Unilever 2006 Annual Report Download - page 45

42 Unilever Annual Report and Accounts 2006
Report of the Directors (continued)
Corporate governance (continued)
Holders of depositary receipts are entitled to dividends that are
paid on the underlying shares held by the Foundation.
Foundation Unilever NV Trust Office’s board
The members of the board are Mr J H Schraven (Chairman),
Mr P P de Koning, Prof Dr L Koopmans and Mr A A Olijslager.
Their Biographies can be found on the website of the Foundation
www.administratiekantoor-unilever.nl.
The Foundation reports periodically, but at least once a year, on
its activities.
Voting by holders of depositary receipts
Although the depositary receipts themselves do not formally have
voting rights, holders of depositary receipts are in practice
equated with shareholders. Holders of depositary receipts can
attend NV’s General Meetings, either personally or by proxy, and
will then automatically, without limitation and under all
circumstances, receive a voting proxy on behalf of the Foundation
to vote on the underlying shares.
Holders of depositary receipts not attending a shareholders’
meeting and who participate in the Dutch Shareholders’
Communication Channel can also issue binding voting
instructions to the Foundation. The Foundation is obliged
to follow these instructions. The same applies to holders
of depositary receipts who instruct the Foundation outside
the Shareholders Communication Channel.
Voting by the Foundation Unilever NV Trust Office
Shares for which the Foundation has not granted voting proxies
or for which it has not received voting instructions arevoted
on by the Foundation in such a way as it deems to be in the
interests of the holders of the depositary receipts. This voting
policy is laid down in the Conditions of Administration that
apply to the depositary receipts. Both the Articles of Association
and the Conditions of Administration can be found on the
Foundation’s website.
Specific provisions apply in the event that a meeting of holders of
NV 7% cumulative preference shares is convened.
If a change to shareholders’ rights is proposed, the Foundation
will let shareholders know if it intends to vote, at least 14 days
in advance if possible. It will do this by advertising in the press.
Hitherto the majority of votes cast by ordinary shareholders at
NV meetings have been cast by the Foundation. Unilever and
the Foundation have a policy of actively encouraging holders
of depositary receipts to exercise their voting rights in
NV meetings.
Unilever considers the arrangements of the Foundation
appropriate and in the interest of NV and its shareholders given
the voting rights attached to the financing preference shares and
the relatively low attendance of the ordinary shares in its AGMs.
Foundation Unilever NV Trust Office’s shareholding
Foundation NV Trust Office’s shareholding fluctuates daily – its
holdings on 1 March 2007 were:
•NV ordinary shares of €0.16: 1 285 189 970 (74.95%);
•NV 7% cumulative preference shares of €428.57: 9 790
(33.76%);
•NV 6% cumulative preference shares of €428.57: 5 (0.00%);
and
•NV 4% cumulative preference shares of €42.86: 23 (0.00%).
Further information on the Foundation, its arrangements
and its activities can be found on its website at
www.administratiekantoor-unilever.nl.
Margarine Union (1930) Limited: Conversion Rights
The first Viscount Leverhulme was the founder of the company
which became PLC. When he died in 1925, he left in his will a
large number of PLC shares in various trusts.
When the will trusts were varied in 1983, the interests of the
beneficiaries of his will were also preserved. Four classes of special
shares were created in Margarine Union (1930) Limited, a
subsidiary of PLC. One of these classes can be converted at the
end of the year 2038 into 70 875 000 PLC ordinary shares of
31⁄9peach. This currently represents 5.4% of PLC’s issued ordinary
capital. These convertible shares replicate the rights which the
descendants of the first Viscount would have had under his will.
This class of the special shares only has a right to dividends in
specified circumstances, and no dividends have yet been paid.
PLC guarantees the dividend and conversion rights of the
special shares.
Requirements and compliance – general
Unilever is subject to corporate governance requirements in the
Netherlands, the UK and as a foreign private issuer in the US.
In the following section we report on our compliance with the
corporate governance regulations and best practice codes
applicable in the Netherlands and the UK and we also describe
compliance with corporate governance regulations in the US.
Our governance arrangements are designed and structured to
promote and further the interests of our companies and their
shareholders. The Boards reserve the right, in cases where they
decide such to be conducive to the interests of the companies
and the enterprise connected therewith or our shareholders, to
depart from that which is set out in the present and previous
sections in relation to our corporate governance. Further changes
will be reported in future Annual Reports and Accounts and,
when necessary,through changes to the relevant documents
published on our website. As appropriate, proposals for change
will be put to our shareholders for approval.
Further information can be found on our website and in ‘The
Governance of Unilever’, the Boards’ own constitutional
document. This describes the terms of reference of our Board
Committees, including their full responsibilities. It will be kept up
to date with changes in our internal constitutional arrangements
that our Boards may make from time to time and it is available on
our website and upon request.