Unilever 2008 Annual Report Download - page 56

Unilever Annual Report and Accounts 2008 53
Report of the Directors
Corporate governance continued
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 also
jointly 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.
Share capital matters
Combined earnings per share
We calculate earnings per share on a combined basis. 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
7 on page 96.
Share capital
NV’s issued share capital on 31 December 2008 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
2 400, known as special shares; and
• €113 599 014 split into several classes (4%, 6% and 7%) of
cumulative preference shares (‘financing preference shares’).
The voting rights attached to NV's outstanding shares are split as
follows:
Total number of votes % of issued capital
1 714 727 700 ordinary shares 1 714 727 700(a) 70.53
2 400 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
(a) Of which 141 560 629 shares were held in treasury and
35 663 020 shares were held in connection with share-based
payments as at 31 December 2008. These shares are not
voted on.
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 AGM held
on 15 May 2008 the Board was designated, in accordance with
Articles 96 and 96a of Book 2 of the Netherlands Civil Code, as
the corporate body authorised until 15 November 2009 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 share capital of the Company in connection with or on
the occasion of mergers and acquisitions.
At the 2008 AGM the Board of NV was authorised, in accordance
with Article 98 of Book 2 of the Netherlands Civil Code, until
15 November 2009 to cause the Company to buy back its own
shares and depositary receipts thereof, within the limits set by
law, 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. The Board agreed at the AGM that it would use the
authority to purchase more than 10% of the Company’s issued
share capital.
The above mentioned authorities are renewed annually.
PLC’s issued share capital on 31 December 2008 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
1 310 156 361 ordinary shares 1 310 156 361(a) 99.76
£100 000 deferred stock 3 214 285 0.24
(a) Of which 26 696 994 shares were held by PLC in treasury and
31 887 851 shares were held by NV group companies or by
share trusts as at 31 December 2008. These shares are not
voted on.
The Board of PLC under sections 80 and 89 of the UK 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 2008 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, which at the time represented approximately 33% of the
Company’s issued Ordinary share capital 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 2008 AGM the Board of PLC was authorised in accordance
with its Articles of Association to make market purchases of its
ordinary shares representing just under 10% of the Company’s
issued capital and within the limits prescribed within the
resolution until the earlier of the 15-month anniversary after the
passing of the resolution or the conclusion of the 2009 AGM.