Unilever 2012 Annual Report Download - page 105

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102 Unilever Annual Report and Accounts 2012Financial statements
NOTES TO THE ONSOLIDATED FINANIAL STATEMENTS UNILEVER ROUP continued
4 Share-based compensaton plans continued
To satisfy the options granted, certain NV group companies hold 23,630,318 (2011: 33,219,526) ordinary shares of NV or PLC, and trusts
in Jersey and the United Kingdom hold 1,205,856 (2011: 3,042,111) PLC shares. The trustees of these trusts have agreed, until further
notice, to waive dividends on these shares, save for the nominal sum of 0.01p per 31/9p ordinary share. Shares acquired during 2012
represent 0.002% of the Group’s called up share capital. The balance of shares held in connection with share plans at 31 December
2012 represented 0.8% (2011: 1.2%) of the Group’s called up share capital.
The book value of €619 million (2011: €799 million) of all shares held in respect of share-based compensation plans for both NV
and PLC is eliminated on consolidation by deduction from other reserves. Their market value at 31 December 2012 was €717 million
(2011:€954 million).
At 31 December 2012 there were no options for which the exercise price was above market price.
Shares held to satisfy options and related trusts are accounted for in accordance with IAS 32 ‘Financial Instruments: Presentation’
and SIC 12 ‘Consolidation of Special Purpose Entities’. All differences between the purchase price of the shares held to satisfy options
granted and the proceeds received for the shares, whether on exercise or lapse, are charged to reserves. The basis of the charge
to operating profit for the economic value of options granted is discussed on page 101.
Between 31 December 2012 and 4 March 2013, 6,262,639 shares were granted and 150,555 shares were forfeited related to the
Performance Share Plans.
5 Net fnance costs5 Net fnance costs
Net finance costs is comprised of finance costs and finance income, including net finance costs in relation to pensions and
similarobligations.
Finance income includes income on cash and cash equivalents and income on other financial assets. Finance costs include interest
costs in relation to financial liabilities.
Borrowing costs which are not capitalised are recognised based on the effective interest method.
Net fnance costs
 mllon
2012
€ million
2011
€ million
2010
Finance costs (526) (540) (491)
Bank loans and overdrafts (69) (59) (38)
Bonds and other loans (451) (472) (441)
Dividends paid on preference shares (4) (5) (6)
Net gain/(loss) on derivatives for which hedge accounting is not applied(a) (2) (4) (6)
On foreign exchange derivatives (19) (379) (601)
Exchange difference on underlying items 17 375 595
Finance income 136 92 77
Pensions and similar obligations(b) (7) 71 20
(397) (377) (394)
(a) For further details of derivatives for which hedge accounting is not applied please refer to note 16C on page 120.
(b) Net finance costs in respect of pensions and similar obligations are analysed in note 4B on page 98.
6 Taxaton6 Taxaton
6A Income tax
Income tax on the profit for the year comprises current and deferred tax. Income tax is recognised in the income statement
except to the extent that it relates to items recognised directly in equity.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted
at the balance sheet date, and any adjustments to tax payable in respect of previous years.