Unilever 2000 Annual Report Download - page 59

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Unilever Annual Report & Accounts and Form 20-F 2000 Financial Statements
Notes to the consolidated accounts
Unilever Group
Unilever Annual Report & Accounts and Form 20-F 2000Unilever Annual Report & Accounts and Form 20-F 2000
4 Exceptional items continued
Exceptional items are those items w ithin ordinary activities w hich,
because of their size or nature, are disclosed to give a proper
understanding of the underlying result for the period. These include
restructuring charges associated w ith reorganising businesses
(comprising impairment of fixed assets, costs of severance, and
other costs directly attributable to the restructuring), and profits
and losses on disposal of businesses. Costs associated with
restructurings, such as training and information technology
development costs, are recognised as they arise and are not
treated as exceptional.
The exceptional item charge in 2000 principally relates to a series of
linked initiatives, (the ‘Path to Grow th’) announced on 22 February
2000 to align the organisation behind plans for accelerating growth
and expanding margins. These initiatives are estimated to cost
5 billion over five years, most of w hich is expected to be
exceptional restructuring costs. Provisions for these costs and asset
write dow ns are being recognised as necessary consultations are
completed and plans finalised. In 2000 2.0 billion has been
charged to the accounts, of which 1.9 billion is exceptional.
Exceptional items in 2000 include a profit of 143 million on
the disposal of the European bakery businesses and a loss of
859 million on the agreed disposal of Elizabeth Arden.
In 1998, exceptional items included the profit on disposal
of Plant Breeding International.
5 Amortisation of goodwill and intangibles
million
2000 1999 1998
By geographical area:
Europe (143) (7) (4)
North America (179) (1) (1)
Africa and M iddle East (1) — (1)
Asia and Pacific (16) (9) (1)
Latin America (96) (6) (1)
(435) (23) (8)
By operation:
Foods – Oil & dairy based foods
and bakery (64) (5) (3)
– Ice cream and beverages (20) (8) (1)
– Culinary and frozen foods (326) (1) (1)
Home care and professional cleaning (16) (5) (2)
Personal care (7) (3) (1)
Other Operations (2) (1) —
(435) (23) (8)
6 Interest
Interest payable and similar charges:
Bank loans and overdrafts (221) (159) (192)
Bonds and other loans (787) (290) (192)
Interest receivable and
similar income 374 422 538
Exchange differences 12 13 2
(622) (14) 156
Less: interest capitalised on
businesses held for resale 27 ——
Add: exceptional interest (37) ——
(632) (14) 156
Exceptional interest principally comprises fees paid on the unused
financing facility put in place prior to the acquisition of Bestfoods.
7 Taxation on profit on ordinary activities
million
2000 1999 1998
Parent and group companies (a)(b) (1 392) (1 364) (1 512)
Joint ventures (11) (5) (3)
(1 403) (1 369) (1 515)
Of w hich:
Adjustments to previous years
United Kingdom taxes (5) (18) 2
Other taxes 36 150 64
(a) United Kingdom
Corporation Tax at 30.0%
(1999: 30.0% , 1998: 31.0% ) (455) (445) (364)
less: double tax relief 334 241 78
plus: non-United Kingdom
taxes (1 271) (1 160) (1 226)
(1 392) (1 364) (1 512)
(b) Of which, tax on exceptional
items amounted to 283 84 (73)
Deferred taxation has been
included on a full provision
basis for:
Accelerated depreciation 119 85 80
Other 153 83 (56)
272 168 24
On a SSAP 15 basis the
credit/(charge) for deferred
taxation w ould be: 262 140 (39)
Profit on ordinary activities after
taxation on a SSAP 15 basis
would be: 1 310 2 944 3 025
Europe is Unilever’s domestic tax base. The reconciliation betw een
the computed rate of income tax expense w hich is generally
applicable to Unilever’s European companies and the actual rate of
taxation charged, expressed in percentages of the profit of ordinary
activities before taxation is as follow s:
%
2000 1999 1998
Computed rate of tax
(see below ) 32 32 32
Differences due to:
Other rates applicable to
non-European countries 221
Incentive tax credits (2) (2) (1)
Withholding tax on dividends 321
Adjustments to previous years (2) (3) (1)
Non-deductible goodwill impairment 13 ——
Non-deductible goodwill amortisation 4——
Other 211
Actual rate of tax 52 32 33
In the above reconciliation, the computed rate of tax is the average
of the standard rate of tax applicable in the European countries
in which Unilever operates, weighted by the amount of profit
on ordinary activities before taxation generated in each of
those countries.