Meeting everyday needs of people everywhere - Unilever

Unilever Group Notes to the consolidated accounts
30 Combined earnings per shar e (continued)
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Calculation of net profit:
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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
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31 Dividends per shar e
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NV PLC
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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
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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.