Unilever 2011 Annual Report Download - page 45

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42
CORPORATE GOVERNANCE continued
Holders of depositary receipts can under all circumstances
exchange their depositary receipts for the underlying shares (and
vice versa), and are entitled to dividends and all economic benefits
on the underlying shares held by the Foundation. They can attend
all General Meetings of NV, either personally or by proxy, and also
have the right to speak. They can under all circumstances and
without limitation exercise their voting rights. The Foundation only
votes shares that are not represented at a General Meeting. The
Foundation votes 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.
The Foundation’s shareholding fluctuates daily. Its holdings on
28February 2012 were 1,252,279,716 NV ordinary shares (73.03%)
and 9,776 NV 7% cumulative preference shares (33.71%).
The members of the board at the Foundation are Mr J H Schraven
(chairman), Mr P P de Koning, Prof Emeritus Dr L Koopmans and
Mr A A Olijslager. The Foundation reports periodically on its
activities. Further information on the Foundation, including its
Articles of Association and Conditions of Administration, can be
found on its website at www.administratiekantoor-unilever.nl.
Unilever considers the arrangements of the Foundation
appropriate and in the interest of NV and its shareholders given
the size of the voting rights attached to the financing preference
shares and the relatively low attendance of holders of ordinary
shares at the General Meetings of NV.
Further information on the share capital of NV and PLC is given on
pages 123 and 124.
Our Foundation Agreements
Foundation Agreements
The Unilever Group is created and maintained by a series of
agreements between the parent companies, NV and PLC,
together with special provisions in their respective Articles of
Association, which are together known as the Foundation
Agreements. These agreements enable Unilever to achieve unity
of management, operations, shareholders’ rights, purpose and
mission and further information on these agreements is provided
below and in the document entitled ‘The Governance of Unilever’
which is available on our website at
www.unilever.com/investorrelations/corp_governance.
NV’s Articles of Association contain, among other things, the
objects clause, which sets out the scope of activities that NV is
authorised to undertake. They are drafted to give a wide scope
and provide that the primary objectives are: to carry on business
as a holding company; to manage any companies in which it has
an interest; and to operate and carry into effect the Equalisation
Agreement. At the 2010 PLC AGM, the shareholders agreed that
the objects clause be removed from PLC’s Articles of Association
so that there are no restrictions on its objects.
NV’s and PLC’s Articles of Association, together with the
additional three Foundation Agreements detailed below, can be
found on our website at
www.unilever.com/investorrelations/corp_governance.
Equalisation Agreement
The Equalisation Agreement makes the economic position of the
shareholders of NV and PLC, as far as possible, the same as if
they held shares in a single company. The Equalisation Agreement
regulates the mutual rights of the shareholders of NV and PLC.
Under the Equalisation Agreement, NV and PLC must adopt the
same financial periods and accounting policies.
Each NV ordinary share represents the same underlying economic
interest in the Unilever Group as each PLC ordinary share.
The Deed of Mutual Covenants
The Deed of Mutual Covenants provides that NV and PLC and their
respective subsidiary companies shall co-operate in every way for
the purpose of maintaining a common operating policy. They shall
exchange all relevant information about their respective
businesses – the intention being to create and maintain a common
operating platform for the Unilever Group throughout the world.
The Deed also contains provisions for the allocation of assets
between NV and PLC.
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.
Unilever Annual Report and Accounts 2011
Report of the Directors Governance