Report & accounts 2002 in full - Unilever

More documents

Recommendations

Info

17 Pensions and similar obligations continued Unilever Annual Report & Accounts and Form 20-F 2002 Notes to the consolidated accounts 93 Unilever Group % % % % % % Other post Other post Other post Key Key Key retirement retirement retirement Pension plans Pension plans Pension plans benefit plans benefit plans benefit plans 2002 2001 2000 2002 2001 2000 Weighted-average assumptions as at 31 December Discount rate 5.70 6.00 6.25 6.50 7.25 7.50 Expected return on plan assets 6.90 7.75 7.25 n/a n/a n/a Salary increases 3.60 3.75 3.75 4.30 4.50 4.50 Pension increases 2.20 2.50 2.50 n/a n/a n/a The valuations of other benefit plans typically assume that medical cost inflation will fall from its current level (assumed to be approximately 10% in 2003) over the next few years and reach a constant level of 4.9% (2001: 5%; 2000: 5%) within five years. € million € million € million € million € million € million Other post Other post Other post Key Key Key retirement retirement retirement Pension plans Pension plans Pension plans benefit plans benefit plans benefit plans 2002 2001 2000 2002 2001 2000 Components of net periodic benefit cost Service cost (gross) 324 253 231 20 20 16 Interest cost 864 737 698 78 83 64 Expected return on plan assets (1 189) (1 007) (932) – – – Expected employee contributions (9) (1) – – – – Amortisation of prior service cost 33 24 26 – – – Amortisation of transition (asset) (63) (63) (66) – – – Amortisation of actuarial loss/(gain) (45) (81) (58) (6) (2) (2) Total before SFAS 88 events (85) (138) (101) 92 101 78 Adjustments for SFAS 88 events (118) 43 19 (23) (2) (1) Net periodic benefit cost (203) (95) (82) 69 99 77 The projected benefit obligation, accumulated benefit obligation, and fair value of plan assets for the pension plans with accumulated benefit obligations in excess of plan assets were €11 015 million, €10 188 million, and €7 334 million respectively, as of 31 December 2002 and €2 171 million, €2 035 million, and €1 308 million respectively, as of 31 December 2001. The Group also maintains a number of smaller defined benefit plans. Approximately €1 129 million (2001: €1 685 million) is provided for on their behalf in the Group balance sheet. In 2002, €158 million (2001: €202 million; 2000: €151 million) was charged in the accounts. These amounts would not have been materially different under SFAS 87. In addition to the special termination benefits included in the table above, during 2002, the Group also charged €96 million (2001: €49 million; 2000: €56 million) in respect of pension or similar obligations arising on terminations of employment. Expected return on plan assets Beginning 1 January 2002 the Group changed its method for determining the expected return on plan assets under US GAAP by changing the value placed on the plan assets. The value now used is the fair value at the balance sheet date instead of a market related value calculated by smoothing asset gains and losses over a five year period. Management believe that using the actual fair value at the balance sheet date provides a better representation of the financial position of the Group. The impact of this change in methodology on reported results is given on pages 114 and 121. Post-retirement health care benefits Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plans. A one-percentage-point change in assumed health care cost trend rates would have the following effects: € million € million 1% point 1% point increase decrease Effect on total of service and interest cost components 7 (6) Effect on post-retirement benefit obligations 68 (62) Financial Statements
94 Notes to the consolidated accounts Unilever Group 18 Deferred taxation United Kingdom Financial Reporting Standard 19 (FRS 19) ’Deferred Tax’, which requires full provision to be made for deferred taxes, has been adopted with effect from 1 January 2002. The impact on the balance sheet of adoption of this standard has been reflected in all periods covered by these accounts by means of a prior period adjustment. As Unilever has previously provided for deferred taxes on a full provision basis in accordance with Netherlands law, FRS 19 does not have a material impact on reported net profit. FRS 19 does not allow deferred tax to be provided on the revaluation of fixed assets and therefore deferred tax so provided in respect of the revaluation of Bestfoods’ tangible fixed assets has been adjusted against goodwill in the comparative figures. Deferred tax was provided in respect of the planned remittance of unremitted earnings of Bestfoods’ subsidiaries; FRS 19 does not allow such provision unless the dividend has been declared. These deferred tax liabilities have also been adjusted against goodwill in the comparative figures. In addition, where (prior to 1998) tax-deductible goodwill was written off directly to reserves, FRS 19 does not allow a deferred tax asset to be created at acquisition. Instead, a deferred tax liability must be created over the life of the goodwill. The consequent reversal of deferred tax assets and creation of deferred tax liabilities has been adjusted in the comparative figures. These two adjustments result in a reduction of shareholders’ equity as at 31 December 2001 of € 202 million. The implementation of FRS 19 has also changed the accounting treatment in the year ended 31 December 2000 for our (then) anticipated disposal of Elizabeth Arden. The effect of implementing FRS 19 means that operating profit for that year is reduced by €121 million, whilst the tax charge on ordinary activities is also reduced by €121 million. This adjustment has been made in the comparative figures for the year ended 31 December 2000. There is no impact on reported net profit. Capital and reserves at 31 December 2001 have been reduced in aggregate by €202 million (2000: €195 million). In the 2001 closing balance sheet, goodwill has been reduced by €133 million (2000: €77 million) while debtors have been reduced by €60 million (2000: €91 million) through a reduction in deferred tax assets. Deferred tax liabilities at the end of 2001 have been increased by €9 million (2000: €27 million). There are no material unrecognised deferred tax assets. € million € million 2002 2001 Deferred taxation on: Accelerated depreciation 877 1 009 Stock reliefs 41 55 Pension and similar provisions (691) (843) Short-term and other timing differences (1 015) (921) (788) (700) Less asset balances reclassified as debtors due after more than one year 13 1 292 1 610 Movements in deferred taxation: 1 January 910 Currency retranslation 187 Acquisition/disposal of group companies 17 Profit and loss account (292) Other movements (318) 31 December 504 Unilever Annual Report & Accounts and Form 20-F 2002 504 910
Page 1 and 2:
Disclaimer Notes to the Annual Repo
Page 3 and 4:
A truly multi-local multinational U
Page 5 and 6:
2 General information The Unilever
Page 7 and 8:
4 Financial highlights at current r
Page 9 and 10:
6 Chairmen’s statement responded
Page 11 and 12:
8 Our code of business principles C
Page 13 and 14:
10 About Unilever Home & Personal C
Page 15 and 16:
12 About Unilever We reduced the im
Page 17 and 18:
14 About Unilever Description of ou
Page 19 and 20:
16 Operating review - highlights 20
Page 21 and 22:
18 Operating review by region Europ
Page 23 and 24:
20 Operating review by region In Ho
Page 25 and 26:
22 Operating review by region Bango
Page 27 and 28:
24 Operating review by category - F
Page 29 and 30:
Page 31 and 32:
Page 33 and 34:
Page 35 and 36:
32 Operating review by category - H
Page 37 and 38:
34 Operating review by category - H
Page 39 and 40:
36 Financial review The decrease is
Page 41 and 42:
38 Financial review equivalent of
Page 43 and 44:
40 Financial review • Innovation:
Page 45 and 46: 42 Corporate governance Organisatio
Page 47 and 48: 44 Corporate governance Nomination
Page 49 and 50: 46 Corporate governance Biographica
Page 51 and 52: 48 Corporate governance Business Pr
Page 53 and 54: 50 Remuneration report Remuneration
Page 55 and 56: 52 Remuneration report Details of t
Page 57 and 58: 54 Remuneration report Directors’
Page 59 and 60: 56 Remuneration report Remuneration
Page 61 and 62: 58 Remuneration report Supplementar
Page 63 and 64: 60 Remuneration report In addition,
Page 65 and 66: 62 Financial statements - Contents
Page 67 and 68: 64 Statement of directors’ respon
Page 69 and 70: 66 Accounting information and polic
Page 71 and 72: 68 Accounting information and polic
Page 73 and 74: 70 Consolidated statement of total
Page 75 and 76: 72 Notes to the consolidated accoun
Page 95: 92 Notes to the consolidated accoun
Page 103 and 104: 100 Notes to the consolidated accou
Page 117 and 118: 114 Five year record Unilever Group
Page 119 and 120: 116 Five year record Unilever Group
Page 121 and 122: 118 Additional information for US i
Page 131 and 132: 128 Principal group companies and f
Page 133 and 134: 130 Principal group companies and f
Page 135 and 136: 132 Company accounts Unilever N.V.
Page 137 and 138: 134 Further statutory information U
Page 139 and 140: 136 Notes to the company accounts U
Page 141 and 142: 138 Control of Unilever Share capit
Page 143 and 144: 140 Control of Unilever If you are
Page 145 and 146: 142 Analysis of shareholding Signif
Page 147 and 148:
144 Nature of the trading market Sh
Page 149 and 150:
146 Taxation for US residents Unite
Page 151 and 152:
148 Cross reference to Form 20-F PA
Page 153 and 154:
150 Financial calendar and addresse
Page 155 and 156:
Design: Fitch: London Typesetting:
show all

Report & accounts 2002 in full - Unilever

Create successful ePaper yourself

Delete template?

Save as template?