Meeting everyday needs of people everywhere - Unilever

Unilever Group Notes to the consolidated accounts
4 Exceptional items (continued)
0000000§0
Exceptional items are those items within ordinary activities which,
because of their size or nature, are disclosed to give a proper
understanding of the underlying result for the period. These
include restructuring charges associated with reorganising
businesses (comprising impairment of fixed assets, costs of
severance, and other costs directly attributable to the
restructuring), and profits and losses on disposal of businesses.
Provisions for impairment of fixed assets are recognised
immediately the decision to reorganise is taken; provisions for
other costs are taken when the obligation arises – normally on
announcement; consequential costs within restructuring which
arise in the ongoing business eg training, relocation and
information technology, are recognised as they arise and are not
normally treated as exceptional.
On 22 February 2000, the Group announced a series of linked
initiatives to align the organisation behind plans for accelerating
growth and expanding margins. These initiatives are estimated to
cost Fl. 11.0 billion over five years, most of which is expected to
be exceptional restructuring costs. Provisions for these costs and
asset write downs will be made as necessary consultations are
completed and plans finalised.
5110001110111110111110
Fl. million
111011111050
1999 1998 1997
5110001110 1110 1110
Non-operating exceptional items
Profit on sale of speciality
chemicals businesses — — 8 482
Loss on disposal of fixed assets — — (484)
1110 1110 1110
— — 7 998
Of the above profit on sale of the speciality chemicals businesses
Fl. 53 million is attributable to minority interests and is reported
under this heading in the profit and loss account.
00000000§
5 Interest
00000000§
Interest payable and similar charges:
Bank loans and overdrafts (350) (424) (306)
Bonds and other loans (638) (424) (686)
Interest receivable and
similar income 929 1 187 857
Exchange differences 29 5 (95)
1110 1110 1110
(30) 344 (230)
000000§00
6 Taxation on profit on ordinary activities
000000§00
Parent and group companies (a) (3 005) (3 333) (4 177)
Joint ventures (12) (5) (8)
1110 1110 1110
(3 017) (3 338) (4 185)
1110 1110 1110
Of which:
Tax on non-operating
exceptional items — — (1 613)
Tax on profit on sale of
discontinued speciality
chemicals businesses — — (1 771)
Tax on loss on disposal of
fixed assets in continuing
businesses — — 158
Adjustments to previous years 291 146 17
6 Taxation on profit on ordinary activities (continued)
0000000§0
Fl. million
111011111050
1999 1998 1997
5110001110 1110 1110
(a) United Kingdom
Corporation Tax at 30.0%
(1998: 31.0%, 1997: 31.5%) (981) (803) (648)
less: double tax relief 531 172 182
plus: non-United Kingdom
taxes (2 555) (2 702) (3 711)
1110 1110 1110
(3 005) (3 333) (4 177)
1110 1110 1110
Deferred taxation has been
included on a full provision
basis for:
Accelerated depreciation 187 177 298
Other 184 (125) 383
1110 1110 1110
371 52 681
1110 1110 1110
On a SSAP 15 basis the
credit/(charge) for deferred
taxation would be: 307 (87) 30
Profit on ordinary activities after
taxation on a SSAP 15 basis
would be: 6 485 6 667 10 580
1110 1110 1110
Europe is Unilever’s domestic tax base. The reconciliation between
the computed rate of income tax expense which is generally
applicable to Unilever’s European companies and the actual rate
of taxation charged, expressed in percentages of the profit of
ordinary activities before taxation, excluding both the profit and
the tax on the profit on non-operating exceptional items, is
as follows:
5110001110111110111110
%
111011111050
1999 1998 1997
5110001110 1110 1110
Computed rate of tax
(see below) 32 32 31
Differences due to:
Other rates applicable to
non-European countries 2 1 2
Incentive tax credits (2) (1) (1)
Withholding tax on dividends 2 1 1
Adjustments to previous years (3) (1) —
Other 1 1 2
1110 1110 1110
Actual rate of tax 32 33 35
1110 1110 1110
In the above reconciliation, the computed rate of tax is the
average of the standard rate of tax applicable in the European
countries in which Unilever operates, weighted by the amount of
profit on ordinary activities before taxation generated in each of
those countries.