I wanted to tell you a bit about innovation. Innovation is an important growth factor, especially in Europe. It's the only way for us to grow our business. We have four main pillars on our innovation agenda. One is cider. That's a new category that we acquired. We acquired Scottish Newcastle in 02/2008, and we're investing a lot in that. The second category is draft beer, both in the food and beverage industry and for home consumption. That's our second innovation pillar. The third one is low and nonalcoholic beer and malt drinks, malt beverages. We're investing there too. And our fourth innovation investment pillar consists of craft beers and varieties of the current brands. And you see some samples illustrating our activities here. I'm sure you remember the launch of Amstel Radler a few years ago here in The Netherlands. That's a low alcohol beer with, with a lemon twist. And our master brewer has completely prohibited that for the Heineken brand. You just heard a zest of lemon, no way, but we can do that with amsle. The recipe is very popular and is now being sold in 46 countries under different brand names to exemplify the proceeds of innovation. Radler in those 46 markets in addition to Austria where it always existed, It wasn't present in those other markets. So we're forging ahead in crafting variety. You see Labonitas, that's thriving in The US, and we'd like to roll that out in other countries such as Mexico, The UK, The Netherlands and France to start with. Closer to home, a brand such as Brand that I'm sure you know, which is also featured as a variety of that brand name Brand. So there's another there's another variety of Brand brand. And that's how the Heineken Group achieves a lot of its growth. In addition to new acquisitions, we're able to grow the Heineken brand, too. Now I'm going to say a tiny bit about margins. This may sound a bit technical. The margins at the left are from twenty fourteen, 16.2% operating margin. We achieved 16.5%. And we sold a very large packaging manufacturer in Mexico, which made for a loss of 23 basis points in operating margin by selling that company in Mexico. And organically, we grew by 46 basis points. So if we hadn't sold that packaging manufacturer, we would have posted 46 basis points in growth. So I just wanted to let you know that we met our obligations under contract. What's also important at Heineken is that we continue to develop our business sustainably as you'll see on the next slide. We issued our sustainability report last week and that describes in detail what we achieved this year in terms of the targets we set. As you can see here the results we scored in how much water we use, carbon dioxide emissions as well as partnerships that we started last year, one with UNIDO to consider our water use because on the one hand, we can keep reducing the amount of water we use, but we've already gone very low. What else can we do to reduce water use? We're analyzing that now. What are the new limits in water consumption and responsible water use in the areas where our breweries operate, where there's water scarcity. We need to consider that very seriously. And we also need to examine human rights protection and compliance with that. Sometimes we need a sparring partner to see how we're doing because, of course, we can keep evaluating ourselves, but now and then we need to ask a critical onlooker who can provide useful input. That's what we mean by partnerships. We want to see whether we're doing things right and where we need to improve and what we need to change. Once again, we have the agenda, to promote sustainable agriculture, and you'll see the results depicted here. Last but not least, I've always said that it's extremely important to use the product that we sell responsibly. Alcoholic beverages have been with us for time immemorial. They're usually, the result of craftsmanship, and they arise from agriculture. As you know that, as you know, beer is made with bar barley that's fermented. It's a natural product, but excessive alcohol consumption is not a good thing. Everybody in society has a role to play. And even though ours may be limited, one of their principles is to make a point with their own products that alcohol abuse just isn't cool. And you have to have the courage to do that with your brand. And our prime instrument here is the Heineken brand. Last year, I featured a brief video dance more, drink slow that was produced by Armin van Buren. And this year, we have another video featuring the Heineken brand about moderate drinkers wanted. Here it is. Gentlemen, I hope you got that message. I'm going to wrap up with the prospects for Q1. Yesterday, we published the results, and the volume growth in Q1 was exceptionally good. We grew organically by 7% in all regions. The Heineken brand was up by 4.8%. Please note that the first quarter in the brewing industry is the most moderate quarter. So that will have a modest impact on the year as a whole. And looking ahead, please note that currency fluctuations worldwide are particularly strong at the moment and in the months ahead, they'll certainly continue influencing the results of our firms such as the Mexican peso or the Brazilian real or the South African rand. Those are particularly sensitive currencies, and they're highly volatile. It's very difficult to predict what course they'll take. We operate globally, so we also work in all currencies of the world just to tell you that, give you a heads up on that. And I'm going to wrap up my presentation for 2015 about Q1 on that note. Thank you very much, Mr. CEO. Ladies and gentlemen, that takes us to discussing the annual report for the 2015 financial year, which you'll find on Pages four through 50 of the annual report. Just to be complete, the implementation of the remuneration policy for the Executive Board appears on Pages 56 to 59 and will be discussed at Agenda Item 1b, so not now, and the financial statements on Page 60 and beyond. They're Agenda Item 1c. So please save your questions for on that subject for then. I'm going to give you the floor after requesting you to start by stating your name and the institution you represent. And without any additional debate, I think it's compatible with our strong tradition of kicking off with Mrs. Statlander. Thank you very much, Mr. Chairman. I'm Ursula Beatriz Statlander. REPRESENTATIVE:] Mr. Chairman, can you hear me? Often the acoustics are difficult. Doing very well. Thank you. I'm speaking as Deputy Chair of the Stiftung Reichs Bescherming Belechers, the foundation for protecting the interests of investors, and I also represent the interests of investors in The U. S. State of Arizona, and I'm a shareholder myself as well. Mr. Chairman, I was delighted at this reporting year because the share price has remained fairly stable despite all the turbulence, and there are even satisfactory results. I'm grateful to the executive and supervisory boards and all employees in The Netherlands and everywhere else in the world. Thank you very, very much for delivering a good year. Mr. Chairman, when I open the annual report, I see welcome to Heineken. Heineken is the most international beer brewer and sells brands in 179 countries. It's such a fascinating Page one of your report. When I read about the brands available in 179 countries worldwide, my question, Mr. Chairman, is would it be possible for your Executive Board represented by Mr. Francois von Boxmeer and Mrs. Laurence Debois in conjunction with the Heineken Group to visit each and every one of those 179 countries on business. I'd be delighted to hear your answer to that. In addition, mister chairman, the report from the CEO touches on all possible topics concerning the environment, topics that concern us as shareholders. Apparently, Mr. Von Bocksmere thought it was very important to zoom in on this topic. Do you have any other pearls of wisdom to share with us as to why this topic is especially important? So that you, filled so many pages with it. And Mr. Chairman, May I ask, you're building breweries in countries such as Mexico and Brazil, is Heineken perhaps accelerating too quickly in doing so? And obviously, there was a quarterly disclosure today. But international banks have issued warnings about riskier costly acquisitions by Heineken. Can you tell me more about that? And Mr. Chairman, yesterday, I was disappointed. I showed up at a large Heineken and wanted to purchase packaged beer, but they didn't have it and they knew nothing about it. Is that type of beer sold in The Netherlands? There was a lot of advertising, but did it hit the market? And is it worthwhile? Will that remain part of your company? Which brand were you asking me about? Paper packaged Heineken. And last but not least, what's the story about Nigeria? Their currency is weak. Are you still interested? Finally, a word about Unilever. They disclosed their quarterly earnings before you and wrote that the situation is roughly the same as with you. There are issues with countries such as Russia, and that's but they're seeing the light at the end of the tunnel in 2016. Finally, about India. Apparently, there's a brewery that you'd love to buy there, but I don't know if you're going to share anything with us about that. And once again, I'm delighted that you listen that you're listening to me. I just arrived from The US two days ago. I'm still a bit jet lagged. I hope you'll forgive me. And I hope that my questions interested the shareholders here as well. Thank you very much, Mr. Chairman, and thank you all for listening to me. Thank you, Ms. Stadtlander. Mr. Von Boxmer, please. Ms. Stadtlander, I think Ms. De Bru and myself will have to discuss things. But if we have to visit the 179 countries, I think we'll have to divide it up and share it between us. I don't know about the last country. The last country we'll visit together, I think. I think that would be the best possible solution. But I do believe that together we can we will have visited the 179 countries at some point of time. So yes, we do have operations everywhere with breweries and broad brand portfolios about in 80 countries. And then we've got a lot of export to you have an endless amount of tiny, tiny countries that most probably will never be visited by us. You're quite right about that. Sustainability agenda. It's a general question, but I must emphasize that sustainability well, how should I put it in simple terms? I mean, if you don't do if you don't work on sustainability, tomorrow or the day after tomorrow, you won't be able to do what you're doing today. So you've got to think ahead. What am I going to do? How am I going to do it? How can I make sure that whatever I'm doing now can be done by my children or my grandchildren in the future? So we have to look at our energy consumption, water consumption, our transport, packaging. We can't sell beer without packaging, but we can take a look at the CO2 footprint of our packaging. Now those sorts of things is what I'm talking about. So we are very much involved in those issues, but it's also a matter of learning as you go along. So you've got pressure from society on the one hand and then you've got the know how that increases on the side of science. And those are two things together that will push us forward in all those areas in which we want to have sustainable entrepreneurship. And of course, we can zoom in on details and talk about what is going well, what is more of a challenge, but it has all these facets and things can only go well if the people who are responsible and in charge of day to day operations understand it. It needs to be part of their way of thinking. So sustainability is not in conflict with economic growth and growth of shareholders' value. That's not in conflict with the growth of society, but it does from time to time lead to clear tensions, but they don't conflict with each other. So that is what Heineken tried to do when it described its policy in this respect. And you asked whether we're not building too many breweries. Well, every time we build a brewery, we take a bit of a risk because assuming capacity is 100, well, that's not something you can fill from day one onwards. So you always have to work with an outlook of a couple of years. So you have to fill it bit by bit. Once you have a brewery, you can hardly uproot it and move it elsewhere. So that is a very important and in-depth investment, one or 2x the sales price per hectoliter. That is the investment that we make in a country and we need to generate returns on that and we have to earn it back. So that's always a risk, albeit calculated risks. And then there are two other things we need to take into account. We build breweries in those countries in which we operation, in which we have an increasing market share where the market is growing. And then we build breweries in new countries where we didn't have any operations, greenfield operations, Myanmar and Ivory Coast, for instance. Those are good examples. And so yes, indeed, we have quite a number of these new breweries, and we're optimistic. And we like looking ahead when we're investing in a lot of new breweries. You're quite right about that. Your question about acquisitions, I'm afraid I did not entirely understand your question. When we carry out acquisitions, a couple of years after the acquisition, we always do what we call a post audit. So we don't only do that for the acquisition, but we also do it for large investments. So three to five years after these investments or acquisitions have taken place, we take a look at what happened, whether everything went as planned, whether we took risks, whether we didn't take too many risks. And there's one lesson I've learned. I mean, things never turn out the way you planned it. And in most of the cases, the vast majority of the cases, things turned out better than planned and only in some exceptional cases, things turned out worse than expected. I must admit that, and I also have examples of things that went wrong, but most of our acquisitions have proven to be rather successful. And then you had a question about paper package beer. This is what we call fresh beer. Actually, it's very slightly pasteurized beer, very fresh from the breweries, and we sell it in the stores as fresh as possible. It's like fresh milk because really fresh beer is always better. It's always slightly better. And for beer amateurs, the beer that you drink in the brewery is the best possible beer you've ever tasted. So knowing that, you want to deliver the freshest products. And we also did a pilot test The Netherlands. We did that with Cuscanpo in Spain and Sopran in Hungary. And so it's a supply chain that is being set up just as with fresh milk, fresh dairy products. So it's transported in refrigerated trucks from the brewery to the retail outlet. So far, it's doing well, but it's never going to be a big booming business. But it is part and parcel of our innovation agenda, and it fits very nicely. About India, as you know, we have a joint venture in India. We've had it since 02/2008. And the joint venture is proceeding very nicely. India is a small beer market, not even two liters of beer per capita is being drunk there. So it is quite a robust investment in India. They're drinking as much beer as in China thirty five years ago. China is the largest beer market in the world. It's also one of the largest countries in the world. Well, India is also important. It's also big in terms of its population. So it's an important long term investment for Heineken. And if this beer market continues to develop this way, well, just keep in mind that United Breweries has a market share of 50% in India. So we have a keen eye on India, and it's a very successful partnership. And how should I put it? We're looking to the future of India with great optimism, but it's going to be a long term future. We're in for the long haul. I'd like to give Laurence the floor in order to answer your questions on Nigeria, which are quite pertinent. On your question on Nigeria, as you know, our geographic footprint today for us is such that we're not depending on any single country. But in any case, Nigeria is an important country for us. It's in 2015, it's one of the top three contributor to our operating margin. We have a strong market share in Nigeria, about 70%. We have a full range of portfolio with premium mainstream value. And so our presence is important. We value it highly, and we are totally convinced of the long term potential continued potential of that market. Where you do feel that, yes, there are some hiccups in Africa and in emerging countries in general, it's high risk, high reward. We're used to that kind of environment, but everything is there for long term growth, whether you talk about demographics, the consumption per capita, the possibility to actually further premiumize the market, everything is there. So we long term, we remain very optimistic about the potential of Nigeria. Now in the short term, Nigeria is suffering. And the currency, in particular, this is all started with the situation of oil. It's a country that is overdependent on oil export. And obviously, in 2015 already, it was a very challenging year. And what we saw first is that, at some point, people were not going out at all anymore. And so the consumption was going down and volume were going down. Second effect that we saw is change in the mix of products that people started going out again and but they would consume much more mainstream product. So what used to be mainstream becomes kind of the premium today. So the mix is kind of rebased down. And then the third consequence, of course, is because this country is deriving most of its hard currencies from the export of oil and the oil price being what it is. There is a short stage of hard currencies. So there is no devaluation as such, because the official rate has not moved as the government does not want to devalue. So as a consequence, it's less a devaluation than a shortage. So we are monitoring the situation on a weekly basis and to because the company does have needs to export some raw materials. One of the mitigation is obviously to continue with our policy of local sourcing. And not only in Nigeria, but in a lot of countries, this is a way out of that type of situation because those countries can export more, but importing less, is at least as efficient for us. So we are trying to work on local supply. And I must say that other than that, this is Nigeria is the reason for our comment on volatility of the currency situation for 2016. So up to now, no devaluation. We still managed to source hard currencies to a certain extent, but this is definitely a situation that could evolve one way or another this year. Thank you, you, Laurence. Before I give the floor to the ladies over there in the far end of the room where it's very dark, I still need to give you some information about the number of shareholders represented here today. From the list of attendees, we know shareholders are present here today, twelve fifty four shareholders are represented and twelve forty nine have voted on the Internet. So we have a total number of thirteen ninety five shareholders and holders of together 502,860,000 shares, entitling them to cast as many votes being 88.232% of issued capital. And furthermore, we have here 35 shareholders of the holding present here today of Heineken Holding, N. V, that are following this meeting as observers. Madam? Yes, let me move towards the light. Good afternoon, Chairman. Good afternoon, ladies and gentlemen. My name is Karleen Van Leyrop. I work for MN, an asset manager for pension fund, PME and PMT, pension fund for the merchant marine and also APG, Robeco, Agmea Investment Management, PGGM and Menzies. Thank you for your presentation on your results and also on innovation. We appreciate that greatly. And thank you for your presentation on sustainability. And I believe the answer or it was almost a statement in response to a question of Ms. Statland. I appreciated that because you say that sustainability and long term strategy go hand in hand. This is something we absolutely concur with. I have a couple of questions. First of all, acquisitions has been an extraordinary year, of course. The merger INBEV and SAVMILLA will create a dominating competitor for Heineken, but also may create potential to expand its operations. And you also referred to your close cooperation with Diageo. I would ask you to tell us a bit more about your strategy also concerning distribution and bottling contracts, not only regarding the regions, but also from that perspective, more information. The acquisition strategy, has it changed after the announcement of the merger of AB InBev and Sadmille? If so, does Heineken also look at the brands the competitors need to divest given their dominating position in the market last year? You entered into a partnership with Lagunitas Brewing Company. We like to hear about your strategy concerning craft beers and also regarding new competitors in Japan, such as Sahi and Kirin, new parties in that market. Human right policies, you commented on that earlier on, and we read your new sustainability report with great interest. And indeed, for some time, you've had an employee and human rights policy. Last year, we asked you can you hear me? Can you still hear me properly? Last year, we asked you about the implementation of this employee and human rights policy. You have reported that the shift organization has supported you in 2015 in your procurement process and Heineken supplier code would have to assure that you operate in conformity with the guiding principles of the United Nations. The question is whether that is indeed the case and whether your due diligence processes are robust and that based on your cooperation with shifts. And then I have a question specifically about water because you touched upon the subject very briefly just now. Thank you for that. In your sustainability report, we can read that in no less than 23 production locations, you are dealing with water stressed areas, scarcity of Europe. And in addition to your own policy, you now started a partnership with the World Wide Life Fund in order to identify the risks. And this is linked to and we read this in your report, linked to climate change and possible flooding in certain areas. We would like to hear from you whether the risks or the additional risks that you identified, whether they have been sufficiently mitigated and whether these risks are being mitigated in time with a view to the risks. Now the shareholding structure of Heineken, it's understandable that major shareholders remain involved within the Board of the company in view of the structure. But for minority shareholders, it's important that within the Supervisory Board, there'd be sufficient independence in order to defend the interests of the minority shareholders. The addition of the two Supervisory Directors means a step in the right direction for Heineken, nonetheless, I do have another question, might not entirely surprise you. Are you also considering other possibilities to defend the interest of minority shareholders? Have you ever considered a lead independent director as is the case in some other corporations? The question is whether you would consider appointing such a person. And furthermore, regarding Mr. Das as a delegated member, veto rights on certain items, for instance, acquisition shareholders right now can approve changes to the Articles Association, other changes within minimum. Could you perhaps increase it to twothree of the votes for such decisions or resolutions? Okay. I'm going to try to wrap up. Just a few more questions concerning the succession, Supervisory Board and Executive Board. Could you please indicate what the policy is for succession? How does this process of nominations work? Can you perhaps indicate how the nomination of the two new supervisory directors took place? And next year, the term of office of Mr. Von Boksmere will come to an end, and we are obviously very curious about the policy concerning succession planning. Remuneration, I do realize that implementation is a different point. But with regards to policy, I do have a brief question in that regard. This year, no changes will be applied and the remuneration committee may want to introduce changes for 2017. Now the question is whether you expect any major changes in your policy. Last question concerns the auditor's opinion. In his opinion, the auditor says under internal controls on financial reporting, Page 144, he says that there are deficiencies in internal risk management and control systems in the field of financial reporting. Question to the auditor, if possible, would be, is it correct that these are his observations and whether he agrees with the Board that the systems work properly during the year of 2015. Those are the exact words. We'd like to hear that from the auditor. And in this respect, also a question to the Board. If the identified deficiencies have been tackled. Thank you. You said at the beginning that you represented a whole lot of pension funds, which is probably the reason why you raised all these questions. Well, we will be answering all these questions. Now let me start for once. Let me start with the questions I can answer on behalf of the Supervisory Board, and then Mr. Van Buxmeer and Ms. Zerdebucher can think about what they want to say about all these other questions. Now question about the independence of the Supervisory Directors. In the Supervisory Board of Heineken, the majority of our directors The chair is independent. And your reference and of course, we're very pleased with this distribution of tasks. The independent supervisory directors are taking their duty very seriously. So the idea of appointing an impartial supervisory director that would fit within a one tier American system board system, we are not considering that. The independence and impartiality of supervisory directors is such that we have a balance, a proper balance in the organization and in the governance of Heineken V. We are not considering any change in the articles of association whatsoever concerning changing voting ratios. We're very, very pleased with the governance because time and time again, it has become clear that the position of our controlling shareholders secures the long term orientation of Heineken, something that Mr. Framane, as you may know, with his committee that looks into governance in The Netherlands, Mr. Framane, who looks into the governance of Dutch companies. They really encourage that companies have a more longer term focus. So I think that those companies should turn to us and be inspired from us, and it shouldn't be the other way around. As far as succession planning is concerned, succession in the Supervisory Board as well as in the Executive Board of Heineken. We have processes that are organized by the Selection Appointment Committee. This is the committee in the Supervisory Board that is in charge and responsible for these issues. We have long term middle long term and long term discussions about the composition of Supervisory Board and also the Executive Board. And in those discussions, we discuss succession profiles. The profiles are public, and we're looking at the world, how it changes. And within this context, we put forward nominations and proposals as we're doing today. We're looking at experience diversity, not only gender diversity, but diversity in experience, in background, etcetera, etcetera. And all that we take into account in the proposals that we put forward to that effect. I would like to ask Mr. Schaffer to comment on the question about the auditor's opinion. REPRESENTATIVE:] Thank you, Mr. Chairman. I just checked your question about deficiency. And indeed, in the opinion, the auditor's opinion, it says very clearly in case of deficiency. So in case, in the event there being any deficiencies, they would look into it. But there's no reason to report on deficiency because there were no such deficiencies. So I can reassure you in that respect. Mr. Valles, before I give the floor to the Executive Board, Mr. Das, who undoubtedly will want to comment on the remuneration policy, are you considering major changes? That's the question. Thank you, Mr. Chairman. The answer to the question is no. We do not expect any major changes in 2017, not even any small changes in 2017 in the remuneration policy. The Chairman, now the Executive Board has the floor. Thank you, Mr. Chairman. Perhaps I can start. Well, let me end with the question on strategy, which is a question of a more general nature. You asked a question about water. With UNIDO, we looked at two countries, Ethiopia and Nigeria. And we looked at our sites there, and we have every confidence in the situation. We know what we need to do. Very much is related to water recuperation and technology, how you use it. The World Wildlife Fund looked at the 23 sites that we flagged as being risk sites, but they also look at a broader sample of our sites, could even be broader than we expected. But we just received the report, and it is being analyzed as we speak. So next year, we'll be informing you more about the context. We'll also publish what it is that we are doing about the situation. And these are projects that oftentimes take years and years and can't just these issues can't be solved in one financial year. So that is the state of play. It is only a beginning. And the approach, the specific targeted approach of watershed and water stressed areas is a new approach for Heineken. So we're working very hard on that. Now I'd like to give Mr. Bru the floor to talk to us about the supplier code and what the current situation is there. REPRESENTATIVE:] We have a four step supplier code, as you know, which has been now signed by 60,000 suppliers. It's 9,000 more this year. We're very strict about applying it. The four steps is actually it starts with an evaluation of the risk and then you have self assessment and then you have risk assessment by an organization called EcoVadis. And then based on if we find there are high risk suppliers, then we can go to the extent in terms of some audit. This year, we discontinued our relationship with 67 suppliers actually that did not want to sign a supplier code. So that's how serious we are. In the supplier code, there are a number of elements, including some pertaining to human rights. And we are reviewing the supplier code regularly, and we will definitely move towards increasing the level of demand that we have on those topics as we review it year after year. So that's Human rights policy, we are cooperating with Shift. This is a new partnership. So I cannot tell you about any specifics right now. But what we have done is given our own people a code of conduct, code of business, 15,000 out of the 85,000 employees that have followed a training to that respect. And it's important to repeat those trainings and to do a due diligence on a regular basis in order to see whether it's being complied with. Now SHIFT helps us in that, in organizing the duty allegiance because very often, you know that things are going wrong because things have gone wrong. And it's all about prevention, and that is the tricky bit to implement that. And once there is an issue, you've got to raise your hand and say, okay, something went wrong, we've got to do something about it. But how can you incorporate a proactive system in your company that make sure that your people are aware of these codes of conducts. And that will take a couple of years certainly. And also given the diversity of the world in which we operate, mentality will never be the same in The Netherlands as it is in Cambodia or in Brazil or whatever. So I'm sure you understand how complex this is. But for that reason, a partnership with NGOs is so extremely important. You need this sounding board. You need someone who has a different perspective, will keep you on your toes, has enough expertise. Why? Because they simply work with different companies, and that's the way we are attempting to make headway. I'm going to finish with acquisition strategy. I hope you understand that we will not comment on our own acquisitions and what's next. I've never done that. I'm not going to do that today. I'm sure you know about that. I say that every year. Same old story. You referred to the acquisition by SAB of ABI, and we expect this acquisition to take place any moment now. Everybody can follow it in the news. Specific question, will any business be released for Heineken? I'm sure you read it about it in the newspaper. The share that SEB Miller had in Corus has been sold to Molson Corus is very complicated. I'm not going to go into all the details. So that business has already been taken out of Monster Coors. And the partner of SAB in Snow, which is the largest brewery in China, is called SRI. It's a Chinese state company. And that also took over the SAB share participating interest. And then ABI itself decided not to go through this lengthy process to get clearance from the European Commission and hence has decided to make sure that all those units of SAB in Europe that would overlap with their existing business units be assured and they be sold, sorry, and they were sold. You've been able to read that in the newspaper. And that's the end of the matter. Now if you look at each and every different country, actually, in terms of competition with Heineken, nothing changes. There's no country in which SAB and ABI companies come together as a consequence of which the competition environment with Heineken should change So that's clear. But what is changing is that ABA and SAB are 5x our cash flow. I mean, they are gigantic. So suddenly, we will have to adjust our strategy a bit and look where they're going. I mean, this is a party that is five times as large as we are. So you can't fight them with the same weaponry. So if we look at the situation in the world and what are the challenges for a company such as Heineken, actually, are three such challenges. First of them is ABI SAB. And this is a company that is so many times bigger than you are. Now how are they going to use and how are we going to use how are they going to use their cash flow in a competitive way? We've got to prepare for that. We've got to come prepared, not only in The U. A, but also Europe and even large cities in emerging markets. There you see that craft brewers conquering more and more of the market in The U. S. Is 12% of the overall beer market in The U. S. So usually, are small players that are gobbling away bits and pieces of this big pie. So that's one of the largest challenges that we face as a large brewer. Now how are we going to respond to that? Well, you've seen a couple of elements of our response in my presentation. And third, in terms of large strategic challenges, how the distribution channels, I. E, where does one purchase and consume the beer are also subject to major changes. And how can we adjust to that? What's more, how can anticipate on these changes? And part and parcel of that is our response to e commerce. How are you going to adjust to changes in e commerce? The sub, the home drafting system, just to give you an example, that is the system that we've been selling. We introduced it in China as well, and it's only being sold by Alibaba, only online, the equipment and the beer. So we're sort of skipping the retailer, the brick and mortar retailer. So those are the challenges. Those are three challenges that we're facing. They're specific to our industry. And for each of these challenges, we have to find a response. Acquisitions are part and parcel of response, but they aren't the panacea, the only not the only response that we're going to give. Ms. Van Neurop, according to my paperwork, we've answered all your questions. Fine. And with that, I'd like to give the floor to the gentleman over there. It's very dark there. I recognize you, but nonetheless, you'll have to tell us what your name is. Good afternoon. I'm Robert VEGA. We connect to Sustainable Public Affairs and Investor Relations. Heineken has delivered excellent results. And what's wonderful about this company is that it's run like a family company. That means long term commitment and pleasant, proper communication. We Dutch people love that because we're such a fun people. I mentioned Heineken Zero previously as a worldwide brand. There are 1,500,000,000 Muslims. And with this nonalcoholic beer, Hannigan is operational in only 45 countries. So we have an awful lot of countries left, about a 150 or so. You also you're also very active in solar power, I think, in about 10 countries. So there's another 180 countries left to enter with solar. Pediatrician Nico von der Leyvi is very worried because there are a thousand children that have drunk themselves into a coma and are have now been hospitalized. And when he started, doing this work in 02/2006, there were only 300 of them. So that's a sky high increase of 300. And he says, look at movies such as Spectre where James Bond is holding a Heineken bottle for an entire hour. So perhaps you could use Vubo Ukel's Superban at the next James Bond film with a nonalcoholic Heineken beer type. Heineken could also do a lot more for the environment. There are extremely unfortunate, gas and electric heaters that use 600% to 2500% more power than environmentally friendly alternatives in Heineken. The Heineken experience was the first place to use a different type of heating that was far more sustainable. And then Tom Papa asked, can you do a test case with these seat heating methods that are very environmentally clean? So Heineken can contribute a lot there. You also mentioned waiting wasting water. There's a device that consumes 90% less water and 90% less gas. You can do your bit as Mr. Polmand with an environmentally friendly shower that cuts water consumption by onethree globally as well as gas. So Heineken's support in countries with water scarcity is wonderful. And I'd also like organic growth. There are no mega mergers that eliminate thousands of jobs, but there's family run organic growth, and Heineken is doing well there. I'm worried about terrorism. No. No. What was the impact in Paris? Well, that exceeds the scope of the innovation agenda. That you're fascinating, but I'd appreciate if you could wrap up. How is cybercrime working? Because that's becoming increasingly serious. Now finally, wouldn't it be nice if Heineken sponsored more art? For example, the Van Gogh realism there, and artist in Breda, the art world could use a lot more corporate sponsorship. That was what I had to tell you. Thank you. Mr. Van Borksmere. Thank you for your comments and questions, Mr. Frege. I'm afraid we'll start a one point five hour debate about everything that we might do. In my introduction about nonalcoholic beverages, yes, that's very clearly one of our major development pillars. I could spend an hour telling you about it, but I hope to surprise you in the future. As for solar energy, even in The Netherlands, all our distribution centers feature solar panels. I didn't believe we had so much sun either, but it seems to work. And we've got three huge windmills that are up and running in Souda De Voure. We take it one step at a time, but do not imagine that we'll end up in a world with billions of people who keep demanding more energy without, CO2 emissions. We can't expect that because we shouldn't dream, but we do use new technology and sustainable recyclable energy generally when we're nearing the end of a cycle of innovation so that we see whether there's something that's both sustainable and economically responsible because our world is highly competitive, and we all pay taxes. If you look at the very long term, then we'll be able to forge ahead, especially in the coming years. And of course, there are no energy we're not an energy guzzling industry. We don't manufacture cement. So saving energy is easier for us to achieve than, energy guzzling companies. You mentioned underage drinking. We can't do away with that topic in a single sentence. It's highly complex. And we won't solve that by raising the price of alcohol or prohibiting advertising or closing the bars and prohibiting alcohol. It's about raising awareness, and it's about identifying alcohol abuse and perceptions thereof. I may have told you about this previously at the shareholders' meeting, that might have been fifteen or sixteen years ago that I worked in Italy. And according to Italian culture, if you drink too much, you make a fool of yourself. They call it motley figure, but it means that you're making a fool of yourself. And there's, very little tolerance of alcohol abuse. That's cultural. The, brewers didn't impose that. The farmers didn't impose that. It's simply part of Italian cultures embedded there. And we do our bit. But what young adults need to keep in mind is that it's not cool to be drunk, but the brewery and brands can't prescribe that. That's the objective, knowing that we probably won't manage to eliminate any alcohol abuse from our society, but you need to keep trying. But it's it's a recalcitrant issue. You can't simply come up with some buzzwords to eliminate that. As for gas heaters on outdoor cafes, that sounds like a good idea if we can install solar panels in outdoor cafes. We've never really thought about it, so we'll take that suggestion on board. You also mentioned our involvement in art. Of course, we're basically a brewery, so we don't really we're not really involved in classical or modern art, but we're very involved in music in not only Heineken, but many of our local breweries sponsor music concerts and singers. I think it was about twenty five years ago when I was working in Central Africa. And the brewery prominently sponsored music, and many up and coming performers managed to rise and get ahead in the career, thanks to sponsoring from breweries. So it was a fine tradition in art. And I'm going to hand you over to Laurence to tell you more about cybercrime. She's in charge of IT. Information security is a key, strategic pillar for us in IT now. And indeed, cybercrime is a major preoccupation. I mean you can read every day in the newspaper, description of attacks on company. We're not a bank. We don't add million of personal data on people, but still data is at the core of our activity more and more. We handle data. We exchange data. Regulation are becoming more and more stringent, and that's normal. So we have to be totally equipped. And when facing attempts of cybercrime and against, we face hundreds of them in a month, what is important is, of course, technology. We are equipping ourselves. We're doing things that most large company do right now is actually asking official companies to try and hack our system just to see how fragile our system are. And frankly speaking, in many system, it's not a matter of if they are fragile, but how long they resist and can you detect the attack in time to be able to respond to it. So it's like protecting your home. So it's how much you actually manage to protect it, how long does it resist to the aggression and does the police have the right to have the time to arrive. We're also deploying everywhere in the world access monitoring system because access rights are a major issue. When you work with 80,000 people, people arrive, people leave. And making sure that we know who has access to what and that we update that is a key issue for all large company. But what is very important to say is that you read different statistics, but you can say safely that 75%, 80% of all cyber attacks that succeed, that is due to human behavior. So the main thing we're doing is training, training, training, raising awareness. We've launched a training program again in 2015. We're going to do it again in 2016. More than 50% of the people in the company have gone through it. And it's amazing how we are all very naive, and we are all at risk of clicking on something, opening a file, even if we've been told that, that could be dangerous. So working on human behavior and awareness is the main way to protect ourselves because the hackers will always invent something more sophisticated. So technology helps, but it's definitely not the only protection. Back to your questions about art sponsoring. When I said it's not natural for brewers to be extremely involved in classical art. Amsterdam is the exception, but that's understandable because our cradle is Amsterdam. And we're the main sponsor of the Hermitage in Amsterdam. We're also the main sponsor of the Fronghoch and Hertbreicht Museums as well as the main concert halls. We're certainly on board, and we're one of the leading sponsors in that field in Amsterdam. Madam? Thank you very much. I'm Rachel Heine from the VBDO, the Association of Investors for Sustainable Development. We're delighted that sustainable figures prominently in your corporate strategy. That was clear from the presentation by Mr. Bocksmir. His reply was music to my ears. We're delighted that you stepped up those targets in the run up to twenty twenty. And I'm also delighted that we saw that Heineken performs very well on the different sustainability benchmarks, which shows how important that is in your operations. I was also delighted to read, as we were asking for a few years, that you're progressing toward integrated reporting. That deserves a compliment. I have questions about three topics: water consumption, a living wage and taxes. I'll start with water consumption. That has been mentioned previously, and there were some questions about that. You're making major strides in reducing water consumption in manufacturing. And the W and F suggested, as you said, examining water use in further down in the chain, such as in cultivating the commodities. In your sustainability report, you mentioned that you're, seriously considering this and intend to progress there. My question is, do you see water consumption further down in the chain as needed to cultivate the commodities? Is that part of Hanukkah's water footprint? Do you intend or do you want to explore setting targets concerning necessary water consumption in cultivating the commodities? And let me check my crib sheet. Are you considering a risk analysis of water consumption for hops and apples because I think it was limited to yeast thus far. Now on to living wage. The VBDO encourages paying a living wage, and we see this as paying wages that are sufficient for the employee and the people who depend on the employee to supply their basic needs. You mentioned that you want to pay a fair wage that could approach a living wage. But my question is how do you define fair wage? Is that close to a living wage as we call it? And do you intend to include that into the supplier code? And we want you to report on that. Do you intend to do that? Finally. That takes me to taxes. In your sustainability report, you've been saying for years that you see paying taxes as a way to boost and support economic growth. We're delighted to hear that. We're also delighted that you've taken a clear stand on that topic and that you're disclosing that. You comply with all legislation and regulations on tax payments. And you also report how much you pay in tax in the different regions. In the Sembla episode from twenty three March, it became clear that Heineken receives €1,200,000 in grants to set up new breweries in Ethiopia. This grant serves to boost the economy and is supposed to benefit the people in that country. At the same time, it was revealed that Heineken is paying less and less in taxes in that country despite an increase in Heineken's revenue. This may be because Heineken has invested a lot. If you invest a lot, your earnings decline and you pay less in capital gains tax. At the same time, it turned out that a lot of people were made redundant because of the capital expenditure. So the amount of wage tax that you paid declines as well. Are you willing to disclose your country reports? Because it turns out that you do have them to demonstrate that the grant that was intended to boost, the local economy and benefit local people ends up where it's supposed to end up and that thanks to paying taxes, you support local economies? Those are my questions so far. Thank you. Thank you. I'll start at the bottom, that Zembla episode, just to keep us going. You mentioned something about $1,200,000 in grants to get breweries up and running. No, it's to ensure local supply, and these are agricultural projects. They're not about producing beer. I just wanted that to be clear. And it's a joint venture, so it benefits the farmers and the breweries because, of course, we like to purchase in Ethiopia because we believe that the more economically active you are on-site, the better the economy will do as will our business. Please don't worry. It costs more to produce a ton of yeast in Ethiopia with all the strings attached than to cultivate it within the European Union. So these projects will take at least a decade to become consistent in Nigeria, where we have a lot of concerns about brewing beer that takes time and money, but eventually, you can organize that market. And the farmers are not dependent exclusively on that. So we need expertise that we don't always have. We also work with the Dutch government and the University of Wacheningen for agriculture and NGOs, and that helps us forge ahead. So basically, this is a tempest in a beer bottle. Now the taxes and the redundancies. We purchased two breweries from the government at an auction. We simply opened an envelope and everybody bid, and we had acquired two of the four breweries on which we bid. One was in Harare, the other was in Bidelin. And just imagine, these breweries are about 40 years old. There has been no investment in recent years at all. So the quality is questionable and safety is nonexistent. And you purchase a license and a brand and a business to start up, but you have to configure it from scratch. And that takes a lot of modernization. If you fast forward four decades, we're not going to, start conveyor belts that, have 20 people working on them. We have to make a quantum leap into the twenty first century. So the immediate jobs that we were able to offer were, of course, drastically reduced. I don't have the exact figures, but it was a drastic reduction in job numbers. But on the other hand, we sell more beer. It's a growth market. And bear in mind that our industry generates employment, perhaps not immediately in the breweries, but in all people who supply the brewery and to purchase from the brewery and resell. That's a lot of the indirect employment. And often, that's one to five to one to 10. So on the one hand, yes, direct employment goes down, but indirect employment goes up. So we built a new brewery as well in Zimbabwe, and that also generated more jobs. So you have to consider the overall picture, a country that is growing as fast as Ethiopia. And it's not only us, everybody is benefiting. Take my word for it. As for tax payments, this doesn't happen in all countries, but you have to amortize your investments faster. We welcome that, but it does reduce your capital gains tax, your tax on your earnings. And what they cut out from, the Zembla episode was that we pay a lot more in tariffs and excise taxes. We pay triple the, we excuse me. We sell triple the amount of beer, so we pay excise duties. And those taxes have risen considerably for Ethiopia. I'll be happy to share those figures with you, but that's basically how the cookie crumbles. Okay. I'm delighted to hear that, and I'm even I'd be even happier if you were to disclose that country report. Madam, I'll be happy to report on everything, but we're not going to hire thousands of people to generate detailed reports about every step we take. I'd say, ask your questions. We'll answer them. I'm not saying that we always get it right, but let's be reasonable. We cannot issue a complete report about each isolated case when there are huge changes, when we invest. We can explain everything, but we can't do do everything. I understand that, but I thought the country reports were already available. I wasn't asking you to generate additional reports merely to disclose what's already available. Yes. But there's also information that would truly interest the competition. So you don't want to report all tax you pay for each countries. But now I'm going to move on to the next question. I would like you to review our policy and where we stand in general concerning tax returns, conduct and publication. Thank you, Henk. We have made a definite step towards providing you transparency on tax reporting by providing the tax rate by region. And I think this really demonstrates beyond the country by country reporting that we're paying our fair share of tax where we actually have our activities. And I think at the end of the day, that's the main concern. Country by country reporting with tax authority, we're very much in favor and exchange of information between tax authorities, we're very much in favor. Now if you look at what we have to report to the tax authorities, it is, the revenue, it is the net profit before tax, profit after tax per country. And frankly, this is highly sensitive information and very interesting for our competition in a number of countries. So of course and we are aware of the proposal at the European Commission level to make public reporting mandatory. We strongly believe that what it would bring in transparency, it would take in terms of competitive disadvantage in a lot of cases. So we really try and make a point to be transparent and give you the information that enables you to see that region by region, we're paying our fair share. And of course, if and when things become mandatory, we will comply, obviously, but we still maintain a position that this would be detrimental. Maybe living wage, living wage, fair wage, I must admit, I'm not a specialist of the definition, but I'm pretty sure we're aiming at the same thing. And I also know that standard definition, you don't necessarily have in an international basis, even so it's more and more understood the same way. We are committed to paying fair wages, and we are committing committed also to considering how we can include that in further review of supplier code. Now every time we include something in our supplier code, we can test it, we can ask the supplier to self assess it, we can audit. Putting together an actual reporting on our suppliers is something, frankly, that I don't know how to do because we have such a large base of supplier. And you are first year supplier, but as you're very well aware, we also have an impact on second, third and fourth tier supplier. So putting it into a formal reporting, we have to look at that, but it seems quite difficult to do. Insisting on it and making sure that we make it a discussion point with the supplier is definitely something that can become present in our supplier code. And your last point was of water on And your final point concerned water. Yes, 90% of our total water consumption relates to agriculture. So we can obviously do a lot with the 10% that we control ourselves, but we cannot truly directly influence the other 90%. So by transitioning to sustainable agriculture through our principles involves considering how you deal with agriculture. And yeast is a crop that grows in countries where nearly 100% of those crops are grown with rainwater. Yep. Barley is grown with rainwater. So sometimes I've explained that whether it's sustainable, sometimes I wonder about that. Once I spoke with the Egyptian government and we explored whether it was truly sustainable, eventually, that's going to have to improve. There's another example that I clearly remember. That was about maize fields we planted in Rwanda in entirely the wrong areas. There was no proper equilibrium with the water or the natural surroundings, and we have to correct that. So sometimes our experiments, go awry, and we have to correct them. But we're fairly comfortable because the crops we cultivate do rely on rainwater. We want to avoid a situation when we work with agricultural suppliers who obtain things in the wrong way, but that is very rare in our branch of industry. Well, we've been at it for one point hours, and we're still at Item 1A. So the last person I'd like to give the floor is that gentleman waiting very patiently in this spotlight. I'm Mr. Espana for the minutes. Otherwise, you'll call me on that. First, I'd like to congratulate the Hennigan Group with the Q1 figures that you've made €65,000,000 more. And why is the Financien d'Archevaltso negative in its reporting? It says by the editors, so they're doing it anonymously. That's question one. Question two is that you gathered EUR 800,000,000 through 1% interest. That's nice. What about your cash flow? What do you intend to do with that EUR 800,000,000? I didn't find that anywhere. That's why I'm asking the question at the shareholders' meeting. Are you trying to start up a venture with these small specialized breweries will each have a tiny share because specialty beers are becoming increasingly popular, as you can see in Amsterdam, where we have four specialty brewers tinkering about. Are you trying to learn something or participate? Why do you need those 800,000,000? And my next remark, then I'll get to my questions. So I thought it was wonderful that all your beers in the portfolio I thought it was wonderful to see the shelf featuring all the beers. It was a perfect presentation display, but let's get back to business. As for the environment and carbon neutral breweries in Austria. That's perfect. I'm sure you learn a lot. And can you answer whether you can carry that over to all the other breweries. And what I think is very unfortunate, I'd like to know how you deal with that soon. We'll have the Summer Olympics in Brazil. And we've got the Holland Heineken House. As for your staff there, I how are you going to protect your staff from the Zika virus? That's my first question. And two, the staff working for Heineken there, what percentage is already coping with the Zika virus, and what do you plan to do about that? Those were the few questions I have at this time. Thank you very much, Mr. Espanyard. REPRESENTATIVE:] Maybe I start with the EUR 800,000,000. If I could have done that secretly, I would because there are so many people in that company having great ideas how to use the €800,000,000 I can tell you that's not going to be a problem. It's not a single purpose, obviously. We to answer more seriously, we have about €11,000,000,000 net debt. And then out of our net debt outstanding, some come to maturity every year. We have actually, we've managed to have no single year with a very high maturity level, but we renew our debt continuously. And if you look last year, in 2015, we were actually able to borrow at cheaper rates because the rates are lower and our credit risk is considered very good and replace some more expensive debts. And that's also how we got some leverage and then in the net result increase. So we are continuing to do that opportunity because we know we have debt that will come to maturity and we replace it. And when we see opportunities today, definitely, there is a window now, which might close with markets being more volatile in a few months maybe. So we've taken advantage of that window to in part as part of a program of funding that is kind of a permanent program. Then about those carbon neutral breweries in Wiesbruggen, Austria, energy consumption is a major problem. Thus far, we have not managed to switch entirely to solar panels and windmills. But in those Austrian breweries and there are sawmills, and that's what keeps them carbon neutral. We learned from that. There's more than one way to bring about a carbon neutral brewery, but there are some cases that are difficult. You can't apply the same procedure everywhere. Sometimes you learn and sometimes things go wrong. In The UK, we tried to set up something that didn't work out. But I do expect to make progress there in the future, but it's a learning process. You can't automatically roll it out to all 143 breweries worldwide. That would be a pipe dream. And then Holland House, the Heineken Holland House. We've always had rigid medical supervision at Holland House, not only for the athletes, but also our own staff. And they'll consider that risk very carefully. I'm convinced that our medical experts will help us. UNIDENTIFIED The report has been adopted, and I close this point of the agenda. And now I'd like to refer to the remuneration policy of the Executive Board. That is the next item on the agenda. This is not a voting item. Nonetheless, we are going to discuss the matter. The explanatory note to the remuneration policy can be found on Pages 56 through 57. And before giving you the floor, I'd like to ask Mr. Das, the Chairman of the Remuneration Committee, to explain the implementation of the remuneration policy in 2015 and what it has led to. Thank you, Mr. Chairman. I'll be happy to give you a brief explanation of the implementation of remuneration policy, the Executive Board in 2015. Ladies and gentlemen, as you may know, the remuneration policy of Heineken for the Executive Board is based on four remuneration principles, I. E, first of all, to support the corporate strategy second, salary related to performance and third, we need to remunerate in a competitive way and fourth, we need to remunerate in a fair way. So to supporting the corporate strategy, first part, this first element, and this relates to more than 80% of the salary package, this 80% has been related to achieving predetermined targets that reflect the corporate strategy. Properly, the financial targets for the short term and for the long term variable remuneration provide us with a balanced focus on the top line growth, bottom line growth and cash generation. Furthermore, for the short term variable remuneration, we have targets that focus on leadership qualities and targets that have been set for that year. And these are targets that have been predetermined. The second principle of remuneration, remunerate according to performance, focuses on the targets that reflect the corporate strategy. And for each and every target, we establish a target performance level. And for the financial targets, we also establish a lower threshold level and a higher maximum level. And for these performance levels, we have remuneration levels that can vary from 50% of the target remuneration level up to 200%. And if the performance is below the threshold, remuneration will be nil. This method, in order to determine variable remuneration, has been in practice at Heineken since 2005 and has been part and parcel of the remuneration policy since then. And that leads to the fact that variable remuneration in a disappointing year could be low or even zero. And in a good year, remuneration could be very high. Now that is precisely the idea of the remuneration policy. This is the way we have structured the system and that is the way that it works. In accordance with these ideas, 2015, which was a very good year, led to a high variable remuneration. For the financial targets, for the short term and long term variable remuneration. In three cases, there was performance between target and maximum level and in four cases, over and above the maximum level. And for those targets that focus on the leadership skills of short term variable remuneration, the Supervisory Board has considered that the Executive Board has performed at a maximum level. The year 2015 was a year of major internal changes and large external challenges. The Supervisory Board is of the opinion that the Executive Board has performed at the highest level in terms of these leadership quality targets and also with a view to internal changes and external challenges. As far as the internal changes are concerned, the following applies. In order to make Heineken leaner and more proactive, there has been a far reaching in-depth restructuring process at the head office. And for the same reasons, the governance has been rebalanced and part of the regional organization has been transferred to the operating companies in the different countries. The composition of the executive team has changed substantially. The previous CEO finished his career by onboarding the new CEO in such a way that the new CEO was able to make a flying start. And all these far reaching internal changes have taken place within a year without the performance of the company being adversely affected. Quite the contrary, 2015 was a top year, an excellent year. The Executive Board has achieved all this in its subsequent compositions in a way in which, according to the Supervisory Board, could not be surpassed. It was so excellent. Furthermore, in the external challenges that we faced, we were dealing with the following. The market conditions were difficult as a consequence of geopolitical and economic conditions and also challenges regarding sustainability. Nonetheless, the company has been extremely successful in 2015. The Heineken brand and other premium brands have continued to grow. The innovation agenda was further implemented. The Brewing a Better World sustainability agenda was implemented even further. And the consolidation process in the beer industry was addressed by means of all sorts of acquisitions, joint ventures, licenses and other operations that we commented on today. The fact that the Executive Board has achieved all of this under these aforementioned challenging conditions is a top notch performance according to the Supervisory Board. All these achievements for financial and leadership targets have led to a short term variable remuneration for January of the target remuneration level and have led to a long term variable remuneration for the period 2013, 2015 of 171% of the target remuneration level. Indeed, a high variable remuneration in an exceptionally good year. In order to put this in the perspective of alignment with shareholders, I would like to make the following comments. In 2015, the share price of Heineken increased by 34%. In the period from 2013 to 2015, the increase was 56%. Dividend in 2015 will, if we adopt the dividend proposal, increase by 8% and for the period 2013 to 2015, the increase of dividend amounts to 46%. So in the period involved, not only has the variable remuneration for the Executive Board been high, but also the reward for shareholders has been high. And then the third remuneration principle, which is competitive pay, and that entails that the level of the base salary and short and long term variable remuneration for Executive Board, and this has been the case since 2011, is derived from the median remuneration level of a worldwide peer group of 15 companies that are comparable to Heineken. A comparison with such a global peer group is justified because Heineken itself is a global company. Out of the 75,000 people that work for Heineken, about 5% works in The Netherlands and the rest works in all corners of the world. The relevant labor market for higher management of Heineken is not the Dutch labor market, but the global labor market. Within the applicable remuneration policy, which was adopted by the AGM, the Supervisory Board can, from time to time, adjust elements of remuneration to the median of this global peer group. And for 2016, the Supervisory Board did so with the base salaries of the CEO and CFO. The base salary of the CEO will, for the first time in three years, increase by 4.3%, which is on average 1.4% per annum. And the base salary of the CFO shall increase by the adjustment to the median level of the worldwide peer group shall increase by 18%. This relatively sharp increase is consequence of the fact that the initial salary of the CFO, salary of 2015, was substantially lower than the median level in the global peer group because we were taking into account on boarding time. Given the performance of our CFO, who showed that the onboarding time in 2015 was much shorter than we had supposed it would be and that there's no onboarding in 2016 at all. So and given the performance, the Supervisory Board's opinion is that the base salary should now be increased by 18% in order to align it with the median level of the global peer group. The fourth remuneration policy is fair remuneration. And this entails that all employees of Heineken from the executive board right down to the lowest level are always remunerated according to the wages for the relevant labor market. And for the Executive Board, that means remuneration in accordance with the global peer group. This is a system, how it works in general and what the effects were for this year. Thank you very much for your attention. Ladies and gentlemen, I can hardly imagine that after this detailed presentation that you should have any questions. However, nonetheless, you may have no, you don't have questions. Item 1C, there is a question. Yes. I think it is very encouraging that Mr. Von Booksmeer received reasonable and fair salary. I think that's a good thing. But what concerns me is that the lower middle class in society, in other words, young people, these are the big spenders. They give they're driving force for the economy. But it turns out to be very difficult for them to get a job. And it would be great if the listed companies, the large companies, do something about that because it's important for Dutch economy. And also internationally, it's important that people who just start on the labor market, even people who've graduated from university, that they get a job very quickly and very quickly earn a fair amount of money. So that's good. With all the profits that most listed companies have at this point in time, it's important that these companies focus on employment. I think that's great. So I applaud you for your excellent performance, and I would like to draw your attention to other parts of the labor market. Absolutely. Thank you very much. Do you have any other questions? If not, we would like to proceed to point or item I formally have to say that the implementation of remuneration policy has been adopted by Cognizant by taking Cognizant thereof. And then we can proceed to Item 1C of the agenda, which is adoption of the twenty fifteen financial statements of the company. And this is Pages 60 through 141 from the annual report. Ladies and gentlemen, the financial statements have been audited by Deloitte Candles BV. You'll find the auditor's opinion on Pages 142 through 144. But before we discuss the financial statements, I would like to give the floor to Mr. Dalhouser of Deloitte, and he shall give a brief presentation of the audit work conducted by Deloitte. Mr. Dalhouser? Just a few short remarks regarding the auditor's opinion that you'll find on Page 142 of the financial statements. And I'll be commenting on this in accordance with this slide, the auditors' opinion, unqualified opinion. That means that we have established that the report of the Executive Board has been drawn up on the basis of the legal requirements to that effect. And this report does not conflict with the information that is disclosed in the financial statements. And then if we move to the right, we have more technical matters. You see the materiality limit that we established for the audit is €100,000,000 Materiality is a rather complicated notion. And in essence, it means that should there be errors in the financial statements that have an influence of more than €100,000,000 on the results, then the question would be, does do the financial statements reflect the actual facts? Well, 100,000,000 is for the financial statements as a whole. But if you look at the different components of the financial statements, you see different materialities. You see the components. You see the operating companies of Heineken. The highest materiality that we worked with there is €40,000,000 And for many businesses, we apply lower materiality levels. And for and because we issue separate opinions for those financial statements, we work with lower materiality levels. Furthermore, any audit differences that came about in our audit in excess of EUR 5,000,000 have been reported to the Supervisory Board. And in joint consultation, we looked at how these differences came about and which measures could be taken in order to correct them in the financial statements and to make sure that we set up procedures or implement procedures so as to avoid this for the future. Scope, which is another point, a very important point, this is the group audit. In other words, the audit of Dutch companies and foreign companies. You see that audit were carried out on 27 components within the group or businesses within the groups, and that led to a very comfortable coverage of more than 80% of the relevant KPIs And furthermore, specific steps have been taken regarding other items of which we could feel that possibly there would be a risk in terms of the materiality limit, very specific steps here. Again, besides the 27 businesses that we audited, we also carried out other auditing steps. Use of various specialists, that means that the auditor uses all sorts of specialists. It goes from IT to tax experts or whatever. I mean, a team is no longer one single auditor. You have all sorts of experts in your team in order to pool know how and be able to audit the financial statements properly. Now to wrap up reporting, you'll be able to find all the details, in our opinion, to the financials, the key audit matters. These are the cases of which we have established that these are the elements that we've spent the most time on. We've consulted the most on with the Supervisory Board and the Executive Board. You'll find the details in the report, but there are a number that are quite self explanatory. Revenue recognition, the way you take a profit in the financial statements and then the more variable elements thereof, the discounts that we give to customers, etcetera, etcetera, volume discounts and then returnable packaging, packaging that is and the way we deal with packaging in our financial statements, how it's reflected, how any obligations are to be valued. That's a specific point. Goodwill, which is also a very substantial item on our balance sheet. And the measure in which goodwill can be earned back is also relevant and taxes. The company is operating in very many areas. That's no easy task. But we deal with it very well. And this was our first audit, so that means that we took a number of steps, specific steps in order to make sure that there was a smooth transition from KPMG to Deloitte. And we looked at valuation elements in great detail. Internal controls on financial reporting, that's a specific element because Heineken has taken a number of specific and clear steps, you can read about that in the risk management paragraph. Steps in order to fine tune its four lines of defense assurance model. And as an auditor, we consulted with Heineken and used that model in setting up our audit and implementing and carrying out our auditor. Mr. Chairman, that's all for now. Thank you for this very clear presentation. Who can I get the floor about the financial statements? Chairman, your name, please. My name still is Peter Spagna. So that's it. But anyway, I do have a couple of questions for the auditor and also have a question for you. Because a couple of days ago, I read in the financial document that when auditors rotate, what they do is in the tenders, they offer very low fees. There's an insurance company that made a bit of money but had to pay €3,000,000 more for its audit services. And every year, you have to negotiate. And I imagine that you're negotiating for 2016 to make sure that your costs don't exceed a certain limit. You may want to stay at the same level as 2015. Can you commit to negotiating very diligently with the auditor? And can you tell me which countries the auditor himself has visited? Has he visited the new countries in order to check things there? I sort of couldn't find that in the report, which was quite regrettable. Those are my questions. As far as the negotiation tactics of the Executive Board, you can rest assured we take this very seriously. And perhaps Mr. Dorhaus would like to tell us a bit more about his very exciting travel plans. Well, the specific question was where which countries I visited myself: Mexico, Nigeria, Egypt, Rwanda, Burundi and obviously, in Congo, South Africa, Vietnam, Singapore and Indonesia and India. So that was only this past year. Well, you still look very good and full of energy. So that's great. Any other questions? If not, ladies and gentlemen, I suggest that we adopt the financial statements for 2015. So now we are actually going to vote. And we shall do so with the handsets. And should it appear that there's a handset that doesn't work properly, we shall vote by acclimation as we acclimation as we usually do. So first of all, I'd like to request the operator to switch on the system to activate the system. So if all goes well, you can see the text, please insert your smart card on the handset, on the display. That means that the system has been activated. And then I would request you to insert your voting card for Heineken NV without the yellow dot with the gold colored chip facing upward, insert it in the handset, and then you will see the different options in the display. Should that not be the case, you can raise your hand and someone will come up to help you. And you can leave the voting card in the handset for the rest of the meeting. Let's see whether there are any issues anywhere as far as the handsets are concerned. No. There's one over there. Okay. So that's settled then. What we'll do is the following. If you want to vote in favor, you press button one. If you are against, you want to press 2. And if you want to abstain from voting, you want to press 3. So the vote is open. Please cast your vote by pressing the button But I'm sure that gives you more than enough time to cast your vote. Ladies and gentlemen, the vote is now closed. And if everything goes well, we will be seeing the results on the screen. And as you see, we have North Korean conditions here because we see that 99.88% of the votes have been cast in favor and 0.12 of the votes have been cast against. And abstentions, 31,656 votes. So I can confirm that the adoption of the financial statements 2015 has been carried with more than 99% of the votes. So that means that we can now proceed to dividend policy. This item on the agenda is Item 1D of our agenda. The Board follows the policy to propose a dividend annually of 30% to 40% of net profit, exclusive of extraordinary items and depreciation of brands and this ban, De Beja, and the bandwidth fits a strong and sustainable cash flow capacity that Heineken has and the points of departure of the company are to maintain its independence and a healthy balance structure and also to be able to grow by means of acquisitions and to grow organically. As usual, dividend will be paid out in the form of an interim dividend and a final dividend, and the interim dividend will be established at 40% of the total dividend of last year. Would anybody like to take the floor on this matter? If not, I would like to close the discussion that never started. And with that, I can confirm that the new dividend policy has been carried. And with that, I can proceed to the next item on the agenda, which is adoption of the dividend proposal 2015, which is Item 1E of the agenda. For the financial year 2015, we proposed payment of a dividend of €1.3 per share, which represents 36.2% of net profit BEIA. $0.04 4 has already been paid as an interim dividend on 12/2015. The final dividend of €0.86 per share shall be made payable on 05/04/2016 at ABN AMRO Bank, Amsterdam. And as per the April 25, that will be the case so that the shares will be listed ex dividend at the Euronext stock exchange. The profit that remains in 2015, which is an amount of EUR $1,151,000,000,000 will be added to retained profit within equity retained earnings rather within equity. Who would like to take the floor? Nobody. So I propose that we adopt the dividend at €1.3 per share, and we shall now vote on the matter. And I request the operator to activate the system, and I would request you to cast your vote. Okay. I'm sure you're getting very thirsty. But if you nonetheless been able to cast your vote properly, I shall close the vote. And I think we can confirm that this proposal has been carried by 99.84% of the votes. And with that, one F, we proceed to one F on the agenda, ladies and gentlemen, which is the proposal to discharge the member of the Executive Board that were members of the Executive Board in 2015 concerning the exercise of their duties in the financial year 2015. Who would like to take the floor on this matter? I then propose that you resolve to grant discharge, and we need to vote on the matter. I would request the operator to activate the system, and I would request you to cast your vote. The stemming is The vote is closed. And I hereby confirm that the proposal to grant discharge of members of the Executive Board has been adopted with 99.65% of the votes. Somebody is applauding the members of the Executive Board who gave their all, but it's only you. Now on to the Supervisory Board members. Let's see if they can get a slightly larger applause item one g on the agenda, which is the proposal to discharge the members of the Supervisory Board serving on the Supervisory Board in 2015 for their supervision of the 2015 financial year. Would anybody like the floor on that? If not, then I'll open the vote. Would the operator please activate the system? Please cast your vote. The stemming. The vote is closed. The proposal has been adopted with 99.65% of the vote, and we will not draw any conclusions based on the difference in the level of applause. Now on to 2a, authorization of the executive board to repurchase shares. It is proposed that the Executive Board be, authorized for a period of eighteen months starting on twenty three April starting on twenty one April twenty sixteen to acquire own shares subject to the following conditions and with due observance of the law and the articles of association subject to the approval by the supervisory board. You have granted this authorization in previous years as well. Who would like the floor on this subject? If nobody wants the floor on this, then I propose that we open the vote. Would the voting operator please activate the system? Please cast your vote. The vote is closed. The proposal has been adopted with 99.91% of the votes cast in favor. Now item two b on the agenda authorization of the executive board to issue shares or rise to shares. It is proposed that the general meeting of shareholders authorizes the executive Board for eighteen months from twenty one April twenty sixteen to issue shares or rights to shares to a maximum of 10% of the capital in issue at that point in time subject to the prior approval from the Supervisory Board. You've also granted this authorization in previous years. Would anybody like the floor on this topic? If not, I will open the vote. With the voting operator, please activate the system. Please cast your vote. The vote is closed, and this proposal has been adopted with 99.53% of the vote on to Item 2C on the agenda, authorization of the Executive Board to restrict or exclude shareholders' preemptive rights. It is proposed that the General Meeting of Shareholders authorize the, Executive Board for eighteen months starting from twenty one April twenty sixteen to restrict or exclude shareholders' preemptive rights in relation to the issue of shares or the granting of rights to subscriber shares. You've authorized this in previous years. Would anybody like the floor? If not, I propose that we open the vote on this subject with the voting operator. Please activate the system. Please cast your vote. Is closed, and this proposal has been adopted with 99.14% of the shares voting in favor. That takes us to item three of the agenda. Item 3a concerns the reappointment to the Supervisory Board of myself. So I'm going to hand the floor over to Mr. Jose Antonio Fernandez, the Deputy Chairman of the Supervisory Board. Thank you, Mr. Chairman. In accordance with the articles of association of the company and the rotation schedule, the Supervisory Board has made a nonbinding nomination of the for the reappointment of Mr. Hans Beyers as member of the Supervisory Board with effect from April 21 for the maximum period of four years. Mr. Beyers was first appointed in 2012 and became Chairman in 2013. Mr. Beyers fits the profile drawn up by the Supervisory Board. The Supervisory Board proposes to reappoint Mr. Beyers in view of his broad economic, national and international experience, his experience in the consumer products industry, his background in the field of relations between businesses and various government authorities and the way he fulfills his role as Chairman of the Supervisory Board. The Supervisory Board has reappointed Mr. Beyers as Chairman of the Supervisory Board, subject to his reappointment as member of the Supervisory Board. Is there anyone who would like to take the floor on this proposal? Yes? I think it's a wonderful idea that Mr. Beyers serves another term. He has a wonderful sense of humor and knows how to tie everything together. I have just one suggestion. Many CEOs and chairman of the supervisory board do a lot of socializing after the meetings. And and I'd like to suggest that to mister Vayers. This is like a village fair, one of these AGMs, and a lot of shareholders would like to hear about the ideas of Mr. Valles. So that was my suggestion. Thank you. Very well taken, this recommendation. Thank you so much. Anybody else who would like to take the floor? If not, we will now proceed to vote the proposal. I request the operator to activate the voting system, and I request you all to cast your vote. And the voting procedure has now ended. And the voting result is shown there. So I confirm that the proposed resolution to reappoint Mr. Beyers has been adopted by a huge number, thank God. Congratulations. Congratulations, Jens. You, Jose Antonio. Dulan Quellademos here. Thank you, ladies and gentlemen. On to Item 3B of the agenda, which is the appointment of Mrs. Pamela Margeraite to the Supervisory Board. In keeping with the articles of the association of the firm, the supervisory board has issued a nonbinding recommendation to appoint missus Marz Wright for a four year term, not to exceed four years. So through the end of the shareholders meeting in 2020, miss missus Mars Wright is a US citizen and meets the profile drafted by the Supervisory Board. We propose appointing her given her extensive strategic expertise in the consumer industry as well as her experience with family firms. She is a scion from the fourth generation of the Mars family working for the Mars firm. She is a board member of Mars Incorporated and even chaired the board for several years. Prior to that, she performed in various capacities in the confectionery and animal feed sections of MARS, most recently for the animal feed section. She meets all requirements in the, supervision act given the maximum number of supervisory board memberships, and she is independent as defined in the Dutch corporate governance code from 2008 and holds no shares in the firm. She would have loved to attend this meeting, but often, you have to plan well in advance. And unfortunately, she had conflicting obligations. Would anybody like the floor about the nomination of Mrs. Mars? Yes, Mr. Spanjer. Yes, Mr. Chairman. I'm Mr. Spanjer. Mars is not such a wonderful company if we think about that. Recall from a few months ago when they had to recall 50,000,000 candy bars because of piece of plastic there all over the world. That's not wonderful. And I think it's pitiful that missus Morris is unable to be present, so we can't really ask her about what she wants. I think that she can certainly get herself a cheese sandwich if she wants. So I'd like to know why she wants to join Heineken, but I can't do that because she's not here. And you you're not connected to her either, so I can't ask her. So I'm going to vote against. That's all I have to do, Stella. I'm sure she'll be extremely disappointed. Mars is a very high quality firm. Okay. And at Hardin Lane of Watt? It's not only a bet. What we can do for her is also about what she can do for Heineken. We have a very experienced executive with lots of experience in logistics and consumer products and somebody who knows what the long term means in a family company. Mr. Stottlander, you went to the floor as well. Yes, mister chairman. I'm delighted to see that two ladies will be joining you. In the nineteen eighties, I struggled with the large, listed Dutch companies for the, position of women at Royal Dutch Shell. The head of human resources sent me a personal letter that they're delighted that I defend women in the firm because as human resource, they're not able to do that. So therefore, I am absolutely delighted and congratulate you for, appointing two ladies to the executive board. Thank you very much. Thank you. Who else would like the floor? If not, then I propose we open the vote with the voting operator. Please activate the system. Please cast your vote. The vote is closed. Her nomination has been approved with 99.71% of the vote. Welcome, Pamela Mars. Ladies and gentlemen, that takes me to three c on the agenda, which is the appointment of missus Jania Brunini as member of the supervisor of board. She is present among us, and I'd like to ask her to rise. Would you mind What they're voting on? Who they're voting on rather. Thank you. In accordance with the articles of association of the company, the Supervisory Board has made a nonbinding nomination, for the nomination of Mrs. Ianka Brunini as member of the Supervisory Board with effect from twenty one April twenty sixteen for the maximum period of four years until the end of the annual general meeting on 2020. Mrs. Brunini is Turkish and British national, and the Supervisory board proposes appointing her given her extensive experience in marketing the media and consumer products. Mrs. Brunini is vice president marketing, MA at Google, has been working for Google since 02/2006. Prior to that, she worked for Yahoo. But from 2003 to 02/2006, she was marketing director UK there. And from 2002 to 02/2003, she was European marketing director. Prior to that, she worked at Unilever for nearly a decade where she had various roles in marketing, most recently, innovation manager at Home and Personal Care Europe, and she was based in London. She meets the Act IV Governance and Administration concerning the maximum number of supervisory board memberships in Dutch entities and is defined as independent in the Dutch corporate governance code from 2008 and holds no shares in the firm. Who would like the floor of that this nomination? Mr. Spaniard, again. In your entire presentation, I don't understand why we have to appoint two additional Supervisory Board members because it was one out of six. We have only two Board members, and we have 12 Supervisory Board members. So each, Executive Board member will have, six people breathing down his or her neck, and that doesn't sound like a good situation. That was my first question. What's your second question? My second question is why does the lady want to join Heineken? Because Google is a perfectly respectable company. Is she did you bring her on board to, contribute knowledge from Google? Why are you reeling her in? It can't just be for the money. Well, I assume those were your questions. Well, you should have been on your toes at the first question because then you would also know that Mrs. Minnick will be leaving our Supervisory Board today. Comment off, Mike. That's one. Mafraud? In terms of why you think you could be very relevant with your experience to our company, particularly around with your you for your interest. It was a big decision for me. To be honest, it's after a world of bytes and bits and software, I'm welcoming something I can hold. But really my main reason is I met the members of the Board and I was very inspired by them and I thought I could learn from them. Thank you. Thank you very much. Thank you very much. Ladies and gentlemen, we will proceed to the vote. With the voting up, wait a minute. We have another. Okay, you'll have to be very quick. Good afternoon. I'm Mrs. De Smet. UNIDENTIFIED Shown an expert on marketing in a portfolio will undoubtedly come the, let's say, the issue of continuing sponsoring FIFA and other events. How is your approach to this corrupt organization in order doesn't it do harm to the excellent name of Heineken? Because that's a very important advice role she's going to execute. Please. Question is basically relevant, but we won't ask her. We will ask the, executive board because that topic will come up. I propose that you ask this question under any other business. This has nothing to do with her appointment. The supervisory board supervise the executive board and collectively accounts for decisions about sponsoring, etcetera. So I don't want to put her in a position where prior to her appointment, she answers questions about that. So feel free to ask your question again if you'd like under any other business what the company's position is with respect to sponsoring UEFA. I submit. I would like to open the vote about the nomination after giving the final speaker the floor. My compliments to the selection committee. You have you have reeled in two excellent top women. I think it's wonderful that you have somebody with a background in Google in Unilever and somebody with background in Mars. As for the family company, she's from the fourth generation. We all know that things often go wrong with the fourth generation. So it's wonderful if the fourth generation enters Hanigan so that we'll, have centuries more to enjoy Hanigan. Thank you for announcing your vote. I with the voting operator, please activate the system. Please cast your vote. The vote is closed. This nomination has been approved with 99.68% of the votes. That takes me to the end of this meeting. I'd like to mention that missus Mary Menick is stepping down as member of the supervisory board. In twenty o eight, she was appointed to the supervisory board, Mary. Also on behalf of the Supervisory Board and the Executive Board, I'd like to thank you for your huge contribution to the firm in addition to serving on the Supervisory Board. You've invested a lot of time into in the, Remunerations Committee and another committee. We're deeply grateful to you, and I hope that the shareholders are also grateful for your wonderful contribution to this firm. Are there any shareholders that would like to speak about that topic? If not, if there are? My compliments to mister from Buksmere because his department was the first to launch the most efficient, outdoor cafe heating, which is now on the roof of Heineken Experience, and there's another division on the Rembrandt plane that's, at the Papa's family of Escape and De Kron by Reign as well as nearby Schiller. That's it. So perhaps we can talk about how we can set that right. So the present heating is 600 to 2500% more polluting. Thank you for listening. Okay. We'll carry on about that over drinks now that we're on that subject. Anyway, ladies and gentlemen, I'd like to close this meeting at three minutes past four, and I'd like to ask all of you to leave the room so that in ten minutes, we can start the Heineken Holding meeting in the Dine lounge in ten minutes, so not in this room. Remark off mic. No, that's what I asked, but you didn't ask that question, so that's why I continued. No, Mr. Chairman, you said that we would it's your mistake. You're interfering, you're interfering with the order of the meeting, Mr. Spaniard. So you wanted to raise that question? Okay. I'd like the Executive Board to answer the question as to how we see UEFA given the recent publicity and the news about some figureheads. Mr. Von Boksmar? Yes, indeed. You mentioned the FIFA. We sponsor the UEFA. We sponsor sport and the proceeds of the UEFA as an organization that's not only from Heineken sponsoring and seven other sponsors, plus the largest source of UEFA's income comes from television broadcasting rights paid to this organization. Now UFA distributes it to all these groups. That's an international European institute. We're not, we don't serve on the supervisory board of the UFA. We have a sponsorship contract, and we have to compete with others every three years to extend that contract. In our opinion, the Heineken brand, nicely matches that sport we've been doing it successfully for twenty years with UEFA. The sponsoring contracts are negotiated on behalf of UFA by an independent firm. I just wanted to add that. Otherwise, we have very little input in how the UFA or the FIFA operates. Now reading what I see in the press and given the course of events, I think that, there will be responses to inactions taken regarding what went down. That's all I can say about it. But that's not cause that's what you're really asking about. That's not cause for us to terminate our sponsorship contracts because you need to bear in mind that all of those clubs depend on the proceeds of TV and sponsorship. I understand that, but it's been greatly discredited, and that's being associated with the sponsors. So some sponsors withdrew individually. I'm not sure whether you're considering doing that as well. But that, clean, pure Heineken, does that relate to what's happening in that branch of industry? There was a competition this afternoon, and Heineken could send a clear message that they'll be willing to continue sponsoring if the conditions change, for example, stating some parameters in advance, we could debate this until the cows come home, but the answer is no. No. We see that this sport, these old organizations, take a hit now and then, and we see that they improve once again after twenty years. Please keep in mind that one company making that kind of statement expecting all of that to change, but this is a very personal consideration. We can agree to disagree, but we don't think that we should send such a message. Okay. Your answer is crystal clear. Perfect. These were clear answers. Now for the second time, I'm going to close this meeting at eight minutes past four. And those of you who will be attending the holding meeting, please leave the room at that end and hostesses will escort you to the dinner lounge. Shareholders of Heineken and Vee can, hand in their voting boxes and their chip cards, and shareholders of Heineken Holding can take the voting boxes and chip cards along to the dinner lounge. Thank you for attending, and I'd also like to thank the listeners to the audio webcast. The Heineken Holding meeting will be audio webcast. Thank you very much for listening. UNIDENTIFIED Hans' work. Item one of the agenda, which is the report of the Board regarding the financial year 2015. As usual, at this meeting, we always say a few words about the development of the Heineken Holding share as compared to the Heineken NVE share, the discount. The discount is shown in the graph that has been included in the report of the Board on Page 10 and the discount throughout the year under review moved between 913% at the end of the year. On the December 31, it amounted to 10%. And yesterday, the discount amounted to 12%. In historical perspectives, these are normal values. We always see a bit of increase when the share price increases. So the discount increases and the share price has increased. From aforementioned graph, we can see that the share price of Heineken Holding, N. V, in 2015 has increased by 36.73% from EUR 52 to EUR 71. And today, we see that once again. So now I would like to proceed to the discussion of the annual report of the Board for 2015. I'd like to give those of you the floor who would like to say something in that respect. I confirm that nobody feels the need to say anything. Ah, Mr. Freca. Well, as last year, I don't know whether microphone works. Yes. I'm extremely pleased with the way the holding deals with Heineken NV. We have established that Heineken is still independent. I am crazy about family businesses. They're dying out though, and I really hope that this tradition will be continued because I think you can tell from the DNA of this business that everything is well organized and much better organized than in other listed companies. You see that there's much more of a long term strategy, and that's what people appreciate. Thank you very much. Thank you, Cesar Chairman. Thank you for your positive and kind words. So I establish that the report has been duly noted, and we can proceed to Item two of the agenda, which is the implementation of the remuneration policy of members of the Board of Directors for the year 2015. In 02/2005, the general meeting of shareholders granted its approval for the policy concerning remuneration of members of Board of Directors, and this entails that the remuneration of the Board of Directors is equal to the remuneration of the Supervisory Board members of Heineken N. V. In 2015, this boils down to the fact that the remuneration for the Chairman amounts to EUR 90,000 and that the remuneration for the members of the Board amounts to EUR 60,000, and that's the policy. And the policy has been implemented in 2015, and you can see in footnote 35 that the consolidated financial statements that these are the amounts that, in fact, were paid out. According to legal provisions, this agenda item needs to be discussed. It's an information item. It's not a voting item. So now I'd like to give you the opportunity to discuss the subject. Who would like to take the floor regarding the implementation of remuneration policy for members of the Board of Directors in 2015? Nobody. I understand that because policy is crystal clear and so is its implementation. I now propose or I confirm that there's no discussion, and we take duly take note of this implementation. Item three, adoption of financial statements 2015. Drafted and published on Page 20, the annual report. Now the financial statements have been audited by DeLoitte Councils. You'll find the auditor's opinion on Page 104 and further the annual report. And I shall ask you again, who would like to take the floor on the financial statements? REPRESENTATIVE:] Nobody. Again, I understand that because the financial statements are crystal clear and very straightforward. I propose that we proceed to the vote. And we are going to do this with the handsets. I request the operator to activate the system. I myself cannot see whether the system has been activated, but if anybody can see that, please tell me. Ah, it's activated. It's been activated. And so the card, please insert the card with the golden chip facing upwards, insert it in the handset. You will see that your name appears on the display and then you have several options for your vote. Is it working for everybody? Is that okay? Okay. So if you wish to vote in favor, please press button 1. If you wish to vote against, press 2. And should you wish to abstain from voting, please press 3. So I now declare that the vote on the financial statements is open, and I would request you to press the button of your choice. That is closed. And I confirm that the proposal to adopt the financial statements has been carried with 99.96% of the votes cast in favor. So the proposal has been adopted. Now Item four of the agenda, which is an announcement concerning the appropriation of the balance of the income statement pursuant to the provisions Article 10, Section six of the Articles Association. And we can infer from this provision that the dividend received by Heineken Holder will be passed on to the shareholders of Heineken Holder. That is established in the Articles Association. The final dividend of EUR $0.08 6 per share shall be made payable as per 05/04/2016, at ABN AMRO Bank in Amsterdam. And as per twenty five April twenty sixteen, the shares will be listed ex dividend at Euronext Amsterdam. Now that takes us to Item five of the agenda, which is discharging the members of the Board of Directors. I'd like to address this item of the agenda, and I'd like to give the floor to whoever would like to take the floor on this matter, nobody. So we can proceed to the vote regarding the discharge of liability. I would request you to cast your vote by pressing the button of your choice. Comment off mic. I see it says that the vote is open, so you can press the button. Apparently, there's a problem with our handset. Lots of comments off mic. Can anyone solve this problem, this technical problem because apparently some of the handsets don't work? So I confirm that handsets don't work. And so now it's over to plan B, which means that we will be voting as we always did by show of hands. That's where we always voted. So those of you who wish to vote against can raise your hands now. And we will include that in the minutes. So we're dealing with the discharge of members of the Board of Directors. The proposal is to accept it by show of hands and acclamation. So I confirm that the proposal has been adopted. And now the three authorizations that we request every year from you under six items, 66a, 6b, 6c. Has the problem with the handsets been solved? Apparently, it has been solved. REPRESENTATIVE:] I suggest that we discontinue any efforts to vote by handset and that we just continue by voting by acclamation. So we're dealing with the authorization of the Board of Directors to acquire its own shares. The conditions have been stipulated in the explanatory notes to the agenda. But anyway, we'd like to take the floor on Item 6A. That not being the case, we can proceed to the vote, and I propose that we adopt the proposal by acclamation. I can confirm as much, and we can proceed to 6b of the agenda, which is authorization the Board of Directors to issue rights to shares. And other conditions are stipulated in the explanatory notes to the agenda. Who would like to take the floor? Nobody. Then I propose that we proceed to the vote by acclamation. So I propose that we adopt the proposal by acclamation. I propose or I confirm that the proposal has been carried. Now Item 6C of the agenda, which is the authorization of the Board of Directors to restrict or exclude shareholders' preemptive rights.

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