NOTES TO THE CONSOLIDATED BALANCE SHEETS Amounts in EUR millions Interests in short-term holdings are valued at cost less provisions where necessary. Dividends declared are included in the consolidated income statements. The interest in the Transamerica non-insurance businesses (Transamerica Finance Corporation) is accounted for under shares in group companies at net asset value. These group companies are not consolidated because the nature of their business is dissimilar to the rest of the AEGON Group businesses. Consolidated financial statements of Transamerica Finance Corporation are presented on page 121 and following. MOVEMENTS IN GROUP COMPANIES AND PARTICIPATIONS Shares in group companies Loans to group companies and participations and participations 2003 2002 2003 2002 Balance at January 1 1,131 1,403 2,425 1,877 Capital contribution and acquisitions 102 169 53 903 Divestitures and redemptions (629) (316) (6) 0 Net income for the financial year 290 87 0 0 Dividend distributed (23) (11) 0 0 Revaluations/exchange rate differences (130) (176) (412) (289) Other movements 196 (25) (113) (66) BALANCE AT DECEMBER 31 937 1,131 1,947 2,425 3 OTHER FINANCIAL INVESTMENTS 2003 2002 Shares 6,545 6,324 Bonds and other fixed rate securities 71,576 75,697 Loans guaranteed by mortgages 16,748 18,568 Other loans 18,710 21,632 Deposits with credit institutions 1,349 1,577 Other financial investments 3,967 4,566 118,895 128,364 SHARES 6,545 6,324 Shares, non-redeemable preferred shares and convertible debentures reported under this caption are valued at their quoted price or, if unquoted, at estimated market value. Unrealized and realized gains and losses on shares as well as results, expenses and currency exchange rate differences from hedging transactions are recognized in the revaluation account, taking into account the related (deferred) taxes. Cost Unrealized Market price gains losses value Amounts at December 31, 2003 5,540 1,097 (92) 6,545 2002 6,069 853 (598) 6,324 For shares whose market value is considered to be impaired on an ’other than temporary’ (durable) basis, a realized loss is recorded. Shares are generally considered to be other than temporarily impaired if the market value is 20% below cost for a period of at least six months. However, independent third party documentation about the financial condition, near-term prospects of the issuer and the intent and ability to retain the investment for a period of time sufficient to allow for any anticipated recovery, are also important factors taken into account. These factors typically require significant management judgement. The impairments for the financial year amounted to EUR 273 million (2002: EUR 1,057 million). Under the indirect income method, this loss has been recognized in the realized part of the revaluation account with offset in the unrealized part of the revaluation account.  When an optional dividend is taken in shares, an amount equal to the cash dividend is credited to income. The participation in AEGON Global Investment Fund N.V. is also accounted for under this caption. Shares and convertible debentures lent out are included and amount to EUR 826 million (2002: EUR 651 million). No shares and convertible debentures were borrowed. AEGON GROUP ANNUAL REPORT 2003 88