Unilever 2004 Annual Report Download - page 141

138 Unilever Annual Report and Accounts 2004
Notes to the consolidated accounts
Unilever Group
29 Analysis of net debt
€ million € million € million € million € million € million
Acquisitions/
disposals Other
1 January Cash (excl. cash & non-cash Currency 31 December
2004 flow overdrafts) changes movements 2004
Cash on call and in hand 1 304 (806) 506 1 004
Overdrafts (320) 134 2 (184)
(672)
Borrowings due within one year (7 114) 3 827 41 (1 910) 185 (4 971)
Borrowings due after one year (8 466) (785) – 2 115 243 (6 893)
Finance leases – (128) – (81) (9) (218)
2 914
Current investments 1 491 (28) (2) (443) (2) 1 016
Cash on deposit 550 59 – – (26) 583
31
Net debt (12 555) 2 273 39 (319) 899 (9 663)
Other non-cash changes include (i) profits and losses on disposal and adjustments to realisable value of current investments; (ii) exchange gains
and losses on inter-company borrowings and related derivatives; (iii) the reclassification of long-term borrowings falling due within one year at
the balance sheet date; and (iv) the reclassification of finance leases entered into in previous years.
New finance leases mainly consist of sale and leaseback transactions.
30 Share-based compensation plans
As at 31 December 2004, the Group had a number of share-based compensation plans:
(i) All-Employee Option Plans
Local All-Employee Option Plans have been set up in 16 countries to enhance employee involvement with Unilever and its performance by
providing a potential financial benefit linked to the Unilever share price. There are no individual performance targets to be met. The plans are
aimed at participation by permanent employees in the country where the relevant plans apply.
(ii) Executive Option Plans
The Executive Option Plans were introduced in 1985 to reward key employees throughout the world for their contribution to the enhancement
of the Group’s longer-term future and their commitment to the Group over a sustained period. The grant is dependent on performance of the
Group and the individual.
(iii) Share Matching Plans
If managers invest part of their annual bonus in Unilever shares, the company will match this with the same number of shares on the condition
that they keep all shares for an agreed number of years and will still be employed by Unilever on the vesting date.
(iv) The TSR Long-Term Incentive Plan
This plan was introduced in 2001 and, depending on the TSR ranking (see page 80) of Unilever in comparison with its peer group, it will
potentially award top executives on the vesting date three years later with between 0% and 200% of the original conditional award.
(v) The North American Performance Share Plan
A long-term incentive plan for North American managers, awarding Unilever shares if company performance targets are met over a three-year
period.
(vi) The Restricted Share Plan
Restricted shares have been awarded to a select number of executives for special performance. After the agreed number of years the awards
will vest provided the executives are still employed by Unilever at that time.
(vii) Other plans
A cash-settled share-based retention plan was introduced in 2004 for a number of key executives.
Unilever will not grant share options in total in respect of executive share-based plans for more than 5% of its issued ordinary capital, and for
all plans together, for more than 10% of its issued ordinary capital. The Boards do not apportion these limits to each plan separately.
In recent years we have met the obligations under our share option and award plans by purchasing shares in advance and transferring them,
in return for the exercise price, to Executive Directors and employees as the options are exercised or the awards vest.
The numbers in this note include those for Executive Directors shown in the Remuneration report on page 79 to 81. No awards were made to
Executive Directors in 2004, 2003 or 2002 under the North American Performance Share Plan, the Restricted Share Plan or the cash-settled
share-based retention plan. Non-Executive Directors do not participate in any of the share-based compensation plans.