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Unilever Annual Accounts 1999
This booklet and the separate booklet ‘Unilever Annual Review 1999’ together
comprise the full Annual Report and Accounts for 1999 of Unilever N.V. (NV) and
Unilever PLC (PLC) when expressed in guilders and pounds sterling respectively.
Contents
Annual Accounts Additional Financial Information
General information 2
Statements of directors’ responsibilities 4
Corporate governance 5
Report of the auditors 6
Accounting policies 7
Unilever Group consolidated accounts 9
– Consolidated profit and loss account
and Statement of total recognised
gains and losses 9
– Consolidated balance sheet 10
– Consolidated cash flow statement 11
– Notes to the consolidated accounts 12
Directors’ remuneration and interests 32
Principal group companies
and fixed investments 41
NV company accounts and further
statutory information 44
PLC company accounts, further statutory
information and other information 47
Five year record 51
Additional information for
United States investors 54
Publications 56
Web site 56
Contact details
Rotterdam
Unilever N.V.
Corporate Relations Department
Weena 455, PO Box 760
3000 DK Rotterdam
Telephone +31 (0)10 217 4848
Telefax +31 (0)10 217 4587
e-mail corporate.relations-rotterdam
@
unilever.com
London
Unilever PLC
Corporate Relations Department
PO Box 68, Unilever House
Blackfriars, London EC4P 4BQ
Telephone +44 (0)20 7822 5794
Telefax +44 (0)20 7822 6907
e-mail corporate.relations-london
@
unilever.com
New York
Unilever United States, Inc.
Corporate Relations Department
390 Park Avenue, New York
NY 10022-4698
Telephone +1 212 906 4240
Telefax +1 212 906 4666
e-mail corporate.relations-newyork
@
unilever.com
Unilever Web site:
www.unilever.com

Table of contents

  • Page 1
    ... information Statements of directors' responsibilities Corporate governance Report of the auditors Accounting policies Unilever Group consolidated accounts - Consolidated profit and loss account and Statement of total recognised gains and losses - Consolidated balance sheet - Consolidated cash flow...

  • Page 2
    ... Agreement provides for both companies to adopt the same accounting principles and requires as a general rule the dividends and other rights and benefits (including rights on liquidation) attaching to each Fl. 12 nominal of ordinary capital of NV to be equal in value at the relevant rate of exchange...

  • Page 3
    ... 27. United Kingdom Urgent Issues Task Force Abstract 13 (UITF 13) requires that NV or PLC shares held by employee trusts to satisfy options should be classified by the sponsoring company as fixed assets. Dutch law requires such shares to be accounted for within capital and reserves. In order to...

  • Page 4
    ... required by Book 2 of the Civil Code in the Netherlands and the United Kingdom Companies Act 1985 to prepare accounts for each financial year which give a true and fair view of the state of affairs of the Unilever Group, NV and PLC as at the end of the financial year and of the profit or loss for...

  • Page 5
    ... Listing Rules of the London Stock Exchange. Unilever's corporate governance arrangements are described on pages 43 to 45 of the 'Unilever Annual Review 1999'. As explained there, the Board controls the company through the Executive Committee. Responsibilities are shared by the Chairmen of NV and...

  • Page 6
    ...profit, total recognised gains and cash flows of the Group for the year then ended. In our opinion the accounts of the Unilever Group, and of Unilever N.V. and Unilever PLC respectively, have been properly prepared in accordance with Book 2 of the Civil Code in the Netherlands and the United Kingdom...

  • Page 7
    ...consolidated accounts, the profit and loss account, the cash flow statement and all movements in assets and liabilities are translated at annual average rates of exchange. The balance sheet, other than the ordinary share capital of NV and PLC, is translated at year-end rates of exchange. In the case...

  • Page 8
    ...lease term, or over the period between rent reviews where these exist. Shares held by employee share trusts The assets and liabilities of certain PLC trusts, NV and group companies which purchase and hold NV and PLC shares to satisfy options granted are included in the Group accounts. The book value...

  • Page 9
    ... Income from fixed investments 10 Interest 5 Profit on ordinary activities before taxation Taxation 6 Profit on ordinary activities after taxation Minority interests Net profit Attributable to: NV 21 PLC 21 Dividends Preference dividends Dividends on ordinary capital 7 Special dividend 7 Profit of...

  • Page 10
    ...10 292 13 492 489 333 (1 337) 4 128 3 613 34 718 PLC: Total capital employed Capital and reserves include amounts relating to preference shares in NV which under United Kingdom Financial Reporting Standard 4 are classified as non-equity. Minority interests in group companies are substantially all...

  • Page 11
    ... of finance 27 Taxation Capital expenditure and financial investment 27 Acquisitions and disposals 27 Dividends paid on ordinary share capital Special dividend Cash flow before management of liquid resources and financing Management of liquid resources 27 Financing 27 Increase/(decrease) in cash in...

  • Page 12
    ... accounts Unilever Group 1 Segmental information Fl. million Continuing operations Acquisitions 1999 Total 1998 Total Turnover (a)(b) By geographical area: Europe North America Africa and Middle East Asia and Pacific Latin America By operation: Foods - Oil & dairy based foods and bakery - Ice cream...

  • Page 13
    ... consolidated accounts 1 Segmental information (continued) Fl. million 1999 1998 1999 3 Staff costs and employees Fl. million 1998 Net operating assets (c) By geographical area: Europe North America Africa and Middle East Asia and Pacific Latin America By operation: Foods - Oil & dairy based foods...

  • Page 14
    ...is the average of the standard rates 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. 7 Dividends on ordinary capital Interest payable and similar charges: Bank loans...

  • Page 15
    ... charge to the profit and loss account would have been increased by Commitments for capital expenditure at 31 December 6 019 13 421 19 440 722 205 5 631 12 414 18 045 675 168 Share of joint ventures: Assets Liabilities Net assets Other fixed investments Investments listed on a recognised stock...

  • Page 16
    ... 1999 Unilever Group Notes to the consolidated accounts 13 Current investments Fl. million 1999 1998 Listed Unlisted 2 946 308 3 254 10 711 159 10 870 Current investments include short-term deposits, government securities and A- or higher rated money and capital market instruments. 14 Cash...

  • Page 17
    ... 1999) and United States dollars (5.8% at 31 December 1999) (c) floating rate Deutschmarks (3.0% at 31 December 1999) and fixed rate Canadian dollars (6.7%) (d) floating rate United States dollars (range 5.8% - 7.5% at 31 December 1999) (e) floating rate French francs (7.9% at 31 December 1999...

  • Page 18
    ... predominantly long-term liabilities: Unfunded pension schemes Funded pension schemes Post-retirement health benefits Add asset balances reclassified as debtors after more than one year 12 Movements during the year: 1 January Currency retranslation Profit and loss account Payments (a) Acquisitions...

  • Page 19
    ...connection with share options Issue of new shares under PLC 1 939 share option schemes 1 291 Issue of new NV preference shares 1 216 31 December 491 2 998 As required by United Kingdom Financial Reporting Standard 4 capital and reserves can be analysed as follows: Equity: Ordinary capital Non-equity...

  • Page 20
    ... nominal values of the shares, arises from the consolidation of the ordinary share capitals, which together with the payment of a special dividend, was approved at the Annual General Meeting of each company on 4 May 1999. The consolidation of the NV ordinary shares was on the basis of 100 new shares...

  • Page 21
    21 Unilever Annual Accounts 1999 Unilever Group Notes to the consolidated accounts 20 Called up share capital (continued) Share options Options granted to directors and employees to acquire ordinary shares of NV and PLC and still outstanding at 31 December 1999 were as set out in the following ...

  • Page 22
    ... between the cost of the shares and the exercise price of the related options is charged to the profit and loss account. 21 Profit retained Fl. million 1999 NV 1998 1999 PLC 1998 Net profit Preference dividends Normal dividends on ordinary capital Special dividend Profit of the year retained...

  • Page 23
    ...of group companies in 1999 on the consolidated balance sheet. Acquisition accounting has been applied in all cases. Fl. million Balance sheets of acquired businesses Adjustments to align accounting policies Fair values at date of acquisition Revaluations Acquisitions Intangible assets Fixed assets...

  • Page 24
    ... which: Cash 27 Cash balances of businesses sold 27 Current investments, cash deposits and borrowings of businesses sold Non cash and deferred consideration 26 Reconciliation of operating profit to operating cash flows Operating profit Depreciation and amortisation Changes in working capital: Stocks...

  • Page 25
    ...netted in the cash flow statement Fl. million 1999 1998 1999 Fl. million 1998 Returns on investments and servicing of finance Dividends from other fixed investments Interest received Interest paid Preference dividend paid Dividends and other payments to minority shareholders Capital expenditure and...

  • Page 26
    ...11 317) (47) (465) 602 1 508 Other non cash changes include profits and losses on disposal and adjustments to realisable value of current investments; exchange gains and losses on borrowings; and the reclassification of long-term borrowings falling due within one year at the balance sheet date.

  • Page 27
    ... United Kingdom Financial Reporting Standard 14, earnings per share for prior years have not been restated. Thousands of share units Fl. 1.12 1999 Fl. 1 1998 Thousands of share units 1.4p 1999 1.25p 1998 Average ordinary capital: NV PLC less shares held by employee share trusts and group companies...

  • Page 28
    ... the profit and loss account represent contributions payable by the Group to the funds. The market value of the assets of externally funded defined contribution schemes as at 31 December 1999 was Fl. 3 931 million (1998: Fl. 3 378 million). 31 Post-retirement health benefits Group companies provide...

  • Page 29
    ...term items, as permitted by United Kingdom Financial Reporting Standard 13, or because the amounts are not material. The reduction in the portion of fixed investments and fixed rate debt during 1999 and the position at the year end is in line with Unilever's interest rate management policy. Unilever...

  • Page 30
    ... future cash flows associated with these instruments. Currency exposures Group treasury manages the foreign exchange exposures that arise from the Group's financing and investing activities in accordance with Group policies. The objectives of Unilever's foreign exchange policies are to allow...

  • Page 31
    31 Unilever Annual Accounts 1999 Unilever Group Notes to the consolidated accounts 33 Summarised accounts of the NV and PLC parts of the Group The following summarised accounts present the profit and loss account and balance sheet of the Unilever Group, analysed between the NV and PLC parts of the ...

  • Page 32
    ... executive remuneration. The Committee determines, on the Boards' behalf, specific remuneration packages for each of the executive directors, including pension rights, grants of share options and any compensation payments. Policy: directors' emoluments The objective of Unilever's remuneration policy...

  • Page 33
    33 Unilever Annual Accounts 1999 Unilever Group Directors' remuneration and interests Report to the shareholders (continued) Policy: directors' pensions The aim of the Remuneration Committee is that pension and other related benefits should be in line with good practice by major companies in the ...

  • Page 34
    ... age 55 for PLC directors appointed after 1 January 1999), in which case the total accrued pension is reduced by 5% per annum for each year of early retirement prior to age 60. Dependants' and children's pensions are payable under the normal and early retirement schemes in each country. Under the NV...

  • Page 35
    ...' remuneration and interests Report to the shareholders (continued) Directors' emoluments The aggregate emoluments of the directors were as follows: Fl. 1999 1998 1999 £ 1998 Salary Allowances and value of benefits in kind Performance related payments Total Gains on exercise of share options...

  • Page 36
    ... work a minimum number of hours in the United Kingdom. The North American Employee Stock Purchase Plan was also introduced in 1995 and is open to all employees in the United States and Canada. Grants of share options to directors and other senior executives in 1999 were made under the International...

  • Page 37
    ... Report to the shareholders (continued) Directors' interests: share options (continued) Options to acquire NV ordinary shares of Fl. 1.12 each and options to acquire PLC ordinary shares of 1.4p each were granted, exercised and held during 1999 as follows: Options outstanding below market price...

  • Page 38
    ... Employee Stock Purchase Plan from their inceptions during 1995. The Board has continued the same practice with the Unilever PLC International 1997 Executive Share Option Scheme. During 1999, 2 803 641 NV shares and 17 732 079 PLC shares were purchased in the market in respect of options granted...

  • Page 39
    ...directors, in common with other employees of PLC and its United Kingdom subsidiaries, have beneficial interests in the undermentioned NV and PLC ordinary shares acquired for the purpose of satisfying options granted under the PLC 1985 Executive Share Option and Sharesave Schemes and the Unilever PLC...

  • Page 40
    ... remuneration of the Advisory Directors is decided by the Boards. Advisory Directors receive an annual fee and are reimbursed expenses incurred in attending meetings. They do not receive any performance related bonuses, pension provisions, share options or other forms of benefit. The annual fee paid...

  • Page 41
    ...and other significant holdings as required by the United Kingdom Companies Act 1985 will be annexed to the next Annual Return of Unilever PLC. The main activities of the companies listed below are indicated according to the following key: Holding companies Foods Home & Personal Care Other Operations...

  • Page 42
    ...- NV (75%); PLC (25%) Calvin Klein Cosmetics Company Diversey Lever, Inc. Elizabeth Arden Co. Good Humor-Breyers Ice Cream Gorton's Lipton Unilever Capital Corporation Unilever Home & Personal Care USA Unilever United States, Inc. FP H P P P F F F O P H F P F P P F H F O P O % 90 Africa and Middle...

  • Page 43
    ... NV Sudy Lever S.A. Venezuela - NV Unilever Andina S.A. FP FP FP FP FP P P FP FP O FP FP FP FP FP 97 51 85 70 Principal fixed investments Joint ventures % 40 % Europe Portugal - NV FIMA - Produtos Alimentares, Lda. North America United States of America - NV (75%); PLC (25%) The Pepsi/Lipton Tea...

  • Page 44
    .... As the accounts of NV have been included in the consolidated accounts, the profit and loss account mentions only income from fixed investments after taxation as a separate item. The balance sheet includes the proposed profit appropriation. The Board of Directors 7 March 2000 References relate to...

  • Page 45
    45 Unilever Annual Accounts 1999 Notes to the company accounts Unilever N.V. Fixed investments Fl. million 1999 1998 1999 Provisions for liabilities and charges Fl. million 1998 Shares in group companies Book value of PLC shares held in connection with share options (a) Less NV shares held by ...

  • Page 46
    ... distributions from reserves on the basis of a proposal by the Board and in compliance with the law and the Equalisation Agreement. Fl. million 1999 1998 Proposed profit appropriation Profit of the year Preference dividends Profit at disposal of the Annual General Meeting of shareholders Ordinary...

  • Page 47
    ... reserves are classified as equity as defined under United Kingdom Financial Reporting Standard 4. As permitted by Section 230 of the United Kingdom Companies Act 1985, PLC's profit and loss account does not accompany its balance sheet. On behalf of the Board of Directors N W A FitzGerald Chairman...

  • Page 48
    48 Unilever Annual Accounts 1999 Notes to the company accounts Unilever PLC Fixed investments £ million 1999 1998 1999 Creditors £ million 1998 Shares in group companies Book value of PLC shares held in connection with share options Shares in group companies Shares in group companies are stated...

  • Page 49
    ...by shareholders and will be open for inspection at the Annual General Meeting. Employee involvement and communication Unilever's companies maintain formal processes to inform, consult and involve employees and their representatives. Most of the United Kingdom sites are accredited to the Investors in...

  • Page 50
    ...Annual Accounts 1999 Further statutory information and other information Unilever PLC Supplier payment policies Individual operating companies are responsible for agreeing the terms and conditions under which business transactions with their suppliers are conducted. The directors' reports of United...

  • Page 51
    ... 1999 share consolidations see note 29 on page 27. Net (funds)/debt comprises borrowings less cash and current investments. Includes goodwill and intangibles purchased after 1 January 1998. 1998 includes the special dividend of Fl. 16 014 million assuming all shareholders had taken the cash dividend...

  • Page 52
    ...ordinary share capital Special dividend Cash flow before management of liquid resources and financing Management of liquid resources Financing Increase/(decrease) in cash in the period Key ratios Return on shareholders' equity (%) Return on capital employed (%) Operating margin (%) Net profit margin...

  • Page 53
    ... Europe North America Africa and Middle East Asia and Pacific Latin America Net operating assets (a) Europe North America Africa and Middle East Asia and Pacific Latin America By operation Turnover (a) Foods Home & Personal Care Other Operations Speciality Chemicals (b) Operating profit (a) 41...

  • Page 54
    ... effect on the Group's net profit, combined earnings per share and capital and reserves of the application of United States generally accepted accounting principles (US GAAP). Fl. million 1999 1998 Net profit as reported in the consolidated profit and loss account US GAAP adjustments: Goodwill...

  • Page 55
    ...periods of tangible fixed assets is capitalised and depreciated over the life of the assets. Pensions Under Unilever's accounting policy the expected costs of providing retirement pensions are charged to the profit and loss account over the periods benefiting from the employees' services. Variations...

  • Page 56
    ..., health care and arts sponsorship. Finance Unilever's annual and quarterly results, the Annual Review and Accounts and the Annual Report on Form 20-F plus a Shareholder Centre which includes key dates in our financial year; details of shareholder meetings; Unilever's financial history; share price...