Unilever 2012 Annual Report Download - page 36

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Unilever Annual Report and Accounts 2012 Report of the Directors About Unilever
ABOUT UNILEVER GOVERNANCE FINANCIAL STATEMENTS SHAREHOLDER INFORMATION
On 17 January 2012 we redeemed our Swiss francs 350 million
notes. On 2 August 2012 we issued two series of senior notes:
(a) US $450 million at 0.45% maturing in 2015; and
(b) US $550 million at 0.85% maturing in 2017.
On 14 November 2012 we redeemed our €750 million five-year
bond which was issued in 2007 at 4.625%.
The main source of liquidity continues to be cash generated from
operations. Unilever is satisfied that its financing arrangements
are adequate to meet its working capital needs for the
foreseeablefuture.
Treasur y
Unilever Treasury’s role is to ensure that appropriate financing
is available for all value-creating investments. Additionally,
Treasury delivers financial services to allow operating companies
to manage their financial transactions and exposures in an
efficient, timely and low-cost manner.
Unilever Treasury is governed by standards approved by the
Unilever Leadership Executive. In addition to guidelines and
exposure limits, a system of authorities and extensive
independent reporting covers all major areas of activity.
Performance is monitored closely. Reviews are undertaken
periodically by the corporate internal audit function.
The key financial instruments used by Unilever are short-term
and long-term borrowings, cash and cash equivalents, and
certain plain vanilla derivative instruments, principally
comprising interest rate swaps and foreign exchange contracts.
The accounting for derivative instruments is discussed in note
16 on page 116 and on page 120. The use of leveraged instruments
is not permitted.
Unilever Treasury manages a variety of market risks, including
the effects of changes in foreign exchange rates, interest rates
and liquidity. Further details of the management of these risks
are given in note 16 on pages 116 to 120.
ash flow
 mllon
2012
€ million
2011
€ million
2010
Net cash flow from
operating activities 6,836 5,452 5,490
Net cash flow from/(used in)
investing activities (755) (4,467) (1,164)
Net cash flow from/(used in)
financing activities (6,622) 411 (4,609)
Net increase/(decrease) in cash
and cash equivalents (541) 1,396 (283)
Cash and cash equivalents
at 1 January 2,978 1,966 2,397
Effect of foreign exchange
rate changes (220) (384) (148)
Cash and cash equivalents
at 31 December 2,217 2,978 1,966
Cash and cash equivalents decreased by €0.5 billion before
the impact of exchange rates on year end balances. After
recognising changes in exchange rates, cash and cash
equivalents in the balance sheet at 31 December 2012 were
€0.8 billion lower at €2.2 billion.
Net cash flow from operating activities of €6.8 billion was
€1.4 billion higher than 2011. Whilst net capital expenditure
and interest were broadly in line with the prior year, the net
inflow of acquisitions, disposals and other investing activities
was €1.2 billion compared to an outflow of €2.6 billion in 2011.
The movement in financing activities is due to a repayment
of borrowings and lower new debt being issued as compared
to the prior year.
At 31 December 2012, the net debt position was €7.4 billion, a
decrease of €1.4 billion compared to 2011. The cash inflow from
operating activities and disposals exceeded the outflow from
dividends, net capital expenditure, tax, acquisitions and interest.
Market captalsaton and dvdends
Unilever N.V.’s and Unilever PLC’s combined market capitalisation
rose from €73.9 billion at the end of 2011 to €81.9 billion at
31 December 2012.
Information on dividends is set out in note 8 on page 105.
Bass of reportng and crtcal accountng polces
The accounting policies that are most significant in connection
with our financial reporting are set out in note 1 on pages 90 to 91.
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