Unilever 2006 Annual Report Download - page 44

Unilever Annual Report and Accounts 2006 41
Report of the Directors (continued)
Corporate governance (continued)
At the 2006 AGM the Board of Directors of NV was authorised,
in accordance with Article 98 of Book 2 of the Netherlands Civil
Code, until 8 November 2007 to cause the Company to buy in its
own shares and depositary receipts therefor, within the limits set
by law (10% of the issued share capital), either through purchase
on a stock exchange or otherwise, at a price, excluding expenses,
not lower than the nominal value of the shares and not higher
than 10% above the average of the closing price of the shares on
Eurolist by Euronext Amsterdam for the five business days before
the day on which the purchase is made.
PLC’s issued share capital on 31 December 2006 was made up of:
•£40 760 420 split into 1 310 156 361 ordinary shares of 31⁄9p
each; and
•£100 000 of deferred stock.
The total number of voting rights attached to PLC’s outstanding
shares are shown hereunder:
Total number of votes % of issued capital
1310 156 361 ordinary shares 2 911 458 580 99.76
£100 000 deferred stock 7 142 857 0.24
Article 83 sets out the voting rights of members which are
currently one vote for every 1.4p of capital. At the 2007 PLC
AGM, a resolution will be proposed to amend Article 83 to state
that every member shall have one vote for every 31⁄9pnominal of
capital held of whatever class.
The Boardof Directors of PLC under sections 80 and 89 United
Kingdom Companies Act 1985 may, subject to the passing of the
appropriate resolutions at a meeting of shareholders, issue shares
within the limits prescribed within the resolutions. At the 2006
AGM the Directors were authorised to issue new shares pursuant
to section 80 of that Act, limited to a maximum of £13 450 000
nominal value, and pursuant to section 89 of that Act, to disapply
pre-emption rights up to approximately 5% of PLC’s issued
ordinary share capital. These authorities are renewed annually.
At the 2006 AGM the Boardof Directors of PLC was authorised
in accordance with its Articles of Association to make market
purchases of its ordinary shares within the limits prescribed within
the resolution until the earlier of the 12 months anniversary after
the passing of the resolution or the conclusion of the 2007 AGM.
Depositary receipts for NV shares
As at 1 March 2007, the majority (around 75%) of NV’s ordinary
shares and around 34% of NV’s 7% cumulative preference shares
areheld by the Foundation Unilever NV Trust Office (Stichting
Administratiekantoor Unilever N.V.), a trust office with a Board
independent from Unilever. As part of its corporate objects, the
Foundation issues depositary receipts in exchange for these
shares. These depositary receipts are listed on Euronext
Amsterdam, as arethe NV ordinary and 7% preference shares
themselves.
Holders of depositary receipts can under all circumstances
exchange their depositary receipts for the underlying shares
(and vice versa).
The Agreement for Mutual Guarantees of Borrowing
Under the Agreement for Mutual Guarantees of Borrowing
between NV and PLC, each company will, if asked by the other,
guarantee the borrowings of the other. The two companies
can also agree jointly to guarantee the borrowings of their
subsidiaries. These arrangements are used, as a matter of financial
policy, for certain significant public borrowings. They enable
lenders to rely on our combined financial strength.
Combined earnings per share
We calculate earnings per share on a combined basis. The
calculation is based on the average amount of NV’s and PLC’s
ordinary share capital in issue during the year.
In our combined earnings per share calculation, we assume that
both companies will be able to pay their dividends out of their
part of our profits. This has always been the case in the past,
but if we did have to make a payment from one to the other
it could result in additional taxes, and reduce our combined
earnings per share.
Further information about the calculation of earnings per share,
including the calculation on a diluted basis, can be found in note
7on page 87.
Share capital
NV’s issued share capital on 31 December 2006 was made up of:
•€274 356 432 split into 1 714 727 700 ordinary shares of
€0.16 each;
•€1 028 568 split into 2 400 ordinary shares numbered 1 to
2400, known as special shares; and
•€113 599 014 split into several classes (4%, 6% and 7%)
cumulative preference shares (‘financing preference shares’).
The total number of voting rights attached to NV's outstanding
shares is shown hereunder:
Total number of votes % of issued capital
1714 727 700 ordinary shares 1 714 727 700 70.53
2400 special shares 6 428 550 0.26
750 000 4% cumulative
preference shares 200 906 250 8.26
161 060 6% cumulative
preference shares 431 409 276 17.75
29 000 7% cumulative
preference shares 77 678 312 3.20
NV may issue shares not yet issued and grant rights to subscribe
for shares only pursuant to a resolution of the General Meeting
of Shareholders or of another corporate body designated for such
purpose by a resolution of the General Meeting. At the Annual
General Meeting held on 8 May 2006 the Boardof Directors was
designated, in accordance with Articles 96 and 96a of Book 2 of
the Netherlands Civil Code, as the corporate body which is
authorised until 8 November 2007 to resolve on the issue of – or
on the granting of rights to subscribe for – shares not yet issued
and to restrict or exclude the statutory pre-emption rights
that accrue to shareholders upon issue of shares, on the
understanding that this authority is limited to 10% of the issued
share capital of the Company, plus an additional 10% of the
issued sharecapital of the Company in connection with or on the
occasion of mergers and acquisitions.