Meeting everyday needs of people everywhere - Unilever

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Unilever Group Notes to the consolidated accounts 29 Financial instruments (continued) 00000000000000001111 Currency exposures Group treasury manages the foreign exchange exposures that arise from the Group’s financing and investing activities in accordance with Group policies. The objectives of Unilever’s foreign exchange policies are to allow operating companies to manage foreign exchange exposures that arise from trading activities effectively within a framework of control that does not expose the Group to unnecessary foreign exchange risks. Operating companies are required to cover substantially all foreign exchange exposures arising from trading activities and each company operates within a specified maximum exposure limit. Business Groups monitor compliance with these policies. Compliance with the Group’s policies means that the net amount of monetary assets and liabilities at 31 December 1999 that are exposed to currency fluctuations is not material. 00000000000000001111 30 Combined earnings per shar e 00000000000000001111 Fl. million £ million 01111101111101111 01111101111101111 Fl. 1.12 Fl. 1 Fl. 1 1.4p 1.25p 1.25p 01111 01111 01111 01111 01111 01111 1999 1998 1997 1999 1998 1997 0000000111101111 01111 01111 01111 01111 01111 Basic earnings per share Fl. 5.80 Fl. 5.80 Fl. 9.78 26.01p 26.45p 44.74p Basic earnings per share before exceptional items Fl. 6.19 Fl. 5.69 Fl. 5.06 27.76p 25.97p 23.86p Diluted earnings per share Fl. 5.66 Fl. 5.66 Fl. 9.55 25.36p 25.80p 43.68p Earnings per share on a SSAP 15 basis Fl. 5.74 Fl. 5.67 Fl. 9.20 25.73p 25.88p 41.99p Basis of calculation: The calculations of combined earnings per share are based on the net profit attributable to ordinary capital divided by the average number of share units representing the combined ordinary capital of NV and PLC in issue during the year, after deducting shares held to meet Unilever employee share options which are not yet vested. For the calculation of combined ordinary capital the exchange rate of £1 = Fl. 12 has been used, in accordance with the Equalisation Agreement. On 10 May 1999 the 1.25p ordinary shares of PLC were consolidated, so that every 112 1.25p ordinary shares were replaced by 100 1.4p ordinary shares. The Fl. 1 ordinary shares of NV were consolidated, so that 100 Fl. 1.12 ordinary shares replaced every 112 Fl. 1 ordinary shares. This consolidation was associated with the payment on 9 June 1999 of a special dividend, so that the economic impact was that of a share buy back at fair value at that date and therefore, in accordance with United Kingdom Financial Reporting Standard 14, earnings per share for prior years have not been restated. Earnings per share before exceptional items is provided because the directors believe it better explains the ongoing trends in the Group’s performance. The calculations of diluted earnings per share are based on (a) conversion into PLC ordinary shares of the shares in a group company which are convertible in the year 2038 as described in note 20 on page 80, and (b) the exercise of share options, details of which are set out in note 20 on pages 82 and 83. Calculation of average number of share units: 000000111111051111105111110511111051111105111 Thousands of share units Thousands of share units 01111101111101111 01111101111101111 Fl. 1.12 Fl. 1 Fl. 1 1.4p 1.25p 1.25p 01111 01111 01111 01111 01111 01111 1999 1998 1997 1999 1998 1997 0000000111101111 01111 01111 01111 01111 01111 Average ordinary capital: NV 601 725 640 165 640 165 4 011 500 4 267 767 4 267 767 PLC 459 745 489 099 489 080 3 064 967 3 260 662 3 260 536 less shares held by employee share trusts and companies (16 287) (13 100) (13 913) (108 583) (87 331) (92 754) 01111 01111 01111 01111 01111 01111 Combined average number of share units for all bases except diluted earnings per share 1 045 183 1 116 164 1 115 332 6 967 884 7 441 098 7 435 549 add shares issuable in 2038 23 625 23 625 23 625 157 500 157 500 157 500 add shares under option 14 264 11 898 10 782 95 094 79 317 71 881 less shares issuable at fair value (11 361) (7 528) (7 338) (75 735) (50 187) (48 920) 01111 01111 01111 01111 01111 01111 Adjusted combined average number of share units for diluted earnings per share basis 1 071 711 1 144 159 1 142 401 7 144 743 7 627 728 7 616 010 01111 01111 01111 01111 01111 01111
Unilever Group Notes to the consolidated accounts 30 Combined earnings per shar e (continued) 00000000000000001111 Calculation of net profit: 000000111111051111105111110511111051111105111 Fl. million £ million 01111101111101111 01111101111101111 Fl. 1.12 Fl. 1 Fl. 1 1.4p 1.25p 1.25p 01111 01111 01111 01111 01111 01111 1999 1998 1997 1999 1998 1997 0000000111101111 01111 01111 01111 01111 01111 Net profit 6 106 6 488 10 923 1 825 1 973 3 331 less preference dividends (44) (15) (15) (13) (4) (5) 01111 01111 01111 01111 01111 01111 Net profit attributable to ordinary capital for basic and diluted earnings per share bases 6 062 6 473 10 908 1 812 1 969 3 326 add exceptional items net of tax 408 (115) (5 268) 122 (36) (1 552) 01111 01111 01111 01111 01111 01111 Net profit before exceptional items for basic earnings per share before exceptional items 6 470 6 358 5 640 1 934 1 933 1 774 01111 01111 01111 01111 01111 01111 Net profit attributable to ordinary capital before adjustment 6 062 6 473 10 908 1 812 1 969 3 326 SSAP 15 tax adjustment (64) (139) (651) (19) (42) (205) 01111 01111 01111 01111 01111 01111 Net profit attributable to ordinary capital on SSAP 15 basis 5 998 6 334 10 257 1 793 1 927 3 121 00000000000000001111 31 Dividends per shar e 00000000000000001111 NV PLC 01111101111101111 01111101111101111 Guilders per Fl. 1.12 (1997-1998: Fl. 1) Pence per 1.4p (1997-1998: 1.25p) of ordinary capital of ordinary capital 01111101111101111 01111101111101111 1999 1998 1997 1999 1998 1997 0000000111101111 01111 01111 01111 01111 01111 Interim 0.88 0.81 0.74 3.93 2.95 2.80 Normal final 1.91 1.70 1.49 8.57 7.75 5.62 Special final 14.50 66.13 01111 01111 01111 01111 01111 01111 Total 2.79 17.01 2.23 12.50 76.83 8.42 00000000000000001111 32 Pension and other benefit plans 00000000000000001111 UK GAAP accounting: In the majority of countries in which the Group operates, employees’ retirement arrangements are provided by defined benefit plans based on employee pensionable remuneration and length of service. These are either externally funded, with the assets of the plan held separately from those of the Group in independently administered funds, or are unfunded but with provisions maintained in the Group balance sheet. All are subject to regular actuarial review. Actuarial advice is provided by both external consultants and actuaries employed by the Unilever Group. Valuations are carried out annually for the largest plans and at least every three years for other plans using the projected unit method, with the aim of ensuring that as far as possible current and future regular pension charges remain a stable percentage of pensionable payroll. The actuarial assumptions used to calculate the benefit obligation vary according to the economic conditions of the country in which the plan is situated. It is usually assumed that, over the long term, the annual rate of return on investments will be higher than the annual increase in pensionable remuneration and in present and future pensions in payment. For the key factors influencing the actuarial valuations, the average assumptions for the principal plans, weighted by market value, at their most recent valuation were: interest rate 7.2% p.a.; salary increases 4.6% p.a.; pension increases 3.2% p.a. Assets are generally valued at a smoothed market value by spreading gains and losses relative to the actuarial basis over a three to five year period. At 31 December 1999 the market value of the assets of externally funded defined benefit plans was Fl. 36 046 million (1998: Fl. 29 175 million), and net provisions in the accounts amounted to Fl. 4 149 million (1998: Fl. 3 691 million). The level of funding of all defined benefit plans at the dates of the last valuations, in aggregate, was 124% (1998: 127%). The levels of funding represent the actuarial value of fund assets and the provisions held in the consolidated accounts at the dates of the most recent valuations expressed as a percentage of the value of benefits that had accrued to members at those dates, after allowing for expected future increases in pensionable remuneration and pensions in the course of payment. Pension costs and company contributions to defined benefit plans (as shown in note 3 on page 72) have been reduced in recent years principally by the amortisation of surpluses in the Group’s two biggest funds, which have been amortised using the ‘mortgage method’. The net amount of surplus recognised in the profit and loss account in 1999 was Fl. 534 million (1998: Fl. 626 million). It is expected that pension costs will continue to benefit from the amortisation of fund surpluses for a number of years.
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Unilever N.V. 1999 Annual Report on
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1 Unilever Annual Report on Form 20
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Financial highlights • Excellent
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Chairmen’s Statement The principa
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Selected financial data Consolidate
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About Unilever History and structur
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Financial review The figures quoted
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