Report & accounts 2002 in full - Unilever
Report & accounts 2002 in full - Unilever
Report & accounts 2002 in full - Unilever
Create successful ePaper yourself
Turn your PDF publications into a flip-book with our unique Google optimized e-Paper software.
78 Notes to the consolidated <strong>accounts</strong><br />
<strong>Unilever</strong> Group<br />
4 Exceptional items cont<strong>in</strong>ued<br />
The total net cost of these programmes is estimated to be<br />
€6.2 billion over five years, most of which is expected to be<br />
exceptional restructur<strong>in</strong>g costs. Provisions for these costs and asset<br />
write downs are be<strong>in</strong>g recognised as necessary consultations are<br />
completed and plans f<strong>in</strong>alised.<br />
In <strong>2002</strong>, €1.3 billion of net costs have been <strong>in</strong>curred under Path<br />
to Growth programmes of which a net €1.1 billion is exceptional.<br />
To date, which is three years <strong>in</strong>to the five year programme, the total<br />
cost <strong>in</strong>curred is €5.2 billion of which €4.5 billion is exceptional.<br />
Other exceptional items <strong>in</strong>clude the release of provisions<br />
(€98 million) aga<strong>in</strong>st environmental exposures when events showed<br />
that the provisions were no longer required. These provisions were<br />
orig<strong>in</strong>ally recorded on the acquisition of the Bestfoods bus<strong>in</strong>ess.<br />
In 2001 exceptional items <strong>in</strong>cluded €1.4 billion of Path to Growth<br />
net costs and €811 million ga<strong>in</strong> on the sale of brands to secure<br />
regulatory approval for the acquisition of Bestfoods.<br />
In 2000 other exceptional items <strong>in</strong>cluded a profit of €143 million<br />
on the disposal of the European bakery bus<strong>in</strong>ess and a loss of<br />
€980 million on the agreed disposal of Elizabeth Arden. The latter<br />
amount has been restated as a result of the implementation of FRS<br />
19; there was no impact on net profit aris<strong>in</strong>g from this restatement.<br />
See note 18 on page 94.<br />
5 Interest<br />
€ million € million € million<br />
<strong>2002</strong> 2001 2000<br />
Total <strong>in</strong>terest payable<br />
and similar charges (1 446) (1 914) (1 008)<br />
Group <strong>in</strong>terest payable<br />
and similar charges:<br />
Bank loans and overdrafts (186) (451) (221)<br />
Bonds and other loans<br />
Share of <strong>in</strong>terest payable<br />
(1 228) (1 463) (787)<br />
of jo<strong>in</strong>t ventures<br />
Share of <strong>in</strong>terest payable<br />
(5) – –<br />
of associates<br />
Group <strong>in</strong>terest receivable<br />
(27) – –<br />
and similar <strong>in</strong>come 247 210 374<br />
Exchange differences 26 (3) 12<br />
(1 173) (1 707) (622)<br />
Less: <strong>in</strong>terest capitalised on<br />
bus<strong>in</strong>esses held for resale – 61 27<br />
Add: exceptional <strong>in</strong>terest – – (37)<br />
Total (1 173) (1 646) (632)<br />
Exceptional <strong>in</strong>terest <strong>in</strong> 2000 pr<strong>in</strong>cipally comprised fees paid on<br />
the unused f<strong>in</strong>anc<strong>in</strong>g facility put <strong>in</strong> place prior to the acquisition<br />
of Bestfoods.<br />
<strong>Unilever</strong> Annual <strong>Report</strong> & Accounts and Form 20-F <strong>2002</strong><br />
6 Taxation on profit on ord<strong>in</strong>ary activities<br />
€ million € million € million<br />
<strong>2002</strong> 2001 2000<br />
Parent and group companies (a)(b) (1 515) (1 522) (1 271)<br />
Jo<strong>in</strong>t ventures (19) (25) (11)<br />
Associates (4) – –<br />
Total (1 538) (1 547) (1 282)<br />
Of which:<br />
Adjustments to previous years<br />
United K<strong>in</strong>gdom taxes 11 (3) (5)<br />
Other taxes 245 61 36<br />
(a) United K<strong>in</strong>gdom<br />
Corporation Tax at 30.0% (173) (381) (451)<br />
less: double tax relief 66 140 334<br />
United K<strong>in</strong>gdom taxes (107) (241) (117)<br />
plus: non-United K<strong>in</strong>gdom taxes (1 408) (1 281) (1 154)<br />
(1 515) (1 522) (1 271)<br />
(b) Of which, tax on exceptional<br />
items amounted to 241 232 404<br />
Deferred taxation has been <strong>in</strong>cluded<br />
on a <strong>full</strong> provision basis for:<br />
Accelerated depreciation 50 87 119<br />
Other 242 (207) 153<br />
292 (120) 272<br />
Where appropriate, amounts have been restated for FRS 19, see<br />
note 18 on page 94.<br />
Europe is <strong>Unilever</strong>’s domestic tax base. The reconciliation between<br />
the computed rate of <strong>in</strong>come tax expense which is generally<br />
applicable to <strong>Unilever</strong>’s European companies and the actual rate of<br />
taxation charged, expressed <strong>in</strong> percentages of the profit of ord<strong>in</strong>ary<br />
activities before taxation is as follows:<br />
% % %<br />
<strong>2002</strong> 2001 2000<br />
Computed rate of tax<br />
(see below) 33 33 32<br />
Differences due to:<br />
Other rates applicable to<br />
non-European countries 3 (1) 2<br />
Incentive tax credits (3) (3) (2)<br />
Withhold<strong>in</strong>g tax on dividends 1 3 3<br />
Adjustments to previous years (6) (2) (2)<br />
Non-deductible goodwill impairment – – 10<br />
Non-deductible goodwill amortisation 9 12 4<br />
Other 2 1 2<br />
Actual rate of tax<br />
(current and deferred) 39 43 49<br />
Actual rate of deferred tax for:<br />
Accelerated depreciation 1 2 5<br />
Other 6 (6) 6<br />
Actual rate of current tax 46 39 60<br />
In the above reconciliation, the computed rate of tax is the average<br />
of the standard rate of tax applicable <strong>in</strong> the European countries<br />
<strong>in</strong> which <strong>Unilever</strong> operates, weighted by the amount of profit<br />
on ord<strong>in</strong>ary activities before taxation generated <strong>in</strong> each of<br />
those countries.