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8/13/2019 Financial Statements AR12
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DISLAIMER
Ths PDF s a secton of the Unlever Annual Report and Accounts 2012 provded to Unlevers
shareholders It does not contan suffcent nformaton to allow a full understandng of the
results of the Unlever roup and the state of affars of Unlever NV, Unlever PL or the
Unlever roup For further nformaton the Unlever Annual Report and Accounts 2012
should be consulted
ertan sectons of the Unlever Annual Report and Accounts 2012 have been audted
These are on pages 86 to 131, 133 to 136, 139 to 141, and those parts noted as audted wthn
the Drectors Remuneraton Report on pages 77 to 81
The mantenance and ntegrty of the Unlever webste s the responsblty of the Drectors the
work carred out by the audtors does not nvolve consderaton of these matters Accordngly,
the audtors accept no responsblty for any changes that may have occurred to the fnancal
statements snce they were ntally placed on the webste
Legslaton n the Unted Kngdom and the Netherlands governng the preparaton anddssemnaton of fnancal statements may dffer from legslaton n other ursdctons
Dsclamer
Except where you are a shareholder, ths materal s provded for nformaton purposes only
and s not, n partcular, ntended to confer any legal rghts on you
The Annual Report and Accounts does not consttute an nvtaton to nvest n Unlever shares
Any decsons you make n relance on ths nformaton are solely your responsblty
The nformaton s gven as of the dates specfed, s not updated, and any forward-lookngstatements are made subect to the reservatons specfed on the fnal page of the Report
Unlever accepts no responsblty for any nformaton on other webstes that may be accessed
from ths ste by hyperlnks
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Notes to the consoldated fnancal statements (contnued)
15 aptal and fundng 11215A Share captal 11315B Equty 11415 Fnancal labltes 115
16 Treasury rsk management 11616A Management of lqudty rsk 11616B Management of market rsk 11816 Dervatves and hedgng 120
17 Investment and return 12117A Fnancal assets 12217B redt rsk 122
18 Fnancal nstruments far value rsk 123
19 Provsons 124
20 ommtments and contngent labltes 125
21 Acqustons and dsposals 126
22 Assets and labltes held for sale 128
23 Related party transactons 128
24 Remuneraton of audtors 129
25 Events after the balance sheet date 129
26 Prncpal group companes and non-current nvestments 130
Independent audtors report Unlever NV 132
ompany accounts Unlever NV 133
Notes to the ompany accounts Unlever NV 134
Further statutory and other nformaton Unlever NV 137
Independent audtors report Unlever PL 138
ompany accounts Unlever PL 139
Notes to the ompany accounts Unlever PL 140
Further statutory and other nformaton Unlever PL 142
Shareholder nformaton 144
Statement of Drectors responsbltes 83
Independent audtors reports 84onsoldated ncome statement 86
onsoldated statement of comprehensve ncome 87
onsoldated statement of changes n equty 87
onsoldated balance sheet 88
onsoldated cash flow statement 89
Notes to the consoldated fnancal statements 90
1 Accountng nformaton and polces 90
2 Segment nformaton 92
3 ross proft and operatng costs 94
4 Employees 954A Staff and management costs 954B Pensons and smlar oblgatons 954 Share-based compensaton plans 101
5 Net fnance costs 102
6 Taxaton 1026A Income tax 1026B Deferred tax 1036 Tax on other comprehensve ncome 104
7 ombned earnngs per share 105
8 Dvdends on ordnary captal 105
9 oodwll and ntangble assets 106
10 Property, plant and equpment 107
11 Other non-current assets 109
12 Inventores 110
13 Trade and other current recevables 110
14 Trade payables and other labltes 111
82 UnleverAnnual Report and Accounts 2012Fnancal statements
FINANIAL STATEMENTS
ontents
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Drectors responsblty statementEach of the Drectors confrms that, to the best of hs orher knowledge The fnancal statements whch have been prepared n
accordance wth Internatonal Fnancal Reportng Standardsas adopted by the EU and as ssued by the InternatonalAccountng Standards Board (n the case of the consoldatedfnancal statements) and UK accountng standards (n thecase of the PL parent company accounts) and UK accountngstandards and Part 9 of Book 2 of the Dutch vl ode (n thecase of the NV parent company accounts), gve a true and farvew of the assets, labltes, fnancal poston and proft or lossof the roup and the NV and PL enttes taken as a whole and
The Report of the Drectors ncludes a far revew of thedevelopment and performance of the busness and the postonof the roup and the NV and PL enttes taken as a whole,together wth a descrpton of the prncpal rsks anduncertantes they face
The Drectors and ther roles are lsted on pages 42 and 49ong concernThe actvtes of the roup, together wth the factors lkely toaffect ts future development, performance, the fnancal postonof the roup, ts cash flows, lqudty poston and borrowngfacltes are descrbed n About Unlever and the Fnancal revew2012 on pages 2 to 35 In addton, we descrbe n notes 15 to 18on pages 112 to 124 the roups obectves, polces and processesfor managng ts captal ts fnancal rsk management obectvesdetals of ts fnancal nstruments and hedgng actvtes and tsexposures to credt and lqudty rsk
The roup has consderable fnancal resources together wthestablshed busness relatonshps wth many customers and
supplers n countres throughout the world As a consequence,the Drectors beleve that the roup s well placed to manage tsbusness rsks successfully despte the current uncertan outlook
After makng enqures, the Drectors have a reasonableexpectaton that the roup has adequate resources to contnuen operatonal exstence for the foreseeable future Accordngly,they contnue to adopt the gong concern bass n preparng thsAnnual Report and Accounts
Internal and dsclosure controls and proceduresPlease refer to pages 36 to 40 for a dscusson of Unleversprncpal rsk factors and to page 41 for commentary on theroups approach to rsk management and control
Annual accountsThe Drectors are requred by Part 9 of Book 2 of the vl oden the Netherlands and the UK ompanes Act 2006 to prepareaccounts for each fnancal year whch gve a true and far vewof the state of affars of the Unlever roup, and the NV and PLenttes, as at the end of the fnancal year and of the proft orloss and cash flows for that year
The Drectors consder that, n preparng the accounts, the roupand the NV and PL enttes have used the most approprateaccountng polces, consstently appled and supported byreasonable and prudent udgements and estmates, and thatall Internatonal Fnancal Reportng Standards as adopted bythe EU and as ssued by the Internatonal Accountng StandardsBoard (n the case of the consoldated fnancal statements), UKaccountng standards (n the case of the parent company accounts)and Dutch law (n the case of the NV parent company accounts)whch they consder to be applcable have been followed
The Drectors have responsblty for ensurng that NV and PLkeep accountng records whch dsclose wth reasonable accuracyther fnancal poston and whch enable the Drectors to ensurethat the accounts comply wth the relevant legslaton Theyalso have a general responsblty for takng such steps as arereasonably open to them to safeguard the assets of the roup,and to prevent and detect fraud and other rregulartes
Ths statement, whch should be read n conuncton wth theAudtors reports, s made wth a vew to dstngushng forshareholders the respectve responsbltes of the Drectorsand of the audtors n relaton to the accounts
A copy of the fnancal statements of the Unlever roup splaced on our webste at wwwunlevercom/nvestorrelatons
The mantenance and ntegrty of the webste are the responsbltyof the Drectors, and the work carred out by the audtors does notnvolve consderaton of these matters Accordngly, the audtorsaccept no responsblty for any changes that may have occurredto the fnancal statements snce they were ntally placed on thewebste Legslaton n the UK and the Netherlands governng thepreparaton and dssemnaton of fnancal statements may dfferfrom legslaton n other ursdctons
UK law sets out addtonal responsbltes for the Drectors ofPL regardng dsclosure of nformaton to audtors Dsclosuren respect of these responsbltes s made on page 143
ABOUT UNILEVER OVERNANE FINANIAL STATEMENTS SHAREHOLDER INFORMATION
83UnleverAnnual Report and Accounts 2012 Fnancal statements
STATEMENT OF DIRETORS RESPONSIBILITIES
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We beleve that the audt evdence we have obtaned s suffcentand approprate to provde a bass for our audt opnon
Opnon wth respect to the consoldated fnancal statementsIn our opnon, the consoldated fnancal statements gve a trueand far vew of the fnancal poston of Unlever roup as at31 December 2012, and of ts result and ts cash flows for the yearthen ended n accordance wth Internatonal Fnancal ReportngStandards as adopted by the European Unon and as ssued by theInternatonal Accountng Standards Board and wth Part 9 of Book2 of the Dutch vl ode
Separate report on company accountsWe have reported separately on the company accounts of UnleverNV for the year ended 31 December 2012
Report on other legal and regulatory requrementsPursuant to the legal requrement under Secton 2 393 sub 5at e and f of the Dutch vl ode, we have no defcences to
report as a result of our examnaton whether the Report of theDrectors, to the extent we can assess, has been prepared naccordance wth Part 9 of Book 2 of ths ode, and whether thenformaton as requred under Secton 2 392 sub 1 at b-h hasbeen annexed Further we report that the Report of the Drectors,to the extent we can assess, s consstent wth the consoldatedfnancal statements as requred by Secton 2 391 sub 4 of theDutch vl ode
Amsterdam, 5 March 2013Prcewaterhouseoopers Accountants NV
R A J Swaak RA
Independent audtors report
To the eneral Meetng of Shareholders ofUnlever NV
Report on the consoldated fnancal statementsWe have audted the accompanyng consoldated fnancalstatements 2012 as set out on pages 86 to 131 whch are partof the Annual Report and Accounts 2012 of the Unlever roupfor the year ended 31 December 2012, whch comprse theconsoldated ncome statement, consoldated statement ofcomprehensve ncome, consoldated statement of changesn equty, consoldated balance sheet, consoldated cash flowstatement and the notes to the consoldated fnancal statements,comprsng a summary of sgnfcant accountng polces andother explanatory nformaton
Drectors responsblty
The Drectors are responsble for the preparaton and farpresentaton of these consoldated fnancal statements naccordance wth Internatonal Fnancal Reportng Standards asadopted by the European Unon and as ssued by the InternatonalAccountng Standards Board and wth Part 9 of Book 2 of theDutch vl ode, and for the preparaton of the Report of theDrectors n accordance wth Part 9 of Book 2 of the Dutch vlode Furthermore, the Drectors are responsble for suchnternal control as they determne s necessary to enable thepreparaton of the consoldated fnancal statements that arefree from materal msstatement, whether due to fraud or error
Audtors responsbltyOur responsblty s to express an opnon on these consoldatedfnancal statements based on our audt We conducted our audt
n accordance wth Dutch law, ncludng the Dutch Standards onAudtng Ths requres that we comply wth ethcal requrementsand plan and perform the audt to obtan reasonable assuranceabout whether the consoldated fnancal statements are freefrom materal msstatement
An audt nvolves performng procedures to obtan audt evdenceabout the amounts and dsclosures n the consoldated fnancalstatements The procedures selected depend on the audtors
udgement, ncludng the assessment of the rsks of materalmsstatement of the consoldated fnancal statements, whetherdue to fraud or error In makng those rsk assessments, theaudtor consders nternal control relevant to the companyspreparaton and far presentaton of the consoldated fnancalstatements n order to desgn audt procedures that are approprate
n the crcumstances, but not for the purpose of expressng anopnon on the effectveness of the companys nternal controlAn audt also ncludes evaluatng the approprateness ofaccountng polces used and the reasonableness of accountngestmates made by the Drectors, as well as evaluatng theoverall presentaton of the consoldated fnancal statements
84 UnleverAnnual Report and Accounts 2012Fnancal statements
AUDITORS REPORT NETHERLANDS
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Opnon on fnancal statementsIn our opnon the group fnancal statements gve a true and far vew of the state of the roups affars
as at 31 December 2012 and of ts proft and cash flows forthe year then ended
have been properly prepared n accordance wth IFRSsas adopted by the European Unon and
have been prepared n accordance wth the requrements ofthe ompanes Act 2006 and Artcle 4 of the IAS Regulaton
Separate opnon n relaton to IFRSs as ssued by the IASBAs explaned n note 1 to the group fnancal statements, theroup n addton to complyng wth ts legal oblgaton to applyIFRSs as adopted by the European Unon, has also appled IFRSsas ssued by the Internatonal Accountng Standards Board (IASB)
In our opnon the group fnancal statements comply wth IFRSsas ssued by the IASB
Opnon on other matters prescrbed by the ompanes Act 2006In our opnon, the nformaton gven n the Drectors Report setout on pages 142 and 143 for the fnancal year for whch the groupfnancal statements are prepared s consstent wth the groupfnancal statements
Matters on whch we are requred to report by exceptonWe have nothng to report n respect of the followngUnder the ompanes Act 2006 we are requred to report to you f,n our opnon certan dsclosures of Drectors remuneraton specfed
by law are not made or we have not receved all the nformaton and explanatons
we requre for our audt
Under the Lstng Rules we are requred to revew the Drectors statement, set out on page 83, n relaton to
gong concern the part of the orporate overnance statement relatng to the
parent companys complance wth the nne provsons of theUK orporate overnance ode specfed for our revew and
certan elements of the report to shareholders by the Boardon Drectors remuneraton
Other mattersWe have reported separately on the parent company fnancalstatements of Unlever PL for the year ended 31 December 2012and on the nformaton n the Drectors Remuneraton Report thats descrbed as havng been audted
John Baker(Senor Statutory Audtor)for and on behalf of Prcewaterhouseoopers LLPhartered Accountants and Statutory AudtorsLondon5 March 2013
Independent audtors reportto the members of Unlever PL
We have audted the group fnancal statements of Unleverroup for the year ended 31 December 2012 whch comprsethe consoldated ncome statement, consoldated statementof comprehensve ncome, consoldated statement of changesn equty, consoldated balance sheet, consoldated cash flowstatement, and the related notes on pages 86 to 131 The fnancalreportng framework that has been appled n ther preparatons applcable law and Internatonal Fnancal Reportng Standards(IFRSs) as adopted by the European Unon
Respectve responsbltes of Drectors and audtorsAs explaned more fully n the Statement of Drectorsresponsbltes set out on page 83, the Drectors are responsblefor the preparaton of the group fnancal statements and for bengsatsfed that they gve a true and far vew Our responsblty s to
audt and express an opnon on the group fnancal statements naccordance wth applcable law and Internatonal Standards onAudtng (UK and Ireland) Those standards requre us to complywth the Audtng Practces Boards Ethcal Standards for Audtors
Ths report, ncludng the opnons, has been prepared for and onlyfor the parent companys members as a body n accordance wthhapter 3 of Part 16 of the ompanes Act 2006 and for no otherpurpose We do not, n gvng these opnons, accept or assumeresponsblty for any other purpose or to any other person to whomths report s shown or nto whose hands t may come save whereexpressly agreed by our pror consent n wrtng
Scope of the audt of the fnancal statementsAn audt nvolves obtanng evdence about the amounts and
dsclosures n the group fnancal statements suffcent to gvereasonable assurance that the fnancal statements are freefrom materal msstatement, whether caused by fraud or errorThs ncludes an assessment of whether the accountngpolces are approprate to the groups crcumstances andhave been consstently appled and adequately dsclosed thereasonableness of sgnfcant accountng estmates made bythe Drectors and the overall presentaton of the group fnancalstatements In addton, we read all the fnancal and non-fnancalnformaton n the Annual Report and Accounts 2012 to dentfymateral nconsstences wth the audted fnancal statementsIf we become aware of any apparent materal msstatementsor nconsstences we consder the mplcatons for our report
ABOUT UNILEVER OVERNANE FINANIAL STATEMENTS SHAREHOLDER INFORMATION
85UnleverAnnual Report and Accounts 2012 Fnancal statements
AUDITORS REPORT UNITED KINDOM
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onsoldated ncome statement
for the year ended 31 December
mllon2012
mllon2011
mllon2010
Turnover 2 51,324 46,467 44,262
Operatng proft 2 6,989 6,433 6,339
After (chargng)/credtng non-core tems 3 (73) 144 308
Net fnance costs 5 (397) (377) (394)
Fnance ncome 136 92 77Fnance costs (526) (540) (491)Pensons and smlar oblgatons (7) 71 20
Share of net proft/(loss) of ont ventures and assocates 11 105 113 111Other ncome/(loss) from non-current nvestments 11 (14) 76 76
Proft before taxaton 6,683 6,245 6,132Taxaton 6A (1,735) (1,622) (1,534)
Net proft 4,948 4,623 4,598
Attrbutable toNon-controllng nterests 468 371 354Shareholders equty 4,480 4,252 4,244
ombned earnngs per share 7Basc earnngs per share () 158 151 151Dluted earnngs per share () 154 146 146
References n the consoldated ncome statement, consoldated statement of comprehensve ncome, consoldated statement ofchanges n equty, consoldated balance sheet and consoldated cash flow statement relate to notes on pages 90 to 131, whch forman ntegral part of the consoldated fnancal statements
86 UnleverAnnual Report and Accounts 2012Fnancal statements
FINANIAL STATEMENTS UNILEVER ROUP
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onsoldated statement ofcomprehensve ncome
for the year ended 31 December
mllon
2012
mllon
2011
mllon
2010
Far value gans/(losses) on fnancal nstruments net of taxOn cash flow hedges (141) (148) 41On avalable-for-sale fnancal assets 16 (20) 2
Actuaral gans/(losses) on penson schemes net of tax (644) (1,243) 105urrency retranslaton gans/(losses) net of tax(a) (316) (703) 460
Other comprehensve ncome 6 (1,085) (2,114) 608Net proft 4,948 4,623 4,598
Total comprehensve ncome 15 3,863 2,509 5,206
Attrbutable toNon-controllng nterests 444 314 412
Shareholders equty 3,419 2,195 4,794(a)Includes far value gans/(losses) on net nvestment hedges of (160) mllon (2011 45 mllon 2010 107 mllon)
onsoldated statement of changes n equty
for the year ended 31 December
mllon
2012
mllon
2011
mllon
2010
Equty at 1 January 14,921 15,078 12,536Total comprehensve ncome for the year 3,863 2,509 5,206Dvdends on ordnary captal (2,696) (2,487) (2,309)
Movement n treasury stock 52 48 (126)Share-based payment credt 153 105 144Dvdends pad to mnorty shareholders (464) (288) (289)urrency retranslaton gans/(losses) net of tax (2) (1) 2Other movements n equty (111) (43) (86)
Equty at 31 December 15B 15,716 14,921 15,078
For further nformaton on movements n equty please refer to note 15B on page 114
ABOUT UNILEVER OVERNANE FINANIAL STATEMENTS SHAREHOLDER INFORMATION
87UnleverAnnual Report and Accounts 2012 Fnancal statements
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onsoldated balance sheet
as at 31 December
mllon2012
mllon2011
AssetsNon-current assetsoodwll 9 14,619 14,896Intangble assets 9 7,099 7,017Property, plant and equpment 10 9,445 8,774Penson asset for funded schemes n surplus 4B 672 1,003Deferred tax assets 6B 1,113 421Fnancal assets 17A 535 478Other non-current assets 11 536 632
34,019 33,221
urrent assetsInventores 12 4,436 4,601
Trade and other current recevables 13 4,436 4,513urrent tax assets 217 219ash and cash equvalents 17A 2,465 3,484Other fnancal assets 17A 401 1,453Non-current assets held for sale 22 192 21
12,147 14,291
Total assets 46,166 47,512
Labltesurrent labltesFnancal labltes 15 2,656 5,840Trade payables and other current labltes 14 11,668 10,971urrent tax labltes 1,129 725Provsons 19 361 393Labltes assocated wth assets held for sale 22 1
15,815 17,929
Non-current labltesFnancal labltes 15 7,565 7,878Non-current tax labltes 100 258Pensons and post-retrement healthcare labltes
Funded schemes n defct 4B 2,291 2,295Unfunded schemes 4B 2,040 1,911
Provsons 19 846 908Deferred tax labltes 6B 1,393 1,125Other non-current labltes 14 400 287
14,635 14,662
Total labltes 30,450 32,591
Equty
Shareholders equtyalled up share captal 15A 484 484Share premum 15B 140 137Other reserves 15B (6,196) (6,004)Retaned proft 15B 20,731 19,676
Shareholders equty 15,159 14,293Non-controllng nterests 15B 557 628
Total equty 15,716 14,921
Total labltes and equty 46,166 47,512
These fnancal statements have been approved by the Drectors
The Board of Drectors5 March 2013
88 UnleverAnnual Report and Accounts 2012Fnancal statements
FINANIAL STATEMENTS UNILEVER ROUP contnued
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onsoldated cash flow statement
for the year ended 31 December
mllon2012
mllon2011
mllon2010
Net proft 4,948 4,623 4,598Taxaton 1,735 1,622 1,534Share of net proft of ont ventures/assocates and other ncome/(loss) from non-current nvestments (91) (189) (187)Net fnance costs 5 397 377 394
Operatng proft 6,989 6,433 6,339Deprecaton, amortsaton and mparment 1,199 1,029 993hanges n workng captal 822 (177) 169
Inventores (9) (219) (573)Trade and other recevables 1 (399) (343)Trade payables and other labltes 830 441 1,085
Pensons and smlar oblgatons less payments (381) (553) (472)Provsons less payments (43) 9 72
Elmnaton of (profts)/losses on dsposals (236) (215) (476)Non-cash charge for share-based compensaton 153 105 144Other adustments 13 8 49
ash flow from operatng actvtes 8,516 6,639 6,818Income tax pad (1,680) (1,187) (1,328)
Net cash flow from operatng actvtes 6,836 5,452 5,490
Interest receved 146 93 70Purchase of ntangble assets (405) (264) (177)Purchase of property, plant and equpment (1,975) (1,835) (1,638)Dsposal of property, plant and equpment 237 125 114Acquston of group companes, ont ventures and assocates (133) (3,098) (1,252)Dsposal of group companes, ont ventures and assocates 246 1,378 891Acquston of other non-current nvestments (91) (88) (85)Dsposal of other non-current nvestments 88 178 151
Dvdends from ont ventures, assocates and other non-current nvestments128
116 184(Purchase)/sale of fnancal assets 1,004 (1,072) 578
Net cash flow (used n)/from nvestng actvtes (755) (4,467) (1,164)
Dvdends pad on ordnary share captal (2,699) (2,485) (2,323)Interest and preference dvdends pad (506) (496) (494)Net change n short-term borrowngs (870) 1,261 (46)Addtonal fnancal labltes 1,441 3,419 86Repayment of fnancal labltes (3,565) (907) (1,391)aptal element of fnance lease rental payments (15) (16) (22)Other movements on treasury stock 48 30 (124)Other fnancng actvtes (456) (395) (295)
Net cash flow (used n)/from fnancng actvtes (6,622) 411 (4,609)
Net ncrease/(decrease) n cash and cash equvalents (541) 1,396 (283)
ash and cash equvalents at the begnnng of the year 2,978 1,966 2,397Effect of foregn exchange rate changes (220) (384) (148)
ash and cash equvalents at the end of the year 17A 2,217 2,978 1,966
The cash flows of penson funds (other than contrbutons and other drect payments made by the roup n respect of pensons andsmlar oblgatons) are not ncluded n the group cash flow statement
ABOUT UNILEVER OVERNANE FINANIAL STATEMENTS SHAREHOLDER INFORMATION
89UnleverAnnual Report and Accounts 2012 Fnancal statements
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Accountng polcesAccountng polces are ncluded n the relevant notes to theconsoldated fnancal statements and have been hghlghtedwth lght green shadng on pages 92 to 129 The accountngpolces below are appled throughout the fnancal statements
Foregn currencesThe consoldated fnancal statements are presented n eurosThe functonal currences of NV and PL are euros and sterlngrespectvely Items ncluded n the fnancal statements ofndvdual group companes are recorded n ther respectvefunctonal currency whch s the currency of the prmaryeconomc envronment n whch each entty operates
Foregn currency transactons n ndvdual group companesare translated nto functonal currency usng exchange rates atthe date of the transacton Foregn exchange gans and lossesfrom settlement of these transactons, and from translaton ofmonetary assets and labltes at year-end exchange rates, are
recognsed n the ncome statement except when deferred nequty as qualfyng hedges
In preparng the consoldated fnancal statements, thebalances n ndvdual group companes are translated fromther functonal currency nto euros The ncome statement,the cash flow statement and all other movements n assets andlabltes are translated at average rates of exchange as a proxyfor the transacton rate, or at the transacton rate tself f moreapproprate Assets and labltes are translated at year-endexchange rates
The ordnary share captal of NV and PL s translated naccordance wth the Equalsaton Agreement The dfferencebetween the value for PL and the value by applyng the year-end
rate of exchange s taken to other reserves (see note 15B onpage 114)
The effect of exchange rate changes durng the year on net assetsof foregn operatons s recorded n equty For ths purpose netassets nclude loans between group companes and any relatedforegn exchange contracts where settlement s nether plannednor lkely to occur n the foreseeable futureThe roup apples hedge accountng to exchange dfferencesarsng between the functonal currency of a foregn operatonand the euro, regardless of whether the net nvestment s helddrectly or through an ntermedate parent Dfferences arsngon retranslaton of a fnancal lablty desgnated as a foregncurrency net nvestment hedge are recorded n equty to the
extent that the hedge s effectve These dfferences are reportedwthn proft or loss to the extent that the hedge s neffectve
umulatve exchange dfferences arsng snce the date oftranston to IFRS of 1 January 2004 are reported as a separatecomponent of other reserves In the event of dsposal or partdsposal of an nterest n a group company ether through saleor as a result of a repayment of captal, the cumulatve exchangedfference s recognsed n the ncome statement as part of theproft or loss on dsposal of group companes
1 Accountng nformaton and polces
The accountng polces adopted are the same as those whchwere appled for the prevous fnancal year, except as set outbelow under the headng Recent accountng developments
UnleverThe two parent companes, NV and PL, together wth ther groupcompanes, operate as a sngle economc entty (the Unleverroup, also referred to as Unlever or the roup) NV and PLhave the same Drectors and are lnked by a seres of agreements,ncludng an Equalsaton Agreement, whch are desgned so thatthe postons of the shareholders of both companes are as closelyas possble the same as f they held shares n a sngle company
The Equalsaton Agreement provdes that both companes adoptthe same accountng prncples It also requres that dvdendsand other rghts and benefts attachng to each ordnary share
of NV, be equal n value to those rghts and benefts attachng toeach ordnary share of PL, as f each such unt of captal formedpart of the ordnary share captal of one and the same company
Bass of consoldatonDue to the operatonal and contractual arrangements referred toabove, NV and PL form a sngle reportng entty for the purposesof presentng consoldated fnancal statements Accordngly, thefnancal statements of Unlever are presented by both NV andPL as ther respectve consoldated fnancal statements roupcompanes ncluded n the consoldaton are those companescontrolled by NV or PL ontrol exsts when the roup has thepower to govern the fnancal and operatng polces of an enttyso as to obtan benefts from ts actvtes
The net assets and results of acqured busnesses are ncluded nthe consoldated fnancal statements from ther respectve datesof acquston, beng the date on whch the roup obtans controlThe results of dsposed busnesses are ncluded n theconsoldated fnancal statements up to ther date of dsposal,beng the date control ceases
Intra-group transactons and balances are elmnated
The company ncome statement for NV s ncluded n theconsoldated fnancal statements An abbrevated ncomestatement has been dsclosed n the NV company accountson page 133 n accordance wth Secton 402, Book 2, of theNetherlands vl ode
ompanes legslaton and accountng standardsThe consoldated fnancal statements have been preparedn accordance wth Internatonal Fnancal Reportng Standards(IFRS) as adopted by the European Unon (EU), IFRI Interpretatonsand n accordance wth Part 9 of Book 2 of the vl ode n theNetherlands and the UK ompanes Act 2006 applcable tocompanes reportng under IFRS They are also n complancewth IFRS as ssued by the Internatonal Accountng StandardsBoard (IASB)
These fnancal statements are prepared under the hstorcalcost conventon unless otherwse ndcated
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NOTES TO THE ONSOLIDATED FINANIAL STATEMENTS UNILEVER ROUP
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IFRS 13 Far value measurement explans how to measurefar value and enhances far value dsclosures The standarddoes not sgnfcantly change the measurement of far valuebut codfes t n one place Ths standard has been endorsedby the EU
IFRS 9 Fnancal nstruments, replaces the currentclassfcaton and measurement models for fnancal assetswth two classfcaton categores amortsed cost and far valuelassfcaton s drven by the busness model for managng theassets and the contractual cash flow characterstcs Fnancallabltes are not affected by the changes Effectve from1 January 2015
Amendments to IAS 1 Presentaton of tems of othercomprehensve ncome wll result n tems of othercomprehensve ncome that may be reclassfed to proft orloss beng presented separately from tems that would never bereclassfed Endorsed by the EU and effectve from 1 July 2012
Amendments to IAS 32 Fnancal nstruments Presentaton(effectve from 1 January 2014) and IFRS 7 Fnancal
nstruments Dsclosures provde addtonal gudance on whenfnancal assets and labltes may be offset These standardshave been endorsed by the EU
Amendments to IFRS 10 onsoldated fnancal statements,IFRS 11 Jont arrangements and IFRS 12 Dsclosure ofnterests n other enttes on transton gudance
Amendments to IAS 1 Presentaton of Fnancal Statementsclarfes comparatve nformaton requrements
Amendments to IAS 16 Property, plant and equpmentexplans that servcng equpment s not classfed as nventorywhen used for more than one perod
Amendments to IAS 32 Fnancal Instruments Presentatonclarfes that the treatment of tax on dstrbutons and equtytransacton costs must follow IAS 12 Income taxes
Amendments to IAS 34 Interm Fnancal Reportng algns
the dsclosure requred for segment assets and labltes nnterm fnancal statements wth IFRS 8 Operatng segments
The EU has endorsed the followng standards, whch wll bemandatory from 1 January 2014 wth early applcaton permttedThs s a year later than the adopton dates n the standardsthemselves, whch requre that enttes complyng wth IFRS asssued by the IASB apply them from 1 January 2013 The roupwll adopt these standards from 1 January 2013, whch s a yearearly from an EU perspectve The mpact of the standards onthe consoldated results or fnancal poston of the roup wllnot be materal IFRS 10 onsoldated fnancal statements replaces current
gudance on control and consoldaton The core prncple thata consoldated entty presents a parent and ts subsdares
as f they were a sngle entty remans unchanged, as do themechancs of consoldaton IFRS 11 Jont arrangements requres ont arrangements
to be accounted for as a ont operaton or as a ont venturedependng on the rghts and oblgatons of each party to thearrangement Equty accountng for ont ventures, alreadyused by Unlever, wll become mandatory
IFRS 12 Dsclosure of nterests n other enttes requresenhanced dsclosures of the nature, rsks and fnancal effectsassocated wth the roups nterests n subsdares, assocates,
ont arrangements and unconsoldated structured enttes IAS 27 Separate fnancal statements (Revsed) The standard
s revsed to reflect the ssue of IFRS 10 IAS 28 Investments n assocates and ont ventures (Revsed)
The standard s revsed to reflect the ssue of IFRS 11
1 Accountng nformaton and polces contnued
rtcal accountng estmates and udgementsThe preparaton of fnancal statements requres managementto make udgements, estmates and assumptons n theapplcaton of accountng polces that affect the reportedamounts of assets, labltes, ncome and expenses Actualresults may dffer from these estmates Estmates and
udgements are contnuously evaluated and are based onhstorcal experence and other factors, ncludng expectatonsof future events that are beleved to be reasonable Revsonsto accountng estmates are recognsed n the perod n whchthe estmate s revsed and n any future perod affected
Informaton about crtcal udgements n applyng accountngpolces, as well as estmates and assumptons that have the mostsgnfcant rsk of causng a materal adustment to the carryngamounts of assets and labltes wthn the next fnancal year,are ncluded n the followng notes
separate presentaton of tems n the ncome statement note 3 measurement of defned beneft oblgatons note 4B key assumptons used n dscounted cash flow proectons
note 9 utlsaton of tax losses and recognton of other deferred tax
assets note 6B lkelhood of occurrence of provsons and contngences,
ncludng tax nvestgatons and audts notes 19 and 20 and measurement of consderaton and assets and labltes
acqured as part of busness combnatons note 21
Recent accountng developments
Adopted by the roup
The followng amended standards are relevant to the roup andhave been adopted for the frst tme n these fnancal statements,wth no materal mpact IFRS 7 Fnancal Instruments Dsclosures (Amendment) IAS 12 Income Taxes (Amendment) Deferred Taxes Recovery
of Underlyng Assets
Not adopted by the roupThe roup s currently assessng the mpact of the followngnew standards and amendments that are not yet effectve
The roup does not currently beleve adopton of these standardswould have a materal mpact on the consoldated results orfnancal poston of the roup All of the followng new standardsand amendments are effectve from 1 January 2013 unless
otherwse stated Standards have not yet been endorsed bythe EU unless otherwse stated IAS 19 Employee benefts (Revsed) changes a number of
dsclosure requrements for post-employment arrangementsand restrcts the accountng optons avalable for defned beneftpenson plans The return on penson plan assets and fnancecharge wll be replaced by a net nterest expense or ncome,calculated by applyng the lablty dscount rate to the netdefned beneft asset or lablty The roup expects ths changewll result n an ncrease n fnance costs of 150 mllon n 2012(179 mllon n 2011) wth a correspondng ncrease n actuaralgans or losses on penson schemes before tax when restatedunder the new standard The revsed standard has beenendorsed by the EU
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2 Segment nformaton
Segmental reportng
The roup has revsed ts operatng segments to algn wth the new structure under whch the busness s managed From 2012,operatng segment nformaton s provded based on four product areas rather than geographcal regons The four productareas arePersonal are ncludng sales of skncare and harcare products, deodorants and oral care productsFoods ncludng sales of soups, boullons, sauces, snacks, mayonnase, salad dressngs, margarnes and spreadsRefreshment ncludng sales of ce cream, tea-based beverages, weght-management products and nutrtonally enhanced
staples sold n developng marketsHome are ncludng sales of home care products, such as laundry tablets, powders and lquds, soap bars and a wde
range of cleanng products
Revenue recogntonTurnover comprses sales of goods after the deducton of dscounts, sales taxes and estmated returns It does not nclude salesbetween group companes Dscounts gven by Unlever nclude rebates, prce reductons and ncentves gven to customers,promotonal couponng and trade communcaton costs
Turnover s recognsed when the rsks and rewards of the underlyng products have been substantally transferred to the customerDependng on ndvdual customer terms, ths can be at the tme of dspatch, delvery or upon formal customer acceptance
ore operatng proftFrom 2012 the roup refers to core operatng proft whch means operatng proft before the mpact of non-core tems(refer to note 3 for explanaton of non-core tems)
mllon
Personal
are
mllon
Foods
mllon
Refreshment
mllon
Home are
mllon
Total
2012Turnover 18,097 14,444 9,726 9,057 51,324
Operatng proft 2,928 2,605 911 545 6,989Non-core tems 3 160 (73) (14) 73
ore operatng proft 3,088 2,532 911 531 7,062
Share of net proft/(loss) of ont ventures and assocates 1 5 99 105
Deprecaton and amortsaton 336 311 340 212 1,199Imparment and other non-cash charges(a) 189 141 106 128 564
2011Turnover 15,471 13,986 8,804 8,206 46,467
Operatng proft 2,536 2,693 723 481 6,433Non-core tems 3 187 (244) (47) (40) (144)
ore operatng proft 2,723 2,449 676 441 6,289
Share of net proft/(loss) of ont ventures and assocates 5 7 98 3 113
Deprecaton and amortsaton 272 286 281 190 1,029Imparment and other non-cash charges(a) 138 183 154 136 611
2010Turnover 13,767 14,164 8,605 7,726 44,262
Operatng proft 2,296 2,846 724 473 6,339Non-core tems 3 50 (464) (2) 108 (308)
ore operatng proft 2,346 2,382 722 581 6,031
Share of net proft/(loss) of ont ventures and assocates 7 18 92 (6) 111
Deprecaton and amortsaton 255 282 273 183 993Imparment and other non-cash charges(a) 123 132 81 190 526
(a)Other non-cash charges nclude charges to the ncome statement durng the year n respect of the share-based compensaton and provsons
92 UnleverAnnual Report and Accounts 2012Fnancal statements
NOTES TO THE ONSOLIDATED FINANIAL STATEMENTS UNILEVER ROUP contnued
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2 Segment nformaton contnued
The home countres of the Unlever roup are the Netherlands and the Unted Kngdom Turnover and non-current assets (b)for thesetwo countres combned, the USA and Brazl (beng the two largest countres outsde the home countres) and all other countres are
2012
mllonNetherlands/
Unted
Kngdom
mllon
USA
mllon
Brazl
mllon
All other
countres
mllon
Total
Turnover 3,980 7,834 3,813 35,697 51,324Non-current assets(b) 3,353 8,670 2,235 17,441 31,699
2011
Turnover 3,693 6,889 3,644 32,241 46,467Non-current assets(b) 2,915 9,286 2,525 16,593 31,319
2010
Turnover 3,490 6,725 3,502 30,545 44,262Non-current assets(b) 2,602 5,960 2,681 15,367 26,610(b)Non-current assets excludng fnancal assets, deferred tax assets and penson assets for funded schemes n surplus
No other country had turnover or non-current assets (as shown above) greater than 10% of the roup total
Addtonal nformaton by geographesAlthough the roups operatons are managed by product area, we provde addtonal nformaton based on geographes The analyssof turnover by geographcal area s stated on the bass of orgn Sales between geographcal areas are carred out at arms length andwere not materal
mllon
Asa/
AMET/
RUB(c)
mllon
The
Amercas
mllon
Europe
mllon
Total
2012Turnover 20,357 17,088 13,879 51,324
Operatng proft 2,637 2,433 1,919 6,989Non-core tems 30 (13) 56 73
ore operatng proft 2,667 2,420 1,975 7,062
Share of net proft/(loss) of ont ventures and assocates (2) 68 39 105
2011Turnover 17,723 15,251 13,493 46,467
Operatng proft 2,109 2,250 2,074 6,433Non-core tems 19 (127) (36) (144)
ore operatng proft 2,128 2,123 2,038 6,289
Share of net proft/(loss) of ont ventures and assocates (1) 67 47 113
2010
Turnover 16,460 14,562 13,240 44,262
Operatng proft 2,142 2,169 2,028 6,339Non-core tems (1) 6 (313) (308)
ore operatng proft 2,141 2,175 1,715 6,031
Share of net proft/(loss) of ont ventures and assocates (1) 69 43 111
(c)Refers to Asa, Afrca, Mddle East, Turkey, Russa, Ukrane and Belarus
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3 ross proft and operatng costs
Research and market support costs
Expendture on research and market support, such as advertsng, s charged to the ncome statement as ncurred
Non-core temsDsclosed on the face of the ncome statement are costs and revenues relatng to busness dsposals, acquston and dsposalrelated costs, mparments and other one-off tems, whch we collectvely term non-core tems due to ther nature andfrequency of occurrence These tems are materal n terms of nature and/or amount and are relevant to an understandngof our fnancal performance
Busness dsposals generate both gans and losses whch are not reflectve of underlyng performance Acquston and dsposalrelated costs are charges drectly attrbutable to the acquston or dsposal of group companes
mllon
2012
mllon
2011
mllon
2010
Turnover 51,324 46,467 44,262
ost of sales (30,703) (27,930) (25,890)ross proft 20,621 18,537 18,372Sellng and admnstratve expenses (13,632) (12,104) (12,033)
Operatng proft 6,989 6,433 6,339
Non-core temsNon-core tems are dsclosed on the face of the ncome statement to provde addtonal nformaton to users to help them betterunderstand underlyng busness performance
mllon
2012
mllon
2011
mllon
2010
Acquston and dsposal related costs (190) (234) (50)an/(loss) on dsposal of group companes 117 221 468Imparments and other one-off tems(a) 157 (110)
Non-core tems before tax (73) 144 308Tax mpact of non-core tems (14) (6) (12)
Non-core tems after tax (87) 138 296
Attrbutable toNon-controllng nterests Shareholders equty (87) 138 296
(a)Included n the 2011 balance s a past servce credt for the UK penson plan amountng to 153 mllon and the 2010 balance relates to provson for EUcompetton nvestgatons
OtherOther tems wthn operatng costs nclude
mllon
2012
mllon
2011
mllon
2010
Staff costs 4 (6,291) (5,345) (5,599)Dstrbuton costs (3,264) (3,080) (3,015)Raw and packagng materals and goods purchased for resale (20,998) ( 19,253) (17,636)Amortsaton of fnte-lfe ntangble assets and software 9 (213) (191) (174)Deprecaton of property, plant and equpment 10 (986) (838) (819)Advertsng and promotons (6,763) (6,069) (6,064)Research and development (1,003) (1,009) (928)Exchange gans/(losses) (118) (9) 7
On underlyng transactons (96) (45) (36)On coverng forward contracts (22) 36 43
Lease rentals (558) (452) (465)
Mnmum operatng lease payments (558) (456) (465)ontngent operatng lease payments (8) (3) (4)Less Sub-lease ncome relatng to operatng lease agreements 8 7 4
94 UnleverAnnual Report and Accounts 2012Fnancal statements
NOTES TO THE ONSOLIDATED FINANIAL STATEMENTS UNILEVER ROUP contnued
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4 Employees
4A Staff and management costs
Staff costs mllon
2012 mllon
2011 mllon
2010
Remuneraton of employees (5,133) (4,596) (4,572)Pensons and other post-employment benefts (346) (17) (276)Socal securty costs (659) (627) (607)Share-based compensaton costs (153) (105) (144)
(6,291) (5,345) (5,599)
Average number of employees durng the year000
2012
000
2011
000
2010
Asa/AMET/RUB 94 92 90The Amercas 43 42 40Europe 35 35 35
172 169 165
Key management compensaton mllon
2012
mllon
2011
mllon
2010
Salares and short-term employee benefts (28) (15) (17)Non-Executve Drectors fees (2) (2) (2)Post-employment benefts (2) (2) (2)Share-based benefts (10) (11) (10)
(42) (30) (31)
Of whchExecutve Drectors (12) (10) (7)Non-Executve Drectors (2) (2) (2)Other (28) (18) (22)
(42) (30) (31)
Key management personnel are defned as the members of the Unlever Leadershp Executve (ULE) and the Non-Executve Drectors
Detals of the remuneraton of Drectors are gven n the parts noted as audted n the Drectors Remuneraton Report on pages 62 to 81
4B Pensons and smlar oblgatons
For defned beneft plans, operatng and fnance costs are recognsed separately n the ncome statement The amount chargedto operatng cost n the ncome statement s the cost of accrung penson benefts promsed to employees over the year, plus thecosts of ndvdual events such as past servce beneft enhancements, settlements and curtalments (such events are recognsedmmedately n the ncome statement) The amount charged or credted to fnance costs ncludes a credt equvalent to the roupsexpected return on the penson plans assets over the year, offset by a charge equal to the expected ncrease n the plans labltes
over the year due to the passage of tme Any dfferences between the expected return on assets and the return actually acheved,and any changes n the labltes over the year due to changes n assumptons or experence wthn the plans, are recognsedmmedately n the statement of comprehensve ncome
The defned beneft plan surplus or defct on the balance sheet comprses the total for each plan of the far value of plan assetsless the present value of the defned beneft oblgaton (usng a dscount rate based on hgh qualty corporate bonds)
All defned beneft plans are subect to regular actuaral revew usng the proected unt method, ether by external consultants orby actuares employed by Unlever The roup polcy s that the most mportant plans, representng approxmately 80% of the defnedbeneft labltes, are formally valued every year Other prncpal plans, accountng for approxmately a further 15% of labltes, havether labltes updated each year roup polcy for the remanng plans requres a full actuaral valuaton at least every three yearsAsset values for all plans are updated every year
For defned contrbuton plans, the charges to the ncome statement are the company contrbutons payable, as the companysoblgaton s lmted to contrbutons pad nto the plans The assets and labltes of such plans are not ncluded n the balance
sheet of the roup
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4B Pensons and smlar oblgatons contnued
Descrpton of plansIn many countres the roup operates defned beneft penson plans based on employee pensonable remuneraton and length ofservce The maorty of these plans are externally funded The roup also provdes other post-employment benefts, manly post-employment healthcare plans n the Unted States These plans are predomnantly unfunded The roup also operates a numberof defned contrbuton plans, the assets of whch are held n external funds
The maorty of the roups externally funded plans are establshed as trusts, foundatons or smlar enttes The operaton of theseenttes s governed by local regulatons and practce n each country, as s the nature of the relatonshp between the roup and thetrustees (or equvalent) and ther composton
Investment strategyThe roups nvestment strategy n respect of ts funded penson plans s mplemented wthn the framework of the varous statutoryrequrements of the terrtores where the plans are based The roup has developed polcy gudelnes for the allocaton of assets todfferent classes wth the obectve of controllng rsk and mantanng the rght balance between rsk and long-term returns n orderto lmt the cost to the roup of the benefts provded To acheve ths, nvestments are well dversfed, such that the falure of any snglenvestment would not have a materal mpact on the overall level of assets The plans contnue to nvest a good proporton of the assetsn equtes, whch the roup beleves offer the best returns over the long term commensurate wth an acceptable level of rsk For
rsk control, the penson funds also have sgnfcant nvestments n lablty matchng assets (bonds) as well as n property and otheralternatve assets The maorty of assets are managed by a number of external fund managers wth a small proporton managedn-house Unlever has a pooled nvestment vehcle (Unvest) whch t beleves offers ts penson plans around the world a smplfedexternally managed nvestment vehcle to mplement ther strategc asset allocaton models, currently for bonds, equtes andalternatve assets The am s to provde hgh qualty, well dversfed, cost effectve, rsk-controlled vehcles The penson plansnvestments are overseen by Unlevers nternal nvestment company, the Unvest ompany
AssumptonsWth the obectve of presentng the assets and labltes of the pensons and other post-employment beneft plans at ther far value onthe balance sheet, assumptons under IAS 19 are set by reference to market condtons at the valuaton date The actuaral assumptonsused to calculate the beneft oblgatons vary accordng to the country n whch the plan s stuated The followng table shows theassumptons, weghted by labltes, used to value the prncpal defned beneft plans (whch cover approxmately 95% of total pensonlabltes) and the plans provdng other post-employment benefts, and n addton the expected long-term rates of return on assets,weghted by asset value
31 December 2012 31 December 2011
Prncpal
defned beneft
penson plans
Other
post-employment
beneft plans
Prncpal
defned beneft
penson plans
Other
post-employment
beneft plans
Dscount rate 39% 40% 46% 43%Inflaton 23% n/a 25% n/aRate of ncrease n salares 32% 36% 34% 35%Rate of ncrease for pensons n payment (where provded) 21% n/a 24% n/aRate of ncrease for pensons n deferment (where provded) 23% n/a 26% n/aLong-term medcal cost nflaton n/a 50% n/a 50%Expected long-term rates of return
Equtes 69% 72%Bonds 30% 38%Property 44% 47%Others 49% 62%
Weghted average asset return 50% 56%
The valuatons of other post-employment beneft plans generally assume a hgher ntal level of medcal cost nflaton, whch fallsfrom 70% to the long-term rate wthn the next fve years Assumed healthcare cost trend rates have a sgnfcant effect on the amountsreported for healthcare plans A one percentage pont change n assumed healthcare cost trend rates would have the followng effect
mllon
1% pont ncrease
mllon
1% pont decrease
Effect on total of servce and nterest cost components 1 (1)Effect on total beneft oblgaton 11 (12)
The expected rates of return on plan assets were determned, based on actuaral advce, by a process that takes the long-term ratesof return on government bonds avalable at the balance sheet date and apples to these rates sutable rsk premums that take accountof hstorc market returns and current market long-term expectatons for each asset class
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NOTES TO THE ONSOLIDATED FINANIAL STATEMENTS UNILEVER ROUP contnued
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4B Pensons and smlar oblgatons contnued
For the most mportant penson plans, representng approxmately 80% of all defned beneft plans by labltes, the assumptons usedat 31 December 2012 and 2011 were
Unted Kngdom Netherlands Unted States ermany
2012 2011 2012 2011 2012 2011 2012 2011
Dscount rate 43% 47% 31% 45% 38% 39% 31% 45%Inflaton 26% 30% 17% 18% 23% 23% 17% 18%Rate of ncrease n salares 36% 40% 22% 23% 35% 35% 28% 28%Rate of ncrease for pensons n payment(where provded) 25% 28% 17% 18% 17% 18%
Rate of ncrease for pensons n deferment(where provded) 26% 29% 17% 18%
Expected long-term rates of returnEqutes 71% 73% 65% 70% 70% 69% 65% 70%Bonds 35% 38% 25% 35% 35% 34% 25% 37%Property 46% 48% 40% 45% 45% 44% 40% 45%Others 57% 69% 34% 58% 50% 54% 43% 46%
Weghted average asset return 58% 62% 42% 50% 51% 50% 43% 49%
Number of years a current pensoner sexpected to lve beyond age 65
Men 217 217 220 215 195 190 194 194Women 236 235 235 233 215 209 230 230
Number of years a future pensoner currentlyaged 45 s expected to lve beyond age 65
Men 235 235 237 230 207 206 194 194Women 252 252 245 242 227 225 230 230
Demographc assumptons, such as mortalty rates, are set havng regard to the latest trends n lfe expectancy (ncludng expectatonsof future mprovements), plan experence and other relevant data These assumptons are revewed and updated as necessary as partof the perodc actuaral valuaton of the penson plans The years of lfe expectancy for 2012 above have been translated from thefollowng tables UK the year of use S1 seres all pensoners (S1AP) tables have been adopted, whch are based on the experence of UK penson
schemes over the perod 2000-2006 Scalng factors are appled reflectng the experence of our penson funds approprate to themembers gender and status Future mprovements n longevty have been allowed for n lne wth the 2009 MI ore Proectonsand a 1% pa long-term mprovement rate
The Netherlands the Dutch Actuaral Socetys A Prognosetafel 2012-2062 table s used wth correcton factors to allow for thetypcally longer lfe expectancy of penson fund members relatve to the general populaton Ths table has an n-bult allowancefor future mprovements n longevty
Unted States the table RP-2000 wth generatonal mortalty mprovement usng Scale BB Ths table has an n-bult allowancefor future mprovements n longevty
ermany fund specfc tables are used whch broadly equate to the Heubeck 2005 generatonal table proected to 2030
Assumptons for the remanng defned beneft plans vary consderably, dependng on the economc condtons of the countres wherethey are stuated
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4B Pensons and smlar oblgatons contnued
Income statementThe charge to the ncome statement comprses
mllon2012
mllon2011
mllon2010
harged to operatng proftDefned beneft penson and other beneft plans
urrent servce cost (278) (252) (261)Employee contrbutons 18 15 13Specal termnaton benefts (17) (31) (22)Past servce cost 27 195 60Settlements/curtalments 20 146 6
Defned contrbuton plans (116) (90) (72)
Total operatng cost 4A (346) (17) (276)
harged to net fnance costsInterest on retrement benefts (904) (908) (963)Expected return on assets 897 979 983
Total net fnance ncome/(cost) 5 (7) 71 20
Net mpact on the ncome statement (before tax) (353) 54 (256)
Sgnfcant tems on the face of the ncome statementIncluded n the 2011 balance are a past servce credt of 153 mllon, as Unlever mplemented amendments to certan constructveoblgatons n the UK that the company had the dscreton to amend and curtalment credts of 146 mllon relatng to beneft changesmanly n the UK, the USA and anada
Statement of comprehensve ncomeAmounts recognsed n the statement of comprehensve ncome comprse
mllon
2012
mllon
2011
mllon
2010
mllon
2009
mllon
2008
mllon
umulatve
1 January
2004 topresent
Actual return less expected return on penson and otherbeneft plan assets 1,221 (440) 677 1,277 (4,243) 750
Experence gans/(losses) arsng on penson plan and otherbeneft plan labltes (210) (74) 197 250 297
hanges n assumptons underlyng the present valueof the penson and other beneft plan labltes (1,826) (1,177) (716) (1,489) 1,116 (5,425)
Actuaral gan/(loss) (815) (1,691) 158 38 (3,127) (4,378)hange n unrecognsed surplus 103Refund of unrecognsed assets 15
Net actuaral gan/(loss) recognsed n statementof comprehensve ncome (before tax) (815) (1,691) 158 38 (3,127) (4,260)
98 UnleverAnnual Report and Accounts 2012Fnancal statements
NOTES TO THE ONSOLIDATED FINANIAL STATEMENTS UNILEVER ROUP contnued
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4B Pensons and smlar oblgatons contnued
Balance sheetThe assets, labltes and surplus/(defct) poston of the penson and other post-employment beneft plans and the expected rates ofreturn on the plan assets at the balance sheet date were
31 December 2012 31 December 2011
mllon mllon % mllon mllon %
Penson
plans
Other post-
employment
beneft
plans
Long-term
rates of
return
expected
Penson
plans
Other post-
employment
beneft
plans
Long-term
rates of
return
expected
Assets of prncpal plansEqutes 7,486 69% 6,860 72%Bonds 6,238 30% 6,120 38%Property 1,129 44% 1,007 47%Other 2,354 49% 1,633 62%
Assets of other plans 458 8 76% 417 7 79%
17,665 8 16,037 7Present value of labltes
Prncpal plans (19,772) (17,703) Other plans (900) (660) (887) (657)
(20,672) (660) (18,590) (657)
Aggregate net defct of the plans (3,007) (652) (2,553) (650)Irrecoverable surplus(a)
Penson lablty net of assets (3,007) (652) (2,553) (650)
Of whch n respect of
Funded plans n surplusLabltes (5,053) (1) (4,201) Assets 5,722 4 5,204
Aggregate surplus 669 3 1,003 Irrecoverable surplus(a)
Penson asset net of labltes 669 3 1,003
Funded plans n defctLabltes (14,216) (22) (13,101) (34)Assets 11,943 4 10,833 7
Penson lablty net of assets (2,273) (18) (2,268) (27)
Unfunded plansPenson lablty (1,403) (637) (1,288) (623)
(a)A surplus s deemed recoverable to the extent that the roup s able to beneft economcally from the surplus
Equty securtes nclude Unlever securtes amountng to 32 mllon (02% of total plan assets) and 41 mllon (03% of total planassets) at 31 December 2012 and 2011 respectvely Property ncludes property occuped by Unlever amountng to 16 mllon
and 14 mllon at 31 December 2012 and 2011 respectvely
The penson assets above exclude the assets n a Specal Benefts Trust amountng to 98 mllon (2011 110 mllon) to fund pensonand smlar oblgatons n the US (see also note 17A on page 122)
The senstvty of the overall penson labltes to changes n the weghted key fnancal assumptons are
hange n assumpton Impact on overall labltes
Dscount rate Increase/decrease by 05% Decrease/ncrease by 8%Inflaton rate Increase/decrease by 05% Increase/decrease by 6%
ABOUT UNILEVER OVERNANE FINANIAL STATEMENTS SHAREHOLDER INFORMATION
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4B Pensons and smlar oblgatons contnued
Reconclaton of change n assets and labltesMovements n assets and labltes durng the year
mllon
Assets
2012
mllon
Assets
2011
mllon
Assets
2010
mllon
Labltes
2012
mllon
Labltes
2011
mllon
Labltes
2010
1 January 16,044 15,974 14,413 (19,247) (18,044) (16,995)Acqustons/dsposals 11 3 (16) (4)urrent servce cost (278) (252) (261)Employee contrbutons 18 15 13 Specal termnaton benefts (17) (31) (22)Past servce costs 27 195 60Settlements/curtalments (6) (162) 26 146 168Expected returns on plan assets 897 979 983 Interest on penson labltes (904) (908) (963)Actuaral gan/(loss) 1,221 (440) 677 (2,036) (1,251) (519)Employer contrbutons 605 463 669 Beneft payments (1,227) (1,130) (1,146) 1,227 1,130 1,146Reclassfcaton of benefts(b) 17 19 (23) (9) (28)urrency retranslaton 104 172 505 (107) (207) (626)
31 December 17,673 16,044 15,974 (21,332) (19,247) (18,044)
(b)ertan oblgatons have been reclassfed as employee beneft oblgatons
The actual return on plan assets durng 2012 was 2,118 mllon beng the sum of 897 mllon and 1,221 mllon from the tableabove (2011 539 mllon)
Funded status of plans at the year end
mllon
2012
mllon
2011
mllon
2010
mllon
2009
mllon
2008
Total assets 17,673 16,044 15,974 14,413 11,719Total penson labltes (21,332) (19,247) (18,044) (16,995) (15,101)
Net labltes (3,659) (3,203) (2,070) (2,582) (3,382)Less unrecognsed surplus
Penson labltes net of assets (3,659) (3,203) (2,070) (2,582) (3,382)
ash flowroup cash flow n respect of pensons and smlar post-employment benefts comprses company contrbutons pad to fundedplans and benefts pad by the company n respect of unfunded plans, as set out n the followng table (ncludng the current estmateof contrbutons for 2013)
mllon
2013E
mllon
2012
mllon
2011
mllon
2010
ompany contrbutons to funded plansDefned beneft 610 435 297 482Defned contrbuton 130 116 90 72
Benefts pad by the company n respect of unfunded plansDefned beneft 160 170 166 187
roup cash flow n respect of pensons and smlar benefts 900 721 553 741
ontrbutons to funded defned beneft plans are subect to perodc revew, takng account of local legslaton
100 UnleverAnnual Report and Accounts 2012Fnancal statements
NOTES TO THE ONSOLIDATED FINANIAL STATEMENTS UNILEVER ROUP contnued
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4 Share-based compensaton plans
The far value of the awards at the grant date s calculated usng prcng models and recognsed over the vestng perod of the
grant as a remuneraton cost wth a correspondng ncrease n equty The value of the charge s adusted to reflect expected andactual levels of awards vestng, except where the falure to vest s as a result of not meetng a market condton ancellatonsof equty nstruments are treated as an acceleraton of the vestng perod and any outstandng charge s recognsed n the ncomestatement mmedately
As at 31 December 2012, the roup had share-based compensaton plans n the form of performance shares, share optonsand other share awards
The numbers n ths note nclude those for Executve Drectors shown n the Drectors Remuneraton Report on pages 62 to 81 andthose for key management personnel shown n note 4A on page 95 Non-Executve Drectors do not partcpate n any of the share-based compensaton plans
The charge n each of the last three years s shown below, and relates to equty settled plans
Income statement charge
mllon
2012
mllon
2011
mllon
2010
Performance share plans (147) (93) (120)Other plans (6) (12) (24)
(153) (105) (144)
Performance Share PlansPerformance share awards are made under the Management o-Investment Plan (MIP) and the lobal Share Incentve Plan (SIP)The MIP allows Unlevers managers to nvest up to 60% of ther annual bonus n shares n Unlever and to receve a correspondngaward of performance-related shares Under SIP Unlevers managers receve annual awards of NV and PL shares The awardsof both plans wll vest after three years between 0% and 200% of grant level, dependng on the satsfacton of performance metrcs
The performance metrcs of both MIP and SIP are underlyng sales growth, operatng cash flow and core operatng margnmprovement There s an addtonal target based on relatve total shareholder return (TSR) for senor executves
A summary of the status of the Performance Share Plans as at 31 December 2012, 2011 and 2010 and changes durng the years endedon these dates s presented below
2012
Number of
shares
2011
Number of
shares
2010
Number of
shares
Outstandng at 1 January 18,642,656 17,240,376 17,536,148Awarded 7,036,147 9,587,934 9,292,689Vested (6,277,057) (6,688,229) (8,626,746)Forfeted (1,370,645) (1,497,425) (961,715)
Outstandng at 31 December 18,031,101 18,642,656 17,240,376
2012 2011 2010
Share award value nformatonFar value per share award durng the year 2502 2291 2149
Addtonal nformatonAt 31 December 2012, there were optons outstandng to purchase 16,823,830 (2011 24,196,358) ordnary shares n NV or PL n respectof share-based compensaton plans of NV and ts subsdares and the North Amercan plans, and 9,418,749 (2011 10,396,180) ordnaryshares n NV or PL n respect of share-based compensaton plans of PL and ts subsdares
ABOUT UNILEVER OVERNANE FINANIAL STATEMENTS SHAREHOLDER INFORMATION
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4 Share-based compensaton plans contnued
To satsfy the optons granted, certan NV group companes hold 23,630,318 (2011 33,219,526) ordnary shares of NV or PL, and trustsn Jersey and the Unted Kngdom hold 1,205,856 (2011 3,042,111) PL shares The trustees of these trusts have agreed, untl furthernotce, to wave dvdends on these shares, save for the nomnal sum of 001p per 31/9p ordnary share Shares acqured durng 2012represent 0002% of the roups called up share captal The balance of shares held n connecton wth share plans at 31 December2012 represented 08% (2011 12%) of the roups called up share captal
The book value of 619 mllon (2011 799 mllon) of all shares held n respect of share-based compensaton plans for both NVand PL s elmnated on consoldaton by deducton from other reserves Ther market value at 31 December 2012 was 717 mllon(2011 954 mllon)
At 31 December 2012 there were no optons for whch the exercse prce was above market prce
Shares held to satsfy optons and related trusts are accounted for n accordance wth IAS 32 Fnancal Instruments Presentatonand SI 12 onsoldaton of Specal Purpose Enttes All dfferences between the purchase prce of the shares held to satsfy optonsgranted and the proceeds receved for the shares, whether on exercse or lapse, are charged to reserves The bass of the chargeto operatng proft for the economc value of optons granted s dscussed on page 101
Between 31 December 2012 and 4 March 2013, 6,262,639 shares were granted and 150,555 shares were forfeted related to thePerformance Share Plans
5 Net fnance costs
Net fnance costs s comprsed of fnance costs and fnance ncome, ncludng net fnance costs n relaton to pensons andsmlar oblgatons
Fnance ncome ncludes ncome on cash and cash equvalents and ncome on other fnancal assets Fnance costs nclude nterestcosts n relaton to fnancal labltes
Borrowng costs whch are not captalsed are recognsed based on the effectve nterest method
Net fnance costs mllon
2012
mllon
2011
mllon
2010
Fnance costs (526) (540) (491)
Bank loans and overdrafts (69) (59) (38)Bonds and other loans (451) (472) (441)Dvdends pad on preference shares (4) (5) (6)Net gan/(loss) on dervatves for whch hedge accountng s not appled(a) (2) (4) (6)
On foregn exchange dervatves (19) (379) (601)Exchange dfference on underlyng tems 17 375 595
Fnance ncome 136 92 77Pensons and smlar oblgatons(b) (7) 71 20
(397) (377) (394)
(a)For further detals of dervatves for whch hedge accountng s not appled please refer to note 16 on page 120(b)Net fnance costs n respect of pensons and smlar oblgatons are analysed n note 4B on page 98
6 Taxaton
6A Income tax
Income tax on the proft for the year comprses current and deferred tax Income tax s recognsed n the ncome statementexcept to the extent that t relates to tems recognsed drectly n equty
urrent tax s the expected tax payable on the taxable ncome for the year, usng tax rates enacted or substantvely enactedat the balance sheet date, and any adustments to tax payable n respect of prevous years
102 UnleverAnnual Report and Accounts 2012Fnancal statements
NOTES TO THE ONSOLIDATED FINANIAL STATEMENTS UNILEVER ROUP contnued
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6A Income tax contnued
Tax charge n ncome statement mllon
2012
mllon
2011
mllon
2010
urrent taxurrent year (1,897) (1,571) (1,479)Over/(under) provded n pror years (135) 93 88
(2,032) (1,478) (1,391)
Deferred taxOrgnaton and reversal of temporary dfferences 164 (179) (237)hanges n tax rates 81 1 (2)Recognton of prevously unrecognsed losses brought forward 52 34 96
297 (144) (143)
(1,735) (1,622) (1,534)
The reconclaton between the computed weghted average rate of ncome tax expense, whch s generally applcable to Unlevercompanes, and the actual rate of taxaton charged s as follows
Reconclaton of effectve tax rate%
2012%
2011%
2010
omputed rate of tax(a) 26 27 28Dfferences due to
Incentve tax credts (5) (5) (5)Wthholdng tax on dvdends 2 2 2Adustments to prevous years (1) (3)Expenses not deductble for tax purposes 2 1 1Other 1 2 3
Effectve tax rate 26 26 26
(a)The computed tax rate used s the average of the standard rate of tax applcable n the countres n whch Unlever operates, weghted by the amount of proftbefore taxaton generated n each of those countres For ths reason the rate may vary from year to year accordng to the mx of proft and related tax rates
6B Deferred tax
Deferred tax s recognsed usng the lablty method on taxable temporary dfferences between the tax base and the accountngbase of tems ncluded n the balance sheet of the roup ertan temporary dfferences are not provded for as follows goodwll not deductble for tax purposes the ntal recognton of assets or labltes that affect nether accountng nor taxable proft and dfferences relatng to nvestments n subsdares to the extent that they wll probably not reverse n the foreseeable futureThe amount of deferred tax provded s based on the expected manner of realsaton or settlement of the carryng amount of assetsand labltes, usng tax rates enacted, or substantvely enacted, at the year end
A deferred tax asset s recognsed only to the extent that t s probable that future taxable profts wll be avalable aganst whchthe asset can be utlsed Deferred tax assets are reduced to the extent that t s no longer probable that the related tax beneftwll be realsed
Movements n 2012 and 2011
mllon
As at
1 January
2012
mllon
Income
statement
mllon
Other
mllon
As at
31 December
2012
mllon
As at
1 January
2011
mllon
Income
statement
mllon
Other
mllon
As at
31 December
2011
Pensons and smlar oblgatons 748 (39) 125 834 440 (113) 421 748Provsons 661 105 (147) 619 701 (45) 5 661oodwll and ntangble assets (1,721) 92 193 (1,436) (1,122) 78 (677) (1,721)Accelerated tax deprecaton (668) (45) 90 (623) (540) (60) (68) (668)Tax losses 100 43 (9) 134 117 (21) 4 100Far value gans (20) 6 (7) (21) (25) (12) 17 (20)Far value losses 31 5 (24) 12 13 2 16 31Share-based payments 118 64 (10) 172 120 (19) 17 118Other 47 66 (84) 29 23 46 (22) 47
(704) 297 127 (280) (273) (144) (287) (704)
ABOUT UNILEVER OVERNANE FINANIAL STATEMENTS SHAREHOLDER INFORMATION
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6B Deferred tax contnued
At the balance sheet date, the roup has unused tax losses of 1,582 mllon (2011 1,568 mllon) and tax credts amountng to120 mllon (2011 39 mllon) avalable for offset aganst future taxable profts Deferred tax assets have not been recognsed nrespect of unused tax losses of 1,234 mllon (2011 1,191 mllon) and tax credts of 120 mllon (2011 38 mllon), as t s notprobable that there wll be future taxable profts wthn the enttes aganst whch the losses can be utlsed The maorty of thesetax losses and credts arse n tax ursdctons where they do not expre wth the excepton of 516 mllon (2011 512 mllon)of state and federal tax losses n the US whch expre between now and 2031
Other deductble temporary dfferences of 39 mllon (2011 58 mllon) have not been recognsed as a deferred tax assetThere s no expry date for these dfferences
At the balance sheet date, the aggregate amount of temporary dfferences assocated wth undstrbuted earnngs of subsdaresfor whch deferred tax labltes have not been recognsed was 1,449 mllon (2011 1,443 mllon) No lablty has been recognsedn respect of these dfferences because the roup s n a poston to control the tmng of the reversal of the temporary dfferences,and t s probable that such dfferences wll not reverse n the foreseeable future
Deferred ncome tax assets and labltes are offset when there s a legally enforceable rght to set off current tax assets aganstcurrent tax labltes and when the deferred ncome taxes relate to the same fscal authorty The followng amounts, determned
after approprate offsettng, are shown n the consoldated balance sheet
Deferred tax assets and labltes
mllon
Assets
2012
mllon
Assets
2011
mllon
Labltes
2012
mllon
Labltes
2011
mllon
Total
2012
mllon
Total
2011
Pensons and smlar oblgatons 614 555 220 193 834 748Provsons 561 419 58 242 619 661oodwll and ntangble assets (111) (612) (1,325) (1,109) (1,436) (1,721)Accelerated tax deprecaton (175) (129) (448) (539) (623) (668)Tax losses 133 69 1 31 134 100Far value gans 7 (1) (28) (19) (21) (20)Far value losses 1 27 11 4 12 31Share-based payments 51 63 121 55 172 118Other 32 30 (3) 17 29 47
1,113 421 (1,393) (1,125) (280) (704)
Of whch deferred tax to be recovered/(settled) aftermore than 12 months 725 163 (1,378) (1,131) (653) (968)
6 Tax on other comprehensve ncome
Income tax s recognsed n other comprehensve ncome for tems recognsed drectly n equty
Tax effects of the components of other comprehensve ncome were as follows
mllon
Before
tax2012
mllon
Tax
charge/
credt2012
mllon
After
tax2012
mllon
Before
tax2011
mllon
Tax
charge/
credt2011
mllon
After
tax2011
Far value gans/(losses) on fnancal nstruments (130) 5 (125) (194) 26 (168)Actuaral gans/(losses) on penson schemes (815) 171 (644) (1,691) 448 (1,243)urrency retranslaton gans/(losses) (307) (9) (316) (713) 10 (703)
(1,252) 167 (1,085) (2,598) 484 (2,114)
104 UnleverAnnual Report and Accounts 2012Fnancal statements
NOTES TO THE ONSOLIDATED FINANIAL STATEMENTS UNILEVER ROUP contnued
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7 ombned earnngs per share
The calculatons of combned earnngs per share are based on the net proft attrbutable to ordnary share captal dvded by the
average number of share unts representng the combned ordnary share captal of NV and PL n ssue durng the year, afterdeductng shares held as treasury stock
The calculatons of dluted earnngs per share and core earnngs per share (ore EPS) are based on () converson nto PL ordnaryshares of those shares n a group company whch are convertble n the year 2038, as descrbed n orporate overnance report onpage 51 and () the effect of share-based compensaton plans, detals of whch are set out n note 4 on pages 101 to 102
ombned earnngs per share
2012
2011
2010
Basc earnngs per share 158 151 151Dluted earnngs per share 154 146 146ore EPS 157 141 136
Mllons of share unts
alculaton of average number of share unts 2012 2011 2010
Average number of shares NV 1,7147 1,7147 1,7147PL 1,3102 1,3102 1,3102
Less shares held by employee share trusts and companes (1961) (2090) (2126)
ombned average number of share unts 2,8288 2,8159 2,8123Add shares ssuable n 2038 709 709 709Add dlutve effect of share-based compensaton plans 162 213 219
Dluted combned average number of share unts 2,9159 2,9081 2,9051
alculaton of earnngs mllon
2012
mllon
2011
mllon
2010
Net proft 4,948 4,623 4,598Non-controllng nterests (468) (371) (354)
Net proft attrbutable to shareholders equty 4,480 4,252 4,244
alculaton of core earnngs mllon
2012
mllon
2011
mllon
2010
Net proft attrbutable to shareholders equty 4,480 4,252 4,244Post tax mpact of non-core tems 3 87 (138) (296)
ore proft attrbutable to shareholders equty 4,567 4,114 3,948
8 Dvdends on ordnary captal
Dvdends are recognsed on the date that the shareholders rght to receve payment s establshed Ths s generally the datewhen the dvdend s declared
Dvdends on ordnary captal durng the year mllon
2012
mllon
2011
mllon
2010
NV dvdends (1,482) (1,368) (1,270)PL dvdends (1,214) (1,119) (1,039)
(2,696) (2,487) (2,309)
Four quarterly nterm dvdends were declared and pad durng 2012 totallng 095 (2011 088) per NV ordnary share and 077(2011 077) per PL ordnary share
Quarterly dvdends of 02430 per NV ordnary share and 02039 per PL ordnary share were declared on 23 January 2013,to be payable n March 2013 See note 25 Events after the balance sheet date on page 129 Total dvdends declared n relaton to 2012
were 097 (2011 090) per NV ordnar y share and 079 (2011 078) per PL ordnary share
ABOUT UNILEVER OVERNANE FINANIAL STATEMENTS SHAREHOLDER INFORMATION
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9 oodwll and ntangble assets
oodwll
oodwll s ntally recognsed based on the accountng polcy for busness combnatons (see note 21) oodwll s subsequentlymeasured at cost less amounts provded for mparment The roups cash generatng unts (Us) are based on the four productcategores and the three geographcal areas
oodwll acqured n a busness combnaton s allocated to the roups Us, or groups of Us, that are expected to beneft fromthe synerges of the combnaton These mght not always be the same as the Us that nclude the assets and labltes of the acquredbusness Each unt or group of unts to whch the goodwll s allocated represents the lowest level wthn the roup at whch the goodwlls montored for nternal management purposes, and s not larger than an operatng segment
Intangble assetsSeparately purchased ntangble assets are ntally measured at cost On acquston of new nterests n group companes,Unlever recognses any specfcally dentfable ntangble assets separately from goodwll Intangble assets are ntallymeasured at far value as at the date of acquston
Fnte-lfe ntangble assets manly comprse patented and non-patented technology, know-how and software These assets are
captalsed and amortsed on a straght-lne bass n the ncome statement over the perod of ther expected useful lves, or theperod of legal rghts f shorter None of the amortsaton perods exceeds ten years Indefnte-lfe ntangbles manly comprsetrademarks and brands These assets are captalsed at cost but are not amortsed They are subect to a revew for mparmentannually, or more frequently f events or crcumstances ndcate ths s necessary Any mparment s charged to the ncomestatement as t arses
Research and developmentDevelopment expendture s captalsed only f the costs can be relably measured, future economc benefts are probable,the product s techncally feasble and the roup has the ntent and the resources to complete the proect Research expendtures recognsed n proft or loss as ncurred
Movements durng 2012
mllon
oodwll
mllon
Indefnte-lfe
ntangble
assets
mllon
Fnte-lfe
ntangble
assets
mllon
Software
mllon
Total
ost1 January 2012 15,929 6,609 663 1,152 24,353Acqustons of group companes 10 9 19Dsposals of group companes (22) (7) (29)Reclassed to held for dsposal (44) (70) (114)Addtons 29 10 396 435Dsposals (10) (1) (45) (56)urrency retranslaton (238) (24) (2) (23) (287)
31 December 2012 15,635 6,536 670 1,480 24,321
Amortsaton and mparment1 January 2012 (1,033) (245) (601) (561) (2,440)Amortsaton for the year (43) (170) (213)Dsposals 11 11urrency retranslaton 17 7 3 12 39
31 December 2012 (1,016) (238) (641) (708) (2,603)
Net book value 31 December 2012 14,619 6,298 29 772 21,718
Movements durng 2011
ost1 January 2011 14,150 4,757 644 899 20,450Acqustons of group companes 1,677 1,935 15 5 3,632Dsposals of group companes (4) (263) (267)Addtons 8 2 260 270Dsposals (16) (16)urrency retranslaton 106 172 2 4 284
31 December 2011 15,929 6,609 663 1,152 24,353
Amortsaton and mparment1 January 2011 (1,007) (235) (540) (435) (2,217)
Amortsaton for the year (58) (133) (191)Dsposals 5 5urrency retranslaton (26) (10) (3) 2 (37)
31 December 2011 (1,033) (245) (601) (561) (2,440)
Net book value 31 December 2011 14,896 6,364 62 591 21,913
106 UnleverAnnual Report and Accounts 2012Fnancal statements
NOTES TO THE ONSOLIDATED FINANIAL STATEMENTS UNILEVER ROUP contnued
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9 oodwll and ntangble assets contnued
There are no sgnfcant carryng amounts of goodwll and ntangble assets that are allocated across multple cash generatng unts
Imparment chargesWe have tested all materal goodwll and ndefnte-lfe ntangble assets for mparment No mparments were dentfed
Sgnfcant UsThe goodwll and ndefnte-lfe ntangble assets held n the three Us relatng to Foods across the geographcal areas are consderedsgnfcant wthn the total carryng amounts of goodwll and ndefnte-lfe ntangble assets at 31 December 2012 n terms of sze, headroomand senstvty to assumptons used No other Us are consdered sgnfcant n ths respect
The goodwll and ndefnte-lfe ntangble assets held n the sgnfcant Us are
bllon
2012
oodwll
bllon
2012
Indefnte-
lfe
ntangbles
bllon
2011
oodwll
bllon
2011
Indefnte-
lfe
ntangbles
Foods Europe 58 16 57 16Foods The Amercas 39 14 41 15Foods Asa/AMET/RUB 14 04 15 04
Durng 2012, the roup conducted an mparment revew of the carryng value of these assets as part of ts comprehensve annualrevew Value n use has been calculated as the present value of proected future cash flows A pre-tax dscount rate of 74% was used
For the sgnfcant Us, the followng key assumptons were used n the dscounted cash flow proectons
Foods
Europe
Foods
The
Amercas
Foods
Asa/AMET/
RUB
Longer-term sustanable growth rates 03% 16% 33%Average near-term nomnal growth rates 08% 49% 105%Average operatng margns 22-24% 17-20% 13-16%
The growth rates and margns used to estmate future performance are based on past performance and our experence of growth ratesand margns achevable n our key markets
The proectons covered a perod of fve years, as we beleve ths to be the most approprate tmescale over whch to revew andconsder annual performances before applyng a fxed termnal value multple to the fnal year cash flows
The growth rates used are consstent wth our annual plannng and strategc plannng processes
We have performed senstvty analyses around the base assumptons and have concluded that no reasonable possble changes n keyassumptons would cause the recoverable amount of the sgnfcant Us to be less than the carryng value
10 Property, plant and equpment
Property, plant and equpment s measured at cost ncludng elgble borrowng costs less deprecaton and accumulatedmparment losses
Deprecaton s provded on a straght-lne bass over the expected average useful lves of the assets Resdual values are revewedat least annually Estmated useful lves by maor class of assets are as follows Freehold buldngs (no deprecaton on freehold land) 40 years Leasehold land and buldngs 40 years (or lfe of lease f less) Plant and equpment 2-20 years
Property, plant and equpment s subect to revew for mparment f trggerng events or crcumstances ndcate that ths snecessary If an ndcaton of mparment exsts, the asset or cash generatng unt recoverable amount s estmated and anymparment loss s charged to the ncome statement as t arses
ABOUT UNILEVER OVERNANE FINANIAL STATEMENTS SHAREHOLDER INFORMATION
107UnleverAnnual Report and Accounts 2012 Fnancal statements
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10 Property, plant and equpment contnued
Movements durng 2012
mllon
Land and
buldngs
mllon
Plant and
equpment
mllon
Total
ost1 January 2012 3,875 12,592 16,467Acqustons 1 1Dsposals of group companes (52) (52)Addtons 293 1,694 1,987Dsposals (65) (516) (581)urrency retranslaton (52) (181) (233)Reclassfcaton as held for sale (50) (77) (127)Other adustments 5 42 47
31 December 2012 4,006 13,503 17,509
Deprecaton1 January 2012 (1,237) (6,456) (7,693)Dsposals of group companes 9 9Deprecaton charge for the year (121) (865) (986)Dsposals 40 448 488urrency retranslaton 13 71 84Reclassfcaton as held for sale 22 64 86Other adustments (3) (49) (52)
31 December 2012 (1,286) (6,778) (8,064)
Net book value 31 December 2012 2,720 6,725 9,445(a)
Includes payments on account and assets n course of constructon 188 1,343 1,531
Movements durng 2011
ost1 January 2011 3,582 11,836 15,418Acqustons 76 107 183Dsposals of group companes (36) (86) (122)Addtons 346 1,502 1,848Dsposals (88) (603) (691)
urrency retranslaton (51) (177) (228)Reclassfcaton as held for sale 26 51 77Other adustments 20 (38) (18)
31 December 2011 3,875 12,592 16,467
Deprecaton1 January 2011 (1,209) (6,355) (7,564)Dsposals of group companes 12 38 50Deprecaton charge for the year (96) (742) (838)Dsposals 69 515 584urrency retranslaton 1 82 83Reclassfcaton as held f