SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 20-F
(Mark one) | ||
☐ | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
OR | ||
☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2016 | ||
OR | ||
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
OR | ||
☐ | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Date of event requiring this shell company report
For the transition period from to
Commission file number 001-04546
UNILEVER PLC
(Exact name of Registrant as specified in its charter)
ENGLAND
(Jurisdiction of incorporation or organization)
100 Victoria Embankment, London, England
(Address of principal executive offices)
T. E. Lovell, Group Secretary
Tel: +44(0)2078225252, Fax: +44(0)2078225464
100 Victoria Embankment, London EC4Y 0DY, UK
(Name, telephone number, facsimile number and address of Company Contact)
Securities registered or to be registered pursuant to Section 12(b) of the Act:
Title of each class |
Name of each exchange on which registered | |
American Shares (evidenced by Depositary Receipts) each representing one ordinary share of the nominal amount of 3 1/9p each | New York Stock Exchange | |
0.85% Notes due 2017 2.2% Notes due 2019 2.1% Notes due 2020 4.25% Notes due 2021 1.375% Notes due 2021 3.1% Notes due 2025 2.0% Notes due 2026 5.9% Notes due 2032 4.8% Notes due 2019 |
New York Stock Exchange New York Stock Exchange New York Stock Exchange New York Stock Exchange New York Stock Exchange New York Stock Exchange New York Stock Exchange New York Stock Exchange New York Stock Exchange |
Securities registered or to be registered pursuant to Section 12(g) of the Act: None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None
Indicate the number of outstanding shares of each of the issuers classes of capital or common stock as of the close of the period covered by the annual report.
The total number of outstanding shares of the issuers capital stock at the close of the period covered by the annual report was: 1,310,156,361 ordinary shares
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act:
Yes ☒ No ☐
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934:
Yes ☐ No ☒
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes ☐ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act.
Large Accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
U.S. GAAP ☐ | International Financial Reporting Standards as issued by the International Accounting Standards Board ☒ | Other ☐ |
If Other has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow. Item 17 ☐ Item 18 ☐
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act):
Yes ☐ No ☒
CAUTIONARY STATEMENT
This document may contain forward-looking statements, including forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995. Words such as will, aim, expects, anticipates, intends, looks, believes, vision, or the negative of these terms and other similar expressions of future performance or results, and their negatives, are intended to identify such forward-looking statements. These forward-looking statements are based upon current expectations and assumptions regarding anticipated developments and other factors affecting the Unilever Group (the Group). They are not historical facts, nor are they guarantees of future performance.
Because these forward-looking statements involve risks and uncertainties, there are important factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements. Among other risks and uncertainties, the material or principal factors which could cause actual results to differ materially are: Unilevers global brands not meeting consumer preferences; Unilevers ability to innovate and remain competitive; Unilevers investment choices in its portfolio management; inability to find sustainable solutions to support long-term growth; customer relationships; the recruitment and retention of talented employees; disruptions in our supply chain; the cost of raw materials and commodities; the production of safe and high quality products; secure and reliable IT infrastructure; successful execution of acquisitions, divestitures and business transformation projects; economic and political risks and natural disasters; the effect of climate change on Unilevers business; financial risks; failure to meet high and ethical standards; and managing regulatory, tax and legal matters.
These forward-looking statements speak only as of the date of this document. Except as required by any applicable law or regulation, the Group expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Groups expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.
Further details of potential risks and uncertainties affecting the Group are described in the Groups filings with the London Stock Exchange, Euronext Amsterdam and the US Securities and Exchange Commission, including in the Unilever Annual Report and Accounts 2016.
MAKING
SUSTAINABLE LIVING
COMMONPLACE
ANNUAL REPORT ON
FORM 20-F 2016
ABOUT US | OUR PURPOSE |
Annual Report on Form 20-F 2016 | Strategic Report | 1 |
CHAIRMANS STATEMENT |
2 | Strategic Report | Annual Report on Form 20-F 2016 |
BOARD OF DIRECTORS |
MARIJN DEKKERS. Chairman. Previous relevant experience: Bayer AG (CEO); Thermo Fisher Scientific Inc. (CEO). Current external appointments: General Electric (NED)
ANN FUDGE. Vice-Chairman/Senior Independent Director. Previous relevant experience: General Electric (NED); Marriott International (NED); Young & Rubicam (Chairman and CEO). Current external appointments: Novartis AG (NED); Northrop Grumman (NED); US Programs Advisory Panel of Gates Foundation (Chairman); Brookings (Honorary Trustee); Catalyst (Honorary Director)
PAUL POLMAN. CEO, Dutch, Male, 60. Appointed CEO: January 2009. Appointed Director: October 2008. Previous relevant experience: Procter & Gamble Co. (Group President, Europe); Nestlé S.A. (CFO); Alcon Inc (Director). Current external appointments: The Dow Chemical Company (NED); World Business Council for Sustainable Development (Chairman, Executive Committee); UN Global Compact (Board member); UK Business Ambassador
GRAEME PITKETHLY. CFO, British, Male, 50. Appointed CFO: October 2015. Appointed Director: April 2016. Previous Unilever posts include: Unilever UK and Ireland (EVP and General Manager); Finance Global Markets (EVP); Group Treasurer; Head of Mergers & Acquisitions; Unilever Indonesia (CFO); Group Chief Accountant
NILS SMEDEGAARD ANDERSEN. Previous relevant experience: A.P. Moller Maersk A/S (Group CEO); Inditex (NED); Carlsberg A/S and Carlsberg Breweries A/S (CEO); Danske Sukkerfabrikker; Tuborg International; Union Cervecera; Hannen Brauerei; Hero Group; European Round Table of Industrialists (Vice-Chairman). Current external appointments: Dansk Supermarket Group (Chairman); BP PLC (NED)
LAURA CHA. Previous relevant experience: Securities and Futures Commission, Hong Kong; China Securities Regulatory Commission. Current external appointments: HSBC Holdings plc (Independent NED); China Telecom Corporation Limited (Independent NED); The Hongkong and Shanghai Banking Corporation (Non-executive deputy Chairman); Foundation Asset Management AB (Senior international advisor)
VITTORIO COLAO. Previous relevant experience: RCS MediaGroup (CEO); McKinsey & Co (Partner); Finmeccanica Group (NED); RAS Insurance (NED). Current external appointments: Vodafone Group Plc (CEO); Bocconi University (International Advisory Board); Harvard Business School (Deans Advisory Board); European Round Table of Industrialists (Vice-Chairman); Oxford Martin School (Advisor)
PROFESSOR LOUISE FRESCO. Previous relevant experience: Rabobank (Supervisory Director); Agriculture Department of the UNs Food and Agriculture Organisation (Assistant director-general for agriculture). Current external appointments: Wageningen UR (President of the Executive Board)
JUDITH HARTMANN. Previous relevant experience: Bertelsmann SE & Co. KGaA (CFO); General Electric; The Walt Disney Company; RTL Group (NED); Penguin Random House (NED); Gruner + Jahr GmbH & Co KG (NED). Current external appointments: Suez (NED); ENGIE (CFO)
MARY MA. Previous relevant experience: TPG Capital (Partner); TPG China (Co-Chairman). Current external appointments: Boyu Capital (Managing Partner); MXZ Investment Limited (Director); Lenovo (NED); Securities and Futures Commission in Hong Kong (NED)
STRIVE MASIYIWA. Previous relevant experience: Africa Against Ebola Solidarity Trust (Co-Founder and Chairman); Grow Africa (Co-Chairman); Micronutrient Initiative (Chairman). Current external appointments: Econet Group (Founder and Executive Chairman); AGRA (Chairman); Rockefeller Foundation (Board member); US Council on Foreign Relations (Member Global Advisory Board); Africa Progress Panel (Board member); Asia Society (Trustee)
YOUNGME MOON. Previous relevant experience: Harvard Business School (Chairman and Senior Associated Dean for the MBA Program); Massachusetts Institute of Technology (Professor); American Red Cross (Board of Governors Member). Current external appointments: Avid Technology (NED); Rakuten (NED); Harvard Business School (Professor)
JOHN RISHTON. Previous relevant experience: Rolls-Royce Holdings plc (CEO); Royal Ahold N.V. (CEO, President and CFO); ICA AB (NED); Allied Domecq plc (NED); AeroSpace and Defence Trade Organisation (ASD) (Board member); British Airways plc (CFO). Current external appointments: Informa PLC (NED); Serco Group PLC (NED); Associated British Ports (NED)
FEIKE SIJBESMA. Previous relevant experience: Supervisory Board of DSM Netherlands (Chairman); Dutch Genomics Initiative (NGI) (Member); Utrecht University (Board member); Dutch Cancer Institute (NKI/AVL) (Board member). Current external appointments: Royal DSM N.V. (CEO and Chairman of the Managing Board); De Nederlandsche Bank (Member of the Supervisory Board); Carbon Pricing Leadership Coalition (Co-Chairman) and Climate Leader, convened by the World Bank Group
Unilevers Group Secretary is Tonia Lovell and she was appointed in 2010.
OVERVIEW OF NON-EXECUTIVE DIRECTORS INCLUDING DIVERSITY AND EXPERIENCE
Marijn | Nils | Laura | Vittorio | Louise | Ann | Judith | Mary | Strive | Youngme | John | Feike | |||||||||||||
Dekkers | Andersen | Cha | Colao | Fresco | Fudge | Hartmann | Ma | Masiyiwa | Moon | Rishton | Sijbesma | |||||||||||||
Age |
59 | 58 | 67 | 55 | 65 | 65 | 47 | 64 | 56 | 52 | 59 | 57 | ||||||||||||
Gender |
Male | Male | Female | Male | Female | Female | Female | Female | Male | Female | Male | Male | ||||||||||||
Nationality |
Dutch / American |
Danish | Chinese | Italian | Dutch | American | Austrian | Chinese | Zimbab- wean |
American | British | Dutch | ||||||||||||
Appointment date |
April 2016 |
April 2015 |
May 2013 |
July 2015 |
May 2009 |
May 2009 |
April 2015 |
May 2013 |
April 2016 |
April 2016 |
May 2013 |
November 2014 | ||||||||||||
Committee membership* |
CC, NCGC | AC | CRC, NCGC | CC | CRC (Chairman) |
CC (Chairman) |
AC | AC | CC | CRC | AC (Chairman) |
NCGC (Chairman), CRC | ||||||||||||
Attendance at planned Board Meetings** |
3/3 | 6/6 | 6/6 | 6/6 | 6/6 | 6/6 | 6/6 | 6/6 | 3/3 | 3/3 | 6/6 | 6/6 | ||||||||||||
Attendance at ad hoc Board Meetings |
2/2 | 1/2 | 1/2 | 1/2 | 1/2 | 2/2 | 2/2 | 2/2 | 2/2 | 2/2 | 0/2 | 2/2 | ||||||||||||
Consumer |
✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | |||||||||||||||
Sales & Marketing |
✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ||||||||||||||||||
Geopolitical networks and insights |
✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ||||||||||||||
Science & Technology |
✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ||||||||||||||||||
Finance |
✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | |||||||||||||||
* | AC refers to the Audit Committee; CC refers to the Compensation Committee; CRC refers to the Corporate Responsibility Committee; and NCGC refers to the Nominating and Corporate Governance Committee. |
** | Attendance is expressed as the number of meetings attended out of the number eligible to be attended. |
Annual Report on Form 20-F 2016 | Strategic Report | 3 |
CHIEF EXECUTIVE OFFICERS REVIEW |
4 | Strategic Report | Annual Report on Form 20-F 2016 |
UNILEVER LEADERSHIP EXECUTIVE (ULE) |
FOR PAUL POLMAN AND GRAEME PITKETHLY SEE PAGE 3
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DAVID BLANCHARD Chief R&D Officer
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MARC ENGEL Chief Supply Chain Officer |
KEVIN HAVELOCK President, Refreshment |
ALAN JOPE President, Personal Care | |||
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Nationality British Age 52, Male Appointed to ULE January 2013 Joined Unilever 1986 Previous Unilever posts include: Unilever Research & Development (SVP); Unilever Canada Inc. (Chairman); Foods America (SVP Marketing Operations); Global Dressings (VP R&D); Margarine and Spreads (Director of Product Development) Current external appointments: Ingleby Farms and Forests (NED) |
Nationality Dutch Age 50, Male Appointed to ULE January 2016 Joined Unilever 1990 Previous Unilever posts include: Unilever East Africa and Emerging Markets (EVP); Chief Procurement Officer; Supply Chain, Spreads, Dressings and Olive Oil Europe (VP); Ice Cream Brazil (Managing Director); Ice Cream Brazil (VP); Corporate Strategy Group; Birds Eye Walls, Unilever UK (Operations Manager) Current external appointments: PostNL (Member of the Supervisory Board)
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Nationality British Age 59, Male Appointed to ULE November 2011 Joined Unilever 1985 Previous Unilever posts include: Global Ice Cream Category (EVP); Unilever North America and Caribbean (EVP); Unilever France (Président Directeur Général); Unilever Arabia (Chairman); Unilever UK (Chairman) Current external appointments: Pepsi/Lipton JV (Co-Chairman) |
Nationality British Age 52, Male Appointed to ULE November 2011 Joined Unilever 1985 Previous Unilever posts include: Unilever Russia, Africa and Middle East (President); Unilever North Asia (President); SCC and Dressings (Global Category Leader); Home and Personal Care business in North America (President) | |||
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KEES KRUYTHOFF President, North America
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LEENA NAIR Chief Human Resources Officer |
NITIN PARANJPE President, Home Care |
RITVA SOTAMAA Chief Legal Officer | |||
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Nationality Dutch Age 48, Male Appointed to ULE November 2011 Joined Unilever 1993 Previous Unilever posts include: Brazil (EVP); Unilever Foods South Africa (CEO); Unilever Bestfoods Asia (SVP and Board member) Current external appointments: Pepsi/Lipton JV (Board member); Enactus (Chairman) |
Nationality Indian Age 47, Female Appointed to ULE March 2016 Joined Unilever 1992 Previous Unilever posts include: HR Leadership and Organisational Development and Global Head of Diversity (SVP) |
Nationality Indian Age 53, Male Appointed to ULE October 2013 Joined Unilever 1987 Previous Unilever posts include: Hindustan Unilever Limited (CEO); Home and Personal Care, India (Executive Director); Home Care (VP); Fabric Wash (Category Head); Laundry and Household Cleaning, Asia (Regional Brand Director) |
Nationality Finnish Age 53, Female Appointed to ULE February 2013 Joined Unilever 2013 Previous posts include: Siemens AG Siemens Healthcare (GC); General Electric Company GE Healthcare (various positions including GE Healthcare Systems (GC)); Instrumentarium Corporation (GC) Current external appointments: Fiskars Corporation (NED)
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AMANDA SOURRY President, Foods |
KEITH WEED Chief Marketing & Communications Officer
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JAN ZIJDERVELD President, Europe |
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Nationality British Age 53, Female Appointed to ULE October 2015 Joined Unilever 1985 Previous Unilever posts include: Global Hair (EVP); Unilever UK and Ireland (EVP and Chairman); Global Spreads and Dressings (EVP); Unilever US Foods (SVP) Current external appointments: PHV Corp. (NED) |
Nationality British Age 55, Male Appointed to ULE April 2010 Joined Unilever 1983 Previous Unilever posts include: Global Home Care and Hygiene (EVP); Lever Fabergé (Chairman); Hair and Oral Care (SVP) Current external appointments: Business in the Community International Board (Chairman); Business in the Community (Board member) |
Nationality Dutch Age 52, Male Appointed to ULE February 2011 Joined Unilever 1988 Previous Unilever posts include: South East Asia and Australasia (EVP); Unilever Middle East North Africa (Chairman); Nordic ice cream business (Chairman) Current external appointments: AIM (Vice-President); FoodDrinkEurope (Board member); Pepsi/Lipton JV (Board member); ECR Europe (Efficient Consumer Response) (Board member)
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Annual Report on Form 20-F 2016 | Strategic Report | 5 |
OUR MARKETS |
6 | Strategic Report | Annual Report on Form 20-F 2016 |
Annual Report on Form 20-F 2016 | Strategic Report | 7 |
8 | Strategic Report | Annual Report on Form 20-F 2016 |
Annual Report on Form 20-F 2016 | Strategic Report | 9 |
OUR STRATEGIC FOCUS |
WINNING WITH BRANDS AND INNOVATION
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We are innovating to meet trends displaying high growth. For instance, Pure Leaf tea responds to the demand for natural ingredients, Sunsilk Hijab Recharge shampoo benefits Muslim women wearing hijabs, while Lux Silicone-Free and the recently launched Hellmanns vegan mayonnaise provide free-from alternatives.
Our ambition is to divide our innovation work as follows: 70% global brands at scale, such as Magnum and Axe; 20% global brands locally adapted, for example Knorr and Sunsilk; 10% local brands like Bango and Marmite.
We are focused on innovating in high-growth segments, creating our own disruptive technologies, innovating faster and being more agile locally. In 2016 43% of innovation turnover was driven by new technology which differentiates us from competitors, up by more than 20% in recent years. This is increasingly driven by collaboration with external parties through our global R&D, supply chain and procurement functions.
Marketing drives consumer-led growth but has to remain relevant. In 2016 we have trained more than 5,000 marketers globally with over 90,000 lessons through our Connected World Programme to increase the digital skills and understanding that are essential in a connected world.
We work closely with partners developing leading marketing and insight technology. Through Unilever Ventures, for example, we have invested in and partnered with Blis to provide geo-located mobile targeting services to drive footfall to our T2 tea stores. Technology also drives further efficiency in our 8 billion annual marketing spend. For instance, ULTRA is our proprietary trading desk which allows programmatic planning and buying across digital platforms globally.
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10 | Strategic Report | Annual Report on Form 20-F 2016 |
WINNING IN THE MARKETPLACE
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We lead market development by growing new channels with a focus on execution through our Perfect Stores programme.
We work with customers, such as large retail chains, to generate insights about who visits their stores using technology that creates detailed shopper profiles. This allows us to target and personalise campaigns. We also work closely with these customers for our new Selling with Purpose programme, which will increase the number of touch-points in our distribution chain, thereby creating more employment opportunities for people across the world, and enabling our consumers to enjoy our brands with purpose, which in turn unlocks growth.
E-commerce grew 49% in 2016 and the direct to consumer channel expanded significantly, mainly through the acquisition of Dollar Shave Club, growing at 47% year-on-year.
Acquisitions are part of our relentless focus on actively managing our brand portfolio. They help preserve our market position in attractive segments where we can bring our global scale and local strengths to bear. They also bring us disruptive business models and business styles that are entrepreneurial, helping transform our business culture. Disposals liberate capital to reinvest in higher-growth segments in support of our objective of long-term growth.
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WINNING THROUGH CONTINUOUS IMPROVEMENT
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Key to Unilever meeting its growth ambitions is building agility and resilience into our organisation. We have three key initiatives within our Connected 4 Growth programme:
Organisational Change a programme to make us faster, simpler, more consumer and customer-centric while unlocking capacity. It will make us more agile at lower cost with a more streamlined organisation. We are deploying more resource in global brand communities and local operations, with fewer layers in decision-making. It will allow us to leverage what can be done globally at scale while empowering people to take more effective action locally.
Zero-Based Budgeting (ZBB) we have analysed expenditure and challenged what we spend, where and why to help drive value and growth. Having benchmarked Unilever to identify where we spend above and below peers, we have identified which activities can deliver savings and which have appropriate expenditure. ZBB, together with the Organisational Change programme, will aim to deliver at least 1 billion of savings by 2018 and more than 1 billion by 2019, to further support our business.
Net Revenue Management (NRM) a detailed programme to optimise pricing which aims to drive additional volume as well as value. It ensures the right packs, at the right prices in the right channels to optimise differing buying opportunities. At the end of 2016 NRM had been applied to about 50% of our turnover since its introduction.
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WINNING WITH PEOPLE
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Our People strategy aims to ensure that we attract and retain the talent we require to achieve our strategic growth priorities. Our workforce, totalling around 169,000 people, is our most powerful resource to transform our business.
We are becoming a more agile and empowered organisation. By changing our structure, we are creating more capable leaders with more time to focus on their roles and we are inspiring our people through purpose, well-being and management. Our people are also key to delivering the USLP and contributing to its targets.
More details about Our People can be found on pages 20 and 21.
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Annual Report on Form 20-F 2016 | Strategic Report | 11 |
THE BENEFITS THAT OUR VISION AND STRATEGY DELIVER TRANSLATE INTO PERFORMANCE FOR SHAREHOLDERS AND SOCIETY AT LARGE.
FINANCIAL PERFORMANCE
GROWING THE BUSINESS: GROUP
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TURNOVER GROWTH | OPERATING MARGIN | |||||
2016 | 2016 | |||||
(1.0)% | 14.8% | |||||
2015: 10.0%
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2015: 14.1%
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UNDERLYING SALES GROWTH* | UNDERLYING VOLUME GROWTH* | CORE OPERATING MARGIN* | FREE CASH FLOW* | |||
2016 | 2016 | 2016 | 2016 | |||
3.7% | 0.9% | 15.3% | 4.8 billion | |||
2015: 4.1% | 2015: 2.1% | 2015: 14.8% | 2015: 4.8 billion | |||
Underlying sales growth averaged 4.4% over five years. |
Underlying volume growth averaged 2.0% over five years. |
Core operating margin has steadily increased over five years from 13.7% to 15.3%.
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Unilever has generated free cash flow of 20.9 billion over five years.
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GROWING THE BUSINESS: CATEGORIES
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PERSONAL CARE | FOODS | HOME CARE | REFRESHMENT | |||
Turnover | Turnover | Turnover | Turnover | |||
20.2 billion | 12.5 billion | 10.0 billion | 10.0 billion | |||
2015: 20.1 billion | 2015: 12.9 billion | 2015: 10.2 billion | 2015: 10.1 billion | |||
Turnover growth | Turnover growth | Turnover growth | Turnover growth | |||
0.5% | (3.1)% | (1.5)% | (1.1)% | |||
2015: 13.2% | 2015: 4.5% | 2015: 10.9% | 2015: 10.3% | |||
Underlying sales growth | Underlying sales growth | Underlying sales growth | Underlying sales growth | |||
4.2% | 2.1% | 4.9% | 3.5% | |||
2015: 4.1% | 2015: 1.5% | 2015: 5.9% | 2015: 5.4% | |||
Operating margin | Operating margin | Operating margin | Operating margin | |||
18.4% | 17.4% | 9.5% | 9.7% | |||
2015: 18.1% | 2015: 17.8% | 2015: 7.3% | 2015: 8.3% | |||
Core operating margin | Core operating margin | Core operating margin | Core operating margin | |||
19.1% | 17.9% | 9.7% | 9.9% | |||
2015: 18.9% | 2015: 18.2%
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2015: 7.6% | 2015: 9.4% |
* | Key Financial Indicators. |
Underlying sales growth, underlying volume growth, core operating margin and free cash flow are non-GAAP measures. For further information about these measures, and the reasons why we believe they are important for an understanding of the performance of the business, please refer to our commentary on non-GAAP measures on pages 26 to 28.
12 | Strategic Report | Annual Report on Form 20-F 2016 |
UNILEVER SUSTAINABLE LIVING PLAN
IMPROVING HEALTH AND WELL-BEING
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ENHANCING LIVELIHOODS
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By 2020 we will help more than a billion people take action to improve their health and well-being.
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By 2020 we will enhance the livelihoods of millions of people as we grow our business. | |||||||
HEALTH AND HYGIENE
TARGET By 2020 we will help more than a billion people to improve their health and hygiene. This will help reduce the incidence of life-threatening diseases like diarrhoea.
PERFORMANCE Around 538 million people reached by end 2016 through our programmes on handwashing, safe drinking water, oral health, sanitation and self-esteem. |
NUTRITION
TARGET By 2020 we will double the proportion of our portfolio that meets the highest nutritional standards, based on globally recognised dietary guidelines. This will help hundreds of millions of people to achieve a healthier diet.
PERFORMANCE 35% of our portfolio by volume met the highest nutritional standards in 2016, based on globally recognised dietary guidelines. |
FAIRNESS IN THE WORKPLACE
TARGET By 2020 we will advance human rights across our operations and extended supply chain.
PERFORMANCE 67% of procurement spend through suppliers meeting mandatory requirements of our Responsible Sourcing Policy.
We continued to embed human rights with a focus on our eight salient human rights issues which are documented in our 2015 Human Rights Report.
Our Total Recordable Frequency Rate for 2016 was 1.01 per million hours worked (2015: 1.12).**◇f
Engagement score among 6,228 employees surveyed in 2016 was 76% (2015: 77%).**
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OPPORTUNITIES FOR WOMEN
TARGET By 2020 we will empower 5 million women.
PERFORMANCE We enabled around 920,000 women to access initiatives aiming to promote their safety, develop their skills and expand their opportunities.
The percentage of persons of each sex who were Unilever managers was 54% male and 46% female (2015: 55% male and 45% female).** |
INCLUSIVE BUSINESS
TARGET By 2020 we will have a positive impact on the lives of 5.5 million people.
PERFORMANCE In 2016 we enabled around 650,000 smallholder farmers and 1.5 million small-scale retailers to access initiatives aiming to improve their agricultural practices or increase their incomes. f | ||||
REDUCING ENVIRONMENTAL IMPACT
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By 2030 our goal is to halve the environmental footprint of the making and use of our products as we grow our business.
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GREENHOUSE GASES
TARGET Halve the greenhouse gas impact of our products across the lifecycle by 2030.
PERFORMANCE
OUR OPERATIONS We produced 83.52 kg CO2 from energy per tonne of manufacturing production (2015: 88.49kg).**◇f
OUR PRODUCTS LIFECYCLE Our greenhouse gas impact per consumer use has increased by around 8% since 2010.q |
WATER
TARGET Halve the water associated with the consumer use of our products by 2020.
PERFORMANCE
OUR OPERATIONS We used 1.85m3 water per tonne of manufacturing production (2015: 1.88m3).**◇f
OUR PRODUCTS IN USE Our water impact per consumer use has reduced by around 7% since 2010. |
WASTE
TARGET Halve the waste associated with the disposal of our products by 2020.
PERFORMANCE
OUR OPERATIONS We sent for disposal 0.35kg of total waste per tonne of manufacturing production (2015: 0.26kg).**◇f
OUR PRODUCTS AT DISPOSAL Our waste impact per consumer use has reduced by around 28% since 2010.◇q
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SUSTAINABLE SOURCING
TARGET By 2020 we will source 100% of our agricultural raw materials sustainably.
PERFORMANCE 51% of agricultural raw materials sustainably sourced by end of 2016 (2015: 60%).y This includes 48% as physical sustainable sources (2015: 39%) and 3% in the form of certificates used mainly in soy and sugar (2015: 3%). In 2016, we stopped buying GreenPalm certificates (2015: 18%). See Society (page 18) for an explanation. |
** | Key Non-Financial Indicators. |
◇ | PricewaterhouseCoopers (PwC) assured. For details and the basis of preparation see www.unilever.com/ara2016/downloads. |
f | Measured 1 October 30 September. |
| Full Global People Survey not undertaken in 2015. Comparator is for full survey among managers in 2014. |
Around 300,000 women have accessed initiatives under both the Inclusive Business and the Opportunities for Women pillars in 2016. |
q | The 2010 baseline has been restated by a reduction of 0.2g CO2 per consumer use for Greenhouse Gases and a reduction of 0.04g per consumer use for Waste. |
y | In 2016 had we continued to buy GreenPalm certificates our overall sustainable sourcing performance in 2016 would have been 66%. |
For more details see www.unilever.com/sustainable-living. |
Annual Report on Form 20-F 2016 | Strategic Report | 13 |
DELIVERING VALUE FOR OUR STAKEHOLDERS |
14 | Strategic Report | Annual Report on Form 20-F 2016 |
Annual Report on Form 20-F 2016 | Strategic Report | 15 |
DELIVERING VALUE FOR OUR STAKEHOLDERS CONTINUED
16 | Strategic Report | Annual Report on Form 20-F 2016 |
Annual Report on Form 20-F 2016 | Strategic Report | 17 |
DELIVERING VALUE FOR OUR STAKEHOLDERS CONTINUED |
18 | Strategic Report | Annual Report on Form 20-F 2016 |
THE GLOBAL GOALS FOR SUSTAINABLE DEVELOPMENT
Through our Unilever Sustainable Living Plan, Sustainable Living brands and our transformational change agenda we contribute to the Global Goals.
GLOBAL GOALS
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RELATED USLP PILLARS | |
Goal 1: No poverty |
Fairness in the workplace Inclusive business Opportunities for women
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Goal 2: Zero hunger |
Improving nutrition Inclusive business Opportunities for women Sustainable sourcing
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Goal 3: Good health and well-being |
Fairness in the workplace Health & hygiene Improving nutrition
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Goal 4: Quality education |
Inclusive business Opportunities for women Sustainable sourcing
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Goal 5: Gender equality |
Opportunities for women
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Goal 6: Clean water and sanitation |
Health & hygiene Water use
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Goal 7: Affordable and clean energy |
Greenhouse gases
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Goal 8: Decent work and economic growth |
All USLP pillars
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Goal 9: Industry, innovation and infrastructure |
Greenhouse gases Inclusive business Opportunities for women Waste & packaging Water use
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Goal 10: Reduce inequality |
Fairness in the workplace Opportunities for women Inclusive business
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Goal 11: Sustainable cities and communities |
Health & hygiene Waste & packaging
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Goal 12: Responsible consumption and production |
Greenhouse gases Waste & packaging Water use
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Goal 13: Climate action |
Greenhouse gases Sustainable sourcing Water use
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Goal 14: Life below water |
Waste & packaging
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Goal 15: Life on land |
Sustainable sourcing
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Goal 16: Peace, justice and strong institutions |
Fairness in the workplace
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Goal 17: Partnerships for the goals |
All USLP pillars
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Annual Report on Form 20-F 2016 | Strategic Report | 19 |
DELIVERING VALUE FOR OUR STAKEHOLDERS CONTINUED
20 | Strategic Report | Annual Report on Form 20-F 2016 |
Annual Report on Form 20-F 2016 | Strategic Report | 21 |
DELIVERING VALUE FOR OUR STAKEHOLDERS CONTINUED |
22 | Strategic Report | Annual Report on Form 20-F 2016 |
FINANCIAL REVIEW |
FINANCIAL OVERVIEW 2016
CONSOLIDATED INCOME STATEMENT
Turnover declined 1.0% to 52.7 billion including a negative currency impact of 5.1% (2015: 5.9% favourable currency impact) primarily from Latin America and the UK. Underlying sales growth was 3.7% (2015: 4.1%) coming from volume growth of 0.9% (2015: 2.1%) and price growth of 2.8% (2015: 1.9%). Acquisitions and disposals had a positive impact of 0.6% (2015: negative 0.1%) coming from the businesses acquired in the last two years including Dermalogica, Murad, Dollar Shave Club, Zest & Camay and Seventh Generation. Emerging markets contributed 57% of total turnover with underlying sales growth of 6.5% (2015: 7.1%) driven by price growth of 5.4% (2015: 4.3%). Developed markets underlying sales growth declined by 0.2% with volume growth in North America offset by negative pricing in Europe.
Core operating margin improved 0.5 percentage points to 15.3%. Gross margin improved 0.5 percentage points driven by margin-accretive innovation, acquisitions and savings programmes. Brand and marketing investment as a percentage of turnover was down 0.4 percentage points due to sales leverage and efficiencies from Zero Based Budgeting. Higher gross margin and lower brand and marketing investment were partially offset by a 0.4 percentage points increase in overheads driven by increased restructuring costs related to the implementation of the Connected 4 Growth programme and the higher overheads ratio of acquired businesses.
Operating profit was up 3.8% at 7.8 billion (2015: 7.5 billion) including 245 million (2015: 350 million) of non-core charges mainly being acquisition and disposal-related costs and losses on business disposals.
Highlights for the year ended 31 December
2016 | 2015 | %
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||||||||||
Turnover ( million) |
52,713 | 53,272 | (1 | ) | ||||||||
Operating profit ( million) |
7,801 | 7,515 | 4 | |||||||||
Core operating profit ( million)* |
8,046 | 7,865 | 2 | |||||||||
Profit before tax ( million) |
7,469 | 7,220 | 3 | |||||||||
Net profit ( million) |
5,547 | 5,259 | 6 | |||||||||
Diluted earnings per share () |
1.82 | 1.72 | 6 | |||||||||
Core earnings per share ()* |
1.88 | 1.82 | 3 |
Net cost of financing borrowings was 469 million compared with 372 million in 2015. The increase was driven by higher borrowing levels and reduced interest on cash deposits. The average interest rate on net debt increased to 3.5% compared with 3.0% in 2015. The charge for pension financing decreased by 27 million to 94 million (2015: 121 million) as a result of a lower net deficit at the beginning of the year.
The effective tax rate was 26.2% compared with 27.6% in 2015. This included the impact of favourable tax audit settlements.
Net profit from joint ventures and associates contributed 127 million compared with 107 million in 2015 due to higher profits from the Pepsi Lipton joint venture. Other income from non-current investment and associates increased to 104 million compared with 91 million in 2015, primarily driven by a gain of 107 million from the sale of financial assets. Diluted earnings per share increased by 5.7% to 1.82 largely due to improved margin. Core earnings per share increased by 3.1% to 1.88 including an adverse currency impact of 3.7%.
The independent auditors reports issued by KPMG Accountants N.V. and KPMG LLP on the consolidated results of the Group, as set out in the financial statements, were unqualified and contained no exceptions or emphasis of matter. For more details see pages 79 to 83.
The consolidated financial statements have been prepared in accordance with IFRS as adopted by the EU and IFRS as issued by the International Accounting Standards Board. The critical accounting policies and those that are most significant in connection with our financial reporting are set out in note 1 on pages 88 to 90 and are consistent with those applied in 2015.
* | Certain measures used in our reporting are not defined under IFRS. For further information about these measures, please refer to the commentary on non-GAAP measures on pages 26 to 28. |
Annual Report on Form 20-F 2016 | Strategic Report | 23 |
FINANCIAL REVIEW CONTINUED
24 | Strategic Report | Annual Report on Form 20-F 2016 |
Annual Report on Form 20-F 2016 | Strategic Report | 25 |
FINANCIAL REVIEW CONTINUED
26 | Strategic Report | Annual Report on Form 20-F 2016 |
Annual Report on Form 20-F 2016 | Strategic Report | 27 |
FINANCIAL REVIEW CONTINUED
28 | Strategic Report | Annual Report on Form 20-F 2016 |
Annual Report on Form 20-F 2016 | Governance | 29 |
CORPORATE GOVERNANCE CONTINUED
30 | Governance | Annual Report on Form 20-F 2016 |
Annual Report on Form 20-F 2016 | Governance | 31 |
CORPORATE GOVERNANCE CONTINUED
32 | Governance | Annual Report on Form 20-F 2016 |
Annual Report on Form 20-F 2016 | Governance | 33 |
CORPORATE GOVERNANCE CONTINUED
34 | Governance | Annual Report on Form 20-F 2016 |
Annual Report on Form 20-F 2016 | Governance | 35 |
36 | Governance | Annual Report on Form 20-F 2016 |
Annual Report on Form 20-F 2016 | Governance | 37 |
RISKS CONTINUED
DESCRIPTION OF RISK |
BRAND PREFERENCE
As a branded goods business, Unilevers success depends on the value and relevance of our brands and products to consumers around the world and on our ability to innovate and remain competitive.
Consumer tastes, preferences and behaviours are constantly changing and Unilevers ability to anticipate and respond to these changes and to continue to differentiate our brands and products is vital to our business.
We are dependent on creating innovative products that continue to meet the needs of our consumers. If we are unable to innovate effectively, Unilevers sales or margins could be materially adversely affected.
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PORTFOLIO MANAGEMENT
Unilevers strategic investment choices will affect the long-term growth and profits of our business.
Unilevers growth and profitability are determined by our portfolio of categories, geographies and channels and how these evolve over time. If Unilever does not make optimal strategic investment decisions then opportunities for growth and improved margin could be missed.
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SUSTAINABILITY
The success of our business depends on finding sustainable solutions to support long-term growth.
Unilevers Vision to accelerate growth in the business while reducing our environmental footprint and increasing our positive social impact will require more sustainable ways of doing business. In a world where resources are scarce and demand for them continues to increase it is critical that we succeed in reducing our resource consumption and converting to sustainably sourced supplies. In doing this we are dependent on the efforts of partners and various certification bodies. We are also committed to improving health and well-being and enhancing livelihoods around the world so Unilever and our communities grow successfully together. There can be no assurance that sustainable business solutions will be developed and failure to do so could limit Unilevers growth and profit potential and damage our corporate reputation.
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CLIMATE CHANGE
Climate changes and governmental actions to reduce such changes may disrupt our operations and/or reduce consumer demand for our products.
Climate changes are occurring around the globe which may impact our business in various ways.
They could lead to water shortages which would reduce demand for those of our products that require a significant amount of water during consumer use. They could also lead to an increase in raw material prices or reduced availability.
Governments may take action to reduce climate change such as the introduction of a carbon tax which could impact our business through higher costs or reduced flexibility of operations.
Climate change could result therefore in making products less affordable or less available for our consumers resulting in reduced growth and profitability.
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38 | Governance | Annual Report on Form 20-F 2016 |
DESCRIPTION OF RISK |
CUSTOMER RELATIONSHIPS
Successful customer relationships are vital to our business and continued growth.
Maintaining strong relationships with our existing customers and building relationships with new customers who serve changing shopper habits are necessary to ensure our brands are well presented to our consumers and available for purchase at all times.
The strength of our customer relationships also affects our ability to obtain pricing and competitive trade terms. Failure to maintain strong relationships with customers could negatively impact our terms of business with affected customers and reduce the availability of our products to consumers.
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TALENT AND ORGANISATION
A skilled workforce and agile organisation are essential for the continued success of our business.
Our ability to attract, develop, organise and retain the right number of appropriately qualified people is critical if we are to compete and grow effectively.
This is especially true in our key emerging markets where there can be a high level of competition for a limited talent pool. The loss of management or other key personnel or the inability to identify, attract and retain qualified personnel could make it difficult to manage the business and could adversely affect operations and financial results.
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SUPPLY CHAIN
Our business depends on purchasing materials, efficient manufacturing and the timely distribution of products to our customers.
Our supply chain network is exposed to potentially adverse events such as physical disruptions, environmental and industrial accidents or bankruptcy of a key supplier which could impact our ability to deliver orders to our customers.
The cost of our products can be significantly affected by the cost of the underlying commodities and materials from which they are made. Fluctuations in these costs cannot always be passed on to the consumer through pricing.
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SAFE AND HIGH QUALITY PRODUCTS
The quality and safety of our products are of paramount importance for our brands and our reputation.
The risk that raw materials are accidentally or maliciously contaminated throughout the supply chain or that other product defects occur due to human error, equipment failure or other factors cannot be excluded.
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Annual Report on Form 20-F 2016 | Governance | 39 |
RISKS CONTINUED
DESCRIPTION OF RISK |
SYSTEMS AND INFORMATION
Unilevers operations are increasingly dependent on IT systems and the management of information.
Increasing digital interactions with customers, suppliers and consumers place ever greater emphasis on the need for secure and reliable IT systems and infrastructure and careful management of the information that is in our possession.
Disruption of our IT systems could inhibit our business operations in a number of ways, including disruption to sales, production and cash flows, ultimately impacting our results.
There is also a threat from unauthorised access and misuse of sensitive information. Unilevers information systems could be subject to unauthorised access or the mistaken disclosure of information which disrupts Unilevers business and/or leads to loss of assets.
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BUSINESS TRANSFORMATION
Successful execution of business transformation projects is key to delivering their intended business benefits and avoiding disruption to other business activities.
Unilever is continually engaged in major change projects, including acquisitions, disposals and organisational transformation, to drive continuous improvement in our business and to strengthen our portfolio and capabilities.
Failure to execute such transactions or change projects successfully could result in under-delivery of the expected benefits. Furthermore, disruption may be caused in other parts of the business.
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ECONOMIC AND POLITICAL INSTABILITY
Unilever operates around the globe and is exposed to economic and political instability that may reduce consumer demand for our products, disrupt sales operations and/or impact the profitability of our operations.
Adverse economic conditions may affect one or more countries within a region, or may extend globally.
Government actions such as foreign exchange or price controls can impact on the growth and profitability of our local operations.
In 2016, more than half of Unilevers turnover came from emerging markets which can offer greater growth opportunities but also expose Unilever to related economic and political volatility.
|
40 | Governance | Annual Report on Form 20-F 2016 |
DESCRIPTION OF RISK |
TREASURY AND PENSIONS
Unilever is exposed to a variety of external financial risks in relation to Treasury and Pensions.
The relative values of currencies can fluctuate widely and could have a significant impact on business results. Further, because Unilever consolidates its financial statements in euros it is subject to exchange risks associated with the translation of the underlying net assets and earnings of its foreign subsidiaries.
We are also subject to the imposition of exchange controls by individual countries which could limit our ability to import materials paid in foreign currency or to remit dividends to the parent company.
Unilever may face liquidity risk, ie difficulty in meeting its obligations, associated with its financial liabilities. A material and sustained shortfall in our cash flow could undermine Unilevers credit rating, impair investor confidence and also restrict Unilevers ability to raise funds.
We are exposed to market interest rate fluctuations on our floating rate debt. Increases in benchmark interest rates could increase the interest cost of our floating rate debt and increase the cost of future borrowings.
In times of financial market volatility, we are also potentially exposed to counter-party risks with banks, suppliers and customers.
Certain businesses have defined benefit pension plans, most now closed to new employees, which are exposed to movements in interest rates, fluctuating values of underlying investments and increased life expectancy. Changes in any or all of these inputs could potentially increase the cost to Unilever of funding the schemes and therefore have an adverse impact on profitability and cash flow.
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ETHICAL
Acting in an ethical manner, consistent with the expectations of customers, consumers and other stakeholders, is essential for the protection of the reputation of Unilever and its brands.
Unilevers brands and reputation are valuable assets and the way in which we operate, contribute to society and engage with the world around us is always under scrutiny both internally and externally. Despite the commitment of Unilever to ethical business and the steps we take to adhere to this commitment, there remains a risk that activities or events cause us to fall short of our desired standard, resulting in damage to Unilevers corporate reputation and business results.
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LEGAL AND REGULATORY
Compliance with laws and regulations is an essential part of Unilevers business operations.
Unilever is subject to national and regional laws and regulations in such diverse areas as product safety, product claims, trademarks, copyright, patents, competition, employee health and safety, the environment, corporate governance, listing and disclosure, employment and taxes.
Failure to comply with laws and regulations could expose Unilever to civil and/or criminal actions leading to damages, fines and criminal sanctions against us and/or our employees with possible consequences for our corporate reputation.
Changes to laws and regulations could have a material impact on the cost of doing business. Tax, in particular, is a complex area where laws and their interpretation are changing regularly, leading to the risk of unexpected tax exposures. International tax reform remains a key focus of attention with the OECDs Base Erosion & Profit Shifting project and further potential tax reform in the EU and the United States.
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Annual Report on Form 20-F 2016 | Governance | 41 |
42 | Governance | Annual Report on Form 20-F 2016 |
Annual Report on Form 20-F 2016 | Governance | 43 |
REPORT OF THE CORPORATE RESPONSIBILITY COMMITTEE
44 | Governance | Annual Report on Form 20-F 2016 |
Annual Report on Form 20-F 2016 | Governance | 45 |
CORPORATE GOVERNANCE COMMITTEE
46 | Governance | Annual Report on Form 20-F 2016 |
Annual Report on Form 20-F 2016 | Governance | 47 |
DIRECTORS REMUNERATION REPORT
48 | Governance | Annual Report on Form 20-F 2016 |
Annual Report on Form 20-F 2016 | Governance | 49 |
DIRECTORS REMUNERATION REPORT CONTINUED
50 | Governance | Annual Report on Form 20-F 2016 |
AT A GLANCE: HOW THE REMUNERATION POLICY WILL BE APPLIED TO EXECUTIVE DIRECTORS IN 2017
The table below sets out a summary of the new remuneration structure that will apply during the 2017 financial year subject to shareholder approval at our 2017 AGMs. Further details are set out in the Directors Remuneration Policy on pages 65-77.
CEO | CFO | |||
Base salary | £1,010,000 | £656,250 | ||
No change | Increase of 5% from current £625,000 | |||
Fixed allowances | Fixed allowance £250,000 | Fixed allowance £200,000 | ||
and other benefits | Other benefits operated in line with policy | Other benefits operated in line with policy | ||
No change | No change | |||
Annual bonus | 120% of base salary at target, 200% at maximum | 100% of base salary at target, 150% at maximum | ||
No change | No change | |||
MCIP | Can invest up to the value of 60% of the gross 2016 annual bonus into the MCIP. | |||
MCIP awards matching shares in the range of zero to 150% based on Unilevers performance over 4 years. | ||||
Performance period has increased from current 3 years and has revised performance measures. | ||||
GSIP | Target award: 200% of salary, | Target award: 150% of salary, | ||
Maximum award: 400% of salary | Maximum award: 300% of salary | |||
Performance assessed over 3 years with | Performance assessed over 3 years with | |||
a subsequent 2 year holding period | a subsequent 2 year holding period | |||
Holding period is an additional requirement | Holding period is an additional requirement | |||
under the new Remuneration Policy | under the new Remuneration Policy | |||
Conditional | £117,123 | n/a | ||
supplemental | No change | No change | ||
pension | ||||
Shareholding | 5 x base salary = £5.05m | 4 x base salary = £2.625m | ||
requirement | Increase from 4 x salary | Increase from 3 x salary |
INCENTIVE PERFORMANCE MEASURES
Performance measures for Executive Directors that will apply to MCIP and GSIP granted in 2017 and the 2017 bonus are as follows:
Performance target ranges for the Annual Bonus are considered to be commercially sensitive and will be disclosed in full in the 2017 DRR.
MCIP 2017 TARGETS | GSIP 2017 TARGETS | |
Performance conditions are assessed over a four-year period. The performance conditions and target ranges for 2017 are as follows: | Performance conditions are assessed over a three-year period. The performance conditions and target ranges for 2017 are as follows: | |
|
Annual Report on Form 20-F 2016 | Governance | 51 |
DIRECTORS REMUNERATION REPORT CONTINUED
DIRECTORS REMUNERATION POLICY
POLICY REPORT
POLICY TABLE
The following sets out our new Directors Remuneration Policy (the Remuneration Policy). This new Remuneration Policy will be presented for approval by shareholders at the April 2017 AGMs and, if approved, applies to payments made after that date and replaces the existing remuneration policy in its entirety. It is intended that the new Remuneration Policy will apply for three years, although the Compensation Committee may seek approval for a new policy at an earlier point if it is considered appropriate. The supporting information section provides the rationale for any changes from the existing remuneration policy where appropriate.
BASE SALARY
|
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PURPOSE AND LINK TO STRATEGY Supports the recruitment and retention of Executive Directors of the calibre required to implement our strategy. Reflects the individuals skills, experience, performance and role within the Group.
OPERATION Set by the Boards on the recommendation of the Committee and generally reviewed once a year, with any changes usually effective from 1 January (although changes may be made at any other time if the Committee considers that is appropriate).
Salary is paid in cash and is generally paid monthly.
Salary is set at an appropriate level to attract and retain Executive Directors of the required calibre, taking into account:
i. our policy generally to pay at around the median of an appropriate peer group of other global companies of a similar financial size and complexity to Unilever;*
ii. the individuals skills, experience and performance; and
iii. pay and conditions across the wider organisation. |
OPPORTUNITY Any increases will normally be in line with the range of increases awarded to other employees within the Group.
Increases may be above this level or applied more frequently in certain circumstances, such as: where there is, in the Committees opinion, a significant change in an Executive Directors scope or role; where a new Executive Director has been appointed to the Boards on a salary lower than the typical market level for such a role and becomes established in the role; and where it is considered necessary to reflect significant changes in market practice.
The maximum aggregate increase for the current Executive Directors during the time in which this policy applies will be no higher than 15%. This excludes the proposed increase of salary for the CFO for 2017.
PERFORMANCE MEASURES n/a.
SUPPORTING INFORMATION A cap on the aggregate increase in salary over the duration of this Remuneration Policy has been set at 15% (excluding the 5% salary increase for the CFO set out in the Letter from the Chair). There are no other changes relative to the previous Remuneration Policy.
| |
FIXED ALLOWANCE
|
||
PURPOSE AND LINK TO STRATEGY Provides a simple competitive alternative to the provision of itemised benefits and pension, not linked to base salary.
OPERATION The fixed allowance is reviewed periodically by the Committee and changes are usually effective from 1 January.
Set at an appropriate level taking into account the median of an appropriate peer group in line with the approach to base salary and individual circumstances (such as whether they have been required to relocate to undertake their role).
Normally, paid monthly in cash.
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OPPORTUNITY The fixed allowance will not exceed the value of current allowance provided as follows: CEO £250,000 CFO £200,000.
PERFORMANCE MEASURES n/a.
SUPPORTING INFORMATION A cap on the fixed allowance has been set at the current levels provided. There are no other changes relative to the previous Remuneration Policy. |
52 | Governance | Annual Report on Form 20-F 2016 |
BENEFITS
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PURPOSE AND LINK TO STRATEGY Provides certain benefits on a cost-effective basis to aid attraction and retention of Executive Directors.
OPERATION Provision of death, disability and medical insurance cover, directors liability insurance and actual tax return preparation costs. Other benefits may be provided in the future where it is considered necessary by the Committee and/or required by legislation.
In the event that Unilever were to require an existing or new Executive Director to relocate, Unilever may pay appropriate relocation allowances for a specified time period of no more than three years. This may cover costs such as (but not limited to) relocation, cost of living, housing benefit, home leave, tax and social security equalisation and education assistance.
In line with the commitments made to the current CEO upon recruitment, Unilever pays the social security obligation in the CEOs country of residence to protect him against the difference between the employee social security obligations in his country of residence versus the UK. He also receives a conditional supplemental pension accrual to compensate him for the arrangement forfeited on leaving his previous employer. This supplemental pension accrual is conditional on the CEO remaining in employment with Unilever to age 60 and subsequently retiring from active service or his death or total disability prior to retirement.
Executive Directors are entitled to participate on the same terms as all UK employees in the Unilever PLC ShareBuy plan.
|
OPPORTUNITY Based on the cost to Unilever of providing the benefit and dependent on individual circumstances.
Relocation allowances the level of such benefits would be set at an appropriate level by the Committee, taking into account the circumstances of the individual and typical market practice.
Social security obligation in the current CEOs country of residence dependent on earnings and rates of social security.
The supplemental pension accrual for the CEO is capped from 2012 onwards at £117,123.
Awards under the all-employee Unilever PLC ShareBuy Plan may be up to HMRC-approved limits. The only change in the value of the current benefits (for single figure purposes) will reflect changes in the costs of providing those benefits.
PERFORMANCE MEASURES n/a.
SUPPORTING INFORMATION The ability to provide additional benefits has been restricted to only instances that the Committee considers are necessary or legally required. |
* | The current peer group includes AstraZeneca, BASF, Bayer, BHP Billiton, BMW (XET), BP, British American Tobacco, BT, Carrefour, Centrica, Daimler (XET), Danone, Diageo, GlaxoSmithKline, Henkel (XET), Imperial Brands, LOréal, Metro, National Grid, Nestlé, Novartis, Reckitt Benckiser, Rio Tinto, Roche, Royal Dutch Shell, SABMiller, Sanofi, Siemens, Tesco, Total and Volkswagen. The peer group used for benchmarking purposes is reviewed regularly and companies are added and/or removed at the Committees discretion to ensure that it remains appropriate. |
Annual Report on Form 20-F 2016 | Governance | 53 |
DIRECTORS REMUNERATION REPORT CONTINUED
ANNUAL BONUS
|
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PURPOSE AND LINK TO STRATEGY Incentivises year-on-year delivery of stretching short-term financial, strategic and operational objectives selected to support our annual business strategy and the ongoing enhancement of shareholder value.
The ability to recognise performance through annual bonus enables us to control our cost base flexibly and react to events and market circumstances.
OPERATION Each year Executive Directors may have the opportunity to participate in the annual bonus plan. Executive Directors are set a target opportunity that is assessed against the Business Performance Multiplier of up to 150% of target opportunity at the end of the year.
Executive Directors personal performance is also assessed at the year end and may result in a Personal Performance Multiplier of up to 150%.
The Business and Personal Performance Multipliers cannot result in a bonus payout greater than the maximum set out in this Remuneration Policy.
Unless otherwise determined by the Committee, Executive Directors are required to invest at least 25% and can invest up to a maximum of 60% of their gross annual bonus into Unilever shares under the MCIP (see the MCIP section on page 55).
Ultimate remedy/malus and claw-back provisions apply (see details on page 57). |
OPPORTUNITY Target bonus opportunities (as a percentage of base salary) are: CEO 120% Other Executive Directors 100%
Maximum bonus opportunities (as a percentage of base salary) are: CEO 200% Other Executive Directors 150%
Achievement of threshold performance results in a payout of 0% of the maximum opportunity, with straight-line vesting between threshold and maximum.
PERFORMANCE MEASURES The Business Performance Multiplier is based on a range of business metrics set by the Committee on an annual basis to ensure that they are appropriately stretching for the delivery of threshold, target and maximum performance. These performance measures may include underlying sales growth (USG), core operating margin improvement (COM) and free cash flow (FCF).
The Committee has discretion to adjust the formulaic outcome of the Business Performance Multiplier up or down by up to plus or minus 25%, based on results, if it believes this better reflects the underlying performance of Unilever. In any event, the overall Business Performance Multiplier will not exceed 150%. The use of any discretion will be fully disclosed in the Remuneration Report for the year to which discretion relates.
When determining pay-outs the Committee will also consider performance against personal performance goals and the quality of results delivered in terms of both business results and leadership.
The Committee may introduce non-financial measures in the future subject to a minimum of 70% of targets being financial in nature.
Performance is normally measured over the financial year.
SUPPORTING INFORMATION The maximum Personal Performance Multiplier is 150%. The Committees discretion to adjust the formulaic outcome of the Business Performance Multiplier up or down has been capped at 25%. There are no other changes relative to the previous Remuneration Policy.
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54 | Governance | Annual Report on Form 20-F 2016 |
MANAGEMENT CO-INVESTMENT PLAN (MCIP)
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PURPOSE AND LINK TO STRATEGY The MCIP encourages senior management to invest their own money into Unilever shares, aligning their interests with shareholders, and focus on the sustained delivery of high performance results over the long-term.
OPERATION The MCIP is a share matching arrangement whereby Executive Directors can invest their own after-tax money into Unilever shares (investment shares) and be awarded matching shares which vest at the end of a four-year performance period.
Depending on Unilevers performance, Executive Directors may receive up to 1.5 x the number the shares they have purchased provided that they keep them for the duration of the four-year period.
Executive Directors are able to choose whether they invest in PLC or NV shares or a 50/50 mix. Executive Directors receive a corresponding number of performance-related shares (matching shares). Matching shares will be awarded in the same form as the investment shares (i.e. in PLC or NV shares or a 50/50 mix).
Ultimate remedy/malus and claw-back provisions apply (see details on page 57). |
OPPORTUNITY Executive Directors are required to invest 25% and may invest up to 60% of their gross annual bonus into Unilever shares.
The number of matching shares received at the end of the performance period is a multiple of the number of shares invested into the MCIP which depends on performance as follows (there is straight line vesting between each of the points below): Threshold 0 x Target 1 x Maximum 1.5 x
The maximum possible opportunity as a % of salary is therefore: CEO 180% Other Executive Directors 135%
PERFORMANCE MEASURES The Committee sets performance measures for each MCIP matching share award. These will be tested over the four financial years starting with that following the one to which the bonus relates.
MCIP performance measures are currently Underlying Sales Growth, Core Earnings Per Share, Return On Invested Capital, and the Unilever sustainability progress index. Each measure has a 25% weighting. The Committee retains the discretion to change these measures and/or weighting for future grants, based on strategic priorities for Unilever at that time.
The Committee will ensure that the targets set are appropriately stretching for the delivery of threshold, target and maximum performance.
SUPPORTING INFORMATION The performance measures for the MCIP to be granted in 2017 have been amended to reflect Unilevers strategic direction.
The MCIP (which will operate under a new set of plan rules for which approval will be sought at the 2017 AGMs) is now assessed over a four-year performance period. The previous MCIP was measured over a three-year performance period.
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Annual Report on Form 20-F 2016 | Governance | 55 |
DIRECTORS REMUNERATION REPORT CONTINUED
GLOBAL SHARE INCENTIVE PLAN (GSIP)
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PURPOSE AND LINK TO STRATEGY The GSIP incentivises Executive Directors to achieve Unilevers clearly stated growth ambition by delivering sustained high performance and sustainable returns for shareholders over the longer term.
OPERATION Awards of shares are normally made annually with vesting conditional on Unilevers performance against long-term targets over a three-year performance period and the quality of results delivered.
A two-year holding period will apply following the three-year vesting period (although shares may be sold to satisfy tax and other relevant liabilities as a result of the award vesting).
Prior to vesting Executive Directors are able to choose whether they receive any shares that are due to vest in PLC or NV shares or a 50/50 mix.
Ultimate remedy/malus and claw-back provisions apply (see details on page 57). |
OPPORTUNITY Target awards of conditional shares under the GSIP each year (as a percentage of base salary) are limited to: CEO 200% other Executive Directors 150%
The vesting range for awards of conditional shares is between 0% and 200% of target award. Accordingly, the maximum award of shares under the GSIP is (as a percentage of base salary at grant): CEO 400% other Executive Directors 300%
31% of the grant level would pay out at threshold performance. However, this may be amended at the discretion of the Committee if the number of companies in the TSR comparator group changes.
PERFORMANCE MEASURES The Committee sets three-year performance measures for each conditional GSIP award.
GSIP performance measures are currently Underlying Sales Growth, Core Operating Margin, Cumulative Operating Cash Flow and Total Shareholder Return. Each measure has a 25% weighting. The Committee retains the discretion to change these measures and/or weighting for future grants, based on strategic priorities for Unilever at that time.
The Committee will ensure that the targets set are appropriately stretching for the delivery of threshold, target and maximum performance.
For the three business-focused measures, 25% of awards vest for threshold performance and for maximum performance 200% of the GSIP awards vest. The TSR measure is measured against the TSR comparator group, comprising 18 other companies (19 including Unilever): 50% vests if Unilever is ranked 10th, 100% vests if Unilever is ranked 7th and 200% of the GSIP award vests if Unilever is ranked 3rd or above. Further details of the TSR comparator group are set out on page 66.
SUPPORTING INFORMATION The GSIP rules were approved by shareholders at the 2007 AGMs and will expire in May 2017. The GSIP will subsequently be operated under a new set of plan rules for which approval will be sought at the 2017 AGMs.
The GSIP awards made to the Executive Directors on 13 February 2017 will have a two-year post-vesting holding period beyond the three-year vesting period, making it a five-year plan, and this will also apply to GSIP awards in subsequent years under this Remuneration Policy.
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ELEMENTS OF PREVIOUS POLICY THAT WILL CONTINUE
MCIP and GSIP awards granted under the previous Remuneration Policy will continue to operate under the terms of that policy and the relevant plan rules. Further details of the terms of the awards made are included in the Annual Remuneration Reports for their respective years. This applies to the GSIP awards granted in 2015, 2016 and 2017 and the MCIP awards granted in 2015 and 2016. This provision will cease to apply once all of these awards have vested, been exercised or been forfeited as appropriate as per the relevant policy and plan rules. Additional details are set out below.
56 | Governance | Annual Report on Form 20-F 2016 |
CLAW-BACK, ULTIMATE REMEDY, DISCRETION AND FLEXIBILITY
Claw-back: The Committee has discretion to reclaim or claw back some or all of the value of awards of performance-related payments to Executive Directors in the event of a significant downward restatement of the financial results of Unilever. This includes the annual bonus together with any awards that have been made and/or vested shares under the GSIP and the MCIP (awards under both this Remuneration Policy and the previous remuneration policy). This claw-back may be effected up to two years from vesting by reducing outstanding awards or requiring the return of the net value of vested awards to Unilever.
Ultimate remedy/malus: Grants under the GSIP and MCIP (under both this Remuneration Policy and the previous Remuneration Policy) are subject to ultimate remedy. Upon vesting of an award, the Committee shall have the discretionary power to adjust the value of the award if the award, in the Committees opinion taking all circumstances into account, produces an unfair result. In exercising this discretion, the Committee may take into account Unilevers performance against non-financial measures. The Committee may apply malus to reduce a GSIP or MCIP award granted under this Remuneration Policy or to GSIP or MCIP awards granted from 2015 under the previous Remuneration Policy, or determine that any such award will not vest or only vest in part in the event of a significant downward restatement of the financial results of Unilever, gross misconduct or gross negligence, material breach of Unilevers Code of Business Principles or any of the Unilever Code Policies, breach of restrictive covenants by which the individual has agreed to be bound, or conduct by the individual which results in significant losses or serious reputation damage to Unilever. The annual bonus will also be subject to malus on the same grounds as apply for MCIP awards.
For future awards under the GSIP and MCIP, the Committee may change the terms of a performance measure or target in accordance with its terms or if anything happens which causes the Committee reasonably to consider it appropriate to do so, and may adjust the number or class of shares subject to awards if certain corporate events (e.g. rights issues) occur. For legacy awards under the MCIP and GSIP, the Committee may change the terms of a performance measure or target during the performance period to take into account any structural changes relating to the shares or the Group (e.g. rights issues) in accordance with established market practice.
The Committee reserves the right to make any remuneration payments and payments for loss of office (including exercising any relevant discretions) notwithstanding that they are not in line with this Remuneration Policy where the terms of the payment were agreed before this Remuneration Policy came into effect or at a time when the relevant individual was not a Director of Unilever N.V. or PLC and, in the opinion of the Committee, the payment was not in consideration for the individual becoming a Director of Unilever N.V. or PLC. For these purposes, payments includes the Committee satisfying awards of variable remuneration and, in relation to an award over shares, the terms of the payment are agreed at the time the award is granted.
REMUNERATION SCENARIOS - OUR EMPHASIS ON PERFORMANCE-RELATED PAY
It is Unilevers policy that the total remuneration package for Executive Directors should be competitive with other global companies and that a significant proportion should be performance-related.
For the remuneration scenarios below, the maximum and target pay opportunities have been chosen to be consistent with the current levels for Executive Directors. In reviewing the appropriate level of pay opportunity for the Executive Directors, the Committee considers internal and external comparators. Although pay is not driven by benchmarking, the Committee is aware that pay needs to be within a reasonable range of competitive practice. The Committee notes that base salary and fixed allowance and total target pay for the Executive Directors is between median and lower quartile for the benchmark group used by the Committee (see page 53).
The Committee typically reviews, on at least an annual basis, the impact of different performance scenarios on the potential reward opportunity and payouts to be received by Executive Directors and the alignment of these with the returns that might be received by shareholders. The Committee believes that the level of remuneration that can be delivered in the various scenarios is appropriate for the level of performance delivered and the value that would be delivered to shareholders.
The charts below show hypothetical values of the remuneration package for Executive Directors in the first year of the policy under three assumed performance scenarios:
Annual Report on Form 20-F 2016 | Governance | 57 |
DIRECTORS REMUNERATION REPORT CONTINUED
DETAILS OF FIXED ELEMENT OF REMUNERATION FOR CEO AND CFO AND ASSUMPTIONS FOR SCENARIO CHARTS
FIXED REMUNERATION (FIXED PAY AND BENEFITS) |
Assumptions as follows (for actual Executive Director pay details please see Implementation Report below): | |||
Base salary for CEO = £1,010,000. | ||||
Base salary for CFO effective from 1 May 2017 = £656,250. | ||||
Fixed allowance = £250,000 for CEO and £200,000 for CFO. | ||||
CEO supplemental pension = £117,123. | ||||
Benefits assumed to be £447,000 for CEO and £19,000 for CFO in line with 2016.
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VARIABLE REMUNERATION |
BELOW THRESHOLD
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No bonus payout and no vesting under the MCIP or the GSIP. | ||
ON TARGET | Target payout of the annual bonus (120% of base salary for the CEO and 100% of base salary for the CFO). | |||
Target vesting under the MCIP (1 x matching shares of the target 2017 annual bonus for CEO and CFO). | ||||
Target vesting under the GSIP (200% of base salary for the CEO and 150% of base salary for the CFO). | ||||
Scenarios assume 60% of the gross annual bonus is invested.
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MAXIMUM | Maximum payout of the annual bonus (200% of base salary for the CEO and 150% of base salary for the CFO). | |||
Maximum vesting under the MCIP (1.5 x matching of the maximum 2017 annual bonus for CEO and CFO). | ||||
Maximum vesting under the GSIP (400% of 2016 base salary for the CEO and 300% of 2016 base salary for the CFO). | ||||
Scenarios assume 60% of the gross annual bonus is invested.
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NOTES TO VARIABLE REMUNERATION |
Dividends, dividend equivalents and share price movements are ignored for the purposes of the illustrations above. |
LEGACY ARRANGEMENTS
For the duration of this Remuneration Policy, entitlements arising before the adoption of this Remuneration Policy will continue to be honoured in line with the approved remuneration policy under which they were granted, or their contractual terms. The last award under the legacy MCIP was made on 11 February 2016, relating to the annual bonus earned in 2015, which will vest on 11 February 2018. The last award under the GSIP rules approved at the 2007 AGMs was made on 13 February 2017 and will vest on 13 February 2020. Further details of these awards can be found within the existing remuneration policy approved at the 2014 AGMs and included within the 2013 and subsequent Annual Report and Accounts.
PERFORMANCE MEASURES AND THE LINK TO STRATEGY
Performance measures are selected to align with Unilevers short-term performance targets and long-term business strategy objectives. Unilevers primary business objective is to create value in a sustainable way. Performance measures focus management on the delivery of a combination of top-line revenue growth and bottom-line profit growth that Unilever believes will build shareholder value over the longer term.
The measures chosen for the incentives will support the delivery of this objective, with distinct measures for each of the annual and longer-term incentive programmes. For the annual incentive, we continue to have a balanced set of performance measures in terms of sales, profitability and cash flow. Performance measures for our long-term incentive relate to the key objectives driving long-term value creation for investors: growth (in the form of USG) is fundamental to our model; core earnings per share (EPS) gives clear line of sight to share price via the Price/Earnings multiple; sustainability (USLP) is at the heart of our strategy for long-term value creation; and return on invested capital (ROIC) is an important measure of value creation, and an appropriate measure for ULE members given their decision-making responsibility regarding merger and acquisition activity. In 2017 there will be no change to the performance measures used for GSIP. For 2018, if the GSIP is maintained, it is intended that a consistent set of performance measures will be used across the MCIP and GSIP.
58 | Governance | Annual Report on Form 20-F 2016 |
The following sets out the performance measures for short- and long-term executive incentive plans to be awarded in 2017, as well as the business performance and the behaviours that they drive.
APPROACH TO TARGET SETTING
INCENTIVE PLAN | PERFORMANCE MEASURE
|
LINK TO STRATEGY | ||
SHORT-TERM: ANNUAL BONUS |
Underlying sales growth (USG) at constant rates | Clear, simple and well understood measure supporting the achievement of Unilevers growth ambition
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Free cash flow (FCF) at constant rates | Provides clear focus on the achievement of Unilevers cash generation ambition and on cost reduction
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Core operating margin improvement (COM) at current rates | Underlines the importance of achieving increasingly profitable growth
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LONG-TERM: MCIP |
Underlying sales growth CAGR (USG) at constant rates | Supports the achievement of Unilevers ambition to deliver sustainable growth over the longer term
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Core earnings per share (Core EPS) at current rates | Provides focus on a measure which is widely understood and applied externally by investors in valuing companies
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Return on invested capital (ROIC) | Supports disciplined investment of capital within the business and discourages acquisitions with low returns and long paybacks (an especially relevant measure for members of the ULE who make investment decisions)
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Unilever sustainability progress index (USLP) | The Unilever Sustainable Living Plan (USLP) helps to secure long-term value creation by decoupling our growth from our environmental impact, while increasing our positive social impact. To avoid over-focus on any one element of the USLP, the progress index is an assessment made by the Committee taking into account progress towards the targets in our reported USLP scorecard
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LONG-TERM: GSIP |
USG at constant rates | Supports the achievement of Unilevers ambition to deliver sustainable growth over the longer term
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COM at current rates | Underlines the importance of achieving sustainable profitable growth over the longer term
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Cumulative operating cash flow | Provides clear focus on the achievement of Unilevers cash generation ambition and on cost reduction
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Relative total shareholder return (TSR) | Provides a relative ranking of share price growth and dividend compared with a set of peer companies | |||
The Committee sets performance targets for incentive plans, taking into account internal budgets, business priorities and external forecasts so that the targets are sufficiently stretching. Good performance results in target payout while maximum payout is only achieved for delivering exceptional performance.
Annual Report on Form 20-F 2016 | Governance | 59 |
DIRECTORS REMUNERATION REPORT CONTINUED
DIFFERENCES IN PAY POLICY GENERALLY
As the Chairmans letter sets out, the reward arrangements for the ULE (excluding the Executive Directors) and Top 500 managers have been significantly simplified by consolidating fixed pay into a single figure and discontinuing the GSIP. Pay for this population (effective from mid-2017) will comprise three elements:
| fixed pay; |
| annual bonus; and |
| MCIP. |
To achieve a genuinely longer-term performance horizon of five years, we will encourage our managers to invest a proportion of their annual bonus after tax in Unilever shares through a revised longer-term version of Unilevers MCIP, for which approval will be sought at the 2017 AGMs. The operation of this new MCIP is the same for the Executive Directors, except that the current cap of 150% will continue to apply to the vesting of Executive Directors MCIP matching shares. For other participants the MCIP matching shares may vest up to 200%, based upon Unilevers performance.
For the ULE (excluding Executive Directors) and our Top 500 managers this new MCIP is the only long term incentive. These individuals have received increases in fixed pay and bonus opportunity and they can invest up to 100% of their gross annual bonus into MCIP. The new remuneration structure has been structured in a way to maintain broadly the same levels of pay for target performance, if they continue to invest 60% of their gross annual bonus in Unilever shares through the MCIP.
We plan to apply the principles driving these proposals to the way we pay all of our 15,000+ managers, not just our senior leaders. As a responsible employer with around 169,000 people in 109 countries as at year end, we are also very mindful of how we pay our many non-management staff.
Remuneration arrangements are determined throughout the Group based on the same principle - that reward should support our business strategy and should be sufficient to attract and retain high-performing individuals without paying more than is necessary. Unilever is a global organisation with employees at a number of different levels of seniority and in a number of different countries and, while this principle underpins all reward arrangements, the way it is implemented varies by geography and level.
In principle, all our managers participate in the same Unilever annual bonus scheme with the same performance measures based on Unilevers overall performance. All middle and senior management are invited to participate in the MCIP. All other employees will have the opportunity to participate in the global buy 3 get 1 free employee share plan called SHARES.
Through these initiatives we will encourage all our employees fully to adopt an owners mindset with the goal of achieving our growth ambition, so they can continuously re-invest and share in the future long-term success of Unilever.
CONSIDERATION OF CONDITIONS ELSEWHERE IN THE GROUP
When determining the pay of Executive Directors, the Committee considers the pay arrangements for other employees in the Group, including considering the average global pay review budget for the management population, to ensure that remuneration arrangements for Executive Directors remain reasonable.
Unilever employs around 169,000 people in 109 countries as at year end and, given this geographic spread and other factors, the Committee did not consider that it was appropriate to consult employees on the Remuneration Policy for Executive Directors during the year. However, Unilever takes the views of its employees seriously and on an ongoing basis we operate the Rate-My-Reward survey to gauge the views of employees on the different parts of their reward package.
The Committee has taken note of the Fair Compensation Unilever Framework (https://www.unilever.com/sustainable-living/the-sustainable-living-plan/enhancing-livelihoods/fairness-in-the-workplace/fair-compensation/) and the advanced living wage awareness together with responsible supplier policies within the Group. Over the last three years we have also offered the award-winning SHARES plan to our non-management staff around the world. We will continue to advance these initiatives over the year ahead and beyond to enhance the livelihoods of all our employees.
CONSIDERATION OF SHAREHOLDER VIEWS
The Committee takes the views of shareholders seriously. In a year when we are proposing to introduce this new Remuneration Policy shareholders have been consulted extensively and their views have been influential in shaping this Remuneration Policy.
We maintain an open and regular dialogue with our shareholders on remuneration matters, including consulting with our largest shareholders, when we are considering making material changes to our Remuneration Policy. As such we will be in contact with our largest shareholders during 2017 to determine how best to structure remuneration for the Executive Directors for 2018 and beyond.
MINIMUM SHAREHOLDING REQUIREMENT
The remuneration arrangements applicable to our Executive Directors require them to build and retain a personal shareholding in Unilever (by the later of 2018 or five years from the date of appointment) to align their interests with those of Unilevers long-term shareholders. The current requirement is 5 x base salary for the CEO and 4 x base salary for the CFO.
Upon leaving Unilever, all Executive Directors will be required to maintain at least 100% of their minimum shareholding requirement for one year after leaving, and at least 50% for two years after leaving. If the leaver has not yet met their shareholding requirements on departure they will be required to retain the shares they do own up to these limits.
60 | Governance | Annual Report on Form 20-F 2016 |
REMUNERATION POLICY FOR NEW HIRES
AREA
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POLICY AND OPERATION
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Overall | The Committee will pay new Executive Directors in accordance with the approved Remuneration Policy and all its elements as set out herein above. The terms of service contracts will not overall be more generous than those of the current CEO and CFO summarised below. The ongoing annual remuneration arrangements for new Executive Directors will therefore comprise salary, fixed allowance, benefits, annual bonus, MCIP and GSIP. In addition, the recruitment policy below permits the Committee to take the following actions, as appropriate, in the best interests of Unilever and therefore shareholders. | |
For internal promotions, any variable remuneration element awarded in respect of a prior role may be paid out according to its original terms.
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Base salary | Salary would be set at an appropriate level to recruit the best candidate based on their skills, experience and current remuneration.
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Fixed allowance | Fixed allowance provision would be in line with the approved normal Remuneration Policy and for a new external hire may be consolidated into salary.
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Benefits | Benefits provision would be in line with the approved normal Remuneration Policy. Where appropriate the Executive Director may also receive relocation benefits or other benefits reflective of normal market practice in the territory in which the Executive Director is employed. In addition, the Committee may agree that Unilever will pay certain allowances linked to repatriation on termination of employment.
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Incentive awards | Incentive awards would be made under the annual bonus, MCIP and GSIP in line with the normal policy. | |
Transition awards and buyout awards |
In addition to normal incentive awards, additional awards may be made to align the joiner as quickly as possible with Unilevers long-term goals, and to reflect value forfeited through an individual leaving their current employer. | |
Transition awards | ||
In the event that we were to appoint a new Executive Director, the Committees preferred approach would be to offer a transition award in Unilever shares to immediately align the new Executive Director with the long-term goals of the business and to recognise that no other long-term incentive will be vesting in their first years of employment at Unilever. The transition award permits the joiner to potentially receive matching awards under the MCIP and GSIP awards as if they had invested a proportion of their target bonus into the in-flight MCIP cycles and had been made awards in previous GSIP cycles that started before they joined Unilever. Accordingly, the transition award may comprise two elements. The first can be worth up to 240% (4 x 60%) of the new Executive Directors initial target annual bonus and vests 25% per year thereafter at the actual performance multiplier (0 x to 1.5 x) for the MCIP cycle ending in the corresponding year. The second element of the transition award may be worth up to 200% of the new Executive Directors initial salary and vests 50% per year thereafter at the actual performance multiplier (0 x to 2 x) for the GSIP cycle ending in the corresponding year. Within these limits the Committee will determine the size of the transition award based on individual circumstances. To be eligible for the transition award element related to MCIP (i.e 4 x 60% of target bonus) the Executive Director must invest no less than a corresponding percentage (i.e. 60%) of actual annual bonus into new cycles of MCIP starting in each of the years that the transition award vests. The final vesting value of the transition award will be scaled back if the corresponding level of investment the new Executive Director has made into the MCIP in that year is lower than the initial commitment. If the Executive Director elects to make a higher investment in new MCIP cycles than the initial commitment, the transition award will not be increased. | ||
A transition award would only be offered if required to compensate an Executive Director for awards foregone. If an Executive Director joins without the need to compensate for awards foregone, a transition award would not be provided. | ||
Buyout awards | ||
The Committees preference is to use transition awards rather than buyout awards. However, as we need to be able to source the best talent from any market, instead of the approach set out above the Committee may elect to compensate Executive Directors hired from outside for any awards they lose by leaving previous employers broadly on a like-for-like basis (although a transition award may form part of this). Incoming Executive Directors will be required to retain all shares vesting from any share awards until their minimum shareholding requirements have been met in full. | ||
If a buyout award is required, the Committee would aim to reflect the nature, timing, and value of awards forgone in any replacement awards. Awards may be made in cash, shares or any other method as deemed appropriate by the Committee. Where possible, share awards will be replaced with share awards. Where performance measures applied to the forfeited awards, performance measures will be applied to the replacement award or the award size will be discounted accordingly. In establishing the appropriate value of any buyout the Committee would also take into account the value of the other elements of the new remuneration package. | ||
The Committee would aim to minimise the cost to Unilever, although buyout awards are not subject to a formal maximum. Any awards would be broadly no more valuable than those being replaced. | ||
Annual Report on Form 20-F 2016 | Governance | 61 |
DIRECTORS REMUNERATION REPORT CONTINUED
SERVICE CONTRACTS
POLICY IN RELATION TO EXECUTIVE DIRECTOR SERVICE CONTRACTS AND PAYMENTS IN THE EVENT OF LOSS OF OFFICE
SERVICE CONTRACTS & NOTICE PERIOD |
Current Executive Directors service contracts are terminable upon notice as follows: 12 months notice from Unilever; and 6 months notice from the Executive Director. | |
Starting dates of the service contracts for the current CEO and CFO: | ||
CEO: 1 October 2008 (signed on 7 October 2008); and | ||
CFO: 1 October 2015 (signed on 16 December 2015). | ||
Service contracts are available to shareholders to view at the AGMs or on request from the Group Secretary.
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TERMINATION PAYMENTS |
A payment in lieu of notice can be made, to the value of no more than 12 months base salary, fixed allowance and other benefits (unless the Boards, at the proposal of the Committee, find this manifestly unreasonable given the circumstances or unless dictated by applicable law).
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OTHER ELEMENTS |
Executive Directors may, at the discretion of the Boards, remain eligible to receive an annual bonus for the financial year in which they cease employment. Such annual bonus will be determined by the Committee taking into account time in employment and performance. Treatment of share awards as set out below. Any outstanding all-employee share arrangements will be treated in accordance with HMRC-approved terms. Other payments, such as legal or other professional fees, repatriation or relocation costs and/or outplacement fees, may be paid if it is considered appropriate.
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62 | Governance | Annual Report on Form 20-F 2016 |
LEAVER PROVISIONS IN PLAN RULES
GOOD LEAVERS AS DETERMINED BY THE COMMITTEE IN ACCORDANCE WITH THE PLAN RULES*
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LEAVERS IN OTHER CIRCUMSTANCES* |
CHANGE OF CONTROL | ||||
INVESTMENT SHARES (MCIP) |
Investment shares are not impacted by termination (although they may be transferred to the personal representative of the Executive Director in the event of his or her death without causing the corresponding matching shares to lapse).
|
Investment shares are not impacted by termination. | Investment shares may normally be disposed of in connection with a change of control without causing the corresponding matching shares to lapse.
Alternatively, participants may be required to exchange the investment shares for equivalent shares in the acquiring company.
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MATCHING SHARES (MCIP), PERFORMANCE SHARES (GSIP) |
Awards will normally vest following the end of the original performance period, taking into account performance and (unless the Boards on the proposal of the Committee determine otherwise) pro-rated for time in employment.
Alternatively, the Boards may determine that awards shall vest upon termination based on performance at that time and pro-rated for time in employment (unless the Boards on the proposal of the Committee determine otherwise). If a director dies, awards will vest at the time of death at the target level of vesting (pro-rated for time in employment if the director had previously left as a good leaver).
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Awards will normally lapse upon termination. |
In accordance with Dutch law, matching shares and performance shares are shares that are obtained as part of the Executive Directors remuneration. Therefore their value is frozen for a period of four weeks before an announcement of a public offer and four weeks after the conclusion of a public offer. Under current Dutch law requirements, any increase in value in this period has to be reclaimed by Unilever from the Executive Director upon retirement or sale of these shares, if at that time the value of the shares is higher than the value four weeks before the announcement of the public offer. If the law changes, Unilever will seek to comply with any new Dutch law requirements that may apply from time to time.
Awards will vest based on performance at the time of the change of control and the Boards, on the proposal of the Committee, have the discretion to pro-rate for time. Alternatively, participants may be required to exchange the awards for equivalent awards over shares in the acquiring company.
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* | An Executive Director will usually be treated as a good leaver if he or she leaves due to ill-health, injury or disability, retirement with Unilevers agreement or redundancy. The Boards may decide to treat an Executive Director who leaves in other circumstances as a good leaver. An Executive Director will not be treated as a good leaver if he or she chooses to leave for another job elsewhere unless the Boards determine otherwise, if he or she is summarily dismissed or leaves because of concerns about performance. In deciding whether or not to treat an Executive Director as a good leaver, the Boards will have regard to his or her performance in the role. |
If Unilever is affected by a demerger, special distribution or other transaction which may affect the value of awards, the Committee may allow matching shares under the current and legacy MCIP and performance shares under the GSIP to vest early over such number of shares as it shall determine (to the extent any performance measures have been met) and may be pro-rated to reflect the acceleration of vesting at the Committees discretion. |
Annual Report on Form 20-F 2016 | Governance | 63 |
DIRECTORS REMUNERATION REPORT CONTINUED
NON-EXECUTIVE DIRECTORS
KEY ASPECTS OF UNILEVERS 2017 FEE POLICY FOR NON-EXECUTIVE DIRECTORS
APPROACH TO SETTING FEES |
Non-Executive Directors receive annual fees from Unilever N.V. and PLC. The Boards determine Non-Executive Director fee levels within total annual limits as approved by shareholders (as specified in PLCs Articles, this is currently PLC £2,000,000 or its equivalent in any other currency based upon such foreign currency exchange rates as the Committee shall determine, and NV 3,000,000).
Unilevers policy is to set fees at a level which is sufficient to attract, motivate and retain high-class talent of the calibre required to direct the strategy of the business. They are set taking into account: Unilevers Group-wide reward philosophy; the commitment and contribution expected by the Group; and fee levels paid in other global non-financial services companies based in Europe.
Fees are paid in cash.
| |
OPERATION | Unilever applies a modular fee structure for Non-Executive Directors to ensure we fairly reflect the roles and responsibilities of Committee membership and Chairmanship. Our basic philosophy is to pay the Chairman an all-inclusive fee. Other Board members receive a basic fee and additional fees for being Vice-Chair, chairing or membership of various committees. The fees are currently split 50/50 between PLC (in sterling) and NV (in euros). The Boards may decide to pay fees in any other currency based on such foreign exchange rates as the Boards shall determine, provided total Non-Executive Director fees stay within the annual limits as approved by shareholders from time to time. The current 2017 fee structure can be found in the Directors Remuneration Report on page 73. The fee structure may vary from year to year within the terms of this Remuneration Policy.
Fees are normally reviewed annually but may be reviewed less frequently.
Additional allowances are made available to Non-Executive Directors where appropriate, to reflect any additional time commitment or duties.
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OTHER ITEMS | Non-Executive Directors are encouraged to build up a personal shareholding of at least 100% of their total annual fees over the five years from appointment.
Non-Executive Directors are not entitled to participate in any of the Groups incentive plans.
All reasonable travel and other expenses incurred by Non-Executive Directors in the course of performing their duties are considered to be business expenses and are reimbursed together with any tax payable. Non-Executive Directors also receive expenses relating to the attendance of the Directors spouse or partner, when they are invited by Unilever. Other benefits or additional payments may be provided in the future if, in the view of the Boards, this is considered appropriate. Such benefits and/or payments would be within the total annual limits as approved by shareholders as described above.
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REMUNERATION POLICY FOR NEW NON-EXECUTIVE DIRECTOR HIRES
In the event of hiring a new Non-Executive Director, the Committee will align the remuneration package with the Remuneration Policy as set out herein above.
NON-EXECUTIVE DIRECTORS LETTERS OF APPOINTMENT
The terms of engagement of Non-Executive Directors are set out in letters of appointment which each Non-Executive Director signed upon appointment. Non-Executive Directors are currently appointed for a one-year term, subject to satisfactory performance, re-nomination at the discretion of the Boards on the recommendation of the Nominating and Corporate Governance Committee and re-election at forthcoming annual shareholder meetings. It is Unilevers expectation that Non-Executive Directors serve for a minimum of three years. The letters of appointment allow for Unilever to terminate a Non-Executive Directors appointment in cases of gross misconduct, bankruptcy or where the Non-Executive Director is prevented from occupying such a position by law.
The letters do not contain provision for notice periods or compensation if the Non-Executive Directors appointments are terminated by Unilever. Non-Executive Directors may terminate their engagement upon three months notice. Except in exceptional circumstances, the Boards will not propose Non-Executive Directors for re-nomination when nine years have elapsed since the date of their appointment. Letters of appointment are available for inspection on request from the Group Secretary.
In considering appointments to the Boards, the Directors and Unilever give due consideration to the time commitment required to fulfil the role appropriately.
64 | Governance | Annual Report on Form 20-F 2016 |
ANNUAL REMUNERATION REPORT
The following sets out how Unilevers existing Remuneration Policy (which is available on our website see www.unilever.com/ara2015/downloads) was implemented in 2016, and how our new Remuneration Policy (set out on pages 52 to 64) will be implemented if it receives shareholder approval at the 2017 AGMs.
IMPLEMENTATION OF THE REMUNERATION POLICY IN 2017 FOR EXECUTIVE DIRECTORS
If approved by shareholders, Unilevers new Remuneration Policy will be implemented with effect from the 2017 AGMs as set out below. If the new Remuneration Policy is not approved, Unilevers existing Remuneration Policy will continue to apply.
ELEMENTS OF REMUNERATION
ELEMENTS OF REMUNERATION |
AT A GLANCE |
ADDITIONAL INFORMATION | ||
BASE SALARY |
Salary effective from 1 May 2017: CEO: £1,010,000 (unchanged from 2016) CFO: £656,250 |
No salary increase is to be awarded to the CEO during 2017. The Committee notes that the CEOs salary continues to be below competitive benchmarks compared to similar-sized UK and European companies, but that he has consistently refused a salary increase over recent years.
The CFO was recently appointed to the Board and has performed strongly in role since appointment. The Committee has therefore determined, in line with our Remuneration Policy, to award the CFO a salary increase of 5% that reflects his strong performance since appointment and development in role. This is above the average increase awarded to the broader employee population, but after careful consideration is considered appropriate by the Committee.
In particular, the Committee notes that the CFO was appointed with a salary significantly below that of his predecessor, and that, even with this increase, the CFOs salary is still below the lower quartile of the market when assessed against our benchmarking peer group (as disclosed on page 53).
The Committee will continue to review the CFOs salary in view of his performance and development in role, and may make salary increases that exceed that of the wider workforce, although any further salary increases awarded will not exceed 15% on aggregate over the course of this Remuneration Policy.
| ||
FIXED ALLOWANCE |
Fixed allowance for 2017: CEO: £250,000 (unchanged from 2016) CFO: £200,000 (unchanged from 2016)
|
n/a | ||
OTHER BENEFIT ENTITLEMENTS |
Implemented in line with the 2017 Remuneration Policy.
|
n/a | ||
ANNUAL BONUS | Implemented in line with the 2017 Remuneration Policy. Target annual bonus of 120% of base salary for the CEO and 100% of base salary for the CFO. Business Performance Multiplier of between 0% and 150% based on achievement against business targets over the year. Personal Performance Multiplier of between 0% and 150% based on personal performance of the Executive Director. Maximum annual bonus is 200% of base salary for the CEO and 150% for the CFO.
|
For 2017, the Business Performance Multiplier will be based on the following metrics:
A 0% multiplier will be applied for threshold performance, and up to 150% multiplier for maximum performance. Performance target ranges are considered to be commercially sensitive and will be disclosed in full with the corresponding performance outcomes retrospectively following the end of the relevant performance year.
|
Annual Report on Form 20-F 2016 | Governance | 65 |
DIRECTORS REMUNERATION REPORT CONTINUED
ELEMENTS OF REMUNERATION |
AT A GLANCE |
ADDITIONAL INFORMATION | ||
GSIP 2017 AWARDS |
Implemented in line with the 2014 Remuneration Policy. GSIP award made on 13 February 2017 (vesting 13 February 2020). Target award 200% of base salary for the CEO (salary = £1,010,000) and 150% of base salary for the CFO (salary = £625,000). Maximum vesting of 200% of initial award (so maximum vesting of 400% of base salary for the CEO (£4,040,000), and 300% of base salary for the CFO (£1,875,000)). In addition, a two-year post-vesting holding period will apply to this award (beyond the three-year vesting period) for the CEO and CFO.
|
Performance conditions are assessed over a three-year period. The performance conditions and target ranges for 2017 awards will be as follows:
For the three business-focused performance conditions, 25% of target awards vest for achieving threshold performance, 100% for target and 200% for maximum performance (with straight-line vesting between threshold and maximum). For the TSR measure, 50% of the target award vests for threshold performance at 10th place, 100% at 7th place, and 200% vests at 3rd place or above (with straight-line vesting occurring between these points).(a) | ||
NEW MCIP | Implemented in line with the 2017 Remuneration Policy. It is intended to make initial awards under the MCIP in May 2017. Paul Polman elected to invest the value of 60% (£1,119,888) of his 2016 annual bonus into the MCIP (upon the plans approval at the 2017 AGMs). Graeme Pitkethly elected to invest the value of 60% (£453,750) of his 2016 annual bonus in MCIP investment shares (upon the plans approval at the 2017 AGMs). Matching shares are awarded based on performance up to a maximum of 1.5 x matching shares. Therefore the maximum value from the matching shares for the CEO would be £1,679,832 and for the CFO would be £680,625. |
Performance conditions are assessed over a four-year period. The performance conditions and target ranges for 2017 awards under the new MCIP will be as follows:
Threshold results in no matching shares being awarded, target performance results in an award of 1 x matching shares, up to a maximum award of 1.5 x matching shares for Executive Directors, with straight-line vesting between threshold and maximum (although the maximum for other participants is 2 x matching)
Participants are required to hold all their own investment shares and remain employed by Unilever for the duration.
It is the Committees intention that management should be assessed against the progress they make on the USLP as a whole, rather than selected components of it. Unilever already publishes periodic progress reports for the USLP on our website and so our shareholders are able to monitor performance against USLP goals. At the end of the MCIP performance period, the Committee will disclose a full narrative setting out the performance achieved and the corresponding outcome that the Committee determines for the Sustainability Progress Index.
|
(a) | For the relative TSR measure, Unilevers TSR is measured against a comparator group of other consumer goods companies. TSR measures the return received by a shareholder, capturing both the increase in share price and the value of dividend income (assuming dividends are reinvested). The TSR results are measured on a common currency basis to better reflect the shareholder experience. The current TSR peer group consists of 18 companies (19 including Unilever) as follows: |
Avon | Colgate-Palmolive | Henkel | LOréal | Reckitt Benckiser | ||||
Beiersdorf | Danone | Kao | Nestlé | Shiseido | ||||
Campbell Soup | General Mills | Kelloggs | PepsiCo | |||||
Coca-Cola | Estée Lauder | Kimberly-Clark | Procter & Gamble |
The Committee may change the TSR vesting levels set out above if the number of companies in the TSR comparator group changes (e.g. via M&A activity etc).
66 | Governance | Annual Report on Form 20-F 2016 |
ULTIMATE REMEDY/MALUS AND CLAWBACK
Grants under the GSIP and MCIP are subject to ultimate remedy as explained in the 2017 Remuneration Policy. Malus and clawback apply to all performance-related payments as explained in the 2017 Remuneration Policy.
In 2016, the Committee did not reclaim or claw back any of the value of awards of performance-related payments to Executive Directors.
SINGLE FIGURE OF REMUNERATION AND IMPLEMENTATION OF THE REMUNERATION POLICY IN 2016 FOR EXECUTIVE DIRECTORS (AUDITED)
The table below shows a single figure of remuneration for each of our Executive Directors, for the years 2015 and 2016.
Paul Polman CEO (UK) (000) |
Graeme Pitkethly CFO (UK) (000) |
Jean-Marc Huët former CFO (UK) (000) | ||||||||||||||||||||||
2016 | 2015 | 2016 | (b) | 2015(b) | 2016 | (c) | 2015 | (c) | ||||||||||||||||
(A) Base salary |
1,239 | 1,392 | 511 | - | - | 738 | ||||||||||||||||||
(B) Fixed allowances and other benefits |
855 | 901 | 185 | - | - | 273 | ||||||||||||||||||
(C) Annual bonus |
2,289 | 2,573 | 928 | - | - | 812 | ||||||||||||||||||
(D) MCIP matching shares (required by UK law)(d) |
1,240 | 1,933 | (a) | 153 | - | - | 375 | (a) | ||||||||||||||||
Long-term incentives |
||||||||||||||||||||||||
(E) GSIP performance shares (required by UK law)(d) |
2,603 | 3,336 | (a) | 305 | - | - | 1,783 | (a) | ||||||||||||||||
Long-term incentives (sub-total) |
3,843 | 5,269 | 458 | - | - | 2,158 | ||||||||||||||||||
(F) Conditional supplemental pension |
144 | 161 | - | - | - | - | ||||||||||||||||||
Total remuneration paid (required by UK law) (A+B+C+D+E+F) |
8,370 | 10,296 | 2,082 | - | - | 3,981 | ||||||||||||||||||
(G) Share awards (required by Dutch law) |
3,170 | 3,274 | 674 | - | - | 573 | ||||||||||||||||||
Total remuneration paid (required by Dutch law) (A+B+C+F+G) |
7,697 | 8,301 | 2,298 | - | - | 2,396 |
(a) | Amount restated using actual share price(s) on relevant dates rather than three-month average share price to 31 December 2015 (which was used for the 2015 report). |
(b) | The figures included relate to amounts paid or payable to Graeme Pitkethly for his services from 21 April 2016 for the remainder of the year, being the date on which he was appointed as an Executive Director of the Boards of NV and PLC. Although Graeme Pitkethly assumed the role of CFO and became a member of the ULE on 1 October 2015, he did not serve as an Executive Director during that year, and therefore his 2015 remuneration is not disclosed herein. |
(c) | The figures included relate to amounts paid to Jean-Marc Huët for his services between 1 January and 1 October 2015, being the date on which he ceased to be CFO and an Executive Director of Unilever. |
(d) | Graeme Pitkethlys GSIP and MCIP values in the above single figure table for 2016 include GSIP performance shares and MCIP matching shares previously granted to him in 2014, before his appointment as an Executive Director. |
Where relevant, amounts for 2016 have been translated into euros using the average exchange rate over 2016 (1 = £0.8152), excluding amounts in respect of MCIP and GSIP which have been translated into euros using the exchange rate at vesting date of 14 February 2017 (1 = £0.8494). Amounts for 2015 have been translated into euros using the average exchange rate over 2015 (1 = £0.7254), excluding amounts in respect of MCIP and GSIP which have been translated into euros using the exchange rate at vesting date of 18 February 2016 (1 = £0.7763).
We do not grant our Executive Directors any personal loans or guarantees.
ELEMENTS OF SINGLE FIGURE REMUNERATION 2016
(A) BASE SALARY (AUDITED)
Salary set in sterling and paid in 2016:
| CEO £1,010,000. |
| CFO £416,667 (amount paid to Graeme Pitkethly for his services from 21 April 2016, being the date on which he was appointed as an Executive Director of the Boards of NV and PLC; Graeme Pitkethlys annual salary is £625,000). |
(B) FIXED ALLOWANCE AND OTHER BENEFITS (AUDITED)
For 2016 this comprises:
|
Paul Polman CEO (UK) (£) |
(a) |
|
Graeme Pitkethly CFO (UK) (£)(a)(b) |
| |||
2016 | 2016 | |||||||
Fixed allowance |
250,000 | 133,333 | ||||||
Medical insurance cover and actual tax return preparation costs |
29,390 | 14,087 | ||||||
Provision of death-in-service benefits and administration |
11,011 | 3,370 | ||||||
Payment to protect against difference between employee social security obligations in country of residence versus UK | 406,247 | - | ||||||
Total |
696,648 | 150,790 |
(a) | The numbers in this table are quoted in sterling and translated into euros for the single figure of remuneration table above using the average exchange rate over 2016 of 1 = £0.8152. |
(b) | The figures included relate to amounts paid or payable to Graeme Pitkethly for his services from 21 April 2016 for the remainder of the year, being the date on which he was elected at the AGMs as an Executive Director of the Boards of NV and PLC. |
Annual Report on Form 20-F 2016 | Governance | 67 |
DIRECTORS REMUNERATION REPORT CONTINUED
(C) ANNUAL BONUS (AUDITED)
Annual bonus 2016 actual outcomes
| CEO £1,866,480 (which is 92.5% of maximum, 185% of base salary). |
| CFO £756,250 (which is 80.7% of maximum, 121% of base salary). |
This includes cash and the portion of annual bonus that Executive Directors have indicated will be re-invested in shares under the MCIP. See below for details. Performance against targets:
At the beginning of the year, the Committee set stretching financial performance targets which management delivered against during the course of the year. In 2016 we achieved underlying sales growth of 3.7%, ahead of our markets, driven by a good step-up in price growth with balanced volume. Improvement in core operating margin compared with 2015 was 0.5 percentage points driven by savings, improved product mix and operational leverage. All categories delivered progress against their strategic priorities. For the annual bonus calculations, free cash flow (FCF) is calculated on a constant basis at 4.7 billion (equivalent to the reported 4.8 billion at current rates), driven by the increase in core operating profit and improvement in working capital, in line with the strong delivery in 2015.
The 2016 results represent good all-round performance despite difficult conditions. The consistent delivery of top-line and bottom-line growth has been established over the last eight years. Operating margin performance, despite significant restructuring spend, was well above target with cash flow and underlying sales growth more in line with target. Hence, the Committee has decided to award a performance factor of 110% versus target. Although purely mathematically the bonus would have been 121%, management recommended the adjustment slightly downwards in light of overall quality of results as we ended the year with slower growth. The Committee considered this to be a fair representation of the performance delivery by the executive team during 2016.
| Paul Polman |
In determining bonus outcomes for Paul Polman, the Committee also considered his very strong personal performance. Again in 2016, Paul demonstrated very firm leadership, both internally and externally. He received significant recognition for his work in leading Unilever and in helping to promote sustainable and responsible business models around the world. He was awarded the Chevalier de la Legion dHonneur, the highest decoration in France, and the Public Service Star from the Singapore Government. Despite increasingly difficult market conditions in 2016, Unilever maintained its consistent track record of delivering underlying sales growth ahead of its markets and growth in core operating margin together with strong free cash flow. In 2016 Paul also introduced and pushed forward a number of major transformation initiatives for Unilever notably Connected 4 Growth (C4G) which are already helping to strengthen the company and will enable it to meet the demands of a fast-changing environment with even greater speed, agility and confidence. In 2016 Paul also oversaw a number of strategic acquisitions that will help to bolster Unilevers position in some fast-growing areas of the market. As a consequence of the review of his personal performance, Paul Polman was awarded a personal performance multiplier of 140%. This resulted in his receiving a bonus of 185% of his base salary, calculated as follows:
| Graeme Pitkethly |
In determining bonus outcomes for Graeme Pitkethly, the Committee considered his personal performance and leadership, including the management of Unilevers financial risk exposure and the continuing drive for enterprise-wide efficiencies. It also took account of his strong focus as CFO on performance management and the extent to which this was reflected in Unilevers positive business results in 2016. Graeme also played an important role in the successful launch of the C4G major organisational re-design, as well as driving the implementation of the ambitious Zero-Based Budgeting (ZBB) programme across the Group, which is already generating savings for reinvestment within Unilever and has the potential to restructure Unilevers cost base over the next two years. Graeme has also pushed to instil enhanced levels of investment discipline and cash delivery. As a consequence of that review, Graeme was awarded a personal performance multiplier of 110%. This resulted in his receiving a bonus of 121% of his base salary, calculated as follows:
68 | Governance | Annual Report on Form 20-F 2016 |
(D) MCIP UK LAW REQUIREMENT (AUDITED)
2016 OUTCOMES
This includes MCIP matching shares granted on 14 February 2014 (based on the percentage of 2013 bonus that Paul Polman and Graeme Pitkethly had invested in Unilever shares, as well as performance in the three-year period to 31 December 2016) which vested on 14 February 2017. Further details of the performance measures are disclosed below in note (E).
The values included in the single figure table for 2016 are calculated by multiplying the number of shares granted on 14 February 2014 (including additional shares in respect of accrued dividends through to 31 December 2016) by the level of vesting (70% of target award for the CEO and 84% of target award for the CFO) and the share prices on the date of vesting (NV 38.81 and PLC £32.86). The CFOs award vested at a different level than the CEOs award as it relates to an award granted in 2014 before his appointment as an Executive Director. Performance measures and performance against them are as set out in the table below (although the weightings of the measures were different for participants below Board level, so the weightings of each measure in the award that vested for the CFO are Underlying Sales Growth at 30%, Core Operating Margin Improvement at 30%, Cumulative Operating Cash Flow at 30% and TSR at 10%). These have been translated into euros using the exchange rate on the date of vesting (1 = £0.8494).
(E) GSIP UK LAW REQUIREMENT (AUDITED)
2016 OUTCOMES
This includes GSIP performance shares granted on 14 February 2014, based on performance in the three-year period to 31 December 2016, which vested on 14 February 2017.
The values included in the single figure table for 2016 are calculated by multiplying the number of shares granted on 14 February 2014 (including additional shares in respect of accrued dividends through to 31 December 2016) by the level of vesting (70% of target award for the CEO and 84% of target award for the CFO) and the share price on the date of vesting (NV 38.81 and PLC £32.86). The CFOs award vested at a different level than the CEOs award as it relates to an award granted in 2014 before his appointment as an Executive Director with the performance measures and weighting as set out under heading (D) above. These have been translated into euros using the exchange rate on the date of vesting (1 = £0.8494).
Performance against targets:
(a) | For details of comparator group please see page 66. |
Over the past three years, Unilever has delivered consistent financial performance. Underlying sales growth during this period was 3.6% per year and core operating margin improvement over the period was an average of 0.4 percentage points per year, demonstrating managements continued drive for consistent top- and bottom-line growth. Unilever also generated strong operating cash in the period, with cumulative operating cash flow of 18.1 billion. Total shareholder return (TSR) over this three-year period was in the middle third of the peer group just below the threshold for minimum vesting and, as such, no part of the GSIP and MCIP awards related to TSR will vest. On the basis of this performance, the Committee determined that the GSIP and MCIP awards to the end of 2016 will vest at 70% of initial award levels (ie 35% of maximum for GSIP and 47% of maximum for MCIP (which is capped at 150% for the Executive Directors)).
(F) CONDITIONAL SUPPLEMENTAL PENSION (AUDITED)
CEO (Paul Polman): Conditional supplemental pension provision agreed with Paul Polman on hiring, which will be paid on his retirement (or his death or total disability prior to retirement). This was £117,123 based on 12% of a capped salary of £976,028 for 2016.
(G) SHARE INCENTIVES DUTCH LAW REQUIREMENT (AUDITED)
As per the Dutch requirements, these costs are non-cash costs and relate to the expenses recognised for the period following IFRS 2. This is based on share prices on grant dates and a 98% adjustment factor for GSIP shares and MCIP matching shares awarded in 2016, 2015 and 2014.
Annual Report on Form 20-F 2016 | Governance | 69 |
DIRECTORS REMUNERATION REPORT CONTINUED
SCHEME INTERESTS AWARDED IN THE YEAR (AUDITED)
PLAN |
BASIS OF AWARD |
MAXIMUM |
THRESHOLD |
PERFORMANCE |
DETAILS OF PERFORMANCE MEASURES | |||||
MCIP Conditional matching share award made on 11 February 2016 |
Based on the level of 2015 bonus paid in 2016 invested by the CEO and CFO.
The following numbers of matching shares were awarded on 11 February 2016(a):
CEO: PLC 0 NV 39,318
CFO: PLC 4,912 NV 4,912
Maximum vesting results in 150% of target awards vesting.
|
CEO: £1,763,984(b)
CFO: £434,415(b) |
Four equally weighted long-term performance measures. For the three business- focused metrics, 25% of the target award vests for threshold performance. For the TSR measure, 50% of the target award vests for threshold performance. |
1 January 2016 31 December 2018 |
Subject to four equally weighted performance measures:
Participants are required to hold all their own investment shares and remain employed by Unilever for the duration. | |||||
GSIP Conditional share award made on 11 February 2016 |
The CEO received a target award of 200% of base salary.
CEO: PLC 35,115 NV 35,115
The CFO received a target award of 150% of base salary.
CFO: PLC 16,297 NV 16,297
Maximum vesting results in 200% of target awards vesting, which translates to a maximum vesting of 400% of base salary for the CEO and 300% of base salary for the CFO.
|
CEO: £4,140,739(b)
CFO: £1,921,732(b) |
As above | As above | Subject to four equally weighted performance measures:
|
(a) | Under MCIP, Executive Directors are able to choose whether they invest in PLC shares or NV shares or an equal number of shares in each. Executive Directors receive a corresponding number of performance-related matching shares. Matching shares will be awarded in the same form as the investment shares (i.e. in PLC shares, NV shares or an equal number of shares in each). On 11 February 2016, the CEO invested 60% (£1,119,888) and the CFO invested 60% (£282,520) of their 2015 bonus in MCIP investment shares. The CEO elected to invest fully in NV shares. The CFO elected to receive an equal number of shares in each of PLC and NV. |
(b) | The face values included in this table are calculated by multiplying the number of shares granted on 11 February 2016 by the share price on that day of PLC £29.05 and NV 36.69 respectively, assuming maximum performance and therefore maximum vesting of 200% for GSIP and 150% for MCIP and then translating into sterling using an average exchange rate over 2016 of 1 = £0.8152. |
70 | Governance | Annual Report on Form 20-F 2016 |
MINIMUM SHAREHOLDING REQUIREMENT AND EXECUTIVE DIRECTOR SHARE INTERESTS (UNAUDITED)
The table below shows the Executive Directors share ownership against the minimum shareholding requirements as at 31 December 2016 and the interest in NV and PLC ordinary shares of Executive Directors and their connected persons as at 31 December 2016.
When calculating an Executive Directors personal shareholding the following methodology is used:
| Base salary at the date of measurement. |
| Shares in either Unilever PLC or Unilever N.V. (or a combination of both) will qualify provided they are personally owned by the Executive Director, by a member of his (immediate) family or by certain corporate bodies, trusts or partnerships as required by law from time to time (each a connected person). |
| Shares purchased under the MCIP from the annual bonus will qualify as from the moment of purchase as these are held in the individuals name and are not subject to further restrictions. |
| Shares or entitlements to shares that are subject only to the Director remaining in employment will qualify on a net of tax basis. |
| Shares awarded on a conditional basis by way of the GSIP or MCIP will not qualify until the moment of vesting (i.e. once the precise number of shares is fixed after the three-year vesting period, or a four-year vesting period for the MCIP, has elapsed). |
| The shares will be valued on the date of measurement or, if that outcome fails the personal shareholding test, on the date of acquisition. The share price for the relevant measurement date will be based on the average closing share prices and the euro/sterling/US dollar exchange rates from the 60 calendar days prior to the measurement date. |
Executive Directors are required to hold shares to the value of 100% of their shareholding requirement for 12 months post cessation of employment at Unilever, and 50% of these shares for 24 months post cessation of employment with Unilever. All ULE members are required to build a shareholding of 300% of base salary. This requirement is 150% of base salary for the Top 100 management layer below ULE.
EXECUTIVE DIRECTORS AND THEIR CONNECTED PERSONS INTERESTS IN SHARES AND SHARE OWNERSHIP (AUDITED)
Share ownership | Actual share | Shares held as at | Shares held as at | |||||||||||||||||||||||||
guideline as % of | Have guidelines | ownership as a % | 1 January 2016(b) | 31 December 2016 | ||||||||||||||||||||||||
base salary (as at | been met (as at | of base salary (as at | NV | PLC | NV | PLC | ||||||||||||||||||||||
31 December 2016) | 31 December 2016)? | 31 December 2016)(a) | ||||||||||||||||||||||||||
CEO: Paul Polman |
400 | Yes | 3,433% | 655,307 | 297,008 | 824,245 | 307,239 | |||||||||||||||||||||
CFO: Graeme Pitkethly |
300 | Yes | 367% | 17,468 | 27,569 | 32,189 | 42,908 |
(a) | Calculated based on the minimum shareholding requirements and methodology set out above and the base salaries as detailed for the CEO and CFO in section (A) on page 67. |
(b) | NV shares are ordinary 0.16 shares and PLC shares are ordinary 3 1⁄9p shares. |
During the period between 31 December 2016 and 21 February 2017, the following changes in interests have occurred:
| Graeme Pitkethly purchased 8 PLC shares under the Unilever PLC ShareBuy Plan: 4 on 10 January 2017 at a share price of £33.50, and a further 4 on 8 February 2017 at a share price of £33.09; and |
| as detailed under headings (D) and (E) on page 69, on 14 February 2017: |
○ | Paul Polman acquired 31,964 NV shares following the vesting of his 2014 MCIP award, and 67,186 NV shares following the vesting of his 2014 GSIP award, in accordance with his share choice to receive 100% NV shares on the vesting of these awards; and |
○ | Graeme Pitkethly acquired 1,964 NV shares and 1,983 PLC shares following the vesting of his 2014 MCIP award, and 3,915 NV shares and 3,952 PLC shares following the vesting of his 2014 GSIP award. |
The voting rights of the Directors (Executive and Non-Executive) and members of the ULE who hold interests in the share capital of NV and PLC are the same as for other holders of the class of shares indicated. As at 21 February 2017 none of the Directors (Executive and Non-Executive) or other ULE members shareholdings amounted to more than 1% of the issued shares in that class of share, excluding the holdings of the Leverhulme Trust and the Leverhulme Trade Charities Trust, which amounted to 5.5%. All shareholdings in the table above are beneficial. In addition, 68,531,182 shares are held by the Leverhulme Trust and 2,035,582 shares are held by the Leverhulme Trade Charities Trust, of which Paul Polman is a director.
INFORMATION IN RELATION TO OUTSTANDING SHARE INCENTIVE AWARDS
As at 31 December 2016, Paul Polman held awards over a total of 362,163 shares which are subject to performance conditions, and Graeme Pitkethly held awards over a total of 66,760 shares which are subject to performance conditions. There are no awards of shares without performance conditions and no awards in the form of options.
Annual Report on Form 20-F 2016 | Governance | 71 |
DIRECTORS REMUNERATION REPORT CONTINUED
MANAGEMENT CO-INVESTMENT PLAN (AUDITED)
The following conditional shares vested during 2016 or were outstanding at 31 December 2016 under the MCIP:
Balance of | Balance of | |||||||||||||||||||||||||||||||||||||||
conditional shares | Conditional shares | conditional shares | ||||||||||||||||||||||||||||||||||||||
at 1 January 2016 | awarded in 2016(a) | at 31 December 2016 | ||||||||||||||||||||||||||||||||||||||
Dividend | ||||||||||||||||||||||||||||||||||||||||
Performance | shares | Additional | ||||||||||||||||||||||||||||||||||||||
period | accrued | shares | ||||||||||||||||||||||||||||||||||||||
Share | Original | 1 January 2016 to | Price at | during | Vested in | earned in | Price at | Shares | No. of | |||||||||||||||||||||||||||||||
type | award | 31 December 2018 | award | the year(d) | 2016(e) | 2016 | vesting | lapsed | shares | |||||||||||||||||||||||||||||||
Paul Polman |
NV | 99,362 | (b) | 39,318 | | 36.69 | 3,327 | 24,779 | 0 | | 38.85 | 505 | 116,723 | |||||||||||||||||||||||||||
PLC | 25,509 | (b) | 0 | £ | 29.05 | 0 | 24,999 | 0 | £ | 30.25 | 510 | 0 | ||||||||||||||||||||||||||||
Graeme Pitkethly |
NV | 5,401 | (c) | 4,912 | | 36.69 | 192 | 3,700 | 564 | | 38.85 | 0 | 7,369 | |||||||||||||||||||||||||||
PLC | 7,715 | (c) | 4,912 | £ | 29.05 | 301 | 3,733 | 569 | £ | 30.25 | 0 | 9,765 |
(a) | Each award of conditional matching shares vests three years after the date of the award, subject to performance conditions (further details can be found on pages 69-70). Awards are all subject to continued employment and maintenance of the underlying investment shares. Under MCIP, Executive Directors are able to choose whether they invest in PLC or NV shares or an equal number of shares in each. Executive Directors receive a corresponding number of performance-related matching shares. |
Matching shares will be awarded in the same form as the investment shares (i.e. in PLC shares, NV shares or an equal number of shares in each). On 11 February 2016, Paul Polman and Graeme Pitkethly each invested in the MCIP 60% of their annual bonus earned during 2015 and paid in 2016, and received a corresponding award of matching shares (which will vest, subject to performance, on 11 February 2019). |
(b) | This includes a grant of 22,999 of each of NV and PLC shares made on 18 February 2013 (98% of which vested on 18 February 2016), a grant of 41,775 NV shares made on 14 February 2014 (70% of which vested on 14 February 2017), a grant of 29,128 NV shares made on 13 February 2015 (vesting 13 February 2018) and 5,460 NV shares and 2,510 PLC shares from reinvested dividends accrued in prior years in respect of awards. |
(c) | This includes grants that were made to Graeme Pitkethly before his appointment as Executive Director on 21 April 2016, being a grant of 2,852 of each of NV and PLC shares made on 18 February 2013 (118% of which vested on 18 February 2016), a grant of 2,139 of each of NV and PLC shares made on 14 February 2014 (84% of which vested on 14 February 2017), a grant of 2,215 PLC shares made on 13 February 2015 (vesting 13 February 2018) and 410 NV shares and 509 PLC shares from reinvested dividends accrued in prior years in respect of awards. |
(d) | Reflects reinvested dividend equivalents accrued during 2016 and subject to the same performance conditions as the underlying matching shares. |
(e) | The 18 February 2013 grant vested on 18 February 2016 at 98% for Paul Polman and 118% for Graeme Pitkethly. In accordance with Unilevers existing Remuneration Policy (www.unilever.com/ara2016/downloads), Executive Directors are able to choose whether they receive any shares due to vest under MCIP in PLC or NV shares or an equal number of shares in each. Paul Polman elected for share choice and chose to receive his shares in the form of 100% NV shares. Therefore, upon vesting, his 18 February 2013 PLC award was cancelled and converted and delivered to him as 24,971 NV shares (resulting in a total vesting for the 18 February grant of 49,750 NV shares). Graeme Pitkethly elected to receive his shares in the form of an equal number of shares in each of PLC and NV. |
GLOBAL SHARE INCENTIVE PLAN (AUDITED)
The following conditional shares vested during 2016 or were outstanding at 31 December 2016 under the GSIP:
Balance of | Balance of | |||||||||||||||||||||||||||||||||||||||
conditional shares | Conditional shares | conditional shares | ||||||||||||||||||||||||||||||||||||||
at 1 January 2016 | awarded in 2016(a) | at 31 December 2016 | ||||||||||||||||||||||||||||||||||||||
Dividend | ||||||||||||||||||||||||||||||||||||||||
Performance | shares | Additional | ||||||||||||||||||||||||||||||||||||||
period | accrued | shares | ||||||||||||||||||||||||||||||||||||||
Share | Original | 1 January 2016 to | Price at | during | Vested in | earned in | Price at | Shares | No. of | |||||||||||||||||||||||||||||||
type | award | 31 December 2018 | award | the year(d) | 2016(e) | 2016 | vesting | lapsed | shares | |||||||||||||||||||||||||||||||
Paul Polman |
NV | 127,306 | (b) | 35,115 | | 36.69 | 3,532 | 42,769 | 0 | | 38.85 | 873 | 122,311 | |||||||||||||||||||||||||||
PLC | 128,029 | (b) | 35,115 | £ | 29.05 | 4,014 | 43,150 | 0 | £ | 30.25 | 879 | 123,129 | ||||||||||||||||||||||||||||
Graeme Pitkethly |
NV | 12,281 | (c) | 16,297 | | 36.69 | 647 | 5,278 | 805 | | 38.85 | 0 | 24,752 | |||||||||||||||||||||||||||
PLC | 12,353 | (c) | 16,297 | £ | 29.05 | 737 | 5,325 | 812 | £ | 30.25 | 0 | 24,874 |
(a) | Each award of conditional shares vests three years after the date of the award, subject to performance conditions (further details can be found on pages 69-70). The 2016 award was made on 11 February 2016 (vesting 11 February 2019). |
(b) | This includes a grant of 39,698 of each of NV and PLC shares made on 18 February 2013 (98% of which vested on 18 February 2016), a grant of 43,700 of each of NV and PLC shares made on 14 February 2014 (70% of which vested on 14 February 2017), a grant of 36,497 of each of NV and PLC shares made on 13 February 2015 (vesting 13 February 2018) and 7,411 NV shares and 8,134 PLC shares from reinvested dividends accrued in prior years in respect of awards. |
(c) | This includes grants that were made to Graeme Pitkethly before his appointment as Executive Director on 21 April 2016, being a grant of 4,068 of each of NV and PLC shares made on 18 February 2013 (118% of which vested on 18 February 2016), a grant of 4,263 of each of NV and PLC shares made on 14 February 2014 (84% of which vested on 14 February 2017), a grant of 3,216 of each of NV and PLC shares made on 13 February 2015 (vesting 13 February 2018) and 734 NV shares and 806 PLC shares from reinvested dividends accrued in prior years in respect of awards. |
(d) | Reflects reinvested dividend equivalents accrued during 2016, subject to the same performance conditions as the underlying GSIP shares. |
(e) | The 18 February 2013 grant vested on 18 February 2016 at 98% for Paul Polman and 118% for Graeme Pitkethly. In accordance with Unilevers existing Remuneration Policy (www.unilever.com/ara2015/downloads), Executive Directors are able to choose whether they receive any shares due to vest under GSIP in PLC or NV shares or an equal number of shares in each. Paul Polman elected for share choice and chose to receive his shares in the form of 100% NV shares. Therefore, upon vesting, his 18 February 2013 PLC award was cancelled and converted and delivered to him as 43,102 NV shares (resulting in a total vesting for the 18 February grant of 85,871 NV shares). Graeme Pitkethly elected to receive his shares in the form of an equal number of shares in each of PLC and NV. |
On 13 February 2017, under the GSIP Paul Polman received an award of 30,532 NV and 30,532 PLC performance-related shares, and Graeme Pitkethly received an award of 14,171 NV and 14,171 PLC performance-related shares.
72 | Governance | Annual Report on Form 20-F 2016 |
EXECUTIVE DIRECTORS SERVICE CONTRACTS
Starting dates of our Executive Directors service contracts:
| Paul Polman: 1 October 2008 (signed on 7 October 2008); and |
| Graeme Pitkethly: 1 October 2015 (signed on 16 December 2015). |
Service contracts are available to shareholders to view at the AGMs or on request from the Group Secretary, and can be terminated with 12 months notice from Unilever or six months notice from the Executive Director. A payment in lieu of notice can be made of no more than one years base salary, fixed allowance and other benefits unless the Boards, at the proposal of the Committee, find this manifestly unreasonable given the circumstances or unless dictated by applicable law. Other payments that can be made to Executive Directors in the event of loss of office are disclosed in our existing Remuneration Policy which is available on our website (see www.unilever.com/ara2015/downloads), and in our new Remuneration Policy detailed above (in the event of its approval by shareholders).
PAYMENTS TO FORMER DIRECTORS (AUDITED)
There have been no payments to former Directors during the year.
PAYMENTS FOR LOSS OF OFFICE (AUDITED)
There were no payments for loss of office.
IMPLEMENTATION OF THE REMUNERATION POLICY IN 2017 FOR NON-EXECUTIVE DIRECTORS
The current Non-Executive Director fee levels will not be changed for 2017 and we will review fee levels for 2018 during the course of the year. The table below outlines the current fee structure (with fees paid 50% by each of Unilever N.V. and Unilever PLC):
Role | Reference sterling total fees |
NV | PLC | |||||||||||||||||||||
Basic Non-Executive Director fee | £75,000 | 48,065 | and | £37,500 | ||||||||||||||||||||
Current Chairman (all-inclusive figure) (a) | £600,000 | 384,510 | and | £300,000 | ||||||||||||||||||||
Vice-Chairman | £30,000 | 19,226 | and | £15,000 | ||||||||||||||||||||
Membership of the Nominating and Corporate Governance, Compensation or Corporate Responsibility Committee | £10,000 | 6,409 | and | £5,000 | ||||||||||||||||||||
Membership of the Audit Committee | £15,000 | 9,613 | and | £7,500 | ||||||||||||||||||||
Chair of the Nominating and Corporate Governance, Compensation or Corporate Responsibility Committee | £20,000 | 12,817 | and | £10,000 | ||||||||||||||||||||
Chair of the Audit Committee | £30,000 | 19,226 | and | £15,000 |
(a) | During 2016 the Compensation Committee increased the Chairmans fee from the previous figure of £550,000; the increase took effect upon the appointment of Marijn Dekkers as Chairman on 21 April 2016. |
All reasonable travel and other expenses incurred by Non-Executive Directors in the course of performing their duties are considered to be business expenses. Non-Executive Directors also receive expenses relating to the attendance of the Directors spouse or partner, when they are invited by Unilever.
Annual Report on Form 20-F 2016 | Governance | 73 |
DIRECTORS REMUNERATION REPORT CONTINUED
SINGLE FIGURE OF REMUNERATION IN 2016 FOR NON-EXECUTIVE DIRECTORS (AUDITED)
The table below shows a single figure of remuneration for each of our Non-Executive Directors, for the years 2015 and 2016.
2016 | 2015 | |||||||||||||||||||||||
Non-Executive Director | |
Fees 000 |
(a)
|
|
Benefits 000 |
(b)
|
|
Total remuneration |
|
|
Fees 000 |
(a)
|
|
Benefits 000 |
(b)
|
|
Total remuneration |
| ||||||
Marijn Dekkers(c) |
502 | 18 | 520 | | | | ||||||||||||||||||
Michael Treschow(d)(h) |
230 | 5 | 235 | 732 | 2 | 734 | ||||||||||||||||||
Nils Andersen |
111 | 17 | 128 | 75 | 4 | 79 | ||||||||||||||||||
Laura Cha |
119 | - | 119 | 122 | | 122 | ||||||||||||||||||
Vittorio Colao |
107 | - | 107 | 57 | | 57 | ||||||||||||||||||
Louise Fresco(e) |
119 | - | 119 | 126 | | 126 | ||||||||||||||||||
Ann Fudge(f) |
157 | - | 157 | 149 | | 149 | ||||||||||||||||||
Byron Grote(g) |
| | | 47 | | 47 | ||||||||||||||||||
Judith Hartmann |
113 | 9 | 122 | 80 | | 80 | ||||||||||||||||||
Mary Ma |
113 | - | 113 | 120 | | 120 | ||||||||||||||||||
Strive Masiyiwa |
71 | - | 71 | | | | ||||||||||||||||||
Youngme Moon |
71 | - | 71 | | | | ||||||||||||||||||
Hixonia Nyasulu(h) |
38 | - | 38 | 120 | | 120 | ||||||||||||||||||
Sir Malcolm Rifkind(g) |
| | | 38 | | 38 | ||||||||||||||||||
John Rishton(i) |
132 | 8 | 140 | 133 | | 133 | ||||||||||||||||||
Kees Storm(g) |
| | | 73 | | 73 | ||||||||||||||||||
Feike Sijbesma(j) |
132 | | 132 | 126 | 1 | 127 | ||||||||||||||||||
Paul Walsh(g) |
| | | 42 | | 42 | ||||||||||||||||||
Total |
2,015 | 57 | 2,072 | 2,040 | 7 | 2,047 |
(a) | This includes fees received from NV in euros and PLC in sterling for 2015 and 2016 respectively. Includes basic Non-Executive Director fee and Committee chairmanship and/or membership. |
(b) | The only benefit received relates to travel by spouses or partners where they are invited by Unilever. |
(c) | Chairman with effect from 21 April 2016. |
(d) | Chairman until 21 April 2016. |
(e) | Chair, Corporate Responsibility Committee. |
(f) | Vice-Chairman and Chair of the Compensation Committee. |
(g) | Retired from the Boards at the April 2015 AGMs. |
(h) | Retired from the Boards at the April 2016 AGMs. |
(i) | Chair, Audit Committee. |
(j) | Chair, Nominating and Corporate Governance Committee. |
We do not grant our Non-Executive Directors any personal loans or guarantees, nor are they entitled to any severance payments.
NON-EXECUTIVE DIRECTORS INTERESTS IN SHARES (AUDITED)
Non-Executive Directors are encouraged to build up a personal shareholding of at least 1 x their annual fees over the five years from 1 January 2012 (or appointment if later). The table shows the interests in NV and PLC ordinary shares of Non-Executive Directors and their connected persons as at 31 December 2016. There has been no change in these interests between 31 December 2016 and 21 February 2017 (other than Judith Hartmann, who bought 1,500 NV shares on 31 January 2017 at a share price of 37.60).
74 | Governance | Annual Report on Form 20-F 2016 |
NON-EXECUTIVE DIRECTORS LETTERS OF APPOINTMENT
All Non-Executive Directors were re-appointed to the Boards at the 2016 AGMs, with the exception of Marijn Dekkers, Strive Masiyiwa and Youngme Moon (who were appointed for the first time), and Michael Treschow and Hixonia Nyasulu (who retired from the Boards).
Non-Executive Director | |
Date first appointed to the Board |
|
|
Effective date of current appointment |
(a) | ||
Marijn Dekkers |
21 April 2016 | 21 April 2016 | ||||||
Michael Treschow |
16 May 2007 | n/a | ||||||
Nils Andersen |
30 April 2015 | 21 April 2016 | ||||||
Laura Cha |
15 May 2013 | 21 April 2016 | ||||||
Vittorio Colao |
1 July 2015 | 21 April 2016 | ||||||
Louise Fresco |
14 May 2009 | 21 April 2016 | ||||||
Ann Fudge |
14 May 2009 | 21 April 2016 | ||||||
Judith Hartmann |
30 April 2015 | 21 April 2016 | ||||||
Mary Ma |
15 May 2013 | 21 April 2016 | ||||||
Strive Masiyiwa |
21 April 2016 | 21 April 2016 | ||||||
Youngme Moon |
21 April 2016 | 21 April 2016 | ||||||
Hixonia Nyasulu |
16 May 2007 | n/a | ||||||
John Rishton |
15 May 2013 | 21 April 2016 | ||||||
Feike Sijbesma |
1 November 2014 | 21 April 2016 |
(a) | The unexpired term for all Non-Executive Directors letters of appointment is the period up to the 2017 AGMs, as they all, unless they are retiring, submit themselves for annual re-appointment. |
OTHER DISCLOSURES RELATED TO DIRECTORS REMUNERATION
SERVING AS A NON-EXECUTIVE ON THE BOARD OF ANOTHER COMPANY
Executive Directors serving as non-executive directors on the boards of other companies are permitted to retain all remuneration and fees earned from outside directorships subject to a maximum of one outside listed directorship (see Independence and Conflicts on page 30 for further details).
Paul Polman is a non-executive director of The Dow Chemical Company and received an annual fee of 127,749 (US$115,000) based on the average exchange rate over the year 2016 of 1 = US$1.1109. In addition, he received a restricted award of 2,680 ordinary shares with a nominal value of US$2.50 per share in the capital of The Dow Chemical Company. The shares include the rights to vote and to receive dividends thereon. The shares cannot be sold or transferred until Paul Polman leaves the board of directors of The Dow Chemical Company, and in any case not earlier than 13 May 2018.
EIGHT-YEAR HISTORICAL TOTAL SHAREHOLDER RETURN (TSR) PERFORMANCE
The graph below includes:
| growth in the value of a hypothetical £100 holding over eight years FTSE 100 comparison based on 30-trading-day average values; and |
| growth in the value of a hypothetical 100 investment over eight years AEX comparison based on 30-trading-day average values. |
The Committee has decided to show Unilevers performance against the FTSE 100 Index, London and also the Euronext 100 index (AEX), Amsterdam as these are the most relevant indices in the UK and the Netherlands where we have our principal listings. Unilever is a constituent of both these indices.
Annual Report on Form 20-F 2016 | Governance | 75 |
DIRECTORS REMUNERATION REPORT CONTINUED
CEO SINGLE FIGURE EIGHT-YEAR HISTORY
The table below shows the eight-year history of the CEO single figure of total remuneration:
2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | |||||||||||||||||||||||||
CEO |
||||||||||||||||||||||||||||||||
Single figure of total remuneration (000) |
3,859 | 6,292 | 6,010 | 7,852 | 7,740 | 9,561 | 10,296 | 8,370 | ||||||||||||||||||||||||
Annual bonus award rates against maximum opportunity |
82% | 80% | 68% | 100% | 78% | 66% | 92% | 92% | ||||||||||||||||||||||||
GSIP performance shares vesting rates against maximum opportunity |
n/a | 47% | 44% | 55% | 64% | 61% | 49% | 35% | ||||||||||||||||||||||||
MCIP matching shares vesting rates against maximum opportunity |
n/a | n/a | n/a | n/a | n/a | 81% | 65% | 47% | ||||||||||||||||||||||||
Share Matching Plan vesting rates against maximum opportunity(a) |
100% | 100% | n/a | n/a | n/a | n/a | n/a | n/a |
(a) | Shown in year of award. |
PERCENTAGE CHANGE IN REMUNERATION OF DIRECTOR UNDERTAKING THE ROLE OF CHIEF EXECUTIVE OFFICER
The table below shows the percentage change from 2015 to 2016 for base salary, bonus and benefits (excluding pension) for both the CEO and all UK and Dutch management in Unilever. The subset of UK and Dutch management has been used as a fair representation of our dual listing status.
% change from 2015 to 2016 | Salary | Bonus | Benefits (not including pension) |
|||||||||
CEO(a)(b) |
-11.0% | -11.0% | -5.1% | |||||||||
UK and Dutch management(c) |
-4.3% | -11.7% | -23.6% |
(a) | Calculated using the data from the Executive Directors single figure table on page 67. |
(b) | It is noted that although the CEOs salary and annual bonus have decreased by 11.0% in the above table, this is due to currency movements, rather than any change in remuneration amounts (as base salary was £1,010,000 in both 2015 and 2016, and actual annual bonus was £1,866,480 in both years). |
(c) | Similarly, figures for UK and Dutch management have also been affected by the sterling:euro exchange rate, and a rebalancing of fixed pay amounts to roll up some local allowances into salary. |
RELATIVE IMPORTANCE OF SPEND ON PAY
The chart below shows the relative spend on pay compared with dividends paid to Unilever shareholders and core earnings. Core earnings represent the net profit attributable to Unilever shareholders, adjusted for non-core items. Over time, both core earnings and core earnings growth provide a good reference point to compare spend on pay.
* | In calculating core earnings, net profit attributable to shareholders equity is adjusted to eliminate the post-tax impact of non-core items. Refer to note 7, and the table entitled Calculation of core earnings on page 103 for reconciliation of core earnings to net profit attributable to shareholders equity. |
76 | Governance | Annual Report on Form 20-F 2016 |
THE COMPENSATION COMMITTEE
The Committees membership has been further refreshed in 2016. Ann Fudge (Chair) and Vittorio Colao both served throughout this period. Former Chairman Michael Treschow was a member of the Committee until 21 April 2016, when he retired from the Boards; he was effectively replaced by his successor in that role, Marijn Dekkers, who became a member of the Committee on 21 April 2016 immediately upon his appointment as Chairman. Similarly, Nils Andersen stepped down from the Committee on 21 April 2016, with his place being taken by Strive Masiyiwa, who joined the Committee immediately upon his appointment as a Non-Executive Director becoming effective on 21 April 2016.
The Committee reviewed its terms of reference during the year. The Committees revised terms of reference are contained within The Governance of Unilever, and are also set out on our website (www.unilever.com/corporategovernance).
As part of the internal Board evaluation carried out in 2016, the Boards evaluated the performance of the Committee. The Committee also carried out an assessment of its own performance in 2016. Overall the Committee members concluded that the Committee is performing effectively, and has enhanced its effectiveness and that of the Boards by keeping the Boards informed of the progress of its review of the executive remuneration framework (and related shareholder consultation) in a timely manner, so as to enhance Board decision-making concerning these proposals. The Committee intends to further enhance its effectiveness in 2017 by reducing pre-read materials where possible, and building in longer NED-only Committee sessions for members to share views and priorities.
ADVISERS
While it is the Committees responsibility to exercise independent judgement, the Committee does request advice from management and professional advisers, as appropriate, to ensure that its decisions are fully informed given the internal and external environment.
The Committee appointed Tom Gosling of PricewaterhouseCoopers (PwC) to provide independent advice on various matters it considered. The wider PwC firm has also provided tax and consultancy services to Unilever including tax compliance, transfer pricing, other tax-related services, contract compliance reviews, internal audit advice and secondees, third party risk and compliance advice, cyber security advice, sustainability assurance and consulting, and financial due diligence on disposals. PwC is a member of the Remuneration Consultants Group and, as such, voluntarily operates under the code of conduct in relation to executive remuneration consulting in the UK, which is available at www.remunerationconsultantsgroup.com.
The Committee is satisfied that the PwC engagement partner and team, which provide remuneration advice to the Committee, do not have connections with Unilever N.V. or Unilever PLC that might impair their independence. The Committee reviewed the potential for conflicts of interest and judged that there were appropriate safeguards against such conflicts. The fees paid to PwC in relation to advice provided to the Committee in the year to 31 December 2016 were £107,900. This figure is calculated based on time spent and expenses incurred for the majority of advice provided, but on occasion for specific projects a fixed fee may be agreed.
During the year, the Committee also sought input from the CEO (Paul Polman), the Chief Human Resources Officer (Leena Nair, who succeeded Doug Baillie upon his retirement from this role in March 2016) and the EVP Global Head of Reward (Peter Newhouse) on various subjects including the remuneration of senior management. No individual Executive Director was present when their own remuneration was being discussed to ensure a conflict of interest did not arise. The Committee also received legal and governance advice from the Group Secretary (Tonia Lovell) and General Counsel - Executive Remuneration & Employment (Margot Fransen).
CLARIFICATION STATEMENT (APPLICABLE TO 2014 REMUNERATION POLICY)
After publication of our Directors Remuneration Report 2013 the Committee issued a clarification statement at the request of The Investment Association (previously: IMA and ABI). The statement is available on our website. The statement confirms that, under our existing Remuneration Policy, we will not make share awards higher than the maximum awards stated in our existing Remuneration Policy for current and newly hired Executive Directors without prior shareholder approval. It further clarifies that awards to newly hired Executive Directors to buy out remuneration items on leaving the previous employer as provided in the new hires policy will be made under the GSIP. Consequently, under such exceptional circumstances, the aggregated GSIP share awards for a newly hired Executive Director may be higher than the maximum annual award set out in the existing Remuneration Policy. As stated in the existing Remuneration Policy in relation to new hires, we will inform shareholders of any such buyout awards when announcing the appointment. Further details of our existing Remuneration Policy are available at www.unilever.com/ara2016/downloads, and for details of our proposed new Remuneration Policy please see above.
SHAREHOLDER VOTING
Unilever remains committed to ongoing shareholder dialogue and takes an active interest in voting outcomes. In the event of a substantial vote against a resolution in relation to Directors remuneration, Unilever would seek to understand the reasons for any such vote and would set out in the following Annual Report and Accounts any actions in response to it. The following table sets out actual voting in respect of our previous report:
Voting outcome (% of votes)
|
For
|
Against
|
||||||||
2015 Directors Remuneration Report (excluding the Directors Remuneration Policy) (2016 AGM)(a) |
PLC | 94.49% | 5.51% | |||||||
2014 Directors Remuneration Policy (2014 AGM)(b) |
PLC | 97.51% | 2.49% | |||||||
2014 Directors Remuneration Policy (2014 AGM)(c) |
NV | 98.37% | 1.63% |
(a) | 1,772,026 votes were withheld (approximately 0.14% of share capital). |
(b) | 7,606,237 votes were withheld (approximately 0.85% of share capital). |
(c) | 4,188,993 votes were withheld (approximately 0.27% of share capital). |
The Directors Remuneration Report is not subject to a shareholder vote in the Netherlands. It has been approved by the Boards, and signed on their behalf by Tonia Lovell, Group Secretary.
Annual Report on Form 20-F 2016 | Governance | 77 |
STATEMENT OF DIRECTORS RESPONSIBILITIES
78 | Financial Statements | Annual Report on Form 20-F 2016 |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMS
THE BOARD OF DIRECTORS AND SHAREHOLDERS
We have audited the accompanying consolidated balance sheets of the Unilever Group (Unilever N.V. and Unilever PLC, together with their subsidiaries) as at 31 December 2016 and 2015 and the related consolidated income statements, consolidated statements of comprehensive income, consolidated statements of changes in equity, and consolidated cash flow statements for each of the years in the three-year period ended 31 December 2016 on pages 84 to 143 of the Unilever Groups Annual Report and Accounts 2016 (excluding note 25 on page 130) and the Guarantor financial information included in the Guarantor Statements on pages 170 to 174 of this Form 20-F (hereafter referred to as Consolidated Financial Statements). We also have audited the Unilever Groups internal control over financial reporting as at 31 December 2016, based on criteria established in Internal Control Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Unilever Groups management is responsible for these Consolidated Financial Statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in Managements Report on Internal Control over Financial Reporting included on page 167 of this Form 20-F. Our responsibility is to express an opinion on these Consolidated Financial Statements and an opinion on the Unilever Groups internal control over financial reporting based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the Consolidated Financial Statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the Consolidated Financial Statements included examining, on a test basis, evidence supporting the amounts and disclosures in the Consolidated Financial Statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
A companys internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companys internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and Directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the companys assets that could have a material effect on the Consolidated Financial Statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
In our opinion, the Consolidated Financial Statements referred to above present fairly, in all material respects, the financial position of the Unilever Group as at 31 December 2016 and 2015, and the results of its operations and its cash flows for each of the years in the three-year period ended 31 December 2016, in conformity with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board and in conformity with IFRS as adopted by the European Union. Also in our opinion, the Unilever Group maintained, in all material respects, effective internal control over financial reporting as of 31 December 2016, based on criteria established in Internal Control Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
KPMG LLP | KPMG Accountants N.V. | |
London, United Kingdom
/s/ KPMG LLP |
Amsterdam, the Netherlands
/s/ KPMG Accountants N.V. | |
24 February 2017 |
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CONSOLIDATED FINANCIAL STATEMENTS
UNILEVER GROUP
for the year ended 31 December
Notes | million 2016 |
million 2015 |
million 2014 |
|||||||||||
Turnover |
2 | 52,713 | 53,272 | 48,436 | ||||||||||
Operating profit |
2 | 7,801 | 7,515 | 7,980 | ||||||||||
After (charging)/crediting non-core items |
3 | (245 | ) | (350 | ) | 960 | ||||||||
Net finance costs |
5 | (563 | ) | (493 | ) | (477 | ) | |||||||
Finance income |
115 | 144 | 117 | |||||||||||
Finance costs |
(584 | ) | (516 | ) | (500 | ) | ||||||||
Pensions and similar obligations |
(94 | ) | (121 | ) | (94 | ) | ||||||||
Share of net profit/(loss) of joint ventures and associates |
11 | 127 | 107 | 98 | ||||||||||
Other income/(loss) from non-current investments and associates |
104 | 91 | 45 | |||||||||||
Profit before taxation |
7,469 | 7,220 | 7,646 | |||||||||||
Taxation |
6A | (1,922 | ) | (1,961 | ) | (2,131 | ) | |||||||
Net profit |
5,547 | 5,259 | 5,515 | |||||||||||
Attributable to: |
||||||||||||||
Non-controlling interests |
363 | 350 | 344 | |||||||||||
Shareholders equity |
5,184 | 4,909 | 5,171 | |||||||||||
Combined earnings per share |
7 | |||||||||||||
Basic earnings per share () |
1.83 | 1.73 | 1.82 | |||||||||||
Diluted earnings per share () |
1.82 | 1.72 | 1.79 |
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 December
Notes | million 2016 |
million 2015 |
million 2014 |
|||||||||||
Net profit |
5,547 | 5,259 | 5,515 | |||||||||||
Other comprehensive income |
6C | |||||||||||||
Items that will not be reclassified to profit or loss: |
||||||||||||||
Remeasurement of defined benefit pension plans net of tax |
15B | (980 | ) | 884 | (1,250) | |||||||||
Items that may be reclassified subsequently to profit or loss: |
||||||||||||||
Currency retranslation gains/(losses) net of tax(a) |
15B | 217 | (481 | ) | (25) | |||||||||
Fair value gains/(losses) on financial instruments net of tax |
15B | (15 | ) | 100 | (85) | |||||||||
Total comprehensive income |
4,769 | 5,762 | 4,155 | |||||||||||
Attributable to: |
||||||||||||||
Non-controlling interests |
374 | 357 | 404 | |||||||||||
Shareholders equity |
4,395 | 5,405 | 3,751 |
(a) | Includes fair value gains/(losses) on net investment hedges and exchange differences in net investments in foreign operations of (365) million (2015: 617 million; 2014: 412 million). |
References in the consolidated income statement, consolidated statement of comprehensive income, consolidated statement of changes in equity, consolidated balance sheet and consolidated cash flow statement relate to notes on pages 90 to 143, which form an integral part of the consolidated financial statements.
84 | Financial Statements | Annual Report on Form 20-F 2016 |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
million | million | million | million | million | million | million | ||||||||||||||||||||||
Consolidated statement of changes in equity | Called up share capital |
Share premium account |
Other reserves |
Retained profit |
Total | Non- controlling interests |
Total equity |
|||||||||||||||||||||
31 December 2013 |
484 | 138 | (6,746 | ) | 20,468 | 14,344 | 471 | 14,815 | ||||||||||||||||||||
Profit or loss for the period |
- | - | - | 5,171 | 5,171 | 344 | 5,515 | |||||||||||||||||||||
Other comprehensive income net of tax: |
||||||||||||||||||||||||||||
Fair value gains/(losses) on financial instruments |
- | - | (85 | ) | - | (85 | ) | - | (85 | ) | ||||||||||||||||||
Remeasurement of defined benefit pension plans net of tax |
- | - | - | (1,253 | ) | (1,253 | ) | 3 | (1,250 | ) | ||||||||||||||||||
Currency retranslation gains/(losses) |
- | - | (290 | ) | 208 | (82 | ) | 57 | (25 | ) | ||||||||||||||||||
Total comprehensive income |
- | - | (375 | ) | 4,126 | 3,751 | 404 | 4,155 | ||||||||||||||||||||
Dividends on ordinary capital |
- | - | - | (3,196 | ) | (3,196 | ) | - | (3,196 | ) | ||||||||||||||||||
Movements in treasury stock(a) |
- | - | (235 | ) | (217 | ) | (452 | ) | - | (452 | ) | |||||||||||||||||
Share-based payment credit(b) |
- | - | - | 188 | 188 | - | 188 | |||||||||||||||||||||
Dividends paid to non-controlling interests |
- | - | - | - | - | (342 | ) | (342 | ) | |||||||||||||||||||
Currency retranslation gains/(losses) net of tax |
- | 7 | - | - | 7 | (2 | ) | 5 | ||||||||||||||||||||
Other movements in equity(c) |
- | - | (182 | ) | (809 | ) | (991 | ) | 81 | (910 | ) | |||||||||||||||||
31 December 2014 |
484 | 145 | (7,538 | ) | 20,560 | 13,651 | 612 | 14,263 | ||||||||||||||||||||
Profit or loss for the period |
- | - | - | 4,909 | 4,909 | 350 | 5,259 | |||||||||||||||||||||
Other comprehensive income net of tax: |
||||||||||||||||||||||||||||
Fair value gains/(losses) on financial instruments |
- | - | 100 | - | 100 | - | 100 | |||||||||||||||||||||
Remeasurement of defined benefit pension plans net of tax |
- | - | - | 882 | 882 | 2 | 884 | |||||||||||||||||||||
Currency retranslation gains/(losses) |
- | - | (377 | ) | (109 | ) | (486 | ) | 5 | (481 | ) | |||||||||||||||||
Total comprehensive income |
- | - | (277 | ) | 5,682 | 5,405 | 357 | 5,762 | ||||||||||||||||||||
Dividends on ordinary capital |
- | - | - | (3,404 | ) | (3,404 | ) | - | (3,404 | ) | ||||||||||||||||||
Movements in treasury stock(a) |
- | - | 6 | (282 | ) | (276 | ) | - | (276 | ) | ||||||||||||||||||
Share-based payment credit(b) |
- | - | - | 150 | 150 | - | 150 | |||||||||||||||||||||
Dividends paid to non-controlling interests |
- | - | - | - | - | (326 | ) | (326 | ) | |||||||||||||||||||
Currency retranslation gains/(losses) net of tax |
- | 7 | - | - | 7 | - | 7 | |||||||||||||||||||||
Other movements in equity |
- | - | (7 | ) | (87 | ) | (94 | ) | - | (94 | ) | |||||||||||||||||
31 December 2015 |
484 | 152 | (7,816 | ) | 22,619 | 15,439 | 643 | 16,082 | ||||||||||||||||||||
Profit or loss for the period |
- | - | - | 5,184 | 5,184 | 363 | 5,547 | |||||||||||||||||||||
Other comprehensive income net of tax: |
||||||||||||||||||||||||||||
Fair value gains/(losses) on financial instruments |
- | - | (15 | ) | - | (15 | ) | - | (15 | ) | ||||||||||||||||||
Remeasurement of defined benefit pension plans net of tax |
- | - | - | (980 | ) | (980 | ) | - | (980 | ) | ||||||||||||||||||
Currency retranslation gains/(losses) |
- | - | 189 | 17 | 206 | 11 | 217 | |||||||||||||||||||||
Total comprehensive income |
- | - | 174 | 4,221 | 4,395 | 374 | 4,769 | |||||||||||||||||||||
Dividends on ordinary capital |
- | - | - | (3,600 | ) | (3,600 | ) | - | (3,600 | ) | ||||||||||||||||||
Movements in treasury stock(a) |
- | - | (45 | ) | (213 | ) | (258 | ) | - | (258 | ) | |||||||||||||||||
Share-based payment credit(b) |
- | - | - | 198 | 198 | - | 198 | |||||||||||||||||||||
Dividends paid to non-controlling interests |
- | - | - | - | - | (364 | ) | (364 | ) | |||||||||||||||||||
Currency retranslation gains/(losses) net of tax |
- | (18 | ) | - | - | (18 | ) | - | (18 | ) | ||||||||||||||||||
Other movements in equity |
- | - | 244 | (46 | ) | 198 | (27 | ) | 171 | |||||||||||||||||||
31 December 2016 |
484 | 134 | (7,443 | ) | 23,179 | 16,354 | 626 | 16,980 |
(a) | Includes purchases and sales of treasury stock, and transfer from treasury stock to retained profit of share-settled schemes arising from prior years and differences between exercise and grant price of share options. |
(b) | The share-based payment credit relates to the non-cash charge recorded against operating profit in respect of the fair value of share options and awards granted to employees. |
(c) | 2014 includes the impact of the purchase of Estate shares (see note 24). |
Annual Report on Form 20-F 2016 | Financial Statements | 85 |
CONSOLIDATED FINANCIAL STATEMENTS
UNILEVER GROUP CONTINUED
as at 31 December
Notes | million 2016 |
million 2015 |
||||||||||
Assets |
||||||||||||
Non-current assets |
||||||||||||
Goodwill |
9 | 17,624 | 16,213 | |||||||||
Intangible assets |
9 | 9,809 | 8,846 | |||||||||
Property, plant and equipment |
10 | 11,673 | 11,058 | |||||||||
Pension asset for funded schemes in surplus |
4B | 694 | 934 | |||||||||
Deferred tax assets |
6B | 1,354 | 1,185 | |||||||||
Financial assets |
17A | 673 | 605 | |||||||||
Other non-current assets |
11 | 718 | 771 | |||||||||
42,545 | 39,612 | |||||||||||
Current assets |
||||||||||||
Inventories |
12 | 4,278 | 4,335 | |||||||||
Trade and other current receivables |
13 | 5,102 | 4,804 | |||||||||
Current tax assets |
317 | 230 | ||||||||||
Cash and cash equivalents |
17A | 3,382 | 2,302 | |||||||||
Other financial assets |
17A | 599 | 836 | |||||||||
Non-current assets held for sale |
22 | 206 | 179 | |||||||||
13,884 | 12,686 | |||||||||||
Total assets |
56,429 | 52,298 | ||||||||||
Liabilities |
||||||||||||
Current liabilities |
||||||||||||
Financial liabilities |
15C | 5,450 | 4,789 | |||||||||
Trade payables and other current liabilities |
14 | 13,871 | 13,788 | |||||||||
Current tax liabilities |
844 | 1,127 | ||||||||||
Provisions |
19 | 390 | 309 | |||||||||
Liabilities associated with assets held for sale |
22 | 1 | 6 | |||||||||
20,556 | 20,019 | |||||||||||
Non-current liabilities |
||||||||||||
Financial liabilities |
15C | 11,145 | 9,854 | |||||||||
Non-current tax liabilities |
120 | 121 | ||||||||||
Pensions and post-retirement healthcare liabilities: |
||||||||||||
Funded schemes in deficit |
4B | 2,163 | 1,569 | |||||||||
Unfunded schemes |
4B | 1,704 | 1,685 | |||||||||
Provisions |
19 | 1,033 | 831 | |||||||||
Deferred tax liabilities |
6B | 2,061 | 1,744 | |||||||||
Other non-current liabilities |
14 | 667 | 393 | |||||||||
18,893 | 16,197 | |||||||||||
Total liabilities |
39,449 | 36,216 | ||||||||||
Equity |
||||||||||||
Shareholders equity |
||||||||||||
Called up share capital |
15A | 484 | 484 | |||||||||
Share premium account |
134 | 152 | ||||||||||
Other reserves |
15B | (7,443 | ) | (7,816 | ) | |||||||
Retained profit |
23,179 | 22,619 | ||||||||||
16,354 | 15,439 | |||||||||||
Non-controlling interests |
626 | 643 | ||||||||||
Total equity |
16,980 | 16,082 | ||||||||||
Total liabilities and equity |
56,429 | 52,298 |
These financial statements have been approved by the Directors.
The Board of Directors
24 February 2017
86 | Financial Statements | Annual Report on Form 20-F 2016 |
CONSOLIDATED CASH FLOW STATEMENT
for the year ended 31 December
million | million | million | ||||||||||||||
Notes | 2016 | 2015 | 2014 | |||||||||||||
Net profit |
5,547 | 5,259 | 5,515 | |||||||||||||
Taxation |
1,922 | 1,961 | 2,131 | |||||||||||||
Share of net profit of joint ventures/associates and other income/(loss) from non-current investments and associates |
(231 | ) | (198 | ) | (143 | ) | ||||||||||
Net finance costs |
5 | 563 | 493 | 477 | ||||||||||||
Operating profit |
7,801 | 7,515 | 7,980 | |||||||||||||
Depreciation, amortisation and impairment |
1,464 | 1,370 | 1,432 | |||||||||||||
Changes in working capital: |
51 | 720 | 8 | |||||||||||||
Inventories |
190 | (129 | ) | (47 | ) | |||||||||||
Trade and other receivables |
142 | 2 | 82 | |||||||||||||
Trade payables and other liabilities |
(281 | ) | 847 | (27 | ) | |||||||||||
Pensions and similar obligations less payments |
(327 | ) | (385 | ) | (364 | ) | ||||||||||
Provisions less payments |
65 | (94 | ) | 32 | ||||||||||||
Elimination of (profits)/losses on disposals |
127 | 26 | (1,460 | ) | ||||||||||||
Non-cash charge for share-based compensation |
198 | 150 | 188 | |||||||||||||
Other adjustments |
(81 | ) | 49 | 38 | ||||||||||||
Cash flow from operating activities |
9,298 | 9,351 | 7,854 | |||||||||||||
Income tax paid |
(2,251 | ) | (2,021 | ) | (2,311 | ) | ||||||||||
Net cash flow from operating activities |
7,047 | 7,330 | 5,543 | |||||||||||||
Interest received |
105 | 119 | 123 | |||||||||||||
Purchase of intangible assets |
(232 | ) | (334 | ) | (359 | ) | ||||||||||
Purchase of property, plant and equipment |
(1,804 | ) | (1,867 | ) | (1,893 | ) | ||||||||||
Disposal of property, plant and equipment |
158 | 127 | 207 | |||||||||||||
Acquisition of group companies, joint ventures and associates |
(1,731 | ) | (1,897 | ) | (313 | ) | ||||||||||
Disposal of group companies, joint ventures and associates |
30 | 199 | 1,741 | |||||||||||||
Acquisition of other non-current investments |
(208 | ) | (78 | ) | (82 | ) | ||||||||||
Disposal of other non-current investments |
173 | 127 | 69 | |||||||||||||
Dividends from joint ventures, associates and other non-current investments |
186 | 176 | 162 | |||||||||||||
(Purchase)/sale of financial assets |
135 | (111 | ) | 4 | ||||||||||||
Net cash flow (used in)/from investing activities |
(3,188 | ) | (3,539 | ) | (341 | ) | ||||||||||
Dividends paid on ordinary share capital |
(3,609 | ) | (3,331 | ) | (3,189 | ) | ||||||||||
Interest and preference dividends paid |
(472 | ) | (579 | ) | (521 | ) | ||||||||||
Purchase of Estate shares |
24 | - | - | (880 | ) | |||||||||||
Net change in short-term borrowings |
258 | 245 | 338 | |||||||||||||
Additional financial liabilities |
6,761 | 7,566 | 5,174 | |||||||||||||
Repayment of financial liabilities |
(5,213 | ) | (6,270 | ) | (5,305 | ) | ||||||||||
Capital element of finance lease rental payments |
(35 | ) | (14 | ) | (16 | ) | ||||||||||
Other movements on treasury stock |
(257 | ) | (276 | ) | (467 | ) | ||||||||||
Other financing activities |
(506 | ) | (373 | ) | (324 | ) | ||||||||||
Net cash flow (used in)/from financing activities |
(3,073 | ) | (3,032 | ) | (5,190 | ) | ||||||||||
Net increase/(decrease) in cash and cash equivalents |
786 | 759 | 12 | |||||||||||||
Cash and cash equivalents at the beginning of the year |
2,128 | 1,910 | 2,044 | |||||||||||||
Effect of foreign exchange rate changes |
284 | (541 | ) | (146 | ) | |||||||||||
Cash and cash equivalents at the end of the year |
17A | 3,198 | 2,128 | 1,910 |
The cash flows of pension funds (other than contributions and other direct payments made by the Group in respect of pensions and similar obligations) are not included in the Group cash flow statement.
Annual Report on Form 20-F 2016 | Financial Statements | 87 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
UNILEVER GROUP
88 | Financial Statements | Annual Report on Form 20-F 2016 |
1. ACCOUNTING INFORMATION AND POLICIES CONTINUED
RECENT ACCOUNTING DEVELOPMENTS
ADOPTED BY THE GROUP
The Group applied for the first time amendments to two standards from 1 January 2016. These did not have a material impact on the Group.
APPLICABLE STANDARD | KEY REQUIREMENTS | IMPACT ON GROUP | ||
Amendments to IAS 1 Presentation of Financial Statements
|
This change provides additional principles to assist preparers with the presentation and disclosure of financial statements.
|
There is no impact as current reporting is consistent with these principles. | ||
Amendments to IAS 41 Agriculture: Bearer Plants |
This changes the reporting for bearer plants to be consistent with IAS 16 Property, Plant and Equipment. This is because these assets are similar to manufacturing assets.
|
There is no material impact as Unilever does not have material bearer plants. |
All other standards or amendments to standards that have been issued by the IASB and were effective by 1 January 2016 were not applicable to Unilever.
NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS OF EXISTING STANDARDS THAT ARE NOT YET EFFECTIVE AND HAVE NOT BEEN EARLY ADOPTED BY THE GROUP
The following three new standards have been released, but are not yet adopted by the Group. The expected impact and progress is shown below.
APPLICABLE STANDARD | KEY REQUIREMENTS OR CHANGES IN ACCOUNTING POLICY |
IMPLEMENTATION PROGRESS AND EXPECTED IMPACT | ||
IFRS 9 Financial Instruments
Effective from the year ended 31 December 2018
The standard has been endorsed by the EU |
This standard introduces new requirements in three areas:
Classification and measurement: Financial assets will now be classified based on 1) the objective of the Group in holding the asset and 2) the contractual cash flows.
Impairment: A new expected credit loss model will be used for calculating impairment on financial assets. A loss event does not have to occur before credit losses are recognised.
Hedge accounting: New general hedge accounting requirements will allow hedge accounting based on the Groups risk management policies rather than only prescribed scenarios.
|
During 2016, the Group continued assessing the impact of the new requirements in IFRS 9, the work on classification and measurement is most advanced.
Classification and measurement: We expect a slight increase in assets classified as fair value through profit or loss driven by the removal of available-for-sale classification, which currently have fair value movements recognised within equity.
Impairment: Based on preliminary work we estimate the impact will be immaterial.
Hedge accounting: Based on preliminary work we estimate the impact will be immaterial. | ||
IFRS 15 Revenue from Contracts with Customers
Effective from the year ended 31 December 2018
The standard has been endorsed by the EU |
The standard clarifies the accounting for bundled services and identifying each performance obligation in contractual arrangements. It also provides more guidance on the measurement of revenue contracts which have discounts, rebates, payments to suppliers and consignment stock. |
During 2016, the Group completed a detailed review of the requirements of IFRS 15 against our current accounting policies. This focused on accounting for trade expenditure, consignment stock, bad debts and incentives.
As a result of our review we concluded that our current accounting policies are in line with the new standard. As our business model evolves, we will continue to review the Groups contracts and transactions with customers to ensure compliance with IFRS 15 on adoption.
| ||
IFRS 16 Leases
Effective from the year ended 31 December 2019
The standard is not yet endorsed by the EU
|
This standard changes the recognition, measurement, presentation and disclosure of leases. In particular it requires lessees to record all leases on the balance sheet with exemptions available for low value and short-term leases. |
Based on preliminary work we estimate that more leases will be recorded on the Group balance sheet. Significant work is required to determine the impact due to a high volume of lease contracts and exemptions available. |
In addition to the above, the Group does not currently believe adoption of the following amendments will have a material impact on the consolidated results or financial position of the Group.
Annual Report on Form 20-F 2016 | Financial Statements | 89 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
UNILEVER GROUP CONTINUED
1. ACCOUNTING INFORMATION AND POLICIES CONTINUED
APPLICABLE STANDARD | KEY REQUIREMENTS OR CHANGES IN ACCOUNTING POLICY |
IMPACT ON GROUP | ||
Amendments to IAS 7 Statement of Cash Flows
Effective from the year ended 31 December 2017
The standard is not yet endorsed by the EU
|
This change adds a new requirement to explain changes in liabilities relating to financing activities. |
This will require additional disclosure to be presented by the Group. |
All other standards or amendments to standards that have been issued by the IASB and are effective from 1 January 2017 onwards are not applicable to Unilever.
2. SEGMENT INFORMATION
SEGMENTAL REPORTING | ||||
Personal Care | | primarily sales of skin care and hair care products, deodorants and oral care products. | ||
Foods | | primarily sales of soups, bouillons, sauces, snacks, mayonnaise, salad dressings, margarines and spreads. | ||
Home Care | | primarily sales of home care products, such as powders, liquids and capsules, soap bars and a wide range of cleaning products. | ||
Refreshment | | primarily sales of ice cream and tea-based beverages. |
REVENUE
Turnover comprises sales of goods after the deduction of discounts, sales taxes and estimated returns. It does not include sales between group companies. Discounts given by Unilever include rebates, price reductions and incentives given to customers, promotional couponing and trade communication costs.
Turnover is recognised when the risks and rewards of the underlying products have been substantially transferred to the customer. Depending on individual customer terms, this can be at the time of dispatch, delivery or upon formal customer acceptance.
CORE OPERATING PROFIT
Core operating profit represents our measure of segment profit or loss as it is the primary measure used for the purpose of making decisions about allocating resources and assessing performance of segments. Core operating margin is calculated as core operating profit divided by turnover.
90 | Financial Statements | Annual Report on Form 20-F 2016 |
2. SEGMENT INFORMATION CONTINUED
million | million | million | million | million | ||||||||||||||||||||||||
Notes | Personal Care |
Foods | Home Care | Refresh- ment |
Total | |||||||||||||||||||||||
2016 |
||||||||||||||||||||||||||||
Turnover |
20,172 | 12,524 | 10,009 | 10,008 | 52,713 | |||||||||||||||||||||||
Operating profit |
3,704 | 2,180 | 949 | 968 | 7,801 | |||||||||||||||||||||||
Non-core items |
3 | 140 | 60 | 18 | 27 | 245 | ||||||||||||||||||||||
Core operating profit |
3,844 | 2,240 | 967 | 995 | 8,046 | |||||||||||||||||||||||
Share of net profit/(loss) of joint ventures and associates |
(5 | ) | 4 | 1 | 127 | 127 | ||||||||||||||||||||||
Significant non-cash charges: |
||||||||||||||||||||||||||||
Depreciation and amortisation(a) |
437 | 322 | 236 | 469 | 1,464 | |||||||||||||||||||||||
Impairment and other non-cash charges(b) |
208 | 151 | 131 | 108 | 598 | |||||||||||||||||||||||
2015 |
||||||||||||||||||||||||||||
Turnover |
20,074 | 12,919 | 10,159 | 10,120 | 53,272 | |||||||||||||||||||||||
Operating profit |
3,637 | 2,298 | 740 | 840 | 7,515 | |||||||||||||||||||||||
Non-core items |
3 | 151 | 56 | 35 | 108 | 350 | ||||||||||||||||||||||
Core operating profit |
3,788 | 2,354 | 775 | 948 | 7,865 | |||||||||||||||||||||||
Share of net profit/(loss) of joint ventures and associates |
(4 | ) | 4 | - | 107 | 107 | ||||||||||||||||||||||
Significant non-cash charges: |
||||||||||||||||||||||||||||
Depreciation and amortisation(a) |
377 | 308 | 235 | 450 | 1,370 | |||||||||||||||||||||||
Impairment and other non-cash charges(b) |
267 | 113 | 134 | 153 | 667 | |||||||||||||||||||||||
2014 |
||||||||||||||||||||||||||||
Turnover |
17,739 | 12,361 | 9,164 | 9,172 | 48,436 | |||||||||||||||||||||||
Operating profit |
3,259 | 3,607 | 576 | 538 | 7,980 | |||||||||||||||||||||||
Non-core items |
3 | 66 | (1,302 | ) | 3 | 273 | (960 | ) | ||||||||||||||||||||
Core operating profit |
3,325 | 2,305 | 579 | 811 | 7,020 | |||||||||||||||||||||||
Share of net profit/(loss) of joint ventures and associates |
(1 | ) | 3 | - | 96 | 98 | ||||||||||||||||||||||
Significant non-cash charges: |
||||||||||||||||||||||||||||
Depreciation and amortisation(a) |
307 | 257 | 192 | 371 | 1,127 | |||||||||||||||||||||||
Impairment and other non-cash charges(b) |
198 | 122 | 100 | 393 | 813 |
(a) | All amounts included within core operating profit. |
(b) | These comprise share-based compensation, movements in provisions and foreign exchange losses resulting from remeasurement of the Argentinian business (in 2016 and 2015) and Venezuelan business (in 2015). Certain amounts are included within non-core items. |
Transactions between the Unilever Groups reportable segments are immaterial and are carried out on an arms length basis.
The Unilever Group is not reliant on revenues from transactions with any single customer and does not receive 10% or more of its revenues from transactions with any single customer.
Segment assets and liabilities are not provided because they are not reported to or reviewed by our chief operating decision-maker, which is Unilever Leadership Executive (ULE) as explained in the Corporate Governance Section.
The home countries of the Unilever Group are the Netherlands and the United Kingdom. Turnover and non-current assets for these two countries combined, for the United States (being the largest country outside the home countries) and for all other countries are:
million | million | million | million | |||||||||||||||||||||||||
2016 | Netherlands/ United Kingdom |
United States |
Others | Total | ||||||||||||||||||||||||
Turnover |
3,819 | 8,263 | 40,631 | 52,713 | ||||||||||||||||||||||||
Non-current assets(c) |
4,770 | 11,696 | 23,358 | 39,824 | ||||||||||||||||||||||||
2015 | ||||||||||||||||||||||||||||
Turnover |
4,157 | 7,956 | 41,159 | 53,272 | ||||||||||||||||||||||||
Non-current assets(c) |
4,878 | 9,674 | 22,336 | 36,888 | ||||||||||||||||||||||||
2014 | ||||||||||||||||||||||||||||
Turnover |
3,851 | 6,684 | 37,901 | 48,436 | ||||||||||||||||||||||||
Non-current assets(c) |
3,921 | 7,668 | 21,714 | 33,303 |
(c) | Non-current assets excluding financial assets, deferred tax assets and pension assets for funded schemes in surplus. |
No other country had turnover or non-current assets (as shown above) greater than 10% of the Group total.
Annual Report on Form 20-F 2016 | Financial Statements | 91 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
UNILEVER GROUP CONTINUED
2. SEGMENT INFORMATION CONTINUED
ADDITIONAL INFORMATION BY GEOGRAPHIES
Although the Groups operations are managed by product area, we provide additional information based on geographies. The analysis of turnover by geographical area is stated on the basis of origin.
million | million | million | million | |||||||||||||||||||||||||
|
Asia/ AMET/RUB |
(d) |
|
The Americas |
|
Europe | Total | |||||||||||||||||||||
2016 |
||||||||||||||||||||||||||||
Turnover |
22,445 | 17,105 | 13,163 | 52,713 | ||||||||||||||||||||||||
Operating profit |
3,275 | 2,504 | 2,022 | 7,801 | ||||||||||||||||||||||||
Non-core items |
19 | 222 | 4 | 245 | ||||||||||||||||||||||||
Core operating profit |
3,294 | 2,726 | 2,026 | 8,046 | ||||||||||||||||||||||||
Share of net profit/(loss) of joint ventures and associates |
(2 | ) | 108 | 21 | 127 | |||||||||||||||||||||||
2015 |
||||||||||||||||||||||||||||
Turnover |
22,425 | 17,294 | 13,553 | 53,272 | ||||||||||||||||||||||||
Operating profit |
3,019 | 2,273 | 2,223 | 7,515 | ||||||||||||||||||||||||
Non-core items |
16 | 244 | 90 | 350 | ||||||||||||||||||||||||
Core operating profit |
3,035 | 2,517 | 2,313 | 7,865 | ||||||||||||||||||||||||
Share of net profit/(loss) of joint ventures and associates |
(1 | ) | 96 | 12 | 107 | |||||||||||||||||||||||
2014 |
||||||||||||||||||||||||||||
Turnover |
19,703 | 15,514 | 13,219 | 48,436 | ||||||||||||||||||||||||
Operating profit |
2,626 | 3,233 | 2,121 | 7,980 | ||||||||||||||||||||||||
Non-core items |
(15 | ) | (959 | ) | 14 | (960 | ) | |||||||||||||||||||||
Core operating profit |
2,611 | 2,274 | 2,135 | 7,020 | ||||||||||||||||||||||||
Share of net profit/(loss) of joint ventures and associates |
- | 68 | 30 | 98 |
(d) | Refers to Asia, Africa, Middle East, Turkey, Russia, Ukraine and Belarus. |
Transactions between the Unilever Groups geographical regions are immaterial and are carried out on an arms length basis.
3. GROSS PROFIT AND OPERATING COSTS
RESEARCH AND MARKET SUPPORT COSTS
Expenditure on research and market support, such as advertising, is charged to the income statement as incurred.
NON-CORE ITEMS
Disclosed on the face of the income statement are costs and revenues relating to business disposals, acquisition and disposal-related costs, impairments and other one-off items, which we collectively term non-core items due to their nature and/or frequency of occurrence. These items are material in terms of nature and/or amount and are relevant to an understanding of our financial performance.
Business disposals generate both gains and losses which are not reflective of underlying performance. Acquisition and disposal-related costs are charges directly attributable to the acquisition or disposal of group companies.
million | million | million | ||||||||||
2016 | 2015 | 2014 | ||||||||||
Turnover |
52,713 | 53,272 | 48,436 | |||||||||
Cost of sales |
(30,229 | ) | (30,808 | ) | (28,387 | ) | ||||||
of which: Distribution costs |
(3,246 | ) | (3,358 | ) | (3,079 | ) | ||||||
Gross profit |
22,484 | 22,464 | 20,049 | |||||||||
Selling and administrative expenses |
(14,683 | ) | (14,949 | ) | (12,069 | ) | ||||||
of which: Brand and Marketing Investment |
(7,731 | ) | (8,003 | ) | (7,166 | ) | ||||||
Research and Development |
(978 | ) | (1,005 | ) | (955 | ) | ||||||
Operating profit |
7,801 | 7,515 | 7,980 |
92 | Financial Statements | Annual Report on Form 20-F 2016 |
3. GROSS PROFIT AND OPERATING COSTS CONTINUED
NON-CORE ITEMS
Non-core items are disclosed on the face of the income statement to provide additional information to users to help them better understand underlying business performance.
million | million | million | ||||||||||
2016 | 2015 | 2014 | ||||||||||
Acquisition and disposal-related costs |
(132 | ) | (105 | ) | (97 | ) | ||||||
Gain/(loss) on disposal of group companies(a) |
(95 | ) | (9 | ) | 1,392 | |||||||
Impairments and other one-off items(b) |
(18 | ) | (236 | ) | (335 | ) | ||||||
Non-core items before tax |
(245 | ) | (350 | ) | 960 | |||||||
Tax impact of non-core items |
60 | 49 | (423 | ) | ||||||||
Non-core items after tax |
(185 | ) | (301 | ) | 537 | |||||||
Attributable to: |
||||||||||||
Non-controlling interests |
1 | - | | |||||||||
Shareholders equity |
(186 | ) | (301 | ) | 537 |
(a) | 2014 includes a gain of 1,316 million from the sale of the Ragú & Bertolli brands and related assets. The total cash consideration for this transaction was approximately US$2.15 billion. |
(b) | 2016 includes 18 million in foreign exchange losses resulting from remeasurement of the Argentinian business (2015: 52 million). 2015 includes an 86 million charge for legal cases pertaining to a number of investigations by local competition regulators (2014: 30 million), a 14 million charge relating to other one-off legal cases (2014: nil), and 84 million in foreign exchange losses resulting from remeasurement of the Venezuelan business. 2014 includes an impairment charge of 305 million on assets related to the Slim.Fast business. |
OTHER
Other significant cost items by nature within operating costs include:
million | million | million | ||||||||||||||||||
Notes | 2016 | 2015 | 2014 | |||||||||||||||||
Staff costs |
4A | (6,523 | ) | (6,555 | ) | (6,054 | ) | |||||||||||||
Raw and packaging materials and goods purchased for resale |
(21,122 | ) | (21,543 | ) | (19,816 | ) | ||||||||||||||
Amortisation of finite-life intangible assets and software |
9 | (310 | ) | (273 | ) | (180 | ) | |||||||||||||
Depreciation of property, plant and equipment |
10 | (1,154 | ) | (1,097 | ) | (947 | ) | |||||||||||||
Exchange gains/(losses): |
(209 | ) | (87 | ) | 12 | |||||||||||||||
On underlying transactions |
(28 | ) | (118 | ) | 15 | |||||||||||||||
On covering forward contracts |
(181 | ) | 31 | (3 | ) | |||||||||||||||
Lease rentals: |
(531 | ) | (534 | ) | (535 | ) | ||||||||||||||
Minimum operating lease payments |
(536 | ) | (546 | ) | (544 | ) | ||||||||||||||
Less: Sub-lease income relating to operating lease agreements |
5 | 12 | 9 | |||||||||||||||||
Annual Report on Form 20-F 2016 | Financial Statements | 93 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
UNILEVER GROUP CONTINUED
4. EMPLOYEES
4A. STAFF AND MANAGEMENT COSTS
million | million | million | ||||||||||
Staff costs | 2016 | 2015 | 2014 | |||||||||
Wages and salaries |
(5,347 | ) | (5,474 | ) | (4,992 | ) | ||||||
Social security costs |
(606 | ) | (606 | ) | (586 | ) | ||||||
Other pension costs |
(372 | ) | (325 | ) | (288 | ) | ||||||
Share-based compensation costs |
(198 | ) | (150 | ) | (188 | ) | ||||||
(6,523 | ) | (6,555 | ) | (6,054 | ) | |||||||
000 | 000 | 000 | ||||||||||
Average number of employees during the year | 2016 | 2015 | 2014 | |||||||||
Asia/AMET/RUB |
95 | 97 | 99 | |||||||||
The Americas |
42 | 42 | 42 | |||||||||
Europe |
32 | 32 | 32 | |||||||||
169 | 171 | 173 | ||||||||||
million | million | million | ||||||||||
Key management compensation(a) | 2016 | 2015 | 2014 | |||||||||
Salaries and short-term employee benefits |
(31 | ) | (34 | ) | (28 | ) | ||||||
Non-Executive Directors fees |
(2 | ) | (2 | ) | (2 | ) | ||||||
Post-employment benefits |
(1 | ) | (1 | ) | (1 | ) | ||||||
Share-based benefits(b) |
(17 | ) | (30 | ) | (19 | ) | ||||||
(51 | ) | (67 | ) | (50 | ) | |||||||
Of which: |
||||||||||||
Executive Directors |
(13 | ) | (18 | ) | (15 | ) | ||||||
Non-Executive Directors |
(2 | ) | (2 | ) | (2 | ) | ||||||
Other(c) |
(36 | ) | (47 | ) | (33 | ) | ||||||
(51 | ) | (67 | ) | (50 | ) |
(a) | Includes full year compensation for Unilever Leadership Executive members joining part way through the year. |
(b) | Share-based benefits are shown on a vesting basis. |
(c) | Other includes all members of the Unilever Leadership Executive, other than Executive Directors. |
Key management are defined as the members of Unilever Leadership Executive and the Non-Executive Directors.
Details of the remuneration of Directors are given in the parts noted as audited in the Directors Remuneration Report on pages 48 to 77.
4B. PENSIONS AND SIMILAR OBLIGATIONS
For defined benefit plans, operating and finance costs are recognised separately in the income statement. The amount charged to operating cost in the income statement is the cost of accruing pension benefits promised to employees over the year, plus the costs of individual events such as past service benefit changes, settlements and curtailments (such events are recognised immediately in the income statement). The amount charged or credited to finance costs is a net interest expense calculated by applying the liability discount rate to the net defined benefit liability or asset. Any differences between the expected interest on assets and the return actually achieved, and any changes in the liabilities over the year due to changes in assumptions or experience within the plans, are recognised immediately in the statement of comprehensive income.
The defined benefit plan surplus or deficit on the balance sheet comprises the total for each plan of the fair value of plan assets less the present value of the defined benefit liabilities (using a discount rate based on high-quality corporate bonds, or a suitable alternative where there is no active corporate bond market).
All defined benefit plans are subject to regular actuarial review using the projected unit method, either by external consultants or by actuaries employed by Unilever. The Group policy is that the most important plans, representing approximately 84% of the defined benefit liabilities, are formally valued every year. Other major plans, accounting for a further 13% of the liabilities, have their liabilities updated each year. Group policy for the remaining plans requires a full actuarial valuation at least every three years. Asset values for all plans are updated every year.
For defined contribution plans, the charges to the income statement are the company contributions payable, as the companys obligation is limited to the contributions paid into the plans. The assets and liabilities of such plans are not included in the balance sheet of the Group.
94 | Financial Statements | Annual Report on Form 20-F 2016 |
4B. PENSIONS AND SIMILAR OBLIGATIONS CONTINUED
DESCRIPTION OF PLANS
The Group increasingly operates a number of defined contribution plans, the assets of which are held in external funds. In certain countries the Group operates defined benefit pension plans based on employee pensionable remuneration and length of service. The majority of defined benefit plans are either career average, final salary or hybrid plans and operate on a funded basis. Benefits are determined by the plan rules and are linked to inflation in some countries. The Group also provides other post-employment benefits, mainly post-employment healthcare plans in the United States. These plans are predominantly unfunded.
GOVERNANCE
The majority of the Groups externally funded plans are established as trusts, foundations or similar entities. The operation of these entities is governed by local regulations and practice in each country, as is the nature of the relationship between the Group and the Trustees (or equivalent) and their composition. Where Trustees (or equivalent) are in place to operate plans, they are generally required to act on behalf of the plans stakeholders. They are tasked with periodic reviews of the solvency of the fund in accordance with local legislation and play a role in the long-term investment and funding strategy. The Group also has an internal body, the Pensions and Equity Committee, that is responsible for setting the companys policies and decision-making on plan matters, including but not limited to design, funding, investments, risk management and governance.
INVESTMENT STRATEGY
The Groups investment strategy in respect of its funded plans is implemented within the framework of the various statutory requirements of the territories where the plans are based. The Group has developed policy guidelines for the allocation of assets to different classes with the objective of controlling risk and maintaining the right balance between risk and long-term returns in order to limit the cost to the Group of the benefits provided. To achieve this, investments are well diversified, such that the failure of any single investment would not have a material impact on the overall level of assets. The plans continue to invest a good proportion of the assets in equities, which the Group believes offer the best returns over the long-term, commensurate with an acceptable level of risk. The plans expose the Group to a number of actuarial risks such as investment risk, interest rate risk, longevity risk and, in certain markets, inflation risk. There are no unusual entity or plan-specific risks to the Group. For risk control, the pension funds also have significant investments in liability matching assets (bonds) as well as in property and other alternative assets; additionally, the Group uses derivatives to further mitigate the impact of the risks outlined above. The majority of assets are managed by a number of external fund managers with a small proportion managed in-house. Unilever has a pooled investment vehicle (Univest) which it believes offers its pension plans around the world a simplified externally managed investment vehicle to implement their strategic asset allocation models, currently for bonds, equities and alternative assets. The aim is to provide high-quality, well diversified, cost-effective, risk-controlled vehicles. The pension plans investments are overseen by Unilevers internal investment company, the Univest Company.
ASSUMPTIONS
With the objective of presenting the assets and liabilities of the pensions and other post-employment benefit plans at their fair value on the balance sheet, assumptions under IAS 19 are set by reference to market conditions at the valuation date. The actuarial assumptions used to calculate the benefit liabilities vary according to the country in which the plan is situated. The following table shows the assumptions, weighted by liabilities, used to value the principal defined benefit plans (which cover approximately 96% of total pension liabilities) and the plans providing other post-employment benefits.
31 December 2016 | 31 December 2015 | |||||||||||||||
Principal defined benefit pension plans |
Other post-employment benefit plans |
Principal defined benefit pension plans |
Other post-employment benefit plans |
|||||||||||||
Discount rate |
2.6% | 4.8% | 3.4% | 5.0% | ||||||||||||
Inflation |
2.5% | n/a | 2.4% | n/a | ||||||||||||
Rate of increase in salaries |
2.9% | 3.0% | 2.7% | 3.1% | ||||||||||||
Rate of increase for pensions in payment (where provided) |
2.4% | n/a | 2.3% | n/a | ||||||||||||
Rate of increase for pensions in deferment (where provided) |
2.7% | n/a | 2.5% | n/a | ||||||||||||
Long-term medical cost inflation |
n/a | 5.3% | n/a | 5.2% |
The valuations of other post-employment benefit plans generally assume a higher initial level of medical cost inflation, which falls from 6% to the long-term rate within the next five years. Assumed healthcare cost trend rates have a significant effect on the amounts reported for healthcare plans.
Annual Report on Form 20-F 2016 | Financial Statements | 95 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
UNILEVER GROUP CONTINUED
4B. PENSIONS AND SIMILAR OBLIGATIONS CONTINUED
For the most important pension plans, representing approximately 84% of all defined benefit plans liabilities, the assumptions used at 31 December 2016 and 2015 were:
United Kingdom | Netherlands | United States | Germany | |||||||||||||
2016 | 2015 | 2016 | 2015 | 2016 | 2015 | 2016 | 2015 | |||||||||
Discount rate |
2.7% | 3.7% | 1.8% | 2.5% | 4.3% | 4.5% | 1.8% | 2.5% | ||||||||
Inflation |
3.2% | 3.0% | 1.7% | 1.7% | 2.1% | 2.3% | 1.7% | 1.7% | ||||||||
Rate of increase in salaries |
3.1% | 2.9% | 2.2% | 2.2% | 3.0% | 3.0% | 3.0% | 2.8% | ||||||||
Rate of increase for pensions in payment |
3.1% | 2.8% | 1.7% | 1.7% | - | - | 1.7% | 1.7% | ||||||||
Rate of increase for pensions in deferment |
3.1% | 2.9% | 1.7% | 1.7% | - | - | - | - | ||||||||
Number of years a current pensioner is expected to live beyond age 65: |
||||||||||||||||
Men |
22.5 | 22.4 | 21.8 | 21.7 | 20.8 | 21.2 | 21.7 | 19.4 | ||||||||
Women |
24.6 | 24.6 | 24.0 | 23.8 | 22.8 | 23.2 | 24.0 | 23.0 | ||||||||
Number of years a future pensioner currently aged 45 is expected to live beyond age 65: |
||||||||||||||||
Men |
23.8 | 23.7 | 24.1 | 23.9 | 23.1 | 22.9 | 21.7 | 19.4 | ||||||||
Women |
26.5 | 26.4 | 26.3 | 25.9 | 26.2 | 24.9 | 24.0 | 23.0 |
Demographic assumptions, such as mortality rates, are set with having regard to the latest trends in life expectancy (including expectations of future improvements), plan experience and other relevant data. These assumptions are reviewed and updated as necessary as part of the periodic actuarial valuation of the pension plans. The years of life expectancy for 2016 above have been translated from the following tables:
| UK: the year of use S1 series all pensioners (S1PA) tables have been adopted, which are based on the experience of UK pension schemes over the period 2000-2006. Scaling factors are applied reflecting the experience of our pension funds appropriate to the members gender and status. Future improvements in longevity have been allowed for in line with the 2012 CMI core projections and a 1% pa long-term improvement rate. |
| The Netherlands: the Dutch Actuarial Societys AG Prognosetafel 2016 table is used with correction factors to allow for the typically longer life expectancy for fund members relative to the general population. This table has an in-built allowance for future improvements in longevity. |
| United States: the table RP-2016 with MP-2016 generational mortality improvement. This table has an in-built allowance for future improvements in longevity. |
| Germany: fund specific tables are used which broadly equate to the Heubeck 2005 base table projected to 2045. |
Assumptions for the remaining defined benefit plans vary considerably, depending on the economic conditions of the countries where they are situated.
INCOME STATEMENT
The charge to the income statement comprises:
million | million | million | ||||||||||||||||||
Notes | 2016 | 2015 | 2014 | |||||||||||||||||
Charged to operating profit: |
||||||||||||||||||||
Defined benefit pension and other benefit plans: |
||||||||||||||||||||
Current service cost |
(226 | ) | (271 | ) | (259 | ) | ||||||||||||||
Employee contributions |
17 | 17 | 16 | |||||||||||||||||
Special termination benefits |
(6 | ) | (9 | ) | (27 | ) | ||||||||||||||
Past service cost including (losses)/gains on curtailments |
32 | 129 | 87 | |||||||||||||||||
Settlements |
(2 | ) | 6 | 10 | ||||||||||||||||
Defined contribution plans |
(187 | ) | (197 | ) | (115 | ) | ||||||||||||||
Total operating cost |
4A | (372 | ) | (325 | ) | (288 | ) | |||||||||||||
Finance income/(cost) |
5 | (94 | ) | (121 | ) | (94 | ) | |||||||||||||
Net impact on the income statement (before tax) |
(466 | ) | (446 | ) | (382 | ) |
96 | Financial Statements | Annual Report on Form 20-F 2016 |
4B. PENSIONS AND SIMILAR OBLIGATIONS CONTINUED
STATEMENT OF COMPREHENSIVE INCOME
Amounts recognised in the statement of comprehensive income on the remeasurement of the net defined benefit liability.
million | million | million | ||||||||||
2016 | 2015 | 2014 | ||||||||||
Return on plan assets excluding amounts included in net finance income/(cost) |
1,877 | (254 | ) | 1,316 | ||||||||
Actuarial gains/(losses) arising from changes in demographic assumptions |
(217 | ) | (22 | ) | (28 | ) | ||||||
Actuarial gains/(losses) arising from changes in financial assumptions |
(2,963 | ) | 1,167 | (3,076 | ) | |||||||
Experience gains/(losses) arising on pension plan and other benefit plan liabilities |
82 | 233 | 78 | |||||||||
Total of defined benefit costs recognised in other comprehensive income |
(1,221 | ) | 1,124 | (1,710 | ) |
BALANCE SHEET
The assets, liabilities and surplus/(deficit) position of the pension and other post-employment benefit plans at the balance sheet date were:
million 2016 |
million 2015 |
|||||||||||||||
Pension plans |
Other post- employment benefit plans |
Pension plans |
Other post- employment benefit plans |
|||||||||||||
Fair value of assets |
21,162 | 21 | 20,723 | 19 | ||||||||||||
Present value of liabilities |
(23,751 | ) | (605 | ) | (22,466 | ) | (596 | ) | ||||||||
Net liabilities |
(2,589 | ) | (584 | ) | (1,743 | ) | (577 | ) | ||||||||
Pension liability net of assets |
(2,589 | ) | (584 | ) | (1,743 | ) | (577 | ) | ||||||||
Of which in respect of: |
||||||||||||||||
Funded plans in surplus: |
||||||||||||||||
Liabilities |
(5,833 | ) | - | (5,936 | ) | - | ||||||||||
Assets |
6,524 | 3 | 6,867 | 3 | ||||||||||||
Aggregate surplus |
691 | 3 | 931 | 3 | ||||||||||||
Pension asset net of liabilities |
691 | 3 | 931 | 3 | ||||||||||||
Funded plans in deficit: |
||||||||||||||||
Liabilities |
(16,783 | ) | (36 | ) | (15,411 | ) | (30 | ) | ||||||||
Assets |
14,638 | 18 | 13,856 | 16 | ||||||||||||
Pension liability net of assets |
(2,145 | ) | (18 | ) | (1,555 | ) | (14 | ) | ||||||||
Unfunded plans: |
||||||||||||||||
Pension liability |
(1,135 | ) | (569 | ) | (1,119 | ) | (566 | ) |
RECONCILIATION OF CHANGE IN ASSETS AND LIABILITIES
Movements in assets and liabilities during the year:
million Assets 2016 |
million Assets 2015 |
million Liabilities 2016 |
million Liabilities 2015 |
million Total 2016 |
million Total 2015 |
|||||||||||||||||||
1 January |
20,742 | 20,484 | (23,062 | ) | (24,055 | ) | (2,320 | ) | (3,571 | ) | ||||||||||||||
Current service cost |
- | - | (226 | ) | (271 | ) | (226 | ) | (271 | ) | ||||||||||||||
Employee contributions |
17 | 17 | - | - | 17 | 17 | ||||||||||||||||||
Special termination benefits |
- | - | (6 | ) | (9 | ) | (6 | ) | (9 | ) | ||||||||||||||
Past service costs including losses/(gains) on curtailments |
- | - | 32 | 129 | 32 | 129 | ||||||||||||||||||
Settlements |
- | (16 | ) | (2 | ) | 22 | (2 | ) | 6 | |||||||||||||||
Actual return on plan assets (excluding amounts in net finance |
1,877 | (254 | ) | - | - | 1,877 | (254 | ) | ||||||||||||||||
Interest cost |
- | - | (758 | ) | (773 | ) | (758 | ) | (773 | ) | ||||||||||||||
Interest income |
664 | 652 | - | - | 664 | 652 | ||||||||||||||||||
Actuarial gain/(loss) arising from changes in demographic assumptions |
- | - | (217 | ) | (22 | ) | (217 | ) | (22 | ) | ||||||||||||||
Actuarial gain/(loss) arising from changes in financial assumptions |
- | - | (2,963 | ) | 1,167 | (2,963 | ) | 1,167 | ||||||||||||||||
Actuarial gain/(loss) arising from experience adjustments |
- | - | 82 | 233 | 82 | 233 | ||||||||||||||||||
Employer contributions |
512 | 513 | - | - | 512 | 513 | ||||||||||||||||||
Benefit payments |
(1,326 | ) | (1,345 | ) | 1,326 | 1,345 | - | - | ||||||||||||||||
Reclassification of benefits(a) |
(2 | ) | - | 2 | (8 | ) | - | (8 | ) | |||||||||||||||
Currency retranslation |
(1,301 | ) | 691 | 1,436 | (820 | ) | 135 | (129 | ) | |||||||||||||||
31 December |
21,183 | 20,742 | (24,356 | ) | (23,062 | ) | (3,173 | ) | (2,320 | ) |
(a) | Certain liabilities have been reclassified as employee benefit liabilities. |
Annual Report on Form 20-F 2016 | Financial Statements | 97 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
UNILEVER GROUP CONTINUED
4B. PENSIONS AND SIMILAR OBLIGATIONS CONTINUED
The actual return on plan assets during 2016 was 2,541 million, being the sum of 1,877 million and 664 million from the table above (2015: 398 million).
The duration of the principal defined benefit liabilities at 31 December 2016 is between 8 and 20 years (2015: 9 and 18 years). The liabilities are split between different categories of plan participants as follows:
| active members 19.9% (2015: 18.7%); |
| deferred members 26.0% (2015: 23.4%); and |
| retired members 54.1% (2015: 57.9%). |
ASSETS
The fair value of plan assets at the end of the reporting period for our major and principal plans for each category are as follows:
million 31 December 2016 |
million 31 December 2015 |
|||||||||||||||
Pension plans |
Other post- employment benefit plans |
Pension plans |
Other post- employment benefit plans |
|||||||||||||
Total assets |
21,162 | 21 | 20,723 | 19 | ||||||||||||
Equities total |
8,133 | - | 7,993 | - | ||||||||||||
Europe |
2,197 | - | 2,526 | - | ||||||||||||
North America |
3,829 | - | 3,313 | - | ||||||||||||
Other |
2,107 | - | 2,154 | - | ||||||||||||
Fixed income total |
10,282 | 20 | 9,741 | 18 | ||||||||||||
Government bonds |
5,326 | 8 | 4,870 | 18 | ||||||||||||
Investment grade corporate bonds |
2,927 | 12 | 2,970 | - | ||||||||||||
Other fixed income |
2,029 | - | 1,901 | - | ||||||||||||
Derivatives |
(1,446 | ) | - | (1,647 | ) | - | ||||||||||
Private equity |
634 | - | 721 | - | ||||||||||||
Property and real estate |
1,461 | - | 1,689 | - | ||||||||||||
Hedge funds |
1,171 | - | 1,123 | - | ||||||||||||
Other |
591 | 1 | 810 | 1 | ||||||||||||
Other plans |
336 | - | 293 | - |
The fair values of the above equity and fixed income instruments are determined based on quoted market prices in active markets. The fair value of private equity, properties, derivatives and hedge funds are not based on quoted market prices in active markets. The Group uses swaps to hedge some of its exposure to inflation and interest rate risk. Foreign currency exposures in part are also hedged by the use of forward foreign exchange contracts. Assets included in the Other category are commodities, cash and insurance contracts which are also unquoted assets.
Equity securities include Unilever securities amounting to 12 million (0.1% of total plan assets) and 14 million (0.1% of total plan assets) at 31 December 2016 and 2015 respectively. Property includes property occupied by Unilever amounting to 34 million at 31 December 2016 (2015: 17 million).
The pension assets above exclude the assets in a Special Benefits Trust amounting to 79 million (2015: 86 million) to fund pension and similar liabilities in the United States (see also note 17A on pages 121 to 122) and 68 million (2015: nil) in an escrow account that would otherwise have been payable to the main UK pension fund (see also note 11 on pages 107 to 108).
SENSITIVITIES
The sensitivity of the overall pension liabilities to changes in the weighted key assumptions are:
Change in assumption | Change in liabilities | |||||
Discount rate |
Increase by 0.5% | -8% | ||||
Inflation rate |
Increase by 0.5% | +6% | ||||
Life expectancy |
Increase by 1 year | +4% | ||||
Long-term medical cost inflation(b) |
Increase by 1.0% | +1% |
An equivalent decrease in each assumption would have an equal and opposite impact on liabilities.
(b) | Long-term medical cost inflation only relates to post retirement medical plans. |
The sensitivity analyses above have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period and may not be representative of the actual change. It is based on a change in the key assumption while holding all other assumptions constant. When calculating the sensitivity to the assumption, the same method used to calculate the liability recognised in the balance sheet has been applied. The methods and types of assumptions used in preparing the sensitivity analysis did not change compared with the previous period.
98 | Financial Statements | Annual Report on Form 20-F 2016 |
4B. PENSIONS AND SIMILAR OBLIGATIONS CONTINUED
CASH FLOW
Group cash flow in respect of pensions and similar post-employment benefits comprises company contributions paid to funded plans and benefits paid by the company in respect of unfunded plans. The table below sets out these amounts:
million | million | million | ||||||||||
2016 | 2015 | 2014 | ||||||||||
Company contributions to funded plans: |
||||||||||||
Defined benefit |
355 | 356 | 386 | |||||||||
Defined contributions |
187 | 197 | 115 | |||||||||
Benefits paid by the company in respect of unfunded plans: |
||||||||||||
Defined benefit |
157 | 157 | 151 | |||||||||
Group cash flow in respect of pensions and similar benefits |
699 | 710 | 652 |
The triennial valuation of the UK pension fund is currently underway. The outcome will determine our funding requirements for 2017 and beyond. Excluding the UK pension fund deficit contributions, the current estimated Group employer contributions to be paid in 2017 are 480 million for our defined benefit plans and 210 million for our defined contribution plans.
The Groups funding policy is to periodically review the contributions made to the plans while taking account of local legislations.
4C. SHARE-BASED COMPENSATION PLANS
The fair value of awards at grant date is calculated using appropriate pricing models. This value is expensed over their vesting period, with a corresponding credit to equity. The expense is reviewed and adjusted to reflect changes to the level of awards expected to vest, except where this arises from a failure to meet a market condition. Any cancellations are recognised immediately in the income statement.
As at 31 December 2016, the Group had share-based compensation plans in the form of performance shares, share options and other share awards.
The numbers in this note include those for Executive Directors shown in the Directors Remuneration Report on pages 48 to 77 and those for key management shown in note 4A on page 94. Non-Executive Directors do not participate in any of the share-based compensation plans.
The charge in each of the last three years is shown below, and relates to equity-settled plans:
million | million | million | ||||||||||
Income statement charge | 2016 | 2015 | 2014 | |||||||||
Performance share plans |
(185 | ) | (143 | ) | (186 | ) | ||||||
Other plans |
(13 | ) | (7 | ) | (2 | ) | ||||||
(198 | ) | (150 | ) | (188 | ) |
PERFORMANCE SHARE PLANS
Performance share awards are made under the Management Co-Investment Plan (MCIP) and the Global Share Incentive Plan (GSIP). The MCIP allows Unilevers managers to invest up to 60% of their annual bonus in shares in Unilever and to receive a corresponding award of performance-related shares. Under GSIP, Unilevers managers receive annual awards of NV and PLC shares. The awards of both plans will vest after three years between 0% and 200% of grant level, depending on the satisfaction of performance metrics.
The performance metrics of both MCIP and GSIP are underlying sales growth, operating cash flow and core operating margin improvement for the Group, except for GSIP awards granted to the managers of certain business units (below the Unilever Leadership Executive) which are subject to similar performance metrics but specific to the relevant business unit. There is an additional target based on relative total shareholder return (TSR) for senior executives.
A summary of the status of the Performance Share Plans as at 31 December 2016, 2015 and 2014 and changes during the years ended on these dates is presented below:
2016 Number of shares |
2015 Number of shares |
2014 Number of shares |
||||||||||
Outstanding at 1 January |
15,979,140 | 17,468,291 | 18,909,204 | |||||||||
Awarded |
7,016,274 | 8,890,394 | 9,724,186 | |||||||||
Vested |
(6,983,053 | ) | (8,448,454 | ) | (9,347,225 | ) | ||||||
Forfeited |
(1,194,301 | ) | (1,931,091 | ) | (1,817,874 | ) | ||||||
Outstanding at 31 December |
14,818,060 | 15,979,140 | 17,468,291 |
Annual Report on Form 20-F 2016 | Financial Statements | 99 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
UNILEVER GROUP CONTINUED
4C. SHARE-BASED COMPENSATION PLANS CONTINUED
Share award value information | 2016 | 2015 | 2014 | |||||||||
Fair value per share award during the year |
35.43 | 33.17 | 27.80 |
ADDITIONAL INFORMATION
At 31 December 2016, shares and options in NV or PLC totalling 16,085,024 (2015: 17,363,014) were held in respect of share-based compensation plans of NV, PLC and its subsidiaries, including North American plans.
To satisfy the options granted, certain NV group companies hold 16,936,797 (2015: 17,772,147) ordinary shares of NV or PLC. Shares acquired during 2016 represent 0.20% of the Groups called up share capital. The balance of shares held in connection with share plans at 31 December 2016 represented 0.6% (2015: 0.6%) of the Groups called up share capital.
The book value of 727 million (2015: 639 million) of all shares held in respect of share-based compensation plans for both NV and PLC is eliminated on consolidation by deduction from other reserves. Their market value at 31 December 2016 was 658 million (2015: 710 million).
At 31 December 2016, the exercise price of nil PLC options (2015: nil) were above the market price of the shares.
Shares held to satisfy options are accounted for in accordance with IAS 32 Financial Instruments: Presentation. All differences between the purchase price of the shares held to satisfy options granted and the proceeds received for the shares, whether on exercise or lapse, are charged to reserves. The basis of the charge to operating profit for the economic value of options granted is discussed on page 99.
Between 31 December 2016 and 21 February 2017 (the latest practicable date for inclusion in this report), 2,862,195 shares were granted, 4,803,965 shares were vested and 13,036 shares were forfeited related to the Performance Share Plans.
5. NET FINANCE COSTS
Net finance costs are comprised of finance costs and finance income, including net finance costs in relation to pensions and similar obligations.
Finance income includes income on cash and cash equivalents and income on other financial assets. Finance costs include interest costs in relation to financial liabilities.
Borrowing costs are recognised based on the effective interest method.
Net finance costs | Notes | 2016 | 2015 | 2014 | ||||||||||||||||
Finance costs |
(584 | ) | (516 | ) | (500 | ) | ||||||||||||||
Bank loans and overdrafts |
(67 | ) | (56 | ) | (57 | ) | ||||||||||||||
Interest on bonds and other loans(a) |
(501 | ) | (492 | ) | (425 | ) | ||||||||||||||
Dividends paid on preference shares |
(4 | ) | (4 | ) | (4 | ) | ||||||||||||||
Net gain/(loss) on transactions for which hedge accounting is not applied(b) |
(12 | ) | 36 | (14 | ) | |||||||||||||||
On foreign exchange derivatives |
(215 | ) | (218 | ) | (655 | ) | ||||||||||||||
Exchange difference on underlying items |
203 | 254 | 641 | |||||||||||||||||
Finance income |
115 | 144 | 117 | |||||||||||||||||
Pensions and similar obligations |
4B | (94 | ) | (121 | ) | (94 | ) | |||||||||||||
(563 | ) | (493 | ) | (477 | ) |
(a) | Interest on bonds and other loans includes the impact of interest rate derivatives that are part of a fair value hedge accounting relationship and the recycling of results from the cash flow hedge accounting reserve relating to derivatives that were part of a cash flow hedge accounting relation. |
(b) | For further details of derivatives for which hedge accounting is not applied, please refer to note 16C. |
100 | Financial Statements | Annual Report on Form 20-F 2016 |
6. TAXATION
6A. INCOME TAX
Income tax on the profit for the year comprises current and deferred tax. Income tax is recognised in the income statement except to the extent that it relates to items recognised directly in equity.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the balance sheet date, and any adjustments to tax payable in respect of previous years.
Current tax in the consolidated income statement will differ from the income tax paid in the consolidated cash flow statement primarily because of deferred tax arising on temporary differences and payment dates for income tax occurring after the balance sheet date.
Unilever is subject to taxation in the many countries in which it operates. The tax legislation of these countries differs, is often complex and is subject to interpretation by management and the government authorities. These matters of judgement give rise to the need to create provisions for tax payments that may arise in future years. Provisions are made against individual exposures and take into account the specific circumstances of each case, including the strength of technical arguments, recent case law decisions or rulings on similar issues and relevant external advice. The provision is estimated based on the individual most likely outcome approach.
million | million | million | ||||||||||
Tax charge in income statement | 2016 | 2015 | 2014 | |||||||||
Current tax |
||||||||||||
Current year |
(2,026 | ) | (1,992 | ) | (2,111 | ) | ||||||
Over/(under) provided in prior years |
158 | (57 | ) | 68 | ||||||||
(1,868 | ) | (2,049 | ) | (2,043 | ) | |||||||
Deferred tax |
||||||||||||
Origination and reversal of temporary differences |
(65 | ) | 82 | (112 | ) | |||||||
Changes in tax rates |
(7 | ) | (13 | ) | 4 | |||||||
Recognition of previously unrecognised losses brought forward |
18 | 19 | 20 | |||||||||
(54 | ) | 88 | (88 | ) | ||||||||
(1,922 | ) | (1,961 | ) | (2,131 | ) |
The reconciliation between the computed weighted average rate of income tax expense, which is generally applicable to Unilever companies, and the actual rate of taxation charged is as follows:
Reconciliation of effective tax rate | % 2016 |
% 2015 |
% 2014 |
|||||||||
Computed rate of tax(a) |
26 | 24 | 27 | |||||||||
Differences due to: |
||||||||||||
Incentive tax credits |
(4 | ) | (5 | ) | (5 | ) | ||||||
Withholding tax on dividends |
3 | 2 | 2 | |||||||||
Expenses not deductible for tax purposes |
1 | 2 | 1 | |||||||||
Irrecoverable witholding tax |
1 | 2 | 1 | |||||||||
Income tax reserve adjustments current and prior year |
(1 | ) | 2 | 1 | ||||||||
Transfer to/(from) unrecognised deferred tax assets |
- | 1 | 1 | |||||||||
Effective tax rate |
26 | 28 | 28 |
(a) | The computed tax rate used is the average of the standard rate of tax applicable in the countries in which Unilever operates, weighted by the amount of profit before taxation generated in each of those countries. For this reason the rate may vary from year to year according to the mix of profit and related tax rates. |
Our tax rate is reduced by incentive tax credits, the benefit from preferential tax regimes that have been legislated by the countries and provinces concerned in order to promote economic development and investment. The tax rate is increased by business expenses which are not deductible for tax, such as entertainment costs and some interest expense and by irrecoverable withholding taxes on dividends paid by subsidiary companies and on other cross-border payments such as royalties and service fees, which cannot be offset against other taxes due. In 2016 there has been a net decrease in the amount provided for uncertain tax provisions, principally as the result of favourable audit settlements (versus a net increase in 2015).
The Groups future tax charge and effective tax rate could be affected by several factors, including changes in tax laws and their interpretation and still to be determined tax reform proposals in the EU, Switzerland and the United States, as well as the impact of acquisitions, disposals and any restructuring of our businesses.
Annual Report on Form 20-F 2016 | Financial Statements | 101 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
UNILEVER GROUP CONTINUED
6B. DEFERRED TAX
Deferred tax is recognised using the liability method on taxable temporary differences between the tax base and the accounting base of items included in the balance sheet of the Group. Certain temporary differences are not provided for as follows:
| goodwill not deductible for tax purposes; |
| the initial recognition of assets or liabilities that affect neither accounting nor taxable profit; and |
| differences relating to investments in subsidiaries to the extent that it is probable that they will not reverse in the foreseeable future. |
The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted, or substantively enacted, at the year end.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised.
million | million | million | million | million | million | million | million | |||||||||||||||||||||||||
Movements in 2016 and 2015 | As at 1 January 2016 |
Income statement |
Other | As at 31 December 2016 |
As at 1 January 2015 |
Income statement |
Other | As at 31 December 2015 |
||||||||||||||||||||||||
Pensions and similar obligations |
557 | 7 | 202 | 766 | 874 | (23 | ) | (294 | ) | 557 | ||||||||||||||||||||||
Provisions |
708 | 68 | 146 | 922 | 657 | 144 | (93 | ) | 708 | |||||||||||||||||||||||
Goodwill and intangible assets |
(1,301 | ) | (104 | ) | (523 | ) | (1,928 | ) | (1,292 | ) | 8 | (17 | ) | (1,301 | ) | |||||||||||||||||
Accelerated tax depreciation |
(752 | ) | (85 | ) | (33 | ) | (870 | ) | (753 | ) | 7 | (6 | ) | (752 | ) | |||||||||||||||||
Tax losses |
123 | (6 | ) | 14 | 131 | 123 | 14 | (14 | ) | 123 | ||||||||||||||||||||||
Fair value gains |
(25 | ) | 14 | 4 | (7 | ) | (10 | ) | (2 | ) | (13 | ) | (25 | ) | ||||||||||||||||||
Fair value losses |
16 | 8 | 5 | 29 | 10 | (62 | ) | 68 | 16 | |||||||||||||||||||||||
Share-based payments |
190 | (14 | ) | (7 | ) | 169 | 172 | (2 | ) | 20 | 190 | |||||||||||||||||||||
Other |
(75 | ) | 58 | 98 | 81 | (29 | ) | 4 | (50 | ) | (75 | ) | ||||||||||||||||||||
(559 | ) | (54 | ) | (94 | ) | (707 | ) | (248 | ) | 88 | (399 | ) | (559 | ) |
At the balance sheet date, the Group had unused tax losses of 4,138 million (2015: 3,338 million) and tax credits amounting to 644 million (2015: 629 million) available for offset against future taxable profits. Deferred tax assets have not been recognised in respect of unused tax losses of 3,622 million (2015: 2,941 million) and tax credits of 629 million (2015: 629 million), as it is not probable that there will be future taxable profits within the entities against which the losses can be utilised. The majority of these tax losses and credits arise in tax jurisdictions where they do not expire with the exception of 2,363 million (2015: 1,790 million) comprising corporate income tax losses in the Netherlands which expire between now and 2025 and state and federal tax losses in the US which expire between now and 2036.
Other deductible temporary differences of 52 million (2015: 67 million) have not been recognised as a deferred tax asset. There is no expiry date for these differences.
At the balance sheet date, the aggregate amount of temporary differences associated with undistributed earnings of subsidiaries for which deferred tax liabilities have not been recognised was 1,557 million (2015: 1,505 million). No liability has been recognised in respect of these differences because the Group is in a position to control the timing of the reversal of the temporary differences, and it is probable that such differences will not reverse in the foreseeable future.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when the deferred income taxes relate to the same fiscal authority. The following amounts, determined after appropriate offsetting, are shown in the consolidated balance sheet:
million | million | million | million | million | million | |||||||||||||||||||
Deferred tax assets and liabilities | Assets 2016 |
Assets 2015 |
Liabilities 2016 |
Liabilities 2015 |
Total 2016 |
Total 2015 |
||||||||||||||||||
Pensions and similar obligations |
568 | 434 | 198 | 123 | 766 | 557 | ||||||||||||||||||
Provisions |
579 | 516 | 343 | 192 | 922 | 708 | ||||||||||||||||||
Goodwill and intangible assets |
2 | 126 | (1,930 | ) | (1,427 | ) | (1,928 | ) | (1,301 | ) | ||||||||||||||
Accelerated tax depreciation |
(60 | ) | (66 | ) | (810 | ) | (686 | ) | (870 | ) | (752 | ) | ||||||||||||
Tax losses |
128 | 96 | 3 | 27 | 131 | 123 | ||||||||||||||||||
Fair value gains |
28 | 12 | (35 | ) | (37 | ) | (7 | ) | (25 | ) | ||||||||||||||
Fair value losses |
9 | (5 | ) | 20 | 21 | 29 | 16 | |||||||||||||||||
Share-based payments |
44 | 59 | 125 | 131 | 169 | 190 | ||||||||||||||||||
Other |
56 | 13 | 25 | (88 | ) | 81 | (75 | ) | ||||||||||||||||
1,354 | 1,185 | (2,061 | ) | (1,744 | ) | (707 | ) | (559 | ) | |||||||||||||||
Of which deferred tax to be recovered/(settled) after more than 12 months |
1,157 | 856 | (2,206 | ) | (1,811 | ) | (1,049 | ) | (955 | ) |
102 | Financial Statements | Annual Report on Form 20-F 2016 |
6C. TAX ON OTHER COMPREHENSIVE INCOME
Income tax is recognised in other comprehensive income for items recognised directly in equity.
Tax effects of the components of other comprehensive income were as follows:
million | million | million | million | million | million | |||||||||||||||||||
Before tax 2016 |
Tax (charge)/ credit 2016 |
After tax 2016 |
Before tax 2015 |
Tax (charge)/ credit 2015 |
After tax 2015 |
|||||||||||||||||||
Fair value gains/(losses) on financial instruments |
(15 | ) | - | (15 | ) | 82 | 18 | 100 | ||||||||||||||||
Remeasurements of defined benefit pension plans |
(1,221 | ) | 241 | (980 | ) | 1,124 | (240 | ) | 884 | |||||||||||||||
Currency retranslation gains/(losses) |
217 | - | 217 | (510 | ) | 29 | (481 | ) | ||||||||||||||||
(1,019 | ) | 241 | (778 | ) | 696 | (193 | ) | 503 |
7. COMBINED EARNINGS PER SHARE
The combined earnings per share calculations are based on the average number of share units representing the combined ordinary shares of NV and PLC in issue during the period, less the average number of shares held as treasury stock.
In calculating diluted earnings per share and core earnings per share, a number of adjustments are made to the number of shares, principally: (i) conversion into PLC ordinary shares in the year 2038 of shares in a group company (refer below) and (ii) the exercise of share options by employees.
On 19 May 2014 Unilever PLC purchased the shares convertible to PLC ordinary shares in 2038. Due to the repurchase the average number of combined share units is not adjusted for these shares from 20 May 2014 to 31 December 2016. For 2014 the adjusted average number of share units is calculated based on the number of days the shares were dilutive during the year ended 31 December 2014.
Earnings per share for total operations for the 12 months were calculated as follows:
| | | ||||||||||||||||||
Combined earnings per share | 2016 | 2015 | 2014 | |||||||||||||||||
Basic earnings per share |
1.83 | 1.73 | 1.82 | |||||||||||||||||
Diluted earnings per share |
1.82 | 1.72 | 1.79 | |||||||||||||||||
Core EPS |
1.88 | 1.82 | 1.61 | |||||||||||||||||
Millions of share units | ||||||||||||||||||||
Calculation of average number of share units | 2016 | 2015 | 2014 | |||||||||||||||||
Average number of shares: NV |
1,714.7 | 1,714.7 | 1,714.7 | |||||||||||||||||
PLC |
1,310.2 | 1,310.2 | 1,310.2 | |||||||||||||||||
Less shares held by employee share trusts and companies |
(184.7 | ) | (184.8 | ) | (184.4 | ) | ||||||||||||||
Combined average number of share units |
2,840.2 | 2,840.1 | 2,840.5 | |||||||||||||||||
Add shares issuable in 2038 |
- | - | 26.8 | |||||||||||||||||
Add dilutive effect of share-based compensation plans |
13.7 | 15.3 | 15.3 | |||||||||||||||||
Diluted combined average number of share units |
2,853.9 | 2,855.4 | 2,882.6 | |||||||||||||||||
Calculation of earnings | million 2016 |
million 2015 |
million 2014 |
|||||||||||||||||
Net profit |
5,547 | 5,259 | 5,515 | |||||||||||||||||
Non-controlling interests |
(363 | ) | (350 | ) | (344 | ) | ||||||||||||||
Net profit attributable to shareholders equity |
5,184 | 4,909 | 5,171 | |||||||||||||||||
Calculation of core earnings | Notes | million 2016 |
million 2015 |
million 2014 |
||||||||||||||||
Net profit attributable to shareholders equity |
5,184 | 4,909 | 5,171 | |||||||||||||||||
Post-tax impact of non-core items |
3 | 186 | 301 | (537 | ) | |||||||||||||||
Core profit attributable to shareholders equity |
5,370 | 5,210 | 4,634 |
Annual Report and Accounts 2016 | Financial Statements | 103 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
UNILEVER GROUP CONTINUED
8. DIVIDENDS ON ORDINARY CAPITAL
Dividends are recognised on the date that the shareholders right to receive payment is established. This is generally the date when the dividend is declared.
million | million | million | ||||||||||
Dividends on ordinary capital during the year | 2016 | 2015 | 2014 | |||||||||
NV dividends |
(1,974 | ) | (1,862 | ) | (1,757 | ) | ||||||
PLC dividends |
(1,626 | ) | (1,542 | ) | (1,439 | ) | ||||||
(3,600 | ) | (3,404 | ) | (3,196 | ) |
Four quarterly interim dividends were declared and paid during 2016 totalling 1.26 (2015: 1.19) per NV ordinary share and £1.04 (2015: £0.87) per PLC ordinary share.
Quarterly dividends of 0.32 per NV ordinary share and £0.28 per PLC ordinary share were declared on 26 January 2017, to be paid in March 2017. See note 26 Events after the balance sheet date on page 130. Total dividends declared in relation to 2016 were 1.28 (2015: 1.21) per NV ordinary share and £1.09 (2015: £0.88) per PLC ordinary share.
9. GOODWILL AND INTANGIBLE ASSETS
GOODWILL
Goodwill is initially recognised based on the accounting policy for business combinations (see note 21). Goodwill is subsequently measured at cost less amounts provided for impairment. The Groups cash generating units (CGUs) are based on the four product categories and the three geographical areas.
Goodwill acquired in a business combination is allocated to the Groups CGUs, or groups of CGUs, that are expected to benefit from the synergies of the combination. These might not always be the same as the CGUs that include the assets and liabilities of the acquired business. Each unit or group of units to which the goodwill is allocated represents the lowest level within the Group at which the goodwill is monitored for internal management purposes, and is not larger than an operating segment.
INTANGIBLE ASSETS
Separately purchased intangible assets are initially measured at cost, being the purchase price as at the date of acquisition. On acquisition of new interests in group companies, Unilever recognises any specifically identifiable intangible assets separately from goodwill. These intangible assets are initially measured at fair value as at the date of acquisition.
Development expenditure for internally-produced intangible assets is capitalised only if the costs can be reliably measured, future economic benefits are probable, the product is technically feasible and the Group has the intent and the resources to complete the project. Research expenditure to support development of internally-produced intangible assets is recognised in profit or loss as incurred.
Indefinite-life intangibles mainly comprise trademarks and brands. These assets are not amortised but are subject to a review for impairment annually, or more frequently if events or circumstances indicate this is necessary. Any impairment is charged to the income statement as it arises.
Finite-life intangible assets mainly comprise software, patented and non-patented technology, know-how and customer lists. These assets are amortised on a straight-line basis in the income statement over the period of their expected useful lives, or the period of legal rights if shorter. None of the amortisation periods exceeds ten years.
104 | Financial Statements | Annual Report on Form 20-F 2016 |
9. GOODWILL AND INTANGIBLE ASSETS CONTINUED
million | million | million | million | million | ||||||||||||||||
Movements during 2016 | Goodwill |
Indefinite-life intangible assets |
Finite-life intangible assets |
Software | Total | |||||||||||||||
Cost |
||||||||||||||||||||
1 January 2016 |
17,378 | 7,444 | 819 | 2,538 | 28,179 | |||||||||||||||
Acquisitions of group companies |
1,140 | 911 | 236 | - | 2,287 | |||||||||||||||
Disposals of group companies |
(2 | ) | (83 | ) | - | - | (85 | ) | ||||||||||||
Reclassification to held for disposal |
(55 | ) | - | - | - | (55 | ) | |||||||||||||
Additions |
- | 2 | 6 | 225 | 233 | |||||||||||||||
Disposals |
- | - | (1 | ) | (42 | ) | (43 | ) | ||||||||||||
Currency retranslation |
328 | 84 | 8 | (143 | ) | 277 | ||||||||||||||
31 December 2016 |
18,789 | 8,358 | 1,068 | 2,578 | 30,793 | |||||||||||||||
Accumulated amortisation and impairment |
||||||||||||||||||||
1 January 2016 |
(1,165 | ) | (13 | ) | (673 | ) | (1,269 | ) | (3,120 | ) | ||||||||||
Amortisation/impairment for the year |
- | - | (19 | ) | (291 | ) | (310 | ) | ||||||||||||
Disposals |
- | - | 1 | 42 | 43 | |||||||||||||||
Currency retranslation |
- | - | (7 | ) | 34 | 27 | ||||||||||||||
31 December 2016 |
(1,165 | ) | (13 | ) | (698 | ) | (1,484 | ) | (3,360 | ) | ||||||||||
Net book value 31 December 2016 |
17,624 | 8,345 | 370 | 1,094 | 27,433 | |||||||||||||||
Movements during 2015 | ||||||||||||||||||||
Cost |
||||||||||||||||||||
1 January 2015 |
15,725 | 6,364 | 685 | 2,136 | 24,910 | |||||||||||||||
Acquisitions of group companies |
1,012 | 842 | 112 | - | 1,966 | |||||||||||||||
Disposals of group companies |
(5 | ) | (42 | ) | - | - | (47 | ) | ||||||||||||
Reclassification to held for disposal |
(34 | ) | (9 | ) | - | - | (43 | ) | ||||||||||||
Additions |
- | 3 | 3 | 329 | 335 | |||||||||||||||
Disposals |
- | - | (3 | ) | (7 | ) | (10 | ) | ||||||||||||
Currency retranslation |
680 | 286 | 22 | 80 | 1,068 | |||||||||||||||
31 December 2015 |
17,378 | 7,444 | 819 | 2,538 | 28,179 | |||||||||||||||
Accumulated amortisation and impairment |
||||||||||||||||||||
1 January 2015 |
(1,083 | ) | (12 | ) | (644 | ) | (997 | ) | (2,736 | ) | ||||||||||
Amortisation/impairment for the year |
- | - | (8 | ) | (265 | ) | (273 | ) | ||||||||||||
Disposals |
- | - | 3 | 7 | 10 | |||||||||||||||
Currency retranslation |
(82 | ) | (1 | ) | (24 | ) | (14 | ) | (121 | ) | ||||||||||
31 December 2015 |
(1,165 | ) | (13 | ) | (673 | ) | (1,269 | ) | (3,120 | ) | ||||||||||
Net book value 31 December 2015 |
16,213 | 7,431 | 146 | 1,269 | 25,059 |
There are no significant carrying amounts of goodwill and intangible assets that are allocated across multiple cash generating units.
IMPAIRMENT CHARGES
We have tested all material goodwill and indefinite-life intangible assets for impairment. No impairments were identified.
SIGNIFICANT CGUs
The goodwill and indefinite-life intangible assets held in the three CGUs relating to Foods across the geographical areas and Personal Care The Americas are considered significant within the total carrying amounts of goodwill and indefinite-life intangible assets at 31 December 2016 in terms of size, headroom and sensitivity to assumptions used. No other CGUs are considered significant in this respect.
The goodwill and indefinite-life intangible assets held in the significant CGUs are:
billion | billion | billion | billion | |||||||||||||
2016 | 2016 | 2015 | 2015 | |||||||||||||
Goodwill | Indefinite- life intangibles |
Goodwill | Indefinite- life intangibles |
|||||||||||||
Foods Europe |
5.8 | 1.6 | 6.0 | 1.6 | ||||||||||||
Foods The Americas |
3.9 | 1.6 | 3.7 | 1.6 | ||||||||||||
Foods Asia/AMET/RUB |
1.8 | 0.5 | 1.6 | 0.5 | ||||||||||||
Personal Care The Americas |
2.8 | 1.7 | 2.1 | 1.6 |
Value in use has been calculated as the present value of projected cash flows. A pre-tax discount rate of 7.4% (2015: 7.4%) was used.
Annual Report on Form 20-F 2016 | Financial Statements | 105 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
UNILEVER GROUP CONTINUED
9. GOODWILL AND INTANGIBLE ASSETS CONTINUED
For the significant CGUs, the following key assumptions were used in the discounted cash flow projections:
Foods | Foods | Foods | Personal Care | |||||||||||||
Europe | The Americas |
Asia/ AMET/RUB |
The Americas |
|||||||||||||
Longer-term sustainable growth rates |
0.4% | 1.2% | 4.3% | 1.2% | ||||||||||||
Average near-term nominal growth rates |
-1.3% | 3.0% | 5.6% | 6.3% | ||||||||||||
Average operating margins |
16% | 15% | 9% | 17% |
The projections cover a period of five years, as we believe this to be the most appropriate timescale over which to review and consider annual performances before applying a fixed terminal value multiple to the final year cash flows.
The growth rates and margins used to estimate future performance are based on the conservative end of the range of estimates from past performance, our annual forecast and three year strategic plan extended to year 4 and 5.
We have performed sensitivity analyses around the base assumptions. There are no reasonably possible changes in a key assumption that would cause the carrying amount to exceed recoverable amount.
10. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment is measured at cost including eligible borrowing costs less depreciation and accumulated impairment losses.
Depreciation is provided on a straight-line basis over the expected average useful lives of the assets. Residual values are reviewed at least annually. Estimated useful lives by major class of assets are as follows:
Freehold buildings (no depreciation on freehold land) | 40 years | |
Leasehold land and buildings | 40 years (or life of lease if less) | |
Plant and equipment | 220 years |
Property, plant and equipment is subject to review for impairment if triggering events or circumstances indicate that this is necessary. If an indication of impairment exists, the assets or cash generating units recoverable amount is estimated and any impairment loss is charged to the income statement as it arises.
million | million | million | ||||||||||
Land and | Plant and | |||||||||||
Movements during 2016 | buildings | equipment | Total | |||||||||
Cost |
||||||||||||
1 January 2016 |
4,551 | 15,366 | 19,917 | |||||||||
Acquisitions of group companies |
- | 13 | 13 | |||||||||
Disposals of group companies |
(1 | ) | (11 | ) | (12 | ) | ||||||
Additions |
358 | 1,553 | 1,911 | |||||||||
Disposals |
(84 | ) | (521 | ) | (605 | ) | ||||||
Currency retranslation |
23 | 64 | 87 | |||||||||
Reclassification as held for sale |
(102 | ) | (2 | ) | (104 | ) | ||||||
31 December 2016 |
4,745 | 16,462 | 21,207 | |||||||||
Accumulated amortisation and impairment |
||||||||||||
1 January 2016 |
(1,443 | ) | (7,416 | ) | (8,859 | ) | ||||||
Disposals of group companies |
1 | 7 | 8 | |||||||||
Depreciation charge for the year |
(149 | ) | (1,005 | ) | (1,154 | ) | ||||||
Disposals |
56 | 332 | 388 | |||||||||
Currency retranslation |
5 | (15 | ) | (10 | ) | |||||||
Reclassification as held for sale |
47 | 46 | 93 | |||||||||
31 December 2016 |
(1,483 | ) | (8,051 | ) | (9,534 | ) | ||||||
Net book value 31 December 2016(a) |
3,262 | 8,411 | 11,673 | |||||||||
Includes payments on account and assets in course of construction |
189 | 1,236 | 1,425 |
(a) | Includes 249 million (2015: 270 million) of freehold land. |
The Group has commitments to purchase property, plant and equipment of 478 million (2015: 535 million).
106 | Financial Statements | Annual Report on Form 20-F 2016 |
10. PROPERTY, PLANT AND EQUIPMENT CONTINUED
million | million | million | ||||||||||
Land and | Plant and | |||||||||||
Movements during 2015 | buildings | equipment | Total | |||||||||
Cost |
||||||||||||
1 January 2015 |
4,200 | 14,714 | 18,914 | |||||||||
Acquisitions of group companies |
40 | 13 | 53 | |||||||||
Disposals of group companies |
- | (5 | ) | (5 | ) | |||||||
Additions |
369 | 1,513 | 1,882 | |||||||||
Disposals |
(64 | ) | (723 | ) | (787 | ) | ||||||
Currency retranslation |
37 | (5 | ) | 32 | ||||||||
Reclassification as held for sale |
(31 | ) | (141 | ) | (172 | ) | ||||||
31 December 2015 |
4,551 | 15,366 | 19,917 | |||||||||
Accumulated depreciation |
||||||||||||
1 January 2015 |
(1,346 | ) | (7,096 | ) | (8,442 | ) | ||||||
Disposals of group companies |
- | 2 | 2 | |||||||||
Depreciation charge for the year |
(120 | ) | (977 | ) | (1,097 | ) | ||||||
Disposals |
31 | 620 | 651 | |||||||||
Currency retranslation |
(29 | ) | (29 | ) | (58 | ) | ||||||
Reclassification as held for sale |
21 | 64 | 85 | |||||||||
31 December 2015 |
(1,443 | ) | (7,416 | ) | (8,859 | ) | ||||||
Net book value 31 December 2015 |
3,108 | 7,950 | 11,058 | |||||||||
Includes payments on account and assets in course of construction |
217 | 1,334 | 1,551 |
11. OTHER NON-CURRENT ASSETS
Joint ventures are undertakings in which the Group has an interest and which are jointly controlled by the Group and one or more other parties. Associates are undertakings where the Group has an investment in which it does not have control or joint control but can exercise significant influence.
Interests in joint ventures and associates are accounted for using the equity method and are stated in the consolidated balance sheet at cost, adjusted for the movement in the Groups share of their net assets and liabilities. The Groups share of the profit or loss after tax of joint ventures and associates is included in the Groups consolidated profit before taxation.
Where the Groups share of losses exceeds its interest in the equity accounted investee, the carrying amount of the investment is reduced to zero and the recognition of further losses is discontinued, except to the extent that the Group has an obligation to make payments on behalf of the investee.
Biological assets are measured at fair value less costs to sell with any changes recognised in the income statement.
million | million | |||||||
2016 | 2015 | |||||||
Interest in net assets of joint ventures |
36 | 48 | ||||||
Interest in net assets of associates |
51 | 59 | ||||||
Long-term trade and other receivables |
421 | 413 | ||||||
Fair value of biological assets |
51 | 48 | ||||||
Other non-current assets(a) |
159 | 203 | ||||||
718 | 771 |
(a) | Mainly relate to assets held in escrow for the UK pension fund and tax assets. |
Annual Report on Form 20-F 2016 | Financial Statements | 107 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
UNILEVER GROUP CONTINUED
11. OTHER NON-CURRENT ASSETS CONTINUED
million | million | |||||||
Movements during 2016 and 2015 | 2016 | 2015 | ||||||
Joint ventures(a) |
||||||||
1 January |
48 | 52 | ||||||
Additions |
24 | 4 | ||||||
Dividends received/reductions |
(151 | ) | (137 | ) | ||||
Share of net profit/(loss) |
130 | 117 | ||||||
Currency retranslation |
(15 | ) | 12 | |||||
31 December |
36 | 48 | ||||||
Associates(b) |
||||||||
1 January |
59 | 42 | ||||||
Additions |
7 | 24 | ||||||
Dividend received/reductions |
(8 | ) | - | |||||
Share of net profit/(loss) |
(3 | ) | (10 | ) | ||||
Currency retranslation |
(4 | ) | 3 | |||||
31 December |
51 | 59 |
(a) | Our principal joint ventures are Unilever Jerónimo Martins for Portugal, the Pepsi/Lipton Partnership for the US and Pepsi Lipton International for the rest of the world. |
(b) | Associates as at 31 December 2016 primarily comprise our investments in Langholm Capital Partners. Other Unilever Ventures assets are included under Other non-current non-financial assets. In 2015 we sold shares in an associate (carrying value zero) for consideration of 110 million. |
The joint ventures and associates have no significant contingent liabilities to which the Group is exposed, and the Group has no significant contingent liabilities in relation to its interests in the joint ventures and associates.
The Group has no outstanding capital commitments to joint ventures.
Outstanding balances with joint ventures and associates are shown in note 23 on page 129.
12. INVENTORIES
Inventories are valued at the lower of weighted average cost and net realisable value. Cost comprises direct costs and, where appropriate, a proportion of attributable production overheads. Net realisable value is the estimated selling price less the estimated costs necessary to make the sale.
million | million | |||||||
Inventories | 2016 | 2015 | ||||||
Raw materials and consumables |
1,385 | 1,381 | ||||||
Finished goods and goods for resale |
2,893 | 2,954 | ||||||
4,278 | 4,335 |
Inventories with a value of 110 million (2015: 100 million) are carried at net realisable value, this being lower than cost. During 2016, 113 million (2015: 119 million) was charged to the income statement for damaged, obsolete and lost inventories. In 2016, 113 million (2015: 123 million) was utilised or released to the income statement from inventory provisions taken in earlier years.
13. TRADE AND OTHER CURRENT RECEIVABLES
Trade and other receivables are initially recognised at fair value plus any directly attributable transaction costs. Subsequently these assets are held at amortised cost, using the effective interest method and net of any impairment losses.
We do not consider the fair values of trade and other receivables to be significantly different from their carrying values. Concentrations of credit risk with respect to trade receivables are limited, due to the Groups customer base being large and diverse. Our historical experience of collecting receivables, supported by the level of default, is that credit risk is low across territories and so trade receivables are considered to be a single class of financial assets. Balances are considered for impairment on an individual basis rather than by reference to the extent that they become overdue.
108 | Financial Statements | Annual Report on Form 20-F 2016 |
13. TRADE AND OTHER CURRENT RECEIVABLES CONTINUED
million | million | |||||||
Trade and other current receivables | 2016 | 2015 | ||||||
Due within one year |
||||||||
Trade receivables |
3,329 | 2,917 | ||||||
Prepayments and accrued income |
504 | 561 | ||||||
Other receivables |
1,269 | 1,326 | ||||||
5,102 | 4,804 |
Other receivables comprise financial assets of 396 million (2015: 379 million), and non-financial assets of 873 million (2015: 947 million). Financial assets include supplier and customer deposits, employee advances and certain derivatives. Non-financial assets mainly consist of reclaimable sales tax.
million | million | |||||||
Ageing of trade receivables | 2016 | 2015 | ||||||
Total trade receivables |
3,472 | 3,047 | ||||||
Less impairment provision for trade receivables |
(143 | ) | (130 | ) | ||||
3,329 | 2,917 | |||||||
Of which: |
||||||||
Not overdue |
2,537 | 2,200 | ||||||
Past due less than three months |
666 | 634 | ||||||
Past due more than three months but less than six months |
102 | 73 | ||||||
Past due more than six months but less than one year |
69 | 52 | ||||||
Past due more than one year |
98 | 88 | ||||||
Impairment provision for trade receivables |
(143 | ) | (130 | ) | ||||
3,329 | 2,917 | |||||||
million | million | |||||||
Impairment provision for trade and other receivables current and non-current impairments | 2016 | 2015 | ||||||
1 January |
155 | 145 | ||||||
Charged to income statement |
42 | 38 | ||||||
Reductions/releases |
(35 | ) | (25 | ) | ||||
Currency retranslation |
4 | (3 | ) | |||||
31 December |
166 | 155 |
14. TRADE PAYABLES AND OTHER LIABILITIES
Trade payables and other liabilities are initially recognised at fair value less any directly attributable transaction costs. Trade payables and accruals are subsequently measured at amortised cost, using the effective interest method. Other liabilities are subsequently measured either at amortised cost, using the effective interest method or at fair value, with changes being recognised in the income statement.
We do not consider the fair values of trade payables and other liabilities to be significantly different from their carrying values.
million | million | |||||||
Trade payables and other liabilities | 2016 | 2015 | ||||||
Due within one year |
||||||||
Trade payables |
8,591 | 8,296 | ||||||
Accruals |
3,655 | 3,616 | ||||||
Social security and sundry taxes |
468 | 559 | ||||||
Others |
1,157 | 1,317 | ||||||
13,871 | 13,788 | |||||||
Due after more than one year |
||||||||
Accruals |
159 | 120 | ||||||
Others |
508 | 273 | ||||||
667 | 393 | |||||||
Total trade payables and other liabilities |
14,538 | 14,181 |
Included in others is deferred consideration on acquisitions, third party royalties, certain derivatives and dividends to non-controlling interests.
Annual Report on Form 20-F 2016 | Financial Statements | 109 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
UNILEVER GROUP CONTINUED
15. CAPITAL AND FUNDING
ORDINARY SHARES
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares are recognised as a deduction from equity, net of any tax effects.
INTERNAL HOLDINGS
The ordinary shares numbered 1 to 2,400 (inclusive) in NV (Special Shares) and deferred stock of PLC are held as to one half of each class by N.V. Elma a subsidiary of NV and one half by United Holdings Limited a subsidiary of PLC. This capital is eliminated on consolidation.
SHARE-BASED COMPENSATION
The Group operates a number of share-based compensation plans involving options and awards of ordinary shares of NV and PLC. Full details of these plans are given in note 4C on pages 99 to 100.
OTHER RESERVES
Other reserves include the fair value reserve, the foreign currency translation reserve, the capital redemption reserve and treasury stock.
SHARES HELD BY EMPLOYEE SHARE TRUSTS AND GROUP COMPANIES
Certain PLC trusts, NV and group companies purchase and hold NV and PLC shares to satisfy performance shares granted, share options granted and other share awards (see note 4C). The assets and liabilities of these trusts and shares held by group companies are included in the consolidated financial statements. The book value of shares held is deducted from other reserves, and trusts borrowings are included in the Groups liabilities. The costs of the trusts are included in the results of the Group. These shares are excluded from the calculation of earnings per share.
FINANCIAL LIABILITIES
Financial liabilities are initially recognised at fair value, less any directly related transaction costs. Certain bonds are designated as being part of a fair value hedge relationship. In these cases, the bonds are carried at amortised cost, adjusted for the fair value of the risk being hedged, with changes in value shown in profit and loss. Other financial liabilities, excluding derivatives, are subsequently carried at amortised cost.
DERIVATIVE FINANCIAL INSTRUMENTS
The Groups use of, and accounting for, derivative instruments is explained in note 16 on page 115 and on pages 119 to 120.
The Groups Treasury activities are designed to:
| maintain a competitive balance sheet in line with A+/A1 rating (see below); |
| secure funding at lowest costs for the Groups operations, M&A activity and external dividend payments (see below); |
| protect the Groups financial results and position from financial risks (see note 16); |
| maintain market risks within acceptable parameters, while optimising returns (see note 16); and |
| protect the Groups financial investments, while maximising returns (see note 17). |
The Treasury department provides central deposit taking, funding and foreign exchange management services for the Groups operations. The department is governed by standards and processes which are approved by Unilever Leadership Executive (ULE). In addition to guidelines and exposure limits, a system of authorities and extensive independent reporting covers all major areas of activity. Performance is monitored closely by senior management. Reviews are undertaken periodically by corporate audit.
Key instruments used by the department are:
| short-term and long-term borrowings; |
| cash and cash equivalents; and |
| plain vanilla derivatives, including interest rate swaps and foreign exchange contracts. |
The Treasury department maintains a list of approved financial instruments. The use of any new instrument must be approved by the Chief Financial Officer. The use of leveraged instruments is not permitted.
110 | Financial Statements | Annual Report on Form 20-F 2016 |
15. CAPITAL AND FUNDING CONTINUED
Unilever considers the following components of its balance sheet to be managed capital:
| total equity retained profit, other reserves, share capital, share premium, non-controlling interests (notes 15A and 15B); |
| short-term debt current financial liabilities (note 15C); and |
| long-term debt non-current bank loans, bonds and other loans (note 15C). |
The Group manages its capital so as to safeguard its ability to continue as a going concern and to optimise returns to our shareholders through an appropriate balance of debt and equity. The capital structure of the Group is based on managements judgement of the appropriate balance of key elements in order to meet its strategic and day-to-day needs. We consider the amount of capital in proportion to risk and manage the capital structure in light of changes in economic conditions and the risk characteristics of the underlying assets.
Our current long-term credit rating is A+/A1 and our short-term credit rating is A1/P1. We aim to maintain a competitive balance sheet which we consider to be the equivalent of a credit rating of A+/A1 in the long-term. This provides us with:
| appropriate access to the debt and equity markets; |
| sufficient flexibility for acquisitions; |
| sufficient resilience against economic and financial uncertainty while ensuring ample liquidity; and |
| optimal weighted average cost of capital, given the above constraints. |
Unilever monitors the qualitative and quantitative factors utilised by the rating agencies. This information is publicly available and is updated by the credit rating agencies on a regular basis.
Unilever will take appropriate steps in order to maintain, or if necessary adjust, its capital structure. Unilever is not subject to financial covenants in any of its significant financing agreements.
15A. SHARE CAPITAL
Issued, | Issued, | |||||||||||||||
called up | called up | |||||||||||||||
and | and | |||||||||||||||
Authorised | (a) | fully paid | (b) | Authorised | (a) | fully paid | (b) | |||||||||
2016 | 2016 | 2015 | 2015 | |||||||||||||
Unilever N.V. | million | million | million | million | ||||||||||||
NV ordinary shares of 0.16 each |
480 | 274 | 480 | 274 | ||||||||||||
NV ordinary shares of 428.57 each (shares numbered 1 to 2,400 Special Shares) |
1 | 1 | 1 | 1 | ||||||||||||
Internal holdings eliminated on consolidation (428.57 shares) |
- | (1 | ) | - | (1 | ) | ||||||||||
481 | 274 | 481 | 274 | |||||||||||||
Unilever PLC | £ million | £ million | ||||||||||||||
PLC ordinary shares of 31/9p each |
40.8 | 40.8 | ||||||||||||||
PLC deferred stock of £1 each |
0.1 | 0.1 | ||||||||||||||
Internal holding eliminated on consolidation (£1 stock) |
(0.1 | ) | (0.1 | ) | ||||||||||||
40.8 | 40.8 | |||||||||||||||
million | million | |||||||||||||||
Euro equivalent in millions (at £1.00 = 5.143)(c) |
210 | 210 | ||||||||||||||
Unilever Group | million | million | ||||||||||||||
Ordinary share capital of NV |
274 | 274 | ||||||||||||||
Ordinary share capital of PLC |
210 | 210 | ||||||||||||||
484 | 484 |
(a) | At 31 December 2016, Unilever N.V. had 3,000,000,000 (2015: 3,000,000,000) authorised ordinary shares. The requirement for a UK company to have an authorised share capital was abolished by the UK Companies Act 2006. In May 2010 Unilever PLC shareholders approved new Articles of Association to reflect this. |
(b) | At 31 December 2016, the following quantities of shares were in issue: 1,714,727,700 of NV ordinary shares; 2,400 of NV Special Shares; 1,310,156,361 of PLC ordinary shares and 100,000 of PLC deferred stock. The same quantities were in issue at 31 December 2015. |
(c) | Conversion rate for PLC ordinary shares nominal value to euros is £1 = 5.143 (which is calculated by dividing the nominal value of NV ordinary shares by the nominal value of PLC ordinary shares). |
For information on the rights of shareholders of NV and PLC and the operation of the Equalisation Agreement, see the Corporate Governance report on pages 29 to 35.
A nominal dividend of 6% per annum is paid on the deferred stock of PLC.
Annual Report on Form 20-F 2016 | Financial Statements | 111 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
UNILEVER GROUP CONTINUED
15B. EQUITY
BASIS OF CONSOLIDATION
Unilever is the majority shareholder of all material subsidiaries and has control in all cases. Information in relation to group companies is provided on pages 131 to 143.
SUBSIDIARIES WITH SIGNIFICANT NON-CONTROLLING INTERESTS
Unilever has one subsidiary company which has a material non-controlling interest, Hindustan Unilever Limited (HUL). Summary financial information in relation to HUL is shown below.
million | million | |||||||
HUL Balance sheet as at 31 December | 2016 | 2015 | ||||||
Non-current assets |
791 | 649 | ||||||
Current assets |
1,160 | 1,265 | ||||||
Current liabilities |
(980 | ) | (968 | ) | ||||
Non-current liabilities |
(110 | ) | (125 | ) | ||||
HUL Comprehensive income for the year ended 31 December | ||||||||
Turnover |
4,084 | 4,212 | ||||||
Profit after tax |
475 | 438 | ||||||
Total comprehensive income |
484 | 484 | ||||||
HUL Cash flow for the year ended 31 December | ||||||||
Net increase/(decrease) in cash and cash-equivalents |
14 | (107 | ) | |||||
HUL Non-controlling interest | ||||||||
1 January |
(271 | ) | (258 | ) | ||||
Share of (profit)/loss for the year ended 31 December |
(157 | ) | (143 | ) | ||||
Other comprehensive income |
(8 | ) | (10 | ) | ||||
Dividend paid to the non-controlling interest |
157 | 152 | ||||||
Other changes in equity |
- | - | ||||||
Currency translation |
(3 | ) | (12 | ) | ||||
31 December |
(282 | ) | (271 | ) |
ANALYSIS OF RESERVES FOR THE GROUP
million | million | million | ||||||||||
Total | Total | Total | ||||||||||
2016 | 2015 | 2014 | ||||||||||
Fair value reserves |
(113 | ) | (98 | ) | (198 | ) | ||||||
Cash flow hedges |
(168 | ) | (174 | ) | (234 | ) | ||||||
Available-for-sale financial assets |
55 | 76 | 36 | |||||||||
Currency retranslation of group companies |
(3,034 | ) | (3,285 | ) | (2,901 | ) | ||||||
Adjustment on translation of PLCs ordinary capital at 31/9p = 0.16 |
(164 | ) | (164 | ) | (164 | ) | ||||||
Capital redemption reserve |
32 | 32 | 32 | |||||||||
Book value of treasury stock |
(4,164 | ) | (4,119 | ) | (4,125 | ) | ||||||
Other(a) |
- | (182 | ) | (182 | ) | |||||||
(7,443 | ) | (7,816 | ) | (7,538 | ) |
(a) | Relates to option on purchase of subsidiary for non-controlling interest. |
Unilever acquired 3,902,584 (2015: 3,342,212) NV ordinary shares and 2,268,600 (2015: 2,102,300) PLC shares through purchases on the stock exchanges during the year. These shares are held as treasury stock as a separate component of other reserves. The total number held at 31 December 2016 was 151,953,411 (2015: 152,638,561) NV shares and 33,241,009 (2015: 33,391,209) PLC shares. Of these, 10,392,782 NV shares and 6,544,015 PLC shares were held in connection with share-based compensation plans (see note 4C on pages 99 to 100).
112 | Financial Statements | Annual Report on Form 20-F 2016 |
15B. EQUITY CONTINUED
million | million | |||||||
Treasury stock movements during the year | 2016 | 2015 | ||||||
1 January |
(4,119 | ) | (4,125 | ) | ||||
Purchases and other utilisations |
(45 | ) | 6 | |||||
31 December |
(4,164 | ) | (4,119 | ) | ||||
million | million | |||||||
Currency retranslation reserve movements during the year | 2016 | 2015 | ||||||
1 January |
(3,285 | ) | (2,901 | ) | ||||
Currency retranslation during the year |
599 | (1,001 | ) | |||||
Movement in net investment hedges and exchange differences in net investments in foreign operations |
(365 | ) | 617 | |||||
Recycled to income statement |
17 | - | ||||||
31 December |
(3,034 | ) | (3,285 | ) | ||||
OTHER COMPREHENSIVE INCOME RECONCILIATION | ||||||||
million | million | |||||||
Fair value gains/(losses) on financial instruments movement during the year | 2016 | 2015 | ||||||
1 January |
(98 | ) | (198 | ) | ||||
Cash flow hedges |
6 | 60 | ||||||
Available for sale financial assets |
(21 | ) | 40 | |||||
31 December |
(113 | ) | (98 | ) |
Refer to the consolidated statement of comprehensive income on page 84, the consolidated statement of changes in equity on page 85, and note 6C on page 103.
million | million | |||||||
Remeasurement of defined benefit pension plans net of tax | 2016 | 2015 | ||||||
1 January |
(1,473 | ) | (2,357 | ) | ||||
Movement during the year |
(980 | ) | 884 | |||||
31 December |
(2,453 | ) | (1,473 | ) |
Refer to the consolidated statement of comprehensive income on page 84, the consolidated statement of changes in equity on page 85, note 4B from page 94 to 99 and note 6C on page 103.
million | million | |||||||
Currency retranslation gains/(losses) movement during the year | 2016 | 2015 | ||||||
1 January |
(3,512 | ) | (3,031 | ) | ||||
Currency retranslation during the year: |
||||||||
Other reserves |
189 | (377 | ) | |||||
Retained profit |
17 | (109 | ) | |||||
Non-controlling interest |
11 | 5 | ||||||
31 December |
(3,295 | ) | (3,512 | ) |
Annual Report on Form 20-F 2016 | Financial Statements | 113 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
UNILEVER GROUP CONTINUED
15C. FINANCIAL LIABILITIES
million | million | million | million | million | million | |||||||||||||||||||||||||||
Current | Non-current | Total | Current | Non-current | Total | |||||||||||||||||||||||||||
Financial liabilities 2016(a)(b) | Notes | 2016 | 2016 | 2016 | 2015 | 2015 | 2015 | |||||||||||||||||||||||||
Preference shares |
- | 68 | 68 | - | 68 | 68 | ||||||||||||||||||||||||||
Bank loans and overdrafts |
899 | 247 | 1,146 | 762 | 302 | 1,064 | ||||||||||||||||||||||||||
Bonds and other loans |
4,367 | 10,686 | 15,053 | 3,583 | 9,120 | 12,703 | ||||||||||||||||||||||||||
Finance lease creditors |
20 | 9 | 134 | 143 | 37 | 158 | 195 | |||||||||||||||||||||||||
Derivatives |
175 | 10 | 185 | 118 | 6 | 124 | ||||||||||||||||||||||||||
Other financial liabilities |
- | - | - | 289 | 200 | 489 | ||||||||||||||||||||||||||
5,450 | 11,145 | 16,595 | 4,789 | 9,854 | 14,643 |
(a) | For the purposes of notes 15C and 17A, financial assets and liabilities exclude trade and other current receivables and trade payables and other liabilities which are covered in notes 13 and 14 respectively. |
(b) | Financial liabilities include 2 million (2015: 4 million) of secured liabilities. |
ANALYSIS OF BONDS AND OTHER LOANS
million | million | |||||||
Total | Total | |||||||
2016 | 2015 | |||||||
Unilever N.V. |
||||||||
Floating Rate Notes 2018 () |
749 | 749 | ||||||
1.750% Bonds 2020 () |
748 | 747 | ||||||
0.500% Notes 2022 () |
743 | 742 | ||||||
1.125% Bonds 2028 () |
692 | - | ||||||
1.000% Notes 2023 () |
496 | 495 | ||||||
0.500% Notes 2024 () |
492 | - | ||||||
0.000% Notes 2020 () |
299 | - | ||||||
2.950% Notes 2017 (Renminbi) |
41 | 42 | ||||||
Commercial paper |
819 | 1,551 | ||||||
Total NV |
5,079 | 4,326 | ||||||
Unilever PLC |
||||||||
4.750% Bonds 2017 (£) |
466 | 542 | ||||||
2.000% Notes 2018 (£) |
294 | (c) | 339 | (c) | ||||
Commercial paper |
373 | - | ||||||
Total PLC |
1,133 | 881 | ||||||
Other group companies |
||||||||
Switzerland |
||||||||
Other |
- | 29 | ||||||
United States |
||||||||
4.250% Notes 2021 (US$) |
950 | 912 | ||||||
5.900% Bonds 2032 (US$) |
942 | 904 | ||||||
4.800% Bonds 2019 (US$) |
714 | 686 | ||||||
2.200% Notes 2019 (US$) |
711 | 681 | ||||||
2.000% Notes 2026 (US$) |
655 | - | ||||||
0.850% Notes 2017 (US$) |
524 | 502 | ||||||
1.375% Notes 2021 (US$) |
519 | - | ||||||
2.100% Notes 2020 (US$) |
474 | 454 | ||||||
3.100% Notes 2025 (US$) |
470 | 451 | ||||||
7.250% Bonds 2026 (US$) |
276 | 265 | ||||||
6.625% Bonds 2028 (US$) |
216 | 206 | ||||||
5.150% Notes 2020 (US$) |
149 | 145 | ||||||
7.000% Bonds 2017 (US$) |
142 | 136 | ||||||
5.600% Bonds 2097 (US$) |
87 | 84 | ||||||
2.750% Notes 2016 (US$) |
- | 458 | ||||||
Commercial paper (US$) |
1,892 | 1,532 | ||||||
Other countries |
120 | 51 | ||||||
Total other group companies |
8,841 | 7,496 | ||||||
Total bonds and other loans |
15,053 | 12,703 |
(c) | Of which 3 million (2015: 1 million) relates to a fair value adjustment following the fair value hedge accounting of a fix-to-float interest rate swap. |
Information in relation to the derivatives used to hedge bonds and other loans within a fair value hedge relationship is shown in note 16.
114 | Financial Statements | Annual Report on Form 20-F 2016 |
16. TREASURY RISK MANAGEMENT
DERIVATIVES AND HEDGE ACCOUNTING
Derivatives are measured at fair value with any related transaction costs expensed as incurred. The treatment of changes in the value of derivatives depends on their use as explained below.
(I) FAIR VALUE HEDGES(a)
Certain derivatives are held to hedge the risk of changes in value of a specific bond or other loan. In these situations, the Group designates the liability and related derivative to be part of a fair value hedge relationship. The carrying value of the bond is adjusted by the fair value of the risk being hedged, with changes going to the income statement. Gains and losses on the corresponding derivative are also recognised in the income statement. The amounts recognised are offset in the income statement to the extent that the hedge is effective. When the relationship no longer meets the criteria for hedge accounting, the fair value hedge adjustment made to the bond is amortised to the income statement using the effective interest method.
(II) CASH FLOW HEDGES(a)
Derivatives are also held to hedge the uncertainty in timing or amount of future forecast cash flows. Such derivatives are classified as being part of cash flow hedge relationships. For an effective hedge, gains and losses from changes in the fair value of derivatives are recognised in equity. Any ineffective elements of the hedge are recognised in the income statement. If the hedged cash flow relates to a non-financial asset, the amount accumulated in equity is subsequently included within the carrying value of that asset. For other cash flow hedges, amounts deferred in equity are taken to the income statement at the same time as the related cash flow.
When a derivative no longer qualifies for hedge accounting, any cumulative gain or loss remains in equity until the related cash flow occurs. When the cash flow takes place, the cumulative gain or loss is taken to the income statement. If the hedged cash flow is no longer expected to occur, the cumulative gain or loss is taken to the income statement immediately.
(III) NET INVESTMENT HEDGES(a)
Certain derivatives are designated as hedges of the currency risk on the Groups investment in foreign subsidiaries. The accounting policy for these arrangements is set out in note 1.
(IV) DERIVATIVES FOR WHICH HEDGE ACCOUNTING IS NOT APPLIED
Derivatives not classified as hedges are held in order to hedge certain balance sheet items and commodity exposures. No hedge accounting is applied to these derivatives, which are carried at fair value with changes being recognised in the income statement.
(a) | Applying hedge accounting has not led to material ineffectiveness being recognised in the income statement for both 2016 and 2015. |
The Group is exposed to the following risks that arise from its use of financial instruments, the management of which is described in the following sections:
| liquidity risk (see note 16A); |
| market risk (see note 16B); and |
| credit risk (see note 17B). |
16A. MANAGEMENT OF LIQUIDITY RISK
Liquidity risk is the risk that the Group will face in meeting its obligations associated with its financial liabilities. The Groups approach to managing liquidity is to ensure that it will have sufficient funds to meet its liabilities when due without incurring unacceptable losses. In doing this, management considers both normal and stressed conditions. A material and sustained shortfall in our cash flow could undermine the Groups credit rating, impair investor confidence and also restrict the Groups ability to raise funds.
The Group maintained a cautious funding strategy, with a positive cash balance throughout 2015. This was the result of cash delivery from the business, coupled with the proceeds from bond issuances. This cash has been invested conservatively with low risk counter-parties at maturities of less than six months.
Cash flow from operating activities provides the funds to service the financing of financial liabilities on a day-to-day basis. The Group seeks to manage its liquidity requirements by maintaining access to global debt markets through short-term and long-term debt programmes. In addition, Unilever has committed credit facilities for general corporate use.
On 31 December 2016 Unilever had undrawn revolving 364-day bilateral credit facilities in aggregate of US$6,550 million (2015: US$6,550 million) with a 364-day term out. As part of the regular annual process, the intention is that these facilities will again be renewed in 2017.
Annual Report on Form 20-F 2016 | Financial Statements | 115 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
UNILEVER GROUP CONTINUED
16A. MANAGEMENT OF LIQUIDITY RISK CONTINUED
The following table shows Unilevers contractually agreed undiscounted cash flows, including expected interest payments, which are payable under financial liabilities at the balance sheet date:
million | million | million | million | million | million | million | million | |||||||||||||||||||||||||||
Net | ||||||||||||||||||||||||||||||||||
carrying | ||||||||||||||||||||||||||||||||||
Due | Due | Due | Due | amount as | ||||||||||||||||||||||||||||||
Due | between | between | between | between | Due | shown in | ||||||||||||||||||||||||||||
within | 1 and | 2 and | 3 and | 4 and | after | balance | ||||||||||||||||||||||||||||
Undiscounted cash flows | Notes | 1 year | 2 years | 3 years | 4 years | 5 years | 5 years | Total | sheet | |||||||||||||||||||||||||
2016 |
||||||||||||||||||||||||||||||||||
Non-derivative financial liabilities: |
||||||||||||||||||||||||||||||||||
Preference shares |
(4 | ) | (4 | ) | (4 | ) | (4 | ) | (4 | ) | (72 | ) | (92 | ) | (68 | ) | ||||||||||||||||||
Bank loans and overdrafts |
(909 | ) | (4 | ) | (243 | ) | - | - | - | (1,156 | ) | (1,146 | ) | |||||||||||||||||||||
Bonds and other loans |
(4,700 | ) | (1,335 | ) | (1,669 | ) | (1,882 | ) | (1,634 | ) | (6,733 | ) | (17,953 | ) | (15,053 | ) | ||||||||||||||||||
Finance lease creditors |
20 | (24 | ) | (18 | ) | (18 | ) | (17 | ) | (16 | ) | (127 | ) | (220 | ) | (143 | ) | |||||||||||||||||
Other financial liabilities |
- | - | - | - | - | - | - | - | ||||||||||||||||||||||||||
Trade payables excluding social |
14 | (13,156 | ) | (125 | ) | - | - | - | - | (13,281 | ) | (13,476 | ) | |||||||||||||||||||||
Deferred consideration |
(247 | ) | (18 | ) | (24 | ) | - | (490 | ) | (10 | ) | (789 | ) | (594 | ) | |||||||||||||||||||
Issued financial guarantees |
- | - | - | - | - | - | - | - | ||||||||||||||||||||||||||
(19,040 | ) | (1,504 | ) | (1,958 | ) | (1,903 | ) | (2,144 | ) | (6,942 | ) | (33,491 | ) | (30,480 | ) | |||||||||||||||||||
Derivative financial liabilities: |
||||||||||||||||||||||||||||||||||
Interest rate derivatives: |
||||||||||||||||||||||||||||||||||
Derivative contracts receipts |
56 | 420 | - | - | - | - | 476 | |||||||||||||||||||||||||||
Derivative contracts payments |
(70 | ) | (429 | ) | - | - | - | - | (499 | ) | ||||||||||||||||||||||||
Foreign exchange derivatives: |
||||||||||||||||||||||||||||||||||
Derivative contracts receipts |
9,263 | - | - | - | - | - | 9,263 | |||||||||||||||||||||||||||
Derivative contracts payments |
(9,580 | ) | - | - | - | - | - | (9,580 | ) | |||||||||||||||||||||||||
Commodity derivatives: |
||||||||||||||||||||||||||||||||||
Derivative contracts receipts |
- | - | - | - | - | - | - | |||||||||||||||||||||||||||
Derivative contracts payments |
(3 | ) | - | - | - | - | - | (3 | ) | |||||||||||||||||||||||||
(334 | ) | (9 | ) | - | - | - | - | (343 | ) | (331 | ) | |||||||||||||||||||||||
Total |
(19,374 | ) | (1,513 | ) | (1,958 | ) | (1,903 | ) | (2,144 | ) | (6,942 | ) | (33,834 | ) | (30,811 | ) | ||||||||||||||||||
2015 |
||||||||||||||||||||||||||||||||||
Non-derivative financial liabilities: |
||||||||||||||||||||||||||||||||||
Preference shares |
(4 | ) | (4 | ) | (4 | ) | (4 | ) | (4 | ) | (72 | ) | (92 | ) | (68 | ) | ||||||||||||||||||
Bank loans and overdrafts |
(741 | ) | (337 | ) | - | - | - | - | (1,078 | ) | (1,064 | ) | ||||||||||||||||||||||
Bonds and other loans |
(3,912 | ) | (1,493 | ) | (1,331 | ) | (1,567 | ) | (1,519 | ) | (5,509 | ) | (15,331 | ) | (12,703 | ) | ||||||||||||||||||
Finance lease creditors |
20 | (51 | ) | (25 | ) | (22 | ) | (20 | ) | (18 | ) | (166 | ) | (302 | ) | (195 | ) | |||||||||||||||||
Other financial liabilities |
(289 | ) | - | - | - | - | (200 | ) | (489 | ) | (489 | ) | ||||||||||||||||||||||
Trade payables excluding social |
14 | (13,205 | ) | (235 | ) | - | - | - | - | (13,440 | ) | (13,442 | ) | |||||||||||||||||||||
security and sundry taxes |
||||||||||||||||||||||||||||||||||
Deferred consideration |
(23 | ) | (158 | ) | - | - | - | - | (181 | ) | (179 | ) | ||||||||||||||||||||||
Issued financial guarantees |
(15 | ) | - | - | - | - | - | (15 | ) | - | ||||||||||||||||||||||||
(18,240 | ) | (2,252 | ) | (1,357 | ) | (1,591 | ) | (1,541 | ) | (5,947 | ) | (30,928 | ) | (28,141 | ) | |||||||||||||||||||
Derivative financial liabilities: |
||||||||||||||||||||||||||||||||||
Interest rate derivatives: |
||||||||||||||||||||||||||||||||||
Derivative contracts receipts |
(255 | ) | (65 | ) | (125 | ) | - | - | - | (445 | ) | |||||||||||||||||||||||
Derivative contracts payments |
198 | 60 | 124 | - | - | - | 382 | |||||||||||||||||||||||||||
Foreign exchange derivatives: |
||||||||||||||||||||||||||||||||||
Derivative contracts receipts |
5,686 | - | - | - | - | - | 5,686 | |||||||||||||||||||||||||||
Derivative contracts payments |
(5,817 | ) | - | - | - | - | - | (5,817 | ) | |||||||||||||||||||||||||
Commodity derivatives: |
||||||||||||||||||||||||||||||||||
Derivative contracts receipts |
- | - | - | - | - | - | - | |||||||||||||||||||||||||||
Derivative contracts payments |
(11 | ) | - | - | - | - | - | (11 | ) | |||||||||||||||||||||||||
(199 | ) | (5 | ) | (1 | ) | - | - | - | (205 | ) | (194 | ) | ||||||||||||||||||||||
Total |
(18,439 | ) | (2,257 | ) | (1,358 | ) | (1,591 | ) | (1,541 | ) | (5,947 | ) | (31,133 | ) | (28,334 | ) |
116 | Financial Statements | Annual Report on Form 20-F 2016 |
16A. MANAGEMENT OF LIQUIDITY RISK CONTINUED
The following table shows cash flows for which cash flow hedge accounting is applied. The derivatives in the cash flow hedge relationships are expected to have an impact on profit and loss in the same periods as the cash flows occur.
million | million | million | million | million | million | million | million | |||||||||||||||||||||||||
Net | ||||||||||||||||||||||||||||||||
Due | Due | Due | Due | carrying | ||||||||||||||||||||||||||||
Due | between | between | between | between | Due | amount of | ||||||||||||||||||||||||||
within | 1 and 2 | 2 and 3 | 3 and 4 | 4 and 5 | after | related | ||||||||||||||||||||||||||
1 year | years | years | years | years | 5 years | Total | derivatives | (a) | ||||||||||||||||||||||||
2016 |
||||||||||||||||||||||||||||||||
Foreign exchange cash inflows |
2,863 | - | - | - | - | - | 2,863 | |||||||||||||||||||||||||
Foreign exchange cash outflows |
(2,905 | ) | - | - | - | - | - | (2,905 | ) | (40 | ) | |||||||||||||||||||||
Interest rate cash flows |
4 | (6 | ) | - | - | - | - | (2 | ) | - | ||||||||||||||||||||||
Commodity contracts cash flows |
(3 | ) | - | - | - | - | - | (3 | ) | 18 | ||||||||||||||||||||||
2015 |
||||||||||||||||||||||||||||||||
Foreign exchange cash inflows |
2,884 | 6 | 348 | - | - | - | 3,238 | |||||||||||||||||||||||||
Foreign exchange cash outflows |
(2,883 | ) | - | (300 | ) | - | - | - | (3,183 | ) | 41 | |||||||||||||||||||||
Interest rate cash flows |
(2 | ) | (1 | ) | - | - | - | - | (3 | ) | (1 | ) | ||||||||||||||||||||
Commodity contracts cash flows |
(11 | ) | - | - | - | - | - | (11 | ) | (5 | ) |
(a) | See note 16C. |
16B. MANAGEMENT OF MARKET RISK
Unilevers size and operations result in it being exposed to the following market risks that arise from its use of financial instruments:
| commodity price risk; |
| currency risk; and |
| interest rate risk. |
The above risks may affect the Groups income and expenses, or the value of its financial instruments. The objective of the Groups management of market risk is to maintain this risk within acceptable parameters, while optimising returns. Generally, the Group applies hedge accounting to manage the volatility in profit and loss arising from market risk.
The Groups exposure to, and management of, these risks is explained below. It often includes derivative financial instruments, the uses of which are described in note 16C.
POTENTIAL IMPACT OF RISK | MANAGEMENT POLICY AND HEDGING STRATEGY
|
SENSITIVITY TO THE RISK | ||
(I) COMMODITY PRICE RISK The Group is exposed to the risk of changes in commodity prices in relation to its purchase of certain raw materials.
At 31 December 2016, the Group had hedged its exposure to future commodity purchases with commodity derivatives valued at 441 million (2015: 221 million). |
The Group uses commodity forward contracts to hedge against this risk. All commodity forward contracts hedge future purchases of raw materials and the contracts are settled either in cash or by physical delivery.
Commodity derivatives are generally designated as hedging instruments in cash flow hedge accounting relations. All commodity forward contracts are done in line with approvals from the Global Commodity Executive which is chaired by the Unilever Chief Supply Chain Officer (CSCO).
|
A 10% increase in commodity prices as at 31 December 2016 would have led to a 46 million gain on the commodity derivatives in the cash flow hedge reserve (2015: 22 million gain in the cash flow hedge reserve). A decrease of 10% in commodity prices on a full-year basis would have the equal but opposite effect. | ||
(II) CURRENCY RISK Currency risk on sales, purchases and borrowings Because of Unilevers global reach, it is subject to the risk that changes in foreign currency values impact the Groups sales, purchases and borrowings.
At 31 December 2016, the exposure to the Group from companies holding financial assets and liabilities other than in their functional currency amounted to 76 million (2015: 60 million). |
The Group manages currency exposures within prescribed limits, mainly through the use of forward foreign currency exchange contracts.
Operating companies manage foreign exchange exposures within prescribed limits. Local compliance is monitored centrally.
Exchange risks related to the principal amounts of the US$ and Swiss franc denominated debt either form part of hedging relationships themselves, or are hedged through forward contracts.
The aim of the Groups approach to management of currency risk is to leave the Group with no material residual risk. This aim has been achieved in all years presented.
|
As an estimation of the approximate impact of the residual risk, with respect to financial instruments, the Group has calculated the impact of a 10% change in exchange rates.
Impact on income statement A 10% strengthening of the euro against key currencies to which the Group is exposed would have led to approximately an additional 7 million gain in the income statement (2015: 6 million gain). A 10% weakening of the euro against these currencies would have led to an equal but opposite effect. |
Annual Report on Form 20-F 2016 | Financial Statements | 117 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
UNILEVER GROUP CONTINUED
16B. MANAGEMENT OF MARKET RISK CONTINUED
POTENTIAL IMPACT OF RISK | MANAGEMENT POLICY AND HEDGING STRATEGY
|
SENSITIVITY TO THE RISK | ||
Currency risk on the Groups net investments The Group is also subject to exchange risk in relation to the translation of the net investments of its foreign operations into euros for inclusion in its consolidated financial statements.
These net investments include Group financial loans, which are monetary items that form part of our net investment in foreign operations, of 7.9 billion (2015: 8.2 billion), of which 3.5 billion (2015: 4.1 billion) is denominated in GBP. In accordance with IAS 21, the exchange differences on these financial loans are booked through reserves.
Part of the currency exposure on the Groups investments is also managed using US$ and Swiss franc net investment hedges with a nominal value of 3.5 billion (2015: 3.9 billion) for US$ and (0.9) billion (2015: nil) for Swiss francs.
At 31 December 2016, the net exposure of the net investments in foreign currencies amounts to 11.1 billion (2015: 11.3 billion). |
Unilever aims to minimise this foreign investment exchange exposure by borrowing in local currency in the operating companies themselves. In some locations, however, the Groups ability to do this is inhibited by local regulations, lack of local liquidity or by local market conditions.
Where the residual risk from these countries exceeds prescribed limits, Treasury may decide on a case-by-case basis to actively hedge the exposure. This is done either through additional borrowings in the related currency, or through the use of forward foreign exchange contracts.
Where local currency borrowings, or forward contracts, are used to hedge the currency risk in relation to the Groups net investment in foreign subsidiaries, these relationships are designated as net investment hedges for accounting purposes. |
Impact on equity trade-related cash flow hedges A 10% strengthening of the euro against other currencies would have led to a 17 million (2015: 22 million) loss (of which 51 million (2015: 40 million) loss would relate to strengthening against sterling) on hedges used to cover future trade cash flows to which cash flow hedge accounting is applied. A 10% weakening of the euro against other currencies would have led to a 19 million (2015: 24 million) gain (out of which 56 million (2015: 44 million) gain would relate to strengthening against sterling) on hedges used to cover future trade cash flows to which cash flow hedge accounting is applied.
Impact on equity net investment hedges A 10% strengthening of the euro against other currencies would have led to a 242 million (2015: 352 million) loss on the net investment hedges used to manage the currency exposure on the Groups investments. A 10% weakening of the euro against other currencies would have led to a 295 million (2015: 430 million) gain on the net investment hedges used to manage the currency exposure on the Groups investments.
Impact on equity net investments in group companies A 10% strengthening of the euro against all other currencies would have led to a 1,008 million negative retranslation effect (2015: 675 million negative retranslation effect). A 10% weakening of the euro against those currencies would have led to a 1,232 million positive retranslation effect (2015: 825 million positive retranslation effect). In line with accepted hedge accounting treatment and our accounting policy for financial loans, the retranslation differences would be recognised in equity.
| ||
(III) INTEREST RATE RISK(a) The Group is exposed to market interest rate fluctuations on its floating rate debt. Increases in benchmark interest rates could increase the interest cost of our floating-rate debt and increase the cost of future borrowings. The Groups ability to manage interest costs also has an impact on reported results.
Taking into account the impact of interest rate swaps, at 31 December 2016, interest rates were fixed on approximately 81% of the expected net debt for 2017, and 71% for 2018 (70% for 2016 and 61% for 2017 at 31 December 2015).
For interest management purposes, transactions with a maturity shorter than six months from inception date are not included as fixed interest transactions.
The average interest rate on short-term borrowings in 2016 was 0.9% (2015: 0.9%).
|
Unilevers interest rate management approach aims for an optimal balance between fixed and floating-rate interest rate exposures on expected net debt. The objective of this approach is to minimise annual interest costs after tax and to reduce volatility.
This is achieved either by issuing fixed or floating-rate long-term debt, or by modifying interest rate exposure through the use of interest rate swaps.
Furthermore, Unilever has interest rate swaps for which cash flow hedge accounting is applied. |
Assuming that all other variables remain constant, a 1.0 percentage point increase in floating interest rates on a full-year basis as at 31 December 2016 would have led to an additional 11 million of finance costs (2015: 21 million additional finance costs). A 1.0 percentage point decrease in floating interest rates on a full-year basis would have an equal but opposite effect.
Assuming that all other variables remain constant, a 1.0 percentage point increase in floating interest rates on a full-year basis as at 31 December 2016 would have led to an additional 1 million debit in equity from derivatives in cash flow hedge relationships (2015: 1 million credit). A 1.0 percentage point decrease in floating interest rates on a full-year basis would have led to an additional 1 million credit in equity from derivatives in cash flow hedge relationships (2015: 1 million debit). |
(a) | See the weighted average amount of net debt with fixed rate interest shown in the following table. |
118 | Financial Statements | Annual Report on Form 20-F 2016 |
16B. MANAGEMENT OF MARKET RISK CONTINUED
The following table shows the split in fixed and floating-rate interest exposures, taking into account the impact of interest rate swaps and cross-currency swaps:
million 2016 |
million 2015 |
|||||||
Cash and cash equivalents |
3,382 | 2,302 | ||||||
Current other financial assets |
599 | 836 | ||||||
Current financial liabilities |
(5,450 | ) | (4,789 | ) | ||||
Non-current financial liabilities |
(11,145 | ) | (9,854 | ) | ||||
Net debt |
(12,614 | ) | (11,505 | ) | ||||
Of which: |
||||||||
Fixed rate (weighted average amount of fixing for the following year) |
(11,539 | ) | (9,429 | ) |
16C. DERIVATIVES AND HEDGING
The Group does not use derivative financial instruments for speculative purposes. The uses of derivatives and the related values of derivatives are summarised in the following table. Derivatives used to hedge:
million | million | million | million | million | million | |||||||||||||||||||||||||||
Trade | Non- | |||||||||||||||||||||||||||||||
Trade | payables | Current | current | |||||||||||||||||||||||||||||
and other | Financial | and other | financial | financial | ||||||||||||||||||||||||||||
receivables | assets | liabilities | liabilities | liabilities | Total | |||||||||||||||||||||||||||
31 December 2016 |
||||||||||||||||||||||||||||||||
Foreign exchange derivatives including cross currency swaps |
||||||||||||||||||||||||||||||||
Fair value hedges |
- | - | - | - | - | - | ||||||||||||||||||||||||||
Cash flow hedges |
36 | - | (76) | - | - | (40 | ) | |||||||||||||||||||||||||
Hedges of net investments in foreign operations |
- | 174 | (a) | - | (27 | ) | - | 147 | ||||||||||||||||||||||||
Hedge accounting not applied |
79 | (133 | )(a) | (67) | (134 | ) | - | (255 | ) | |||||||||||||||||||||||
Interest rate swaps |
||||||||||||||||||||||||||||||||
Fair value hedges |
- | 3 | - | - | - | 3 | ||||||||||||||||||||||||||
Cash flow hedges |
- | 4 | - | - | (4 | ) | - | |||||||||||||||||||||||||
Hedge accounting not applied |
- | 43 | - | (14 | ) | (6 | ) | 23 | ||||||||||||||||||||||||
Commodity contracts |
||||||||||||||||||||||||||||||||
Cash flow hedges |
21 | - | (3) | - | - | 18 | ||||||||||||||||||||||||||
Hedge accounting not applied |
(1) | - | - | - | - | (1 | ) | |||||||||||||||||||||||||
135 | 91 | (146) | (175 | ) | (10 | ) | (105 | ) | ||||||||||||||||||||||||
Total assets | 226 | Total liabilities | (331 | ) | (105 | ) | ||||||||||||||||||||||||||
31 December 2015 |
||||||||||||||||||||||||||||||||
Foreign exchange derivatives including cross currency swaps |
||||||||||||||||||||||||||||||||
Fair value hedges |
- | 1 | - | - | - | 1 | ||||||||||||||||||||||||||
Cash flow hedges |
29 | 45 | (34) | - | - | 40 | ||||||||||||||||||||||||||
Hedges of net investments in foreign operations |
- | 155 | (a) | - | - | - | 155 | |||||||||||||||||||||||||
Hedge accounting not applied |
39 | 25 | (a) | (26) | (118 | ) | (5 | ) | (85 | ) | ||||||||||||||||||||||
Interest rate swaps |
||||||||||||||||||||||||||||||||
Fair value hedges |
- | - | - | - | - | - | ||||||||||||||||||||||||||
Cash flow hedges |
- | - | - | - | (1 | ) | (1 | ) | ||||||||||||||||||||||||
Hedge accounting not applied |
- | 4 | - | - | - | 4 | ||||||||||||||||||||||||||
Commodity contracts |
||||||||||||||||||||||||||||||||
Cash flow hedges |
5 | - | (10) | - | - | (5 | ) | |||||||||||||||||||||||||
Hedge accounting not applied |
- | - | - | - | - | - | ||||||||||||||||||||||||||
73 | 230 | (70) | (118 | ) | (6 | ) | 109 | |||||||||||||||||||||||||
Total assets | 303 | Total liabilities | (194 | ) | 109 | |||||||||||||||||||||||||||
(a) | Swaps that hedge the currency risk on intra-group loans and offset 174 million (2015: 155 million) within Hedges of net investments in foreign operations are included within Hedge accounting not applied. |
Annual Report on Form 20-F 2016 | Financial Statements | 119 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
UNILEVER GROUP CONTINUED
16C. DERIVATIVES AND HEDGING CONTINUED
MASTER NETTING OR SIMILAR AGREEMENTS
A number of legal entities within our Group enter into derivative transactions under International Swap and Derivatives Association (ISDA) master netting agreements. In general, under such agreements the amounts owed by each counter-party on a single day in respect of all transactions outstanding in the same currency are aggregated into a single net amount that is payable by one party to the other. In certain circumstances, such as when a credit event such as a default occurs, all outstanding transactions under the agreement are terminated, the termination value is assessed and only a single net amount is payable in settlement of all transactions.
The ISDA agreements do not meet the criteria for offsetting the positive and negative values in the consolidated balance sheet. This is because the Group does not have any currently legally enforceable right to offset recognised amounts, between various Group and bank affiliates, because the right to offset is enforceable only on the occurrence of future credit events such as a default.
The column Related amounts not set off in the balance sheet Financial instruments shows the netting impact of our ISDA agreements, assuming the agreements are respected in the relevant jurisdiction.
(A) FINANCIAL ASSETS
The following financial assets are subject to offsetting, enforceable master netting arrangements and similar agreements.
Related amounts not set | ||||||||||||||||||||||||
off in the balance sheet | ||||||||||||||||||||||||
million | million | million | million | million | million | |||||||||||||||||||
Gross amounts of | ||||||||||||||||||||||||
recognised | Net amounts of | |||||||||||||||||||||||
Gross amounts | financial liabilities | financial assets | Cash | |||||||||||||||||||||
of recognised | set off in the | presented in the | Financial | collateral | ||||||||||||||||||||
As at 31 December 2016 | financial assets | balance sheet | balance sheet | instruments | received | Net amount | ||||||||||||||||||
Derivative financial assets |
400 | (174 | ) | 226 | (147 | ) | - | 79 | ||||||||||||||||
As at 31 December 2015 |
||||||||||||||||||||||||
Derivative financial assets |
458 | (155 | ) | 303 | (153 | ) | (30 | ) | 120 | |||||||||||||||
(B) FINANCIAL LIABILITIES The following financial liabilities are subject to offsetting, enforceable master netting arrangements and similar agreements.
|
||||||||||||||||||||||||
Related amounts not set | ||||||||||||||||||||||||
off in the balance sheet | ||||||||||||||||||||||||
million | million | million | million | million | million | |||||||||||||||||||
Gross amounts of | ||||||||||||||||||||||||
recognised | Net amounts of | |||||||||||||||||||||||
Gross amounts | financial liabilities | financial liabilities | Cash | |||||||||||||||||||||
of recognised | set off in the | presented in the | Financial | collateral | ||||||||||||||||||||
As at 31 December 2016 | financial liabilities | balance sheet | balance sheet | instruments | pledged | Net amount | ||||||||||||||||||
Derivative financial liabilities |
505 | (174 | ) | 331 | (147 | ) | - | 184 | ||||||||||||||||
As at 31 December 2015 |
||||||||||||||||||||||||
Derivative financial liabilities |
349 | (155 | ) | 194 | (153 | ) | - | 41 |
17. INVESTMENT AND RETURN
CASH AND CASH EQUIVALENTS
Cash and cash equivalents in the balance sheet include deposits, investments in money market funds and highly liquid investments. To be classified as cash and cash equivalents, an asset must:
| be readily convertible into cash; |
| have an insignificant risk of changes in value; and |
| have a maturity period of three months or less at acquisition. |
Cash and cash equivalents in the cash flow statement also include bank overdrafts and are recorded at amortised cost.
OTHER FINANCIAL ASSETS
Other financial assets are first recognised on the trade date. At that point, they are classified as:
| held-to-maturity investments; |
| loans and receivables; |
| available-for-sale financial assets; or |
| financial assets at fair value through profit or loss. |
120 | Financial Statements | Annual Report on Form 20-F 2016 |
17. INVESTMENT AND RETURN CONTINUED
(I) HELD-TO-MATURITY INVESTMENTS
These are assets with set cash flows and fixed maturities which Unilever intends to hold to maturity. They are held at cost plus interest using the effective interest method, less any impairment.
(II) LOANS AND RECEIVABLES
These are assets with an established payment profile and which are not listed on a recognised stock exchange. They are initially recognised at fair value, which is usually the original invoice amount plus any directly related transaction costs. Afterwards, loans and receivables are carried at amortised cost, less any impairment.
(III) AVAILABLE-FOR-SALE FINANCIAL ASSETS
Any financial assets not classified as either loans and receivables or financial assets at fair value through profit or loss or held-to-maturity investments are designated as available-for-sale. They are initially recognised at fair value, usually the original invoice amount plus any directly related transaction costs. Afterwards, they are measured at fair value with changes being recognised in equity. When the investment is sold or impaired, the accumulated gains and losses are moved from equity to the income statement. Interest and dividends from these assets are recognised in the income statement.
(IV) FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
These are derivatives and assets that are held for trading. Related transaction costs are expensed as incurred. Unless they form part of a hedging relationship, these assets are held at fair value, with changes being recognised in the income statement.
IMPAIRMENT OF FINANCIAL ASSETS
Each year, the Group assesses whether there is evidence that financial assets are impaired. A significant or prolonged fall in value below the cost of an asset generally indicates that an asset may be impaired. If impaired, financial assets are written down to their estimated recoverable amount. Impairment losses on assets classified as loans and receivables are recognised in profit and loss. When a later event causes the impairment losses to decrease, the reduction in impairment loss is also recognised in profit and loss. Impairment losses on assets classified as available-for-sale are recognised by moving the loss accumulated in equity to the income statement. Any subsequent recovery in value of an available-for-sale debt security is recognised within profit and loss. However, any subsequent recovery in value of an equity security is recognised within equity, and is recorded at amortised cost.
17A. FINANCIAL ASSETS
The Groups Treasury function aims to protect the Groups financial investments, while maximising returns. The fair value of financial assets is the same as the carrying amount for 2016 and 2015. The Groups cash resources and other financial assets are shown below.
million | million | million | million | million | million | |||||||||||||||||||
Non- | Non- | |||||||||||||||||||||||
Current | current | Total | Current | current | Total | |||||||||||||||||||
Financial assets(a) | 2016 | 2016 | 2016 | 2015 | 2015 | 2015 | ||||||||||||||||||
Cash and cash equivalents |
||||||||||||||||||||||||
Cash at bank and in hand |
1,779 | | 1,779 | 1,547 | | 1,547 | ||||||||||||||||||
Short-term deposits with maturity of less than three months |
1,513 | | 1,513 | 655 | | 655 | ||||||||||||||||||
Other cash equivalents |
90 | | 90 | 100 | | 100 | ||||||||||||||||||
3,382 | | 3,382 | 2,302 | | 2,302 | |||||||||||||||||||
Other financial assets |
||||||||||||||||||||||||
Held-to-maturity investments |
43 | 99 | 142 | 38 | 106 | 144 | ||||||||||||||||||
Loans and receivables(b) |
208 | 190 | 398 | 269 | 34 | 303 | ||||||||||||||||||
Available-for-sale financial assets(c) |
126 | 383 | 509 | 179 | 462 | 641 | ||||||||||||||||||
Financial assets at fair value through profit or loss: |
||||||||||||||||||||||||
Derivatives |
91 | | 91 | 230 | | 230 | ||||||||||||||||||
Other |
131 | 1 | 132 | 120 | 3 | 123 | ||||||||||||||||||
599 | 673 | 1,272 | 836 | 605 | 1,441 | |||||||||||||||||||
Total |
3,981 | 673 | 4,654 | 3,138 | 605 | 3,743 |
(a) | For the purposes of notes 15C and 17A, financial assets and liabilities exclude trade and other current receivables and trade payables and other liabilities which are covered in notes 13 and 14 respectively. |
(b) | Current loans and receivables include short-term deposits with banks with maturities of longer than three months. |
(c) | Current available-for-sale financial assets include government securities and A- or higher rated money and capital market instruments. Non-current available-for-sale financial assets predominantly consist of investments in a number of companies and financial institutions in Europe, India and the US, including 79 million (2015: 86 million) of assets in a trust to fund benefit obligations in the US (see also note 4B). |
Annual Report on Form 20-F 2016 | Financial Statements | 121 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
UNILEVER GROUP CONTINUED
17A. FINANCIAL ASSETS CONTINUED
Cash and cash equivalents reconciliation to the cash flow statement | million 2016 |
million 2015 |
||||||
Cash and cash equivalents per balance sheet |
3,382 | 2,302 | ||||||
Less: bank overdrafts |
(184 | ) | (174 | ) | ||||
Cash and cash equivalents per cash flow statement |
3,198 | 2,128 |
Approximately 1.5 billion (or 43%) of the Groups cash and cash equivalents are held in the parent and central finance companies, for maximum flexibility. These companies provide loans to our subsidiaries that are also funded through retained earnings and third party borrowings. We maintain access to global debt markets through an infrastructure of short and long-term debt programmes. We make use of plain vanilla derivatives, such as interest rate swaps and foreign exchange contracts, to help mitigate risks. More detail is provided in notes 16, 16A, 16B and 16C on pages 115 to 120.
The remaining 1.9 billion (57%) of the Groups cash and cash equivalents are held in foreign subsidiaries which repatriate distributable reserves on a regular basis. For most countries, this is done through dividends which are in some cases subject to withholding or distribution tax. This balance includes 240 million (2015: 284 million, 2014: 452 million) of cash that is held in a few countries where we face cross-border foreign exchange controls and/or other legal restrictions that inhibit our ability to make these balances available for general use by the wider business. The cash will generally be invested or held in the relevant country and, given the other capital resources available to the Group, does not significantly affect the ability of the Group to meet its cash obligations.
17B. CREDIT RISK
Credit risk is the risk of financial loss to the Group if a customer or counter-party fails to meet its contractual obligations. Additional information in relation to credit risk on trade receivables is given in note 13. These risks are generally managed by local controllers. Credit risk related to the use of treasury instruments is managed on a Group basis. This risk arises from transactions with financial institutions involving cash and cash equivalents, deposits and derivative financial instruments. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets. To reduce this risk, Unilever has concentrated its main activities with a limited number of counter-parties which have secure credit ratings. Individual risk limits are set for each counter-party based on financial position, credit rating and past experience. Credit limits and concentration of exposures are actively monitored by the Groups treasury department. Netting agreements are also put in place with Unilevers principal counter-parties. In the case of a default, these arrangements would allow Unilever to net assets and liabilities across transactions with that counter-party. To further reduce the Groups credit exposures on derivative financial instruments, Unilever has collateral agreements with Unilevers principal counter-parties in relation to derivative financial instruments. Under these arrangements, counter-parties are required to deposit securities and/or cash as a collateral for their obligations in respect of derivative financial instruments. At 31 December 2016 the collateral held by Unilever under such arrangements amounted to 3 million (2015: 30 million), of which nil (2015: 30 million) was in cash, and 3 million (2015: nil) was in the form of bond securities. The non-cash collateral has not been recognised as an asset in the Groups balance sheet.
Further details in relation to the Groups exposure to credit risk are shown in note 13 and note 16A.
18. FINANCIAL INSTRUMENTS FAIR VALUE RISK
The Group is exposed to the risks of changes in fair value of its financial assets and liabilities. The following table summarises the fair values and carrying amounts of financial instruments.
million | million | million | million | |||||||||||||
Carrying | Carrying | |||||||||||||||
Fair value | Fair value | amount | amount | |||||||||||||
Fair values of financial assets and financial liabilities | 2016 | 2015 | 2016 | 2015 | ||||||||||||
Financial assets |
||||||||||||||||
Cash and cash equivalents |
3,382 | 2,302 | 3,382 | 2,302 | ||||||||||||
Held-to-maturity investments |
142 | 144 | 142 | 144 | ||||||||||||
Loans and receivables |
398 | 303 | 398 | 303 | ||||||||||||
Available-for-sale financial assets |
509 | 641 | 509 | 641 | ||||||||||||
Financial assets at fair value through profit or loss: |
||||||||||||||||
Derivatives |
91 | 230 | 91 | 230 | ||||||||||||
Other |
132 | 123 | 132 | 123 | ||||||||||||
4,654 | 3,743 | 4,654 | 3,743 | |||||||||||||
Financial liabilities |
||||||||||||||||
Preference shares |
(125 | ) | (132 | ) | (68 | ) | (68 | ) | ||||||||
Bank loans and overdrafts |
(1,147 | ) | (1,067 | ) | (1,146 | ) | (1,064 | ) | ||||||||
Bonds and other loans |
(15,844 | ) | (13,509 | ) | (15,053 | ) | (12,703 | ) | ||||||||
Finance lease creditors |
(165 | ) | (217 | ) | (143 | ) | (195 | ) | ||||||||
Derivatives |
(185 | ) | (124 | ) | (185 | ) | (124 | ) | ||||||||
Other financial liabilities |
- | (489 | ) | - | (489 | ) | ||||||||||
(17,466 | ) | (15,538 | ) | (16,595 | ) | (14,643 | ) |
122 | Financial Statements | Annual Report on Form 20-F 2016 |
18. FINANCIAL INSTRUMENTS FAIR VALUE RISK CONTINUED
The fair value of trade receivables and payables is considered to be equal to the carrying amount of these items due to their short-term nature. The instruments that have a fair value that is different from the carrying amount are classified as Level 2 for both 2015 and 2016 with exception of preference shares which are classified as Level 1 for both years.
FAIR VALUE HIERARCHY
The fair values shown in notes 15C and 17A have been classified into three categories depending on the inputs used in the valuation technique. The categories used are as follows:
| Level 1: quoted prices for identical instruments; |
| Level 2: directly or indirectly observable market inputs, other than Level 1 inputs; and |
| Level 3: inputs which are not based on observable market data. |
For assets and liabilities which are carried at fair value, the classification of fair value calculations by category is summarised below:
million | million | million | million | million | million | million | million | |||||||||||||||||||||||||||||
Total fair | Total fair | |||||||||||||||||||||||||||||||||||
Level 1 | Level 1 | Level 2 | Level 2 | Level 3 | Level 3 | value | value | |||||||||||||||||||||||||||||
Notes | 2016 | 2015 | 2016 | 2015 | 2016 | 2015 | 2016 | 2015 | ||||||||||||||||||||||||||||
Assets at fair value |
||||||||||||||||||||||||||||||||||||
Other cash equivalents |
17A | - | - | 90 | 100 | - | - | 90 | 100 | |||||||||||||||||||||||||||
Available-for-sale financial assets |
17A | 138 | 14 | 98 | 180 | 273 | 447 | 509 | 641 | |||||||||||||||||||||||||||
Financial assets at fair value through profit or loss: |
||||||||||||||||||||||||||||||||||||
Derivatives(a) |
16C | - | - | 226 | 303 | - | - | 226 | 303 | |||||||||||||||||||||||||||
Other |
17A | - | 120 | 131 | - | 1 | 3 | 132 | 123 | |||||||||||||||||||||||||||
Liabilities at fair value |
||||||||||||||||||||||||||||||||||||
Derivatives(b) |
16C | - | - | (331 | ) | (194 | ) | - | - | (331 | ) | (194 | ) | |||||||||||||||||||||||
Contingent consideration |
21 | - | - | - | - | (380 | ) | (104 | ) | (594 | ) | (179 | ) |
(a) | Includes 135 million (2015: 73 million) derivatives, reported within trade receivables, that hedge trading activities. |
(b) | Includes (146) million (2015: (71) million) derivatives, reported within trade payables, that hedge trading activities. |
There were no significant changes in classification of fair value of financial assets and financial liabilities since 31 December 2015. There were also no significant movements between the fair value hierarchy classifications since 31 December 2015.
The impact in the 2016 income statement due to Level 3 instruments is a gain of 94 million (2015: loss of 45 million).
Reconciliation of Level 3 fair value measurements of financial assets is given below:
Reconciliation of movements in Level 3 valuations | million 2016 |
million 2015 |
||||||
1 January |
346 | 475 | ||||||
Gains and losses recognised in profit and loss |
94 | (45 | ) | |||||
Gains and losses recognised in other comprehensive income |
(12 | ) | 120 | |||||
Purchases and new issues |
(247 | ) | (91 | ) | ||||
Sales and settlements |
(187 | ) | (113 | ) | ||||
Transfers into Level 3 |
- | - | ||||||
Transfers out of Level 3 |
(100 | ) | - | |||||
31 December |
(106 | ) | 346 |
SIGNIFICANT UNOBSERVABLE INPUTS USED IN LEVEL 3 FAIR VALUES
The largest asset valued using Level 3 techniques is a Split-Dollar Life Insurance of 43 million (2015: 41 million).
A change in one or more of the inputs to reasonably possible alternative assumptions would not change the value significantly.
During the year, an asset with a carrying value of 62 million as at 31 December 2015 (2014: 189 million, 2013: 190 million) was de-recognised. The asset was previously valued using Level 3 techniques and related to an unlisted investment recognised as an available for sale financial asset. The asset was impaired in 2015 but due to unforeseen circumstances, in 2016, this impairment was reversed and the asset disposed for a total consideration of 130 million. The 2016 profit or loss impact of the reversal of the previous impairment was a gain of 63 million recognised within other income/(loss) from non-current investments. Interest income of 5m was also recognised from this asset in 2016.
CALCULATION OF FAIR VALUES
The fair values of the financial assets and liabilities are defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Methods and assumptions used to estimate the fair values are consistent with those used in the year ended 31 December 2015.
Annual Report on Form 20-F 2016 | Financial Statements | 123 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
UNILEVER GROUP CONTINUED
18. FINANCIAL INSTRUMENTS FAIR VALUE RISK CONTINUED
ASSETS AND LIABILITIES CARRIED AT FAIR VALUE
| The fair values of quoted investments falling into Level 1 are based on current bid prices. |
| The fair values of unquoted available-for-sale financial assets are based on recent trades in liquid markets, observable market rates, discounted cash flow analysis and statistical modelling techniques such as the Monte Carlo simulation. If all significant inputs required to fair value an instrument are observable, the instrument is included in Level 2. If one or more of the significant inputs is not based on observable market data, the instrument is included in Level 3. |
| Derivatives are valued using valuation techniques with market observable inputs. The models incorporate various inputs including the credit quality of counter-parties, foreign exchange spot and forward rates, interest rate curves and forward rate curves of the underlying commodities. |
| For listed securities where the market is not liquid, and for unlisted securities, valuation techniques are used. These include the use of recent arms length transactions, reference to other instruments that are substantially the same and discounted cash flow calculations. |
OTHER FINANCIAL ASSETS AND LIABILITIES (FAIR VALUES FOR DISCLOSURE PURPOSES ONLY)
| Cash and cash equivalents, trade and other current receivables, bank loans and overdrafts, trade payables and other current liabilities have fair values that approximate to their carrying amounts due to their short-term nature. |
| The fair values of preference shares and listed bonds are based on their market value. |
| Non-listed bonds, other loans, bank loans and non-current receivables and payables are based on the net present value of the anticipated future cash flows associated with these instruments using rates currently available for debt on similar terms, credit risk and remaining maturities. |
| Fair values for finance lease creditors have been assessed by reference to current market rates for comparable leasing arrangements. |
POLICIES AND PROCESSES USED IN RELATION TO THE CALCULATION OF LEVEL 3 FAIR VALUES
Assets valued using Level 3 valuation techniques are primarily made up of long-term cash receivables and unlisted investments. Valuation techniques used are specific to the circumstances involved. Unlisted investments include 172 million (2015: 192 million) of investments within Unilever Ventures companies.
19. PROVISIONS
Provisions are recognised where a legal or constructive obligation exists at the balance sheet date, as a result of a past event, where the amount of the obligation can be reliably estimated and where the outflow of economic benefit is probable.
million | million | |||||||||||||||||||
Provisions | 2016 | 2015 | ||||||||||||||||||
Due within one year |
390 | 309 | ||||||||||||||||||
Due after one year |
1,033 | 831 | ||||||||||||||||||
Total provisions |
1,423 | 1,140 | ||||||||||||||||||
million | million | million | million | million | ||||||||||||||||
Movements during 2016 | Restructuring | Legal | Disputed indirect taxes |
Other | Total | |||||||||||||||
1 January 2016 |
188 | 161 | 570 | 221 | 1,140 | |||||||||||||||
Income Statement: |
||||||||||||||||||||
Charges |
258 | 72 | 154 | 69 | 553 | |||||||||||||||
Releases |
(33 | ) | (51 | ) | (46 | ) | (41 | ) | (171 | ) | ||||||||||
Utilisation |
(116 | ) | (55 | ) | (38 | ) | (38 | ) | (247 | ) | ||||||||||
Currency translation |
(6 | ) | (2 | ) | 154 | 2 | 148 | |||||||||||||
31 December 2016 |
291 | 125 | 794 | 213 | 1,423 |
Restructuring provisions primarily include people costs such as redundancy costs and cost of compensation where manufacturing, distribution or selling agreements are to be terminated.
The Group is involved from time to time in legal and arbitration proceedings arising in the ordinary course of business. As previously disclosed, along with other consumer products companies and retail customers, Unilever is involved in a number of ongoing investigations by national competition authorities. These proceedings and investigations are at various stages and concern a variety of product markets. Where specific issues arise, provisions are made to the extent appropriate.
Unilever expects the issues relating to these restructuring, legal and other provisions to be substantively resolved within five years.
The provision for disputed indirect taxes is primarily comprised of disputes with Brazilian authorities, in particular relating to tax credits that can be taken for the PIS and COFINS indirect taxes in Brazil. Due to the nature of these disputes, the timing of any utilisation in relation to these provisions is uncertain.
124 | Financial Statements | Annual Report on Form 20-F 2016 |
20. COMMITMENTS AND CONTINGENT LIABILITIES
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership. All other leases are classified as operating leases.
Assets held under finance leases are initially recognised at the lower of fair value at the date of commencement of the lease and the present value of the minimum lease payments. Subsequent to initial recognition, these assets are accounted for in accordance with the accounting policy relating to that specific asset. The corresponding liability is included in the balance sheet as a finance lease obligation. Lease payments are apportioned between finance costs in the income statement and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability.
Lease payments under operating leases are charged to the income statement on a straight-line basis over the term of the lease.
Contingent liabilities are either possible obligations that will probably not require a transfer of economic benefits, or present obligations that may, but probably will not, require a transfer of economic benefits. It is not appropriate to make provisions for contingent liabilities, but there is a chance that they will result in an obligation in the future. Contingent liabilities are disclosed at the risk adjusted best estimate of the amount that would be required to settle the liability as at the balance sheet date. Where a risk weighting is not available, the maximum exposure is reported.
million | million | million | million | million | million | |||||||||||||||||||
Long-term finance lease commitments | Future minimum lease payments 2016 |
Finance Cost 2016 |
Present value 2016 |
Future minimum lease payments 2015 |
Finance cost 2015 |
Present value 2015 |
||||||||||||||||||
Buildings(a) |
202 | 75 | 127 | 284 | 105 | 179 | ||||||||||||||||||
Plant and machinery |
18 | 2 | 16 | 18 | 2 | 16 | ||||||||||||||||||
220 | 77 | 143 | 302 | 107 | 195 | |||||||||||||||||||
The commitments fall due as follows: |
||||||||||||||||||||||||
Within 1 year |
24 | 15 | 9 | 51 | 14 | 37 | ||||||||||||||||||
Later than 1 year but not later than 5 years |
69 | 28 | 41 | 85 | 37 | 48 | ||||||||||||||||||
Later than 5 years |
127 | 34 | 93 | 166 | 56 | 110 | ||||||||||||||||||
220 | 77 | 143 | 302 | 107 | 195 | |||||||||||||||||||
(a) All leased land is classified as operating leases.
The table below shows the net book value of property, plant and equipment under a number of finance lease agreements.
|
||||||||||||||||||||||||
million | million | million | ||||||||||||||||||||||
Net book value | Buildings | Plant and equipment |
Total | |||||||||||||||||||||
Cost |
211 | 134 | 345 | |||||||||||||||||||||
Accumulated depreciation |
|
(79 | ) | (115 | ) | (194 | ) | |||||||||||||||||
31 December 2016 |
132 | 19 | 151 | |||||||||||||||||||||
Cost |
239 | 154 | 393 | |||||||||||||||||||||
Accumulated depreciation |
|
(82 | ) | (133 | ) | (215 | ) | |||||||||||||||||
31 December 2015 |
157 | 21 | 178 | |||||||||||||||||||||
The Group has sublet part of the leased properties under finance
leases. Future minimum sublease payments of 31 million (2015: 41 million) are
|
||||||||||||||||||||||||
million | million | |||||||||||||||||||||||
Long-term operating lease commitments | 2016 | 2015 | ||||||||||||||||||||||
Land and buildings |
2,149 | 2,024 | ||||||||||||||||||||||
Plant and machinery |
692 | 430 | ||||||||||||||||||||||
2,841 | 2,454 | |||||||||||||||||||||||
million | million | million | million | |||||||||||||||||||||
Operating lease and other commitments fall due as follows: | Operating leases 2016 |
Operating leases 2015 |
Other commitments 2016 |
Other commitments 2015 |
||||||||||||||||||||
Within 1 year |
457 | 410 | 1,204 | 919 | ||||||||||||||||||||
Later than 1 year but not later than 5 years |
|
1,393 | 1,187 | 1,231 | 830 | |||||||||||||||||||
Later than 5 years |
991 | 857 | 30 | 35 | ||||||||||||||||||||
2,841 | 2,454 | 2,465 | 1,784 |
The Group has sublet part of the leased properties under operating leases. Future minimum sublease payments of 17 million (2015: 5 million) are expected to be received.
Other commitments principally comprise commitments under contracts to purchase materials and services. They do not include commitments to purchase property, plant and equipment, which are reported in note 10 on page 106.
Annual Report on Form 20-F 2016 | Financial Statements | 125 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
UNILEVER GROUP CONTINUED
20. COMMITMENTS AND CONTINGENT LIABILITIES CONTINUED
CONTINGENT LIABILITIES
Contingent liabilities are possible obligations that are not probable. They arise in respect of litigation against Group companies, investigations by competition, regulatory and fiscal authorities and obligations arising under environmental legislation. In many markets, there is a high degree of complexity involved in the local tax regimes. The majority of contingent liabilities are in respect of fiscal matters.
Assessing the amount of liabilities that are not probable is highly judgemental. Our best estimate of contingent liabilities at 31 December 2016 was 2,360 million (2015: 1,310 million), the largest of which relates to the local corporate reorganisation in 2001 explained further below. There has been no material change in our total contingent liability exposure since 2015. However, in prior years the contingent liabilities in respect of fiscal matters were disclosed on a tax assessment basis whereas in 2016 the basis has been extended to include unassessed years.
During 2004, and in common with many other businesses operating in Brazil, one of our Brazilian subsidiaries received a notice of infringement from the Federal Revenue Service in respect of indirect taxes. The notice alleges that a 2001 reorganisation of our local corporate structure was undertaken without valid business purpose. The 2001 reorganisation was comparable with restructurings done by many companies in Brazil. The original dispute was resolved in the courts in the Groups favour. However, in 2013 a new assessment was raised in respect of a similar matter. Additionally, during the course of 2014 another notice of infringement was issued based on the same grounds argued in the previous assessments. The total amount of the tax assessments in respect of this matter is 1,464 million. The judicial process in Brazil is likely to take a number of years to conclude.
During 2006, Unilever filed a judicial measure to obtain the right to exclude the Brazilian ICMS indirect tax from the taxable base for the Brazilian PIS and COFINS indirect taxes, and obtained a favourable decision in 2007. In November 2016, this favourable decision was reversed on appeal to a higher court. The Group intends to appeal this decision. The total amount of the tax assessments in respect of this matter is 655 million.
The Group believes that the likelihood that the tax authorities will ultimately prevail is low, however there can be no guarantee of success in court. In each case we believe our position is strong so they have not been provided for and are considered to be contingent liabilities.
21. ACQUISITIONS AND DISPOSALS
Business combinations are accounted for using the acquisition accounting method as at the acquisition date, which is the date at which control is transferred to the Group.
Goodwill is measured at the acquisition date as the fair value of consideration transferred, plus non-controlling interests and the fair value of any previously-held equity interests less the net recognised amount (which is generally fair value) of the identifiable assets and liabilities assumed. Goodwill is subject to an annual review for impairment (or more frequently if necessary) in accordance with our accounting policies. Any impairment is charged to the income statement as it arises.
Contingent consideration is measured at fair value with changes being recognised in the income statement. All other deferred consideration is held at amortised cost. Consideration transferred does not include amounts related to settlement of pre-existing relationships. Such amounts are generally recognised in net profit.
Transaction costs are expensed as incurred, other than those incurred in relation to the issue of debt or equity securities.
Changes in ownership that do not result in a change of control are accounted for as equity transactions and therefore do not have any impact on goodwill. The difference between consideration and the non-controlling share of net assets acquired is recognised within equity.
126 | Financial Statements | Annual Report on Form 20-F 2016 |
21. ACQUISITIONS AND DISPOSALS CONTINUED
2016
In 2016, the Group completed the following business acquisitions and disposals as listed below. Total consideration for 2016 acquisitions is 2,069 million (2015: 2,011 million for acquisitions completed during that year). More information related to the 2016 acquisitions is given on page 22.
DEAL COMPLETION DATE
|
ACQUIRED/DISPOSED BUSINESS | |
31 March 2016
|
Sold the bread and bakery business under the brand Modern in India to Nimman Foods Private Limited, part of the Everstone Group.
| |
7 April 2016
|
Acquired Indulekha and Vayodha brands from Mosons Group.
| |
6 May 2016
|
Sold local Alberto Culver brands Antiall, Farmaco, Veritas, the rights for VO5 in Argentina and a manufacturing plant to Santiago Saenz.
| |
31 July 2016
|
Sold the Rice Exports business in India to LT Foods Middle East DMCC, a Group company of LT Foods Limited.
| |
10 August 2016
|
Acquired Dollar Shave Club, a subscription-based direct-to-consumer male grooming business.
| |
20 October 2016
|
Acquired Seventh Generation, a North American home and personal care eco-friendly naturals business.
| |
1 December 2016
|
Acquired Blueair, a supplier of innovative mobile indoor air purification technologies and solutions.
|
On 1 June 2016 the Group announced that it had signed an agreement with Coca-Cola FEMSA and The Coca-Cola Company to sell the AdeS soy beverage business in Latin America for an aggregate amount of US$575 million. Subject to regulatory approval, the transaction is expected to complete during the first quarter of 2017.
On 16 December 2016 the Group announced that it had signed an agreement to purchase Living Proof Inc., an innovative premium hair care business. The transaction completed on 1 February 2017 after receiving regulatory approval. Due to the proximity of deal completion to the issuance of the financial statements, no valuation work has commenced and no provisional numbers have been disclosed in the notes to the consolidated financial statements.
EFFECT ON CONSOLIDATED INCOME STATEMENT
Since the acquisition dates the 2016 acquisitions above have contributed 149 million to Group revenue and 21 million loss to Group operating profit.
If all the above acquisitions had taken place at the beginning of the year, Group revenue would have been 53,127 million and Group operating profit would have been 7,807 million.
2015
In 2015, the Group completed the following business acquisitions listed below. The acquisition accounting has been finalised and subsequent changes to the provisional numbers published last year were immaterial.
DEAL COMPLETION DATE
|
ACQUIRED BUSINESS | |
1 May 2015
|
Acquired REN Skincare, a prestige Personal Care business with an iconic British skin care brand.
| |
1 May 2015
|
Camay and Zest brands acquired from The Procter & Gamble Company. In addition a manufacturing site was acquired.
| |
6 May 2015
|
Acquired Kate Somerville Skincare, a prestige Personal Care business with a leading independent skin care brand.
| |
1 August 2015
|
Acquired Dermalogica, a prestige Personal Care business with the leading skin care brand in professional salons and spas. The assets acquired were principally the Dermalogica brand.
| |
1 September 2015
|
Murad, the leading clinical skin care brand, part of our prestige Personal Care business.
| |
30 September 2015
|
Acquired Grom, a premium Italian gelato business.
|
Annual Report on Form 20-F 2016 | Financial Statements | 127 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
UNILEVER GROUP CONTINUED
21. ACQUISITIONS AND DISPOSALS CONTINUED
EFFECT ON CONSOLIDATED BALANCE SHEET
The following table sets out the effect of the acquisitions in 2016, 2015 and 2014 on the consolidated balance sheet. The fair values currently established for all acquisitions made in 2016 are provisional. Detailed information relating to goodwill is given in note 9 on pages 104 to 106.
million | million | million | ||||||||||
Acquisitions | 2016 | 2015 | 2014 | |||||||||
Net assets acquired |
929 | 999 | 240 | |||||||||
Goodwill arising in subsidiaries |
1,140 | 1,012 | 184 | |||||||||
Total consideration |
2,069 | 2,011 | 424 |
In 2016 the net assets acquired and total consideration consist of:
million | ||||
2016 | ||||
Intangible assets |
1,147 | |||
Other non-current assets |
115 | |||
Trade and other receivables |
44 | |||
Other current assets |
122 | |||
Non-current liabilities |
(398 | ) | ||
Current liabilities |
(101 | ) | ||
Net assets acquired |
929 | |||
Cash consideration |
1,640 | |||
Deferred consideration |
429 | |||
Total consideration |
2,069 | |||
Goodwill |
1,140 |
No contingent liabilities were acquired in the acquisitions described above.
Deferred consideration includes future payments which are contingent on acquired businesses achieving or exceeding contractually agreed financial targets within a predetermined timescale. These payments fall due up until 2021 with the maximum possible total payment of 1,950 million. A financial liability representing the best estimate of the Groups future cash outflows is recognised in other current liabilities and other non-current liabilities on the balance sheet. This is initially recorded at fair-value and revalued at each reporting date with movements in fair value taken to the income statement.
At 31 December 2016, the balance held in deferred consideration for acquisitions is 594 million (2015: 179 million), of which contingent consideration is 380 million (2015: 104 million).
Goodwill represents the future value which the Group believes it will obtain through operational synergies and the application of acquired company ideas to existing Unilever channels and businesses.
The table below shows the impact of all disposals during the year on the Group. The results of disposed businesses are included in the consolidated financial statements up to their date of disposal:
million | million | million | ||||||||||
Disposals | 2016 | 2015 | 2014 | |||||||||
Goodwill and intangible assets |
85 | 47 | 229 | |||||||||
Other non-current assets |
29 | 2 | 106 | |||||||||
Current assets |
5 | 23 | 50 | |||||||||
Trade creditors and other payables |
- | (2 | ) | (5 | ) | |||||||
Net assets sold |
119 | 70 | 380 | |||||||||
(Gain)/loss on recycling of currency retranslation on disposal |
- | - | (76 | ) | ||||||||
Profit/(loss) on sale attributable to Unilever |
(95 | ) | (9 | ) | 1,392 | |||||||
Consideration |
24 | 61 | 1,696 | |||||||||
Cash |
16 | 62 | 1,727 | |||||||||
Cash balances of businesses sold |
8 | (1 | ) | (4 | ) | |||||||
Non-cash items and deferred consideration |
- | - | (27 | ) | ||||||||
24 | 61 | 1,696 |
128 | Financial Statements | Annual Report on Form 20-F 2016 |
22. ASSETS AND LIABILITIES HELD FOR SALE
Non-current assets and groups of assets and liabilities which comprise disposal groups are classified as held for sale when all of the following criteria are met: a decision has been made to sell; the assets are available for sale immediately; the assets are being actively marketed; and a sale has been agreed or is expected to be concluded within 12 months of the balance sheet date.
Immediately prior to classification as held for sale, the assets or groups of assets are remeasured in accordance with the Groups accounting policies. Subsequently, assets and disposal groups classified as held for sale are valued at the lower of book value or fair value less disposal costs. Assets held for sale are not depreciated.
million 2016 |
million 2015 |
|||||||
Groups of assets held for sale(a) |
||||||||
Goodwill and intangibles |
98 | 43 | ||||||
Property, plant and equipment |
46 | 73 | ||||||
Inventories |
34 | 35 | ||||||
Trade and other receivables |
1 | 3 | ||||||
Other |
5 | 5 | ||||||
184 | 159 | |||||||
Non-current assets held for sale |
||||||||
Property, plant and equipment |
22 | 20 | ||||||
Liabilities held for sale |
||||||||
Liabilities associated with assets held for sale |
1 | 6 |
(a) | Groups of assets held for sale are primarily assets of the AdeS soy beverage business in Latin America. Refer to note 21 on pages 126 to 128. |
23. RELATED PARTY TRANSACTIONS
A related party is a person or entity that is related to the Group. These include both people and entities that have, or are subject to, the influence or control of the Group.
The following related party balances existed with associate or joint venture businesses at 31 December:
Related party balances | million 2016 |
million 2015 |
||||||
Trading and other balances due from joint ventures |
115 | 116 | ||||||
Trading and other balances due from/(to) associates |
- | - |
JOINT VENTURES
Sales by Unilever group companies to Unilever Jerónimo Martins and Pepsi Lipton joint ventures were 118 million and 69 million in 2016 (2015: 121 million and 69 million) respectively. Sales from Unilever Jerónimo Martins and from Pepsi Lipton joint ventures to Unilever group companies were 66 million and 51 million in 2016 (2015: 46 million and 51 million) respectively. Balances owed by/(to) Unilever Jerónimo Martins and Pepsi Lipton joint ventures at 31 December 2016 were 119 million and (4) million (2015: 121 million and (5) million) respectively.
ASSOCIATES
Langholm Capital Partners invests in private European companies with above-average longer-term growth prospects.
Langholm Capital II was launched in 2009. Unilever has invested 57 million in Langholm Capital II, with an outstanding commitment at the end of 2016 of 18 million (2015: 20 million).
Annual Report on Form 20-F 2016 | Financial Statements | 129 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
UNILEVER GROUP CONTINUED
24. 2014 PURCHASE OF ESTATE SHARES CONVERTIBLE TO UNILEVER PLC SHARES IN 2038
The first Viscount Leverhulme was the founder of the company which became Unilever PLC. When he died in 1925, he left in his will a large number of PLC shares in various trusts. When the will trusts were varied in 1983, the interests of the beneficiaries of his will were also preserved. Four classes of special shares were created in Margarine Union (1930) Limited, a subsidiary of PLC.
One of these classes of shares (Estate shares) has rights that enable it to be converted at the end of the year 2038 to 70,875,000 Unilever PLC ordinary shares. Before this date, these shares have no rights to dividends nor do they allow early conversion. There are 20,000 Estate shares with a nominal value of £0.01 each.
On 19 May 2014, Unilever PLC purchased all of the Estate shares for a cash consideration of £715 million plus transaction costs. The resulting loss of 880 million, being the difference between the nominal value and the amount paid, was recorded in retained earnings. Unilever does not intend to re-sell these shares.
25. REMUNERATION OF AUDITORS
This note includes all amounts paid to the Groups auditors, whether in relation to their audit of the Group or otherwise.
During the year the Group (including its subsidiaries) obtained the following services from the Group auditors and its associates:
million 2016 |
million 2015 |
million 2014 |
||||||||||
Fees payable to the Groups auditors for the audit of the consolidated and parent company accounts of Unilever N.V. and Unilever PLC(a) |
4 | 5 | 5 | |||||||||
Fees payable to the Groups auditors for the audit of accounts of subsidiaries of Unilever N.V. and Unilever PLC pursuant to legislation(b) |
10 | 9 | 9 | |||||||||
Total statutory audit fees(c) |
14 | 14 | 14 | |||||||||
Audit-related assurance services |
| (d) | | (d) | | (d) | ||||||
Other taxation advisory services |
| (d) | | (d) | | (d) | ||||||
Services relating to corporate finance transactions |
| | | |||||||||
Other assurance services |
| (d) | | (d) | | (d) | ||||||
All other non-audit services |
| (d) | | (d) | | (d) |
(a) | Of which 1 million was payable to KPMG Accountants N.V. (2015: 1 million; 2014: 1 million) and 3 million was payable to KPMG LLP (2015: 4 million; 2014: 4 million). |
(b) | Comprises fees payable to the KPMG network of independent member firms affiliated with KPMG International Cooperative for audit work on statutory financial statements and Group reporting returns of subsidiary companies. |
(c) | Amount payable to KPMG in respect of services supplied to associated pension schemes was less than 1 million individually and in aggregate (2015: less than 1 million individually and in aggregate; 2014: less than 1 million individually and in aggregate). |
(d) | Amounts paid in relation to each type of service are individually less than 1 million. In aggregate the fees paid were 1 million (2015: 1 million; 2014: less than 1 million). |
26. EVENTS AFTER THE BALANCE SHEET DATE
Where events occurring after the balance sheet date provide evidence of conditions that existed at the end of the reporting period, the impact of these events is adjusted within the financial statements. Otherwise, events after the balance sheet date of a material size or nature are disclosed below.
On 26 January 2017 Unilever announced a quarterly dividend with the 2016 fourth quarter results of 0.3201 per NV ordinary share and £0.2768 per PLC ordinary share.
On 1 February 2017 the Group completed the acquisition of Living Proof Inc.
130 | Financial Statements | Annual Report on Form 20-F 2016 |
27. GROUP COMPANIES
AS AT 31 DECEMBER 2016
In accordance with section 409 of the Companies Act 2006 a list of subsidiaries, partnerships, associates, and joint ventures as at 31 December 2016 is set out below. All subsidiary undertakings are subsidiary undertakings of their immediate parent undertaking(s) pursuant to section 1162 (2) (a) of the Companies Act 2006 unless otherwise indicated see the notes on page 143. All subsidiary undertakings not included in the consolidation are not included because they are not material for such purposes. All associated undertakings are included in the Unilever Groups financial statements using the equity method of accounting unless otherwise indicated see the notes on page 143.
Principal group companies are identified in bold. These companies are incorporated and principally operate in the countries under which they are shown.
The aggregate percentage of capital held by the Group is shown in the first column, except where it is 100%.
SUBSIDIARY UNDERTAKINGS INCLUDED IN THE CONSOLIDATION
%
|
Country of
|
Name of Undertaking
|
% holding as between NV/PLC
|
Class of share held in subsidiary undertaking
|
Registered address
| |||||
72.50 | Algeria | Unilever Algérie SPA | NV 72.50 | DZD1,000.00 Ordinary | Zone Industrielle Hassi Ameur Oran 31000 | |||||
Argentina | Alimentos de Soja S.A.U. | NV 64.55 PLC 35.45 | ARA1.00 Ordinary | Tucumán 1, Piso 4°, Cdad. de Buenos Aires | ||||||
Argentina | Arisco S.A. | NV 64.55 PLC 35.45 | ARA1.00 Ordinary | Tucumán 1, Piso 4°, Cdad. de Buenos Aires | ||||||
Argentina | Helket S.A. | NV 64.55 PLC 35.45 | ARA1.00 Ordinary | Mendoza km 7/8 Pocitos, San Juan | ||||||
98 | Argentina | S.A.G.R.A. S.A. | NV 63.26 PLC 34.74 | ARA1.00 Ordinary | Tucumán 1, Piso 4°, Cdad. de Buenos Aires | |||||
Argentina | Unilever de Argentina S.A. | NV 64.55 PLC 35.45 | ARA1.00 Ordinary | Tucumán 1, Piso 4°, Cdad. de Buenos Aires | ||||||
Australia | Ben & Jerrys Franchising Australia Limited | PLC 100 | AUD1.00 Ordinary | Level 17, 2-26 Park Street, Sydney, NSW 2000 | ||||||
Australia | Dermalogica Holdings Pty Limited | PLC 100 | AUD1.00 Ordinary | 111 Chandos Street, Crows Nest, NSW 2065 | ||||||
Australia | Dermalogica Pty Limited | PLC 100 | AUD2.00 Ordinary | 111 Chandos Street, Crows Nest, NSW 2065 | ||||||
Australia | DSC Australia Pty Limited | NV 55.40 PLC 44.60 | AUD1.00 Ordinary | DLA Piper Australia, Level 38, 201 Elizabeth Street, Sydney, NSW 2000 | ||||||
Australia | Tea Too Pty Limited | PLC 100 | AUD1.00 Ordinary | Level 17, 2-26 Park Street, Sydney, NSW 2000 | ||||||
Australia | TIGI Australia Pty Limited | PLC 100 | AUD1.00 Ordinary-A | Level 17, 2-26 Park Street, Sydney, NSW 2000 | ||||||
PLC 100 | AUD1.00 Ordinary-B | |||||||||
Australia | Unilever Australia (Holdings) Pty Limited | PLC 100 | AUD1.00 Ordinary | Level 17, 2-26 Park Street, Sydney, NSW 2000 | ||||||
Australia | Unilever Australia Group Partnership | PLC 100 | Partnership Interest | Level 17, 2-26 Park Street, Sydney, NSW 2000 | ||||||
Australia | Unilever Australia Group Pty Limited | PLC 100 | AUD2.00 Ordinary | Level 17, 2-26 Park Street, Sydney, NSW 2000 | ||||||
Australia | Unilever Australia Limited | PLC 100 | AUD1.00 Ordinary | Level 17, 2-26 Park Street, Sydney, NSW 2000 | ||||||
Australia | Unilever Australia Supply Services Limited | PLC 100 | AUD1.00 Ordinary | Level 17, 2-26 Park Street, Sydney, NSW 2000 | ||||||
Australia | Unilever Australia Trading Limited | PLC 100 | AUD1.00 Ordinary | Level 17, 2-26 Park Street, Sydney, NSW 2000 | ||||||
Austria | Delico Handels GmbH | NV 100 | EUR36,337.00 Ordinary | Stella-Klein-Löw Weg 13, 1023 Wien | ||||||
Austria | Kuner Nahrungsmittel GmbH | NV 100 | EUR36,336.00 Ordinary | Stella-Klein-Löw Weg 13, 1023 Wien | ||||||
Austria | Intuiskin GmbH | NV 100 | EUR35,000.00 Ordinary | Seilerstätte 13, 1010, Wien | ||||||
Austria | TIGI Handels GmbH | NV 100 | EUR36,336.00 Ordinary | Stella-Klein-Löw Weg 13, 1023 Wien | ||||||
Austria | ULPC Handels GmbH | NV 100 | EUR218,019.00 Ordinary | Stella-Klein-Löw Weg 13, 1023 Wien | ||||||
Austria | Unilever Austria GmbH | NV 100 | EUR10,000,000.00 Ordinary | Stella-Klein-Löw Weg 13, 1023 Wien | ||||||
Austria | Unilever BCS Austria GmbH | NV 55.40 PLC 44.60 | EUR35,000.00 Ordinary | Stella-Klein-Löw Weg 13, 1023 Wien | ||||||
60.75 | Bangladesh | Unilever Bangladesh Limited | NV 0 PLC 60.75 | BDT100.00 Ordinary | 51 Kalurghat Heavy Industrial Area, Kalurghat, Chittagong | |||||
Belgium | Intuiskin SPRL | NV 100 | EUR185.50 Ordinary | Rond-Point Schuman, 6 Box 5, 1040 Ettebeek | ||||||
Belgium | Unilever BCS Belgium NV/SA | NV 55.40 PLC 44.60 | No Par Value Ordinary | Humaniteitslaan 292, 1190 Brussels | ||||||
Belgium | Unilever Belgium NV/SA | NV 100 | No Par Value Ordinary | Humaniteitslaan 292, 1190 Brussels | ||||||
Belgium | Unilever Belgium Services SA/NV | NV 100 | No Par Value Ordinary | Humaniteitslaan 292, 1190 Brussels | ||||||
Belgium | Unilever Lipton Tea NV/SA | NV 100 | EUR1.00 Ordinary | Humaniteitslaan 292, 1190 Brussels | ||||||
Bolivia | Unilever Andina Bolivia S.A. | NV 100 | BOB10.00 Ordinary | Av. Blanco Galindo Km. 10.4 Cochabamba | ||||||
Brazil | Alberto Culver Participacoes Limitada | NV 55.40 PLC 44.60 | BRL1.00 Quotas | Rua Líbero Badaró, 293 27° Floor Suite 27D, Room 18 São Paulo/SP | ||||||
Brazil | Alberto-Culver do Brasil Cosmeticos Limitada |
NV 55.40 PLC 44.60 | BRL1.00 Quotas | Rua Caio Prado, 267 Room 13, São Paulo/SP | ||||||
Brazil | Euphoria Ice Cream Comercio de Alimentos Limitada | NV 64.55 PLC 35.45 | BRL1.00 Quotas | São Paulo, Estado de São Paulo, na Rua Pedroso Alvarenga, 1046, sala 147, Itaim Bibi, CEP 04531-004 | ||||||
Brazil | Cicanorte Industria de Conservas Alimenticas S.A. |
NV 64.55 PLC 35.45 | BRL2.80 Ordinary | Rod. BR 101-Norte, s/n, km. 43,6 Room 4, Igarassu /PE | ||||||
Brazil | RGG Comércio E Representações De Produtos De Higiene Pessoal Limitada |
NV 64.55 PLC 35.45 | BRL1.00 Quotas | Av. Presidente Juscelino Kubitschek, 1.309 13° floor Room 19 São Paulo/SP | ||||||
Brazil | Sorvete Escola Comercio de Alimentos Limitada |
NV 64.55 PLC 35.45 | BRL1.00 Quotas | Rua Pedroso Alvarenga, 1046, Suit 146, Itaim Bibi, Sao Paulo | ||||||
Brazil | UB 4 Comércio de Produtos de Limpeza Limitada |
NV 64.55 PLC 35.45 | BRL1.00 Quotas | Av. Presidente Juscelino Kubitschek, 1.309 13° floor Room 29 São Paulo/SP | ||||||
Brazil | UBA 2 Comércio e Representação de Alimentos Limitada |
NV 64.55 PLC 35.45 | BRL1.00 Quotas | Av. Presidente Juscelino Kubitschek, 1.309 13° floor Room 21 São Paulo/SP | ||||||
Brazil | UBI 2 Comercio de Alimentos Limitada | NV 64.55 PLC 35.45 | BRL1.00 Quotas | Av. Presidente Juscelino Kubitschek, 1.309 13° floor Room 24 São Paulo/SP | ||||||
Brazil | UBI 4 Comércio de Alimentos Limitada | NV 64.55 PLC 35.45 | BRL1.00 Quotas | Av. Presidente Juscelino Kubitschek, 1.309 13° floor Room 28 São Paulo/SP | ||||||
Brazil | Unilever Brasil Gelados do Nordeste S.A. | NV 64.55 PLC 35.45 | No Par Value Ordinary A | Rod. BR 232, s/n, km. 13 Jaboatão dos Guararapes/PE | ||||||
NV 64.55 PLC 35.45 | No Par Value Ordinary B | |||||||||
Brazil | Unilever Brasil Gelados Limitada | NV 64.55 PLC 35.45 | BRL1.00 Quotas | Av. Presidente Juscelino Kubitschek, 1.309 13° floor Room 23 | ||||||
Brazil | Unilever Brasil Industrial Limitada | NV 64.55 PLC 35.45 | BRL1.00 Quotas | Av. Presidente Juscelino Kubitschek, 1.309 13° floor Room 4 | ||||||
Brazil | Unilever Brasil Limitada | NV 64.55 PLC 35.45 | BRL1.00 Quotas | Av. Presidente Juscelino Kubitschek, 1.309 12° floor Room 23, part of 13° floor and 14° floor São Paulo/SP | ||||||
50 | Brazil | UP! Alimentos Limitada | NV 32.28 PLC 17.72 | BRL1.00 Quotas | Av. Escola Politécnica, 760, 2° Floor Room 6 São Paulo/SP | |||||
99 | Brazil | Veritas do Brazil Limitada | NV 63.90 PLC 35.10 | BRL1.00 Quotas | Av. Marechal Floriano, 19 Room 1001 Part Rio de Janeiro/RJ | |||||
Bulgaria | Unilever BCS Bulgaria EOOD | NV 55.40 PLC 44.60 | BGN1,000.00 Ordinary | City of Sofia, Borough Mladost, 1, Business Park, Building 3, Floor 1 |
Annual Report on Form 20-F 2016 | Financial Statements | 131 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
UNILEVER GROUP CONTINUED
27. GROUP COMPANIES CONTINUED
%
|
Country of
|
Name of Undertaking
|
% holding as between NV/PLC
|
Class of share held in subsidiary undertaking
|
Registered address
| |||||
Bulgaria | Unilever Bulgaria EOOD | NV 100 | BGN1,000.00 Ordinary | City of Sofia, Borough Mladost, 1, Business Park, Building 3, Floor 1 | ||||||
Cambodia | Unilever (Cambodia) Limited | NV 100 | KHR20,000.00 Ordinary | No. 443A Street 105, Sangkat Boeung Pralit, Khan 7 Makara Phnom Penh Capital | ||||||
Canada | Dermalogica Canada Limited | PLC 100 | No Par Value Class A | 3081, 3rd Avenue, Whitehorse, Yukon Territory, Y1A 4Z7 | ||||||
Common | ||||||||||
Canada | DSC Canada, Inc | NV 55.40 PLC 44.60 | CAD0.01 Common | P.O. Box 49130, 2900 595 Burrard Street, Vancouver BC V7X 1J5 | ||||||
Canada | Rexdale Property Inc. | NV 55.40 PLC 44.60 | No Par Value Common | 195 Belfield Road, Rexdale, Toronto, Ontario M9W 1G9 | ||||||
Canada | Seventh Generation Family & Home ULC | NV 55.40 PLC 44.60 | No Par Value Common | 800-885 West Georgia Street, Vancouver BC V6C 3H1 | ||||||
Canada | Unilever BCS Canada Inc. | NV 55.40 PLC 44.60 | No Par Value Common | 195 Belfield Road, Rexdale, Toronto, Ontario M9W 1G9 | ||||||
Canada | 4012208 Canada Inc. | NV 64.54 PLC 35.46 | No Par Value Common | 1000 rue de la Gauchetière Ouest, Bureau 2500, Montreal H3B 0A2 | ||||||
Canada | Unilever Canada Inc. | NV 64.54 PLC 35.46 | No Par Value Class A | 160 Bloor Street East, Suite 1400, Toronto ON M4W 3R2 | ||||||
NV 64.54 PLC 35.46 | No Par Value Class B | |||||||||
PLC 100 | No Par Value Class C | |||||||||
NV 64.54 PLC 35.46 | No Par Value Class II | |||||||||
Common | ||||||||||
NV 64.54 PLC 35.46 | No Par Value Class III | |||||||||
Common | ||||||||||
Chile | Unilever Chile Limitada | NV 64.55 PLC 35.45 | Membership Interest | Av. Carrascal N°3351, Quinta Normal, Santiago | ||||||
Chile | Unilever Chile SCC Limitada | NV 64.55 PLC 35.45 | Membership Interest | Av. Carrascal N°3351, Quinta Normal, Santiago | ||||||
China | Blueair Shanghai Sales Co. Limited | NV 100 | RMB1,000,000 | Noreste de la Terminal de Contenedores Mariel, aproximadamente 1.6 km, en el Municipio Mariel, Provincia Artemisa | ||||||
67.71 | China | Ningbo Qinyuan Marketing Services Co. | NV 67.71 PLC 0 | CNY1.00 Ordinary | 298, Seaside Avenue, Hangzhou Bay New Zone | |||||
Limited | ||||||||||
67.71 | China | Ningbo Qinyuan Water Equipment Co. | NV 67.71 PLC 0 | CNY1.00 Ordinary | 358, Ci Yi Road, Hangzhou Bay New Zone | |||||
Limited | ||||||||||
67.71 | China | Qinyuan Group Co. Limited | NV 67.71 PLC 0 | CNY1.00 Ordinary | Seaside Avenue, Cixi Econimce and Technical Development Zone (Hangzhou Bay New Zone) | |||||
67.71 | China | Shanghai Qinyuan Environment Protection | NV 67.71 PLC 0 | CNY1.00 Ordinary | Room 23, Hall 5, No. 38, Lane 168, Xing Fu Li Road, Fenjing Town, | |||||
Technology Co. Limited | Jinsham District, Shanghai 201100 | |||||||||
China | Unilever (China) Investing Company Limited | NV 100 | USD1.00 Ordinary | No.33 North Fuquan Road, Shanghai, 200335, | ||||||
China | Unilever (China) Limited | NV 100 | USD1.00 Ordinary | 88 Jinxiu Avenue, Hefei Economic and Technology Development | ||||||
Zone, Hefei, 230601 | ||||||||||
China | Unilever (Tianjin) Company Limited | NV 100 | USD1.00 Ordinary | Jingyi Road and Weiliu Road, Tianjin Airport Economic Area, Tianjin | ||||||
China | Unilever Foods (China) Co. Limited | NV 100 | USD1.00 Ordinary | 1068 Ting Wei Road, Jinshanzui Industrial Region, Jinshan District, Shanghai | ||||||
China | Unilever Services (Hefei) Co. Limited | NV 100 | CNY1.00 Ordinary | 88 Jinxiu Avenue, Hefei Economic and Technology Development Zone, Hefei, 230601 | ||||||
China | Unilever (Sichuan) Company Limited | NV 100 | USD1.00 Ordinary | No. 1 Unilever Avenue, Pengshan Country, Sichuan Province 610016 | ||||||
China | Walls (China) Co. Limited | NV 100 | USD1.00 Ordinary | No.16 Wanyuan Road, Beijing E&T Development, Beijing 100076 | ||||||
67.71 | China | Zhejiang Qinyuan Water Treatment | NV 67.71 PLC 0 | CNY1.00 Ordinary | 358, Ci Yi Road, Hangzhou Bay New Zone | |||||
Technology Co. Limited | ||||||||||
Colombia | Unilever Colombia SCC S.A.S. | NV 100 | COP100.00 Ordinary | Av. El Dorado, No. 69B-45. Bogota Corporate Center Piso 7, Bogotá | ||||||
Colombia | Unilever Andina Colombia Limitada | NV 100 | COP100.00 Ordinary | Av. El Dorado, No. 69B-45. Bogota Corporate Center Piso 7, Bogotá | ||||||
Costa Rica | Unilever de Centroamerica S.A. | NV 100 | CRC1.00 Ordinary | La Asunción de Belén, Planta Industrial Lizano, Autopista Bernardo Soto | ||||||
Costa Rica | Unilever Costa Rica SCC S.A. | NV 100 | CRC1000.00 Ordinary | Provincia de Heredia, Cantón Belén, Distrito de la Asunción, | ||||||
de la intersección Cariari- Belén, 400 Mts. Oeste, 800 Mts., al Norte | ||||||||||
89.98 | Cote DIvoire | Unilever-Cote DIvoire | NV 0 PLC 89.98 | XOF5,000.00 Ordinary | 01 BP 1751 Abidjan 01, Boulevard de Vridi | |||||
Cote DIvoire | Unilever Afrique de lOuest | PLC 100 | CFA 10,000.00 Ordinary | Abidjan-Marcory, Boulevard Valery Giscard dEstaing, | ||||||
Immeuble Plein Ciel, Business Center, 26 BP 1377, Abidjan 26 | ||||||||||
Croatia | Unilever Hrvatska d.o.o. | NV 100 | HRK1.00 Ordinary | Strojarska cesta 20, 10000 Zagreb | ||||||
84 | Cyprus | Unilever Tseriotis Cyprus Limited | NV 0 PLC 84 | EUR1.00 Ordinary | Head Offices, 195C Old Road Nicosia Limassol, CY-2540 Idalion | |||||
Industrial Zone Nicosia | ||||||||||
Czech | Unilever BCS ČR, spol. s r.o. | NV 55.40 PLC 44.60 | CZK100,000.00 Ordinary | Rohanské nábřeí 670/17, Karlín, Praha 8, 186 00 | ||||||
Republic | ||||||||||
Czech | Unilever ČR, spol. s r.o. | PLC 100 | CZK210,000.00 Ordinary | Rohanské nábřeí 670/17, Karlín, Praha 8, 186 00 | ||||||
Republic | ||||||||||
Denmark | Unilever BCS Danmark A/S | NV 55.40 PLC 44.60 | DKK1,000.00 Ordinary | Ørestads Boulevard 73, 2300 København S | ||||||
Denmark | Unilever Danmark A/S | NV 100 | DKK1,000.00 Ordinary | Ørestads Boulevard 73, 2300 København S | ||||||
Denmark | Unilever Production ApS | NV 100 | DKK100.00 Ordinary | Petersmindevej 30, 5000 Odense C | ||||||
73.64 | Denmark | Froosh ApS | NV 0 PLC 73.64 | DKK1,000.00 Ordinary | Lindgreens Alle 12, 3 Sal, 2300 København S | |||||
Dominican | Unilever Caribe, S.A. | NV 100 | DOP1,000.00 Ordinary | Ave. Winston Churchill, Torre Acrópolis Piso 17, Santo Domingo | ||||||
Republic | ||||||||||
Ecuador | Unilever Andina Ecuador S.A. | NV 100 | USD1.00 Ordinary | Km 25 Vía a Daule, Guayaquil | ||||||
Egypt | Fine Tea Co (SAE) | PLC 100 | EGP2.00 Ordinary | Bourg El-Arab City, Alexandria | ||||||
Egypt | Unilever Mashreq Foods (SAE) | PLC 100 | EGP20.00 Ordinary | Bourg El-Arab City, Alexandria | ||||||
Egypt | Unilever Mashreq Home Care (SAE) | PLC 100 | EGP2.00 Ordinary | 6th of October City, 4th Industrial Zone, Piece Number 68, Giza | ||||||
Egypt | Unilever Mashreq International Company | PLC 100 | USD1000.00 Ordinary | 14th May Bridge, Ezbet Hegazy, Alexandria | ||||||
60 | Egypt | Unilever Mashreq Trading LLC | NV 0 PLC 60 | EGP10.00 Ordinary | Industrial Zone 14th May Bridge, Smouha, Alexandria | |||||
Egypt | Unilever Mashreq Personal Care (SAE) | PLC 100 | EGP10.00 Ordinary | 6th of October City, 4th Industrial Zone, Piece Number 68, Giza | ||||||
Egypt | Unilever Mashreq Tea (SAE) | PLC 100 | EGP100.00 Ordinary | Bourg El-Arab City, 1st Industrial Zone, Block 11, Piece Number 5, | ||||||
Alexandria | ||||||||||
El Salvador | Unilever El Salvador SCC S.A. de C.V. | NV 100 | USD1.00 Ordinary | Boulevard del Ejercito Nacional, Km. 3 1/2, San Salvador | ||||||
El Salvador | Unilever de Centro America S.A. | NV 100 | USD100.00 Ordinary | Boulevard del Ejercito Nacional, Km. 3 1/2, San Salvador | ||||||
England | Accantia Group Holdings | NV 5.61 PLC 94.39 | GBP0.01 Ordinary | Unilever House, 100 Victoria Embankment, London, EC4Y 0DY | ||||||
and Wales | (unlimited company) | |||||||||
England | Alberto-Culver (Europe) Limited | NV 55.40 PLC 44.60 | GBP1.00 Ordinary | Unilever House, 100 Victoria Embankment, London, EC4Y 0DY | ||||||
and Wales |
132 | Financial Statements | Annual Report on Form 20-F 2016 |
27. GROUP COMPANIES CONTINUED
%
|
Country of
|
Name of Undertaking
|
% holding as between NV/PLC
|
Class of share held in subsidiary undertaking
|
Registered address
| |||||
England and Wales | Alberto-Culver Company (U.K.) Limited | NV 5.61 PLC 94.39 | GBP1.00 Ordinary | Unilever House, Springfield Drive, Leatherhead, KT22 7GR | ||||||
England and Wales | Alberto-Culver Group Limited | NV 55.40 PLC 44.60 | GBP1.00 Ordinary | Unilever House, 100 Victoria Embankment, London, EC4Y 0DY | ||||||
England and Wales | Alberto-Culver UK Holdings Limited | NV 55.40 PLC 44.60 | GBP1.00 Ordinary | Unilever House, 100 Victoria Embankment, London, EC4Y 0DY | ||||||
England and | Alberto-Culver UK Products Limited | NV 55.40 PLC 44.60 | GBP1.00 Ordinary | Unilever House, 100 Victoria Embankment, London, EC4Y 0DY | ||||||
Wales | NV 55.40 PLC 44.60 | GBP5.00 Preference |
||||||||
England and Wales | Associated Enterprises Limited° | PLC 100 | GBP1.00 Ordinary | Unilever House, 100 Victoria Embankment, London, EC4Y 0DY | ||||||
England and Wales | BBG Investments (France) Limited | PLC 100 | GBP1.00 Ordinary | Unilever House, 100 Victoria Embankment, London, EC4Y 0DY | ||||||
England and Wales | Brooke Bond Assam Estates Limited | PLC 100 | GBP1.00 Ordinary | Unilever House, 100 Victoria Embankment, London, EC4Y 0DY | ||||||
England and Wales | Brooke Bond Group Limited° | PLC 100 | GBP0.25 Ordinary | Unilever House, 100 Victoria Embankment, London, EC4Y 0DY | ||||||
England and | Brooke Bond South India Estates Limited° | PLC 100 | GBP1.00 Ordinary | Unilever House, 100 Victoria Embankment, London, EC4Y 0DY | ||||||
Wales | PLC 100 | GBP1.00 Redeemable Preference | ||||||||
England and Wales | CPC (UK) Pension Trust Limited | PLC 100 | Limited by Guarantee | Unilever House, 100 Victoria Embankment, London, EC4Y 0DY | ||||||
England and Wales | Dermalogica (UK) Limited | PLC 100 | GBP1.00 Ordinary | The Manser Building, Thorncroft Manor, Thorncroft Drive, Dorking, KT22 8JB | ||||||
England and Wales | Intuiskin Limited | NV 100 | GBP1.00 Ordinary | 16 Great Queen Street, Covent Garden, London, WC2B 5AH | ||||||
England and | Margarine Union (1930) Limited° | PLC 100 | GBP0.01 Estate | Unilever House, 100 Victoria Embankment, London, EC4Y 0DY | ||||||
Wales | PLC 100 | GBP1.00 Ordinary | ||||||||
PLC 100 | GBP1.00 Viscountcy | |||||||||
England and Wales | MBUK Trading Limited | PLC 100 | GBP1.00 Ordinary | Unilever House, 100 Victoria Embankment, London, EC4Y 0DY | ||||||
England and Wales | Mixhold Investments Limited | PLC 100 | GBP1.00 Ordinary | Unilever House, 100 Victoria Embankment, London, EC4Y 0DY | ||||||
England and Wales | Murad Europe Limited | PLC 100 | GBP1.00 Ordinary | Unilever House, 100 Victoria Embankment, London, EC4Y 0DY | ||||||
England and Wales | Ren Limited | PLC 100 | GBP1.00 Ordinary | 1st Floor, 16 Charles II Street, London, SW1Y 4QU | ||||||
England and Wales | Ren Skincare Limited | PLC 100 | GBP1.00 Ordinary | The Edison, 223 231 Old Marylebone Road, London, NW1 5QT | ||||||
England and Wales | T2 Tea (UK) Limited | PLC 100 | GBP1.00 Ordinary | Unilever House, 100 Victoria Embankment, London, EC4Y 0DY | ||||||
England and Wales | TIGI Holdings Limited | PLC 100 | GBP1.00 Ordinary | Unilever House, 100 Victoria Embankment, London, EC4Y 0DY | ||||||
England and Wales | TIGI International Limited | PLC 100 | GBP1.00 Ordinary | Unilever House, Springfield Drive, Leatherhead, KT22 7GR | ||||||
England and Wales | TIGI Limited | PLC 100 | GBP1.00 Ordinary | Unilever House, 100 Victoria Embankment, London, EC4Y 0DY | ||||||
England and Wales | Toni & Guy Products Limited° | PLC 100 | GBP0.001 Ordinary | Unilever House, 100 Victoria Embankment, London, EC4Y 0DY | ||||||
England and Wales | UAC International Limited | PLC 100 | GBP1.00 Ordinary | Unilever House, 100 Victoria Embankment, London, EC4Y 0DY | ||||||
England and Wales | UML Limited | PLC 100 | GBP1.00 Ordinary | Unilever House, 100 Victoria Embankment, London, EC4Y 0DY | ||||||
England and Wales | Unidis Forty Nine Limited | PLC 100 | GBP1.00 Ordinary | Unilever House, 100 Victoria Embankment, London, EC4Y 0DY | ||||||
England and | Unilever Australia Investments Limited | PLC 100 | AUD10.00 Ordinary-A | Unilever House, 100 Victoria Embankment, London, EC4Y 0DY | ||||||
Wales | PLC 100 | GBP1.00 Ordinary | ||||||||
England and | Unilever Australia Partnership Limited | PLC 100 | AUD10.00 Ordinary-A | Unilever House, 100 Victoria Embankment, London, EC4Y 0DY | ||||||
Wales | PLC 100 | GBP1.00 Ordinary | ||||||||
England and | Unilever Australia Services Limited | PLC 100 | AUD10.00 Ordinary-A | Unilever House, 100 Victoria Embankment, London, EC4Y 0DY | ||||||
Wales | PLC 100 | GBP1.00 Ordinary | ||||||||
England and Wales | Unilever BCS Limited | NV 55.40 PLC 44.60 | GBP1.00 Ordinary | Unilever House, 100 Victoria Embankment, London, EC4Y 0DY | ||||||
England and | Unilever BCS UK Limited° | NV 55.40 PLC 44.60 | GBP1.00 Ordinary | Unilever House, 100 Victoria Embankment, London, EC4Y 0DY | ||||||
Wales | PLC 100 | GBP1.00 Redeemable Golden Share |
||||||||
England and Wales | Unilever BCS UK Services Limited° | NV 55.40 PLC 44.60 PLC 100 | GBP1.00 Ordinary GBP1.00 Redeemable Golden Share |
Unilever House, 100 Victoria Embankment, London, EC4Y 0DY | ||||||
England and Wales | Unilever Company for Industrial Development Limited | PLC 100 | GBP1.00 Ordinary | Unilever House, 100 Victoria Embankment, London, EC4Y 0DY | ||||||
England and Wales | Unilever Company for Regional Marketing and Research Limited | PLC 100 | GBP1.00 Ordinary | Unilever House, 100 Victoria Embankment, London, EC4Y 0DY | ||||||
England and Wales | Unilever Corporate Holdings Limited° | PLC 100 | GBP1.00 Ordinary | Unilever House, 100 Victoria Embankment, London, EC4Y 0DY | ||||||
England and Wales | Unilever Employee Benefit Trustees Limited | PLC 100 | GBP1.00 Ordinary | Unilever House, 100 Victoria Embankment, London, EC4Y 0DY | ||||||
England and Wales | Unilever General Partner (Colworth Park) Limited | PLC 100 | GBP1.00 Ordinary | Unilever House, 100 Victoria Embankment, London, EC4Y 0DY |
Annual Report on Form 20-F 2016 | Financial Statements | 133 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
UNILEVER GROUP CONTINUED
27. GROUP COMPANIES CONTINUED
%
|
Country of
|
Name of Undertaking
|
% holding as between NV/PLC
|
Class of share held in subsidiary undertaking
|
Registered address
| |||||
England | Unilever Innovations Limited | PLC 100 | GBP1.00 Deferred | Unilever House, 100 Victoria Embankment, London, EC4Y 0DY | ||||||
and Wales | PLC 100 | GBP0.10 Ordinary | ||||||||
England and Wales | Unilever Overseas Holdings Limited° | PLC 100 | GBP1.00 Ordinary | Unilever House, 100 Victoria Embankment, London, EC4Y 0DY | ||||||
England | Unilever Pension Trust Limited | PLC 100 | GBP1.00 Ordinary | Unilever House, Springfield Drive, Leatherhead, KT22 7GR | ||||||
and Wales | ||||||||||
England and Wales | Unilever Superannuation Trustees Limited | PLC 100 | GBP1.00 Ordinary | Unilever House, 100 Victoria Embankment, London, EC4Y 0DY | ||||||
England and Wales | Unilever U.K. Central Resources Limited | PLC 100 | GBP1.00 Ordinary | Unilever House, 100 Victoria Embankment, London, EC4Y 0DY | ||||||
England and Wales | Unilever U.K. Holdings Limited° | PLC 100 | GBP1.00 Ordinary | Unilever House, 100 Victoria Embankment, London, EC4Y 0DY | ||||||
England | Unilever UK & CN Holdings Limited | PLC 100 | GBP10.00 Class A | Unilever House, 100 Victoria Embankment, London, EC4Y 0DY | ||||||
and Wales | Redeemable Preference | |||||||||
PLC 100 | GBP10.00 Class B | |||||||||
Redeemable Preference | ||||||||||
PLC 100 | GBP1.00 Ordinary-A | |||||||||
PLC 100 | GBP1.00 Ordinary-B | |||||||||
England | Unilever UK Group Limited | NV 49.86 PLC 50.14 | GBP1.00 Ordinary-A | Unilever House, 100 Victoria Embankment, London, EC4Y 0DY | ||||||
and Wales | NV 1.67 PLC 98.33 | GBP1.00 Ordinary-B | ||||||||
NV 5.61 PLC 94.39 | GBP1.00 Ordinary-C | |||||||||
England and Wales | Unilever UK Limited | NV 5.61 PLC 94.39 | GBP1.00 Ordinary | Unilever House, Springfield Drive, Leatherhead, KT22 7GR | ||||||
England and Wales | Unilever UK Pension Fund Trustees Limited | PLC 100 | GBP1.00 Ordinary | Unilever House, Springfield Drive, Leatherhead, KT22 7GR | ||||||
England and Wales | Unilever US Investments Limited° | PLC 100 | GBP1.00 Ordinary | Unilever House, 100 Victoria Embankment, London, EC4Y 0DY | ||||||
86.25 | England and Wales | Unilever Ventures III Limited Partnership | NV 57.50 PLC 28.75 | Partnership Interest | 1st Floor, 16 Charles II Street, London, SW1Y 4QU | |||||
England and Wales | Unilever Ventures Limited | PLC 100 | GBP1.00 Ordinary | Unilever House, 100 Victoria Embankment, London, EC4Y 0DY | ||||||
England | United Holdings Limited° | PLC 100 | GBP1.00 Ordinary | Unilever House, 100 Victoria Embankment, London, EC4Y 0DY | ||||||
and Wales | NV 99.67 PLC 0.33 | GBP500.00 Preferred | ||||||||
England and Wales | USF Nominees Limited | PLC 100 | GBP1.00 Ordinary | Unilever House, Springfield Drive, Leatherhead, KT22 7GR | ||||||
Estonia | Unilever Eesti AS | NV 100 | EUR6.30 Ordinary | Kalmistu tee 28a, Tallinna linn, Harju maakond, 11216 | ||||||
Ethiopia | Unilever Manufacturing PLC | PLC 100 | ETB1,000.00 Ordinary | Bole Sub City, Kebele 03/05, Lidiya Building, Addis Ababa | ||||||
Finland | Unilever Finland Oy | NV 100 | EUR16.82 Ordinary | Post Box 254, 00101 Helsinki | ||||||
Finland | Unilever Ingman Production Oy | NV 100 | EUR1.00 Ordinary | Post Box 254, 00101 Helsinki | ||||||
Finland | Unilever Spreads Finland Oy | NV 55.40 PLC 44.60 | EUR1,250.00 Ordinary | Roineentie 10, 00510 Helsinki | ||||||
73.64 | Finland | Froosh OY | NV 0 PLC 73.64 | EUR25.00 Ordinary | Energiataku 3, 00180 Helsinki | |||||
99.99 | France | Alsa France S.A.S. | NV 64.54 PLC 35.45 | No Par Value Ordinary | 20, rue des Deux Gares, 92500, Ruiel-Malmaison | |||||
99.99 | France | Amora Maille Societe Industrielle S.A.S. | NV 64.54 PLC 35.45 | No Par Value Ordinary | ZI de la Norge Chevigny Saint-Sauveur, 21800 Quetigny | |||||
99.99 | France | Bestfoods France Industries S.A.S. | NV 64.54 PLC 35.45 | No Par Value Ordinary | 20, rue des Deux Gares, 92500, Rueil-Malmaison | |||||
99.99 | France | Cogesal-Miko S.A.S. | NV 64.54 PLC 35.45 | No Par Value Ordinary | 20, rue des Deux Gares, 92500, Rueil-Malmaison | |||||
99.99 | France | Fralib Sourcing Unit S.A.S. | NV 64.54 PLC 35.45 | No Par Value Ordinary | 20, rue des Deux Gares, 92500, Rueil-Malmaison | |||||
France | Grom France S.a.r.l | NV 100 | EUR10,000.00 Ordinary | 81 Rue De Seine, 75006 Paris | ||||||
France | Intuiskin S.A.S. | NV 100 | EUR1.00 Ordinary | Parc activillage des Fontaines 38926 Crolles Cedex | ||||||
France | Pégase S.A.S. | NV 64.54 PLC 35.45 | EUR50.00 Ordinary | 6 rue des Frères Caudron, 78 140 Velizy Villacoublay | ||||||
99.99 | France | Relai Dor Centrale S.A.S | NV 64.54 PLC 35.45 | No Par Value Ordinary | 7, rue Armand Peugeot 92500 Rueil-Malmaison | |||||
99.99 | France | Saphir S.A.S. | NV 64.54 PLC 35.45 | EUR1.00 Ordinary | 20, rue des Deux Gares, 92500, Rueil-Malmaison | |||||
99.99 | France | Sfejer S.A.S. | NV 64.54 PLC 35.45 | No Par Value Ordinary | 20, rue des Deux Gares, 92500, Rueil-Malmaison | |||||
99.99 | France | Tigi Services France S.A.S. | NV 64.54 PLC 35.45 | No Par Value Ordinary | 20, rue des Deux Gares, 92500, Rueil-Malmaison | |||||
France | Unilever BCS France S.A.S. | NV 55.40 PLC 44.60 | No Par Value Ordinary | 20, rue des Deux Gares, 92500, Rueil-Malmaison | ||||||
99.99 | France | Unilever France S.A.S. | NV 64.54 PLC 35.45 | No Par Value Ordinary | 20, rue des Deux Gares, 92500, Rueil-Malmaison | |||||
99.99 | France | Unilever France Holdings S.A.S. | NV 64.54 PLC 35.45 | EUR1.00 Ordinary | 20, rue des Deux Gares, 92500, Rueil-Malmaison | |||||
99.99 | France | Unilever France HPC Industries S.A.S. | NV 64.54 PLC 35.45 | EUR1.00 Ordinary | 20, rue des Deux Gares, 92500, Rueil-Malmaison | |||||
99.99 | France | Unilever Retail Organization France | NV 64.54 PLC 35.45 | No Par Value Ordinary | 20, rue des Deux Gares, 92500, Rueil-Malmaison | |||||
Germany | Dermalogica GmbH | NV 100 | EUR25,000.00 Ordinary | Gerresheimer Landstraße 71, 40627 Düsseldorf | ||||||
99.99 | Germany | DU Gesellschaft für | NV 64.54 PLC 35.45 | DEM50,000.00 Ordinary | Am Strandkai 1, 20457 Hamburg | |||||
Arbeitnehmerüberlassung mbH | ||||||||||
99.99 | Germany | Maizena Grundstücksverwaltung GmbH | NV 63.60 PLC 36.39 | Partnership Interest | Schultetusstraße 37, 17153 Stavenhagen | |||||
& Co. OHG | ||||||||||
99.99 | Germany | Pfanni GmbH & Co. OHG | NV 64.54 PLC 35.45 | Partnership Interest | Schultetusstraße 37, 17153 Stavenhagen | |||||
Germany | Rizofoor GmbH | NV 96.45 PLC 3.55 | EUR15,350.00 Ordinary | Schultetusstraße 37, 17153 Stavenhagen | ||||||
NV 100 | EUR138,150.00 Ordinary | |||||||||
Germany | Schafft GmbH | NV 64.55 PLC 35.45 | EUR63,920.00 Ordinary | Schultetusstraße 37, 17153 Stavenhagen | ||||||
NV 64.55 PLC 35.45 | EUR100,000.00 Ordinary | |||||||||
Germany | TIGI Eurologistic GmbH | PLC 100 | EUR100.00 Ordinary | Hertzstraße 6, 71083 Herrenberg-Gülstein | ||||||
PLC 100 | EUR24.900.00 Ordinary | |||||||||
Germany | TIGI Haircare GmbH | PLC 100 | EUR25,600.00 Ordinary | Hertzstraße 6, 71083 Herrenberg-Gülstein | ||||||
Germany | UBG Vermietungs GmbH | NV 64.74 PLC 35.26 | EUR136,377,489.00 | Schultetusstraße 37, 17153 Stavenhagen | ||||||
Ordinary | ||||||||||
Germany | Unilever BCS Deutschland GmbH | NV 55.40 PLC 44.60 | EUR25,000.00 Ordinary | Am Strandkai 1, 20457 Hamburg | ||||||
Germany | Unilever BCS Deutschland Immobilien | NV 66.22 PLC 33.78 | Partnership Interest | Am Strandkai 1, 20457 Hamburg | ||||||
Leasing GmbH & Co. OHG |
134 | Financial Statements | Annual Report on Form 20-F 2016 |
27. GROUP COMPANIES CONTINUED
%
|
Country of
|
Name of Undertaking
|
% holding as between NV/PLC
|
Class of share held in subsidiary undertaking
|
Registered address
| |||||
Germany | Unilever BCS IP Deutschland GmbH & Co. OHG | NV 64.45 PLC 35.55 | Partnership Interest | Am Strandkai 1, 20457 Hamburg | ||||||
Germany | Unilever BCS Sourcing Deutschland GmbH & Co. OHG | NV 64.45 PLC 35.55 | Partnership Interest | Am Strandkai 1, 20457 Hamburg | ||||||
Germany | Unilever BCS Verwaltungs GmbH | NV 55.40 PLC 44.60 | EUR25.000,00 Ordinary | Am Strandkai 1, 20457 Hamburg | ||||||
Germany | Unilever Deutschland GmbH | NV 64.55 PLC 35.45 | EUR90,000,000.00 Ordinary | Am Strandkai 1, 20457 Hamburg | ||||||
NV 64.55 PLC 35.45 | EUR2,000,000.00 Ordinary | |||||||||
NV 64.55 PLC 35.45 | EUR1,000,000.00 Ordinary | |||||||||
Germany | Unilever Deutschland Holding GmbH | NV 64.55 PLC 35.45 | EUR39,000.00 Ordinary | Am Strandkai 1, 20457 Hamburg | ||||||
NV 64.55 PLC 35.45 | EUR18,000.00 Ordinary | |||||||||
NV 64.55 PLC 35.45 | EUR14,300.00 Ordinary | |||||||||
NV 64.55 PLC 35.45 | EUR5.200.00 Ordinary | |||||||||
NV 64.55 PLC 35.45 | EUR6,500.00 Ordinary | |||||||||
Germany | Unilever Deutschland Immobilien Leasing GmbH & Co. OHG | NV 66.33 PLC 33.67 | Partnership Interest | Schultetusstraße 37, 17153 Stavenhagen | ||||||
Germany | Unilever Deutschland IPR GmbH & Co. OHG | NV 64.55 PLC 35.45 | Partnership Interest | Schultetusstraße 37, 17153 Stavenhagen | ||||||
Germany | Unilever Deutschland Produktions GmbH & Co. OHG | NV 64.55 PLC 35.45 | Partnership Interest | Am Strandkai 1, 20457 Hamburg | ||||||
Germany | Unilever Deutschland Produktions Verwaltungs GmbH | NV 64.55 PLC 35.45 | EUR179,000.00 Ordinary | Am Strandkai 1, 20457 Hamburg | ||||||
Germany | Unilever Deutschland Supply Chain Services GmbH | NV 64.55 PLC 35.45 | EUR51,150.00 Ordinary | Am Strandkai 1, 20457 Hamburg | ||||||
Ghana | Millers Swanzy (Ghana) Limited | PLC 100 | GHC1.00 Ordinary | Swanmill, Kwame Nkrumah Avenue, Accra | ||||||
66.56 | Ghana | Unilever Ghana Investments Limited | NV 0 PLC 66.56 | GHC10.00 Ordinary | Plot No. Ind/A/3A-4, Heavy Industrial Area, Tema | |||||
66.56 | Ghana | Unilever Ghana Limited | NV 0 PLC 66.56 | GHC0.0192 Ordinary | Plot No. Ind/A/3A-4, Heavy Industrial Area, Tema | |||||
Greece | Elais Unilever Hellas SA | NV 100 | EUR10.00 Ordinary | Kymis ave & 10, Seneka str. GR-145 64 Kifissia | ||||||
Greece | Elanthi SA | NV 100 | EUR10.00 Ordinary | Kymis ave & 10, Seneka str. GR-145 64 Kifissia | ||||||
Greece | Unilever Knorr SA | NV 100 | EUR10.00 Ordinary | Kymis ave & 10, Seneka str. GR-145 64 Kifissia | ||||||
Greece | UL BCS Logistics Consulting SA | NV 100 | EUR10.00 Ordinary | Kymis ave & 10, Seneka str. GR-145 64 Kifissia | ||||||
Greece | Unilever Logistics SA | NV 100 | EUR10.00 Ordinary | Kymis ave & 10, Seneka str. GR-145 64 Kifissia | ||||||
Guatemala | Unilever de Centroamerica S.A. Guatemala | NV 100 | GTQ60.00 Ordinary | Diagonal 6. 10-50 zona 10, Ciudad de Guatemala. Nivel 17 Torre Norte Ed. Interamericas World Financial Center | ||||||
Guatemala | Unilever Guatemala SCC S.A. | NV 100 | GTQ100.00 Ordinary | 24 Avenida , Calzada Atanacio Tzul, 35-87 Zona 12 Ciudad de Guatemala | ||||||
Honduras | Unilever de Centroamerica S.A. Honduras | NV 100 | HNL10.00 Ordinary | Anillo Periférico 600 metros después de la colonia, Residencial Las Uvas contigua acceso de colonia residencial, Tegucigalpa | ||||||
Hong Kong | Blueair Asia Limited | NV 100 | HKD0.01 Ordinary | Suite 1106-8, 11/F, Tai Yau Building, 181 Johnston Road, Wanchai | ||||||
Hong Kong | Kate Somerville Skincare, Hong Kong Limited | NV 100 | HKD1.00 Ordinary | Room 1505, Wheelock House, 20 Pedder Street, Central | ||||||
Hong Kong | Unilever Hong Kong Limited | NV 64.55 PLC 35.45 | HKD0.10 Ordinary | 6 Dai Fu Street, Tai Po Industrial Estate, N.T. | ||||||
Hungary | Multifrozen Kereskedelmi Kft | PLC 100 | HUF1.00 Ordinary | 1138-Budapest, Váci u. 182 | ||||||
Hungary | Unilever BCS Hungary Kft | NV 55.40 PLC 44.60 | HUF1.00 Ordinary | 1138-Budapest, Váci u. 182 | ||||||
Hungary | Unilever Magyarország Kft | PLC 100 | HUF1.00 Ordinary | 1138-Budapest, Váci u. 182 | ||||||
67.20 | India | Bhavishya Alliance Child Nutrition Initiatives | NV 0 PLC 67.20 | INR10.00 Ordinary | Unilever House, B. D. Sawant Marg, Chakala, Andheri (E), Mumbai 400 099 | |||||
India | Blueair Limited | NV 99.98 PLC 0.02 | INR10. 00 Ordinary | S-327, Greater Kailash II, New Delhi 110048, Delhi | ||||||
67.20 | India | Daverashola Estates Private Limited | NV 0 PLC 67.20 | INR10.00 Ordinary | Unilever House, B. D. Sawant Marg, Chakala, Andheri (E), Mumbai 400 099 | |||||
67.20 | India | Hindlever Trust Limited | NV 0 PLC 67.20 | INR10.00 Ordinary | Unilever House, B. D. Sawant Marg, Chakala, Andheri (E), Mumbai 400 099 | |||||
67.20 | India | Hindustan Unilever Limited° | NV 0 PLC 67.20 | INR1.00 Ordinary | Unilever House, B. D. Sawant Marg, Chakala, Andheri (E), Mumbai 400 099 | |||||
67.20 | India | Jamnagar Properties Private Limited | NV 0 PLC 67.20 | INR10.00 Ordinary | Unilever House, B. D. Sawant Marg, Chakala, Andheri (E), Mumbai 400 099 | |||||
67.20 | India | Lakme Lever Private Limited | NV 0 PLC 67.20 | INR10.00 Ordinary | 1st Floor, Shreeniwas House, H. Somani Marg, (behind Bombay Gymkhana) Fort, Mumbai 40001 | |||||
67.20 | India | Levers Associated Trust Limited | NV 0 PLC 67.20 | INR10.00 Ordinary | Unilever House, B. D. Sawant Marg, Chakala, Andheri (E), Mumbai 400 099 | |||||
67.20 | India | Levindra Trust Limited | NV 0 PLC 67.20 | INR10.00 Ordinary | Unilever House, B. D. Sawant Marg, Chakala, Andheri (E), Mumbai 400 099 | |||||
67.20 | India | Ponds Exports Limited | NV 0 PLC 67.20 | INR1.00 Ordinary | Unilever House, B. D. Sawant Marg, Chakala, Andheri (E), Mumbai 400 099 | |||||
67.20 | India | Unilever India Exports Limited | NV 0 PLC 67.20 | INR10.00 Ordinary | Unilever House, B. D. Sawant Marg, Chakala, Andheri (E), Mumbai 400 099 | |||||
India | Unilever Industries Private Limited° | PLC 100 | INR10.00 Ordinary | Unilever House, B. D. Sawant Marg, Chakala, Andheri (E), Mumbai 400 099 | ||||||
India | Unilever Ventures India Advisory Private Limited | PLC 100 | INR1.00 Ordinary | Unilever House, B. D. Sawant Marg, Chakala, Andheri (E), Mumbai 400 099 | ||||||
84.99 | Indonesia | PT Unilever Indonesia Tbk | NV 54.86 PLC 30.13 | IDR10.00 Ordinary | Grha Unilever, Green Office Park Kav 3, Jalan BSD Boulevard Barat, BSD City, Tangerang, 15345 | |||||
99.26 | Indonesia | PT Unilever Enterprises Indonesia | NV 64.07 PLC 35.19 | IDR1,000.00 Ordinary | Grha Unilever, Green Office Park Kav 3, Jalan BSD Boulevard Barat, BSD City, Tangerang, 15345 | |||||
Indonesia | PT Unilever Oleochemical Indonesia | NV 100 | IDR1,000,000.00 Ordinary | KEK Sei Mangkei, Nagori Sei Mangkei, Kecamatan Bosar Maligas, Kabupaten Simalungun 21183, Sumatera Utara | ||||||
99.35 | Iran | Unilever Iran (Private Joint Stock Company) | NV 99.35 PLC 0 | IRR1,000,000.00 Ordinary | 137 Shiraz Building, Corner of the 21st Street, Khaled Eslamboli Ave, Tehran | |||||
Ireland | Lipton Soft Drinks (Ireland) Limited | PLC 100 | EUR1.26 Ordinary | 20 Riverwalk, National Digital Park, Citywest Business Campus Dublin 24 |
Annual Report on Form 20-F 2016 | Financial Statements | 135 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
UNILEVER GROUP CONTINUED
27. GROUP COMPANIES CONTINUED
%
|
Country of
|
Name of Undertaking
|
% holding as between NV/PLC
|
Class of share held in subsidiary undertaking
|
Registered address
| |||||
Ireland | Unilever BCS Ireland Limited | NV 55.40 PLC 44.60 | EUR1.00 Ordinary | 20 Riverwalk, National Digital Park, Citywest Business Campus Dublin 24 | ||||||
Ireland | Unilever Ireland (Holdings) Limited | PLC 100 | EUR1.26 Ordinary | 20 Riverwalk, National Digital Park, Citywest Business Campus Dublin 24 | ||||||
Ireland | Unilever Ireland Limited | PLC 100 | EUR1.26 Ordinary | 20 Riverwalk, National Digital Park, Citywest Business Campus Dublin 24 | ||||||
Ireland | Unilever Superannuation (Ireland) Trust Limited | PLC 100 | EUR1.26 Ordinary | 20 Riverwalk, National Digital Park, Citywest Business Campus Dublin 24 | ||||||
Isle of Man | Rational International Enterprises Limited | PLC 100 | USD1.00 Ordinary | Bridge Chambers, West Quay, Ramsey, Isle of Man, IM8 1DL | ||||||
Israel | Beigel & Beigel Mazon (1985) Limited | NV 12.8 PLC 87.2 | ILS1.00 Ordinary | 3 Gilboa St. Airport City, Ben Gurion Airport | ||||||
Israel | Bestfoods TAMI Holdings Limited | NV 25.11 PLC 74.89 | ILS0.001 Ordinary | 52 Julius Simon Street, Haifa | ||||||
Israel | Glidat Strauss Limited | PLC 100 | ILS1.00 Management | Haharoshet 1, PO Box 2288, Akko, 24122 | ||||||
PLC 100 | ILS1.00 Ordinary | |||||||||
NV 0 PLC 0 | ILS1.00 Dormant | |||||||||
Israel | Israel Vegetable Oil Company Limited | NV 25.11 PLC 74.89 | ILS0.0001 Ordinary | 52 Julius Simon Street, Haifa | ||||||
Israel | Lever Distribution of Personal and | PLC 100 | ILS0.0001 Ordinary | 52 Julius Simon Street, Haifa | ||||||
Cleaning Products Limited | ||||||||||
Israel | Unilever Israel Foods Limited | NV 25.10 PLC 74.90 | ILS0.10 Class A | 52 Julius Simon Street, Haifa | ||||||
NV 25.10 PLC 74.90 | ILS0.10 Class B | |||||||||
NV 25.10 PLC 74.90 | ILS0.10 Class C | |||||||||
NV 25.10 PLC 74.90 | ILS0.0002 Special | |||||||||
Israel | Unilever Israel Home and Personal Care | PLC 100 | ILS1.00 Ordinary | 52 Julius Simon Street, Haifa | ||||||
Limited | ||||||||||
Israel | Unilever Israel Marketing Limited | NV 25.11 PLC 74.89 | ILS0.0001 Ordinary | 52 Julius Simon Street, Haifa | ||||||
Israel | Unilever Shefa Israel Limited | NV 25.11 PLC 74.89 | ILS1.00 Ordinary | 52 Julius Simon Street, Haifa | ||||||
Italy | Gromart S.R.L. | NV 100 | EUR1,815,800.00 Ordinary | Piazza Paleocapa 1/D, 10100, Torino | ||||||
51 | Italy | G.L.L. S.R.L. | NV 51 PLC 0 | EUR40,000.00 Common | Via Crea 10, 10095, Grugliasco | |||||
Italy | Grom-PD S.R.L. | NV 100 | EUR40,000.00 Common | Via Roma 101, 35122, Padova | ||||||
Italy | Intuiskin S.R.L. | NV 100 | EUR10,000.00 Ordinary | Via Tortona 25, cap 20144 Milano | ||||||
Italy | Unilever BCS Italia S.R.L. | NV 55.40 PLC 44.60 | EUR10,000.00 Ordinary | Via Paolo di Dono 3/A 00142 Roma | ||||||
Italy | Unilever Italia Administrative Services S.R.L. | NV 100 | EUR70,000.00 Ordinary | Piazzale Biancamano n.8, 20121, Milano | ||||||
Italy | Unilever Italia Logistics S.R.L. | NV 100 | EUR600,000.00 Ordinary | Via Paolo di Dono 3/A 00142 Roma | ||||||
Italy | Unilever Italia Manufacturing S.R.L. | NV 100 | EUR10,000,000.00 Ordinary | Via Paolo di Dono 3/A 00142 Roma | ||||||
Italy | Unilever Italia Mkt Operations S.R.L. | NV 100 | EUR25,000,000.00 Ordinary | Via Paolo di Dono 3/A 00142 Roma | ||||||
Italy | Unilever Italy Holdings S.R.L. | NV 100 | EUR200,000,000.00 | Via Paolo di Dono 3/A 00142 Roma | ||||||
Ordinary | ||||||||||
Japan | Unilever Japan Beverage K.K. | NV 100 | JPY50,000.00 Ordinary | 2-1-1, Kamimeguro, Meguro-ku, Tokyo 153-8578 | ||||||
Japan | Unilever Japan Customer Marketing K.K. | NV 100 | JPY50,000.00 Ordinary | 2-1-1, Kamimeguro, Meguro-ku, Tokyo 153-8578 | ||||||
Japan | Unilever Japan Holdings K.K. | NV 100 | JPY10,000.00 Ordinary | 2-1-1, Kamimeguro, Meguro-ku, Tokyo 153-8578 | ||||||
Japan | Unilever Japan K.K. | NV 100 | JPY50,000.00 Ordinary | 2-1-1, Kamimeguro, Meguro-ku, Tokyo 153-8578 | ||||||
73.64 | Japan | Froosh K.K. | NV 0 PLC 73.64 | JPY50,000.00 Ordinary | 1103901 Roppongi, Minatuku, Tokyo 1060032 | |||||
Japan | Unilever Japan Service K.K. | NV 100 | JPY50,000.00 Ordinary | 2-1-1, Kamimeguro, Meguro-ku, Tokyo 153-8578 | ||||||
Jersey | Unilever Chile Investments Limited | NV 64.55 PLC 35.45 | GBP1.00 Ordinary | 13 Castle Street, St Helier, Jersey , JE4 5UT | ||||||
98.19 | Kenya | Brooke Bond Mombasa Limited | NV 0 PLC 98.19 | KES1.00 Ordinary | Head Office, Kericho-Nakuru Road, P.O. BOX 20, 20200, Kericho | |||||
98.19 | Kenya | Mabroukie Tea & Coffee Estates Limited | NV 0 PLC 98.19 | KES1.00 Ordinary | Head Office, Kericho-Nakuru Road, P.O. BOX 20, 20200, Kericho | |||||
51.08 | Kenya | The Limuru Tea Company Limited | NV 0 PLC 51.08 | KES20.00 Ordinary | Head Office, Kericho-Nakuru Road, P.O. BOX 20, 20200, Kericho | |||||
Kenya | Unilever Kenya Limited° | PLC 100 | KES20.00 Ordinary | Commercial Street, Industrial Area, P.O. BOX 30062-00100, Nairobi | ||||||
98.20 | Kenya | Unilever Tea Kenya Limited | NV 0 PLC 98.20 | KES1.00 Ordinary | Head Office, Kericho-Nakuru Road, P.O. BOX 20, 20200, Kericho | |||||
Korea | Unilever Korea Chusik Hoesa | NV 100 | KRW10,000.00 Ordinary | 443 Taeheran-ro, Samsung-dong, Kangnam-gu, Seoul | ||||||
NV 100 | KRW10,000.00 Preference | |||||||||
Laos | Unilever Services (Lao) Sole Co Limited | NV 100 | LAK80,0000.00 Ordinary | Viengvang Tower, 4th Floor, Room no. 402A, Boulichan Road, | ||||||
Dongpalan Thong Village, Sisattanak District, Vientiane Capital | ||||||||||
Latvia | Unilever Baltic LLC | NV 100 | EUR1.00 Ordinary | Kronvalda bulvāris 3-10, Rīga, LV-1010 | ||||||
Lebanon | Unilever Levant s.a.r.l. | NV 100 | LBP1,000,000.00 Ordinary | Sin El Fil, Zakher Building, Floor 4, Beirut | ||||||
Lithuania | UAB Unilever Lietuva distribucija | NV 100 | EUR3,620.25 Ordinary | Skuodo st. 28, Mazeikiai, LT-89100 | ||||||
Lithuania | UAB Unilever Lietuva ledu gamyba | NV 100 | EUR3,620.25 Ordinary | Skuodo st. 28, Mazeikiai, LT-89100 | ||||||
Malawi | Unilever South East Africa (Private) | PLC 100 | MWK2.00 Ordinary | Abdul Majid Motor City, Chipembere Highway, Ginnery Corner, | ||||||
Limited | Blantyre | |||||||||
70 | Malaysia | Unilever (Malaysia) Holdings Sdn. Bhd. | NV 0 PLC 70 | RM1.00 Ordinary | Level 34, Menara TM, Jalan Pantai Baru, 59200 Kuala Lumpur | |||||
70 | Malaysia | Unilever (Malaysia) Services Sdn. Bhd. | NV 0 PLC 70 | RM1.00 Ordinary | Level 34, Menara TM, Jalan Pantai Baru, 59200 Kuala Lumpur | |||||
Malaysia | Unilever Foods (Malaysia) Sdn. Bhd. | PLC 100 | RM75.00 Ordinary | Level 34, Menara TM, Jalan Pantai Baru, 59200 Kuala Lumpur | ||||||
Malaysia | Unilever Malaysia Aviance Sdn. Bhd. | PLC 100 | RM1.00 Ordinary | Level 34, Menara TM, Jalan Pantai Baru, 59200 Kuala Lumpur | ||||||
Mexico | Unilever de Mexico S.de R.L. de C.V. | NV 64.55 PLC 35.45 | Partnership Interest | Av. Tepalcapa No.2, Col. Rancho Santo Domingo, C.P. 54900 Tultitlán, Estado de México | ||||||
Mexico | Unilever Holding Mexico S.de R.L. de C.V. | NV 64.55 PLC 35.45 | Partnership Interest | Av. Tepalcapa No.2, Col. Rancho Santo Domingo, C.P. 54900 Tultitlán, Estado de México | ||||||
Mexico | Unilever Manufacturera S.de R.L. de C.V. | NV 64.55 PLC 35.45 | Partnership Interest | Av. Tepalcapa No.2, Col. Rancho Santo Domingo, C.P. 54900 Tultitlán, Estado de México | ||||||
Mexico | Servicios Professionales Unilever S.de R.L. de C.V. | NV 64.55 PLC 35.45 | Partnership Interest | Av. Tepalcapa No.2, Col. Rancho Santo Domingo, C.P. 54900 Tultitlán, Estado de México | ||||||
Mexico | Unilever Mexicana S.de R.L. de C.V. | NV 64.55 PLC 35.45 | Partnership Interest | Av. Tepalcapa No.2, Col. Rancho Santo Domingo, C.P. 54900 Tultitlán, Estado de México | ||||||
Mexico | Unilever Real Estate Mexico S.de R.L. de C.V. | NV 64.55 PLC 35.45 | Partnership Interest | Av. Tepalcapa No.2, Col. Rancho Santo Domingo, C.P. 54900 Tultitlán, Estado de México | ||||||
Mexico | Unilever Servicios de Promotoria, S.de R.L. de C.V. | NV 64.55 PLC 35.45 | Partnership Interest | Av. Tepalcapa No.2, Col. Rancho Santo Domingo, C.P. 54900 Tultitlán, Estado de México |
136 | Financial Statements | Annual Report on Form 20-F 2016 |
27. GROUP COMPANIES CONTINUED
%
|
Country of
|
Name of Undertaking
|
% holding as between NV/PLC
|
Class of share held in subsidiary undertaking
|
Registered address
| |||||
99.98 | Morocco | Unilever Maghreb S.A. | NV 99.98 PLC 0 | MAD100.00 Ordinary | Km 10, Route Cotiere, Ain Sebaa, Casablanca | |||||
Mozambique | Unilever Mocambique Limitada | NV 100 | USD0.01 Ordinary | Avenida 24 de Julho, Edifício 24, nº 1097, 4º andar, Maputo | ||||||
Myanmar | Unilever (Myanmar) Limited | NV 100 | MMK8,200.00 Ordinary | 40,41,47, Mintheidie Kyaw Swar Street, Shwe Pyi Thar Industrial Zone (2), Yangon | ||||||
Myanmar | Unilever (Myanmar) Services Limited | NV 100 | USD10.00 Ordinary | 150, Kabar Aye Pagoda Road, Bahn Township, Yangon | ||||||
53.76 | Nepal | Unilever Nepal Limited | NV 0 PLC 53.76 | NPR100.00 Ordinary | Basamadi V.D.C. 5, P.O. Box-11, Hetauda, Dist. Makwanpur | |||||
Netherlands | Alberto-Culver Netherlands B.V.* | NV 55.40 PLC 44.60 | EUR1.00 Ordinary-A | Weena 455, 3013 AL Rotterdam | ||||||
NV 55.40 PLC 44.60 | EUR1.00 Ordinary-B | |||||||||
Netherlands | Argentina Investments B.V.* | NV 64.55 PLC 35.45 | EUR454.00 Ordinary | Weena 455, 3013 AL Rotterdam | ||||||
Netherlands | Ben en Jerrys Hellendoorn B.V.* | NV 100 | EUR453.78 Ordinary | Reggeweg 15, 7447 AN Hellendoorn | ||||||
Netherlands | BFO Holdings B.V.* | NV 64.55 PLC 35.45 | EUR1.00 Ordinary | Weena 455, 3013 AL Rotterdam | ||||||
Netherlands | BFO TWO B.V.* | NV 55.40 PLC 44.60 | EUR1.00 Ordinary | Weena 455, 3013 AL Rotterdam | ||||||
Netherlands | BrazH1 B.V.* | NV 64.55 PLC 35.45 | EUR1.00 Ordinary | Weena 455, 3013 AL Rotterdam | ||||||
Netherlands | BrazH2 B.V.* | NV 64.55 PLC 35.45 | EUR1.00 Ordinary | Weena 455, 3013 AL Rotterdam | ||||||
Netherlands | Brazinvest B.V.* | NV 64.55 PLC 35.45 | EUR1.00 Ordinary | Weena 455, 3013 AL Rotterdam | ||||||
Netherlands | Brazinvestee B.V.* | NV 64.55 PLC 35.45 | EUR1.00 Ordinary | Weena 455, 3013 AL Rotterdam | ||||||
Netherlands | Chico-invest B.V.* | NV 64.55 PLC 35.45 | EUR455.00 Ordinary | Weena 455, 3013 AL Rotterdam | ||||||
Netherlands | Doma B.V.* | NV 100 | NLG1,000.00 Ordinary | Weena 455, 3013 AL Rotterdam | ||||||
Netherlands | Handelmaatschappij Noorda B.V.°* | NV 100 | NLG1,000.00 Ordinary | Weena 455, 3013 AL Rotterdam | ||||||
Netherlands | Immobilia Transhome B.V.* | NV 100 | NLG1,000.00 Ordinary | Weena 455, 3013 AL Rotterdam | ||||||
Netherlands | Itaho B.V.* | NV 100 | EUR1.00 Ordinary | Weena 455, 3013 AL Rotterdam | ||||||
Netherlands | Lever Faberge Europe-Sourcing Unit | NV 100 | NLG1,000.00 Ordinary | Deltaweg 150, 3133 KM Vlaardingen | ||||||
Vlaardingen B.V.* | ||||||||||
Netherlands | Lipoma B.V.°* | NV 100 | NLG1,000.00 Ordinary | Weena 455, 3013 AL Rotterdam | ||||||
Netherlands | Marga B.V.°* | NV 100 | EUR1.00 Ordinary | Weena 455, 3013 AL Rotterdam | ||||||
Netherlands | Mavibel (Maatschappij voor Internationale | NV 100 | EUR1.00 Ordinary | Weena 455, 3013 AL Rotterdam | ||||||
Beleggingen) B.V.°* | ||||||||||
Netherlands | Mexinvest B.V.* | NV 64.55 PLC 35.45 | EUR1.00 Ordinary | Weena 455, 3013 AL Rotterdam | ||||||
Netherlands | Mixhold B.V.* | NV 100 | EUR1.00 Ordinary-A | Weena 455, 3013 AL Rotterdam | ||||||
PLC 100 | EUR1.00 Ordinary-B | |||||||||
NV 55.40 PLC 44.60 | EUR1.00 cumulative | |||||||||
preference shares | ||||||||||
Netherlands | Naamlooze Vennootschap Elma°* | NV 100 | NLG1,000.00 Ordinary | Weena 455, 3013 AL Rotterdam | ||||||
NV 0.25 PLC 99.75 | NLG1,000.00 5% | |||||||||
Cumulative Preference | ||||||||||
Netherlands | New Asia B.V.* | NV 64.55 PLC 35.45 | EUR1.00 Ordinary | Weena 455, 3013 AL Rotterdam | ||||||
Netherlands | Nommexar B.V.* | NV 64.55 PLC 35.45 | EUR1.00 Ordinary | Weena 455, 3013 AL Rotterdam | ||||||
Netherlands | Oprichting Tessa BV | NV 100 | EUR1.00 Ordinary | Nassaukade 5, Rotterdam | ||||||
Netherlands | Ortiz Finance B.V.* | NV 64.55 PLC 35.45 | NLG100.00 Ordinary | Weena 455, 3013 AL Rotterdam | ||||||
Netherlands | Pabulum B.V.* | NV 100 | NLG1,000.00 Ordinary | Weena 455, 3013 AL Rotterdam | ||||||
Netherlands | Rizofoor B.V.* | PLC 100 | NLG1,000.00 Ordinary | Weena 455, 3013 AL Rotterdam | ||||||
Netherlands | Rolf von den Baumens Vetsmelterij B.V.* | NV 100 | EUR454.00 Ordinary | Weena 455, 3013 AL Rotterdam | ||||||
Netherlands | Rolon B.V.* | NV 64.55 PLC 35.45 | NLG1,000.00 Ordinary | Weena 455, 3013 AL Rotterdam | ||||||
Netherlands | Saponia B.V.°* | NV 100 | NLG1,000.00 Ordinary | Weena 455, 3013 AL Rotterdam | ||||||
Netherlands | ThaiB1 B.V.* | NV 64.55 PLC 35.45 | NLG1,000.00 Ordinary | Weena 455, 3013 AL Rotterdam | ||||||
Netherlands | ThaiB2 B.V. | NV 64.55 PLC 35.45 | NLG1,000.00 Ordinary | Weena 455, 3013 AL Rotterdam | ||||||
Netherlands | Unilever Administration Centre B.V.* | NV 100 | EUR1.00 Ordinary | Weena 455, 3013 AL Rotterdam | ||||||
Netherlands | Unilever Alser B.V.* | NV 100 | EUR1.00 Ordinary | Weena 455, 3013 AL Rotterdam | ||||||
Netherlands | Unilever BCS Europe B.V.* | NV 55.40 PLC 44.60 | EUR1.00 Ordinary | Weena 455, 3013 AL Rotterdam | ||||||
Netherlands | Unilever BCS Holdings B.V.* | NV 55.40 PLC 44.60 | EUR1.00 Ordinary | Weena 455, 3013 AL Rotterdam | ||||||
Netherlands | Unilever BCS NL Holdings Two B.V.* | NV 55.40 PLC 44.60 | EUR1.00 Ordinary | Weena 455, 3013 AL Rotterdam | ||||||
Netherlands | Unilever BCS Nederland B.V.* | NV 55.40 PLC 44.60 | EUR1.00 Ordinary | Nassaukade 5, 3071 JL Rotterdam | ||||||
Netherlands | Unilever BCS Research and Development | NV 55.40 PLC 44.60 | EUR1.00 Ordinary | Olivier van Noortlaan 120, 3133 AT Vlaardingen | ||||||
B.V.* | ||||||||||
Netherlands | Unilever BCS Sourcing Nederland B.V.* | NV 55.40 PLC 44.60 | EUR1.00 Ordinary | Nassaukade 3, 3071 JL Rotterdam | ||||||
Netherlands | Unilever Berran B.V.* | NV 100 | EUR1.00 Ordinary | Weena 455, 3013 AL Rotterdam | ||||||
Netherlands | Unilever Canada Investments B.V.* | NV 64.55 PLC 35.45 | EUR1.00 Ordinary | Weena 455, 3013 AL Rotterdam | ||||||
Netherlands | Unilever Caribbean Holdings B.V.* | NV 100 | EUR1,800.00 Ordinary | Weena 455, 3013 AL Rotterdam | ||||||
Netherlands | Unilever Employee Benefits Management | PLC 100 | NLG1,000.00 Ordinary | Weena 455, 3013 AL Rotterdam | ||||||
B.V.* | ||||||||||
Netherlands | Unilever Employment Services B.V.* | NV 100 | NLG1,000.00 Ordinary | Weena 455, 3013 AL Rotterdam | ||||||
Netherlands | Unilever Europe Business Center B.V.* | NV 100 | EUR454.00 Ordinary | Weena 455, 3013 AL Rotterdam | ||||||
Netherlands | Unilever Finance International B.V.°* | NV 100 | EUR1.00 Ordinary | Weena 455, 3013 AL Rotterdam | ||||||
Netherlands | Unilever Foodsolutions B.V.* | NV 100 | EUR1.00 Ordinary | Weena 455, 3013 AL Rotterdam | ||||||
Netherlands | Unilever Global Services B.V.* | NV 100 | EUR1.00 Ordinary | Weena 455, 3013 AL Rotterdam | ||||||
Netherlands | Unilever Holdings B.V.* | NV 100 | EUR454.00 Ordinary | Weena 455, 3013 AL Rotterdam | ||||||
Netherlands | Unilever Home & Personal Care Nederland | NV 100 | EUR100.00 Ordinary | Weena 455, 3013 AL Rotterdam | ||||||
B.V.* | ||||||||||
Netherlands | Unilever Indonesia Holding B.V.* | NV 64.55 PLC 35.45 | EUR1.00 Ordinary | Weena 455, 3013 AL Rotterdam | ||||||
Netherlands | Unilever Insurances N.V. | NV 100 | EUR454.00 Ordinary | Weena 455, 3013 AL Rotterdam | ||||||
Netherlands | Unilever Nederland B.V.* | NV 100 | EUR454.00 Ordinary | Nassaukade 5, 3071 JL Rotterdam | ||||||
Netherlands | Unilever Nederland Foods Factories B.V.* | NV 100 | EUR46.00 ordinary | Nassaukade 5, 3071 JL Rotterdam | ||||||
Netherlands | Unilever Netherlands Retail Operations B.V.* | NV 100 | EUR1.00 Ordinary | Weena 455, 3013 AL Rotterdam | ||||||
Netherlands | Unilever Nederland Holdings B.V.°* | NV 100 | EUR454.00 Ordinary | Weena 455, 3013 AL Rotterdam | ||||||
Netherlands | Unilever Nederland Services B.V.* | NV 100 | EUR460.00 Ordinary | Nassaukade 3, 3071 JL Rotterdam |
Annual Report on Form 20-F 2016 | Financial Statements | 137 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
UNILEVER GROUP CONTINUED
27. GROUP COMPANIES CONTINUED
%
|
Country of
|
Name of Undertaking
|
% holding as between NV/PLC
|
Class of share held in subsidiary undertaking
|
Registered address
| |||||
Netherlands | Unilever Overseas Holdings B.V.* | PLC 100 | NLG1,000.00 Ordinary | Unilever House , 100 Victoria Embankment, London, EC4Y 0DY (Registered Seat: Rotterdam) | ||||||
Netherlands | Unilever Research and Development | NV 100 | EUR460.00 Ordinary | Olivier van Noortlaan 120, 3133 AT Vlaardingen | ||||||
Vlaardingen B.V.* | ||||||||||
Netherlands | Unilever Turkey Holdings B.V.* | NV 64.55 PLC 35.45 | EUR1.00 Ordinary | Weena 455, 3013 AL Rotterdam | ||||||
Netherlands | Unilever US Investments B.V.°* | NV 100 | EUR1.00 Ordinary | Weena 455, 3013 AL Rotterdam | ||||||
Netherlands | Unilever Ventures Holdings B.V. | NV 100 | EUR453.79 Ordinary | Weena 455, 3013 AL Rotterdam | ||||||
Netherlands | Univest Company B.V. | NV 100 | EUR1.00 Ordinary | Weena 455, 3013 AL Rotterdam | ||||||
Netherlands | UNUS Holding B.V.* | NV 100 | EUR0.10 Ordinary-A | Weena 455, 3013 AL Rotterdam | ||||||
PLC 100 | EUR0.10 Ordinary-B | |||||||||
NV 0 PLC 0 | EUR0.10 OrdinaryB | |||||||||
Non-voting | ||||||||||
Netherlands | Verenigde Zeepfabrieken B.V.* | NV 100 | NLG1,000.00 Ordinary | Weena 455, 3013 AL Rotterdam | ||||||
Netherlands | Wemado B.V.°* | NV 100 | NLG1,000.00 Ordinary | Weena 455, 3013 AL Rotterdam | ||||||
New Zealand | T2 NZ Limited | PLC 100 | NZD1.00 Ordinary | Level 4, 103 Carlton Gore Rd, Newmarket, Auckland 1023 | ||||||
New Zealand | Unilever New Zealand Limited | PLC 100 | NZD2.00 Ordinary | Level 4, 103 Carlton Gore Rd, Newmarket, Auckland 1023 | ||||||
New Zealand | Unilever New Zealand Superannuation | PLC 100 | NZD1.00 Ordinary | Level 4, 103 Carlton Gore Rd, Newmarket, Auckland 1023 | ||||||
Trustee Limited | ||||||||||
New Zealand | Unilever New Zealand Trading Limited | PLC 100 | NZD1.00 Ordinary | Level 4, 103 Carlton Gore Rd, Newmarket, Auckland 1023 | ||||||
New Zealand | Ben & Jerrys Franchising New Zealand Limited | PLC 100 | NZD1.00 Ordinary | Level 4, 103 Carlton Gore Rd, Newmarket, Auckland 1023 | ||||||
Nicaragua | Unilever de Centroamerica S.A. Nicaragua | NV 100 | NIC50.00 Ordinary | Km 11.5, Carretera Vieja a León, 800 Mts Norte, 100 Mts Este, 300 Mts Norte, Managua | ||||||
56.27 | Niger | Unilever Niger S.A. | NV 0 PLC 56.27 | XOF10,000.00 Ordinary | BP 10272 Niamey | |||||
60.06 | Nigeria | Unilever Nigeria Plc | NV 0 PLC 60.06 | NGN0.50 Ordinary | 1 Billings Way, Oregun, Ikeja, Lagos | |||||
51 | Nigeria | West Africa Popular Foods Nigeria Limited | NV 0 PLC 51 | NGN1.00 Ordinary | 1 Billings Way, Oregun, Ikeja, Lagos | |||||
Norway | Unilever Norge AS | NV 100 | NOK100.00 Ordinary | Martin Linges vei 25, Postbox 1, 1331 Fornebu | ||||||
73.64 | Norway | Froosh AS | NV 0 PLC 73.64 | NOK100.00 Ordinary | Karl Johans Gate 2, Oslo, 0154 | |||||
99.09 | Pakistan | Lever Associated Pakistan Trust (Private) Limited | PLC 99.09 | PKR10.00 Ordinary | Avari Plaza, Fatima Jinnah Road, Karachi 75530 | |||||
99.09 | Pakistan | Lever Chemicals (Private) Limited | NV 0 PLC 99.09 | PKR10.00 Ordinary | Avari Plaza, Fatima Jinnah Road, Karachi 75530 | |||||
99.09 | Pakistan | Sadiq (Private) Limited | NV 0 PLC 99.09 | PKR10.00 Ordinary | Avari Plaza, Fatima Jinnah Road, Karachi 75530 | |||||
Pakistan | Unilever Birds Eye Foods Pakistan (Private) Limited | PLC 100 | PKR10.00 Ordinary | Avari Plaza, Fatima Jinnah Road, Karachi 75530 | ||||||
75.85 | Pakistan | Unilever Pakistan Foods Limited | NV 42.02 PLC 33.83 | PKR10.00 Ordinary | Avari Plaza, Fatima Jinnah Road, Karachi 75530 | |||||
99.09 | Pakistan | Unilever Pakistan Limited | NV 0 PLC 99.09 | PKR50.00 Ordinary | Avari Plaza, Fatima Jinnah Road, Karachi 75530 | |||||
70.52 | NV 0 PLC 70.52 | PKR100.00 Preference | ||||||||
Palestine | Unilever Market Development Company | PLC 100 | ILS1.00 Ordinary | Ersal St. Awad Center P.O.B 3801 Al-Beireh, Ramallah | ||||||
Panama | Unilever Regional Services Panama S.A. | NV 100 | USD1.00 Ordinary | Punta Pacífica, Calle Isaac Hanono Missri, P.H. Torre de las Américas, Torre C, Oficina 32, corregimiento de San Francisco, Distrito y Provincia de Panamá, | ||||||
Panama | Unilever de Centroamerica S.A. Panama | NV 100 | No Nominal Value | Calle Isaac Hanoro, Torre de las Americas, torre C, piso 32, corregimiento de San Francisco, distrito y provincia de Panamá | ||||||
Paraguay | Unilever de Paraguay S.A. | NV 100 | PYG1,000,000.00 Ordinary | 4544 Roque Centurión Miranda N° 1635 casi San Martin. Edificio Aymac II, Asunción | ||||||
Peru | Unilever Andina Perú S.A. | NV 100 | PEN1.00 Ordinary | Av. Paseo de la Republica 5895 OF. 401, Miraflores, Lima 18 | ||||||
Philippines | Metrolab Industries, Inc. | NV 64.55 PLC 35.45 | PHP1.00 Common | Linares Road, Gateway Business Park, Gen. Trias, Cavite | ||||||
NV 64.55 PLC 35.45 | PHP10.00 Preference | |||||||||
Philippines | Unilever Philippines, Inc. | NV 64.55 PLC 35.45 | PHP50.00 Common | 7th Floor, Bonifacio Stopover Corporate Center, 31st Street corner 2nd Avenue, Bonifacio Global City, Taguig City | ||||||
Philippines | Unilever Philippines Body Care, Inc. | NV 64.55 PLC 35.45 | PHP100.00 Common | 11th Avenue corner 39th Street, Bonifacio Triangle, Bonifacio Global City, Taguig City | ||||||
Philippines | Unilever Philippines Manufacturing, Inc. | NV 64.55 PLC 35.45 | PHP1.00 Common | 11th Avenue corner 39th Street, Bonifacio Triangle, Bonifacio Global City, Taguig City | ||||||
50 | Philippines | Unilever RFM Ice Cream, Inc. | NV 32.28 PLC 17.72 | PHP1.00 Common-B | Manggahan Light Industrial Compound, A. Rodriguez Avenue, Bo. Manggahan, Pasig City | |||||
Poland | Unilever Polska Sp. z o.o. | PLC 100 | PLN50.00 Ordinary | Jerozolimskie 134, 02-305, Warszawa | ||||||
Poland | Unilever Poland Services Sp. z o.o. | PLC 100 | PLN50.00 Ordinary | Jerozolimskie 134, 02-305, Warszawa | ||||||
Poland | Unilever Polska S.A. | PLC 100 | PLN10.00 Ordinary | Jerozolimskie 134, 02-305, Warszawa | ||||||
Poland | Unilever BCS Polska Sp. z o.o. | NV 55.40 PLC 44.60 | PLN50.00 Ordinary | Jerozolimskie 134, 02-305, Warszawa | ||||||
Poland | Unilever BCS Polska Holding Sp. z o.o. | PLC 100 | PLN50.00 Ordinary | Jerozolimskie 134, 02-305, Warszawa | ||||||
Puerto Rico | Unilever de Puerto Rico, Inc° | NV 100 | USD100.00 Ordinary | Professional Services Park 997, San Roverta St., Suite 7, San Juan | ||||||
99 | Romania | Unilever Romania S.A. | NV 99 PLC 0 | ROL0.10 Ordinary | Ploiesti, 291 Republicii Avenue, Prahova County | |||||
Romania | Unilever Distribution SRL | NV 100 | ROL20.00 Ordinary | Ploiesti, 291 Republicii Avenue, Prahova County | ||||||
Romania | Unilever BCS SCE SRL | NV 55.40 PLC 44.60 | ROL10.00 Ordinary | Ploiesti, 291 Republicii Avenue, Prahova County | ||||||
Romania | Unilever South Central Europe S.A. | NV 100 | ROL260.50 Ordinary | Ploiesti, 291 Republicii Avenue, Prahova County | ||||||
Russia | Concern Kalina LLC | NV 7.12 PLC 92.88 | Membership Interest | 620138, 80, Komsomolskaya, Ekaterinburg | ||||||
Russia | Inmarko Trade LLC | NV 7.12 PLC 92.88 | Membership Interest | 644031, 205, 10 let Oktyabrya, Omsk | ||||||
98.29 | Russia | JLLC Tulskiy Khladokombinat | NV 6.99 PLC 91.29 | RUR1.00 Ordinary | 300016, 78, Ostrovskogo Street, Tula | |||||
Russia | OOO Unilever Rus | NV 7.12 PLC 92.88 | Membership Interest | 123022, 13, Sergeya Makeeva Street, Moscow | ||||||
49 | Saudi Arabia | Binzagr Unilever Limitedx | NV 0 PLC 49 | SAR1,000.00 Ordinary | P.O.Box 5694, Jeddah 21432 | |||||
Serbia | Unilever Beograd d.o.o. | NV 100 | Membership Interest | Belgrade, Serbia, Omladinskih brigada 90b Novi Beograd | ||||||
Singapore | T2 Singapore PTE Limited | PLC 100 | SGD1.00 Ordinary | 20E Pasir Panjang Road, #06-22 Mapletree Business City, 117439 | ||||||
Singapore | Unilever Asia Private Limited | NV 100 | SGD1.00 Ordinary | 20 Pasir Panjang Road, #06-22 Mapletree Business City, 117439 | ||||||
Singapore | Unilever Singapore Pte. Limited | PLC 100 | SGD1.00 Ordinary | 20 Pasir Panjang Road, #06-22 Mapletree Business City, 117439 |
138 | Financial Statements | Annual Report on Form 20-F 2016 |
27. GROUP COMPANIES CONTINUED
%
|
Country of
|
Name of Undertaking
|
% holding as between NV/PLC
|
Class of share held in subsidiary undertaking
|
Registered address
| |||||
Slovakia | Unilever BCS Slovensko, spol. s r.o. | NV 55.40 PLC 44.60 | EUR1.00 Ordinary | Karadzicova 10, 821 08 Bratislava | ||||||
Slovakia | Unilever Slovensko spol. s r.o. | NV 100 | EUR1.00 Ordinary | Karadzicova 10, 821 08 Bratislava | ||||||
74.25 | South Africa | Nollsworth Park Properties (Pty) Limited | NV 11.21 PLC 63.04 | ZAR2.00 Ordinary | 15 Nollsworth Crescent, Nollsworth Park, La Lucia Ridge Office Estate, La Lucia, 4051 | |||||
South Africa | Unilever Market Development (Pty) Limited | PLC 100 | ZAR1.00 Ordinary | 15 Nollsworth Crescent, Nollsworth Park, La Lucia Ridge Office Estate, La Lucia, 4051 | ||||||
74.25 | South Africa | Unilever South Africa (Pty) Limited | NV 11.21 PLC 63.04 | ZAR2.00 Ordinary | 15 Nollsworth Crescent, Nollsworth Park, La Lucia Ridge Office Estate, La Lucia, 4051 | |||||
74.25 | South Africa | Unilever South Africa Holdings (Pty) | NV 11.21 PLC 63.04 | ZAR1.00 Ordinary | 15 Nollsworth Crescent, Nollsworth Park, La Lucia Ridge Office | |||||
0.02 | Limitedr | NV 0.005 PLC 0.015 | ZAR1.00 Ordinary-A | Estate, La Lucia, 4051 | ||||||
0.009 | NV 0.002 PLC 0.007 | ZAR1.00 Ordinary-B | ||||||||
Spain | Intuiskin S.L.U. | NV 100 | EUR1.00 Ordinary | PA / Reding, 43, Izda 1, 29016 Malaga | ||||||
Spain | Unilever BCS Spain, S.L.U. | NV 55.40 PLC 44.60 | EUR1.00 Ordinary | C/ Tecnología 19, 08840 Viladecans | ||||||
Spain | Unilever Espana S.A. | NV 100 | EUR48.00 Ordinary | C/ Tecnología 19, 08840 Viladecans | ||||||
Spain | Unilever HPC Industrial Espana S.L.U. | NV 100 | EUR1.00 Ordinary | C/ Fuente de la Mora, 3-5-7-Edificio A, 3ª planta, 28050 Madrid | ||||||
Spain | Unilever Services Espana S.A. | NV 100 | EUR60.00 Ordinary | C/ Tecnología 19, 08840 Viladecans | ||||||
Spain | Unilever Foods Industrial Espana, S.L.U. | NV 100 | EUR1.00 Ordinary | C/ Felipe del Río, 14 48940 Leioa | ||||||
Sri Lanka | Brooke Bond Ceylon Limited | PLC 100 | LKR100.00 Ordinary | 258 M Vincent Perera Mawatha, Colombo 14 | ||||||
Sri Lanka | Ceytea Limited | PLC 100 | LKR10.00 Ordinary | 258 M Vincent Perera Mawatha, Colombo 14 | ||||||
Sri Lanka | Lever Brothers (Exports and Marketing) | PLC 100 | LKR2.00 Ordinary | 258 M Vincent Perera Mawatha, Colombo 14 | ||||||
Limited° | ||||||||||
Sri Lanka | Maddema Trading Co. Limited | PLC 100 | LKR10.00 Ordinary | 258 M Vincent Perera Mawatha, Colombo 14 | ||||||
Sri Lanka | Premium Exports Ceylon (Pvt) Limited | PLC 100 | LKR10.00 Ordinary | 258 M Vincent Perera Mawatha, Colombo 14 | ||||||
Sri Lanka | R.O. Mennell & Co. (Ceylon) Limited | PLC 100 | LKR10.00 Ordinary | 258 M Vincent Perera Mawatha, Colombo 14 | ||||||
Sri Lanka | Tea Estates Ceylon Limited | PLC 100 | LKR100.00 Ordinary | 258 M Vincent Perera Mawatha, Colombo 14 | ||||||
Sri Lanka | Unilever Ceylon Services Limited | PLC 100 | LKR10.00 Ordinary | 258 M Vincent Perera Mawatha, Colombo 14 | ||||||
Sri Lanka | Unilever Ceylon Marketing Limited | PLC 100 | LKR10.00 Ordinary | 258 M Vincent Perera Mawatha, Colombo 14 | ||||||
Sri Lanka | Unilever Lipton Ceylon Limited | PLC 100 | LKR10.00 Ordinary | 258 M Vincent Perera Mawatha, Colombo 14 | ||||||
Sri Lanka | Unilever Sri Lanka Limited° | PLC 100 | LKR10.00 Ordinary | 258 M Vincent Perera Mawatha, Colombo 14 | ||||||
Sweden | Alberto Culver AB | NV 55.40 PLC 44.60 | SEK100.00 Ordinary | Box 1056, Svetsarevaegen 15, 17122, Solna | ||||||
Sweden | Blueair AB | NV 100 | SEK100.00 Ordinary | Danderydsgatan 11, 114 26, Stockholm | ||||||
Sweden | Blueair Cabin Air AB | NV 100 | SEK100.00 Ordinary | Danderydsgatan 11, 114 26, Stockholm | ||||||
Sweden | Unilever BCS Sourcing Sweden AB | NV 55.40 PLC 44.60 | SEK1.00 Ordinary | Box 1056, Svetsarevaegen 15, 17122, Solna | ||||||
Sweden | Unilever BCS Sweden AB | NV 55.40 PLC 44.60 | SEK1.00 Ordinary | Box 1056, Svetsarevaegen 15, 17122, Solna | ||||||
Sweden | Unilever Holding AB | NV 100 | SEK100.00 Ordinary | Box 1056, Svetsarevaegen 15, 17122, Solna | ||||||
Sweden | Unilever Produktion AB | NV 100 | SEK50.00 Ordinary | Box 1056, Svetsarevaegen 15, 17122, Solna | ||||||
Sweden | Unilever Sverige AB | NV 100 | SEK100.00 Ordinary | Box 1056, Svetsarevaegen 15, 17122, Solna | ||||||
74.72 | Sweden | Froosh AB | NV 0 PLC 74.72 | SEK0.10A | Hammarby Kaj 24, Stockholm, 120 62 | |||||
24.90 | NV 0 PLC 24.90 | SEK0.10B | ||||||||
73.64 | Sweden | Froosh Sverige AB | NV 0 PLC 73.64 | SEK100.00A | Hammarby Kaj 24, Stockholm, 120 62 | |||||
Sweden | Jonborsten AB | NV 100 | SEK1.00 Ordinary | Karlavagen 108, 115 26, Stockholm | ||||||
Switzerland | Intuiskin SARL | NV 100 | CHF100.00 Ordinary | Chemin Frank-Thomas 34, 1208 Genève | ||||||
Switzerland | Knorr-Nährmittel AG | NV 100 | CHF1,000.00 Ordinary | Bahnhofstrasse 19, CH 8240 Thayngen | ||||||
Switzerland | Oswald Nahrungsmittel GmbH | NV 100 | CHF800,000.00 Ordinary | Hinterbergstr. 30, CH-6312 Steinhausen | ||||||
Switzerland | Unilever ASCC AG | NV 100 | CHF1,000.00 Ordinary | Spitalstrasse 5, 8200, Schaffhausen | ||||||
Switzerland | Unilever BCS Schweiz GmbH | NV 55.40 PLC 44.60 | CHF100.00 Ordinary | Bahnhofstrasse 19, CH-8240 , Thayngen | ||||||
Switzerland | Unilever Business and Marketing Support | NV 100 | CHF1,000.00 Ordinary | Spitalstrasse 5, 8200 Schaffhausen | ||||||
AG | ||||||||||
Switzerland | Unilever Finance International AG | NV 100 | CHF1,000.00 Ordinary | Spitalstrasse 5, 8200, Schaffhausen | ||||||
Switzerland | Unilever Overseas Holdings AG | PLC 100 | CHF1,000.00 Ordinary | Spitalstrasse 5, 8200, Schaffhausen | ||||||
Switzerland | Unilever Reinsurance AG | NV 100 | CHF1,000.00 Ordinary | Baarerstrasse 75, CH-6302 Zug | ||||||
Switzerland | Unilever Schaffhausen Service AG | NV 100 | CHF1,000.00 Ordinary | Spitalstrasse 5, 8200, Schaffhausen | ||||||
Switzerland | Unilever Schweiz GmbH | NV 100 | CHF100,000.00 Ordinary | Bahnhofstrasse 19, CH-8240 Thayngen | ||||||
Switzerland | Unilever Supply Chain Company AG | NV 100 | CHF1,000.00 Ordinary | Spitalstrasse 5, 8201, Schaffhausen | ||||||
Switzerland | Unilever Swiss Holdings AG | NV 100 | CHF1,000.00 Ordinary | Spitalstrasse 5, 8200, Schaffhausen | ||||||
99.92 | Taiwan | Unilever Taiwan Limited | NV 64.50 PLC 35.42 | TWD10.00 Ordinary | 3F., No. 550, Sec. 4, Zhongxiao East Rd., Xinyi District, Taipei City | |||||
Tanzania | Distan Limited | PLC 100 | TZS20.00 Ordinary | Plot No.4A Pugu Road, Dar Es Salaam | ||||||
Tanzania | UAC of Tanzania Limited | PLC 100 | TZS20.00 Ordinary | Plot No.4A Pugu Road, Dar Es Salaam | ||||||
Tanzania | Uniafric Trust Tanzania Limited | PLC 100 | TZS20.00 Ordinary | Plot No.4A Pugu Road, Dar Es Salaam | ||||||
Tanzania | Unilever Tanzania Limited | PLC 100 | TZS20.00 Ordinary | Plot 4A Nyerere Road, Dar Es Salaam | ||||||
Tanzania | Unilever Tea Tanzania Limited | PLC 100 | TZS20.00 Ordinary | P.O. Box 40, Mufindi | ||||||
Thailand | Unilever Thai Holdings Limited | NV 64.55 PLC 35.45 | THB100.00 Ordinary | 161 Rama 9 Road, Huay Kwang, Bangkok 10310 | ||||||
Thailand | Unilever Thai Services Limited | NV 64.55 PLC 35.45 | THB100.00 Ordinary | 161 Rama 9 Road, Huay Kwang, Bangkok 10310 | ||||||
Thailand | Unilever Thai Trading Limited | NV 64.55 PLC 35.45 | THB100.00 Ordinary | 161 Rama 9 Road, Huay Kwang, Bangkok 10310 | ||||||
50.01 | Trinidad & Tobago | Unilever Caribbean Limited | NV 0 PLC 50.01 | TTD1.00 Ordinary | Eastern Main Road, Champs Fleurs | |||||
97.61 | Tunisia | Unilever Tunisia S.A. | NV 97.61 PLC 0 | TND6.00 Ordinary | Z.I. Voie Z4-2014 Mégrine Erriadh Tunis | |||||
97.59 | Tunisia | Unilever Maghreb Export S.A. | NV 97.59 PLC 0 | TND5.00 Ordinary | Voie Z4-2014 Mégrine Erriadh Tunis | |||||
47.82 | Tunisia | UTIC Distribution S.A.x | NV 47.82 PLC 0 | TND10.00 Ordinary | Z.I. Voie Z4 , Megrine Riadh, Tunis, 2014 | |||||
99.98 | Turkey | Unilever Gida Sanayi ve Ticaret AŞ° | NV 0.05 PLC 99.93 | TRY0.01 Ordinary | Saray Mahallesi Dr. Adnan Büyükdeniz Cad. No.13 34768 Ümraniye İstanbul | |||||
99.98 | Turkey | Unilever Sanayi ve Ticaret Türk AŞ° | NV 64.54 PLC 35.44 | TRY0.01 Ordinary | Saray Mahallesi Dr. Adnan Büyükdeniz Cad. No.13 34768 Ümraniye İstanbul | |||||
99.99 | Turkey | Besan Besin Sanayi ve Ticaret AŞ | NV 64.55 PLC 35.44 | TRY0.01 Ordinary | Saray Mahallesi Dr. Adnan Büyükdeniz Cad. No.13 34768 Ümraniye İstanbul |
Annual Report on Form 20-F 2016 | Financial Statements | 139 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
UNILEVER GROUP CONTINUED
27. GROUP COMPANIES CONTINUED
%
|
Country of
|
Name of Undertaking
|
% holding as between NV/PLC
|
Class of share held in subsidiary undertaking
|
Registered address
| |||||
99.64 | Turkey | Dosan Konserve Sanayi ve Ticaret AŞ | NV 64.32 PLC 35.32 | TRY0.01 Ordinary | Saray Mahallesi Dr. Adnan Büyükdeniz Cad. No.13 34768 Ümraniye İstanbul | |||||
Uganda | Unilever Uganda Limited | PLC 100 | UGX20.00 Ordinary | Plot 10/12 Nyondo Close, Industrial Area, P.O. Box 3515 Kampala | ||||||
Ukraine | Pallada Ukraine LLC | NV 7.12 PLC 92.88 | Membership Interest | 04119, 27-T, Dehtyarivska Str., Kyiv | ||||||
Ukraine | Unilever Ukraine LLC | NV 100 | Membership Interest | 04119, 27-T, Dehtyarivska Str., Kyiv | ||||||
50 | United Arab Emirates | Severn Gulf FZCOx | NV 50 PLC 0 | AED100,000.00 Ordinary | PO Box 17053, Jebel Ali, Dubai | |||||
49 | United Arab Emirates | Unilever General Trading LLCx | NV 0 PLC 49 | AED1,000.00 Ordinary | Parcel ID 598633, German Emarati Business Centre, Dubai Complex for Investment First, Office BC6, Dubai | |||||
United Arab Emirates | Unilever Gulf FZE | PLC 100 | AED1,000.00 Ordinary | P.O.Box 17055, Jebel Ali, Dubai | ||||||
49 | United Arab Emirates | Unilever Trading LLCx | NV 49 PLC 0 | AED1,000.00 Ordinary | P.O.Box 18221 European Business Center Dubai Investments Park 1 | |||||
United States | ACI Brazil Holdings, LLC | NV 55.40 PLC 44.60 | Membership Interest | 700 Sylvan Avenue, Englewood Cliffs, New Jersey 07632-3201 | ||||||
United States | ACUSA Brazil Holdings, LLC | NV 55.40 PLC 44.60 | Membership Interest | 700 Sylvan Avenue, Englewood Cliffs, New Jersey 07632-3201 | ||||||
United States | Alberto Share Holdings, LLC | NV 55.40 PLC 44.60 | Membership Interest | 700 Sylvan Avenue, Englewood Cliffs, New Jersey 07632-3201 | ||||||
United States | Alberto-Culver Company | NV 55.40 PLC 44.60 | No Par Value Ordinary | 700 Sylvan Avenue, Englewood Cliffs, New Jersey 07632-3201 | ||||||
United States | Alberto-Culver International, Inc | NV 55.40 PLC 44.60 | USD1.00 Ordinary | 700 Sylvan Avenue, Englewood Cliffs, New Jersey 07632-3201 | ||||||
United States | Alberto-Culver (P.R.), Inc | NV 55.40 PLC 44.60 | USD1.00 Ordinary | 700 Sylvan Avenue, Englewood Cliffs, New Jersey 07632-3201 | ||||||
United States | Alberto-Culver USA, Inc | NV 55.40 PLC 44.60 | No Par Value Ordinary | 700 Sylvan Avenue, Englewood Cliffs, New Jersey 07632-3201 | ||||||
United States | Ben & Jerrys Franchising, Inc | NV 55.40 PLC 44.60 | USD1.00 Common | 700 Sylvan Avenue, Englewood Cliffs, New Jersey 07632-3201 | ||||||
United States | Ben & Jerrys Gift Card, LLC | NV 55.40 PLC 44.60 | Membership Interest | 700 Sylvan Avenue, Englewood Cliffs, New Jersey 07632-3201 | ||||||
United States | Ben & Jerrys Homemade, Inc | NV 55.40 PLC 44.60 | USD0.01 Common | 700 Sylvan Avenue, Englewood Cliffs, New Jersey 07632-3201 | ||||||
United States | Bestfoods International (Holdings) Inc | NV 55.40 PLC 44.60 | USD100.00 Common | 700 Sylvan Avenue, Englewood Cliffs, New Jersey 07632-3201 | ||||||
United States | Blueair Inc. | NV 100 | No Par Value Ordinary | 1013 Centre Road, City of Wilmington 19805, County of New Castle, Delaware | ||||||
United States | Carapina LLC | NV 100 | Membership Interest | 233 Bleecker Street, New York, 10014 | ||||||
United States | Chesebrough-Ponds Manufacturing | NV 55.40 PLC 44.60 | No Par Value Ordinary | 700 Sylvan Avenue, Englewood Cliffs, New Jersey 07632-3201 | ||||||
Company | ||||||||||
United States | Conopco, Inc | NV 55.40 PLC 44.60 | USD1.00 Common | 700 Sylvan Avenue, Englewood Cliffs, New Jersey 07632-3201 | ||||||
United States | Dermalogica, LLC | NV 55.40 PLC 44.60 | Membership Interest | 700 Sylvan Avenue, Englewood Cliffs, New Jersey 07632-3201 | ||||||
United States | Dollar Shave Club, Inc. | NV 55.40 PLC 44.60 | Membership Interest | 13335 Maxella Ave. Marina del Rey, CA 90292 | ||||||
United States | DTJJS, LLC | NV 55.40 PLC 44.60 | Membership Interest | 700 Sylvan Avenue, Englewood Cliffs, New Jersey 07632-3201 | ||||||
United States | Grom Columbus LLC | NV 100 | Membership Interest | 233 Bleecker Street, New York, 10014 | ||||||
United States | Grom Franchising LLC | NV 100 | Membership Interest | 2711 Centerville Road, Suite 400, Wilmington, Delaware | ||||||
United States | Grom Malibu LLC | NV 100 | Membership Interest | 233 Bleecker Street, New York, 10014 | ||||||
United States | Grom USA LLC | NV 100 | Membership Interest | 233 Bleecker Street, New York, 10014 | ||||||
United States | Hollywood LLC | NV 100 | Membership Interest | 233 Bleecker Street, New York, 10014 | ||||||
United States | Intuiskin Inc | NV 100 | No Par Value Ordinary | 55 East 59th Street, New York, 10022 | ||||||
United States | Kate Somerville Holdings, LLC | NV 55.40 PLC 44.60 | Membership Interest | 700 Sylvan Avenue, Englewood Cliffs, New Jersey 07632-3201 | ||||||
United States | Kate Somerville Skincare LLC | NV 55.40 PLC 44.60 | Membership Interest | 700 Sylvan Avenue, Englewood Cliffs, New Jersey 07632-3201 | ||||||
United States | Lipton Industries, Inc | NV 55.40 PLC 44.60 | USD1.00 Ordinary | 700 Sylvan Avenue, Englewood Cliffs, New Jersey 07632-3201 | ||||||
United States | Murad LLC | NV 55.40 PLC 44.60 | Membership Interest | 700 Sylvan Avenue, Englewood Cliffs, New Jersey 07632-3201 | ||||||
United States | Pantresse, Inc | NV 55.40 PLC 44.60 | USD120.00 Ordinary | 700 Sylvan Avenue, Englewood Cliffs, New Jersey 07632-3201 | ||||||
United States | Personal Care Marketing & Research Inc | NV 55.40 PLC 44.60 | USD 1.00 Common | 420 South Robertson Dr., #260, Beverly Hills, CA 90212 | ||||||
United States | Ren USA Inc | PLC 100 | No Par Value Common | 700 Sylvan Avenue, Englewood Cliffs, New Jersey 07632-3201 | ||||||
United States | Seventh Generation Canada, Inc. | NV 55.40 PLC 44.60 | No Par Value Common | 60 Lake Street, Suite 3N, Burlington, VT 05401 | ||||||
United States | Seventh Generation, Inc. | NV 55.40 PLC 44.60 | USD.001 Common Shares | 60 Lake Street, Suite 3N, Burlington, VT 05401 | ||||||
United States | Seventh Generation Ventures, Inc. | NV 55.40 PLC 44.60 | USD.001 Common Shares | 60 Lake Street, Suite 3N, Burlington, VT 05401 | ||||||
United States | Skin Health Experts, LLC | NV 55.40 PLC 44.60 | Membership Interest | 700 Sylvan Avenue, Englewood Cliffs, New Jersey 07632-3201 | ||||||
United States | Spatula LLC | NV 100 | Membership Interest | 233 Bleecker Street, New York, 10014 | ||||||
United States | St. Ives Laboratories, Inc | NV 55.40 PLC 44.60 | USD0.01 Ordinary | 700 Sylvan Avenue, Englewood Cliffs, New Jersey 07632-3201 | ||||||
United States | T2 US LLC | NV 55.40 PLC 44.60 | Membership Interest | 700 Sylvan Avenue, Englewood Cliffs, New Jersey 07632-3201 | ||||||
United States | Talenti Gelato, LLC | NV 55.40 PLC 44.60 | Membership Interest | 700 Sylvan Avenue, Englewood Cliffs, New Jersey 07632-3201 | ||||||
United States | Talenti Holdings, LLC | NV 55.40 PLC 44.60 | Membership Interest | 700 Sylvan Avenue, Englewood Cliffs, New Jersey 07632-3201 | ||||||
United States | TIGI Linea Corp | NV 55.40 PLC 44.60 | No Par Value Ordinary | 700 Sylvan Avenue, Englewood Cliffs, New Jersey 07632-3201 | ||||||
United States | Unilever AC Canada Holding, Inc | NV 55.40 PLC 44.60 | USD10.00 Ordinary | 700 Sylvan Avenue, Englewood Cliffs, New Jersey 07632-3201 | ||||||
United States | Unilever BCS Sourcing US Inc | NV 55.40 PLC 44.60 | USD1.00 Ordinary | 700 Sylvan Avenue, Englewood Cliffs, New Jersey 07632-3201 | ||||||
United States | Unilever BCS US Inc | NV 55.40 PLC 44.60 | USD1.00 Ordinary | 700 Sylvan Avenue, Englewood Cliffs, New Jersey 07632-3201 | ||||||
United States | Unilever Bestfoods (Holdings) LLC | NV 25.10 PLC 74.90 | Membership Interest | 700 Sylvan Avenue, Englewood Cliffs, New Jersey 07632-3201 | ||||||
United States | Unilever Capital Corporation | NV 55.40 PLC 44.60 | USD1.00 Ordinary | 700 Sylvan Avenue, Englewood Cliffs, New Jersey 07632-3201 | ||||||
United States | Unilever Illinois Manufacturing, LLC | NV 55.40 PLC 44.60 | Membership Interest | 700 Sylvan Avenue, Englewood Cliffs, New Jersey 07632-3201 | ||||||
United States | Unilever Manufacturing (US), Inc | NV 55.40 PLC 44.60 | USD1.00 Ordinary | 700 Sylvan Avenue, Englewood Cliffs, New Jersey 07632-3201 | ||||||
United States | Unilever Trumbull Holdings, Inc | NV 42.54 PLC 57.46 | USD1.00 Common | 700 Sylvan Avenue, Englewood Cliffs, New Jersey 07632-3201 | ||||||
United States | Unilever Trumbull Research Services, Inc | NV 55.40 PLC 44.60 | USD1.00 Ordinary | 700 Sylvan Avenue, Englewood Cliffs, New Jersey 07632-3201 | ||||||
NV 55.40 PLC 44.60 | USD1.00 Cumulative | |||||||||
Redeemable Preference | ||||||||||
United States | Unilever United States Foundation, Inc | NV 55.40 PLC 44.60 | Membership Interest | 700 Sylvan Avenue, Englewood Cliffs, New Jersey 07632-3201 | ||||||
United States | Unilever United States, Inc | NV 55.40 PLC 44.60 | USD0.3333 Common | 700 Sylvan Avenue, Englewood Cliffs, New Jersey 07632-3201 | ||||||
United States | Unilever Ventures Advisory LLC | NV 55.40 PLC 44.60 | Membership Interest | 700 Sylvan Avenue, Englewood Cliffs, New Jersey 07632-3201 | ||||||
Uruguay | Unilever del Uruguay S.R.L. | NV 100 | UYU1.00 Ordinary | Camino Carrasco 5975, Montevideu | ||||||
Uruguay | Unilever Uruguay SCC S.A. | NV 100 | UYU1.00 Ordinary | Camino Carrasco 5976, Montevideu | ||||||
Uruguay | Lever S.A. | NV 100 | UYP0.10 Ordinary | Camino Carrasco 5977, Montevideu | ||||||
Uruguay | Arisco Productos Alimenticios Uruguay S.A. | NV 64.55 PLC 35.45 | UYP1.00 Ordinary | Camino Carrasco 5978, Montevideu |
140 | Financial Statements | Annual Report on Form 20-F 2016 |
27. GROUP COMPANIES CONTINUED
%
|
Country of
|
Name of Undertaking
|
% holding as between NV/PLC
|
Class of share held in subsidiary undertaking
|
Registered address
| |||||
Venezuela | Unilever Andina Venezuela S.A. | NV 100 | VEB1,000.00 Ordinary | Edificio Torre Corp Banca, Piso 15, entre Avenidas Blandín y Los Chaguaramos, Urbanización La Castellana, Caracas | ||||||
Vietnam | Unilever Vietnam International Company Limited | NV 100 | Membership Interest | Lot A2-3, Tay Bac Cu Chi Industry Zone, Tan An Hoi Ward, Cu Chi District, Ho Chi Minh City | ||||||
Zambia | Unilever South East Africa Zambia Limited | PLC 100 | ZMK2.00 Cumulative Redeemable Preference | Stand No. 7136, Mwembeshi Road, P.O.Box 31953 Lusaka | ||||||
PLC 100 | ZMK2.00 Ordinary | |||||||||
Zimbabwe | Unilever Zimbabwe (Pvt) Limitedr | PLC 100 | ZWD2.00 Ordinary | Box 950 Harare |
SUBSIDIARY UNDERTAKINGS NOT INCLUDED IN THE CONSOLIDATION
%
|
Country of
|
Name of Undertaking
|
% holding as between NV/PLC
|
Class of share held in subsidiary undertaking
|
Registered address
| |||||
Cayman Islands | Personal Care Marketing & Technology Inc | NV 55.40 PLC 44.60 | KYD1.00 Ordinary | Walker Nominees Limited, 190 Elgin Ave, Georgetown, GC KY1-9001 | ||||||
China | Blueair Technology (Shenzen) Co. Limited | NV 100 | Membership Interest | Unit 1A, Building B5, Zhaoshangju Guangming Science and Technology Park, Guanguang Road, Guangming New District, Shenzhen City | ||||||
60 | Cuba | Unilever Suchel, S.A. | NV 60 PLC 0 | USD1,000.00 Ordinary | Zona Especial de Desarrollo Mariel, Provincia Artemisa | |||||
Djibouti | Unilever Djibouti FZCO Limited | PLC 100 | USD20.00 Ordinary | Haramous, BP 169 | ||||||
Ecuador | Visanuasa S.A. | NV 100 | USD1.00 Ordinary | Km 25 Vía a Daule, Guayaquil | ||||||
67.39 | England | Big Sync Music Limitedr◇ | NV 67.39 PLC 0 | GBP0.001 A Ordinary | 5th Floor, 6 St Andrew Street, London, EC4A 3AE | |||||
and Wales | NV 100 | GBP1.00 Preferred Ordinary | ||||||||
97.67 | England | Catexel Limitedr◇ | NV 0 PLC 97.67 | GBP0.01 Ordinary-A | 5th Floor, 6 St Andrew Street, London, EC4A 3AE | |||||
45.25 | and Wales | NV 0 PLC 45.25 | GBP0.01 Ordinary-G | |||||||
96.67 | NV 0 PLC 96.67 | GBP0.01 Preference | ||||||||
79.52 | England | Catexel Technologies Limitedr◇ | NV 0 PLC 79.52 | GBP0.001 A Ordinary | 5th Floor, 6 St Andrew Street, London, EC4A 3AE | |||||
and Wales | ||||||||||
80.27 | England | Catexel Cellulosics Limitedr◇ | NV 0 PLC 80.27 | GBP0.001 A Ordinary | 5th Floor, 6 St Andrew Street, London, EC4A 3AE | |||||
and Wales | ||||||||||
England | Unilever Ventures General Partner | PLC 100 | GBP1.00 Ordinary | 5th Floor, 6 St Andrew Street, London, EC4A 3AE | ||||||
and Wales | Limited◇ | |||||||||
Ghana | United Africa Trust Limited | PLC 100 | GHC10.00 Ordinary | Plot No. Ind/A/3A4, Heavy Industrial Area, Tema | ||||||
Greece | Lipoma Management Consulting SA | NV 100 | EUR10.00 Ordinary | Kymis ave & 10, Seneka str. GR-145 64 Kifissia | ||||||
67.21 | India | Hindustan Unilever Foundation | NV 0 PLC 67.21 | INR10.00 Ordinary | Unilever House, B. D. Sawant Marg, Chakala, Andheri (E), Mumbai 400 099 | |||||
Indonesia | Unilever Trading Indonesia | NV 100 | IDR1,000.00 Ordinary | Graha Unilever, Jalan Jenderal Gatot Subroto Kav 15, Jakarata 12930 | ||||||
Israel | PCMR International Limited | NV 55.40 PLC 44.60 | NIS0.10 Ordinary | 3 Daniel Fisch St., Tel Aviv, 6473104, Israel | ||||||
Jamaica | Unilever Jamaica Limited | PLC 100 | JMD1.00 Ordinary | White Marl Street, Spanish Town, PO Box 809, Parish Saint Catherine | ||||||
Jordan | Unilever Jordan LLC | NV 100 | JOD10.00 Ordinary | Amman, Jordan | ||||||
Kenya | Union East African Trust Limited* | PLC 100 | KES20.00 Ordinary | Commercial Street, P.O. BOX 40592-00100, Nairobi | ||||||
Morocco | Societe Commerciale du Rif | PLC 100 | MAD50.00 Ordinary | Km 10, Route Cotiere, Ain Sebaa, Casablanca | ||||||
Morocco | Societe Tangeroise de Parfumerie et dHygiene S.A.R.L. | PLC 100 | MAD50.00 Ordinary | Km 10, Route Cotiere, Ain Sebaa, Casablanca | ||||||
79.52 | Netherlands | Chemsenti B.V. | NV 0 PLC 79.52 | EUR1.00 Ordinary | Wassenaarseweg 72, 2333 AL Leiden | |||||
Netherlands | Unilever Europe B.V.* | NV 100 | EUR1.00 Ordinary | Weena 455, 3013 AL Rotterdam | ||||||
Rwanda | Unilever Tea Rwanda Limited | PLC 100 | RWF4270.00 Ordinary | Nyarugenge, Nyarungenge, Umujyi wa Kigali, Rwanda, P O BOX 6428 KIgali | ||||||
Scotland | Unilever Ventures (SLP) General Partner Limited | PLC 100 | GBP1.00 Ordinary | 15 Atholl Crescent, Edinburgh, EH3 8HA | ||||||
49 | United Arab Emirates | Unilever Home & Personal Care Products Manufacturing LLCx | NV 0 PLC 49 | AED1,000.00 Ordinary | P.O.Box 18221 European Business Center Dubai Investments Park 1 | |||||
United States | DSC Distribution, Inc. | NV 55.40 PLC 44.60 | Membership Interest | 13335 Maxella Ave. Marina del Rey, CA 90292 | ||||||
United States | Grom WTC LLC | NV 100 | Membership Interest | 233 Bleecker Street, New York, 10014 | ||||||
United States | Grom Century City LLC | NV 100 | Membership Interest | 233 Bleecker Street, New York, 10014 | ||||||
Zimbabwe | Birds Eye Foods (Private) Limited | PLC 100 | ZWD2.00 Ordinary | Box 950 Harare | ||||||
Zimbabwe | Hudson and Knight (Private) Limited | PLC 100 | ZWD2.00 Ordinary | Box 950 Harare | ||||||
Zimbabwe | Van den Berghs and Jurgens (Private) | PLC 100 | ZWD2.00 Ordinary | Box 950 Harare | ||||||
Limited |
Annual Report on Form 20-F 2016 | Financial Statements | 141 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
UNILEVER GROUP CONTINUED
27. GROUP COMPANIES CONTINUED
ASSOCIATED UNDERTAKINGS
%
|
Country of
|
Name of Undertaking
|
% holding as between NV/PLC
|
Class of share held in subsidiary undertaking
|
Registered address
| |||||
49 | Bahrain | Unilever Bahrain Co. W.L.L. | NV 0 PLC 49 | BHD50.00 Ordinary | 161, Road 328, Block 358, Zinj, Manama | |||||
50 | Brazil | ITB Ice Tea do Brazil Limitada | NV 32.28 PLC 17.72 | BRL1.00 Quotas | Rod. Dom Gabriel Paulino Bueno Couto, km. 66 Part | |||||
40 | Canada | A&W Root Beer Beverages Canada Inc. | NV 25.82 PLC 14.18 | No Par Value Class B Common | 171 West Esplanade, Suite 300, North Vancouver, British Colombia V7M 3K9 | |||||
49 | Cyprus | Unilever PMT Limitedr | NV 0 PLC 49 | EUR1.71 Ordinary-B | 2 Marcou Dracou str., Engomi Industrial Estate, 2409 Nicosia | |||||
24.22 | England | Arecor Limitedr◇ | NV 0 PLC 24.22 | GBP0.01 Ordinary | Chesterford Research Park, Little Chesterford, Saffron, | |||||
35.72 | and Wales | NV 0 PLC 35.72 | GBP0.01 A Ordinary | Waldon CB10 1XL | ||||||
30.11 | England and Wales | Blis Media Limitedr◇ | NV 30.11 PLC 0 | GBP0.00001 Series A Participating Preference | 3rd Floor, 101 New Cavendish Street, London W1W 6XH | |||||
49.53 | England and Wales | CDDM Technology Limitedr◇ | NV 0 PLC 49.53 | GBP0.01 Preferred Ordinary | First Floor, 59-61 High Street West, Glossop SK13 8AZ | |||||
46.30 | England and Wales | Langholm Capital II L.P. | NV 46.30 PLC 0 | Partnership Interest | 1st Floor, Charles House, 5-11 Regent Street, London SW1Y 4LR | |||||
24.93 | England and Wales | Limitless Technology Limitedr◇ | NV 24.93 PLC 0 | GBP0.001 A Ordinary | Ashton, Hillbrow Road, Esher KT10 9UD | |||||
5.98 | England and Wales |
SCA Investments Limitedr◇ | NV 5.98 PLC 0 | GBP0.001 A Ordinary | Unit 3 Morris House, Swainson Road, London W3 7UP | |||||
74.60 | NV 74.60 PLC 0 | GBP0.001 H Ordinary | ||||||||
25.19 | NV 25.19 PLC 0 | GBP0.001 I Ordinary | ||||||||
29.84 | NV 29.84 PLC 0 | GBP0.001 J Ordinary | ||||||||
64.22 | England and Wales | Trinny London Limitedr◇ | NV 64.22 PLC 0 | GBP0.01 Series A Preferred | Cambridge House, 16 High Street, Saffron Walden, Essex CB10 1AX | |||||
22.22 | England and Wales |
Voltea Limitedr◇ | NV 0 PLC 22.22 | EUR0.10 A Ordinary | 5th Floor, 6 St Andrew Street, London EC4A 3AE | |||||
58.32 | NV 0 PLC 58.32 | EUR0.10 A Preferred | ||||||||
25.41 | NV 0 PLC 25.41 | EUR0.10 A1 Preferred | ||||||||
17.71 | NV 0 PLC 17.71 | EUR0.10 B Preferred | ||||||||
49.99 | France | Relais Dor Centrale S.A.S. | NV 32.27 PLC 17.72 | No Par Value Ordinary | 7 rue Armand Peugeot, 92500 Rueil-Malmaison | |||||
50 | Germany | Hans Henglein & Sohn GmbH | NV 32.78 PLC 17.22 | EUR100,000.00 Ordinary | Beerbachstraße 19, 91183 Abenberg | |||||
50 | Germany | Henglein & Co. Handels-und Beteiligungs GmbH & Co. KG◇ | NV 32 PLC 18 | Partnership Interest | Beerbachstraße 19, 91183 Abenberg | |||||
50 | Germany | Henglein Geschäftsführungs GmbH◇ | NV 32 PLC 18 | DEM 50,000.00 Ordinary | Beerbachstraße 19, 91183 Abenberg | |||||
50 | Germany | Henglein GmbH◇ | NV 32 PLC 18 | DEM 50,000.00 Ordinary | Bad Bribaer Straße, 06647 Klosterhäseler | |||||
50 | Germany | Hochreiter Frischteigwaren GmbH | NV 32.78 PLC 17.22 | DEM250,000.00 Ordinary | Beerbachstruße 37, 17153 Stavenhagen | |||||
50 | Germany | Nürnberger Kloßteig NK GmbH & Co. KG◇ | NV 32 PLC 18 | Partnership Interest | Beerbachstraße 19, 91183 Abenberg | |||||
33.61 | India | Kimberly Clark Lever Private Limited◇ | NV 0 PLC 33.61 | INR10.00 Ordinary | GAT No. 934-937, Village Sanaswadi | |||||
40 | Indonesia | PT Anugrah Mutu Bersama | NV 26.22 PLC 13.78 | IDR1,000,000.00 Ordinary | Wisma Bango Lt.05, Jl.Sulaiman No.32, Jakarta Barat 11540 | |||||
51.78 | Ireland | Brandtone Holdings Limitedr◇ | NV 51.78 PLC 0 | EUR0.001 A Ordinary | 51-54 Pearse Street, Dublin 2 | |||||
70.38 | NV 70.38 PLC 0 | EUR0.001 Preferred Ordinary | ||||||||
21.58 | NV 21.58 PLC 0 | EUR0.001 Series 2 Preferred | ||||||||
19.99 | NV 19.99 PLC 0 | EUR0.001 Series 3 Preferred | ||||||||
23.70 | Ireland | Clavis Technology Limitedr◇ | NV 23.70 PLC 0 | EUR0.0025 Series A2 Convertible Redeemable Preference | 7th Floor, OConnell Bridge House, DOlier Street, Dublin 2 | |||||
9.95 | NV 9.95 PLC 0 | EUR0.0025 Series Convertible Redeemable Preference | ||||||||
Ireland | Pepsi Lipton International Limitedr | NV 100 | EUR1.00 B Ordinary | 70 Sir John Rogersons Quay, Dublin 2 | ||||||
NV 100 | EUR1.00 C Preferred | |||||||||
NV 100 | EUR1.00 E Ordinary | |||||||||
NV 100 | EUR1.00 G Preferred | |||||||||
99.74 | Israel | Iluminage Beauty Limitedr | NV 99.74 PLC 0 | ILS1.00 Preference | Kochav Yokneam Building, 4th Floor, P.O Box 14, Yokneam Illit 20692 | |||||
34 | Japan | Grom Japan K.K◇ | NV 34 PLC 0 | JPY50,000.00 Ordinary | #308, 541, Minami Azabu, Tokyo | |||||
40.40 | Mauritius | Capvent Asia Consumer Fund Limitedr | NV 40.40 PLC 0 | USD0.01 Class A | 3rd Floor, Harbour Front Building, President John Kennedy Street, Port Louis | |||||
49 | Oman | Towell Unilever LLC | NV 0 PLC 49 | OMR10.00 Ordinary | Po Box 1711, Ruwi, Postal code 112 | |||||
Philippines | Sto Tomas Paco Land Corpr◇ | NV 64.55 PLC 35.45 | PHP1.00 Common | 11th Avenue corner 39th Street, Bonifacio Triangle, Bonifacio Global City, Taguig City, M.M | ||||||
Philippines | WS Holdings Inc.r◇ | NV 64.55 PLC 35.45 | PHP1.00 Common B | Manggahan Light Industrial Compound, A. Rodriguez Avenue, Bo. Manggahan, Pasig City | ||||||
Philippines | Selecta Walls Land Corpr◇ | NV 64.55 PLC 35.45 | PHP10.00 Common B | Manggahan Light Industrial Compound, A. Rodriguez Avenue, Bo. Manggahan, Pasig City | ||||||
Philippines | Paco Platform 7.5 Inc.r◇ | NV 64.55 PLC 35.45 | PHP1.00 Common | 11th Avenue corner 39th Street, Bonifacio Triangle, Bonifacio Global City, Taguig City, M.M | ||||||
35.10 | Philippines | Cavite Horizons Land, Inc.◇ | NV 22.66 PLC 12.44 | PHP1.00 Common | 11th Avenue corner 39th Street, Bonifacio Triangle, | |||||
NV 64.55 PLC 35.45 | PHP10,000.00 Preference | Bonifacio Global City, Taguig City | ||||||||
45.40 | Philippines | Industrial Realties, Inc.◇ | NV 29.30 PLC 16.1 | PHP1.00 Common | 11th Avenue corner 39th Street, Bonifacio Triangle, Bonifacio Global City, Taguig City | |||||
55 | Portugal | Fima Ola Produtos Alimentares, S.A. | NV 0 PLC 55 | EUR500.00 Ordinary | Largo Monterroio Mascarenhas, 1,1099081 Lisboa | |||||
55 | Portugal | Gallo Worldwide, Limitada | NV 0 PLC 55 | EUR1,000,000.00 Quotas | Largo Monterroio Mascarenhas, 1,1099081 Lisboa | |||||
54 | Portugal | Transportadora Central do Infante, Limitada | NV 0 PLC 54 | EUR1.00 Ordinary | Largo Monterroio Mascarenhas, 1,1099081 Lisboa | |||||
55 | Portugal | Unilever Jerónimo Martins, Limitada | NV 0 PLC 55 | EUR26,295,157.00 Quotas | Largo Monterroio Mascarenhas, 1,1099081 Lisboa | |||||
55 | Portugal | Victor Guedes Industria e Comercio, S.A. | NV 0 PLC 55 | EUR5.00 Ordinary | Largo Monterroio Mascarenhas, 1,1070-184 Lisboa |
142 | Financial Statements | Annual Report on Form 20-F 2016 |
27. GROUP COMPANIES CONTINUED
%
|
Country of
|
Name of Undertaking
|
% holding as between NV/PLC
|
Class of share held in subsidiary undertaking
|
Registered address
| |||||
99.50 | Sweden | SachaJuan Haircare ABr◇ | NV 99.50 PLC 0 | SEK1.00 Class B Shares | No 18 Office & Lounge, Briger Jarlsgatan 18,114 34 Stockholm | |||||
49 | United Arab Emirates | Al Gurg Unilever LLC | NV 0 PLC 49 | AED1,000.00 Ordinary | P.O.Box 49, Dubai | |||||
49 | United Arab Emirates | Al Gurg Unilever LLC | NV 0 PLC 49 | AED1,000.00 Ordinary | P.O.Box 49, Dubai | |||||
49 | United Arab Emirates | Thani Murshid Unilever LLC | NV 49 PLC 0 | AED1,000.00 Ordinary | Po Box 49, Abu Dhabi | |||||
8.30 | United States | Discuss.io Incr◇ | NV 8.30 PLC 0 | USD0.0001 Common Stock | C/O National Registered Agents, Inc.160 Green Tree Drive, | |||||
15.36 | NV 15.36 PLC 0 | USD0.0001 Series Seed | Suite 101, Dover, Delaware 19904 | |||||||
50 | United States | Pepsi Lipton Tea Partnership | NV 27.70 PLC 22.30 | Partnership Interest | 700 Sylvan Avenue, Englewood Cliffs, New Jersey 07632-3201 | |||||
57.27 | United States | Physic Ventures L.P.◇ | NV 57.27 PLC 0 | Partnership Interest | 2711 Centerville Road, Suite 400, Wilmington, Delaware |
Notes:
* | Indicates an undertaking for which Unilever N.V. has issued a declaration of assumption of liability in accordance with section 403, Book 2, Dutch Civil Code. |
o | Indicates an undertaking directly held by N.V. or PLC. All other undertakings are indirectly held. In the case of Hindustan Unilever Limited 51.50% is directly held and the remainder of 15.70% is indirectly held. In the case of Unilever Kenya Limited 39.13% is directly held and the remainder of 60.87% is indirectly held. In the case of Unilever Sri Lanka Limited 5.49% is directly held and the remainder of 94.51% is indirectly held. In the cases of each of Unilever BCS UK Services Limited and Unilever BCS UK Limited the ordinary shares are indirectly held and the redeemable golden share is directly held. In the case of Mixhold B.V. 27.71% is directly held and the remainder of 72.29% is indirectly held. In the cases of each of Unilever Gida Sarayi ve Ticaret A.Ş. and Unilever Sarayi ve Ticaret Turk A.Ş. a fractional amount is directly held and the remainder is indirectly held. In the case of United Holdings Limited, the ordinary shares are directly held and the preferred shares are indirectly held. In the case of Mixhold N.V., 55.37% of the ordinary A shares are directly held, the remainder of 44.63% are indirectly held and the other share classes are indirectly held. In the case of Naamlooze Vernootschap Elma the ordinary shares are directly held and the cumulative preference shares are indirectly held. |
| Shares the undertaking holds in itself. |
r | Denotes an undertaking where other classes of shares are held by a third party. |
X | Unilever Trading LLC, Binzagr Unilever Limited, Unilever Home and Personal Care Products Manufacturing LLC and UTIC Distribution S.A. are subsidiary undertakings pursuant to section 1162(2)(b) Companies Act 2006. Servern Gulf FZCO is a subsidiary undertaking pursuant to section 1162(4)(a) Companies Act 2006. The Unilever Group is entitled to 50% of the profits made by Binzagr Unilever Limited. The Unilever Group is entitled to 80% of the profits made by Unilever Trading LLC, Unilever Home and Personal Care Products Manufacturing LLC and Unilever General Trading LLC. |
◇ | Accounted for as non-current investments within non-current financial assets. |
Exemption pursuant to Section 264b German Commercial Code. |
Further to the above disclosures (1) due to the unified board of Unilever N.V. and Unilever PLC, Unilever N.V. and Unilever PLC are each considered to be a subsidiary undertaking of the other in accordance with section 1162 (4) (b) of the Companies Act 2006 and (2) details of holdings of subsidiary undertakings in the share capitals of Unilever N.V. and Unilever PLC are given under the heading Our Shares on pages 30 to 32.
In addition, we have revenues either from our own operations or otherwise in the following locations: Afghanistan, Albania, Andorra, Angola, Antartica, Antigua, Armenia, Azerbaijan, Bahamas, Barbados, Belarus, Belize, Benin, Bhutan, Botswana, Brunei Darussalam, Burkina Faso, Burundi, Cameroon, Cape Verde, Central African Republic, Chad, Comoros, Congo, Democratic Republic of Congo, Dominica, Equatorial Guinea, Eritrea, Fiji, French Guiana, Gabon, Gambia, Georgia, Grenada, Guadeloupe, Guinea, Guinea-Bissau, Guyana, Haiti, Iceland, Iraq, Kiribati, Kuwait, Kyrgyzstan, Lesotho, Liberia, Libya, Liechtenstein, Luxembourg, Macao, Macedonia, Madagascar, Maldives, Mali, Malta, Marshall Islands, Martinique, Mauritania, Mauritius, Micronesia (federated states of), Moldova (Republic of), Monaco, Mongolia, Montenegro, Namibia, Nauru, Palau, Papua New Guinea, Qatar, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Samoa, San Marino, Senegal, Seychelles, Sierra Leone, Solomon Islands, Somalia, South Sudan, Sudan, Suriname, Swaziland, Syrian Arab Republic, Tajikistan, Timor Leste, Togo, Tonga, Turkmenistan, Tuvalu, Uzbekistan, Vanuatu and Yemen.
The Group has established branches in Argentina, Azerbaijan, Cuba, the Dominican Republic, Kazakhstan, Moldova, the Netherlands, the Philippines, Rwanda, Russia, Saudi Arabia, Slovenia and Turkey.
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FINANCIAL CALENDAR
ANNUAL GENERAL MEETINGS
Date | Voting Record date | Voting and Registration date | ||||
NV |
1.30pm 26 April 2017 | 29 March 2017 | 19 April 2017 | |||
PLC |
1.30pm 27 April 2017 | | 25 April 2017 |
QUARTERLY DIVIDENDS
Dates listed below are applicable to all four Unilever listings (NV ordinary shares, PLC ordinary shares, NV New York shares, and PLC ADRs).
Announced | NV NY and PLC ADR ex-dividend date |
NV and PLC | Record date | Payment date | ||||||
Quarterly dividend announced with the Q4 2016 results |
26 January 2017 | 8 February 2017 | 9 February 2017 | 10 February 2017 | 15 March 2017 | |||||
Quarterly dividend announced with the Q1 2017 results |
20 April 2017 | 3 May 2017 | 4 May 2017 | 5 May 2017 | 7 June 2017 | |||||
Quarterly dividend announced with the Q2 2017 results* |
20 July 2017 | 2 August 2017 | 3 August 2017 | 4 August 2017 | 6 September 2017 | |||||
Quarterly dividend announced with the Q3 2017 results |
19 October 2017 | 1 November 2017 | 2 November 2017 | 3 November 2017 | 13 December 2017 |
* | Also applicable for preferential dividends NV. |
Annual Report on Form 20-F 2016 | Shareholder information | 155 |
156 | Annual Report on Form 20-F 2016 |
ADDITIONAL INFORMATION FOR US LISTING PURPOSES
FORM 20-F REFERENCES
Item 1 | Identity of Directors, Senior Management and Advisers | n/a | ||||
Item 2 | Offer Statistics and Expected Timetable | n/a | ||||
Item 3 | Key Information | |||||
A. | Selected Financial Data | 111, 162, 168 170 | ||||
B. | Capitalisation and Indebtedness | n/a | ||||
C. | Reasons for the offer and use of proceeds | n/a | ||||
D. | Risk factors | 36 41 | ||||
Item 4 | Information on the Company | |||||
A. | History and development of the company | 17 18, 22 35, 87, 106 107, 126 128, 155, 175 178 | ||||
B. | Business overview | 1, 6 11, 14 29, 41, 90 92, 175 178 | ||||
C. | Organisational structure | 29, 131 143 | ||||
D. | Property, plant and equipment | 106 107, 178 | ||||
Item 4A | Unresolved Staff Comments | n/a | ||||
Item 5 | Operating and Financial Review and Prospects | |||||
A. | Operating results | 4, 6 7, 12, 21 22, 23 28, 41, 117 118, 175 178 | ||||
B. | Liquidity and capital resources | 25, 36, 78, 87, 106 107, 110 111, 114 126, 177 178 | ||||
C. | Research and development, patents and licences, etc. | 8 9, 92 93 | ||||
D. | Trend information | 4, 6 7, 23 28, 37 41, 175 178 | ||||
E. | Off-balance sheet arrangements | 115 120, 122 126 | ||||
F. | Tabular disclosure of contractual obligations | 26, 106 107, 114, 125 126 | ||||
G. | Safe harbour | Inside back cover | ||||
Item 6 | Directors, Senior Management and Employees | |||||
A. | Directors and senior management | 3, 29, 159 | ||||
B. | Compensation | 25, 41, 48, 63, 94 100 | ||||
C. | Board practices | 3, 5, 29, 30, 42 47, 62 63, 73, 75 | ||||
D. | Employees | 94, 159 | ||||
E. | Share ownership | 67, 70 74, 99 100, 159 | ||||
Item 7 | Major Shareholders and Related Party Transactions | |||||
A, | Major shareholders | 29, 31 33, 160 | ||||
B. | Related party transactions | 129, 160 | ||||
C. | Interest of experts and counsel | n/a | ||||
Item 8 | Financial Information | |||||
A. | Consolidated statements and other financial information | 78, 79, 84 143, 155, 162, 170 174 | ||||
B. | Significant changes | 130 | ||||
Item 9 | The Offer and Listing | |||||
A. | Offer and listing details | 160 161 | ||||
B. | Plan of distribution | n/a | ||||
C. | Markets | 30 32 | ||||
D. | Selling shareholders | n/a | ||||
E. | Dilution | n/a | ||||
F. | Expenses of the issue | n/a | ||||
Item 10 | Additional Information | |||||
A. | Share capital | n/a | ||||
B. | Articles of association | 29 35, 46 47, 71, 111, 163 | ||||
C. | Material contracts | 29, 33, 163 | ||||
D. | Exchange controls | 163 | ||||
E. | Taxation | 164 165 | ||||
F. | Dividends and paying agents | n/a | ||||
G. | Statement by experts | n/a | ||||
H. | Documents on display | 155, 163 | ||||
I. | Subsidiary information | n/a |
Annual Report on Form 20-F 2016 | 157 |
ADDITIONAL INFORMATION FOR US LISTING PURPOSES CONTINUED
Item 11 | Quantitative and Qualitative Disclosures About Market Risk | 94 99, 108 111, 115 124, 178 | ||||||
Item 12 | Description of Securities Other than Equity Securities | |||||||
A. | Description of debt securities | n/a | ||||||
B. | Description of warrants and rights | n/a | ||||||
C. | Description of other securities | n/a | ||||||
D.1 | Name of depositary and address of principal executive | n/a | ||||||
D.2 | Title of ADRS and brief description of provisions | n/a | ||||||
D.3 | Transfer agent fees and charges | 166 | ||||||
D.4 | Transfer agent payments fiscal year 2016 | 166 | ||||||
Item 13 | Defaults, Dividend Arrearages and Delinquencies | |||||||
A. | Defaults | 166 | ||||||
B. | Dividend arrearages and delinquencies | 166 | ||||||
Item 14 | Material Modifications to the Rights of Security Holders and Use of Proceeds | n/a | ||||||
Item 15 | Controls and Procedures | 35 36, 43, 79, 167 | ||||||
Item 16 | Reserved | n/a | ||||||
Item 16A | Audit Committee Financial Expert | 30, 42 | ||||||
Item 16B | Code of Ethics | 35, 36, 44 | ||||||
Item 16C | Principal Accountant Fees and Services | 42 43, 167 | ||||||
Item 16D | Exemptions From The Listing Standards For Audit Committees | n/a | ||||||
Item 16E | Purchases Of Equity Securities By The Issuer and Affiliated Purchasers | 30 32, 167 | ||||||
Item 16F | Change in Registrants Certifying Accountant | n/a | ||||||
Item 16G | Corporate Governance | 29 35 | ||||||
Item 16H | Mine Safety Disclosures | n/a | ||||||
Item 17 | Financial Statements | 78, 79, 84 143, 170 174 | ||||||
Item 18 | Financial Statements | 78, 79, 84 143, 170 174 | ||||||
Item 19 | Exhibits | Please refer to the Exhibit list located immediately following the signature page for this document as filed with the SEC. |
158 | Annual Report on Form 20-F 2016 |
DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
EMPLOYEES
The average number of employees for the last three years is provided in note 4A on page 94. The average number of employees during 2016 included 9,297 seasonal workers. We believe our relationship with our employees and any labour unions of which they may be part is satisfactory in all material respects.
GLOBAL EMPLOYEE SHARE PLANS (SHARES)
In November 2014, Unilevers new global employee plan SHARES was launched in 17 countries. SHARES gives eligible Unilever employees below senior management level the opportunity to invest between 25 and 200 per month from their net salary in Unilever shares. For every three shares our employees buy (Investment Shares), Unilever will give them one free Matching Share, which will vest if employees hold their Investment Shares for at least three years. The Matching Shares are not subject to any performance conditions. In 2015, SHARES was rolled out globally and is now offered in more than 100 countries. Executive Directors are not eligible to participate in SHARES. As of 21 February 2017, awards for 182,558 NV and 130,942 PLC shares were outstanding under SHARES.
NORTH AMERICAN SHARE PLANS
Unilever also maintains share plans for its North American employees that are governed by an umbrella plan referred to as the Unilever North America Omnibus Equity Compensation Plan. These plans are the North American equivalents of the GSIP, MCIP and SHARES plans. The rules governing these share plans are materially the same as the rules governing the GSIP, MCIP and SHARES plans, respectively. However, the plans contain non-competition and non-solicitation covenants and they are subject to US and Canadian employment and tax laws. The plans are administered by the North America Compensation Committee of Unilever United States Inc. and they are governed by New York law.
The foregoing description of the Unilever North America Omnibus Equity Compensation Plan does not purport to be complete and is qualified in its entirety by reference to the Unilever North America Omnibus Equity Compensation Plan, including all amendments thereto, filed as Exhibit 99.1 to the Form S-8 (File No. 333-185299) filed with the SEC on 6 December 2012, which is incorporated herein by reference.
COMPENSATION COMMITTEE
The Committee is concerned with the remuneration of the Executive and Non-Executive Directors and the tier of management directly below the Boards. It also has responsibility for the cash and executive and all employee share-based incentive plans, the Remuneration Policy and performance evaluation of the Unilever Leadership Executive and senior corporate executives.
DIRECTORS AND SENIOR MANAGEMENT
FAMILY RELATIONSHIP
There are no family relationships between any of our Executive Directors, members of the ULE or Non-Executive Directors.
OTHER ARRANGEMENTS
None of our Non-Executive Directors, Executive Directors or other key management personnel are elected or appointed under any arrangement or understanding with any major shareholder, customer, supplier or otherwise.
Annual Report on Form 20-F 2016 | 159 |
ADDITIONAL INFORMATION FOR US LISTING PURPOSES CONTINUED
MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
THE OFFER AND LISTING
SHARE PRICES AT 31 DECEMBER 2016
The share prices of the ordinary shares at the end of the year were as follows:
NV per 0.16 ordinary share in Amsterdam
|
|
39.12
|
| |
NV per 0.16 ordinary share in New York
|
|
US$41.06
|
| |
PLC per 31/9p ordinary share in London
|
|
£32.93
|
| |
PLC per 31/9p ordinary share in New York
|
|
US$40.70
|
|
160 | Annual Report on Form 20-F 2016 |
MONTHLY HIGH AND LOW PRICES FOR THE MOST RECENT SIX MONTHS
August | September | October | November | December | January | February | ||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2016 | 2016 | 2017 | 2017 | ||||||||||||||||||||||||||
NV per 0.16 ordinary share in Amsterdam |
High | 41.89 | 42.94 | 41.79 | 38.30 | 39.28 | 39.37 | 44.80(a) | ||||||||||||||||||||||||
(in ) |
Low | 40.58 | 40.23 | 38.18 | 36.39 | 36.80 | 37.40 | 37.49(a) | ||||||||||||||||||||||||
NV per 0.16 ordinary share in New York |
High | 46.84 | 47.88 | 46.43 | 42.19 | 41.06 | 42.32 | 48.79(a) | ||||||||||||||||||||||||
(in US$) |
Low | 44.93 | 44.94 | 41.67 | 38.66 | 39.12 | 40.27 | 40.56(a) | ||||||||||||||||||||||||
PLC per 31/9p ordinary share in London |
High | 36.42 | 36.63 | 37.64 | 34.44 | 32.93 | 34.03 | 37.97(a) | ||||||||||||||||||||||||
(in £) |
Low | 34.78 | 35.05 | 34.18 | 31.07 | 30.92 | 31.91 | 32.04(a) | ||||||||||||||||||||||||
PLC per 31/9p ordinary share in New York |
High | 47.34 | 48.63 | 47.75 | 42.15 | 40.79 | 42.58 | 48.53(a) | ||||||||||||||||||||||||
(in US$) |
Low | 45.86 | 46.02 | 41.67 | 38.78 | 39.14 | 40.51 | 41.11(a) |
(a) | Through 21 February 2017 (the latest practicable date for inclusion in this report). |
QUARTERLY HIGH AND LOW PRICES FOR 2016 AND 2015
1st | 2nd | 3rd | 4th | |||||||||||||||||||||
Quarter | Quarter | Quarter | Quarter | |||||||||||||||||||||
2016 | 2016 | 2016 | 2016 | |||||||||||||||||||||
NV per 0.16 ordinary share in Amsterdam (in ) |
High | 40.89 | 41.91 | 42.94 | 41.79 | |||||||||||||||||||
Low | 36.69 | 38.15 | 40.23 | 36.39 | ||||||||||||||||||||
NV per 0.16 ordinary share in New York (in US$) |
High | 45.52 | 47.05 | 47.88 | 46.43 | |||||||||||||||||||
Low | 40.27 | 42.87 | 44.93 | 38.66 | ||||||||||||||||||||
PLC per 31/9p ordinary share in London (in £) |
High | 31.90 | 35.79 | 36.79 | 37.64 | |||||||||||||||||||
Low | 27.63 | 30.42 | 34.78 | 30.92 | ||||||||||||||||||||
PLC per 31/9p ordinary share in New York (in US$) |
High | 45.77 | 47.91 | 48.63 | 47.75 | |||||||||||||||||||
Low | 40.09 | 43.62 | 45.86 | 38.78 | ||||||||||||||||||||
1st | 2nd | 3rd | 4th | |||||||||||||||||||||
Quarter | Quarter | Quarter | Quarter | |||||||||||||||||||||
2015 | 2015 | 2015 | 2015 | |||||||||||||||||||||
NV per 0.16 ordinary share in Amsterdam (in ) |
High | 40.52 | 41.88 | 42.32 | 42.48 | |||||||||||||||||||
Low | 31.55 | 36.86 | 33.87 | 35.82 | ||||||||||||||||||||
NV per 0.16 ordinary share in New York (in US$) |
High | 43.94 | 44.98 | 46.51 | 46.04 | |||||||||||||||||||
Low | 37.64 | 41.40 | 38.43 | 40.25 | ||||||||||||||||||||
PLC per 31/9p ordinary share in London (in £) |
High | 29.52 | 30.15 | 29.66 | 29.60 | |||||||||||||||||||
Low | 25.73 | 27.30 | 25.24 | 26.82 | ||||||||||||||||||||
PLC per 31/9p ordinary share in New York (in US$) |
High | 44.67 | 45.08 | 46.07 | 45.72 | |||||||||||||||||||
Low | 39.03 | 41.83 | 39.08 | 40.84 | ||||||||||||||||||||
ANNUAL HIGH AND LOW PRICES | ||||||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | ||||||||||||||||||||
NV per 0.16 ordinary share in Amsterdam (in ) |
High | 42.94 | 42.48 | 33.49 | 32.89 | 29.50 | ||||||||||||||||||
Low | 36.39 | 31.55 | 27.16 | 27.50 | 24.56 | |||||||||||||||||||
NV per 0.16 ordinary share in New York (in US $) |
High | 47.88 | 46.51 | 44.31 | 42.78 | 38.75 | ||||||||||||||||||
Low | 38.66 | 37.64 | 36.72 | 37.27 | 30.79 | |||||||||||||||||||
PLC per 31/9p ordinary share in London (in £) |
High | 37.64 | 30.15 | 27.29 | 28.85 | 24.29 | ||||||||||||||||||
Low | 27.63 | 25.24 | 23.06 | 23.19 | 19.94 | |||||||||||||||||||
PLC per 31/9p ordinary share in New York (in US $) |
High | 48.63 | 46.07 | 45.85 | 43.54 | 39.37 | ||||||||||||||||||
Low | 38.78 | 39.03 | 37.85 | 37.67 | 31.04 |
There have not been any significant suspensions in the past three years.
Annual Report on Form 20-F 2016 | 161 |
ADDITIONAL INFORMATION FOR US LISTING PURPOSES CONTINUED
DIVIDEND RECORD
The following tables show the dividends declared and dividends paid by NV and PLC for the last five years, expressed in terms of the revised share denominations which became effective from 22 May 2006. Differences between the amounts ultimately received by US holders of NV and PLC shares are the result of changes in exchange rates between the equalisation of the dividends and the date of payment.
Following agreement at the 2009 Annual General Meetings (AGMs) and separate meetings of ordinary shareholders, the Equalisation Agreement was modified to facilitate the payment of quarterly dividends from 2010 onwards.
2016 | 2015 | 2014 | 2013 | 2012 | ||||||||||||||||
Dividends declared for the year |
||||||||||||||||||||
NV dividends |
||||||||||||||||||||
Dividend per 0.16 |
1.28 | 1.21 | 1.14 | 1.08 | 0.97 | |||||||||||||||
Dividend per 0.16 (US Registry) |
US$1.42 | US$1.32 | US$1.47 | US$1.44 | US$1.25 | |||||||||||||||
PLC dividends |
||||||||||||||||||||
Dividend per 31/9p |
£1.09 | £0.88 | £0.90 | £0.91 | £0.79 | |||||||||||||||
Dividend per 31/9p (US Registry) |
US$1.42 | US$1.32 | US$1.47 | US$1.44 | US$1.25 | |||||||||||||||
Dividends paid during the year |
||||||||||||||||||||
NV dividends |
||||||||||||||||||||
Dividend per 0.16 |
1.26 | 1.19 | 1.12 | 1.05 | 0.95 | |||||||||||||||
Dividend per 0.16 (US Registry) |
US$1.40 | US$1.32 | US$1.51 | US$1.40 | US$1.23 | |||||||||||||||
PLC dividends |
||||||||||||||||||||
Dividend per 31/9p |
£1.04 | £0.87 | £0.91 | £0.89 | £0.77 | |||||||||||||||
Dividend per 31/9p (US Registry) |
US$1.40 | US$1.32 | US$1.51 | US$1.40 | US$1.23 |
EXCHANGE RATES
Unilever reports its financial results and balance sheet position in euros. Other currencies which may significantly impact our financial statements are sterling and US dollars. Average and year-end exchange rates for these two currencies for the last five years are given below.
2016 | 2015 | 2014 | 2013 | 2012 | ||||||||||||||||
Year end |
||||||||||||||||||||
1 = US$ |
1.049 | 1.092 | 1.215 | 1.378 | 1.318 | |||||||||||||||
1 = £ |
0.857 | 0.736 | 0.781 | 0.833 | 0.816 | |||||||||||||||
Average |
||||||||||||||||||||
1 = US$ |
1.111 | 1.111 | 1.334 | 1.325 | 1.283 | |||||||||||||||
1 = £ |
0.815 | 0.725 | 0.807 | 0.849 | 0.811 |
On 21 February 2017 (the latest practicable date for inclusion in this report), the exchange rates between euros and US dollars and between euros and sterling as published in the Financial Times in London were as follows: 1 = US$1.063 and 1 = £0.855.
Noon Buying Rates in New York for cable transfers in foreign currencies as certified for customs purposes by the Federal Reserve Bank of New York were as follows:
2016 | 2015 | 2014 | 2013 | 2012 | ||||||||||||||||
Year end |
||||||||||||||||||||
1 = US$ |
1.055 | 1.086 | 1.210 | 1.378 | 1.319 | |||||||||||||||
Average |
||||||||||||||||||||
1 = US$ |
1.103 | 1.110 | 1.330 | 1.328 | 1.286 | |||||||||||||||
High |
||||||||||||||||||||
1 = US$ |
1.152 | 1.202 | 1.393 | 1.382 | 1.346 | |||||||||||||||
Low |
||||||||||||||||||||
1 = US$ |
1.038 | 1.052 | 1.210 | 1.277 | 1.206 |
On 17 February 2017 (the latest available data for inclusion in this report), the Noon buying rate was 1 = US$1.061.
High and low exchange rate values for each of the last six months:
August | September | October | November | December | January | February | ||||||||||||||||||||||
2016 | 2016 | 2016 | 2016 | 2016 | 2017 | 2017(a) | ||||||||||||||||||||||
High 1 = US $ |
1.133 | 1.127 | 1.121 | 1.112 | 1.076 | 1.079 | 1.080 | |||||||||||||||||||||
Low 1 = US $ |
1.108 | 1.116 | 1.087 | 1.056 | 1.038 | 1.042 | 1.058 |
(a) | Through 17 February 2017 (the latest available data for inclusion in this report). |
162 | Annual Report on Form 20-F 2016 |
Annual Report on Form 20-F 2016 | 163 |
ADDITIONAL INFORMATION FOR US LISTING PURPOSES CONTINUED
164 | Annual Report on Form 20-F 2016 |
Annual Report on Form 20-F 2016 | 165 |
ADDITIONAL INFORMATION FOR US LISTING PURPOSES CONTINUED
166 | Annual Report on Form 20-F 2016 |
PURCHASES OF EQUITY SECURITIES
SHARE PURCHASES DURING 2016
Please also refer to Our shares section on pages 30 to 32.
million | ||||||||||||||||
Of which, number of | Maximum value that | |||||||||||||||
shares purchased | may yet be purchased | |||||||||||||||
Total number of | Average price | as part of publicly | as part of publicly | |||||||||||||
shares purchased | paid per share () | announced plans | announced plans | |||||||||||||
January |
- | - | - | - | ||||||||||||
February(a) |
13,434 | 38.82 | - | - | ||||||||||||
March |
- | - | - | - | ||||||||||||
April |
- | - | - | - | ||||||||||||
May(a) |
3,076,000 | 40.22 | - | - | ||||||||||||
June(a) |
3,081,750 | 40.45 | - | - | ||||||||||||
July |
- | - | - | - | ||||||||||||
August |
- | - | - | - | ||||||||||||
September |
- | - | - | - | ||||||||||||
October |
- | - | - | - | ||||||||||||
November |
- | - | - | - | ||||||||||||
December |
- | - | - | - | ||||||||||||
Total |
6,171,184 | 40.33 | - | - |
(a) | Shares were purchased to satisfy commitments to deliver shares under our share-based plans as described in note 4C Share-based compensation plans on pages 99 and 100. |
Between 31 December 2016 and 21 February 2017 (the latest practicable date for inclusion in this report) neither NV or PLC conducted any share repurchases.
MANAGEMENTS REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
In accordance with the requirements of Section 404 of the US Sarbanes-Oxley Act of 2002, the following report is provided by management in respect of the Groups internal control over financial reporting (as defined in rule 13a15(f) or rule 15d15(f) under the US Securities Exchange Act of 1934):
| Unilevers management is responsible for establishing and maintaining adequate internal control over financial reporting for the Group; |
| Unilevers management has used the Committee of Sponsoring Organizations of the Treadway Commission (COSO) framework (2013) to evaluate the effectiveness of our internal control over financial reporting. Management believes that the COSO framework (2013) is a suitable framework for its evaluation of our internal control over financial reporting because it is free from bias, permits reasonably consistent qualitative and quantitative measurements of internal controls, is sufficiently complete so that those relevant factors that would alter a conclusion about the effectiveness of internal controls are not omitted and is relevant to an evaluation of internal control over financial reporting; |
| Management has assessed the effectiveness of internal control over financial reporting as of 31 December 2016, and has concluded that such internal control over financial reporting is effective; and |
| KPMG LLP and KPMG Accountants N.V., who have audited the consolidated financial statements of the Group for the year ended 31 December 2016, have also audited the effectiveness of internal control over financial reporting as at 31 December 2016 and have issued an attestation report on internal control over financial reporting. |
PRINCIPAL ACCOUNTANT FEES AND SERVICES
million 2016 |
million 2015 |
million 2014 |
||||||||||
Audit fees(a) |
14 | 14 | 14 | |||||||||
Audit-related fees(b) |
(c) | (c) | (c) | |||||||||
Tax fees |
(c) | (c) | (c) | |||||||||
All other fees |
(c) | (c) | (c) |
(a) | Amount payable to KPMG in respect of services supplied to associated pension schemes was less than 1 million individually and in aggregate (2015: less than 1 million individually and in aggregate; 2014: less than 1 million individually and in aggregate). |
(b) | Includes other audit services which comprise audit and similar work that regulations or agreements with third parties require the auditors to undertake. |
(c) | Amounts paid in relation to each type of service are individually less than 1 million. In aggregate the fees paid were 1 million (2015: 1 million, 2014: less than 1 million). |
Annual Report on Form 20-F 2016 | 167 |
ADDITIONAL INFORMATION FOR US LISTING PURPOSES CONTINUED
SELECTED FINANCIAL DATA
The schedules below provide the Groups selected financial data for the five most recent financial years.
million | million | million | million | million | ||||||||||||||||
Consolidated income statement | 2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||
Turnover |
52,713 | 53,272 | 48,436 | 49,797 | 51,324 | |||||||||||||||
Operating profit |
7,801 | 7,515 | 7,980 | 7,517 | 6,977 | |||||||||||||||
Net finance costs |
(563 | ) | (493 | ) | (477 | ) | (530 | ) | (535 | ) | ||||||||||
Share of net profit/(loss) of joint ventures and associates and other income/(loss) from non-current investments | 231 | 198 | 143 | 127 | 91 | |||||||||||||||
Profit before taxation |
7,469 | 7,220 | 7,646 | 7,114 | 6,533 | |||||||||||||||
Taxation |
(1,922 | ) | (1,961 | ) | (2,131 | ) | (1,851 | ) | (1,697 | ) | ||||||||||
Net profit |
5,547 | 5,259 | 5,515 | 5,263 | 4,836 | |||||||||||||||
Attributable to: |
||||||||||||||||||||
Non-controlling interests |
363 | 350 | 344 | 421 | 468 | |||||||||||||||
Shareholders equity |
5,184 | 4,909 | 5,171 | 4,842 | 4,368 | |||||||||||||||
million | million | million | million | million | ||||||||||||||||
Combined earnings per share(a) | 2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||
Basic earnings per share |
1.83 | 1.73 | 1.82 | 1.71 | 1.54 | |||||||||||||||
Diluted earnings per share |
1.82 | 1.72 | 1.79 | 1.66 | 1.50 | |||||||||||||||
(a) For the basis of the calculations of combined earnings per share see Note 7 Combined earnings per share on page 103. |
| |||||||||||||||||||
million | million | million | million | million | ||||||||||||||||
Consolidated balance sheet | 2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||
Non-current assets |
42,545 | 39,612 | 35,680 | 33,391 | 34,042 | |||||||||||||||
Current assets |
13,884 | 12,686 | 12,347 | 12,122 | 12,147 | |||||||||||||||
Total assets |
56,429 | 52,298 | 48,027 | 45,513 | 46,189 | |||||||||||||||
Current liabilities |
20,556 | 20,019 | 19,642 | 17,382 | 15,815 | |||||||||||||||
Non-current liabilities |
18,893 | 16,197 | 14,122 | 13,316 | 14,425 | |||||||||||||||
Total liabilities |
39,449 | 36,216 | 33,764 | 30,698 | 30,240 | |||||||||||||||
Shareholders equity |
16,354 | 15,439 | 13,651 | 14,344 | 15,392 | |||||||||||||||
Non-controlling interests |
626 | 643 | 612 | 471 | 557 | |||||||||||||||
Total equity |
16,980 | 16,082 | 14,263 | 14,815 | 15,949 | |||||||||||||||
Total liabilities and equity |
56,429 | 52,298 | 48,027 | 45,513 | 46,189 | |||||||||||||||
million | million | million | million | million | ||||||||||||||||
Consolidated cash flow statement | 2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||
Net cash flow from operating activities |
7,047 | 7,330 | 5,543 | 6,294 | 6,836 | |||||||||||||||
Net cash flow from/(used in) investing activities |
(3,188 | ) | (3,539 | ) | (341 | ) | (1,161 | ) | (755 | ) | ||||||||||
Net cash flow from/(used in) financing activities |
(3,073 | ) | (3,032 | ) | (5,190 | ) | (5,390 | ) | (6,622 | ) | ||||||||||
Net increase/(decrease) in cash and cash equivalents |
786 | 759 | 12 | (257 | ) | (541 | ) | |||||||||||||
Cash and cash equivalents at the beginning of the year |
2,128 | 1,910 | 2,044 | 2,217 | 2,978 | |||||||||||||||
Effect of foreign exchange rates |
284 | (541 | ) | (146 | ) | 84 | (220 | ) | ||||||||||||
Cash and cash equivalents at the end of the year |
3,198 | 2,128 | 1,910 | 2,044 | 2,217 | |||||||||||||||
Key performance indicators | 2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||
Underlying sales growth (%)(b) |
3.7 | 4.1 | 2.9 | 4.3 | 6.9 | |||||||||||||||
Underlying volume growth (%)(b) |
0.9 | 2.1 | 1.0 | 2.5 | 3.4 | |||||||||||||||
Core operating margin (%)(b) |
15.3 | 14.8 | 14.5 | 14.1 | 13.7 | |||||||||||||||
Free cash flow ( million)(b) |
4,802 | 4,796 | 3,100 | 3,856 | 4,333 |
(b) | NonGAAP measures are defined and described on pages 26 to 28. Reconciliations of non-GAAP measures to relevant GAAP measures are also detailed on pages 26 to 28. |
168 | Annual Report on Form 20-F 2016 |
Ratios and other metrics | 2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||
Operating margin (%) |
14.8 | 14.1 | 16.5 | 15.1 | 13.6 | |||||||||||||||
Net profit margin (%)(c) |
9.8 | 9.2 | 10.7 | 9.7 | 8.5 | |||||||||||||||
Net debt ( million)(b) |
12,614 | 11,505 | 9,900 | 8,456 | 7,355 | |||||||||||||||
Ratio of earnings to fixed charges (times)(d) |
10.8 | 11.4 | 12.3 | 11.7 | 10.2 | |||||||||||||||
(b) NonGAAP measures are defined and described on pages 26 to 28. Reconciliations of non-GAAP measures to relevant GAAP measures are also detailed on pages 26 to 28. (c) Net profit margin is expressed as net profit attributable to shareholders equity as a percentage of turnover. (d) In the ratio of earnings to fixed charges, earnings consist of net profit from continuing operations excluding net profit or loss of joint ventures and associates increased by fixed charges, income taxes and dividends received from joint ventures and associates. Fixed charges consist of interest payable on debt and a portion of lease costs determined to be representative of interest. This ratio takes no account of interest receivable although Unilevers treasury operations involve both borrowing and depositing funds.
|
| |||||||||||||||||||
Underlying sales growth (%) | 2016 vs 2015 |
2015 vs 2014 |
2014 vs 2013 |
2013 vs 2012 |
2012 vs 2011 |
|||||||||||||||
Turnover growth (%) |
(1.0 | ) | 10.0 | (2.7 | ) | (3.0 | ) | 10.5 | ||||||||||||
Effect of acquisitions (%) |
0.8 | 0.7 | 0.4 | | 1.8 | |||||||||||||||
Effect of disposals (%) |
(0.2 | ) | (0.8 | ) | (1.3 | ) | (1.1 | ) | (0.7 | ) | ||||||||||
Effect of exchange rates (%) |
(5.1 | ) | 5.9 | (4.6 | ) | (5.9 | ) | 2.2 | ||||||||||||
Underlying sales growth (%) |
3.7 | 4.1 | 2.9 | 4.3 | 6.9 | |||||||||||||||
Underlying volume growth (%) | 2016 vs 2015 |
2015 vs 2014 |
2014 vs 2013 |
2013 vs 2012 |
2012 vs 2011 |
|||||||||||||||
Underlying volume growth (%) |
0.9 | 2.1 | 1.0 | 2.5 | 3.4 | |||||||||||||||
Effect of price changes (%) |
2.8 | 1.9 | 1.9 | 1.8 | 3.3 | |||||||||||||||
Underlying sales growth (%) |
3.7 | 4.1 | 2.9 | 4.3 | 6.9 | |||||||||||||||
Core operating margin and core operating profit | million 2016 |
million 2015 |
million 2014 |
million 2013 |
million 2012 |
|||||||||||||||
Operating profit |
7,801 | 7,515 | 7,980 | 7,517 | 6,977 | |||||||||||||||
Acquisition and disposal-related cost |
132 | 105 | 97 | 112 | 190 | |||||||||||||||
(Gain)/loss on disposal of group companies |
95 | 9 | (1,392 | ) | (733 | ) | (117 | ) | ||||||||||||
Impairments and other one-off items |
18 | 236 | 335 | 120 | - | |||||||||||||||
Core operating profit |
8,046 | 7,865 | 7,020 | 7,016 | 7,050 | |||||||||||||||
Turnover |
52,713 | 53,272 | 48,436 | 49,797 | 51,324 | |||||||||||||||
Operating margin (%) |
14.8 | 14.1 | 16.5 | 15.1 | 13.6 | |||||||||||||||
Core operating margin (%) |
15.3 | 14.8 | 14.5 | 14.1 | 13.7 | |||||||||||||||
Net profit to free cash flow (FCF) | million 2016 |
million 2015 |
million 2014 |
million 2013 |
million 2012 |
|||||||||||||||
Net profit |
5,547 | 5,259 | 5,515 | 5,263 | 4,836 | |||||||||||||||
Taxation |
1,922 | 1,961 | 2,131 | 1,851 | 1,697 | |||||||||||||||
Share of net profit of joint ventures/associates and other income from non-current investments |
(231 | ) | (198 | ) | (143 | ) | (127 | ) | (91 | ) | ||||||||||
Net finance costs |
563 | 493 | 477 | 530 | 535 | |||||||||||||||
Depreciation, amortisation and impairment |
1,464 | 1,370 | 1,432 | 1,151 | 1,199 | |||||||||||||||
Changes in working capital |
51 | 720 | 8 | 200 | 822 | |||||||||||||||
Pensions and similar obligations less payments |
(327 | ) | (385 | ) | (364 | ) | (383 | ) | (369 | ) | ||||||||||
Provisions less payments |
65 | (94 | ) | 32 | 126 | (43 | ) | |||||||||||||
Elimination of (profits)/losses on disposals |
127 | 26 | (1,460 | ) | (725 | ) | (236 | ) | ||||||||||||
Non-cash charge for share-based compensation |
198 | 150 | 188 | 228 | 153 | |||||||||||||||
Other adjustments |
(81 | ) | 49 | 38 | (15 | ) | 13 | |||||||||||||
Cash flow from operating activities |
9,298 | 9,351 | 7,854 | 8,099 | 8,516 | |||||||||||||||
Income tax paid |
(2,251 | ) | (2,021 | ) | (2,311 | ) | (1,805 | ) | (1,680 | ) | ||||||||||
Net capital expenditure |
(1,878 | ) | (2,074 | ) | (2,045 | ) | (2,027 | ) | (2,143 | ) | ||||||||||
Net interest and preference dividends paid |
(367 | ) | (460 | ) | (398 | ) | (411 | ) | (360 | ) | ||||||||||
Free cash flow |
4,802 | 4,796 | 3,100 | 3,856 | 4,333 | |||||||||||||||
Net cash flow (used in)/from investing activities |
(3,188 | ) | (3,539 | ) | (341 | ) | (1,161 | ) | (755 | ) | ||||||||||
Net cash flow (used in)/from financing activities |
(3,073 | ) | (3,032 | ) | (5,190 | ) | (5,390 | ) | (6,622 | ) |
Annual Report on Form 20-F 2016 | 169 |
ADDITIONAL INFORMATION FOR US LISTING PURPOSES CONTINUED
Total financial liabilities to net debt | million 2016 |
million 2015 |
million 2014 |
million 2013 |
million 2012 |
|||||||||||||||
Total financial liabilities |
(16,595 | ) | (14,643 | ) | (12,722 | ) | (11,501 | ) | (10,221 | ) | ||||||||||
Current financial liabilities |
(5,450 | ) | (4,789 | ) | (5,536 | ) | (4,010 | ) | (2,656 | ) | ||||||||||
Non-current financial liabilities |
(11,145 | ) | (9,854 | ) | (7,186 | ) | (7,491 | ) | (7,565 | ) | ||||||||||
Cash and cash equivalents as per balance sheet |
3,382 | 2,302 | 2,151 | 2,285 | 2,465 | |||||||||||||||
Cash and cash equivalents as per cash flow statement |
3,198 | 2,128 | 1,910 | 2,044 | 2,217 | |||||||||||||||
Add bank overdrafts deducted therein |
184 | 174 | 241 | 241 | 248 | |||||||||||||||
Other current financial assets |
599 | 836 | 671 | 760 | 401 | |||||||||||||||
Net debt |
(12,614 | ) | (11,505 | ) | (9,900 | ) | (8,456 | ) | (7,355 | ) |
GUARANTOR STATEMENTS (AUDITED)
On 30 September 2014, Unilever N.V. and Unilever Capital Corporation (UCC) filed a US Shelf registration, which is unconditionally and fully guaranteed, jointly and severally, by Unilever N.V., Unilever PLC and Unilever United States, Inc. (UNUS) and that superseded the NV and UCC US Shelf registration filed on 1 November 2011, which was unconditionally and fully guaranteed, jointly and severally, by NV, PLC and UNUS. UCC and UNUS are each indirectly 100% owned by the Unilever parent entities (as defined below). Of the US Shelf registration, US$6.3 billion of Notes were outstanding at 31 December 2016 (2015: US$5.6 billion; 2014: US$5.0 billion) with coupons ranging from 0.85% to 5.9%. These Notes are repayable between 2 August 2017 and 15 November 2032.
Provided below are the income statements, cash flow statements and balance sheets of each of the companies discussed above, together with the income statement, cash flow statement and balance sheet of non-guarantor subsidiaries. These have been prepared under the historical cost convention and, aside from the basis of accounting for investments at net asset value (equity accounting), comply in all material respects with International Financial Reporting Standards. The financial information in respect of NV, PLC and UNUS has been prepared with all subsidiaries accounted for on an equity basis. Information on NV and PLC is shown collectively as Unilever parent entities. The financial information in respect of the non-guarantor subsidiaries has been prepared on a consolidated basis.
million | million | million | million | million | million | |||||||||||||||||||
Income statement for the year ended 31 December 2016 |
|
Unilever Capital Corporation subsidiary issuer |
|
|
Unilever parent |
(a) |
|
Unilever United States Inc. subsidiary guarantor |
|
|
Non- guarantor subsidiaries |
|
Eliminations | |
Unilever Group |
| ||||||||
Turnover |
- | - | - | 52,713 | - | 52,713 | ||||||||||||||||||
Operating profit |
- | 269 | (5 | ) | 7,537 | - | 7,801 | |||||||||||||||||
Net finance income/(costs) |
1 | (110 | ) | (331 | ) | (29 | ) | - | (469 | ) | ||||||||||||||
Pensions and similar obligations |
- | (3 | ) | (27 | ) | (64 | ) | - | (94 | ) | ||||||||||||||
Other income/(losses) |
- | - | - | 231 | - | 231 | ||||||||||||||||||
Profit before taxation |
1 | 156 | (363 | ) | 7,675 | - | 7,469 | |||||||||||||||||
Taxation |
- | (114 | ) | - | (1,808 | ) | - | (1,922 | ) | |||||||||||||||
Net profit before subsidiaries |
1 | 42 | (363 | ) | 5,867 | - | 5,547 | |||||||||||||||||
Equity earnings of subsidiaries |
- | 5,142 | 804 | (4,559 | ) | (1,387 | ) | - | ||||||||||||||||
Net profit |
1 | 5,184 | 441 | 1,308 | (1,387 | ) | 5,547 | |||||||||||||||||
Attributable to: |
||||||||||||||||||||||||
Non-controlling interests |
- | - | - | 363 | - | 363 | ||||||||||||||||||
Shareholders equity |
1 | 5,184 | 441 | 945 | (1,387 | ) | 5,184 | |||||||||||||||||
Total comprehensive income |
1 | 5,170 | 468 | 517 | (1,387 | ) | 4,769 |
(a) | The term Unilever parent entities includes Unilever N.V. and Unilever PLC. Though Unilever N.V. and Unilever PLC are separate legal entities, with different shareholder constituencies and separate stock exchange listings, they operate as nearly as practicable as a single economic entity. Debt securities issued by entities in the Unilever Group are fully and unconditionally guaranteed by both Unilever N.V. and Unilever PLC. |
170 | Annual Report on Form 20-F 2016 |
million | million | million | million | million | million | |||||||||||||||||||
Unilever | Unilever | |||||||||||||||||||||||
Capital | United | |||||||||||||||||||||||
Corporation | Unilever | (a) | States Inc. | Non- | ||||||||||||||||||||
Income statement | subsidiary | parent | subsidiary | guarantor | Unilever | |||||||||||||||||||
for the year ended 31 December 2015 | issuer | entities | guarantor | subsidiaries | Eliminations | Group | ||||||||||||||||||
Turnover |
- | - | - | 53,272 | - | 53,272 | ||||||||||||||||||
Operating profit |
- | 990 | (5 | ) | 6,530 | - | 7,515 | |||||||||||||||||
Net finance income/(costs) |
- | (103 | ) | (327 | ) | 58 | - | (372 | ) | |||||||||||||||
Pensions and similar obligations |
- | (3 | ) | (29 | ) | (89 | ) | - | (121 | ) | ||||||||||||||
Other income/(losses) |
- | 439 | - | (241 | ) | - | 198 | |||||||||||||||||
Profit before taxation |
- | 1,323 | (361 | ) | 6,258 | - | 7,220 | |||||||||||||||||
Taxation |
- | (461 | ) | (87 | ) | (1,413 | ) | - | (1,961 | ) | ||||||||||||||
Net profit before subsidiaries |
- | 862 | (448 | ) | 4,845 | - | 5,259 | |||||||||||||||||
Equity earnings of subsidiaries |
- | 4,047 | 690 | (9,408 | ) | 4,671 | - | |||||||||||||||||
Net profit |
- | 4,909 | 242 | (4,563 | ) | 4,671 | 5,259 | |||||||||||||||||
Attributable to: |
||||||||||||||||||||||||
Non-controlling interests |
- | - | - | 350 | - | 350 | ||||||||||||||||||
Shareholders equity |
- | 4,909 | 242 | (4,913 | ) | 4,671 | 4,909 | |||||||||||||||||
Total comprehensive income |
(1 | ) | 4,922 | 332 | (4,162 | ) | 4,671 | 5,762 | ||||||||||||||||
million | million | million | million | million | million | |||||||||||||||||||
Unilever | Unilever | |||||||||||||||||||||||
Capital | United | |||||||||||||||||||||||
Corporation | Unilever | (a) | States Inc. | Non- | ||||||||||||||||||||
Income statement | subsidiary | parent | subsidiary | guarantor | Unilever | |||||||||||||||||||
for the year ended 31 December 2014 | issuer | entities | guarantor | subsidiaries | Eliminations | Group | ||||||||||||||||||
Turnover |
- | - | - | 48,436 | - | 48,436 | ||||||||||||||||||
Operating profit |
- | 363 | (6 | ) | 7,623 | - | 7,980 | |||||||||||||||||
Net finance costs |
- | (97 | ) | (258 | ) | (28 | ) | - | (383 | ) | ||||||||||||||
Pensions and similar obligations |
- | (4 | ) | (26 | ) | (64 | ) | - | (94 | ) | ||||||||||||||
Other income |
- | - | - | 143 | - | 143 | ||||||||||||||||||
Profit before taxation |
- | 262 | (290 | ) | 7,674 | - | 7,646 | |||||||||||||||||
Taxation |
- | (93 | ) | (562 | ) | (1,476 | ) | - | (2,131 | ) | ||||||||||||||
Net profit before subsidiaries |
- | 169 | (852 | ) | 6,198 | - | 5,515 | |||||||||||||||||
Equity earnings of subsidiaries |
- | 5,002 | 1,713 | (5,269 | ) | (1,446 | ) | - | ||||||||||||||||
Net profit |
- | 5,171 | 861 | 929 | (1,446 | ) | 5,515 | |||||||||||||||||
Attributable to: |
||||||||||||||||||||||||
Non-controlling interests |
- | - | - | 344 | - | 344 | ||||||||||||||||||
Shareholders equity |
- | 5,171 | 861 | 585 | (1,446 | ) | 5,171 | |||||||||||||||||
Total comprehensive income |
(1 | ) | 5,165 | 754 | (317 | ) | (1,446 | ) | 4,155 |
(a) | The term Unilever parent entities includes Unilever N.V. and Unilever PLC. Though Unilever N.V. and Unilever PLC are separate legal entities, with different shareholder constituencies and separate stock exchange listings, they operate as nearly as practicable as a single economic entity. Debt securities issued by entities in the Unilever Group are fully and unconditionally guaranteed by both Unilever N.V. and Unilever PLC. |
Annual Report on Form 20-F 2016 | 171 |
ADDITIONAL INFORMATION FOR US LISTING PURPOSES CONTINUED
million | million | million | million | million | million | |||||||||||||||||||
Unilever | Unilever | |||||||||||||||||||||||
Capital | United | |||||||||||||||||||||||
Corporation | Unilever | (a) | States Inc. | Non- | ||||||||||||||||||||
subsidiary | parent | subsidiary | guarantor | Unilever | ||||||||||||||||||||
Balance sheet at 31 December 2016 | issuer | entities | guarantor | subsidiaries | Eliminations | Group | ||||||||||||||||||
Assets |
||||||||||||||||||||||||
Non-current assets |
||||||||||||||||||||||||
Goodwill and intangible assets |
- | 2,202 | - | 25,231 | - | 27,433 | ||||||||||||||||||
Deferred tax assets |
- | 86 | - | 1,268 | - | 1,354 | ||||||||||||||||||
Other non-current assets |
- | 70 | 2 | 13,686 | - | 13,758 | ||||||||||||||||||
Amounts due from group companies |
14,931 | 4,569 | - | - | (19,500 | ) | - | |||||||||||||||||
Net assets of subsidiaries (equity accounted) |
- | 39,676 | 20,052 | - | (59,728 | ) | - | |||||||||||||||||
14,931 | 46,603 | 20,054 | 40,185 | (79,228 | ) | 42,545 | ||||||||||||||||||
Current assets |
||||||||||||||||||||||||
Amounts due from group companies |
14 | 2,539 | 5,293 | 33,211 | (41,057 | ) | - | |||||||||||||||||
Trade and other current receivables |
- | 70 | 4 | 5,028 | - | 5,102 | ||||||||||||||||||
Current tax assets |
- | 90 | - | 227 | - | 317 | ||||||||||||||||||
Other current assets |
- | 6 | - | 8,459 | - | 8,465 | ||||||||||||||||||
14 | 2,705 | 5,297 | 46,925 | (41,057 | ) | 13,884 | ||||||||||||||||||
Total assets |
14,945 | 49,308 | 25,351 | 87,110 | (120,285 | ) | 56,429 | |||||||||||||||||
Liabilities |
||||||||||||||||||||||||
Current liabilities |
||||||||||||||||||||||||
Financial liabilities |
2,415 | 1,700 | 1 | 1,334 | - | 5,450 | ||||||||||||||||||
Amounts due to group companies |
6,682 | 26,514 | 15 | 7,846 | (41,057 | ) | - | |||||||||||||||||
Trade payables and other current liabilities |
63 | 193 | 18 | 13,597 | - | 13,871 | ||||||||||||||||||
Current tax liabilities |
- | - | 21 | 823 | - | 844 | ||||||||||||||||||
Other current liabilities |
- | 4 | - | 387 | - | 391 | ||||||||||||||||||
9,160 | 28,411 | 55 | 23,987 | (41,057 | ) | 20,556 | ||||||||||||||||||
Non-current liabilities |
||||||||||||||||||||||||
Financial liabilities |
5,437 | 4,577 | - | 1,131 | - | 11,145 | ||||||||||||||||||
Amounts due to group companies |
- | - | 14,925 | 4,575 | (19,500 | ) | - | |||||||||||||||||
Pensions and post-retirement healthcare liabilities: |
||||||||||||||||||||||||
Funded schemes in deficit |
- | 7 | 101 | 2,055 | - | 2,163 | ||||||||||||||||||
Unfunded schemes |
- | 96 | 513 | 1,095 | - | 1,704 | ||||||||||||||||||
Other non-current liabilities |
- | - | 46 | 3,835 | - | 3,881 | ||||||||||||||||||
5,437 | 4,680 | 15,585 | 12,691 | (19,500 | ) | 18,893 | ||||||||||||||||||
Total liabilities |
14,597 | 33,091 | 15,640 | 36,678 | (60,557 | ) | 39,449 | |||||||||||||||||
Shareholders equity |
348 | 16,217 | 9,711 | 49,806 | (59,728 | ) | 16,354 | |||||||||||||||||
Non-controlling interests |
- | - | - | 626 | - | 626 | ||||||||||||||||||
Total equity |
348 | 16,217 | 9,711 | 50,432 | (59,728 | ) | 16,980 | |||||||||||||||||
Total liabilities and equity |
14,945 | 49,308 | 25,351 | 87,110 | (120,285 | ) | 56,429 |
(a) | The term Unilever parent entities includes Unilever N.V. and Unilever PLC. Though Unilever N.V. and Unilever PLC are separate legal entities, with different shareholder constituencies and separate stock exchange listings, they operate as nearly as practicable as a single economic entity. Debt securities issued by entities in the Unilever Group are fully and unconditionally guaranteed by both Unilever N.V. and Unilever PLC. |
172 | Annual Report on Form 20-F 2016 |
million | million | million | million | million | million | |||||||||||||||||||
Unilever | Unilever | |||||||||||||||||||||||
Capital | United | |||||||||||||||||||||||
Corporation | Unilever | (a) | States Inc. | Non- | ||||||||||||||||||||
subsidiary | parent | subsidiary | guarantor | Unilever | ||||||||||||||||||||
Balance sheet at 31 December 2015 | issuer | entities | guarantor | subsidiaries | Eliminations | Group | ||||||||||||||||||
Assets |
||||||||||||||||||||||||
Non-current assets |
||||||||||||||||||||||||
Goodwill and intangible assets |
- | 2,429 | - | 22,630 | - | 25,059 | ||||||||||||||||||
Deferred tax assets |
- | 160 | 90 | 935 | - | 1,185 | ||||||||||||||||||
Other non-current assets |
- | 8 | 3 | 13,357 | - | 13,368 | ||||||||||||||||||
Amounts due from group companies |
12,961 | 2,763 | - | - | (15,724 | ) | - | |||||||||||||||||
Net assets of subsidiaries (equity accounted) |
- | 39,770 | 18,952 | - | (58,722 | ) | - | |||||||||||||||||
12,961 | 45,130 | 19,045 | 36,922 | (74,446 | ) | 39,612 | ||||||||||||||||||
Current assets |
||||||||||||||||||||||||
Amounts due from group companies |
86 | 2,917 | 4,290 | 33,450 | (40,743 | ) | - | |||||||||||||||||
Trade and other current receivables |
- | 69 | 5 | 4,730 | - | 4,804 | ||||||||||||||||||
Current tax assets |
- | 92 | - | 138 | - | 230 | ||||||||||||||||||
Other current assets |
- | 4 | 1 | 7,647 | - | 7,652 | ||||||||||||||||||
86 | 3,082 | 4,296 | 45,965 | (40,743 | ) | 12,686 | ||||||||||||||||||
Total assets |
13,047 | 48,212 | 23,341 | 82,887 | (115,189 | ) | 52,298 | |||||||||||||||||
Liabilities |
||||||||||||||||||||||||
Current liabilities |
||||||||||||||||||||||||
Financial liabilities |
1,990 | 1,551 | 4 | 1,244 | - | 4,789 | ||||||||||||||||||
Amounts due to group companies |
6,077 | 27,351 | 22 | 7,293 | (40,743 | ) | - | |||||||||||||||||
Trade payables and other current liabilities |
57 | 170 | 38 | 13,523 | - | 13,788 | ||||||||||||||||||
Current tax liabilities |
- | - | 10 | 1,117 | - | 1,127 | ||||||||||||||||||
Other current liabilities |
- | 5 | - | 310 | - | 315 | ||||||||||||||||||
8,124 | 29,077 | 74 | 23,487 | (40,743 | ) | 20,019 | ||||||||||||||||||
Non-current liabilities |
||||||||||||||||||||||||
Financial liabilities |
4,589 | 3,723 | - | 1,542 | - | 9,854 | ||||||||||||||||||
Amounts due to group companies |
- | - | 12,960 | 2,764 | (15,724 | ) | - | |||||||||||||||||
Pensions and post-retirement healthcare liabilities: |
||||||||||||||||||||||||
Funded schemes in deficit |
- | 9 | 92 | 1,468 | - | 1,569 | ||||||||||||||||||
Unfunded schemes |
- | 97 | 543 | 1,045 | - | 1,685 | ||||||||||||||||||
Other non-current liabilities |
- | 22 | 2 | 3,065 | - | 3,089 | ||||||||||||||||||
4,589 | 3,851 | 13,597 | 9,884 | (15,724 | ) | 16,197 | ||||||||||||||||||
Total liabilities |
12,713 | 32,928 | 13,671 | 33,371 | (56,467 | ) | 36,216 | |||||||||||||||||
Shareholders equity |
334 | 15,284 | 9,670 | 48,873 | (58,722 | ) | 15,439 | |||||||||||||||||
Non-controlling interests |
- | - | - | 643 | - | 643 | ||||||||||||||||||
Total equity |
334 | 15,284 | 9,670 | 49,516 | (58,722 | ) | 16,082 | |||||||||||||||||
Total liabilities and equity |
13,047 | 48,212 | 23,341 | 82,887 | (115,189 | ) | 52,298 |
(a) | The term Unilever parent entities includes Unilever N.V. and Unilever PLC. Though Unilever N.V. and Unilever PLC are separate legal entities, with different shareholder constituencies and separate stock exchange listings, they operate as nearly as practicable as a single economic entity. Debt securities issued by entities in the Unilever Group are fully and unconditionally guaranteed by both Unilever N.V. and Unilever PLC. |
Annual Report on Form 20-F 2016 | 173 |
ADDITIONAL INFORMATION FOR US LISTING PURPOSES CONTINUED
million | million | million | million | million | million | |||||||||||||||||||
Unilever | Unilever | |||||||||||||||||||||||
Capital | United | |||||||||||||||||||||||
Corporation | Unilever | (a) | States Inc. | Non- | ||||||||||||||||||||
Cash flow statement | subsidiary | parent | subsidiary | guarantor | Unilever | |||||||||||||||||||
for the year ended 31 December 2016 | issuer | entities | guarantor | subsidiaries | Eliminations | Group | ||||||||||||||||||
Net cash flow from/(used in) operating activities |
- | 45 | (177 | ) | 7,179 | - | 7,047 | |||||||||||||||||
Net cash flow from/(used in)investing activities |
(1,053 | ) | (679 | ) | (783 | ) | (1,712 | ) | 1,039 | (3,188 | ) | |||||||||||||
Net cash flow from/(used in) financing activities |
1,048 | 621 | 959 | (4,662 | ) | (1,039 | ) | (3,073 | ) | |||||||||||||||
Net increase/(decrease) in cash and cash equivalents |
(5 | ) | (13 | ) | (1 | ) | 805 | - | 786 | |||||||||||||||
Cash and cash equivalents at beginning of year |
- | 3 | (1 | ) | 2,126 | - | 2,128 | |||||||||||||||||
Effect of foreign exchange rates |
5 | 15 | - | 264 | - | 284 | ||||||||||||||||||
Cash and cash equivalents at end of year |
- | 5 | (2 | ) | 3,195 | - | 3,198 | |||||||||||||||||
million | million | million | million | million | million | |||||||||||||||||||
Unilever | Unilever | |||||||||||||||||||||||
Capital | United | |||||||||||||||||||||||
Corporation | Unilever | (a) | States Inc. | Non- | ||||||||||||||||||||
Cash flow statement | subsidiary | parent | subsidiary | guarantor | Unilever | |||||||||||||||||||
for the year ended 31 December 2015 | issuer | entities | guarantor | subsidiaries | Eliminations | Group | ||||||||||||||||||
Net cash flow from/(used in) operating activities |
(1 | ) | (699 | ) | (140 | ) | 8,170 | - | 7,330 | |||||||||||||||
Net cash flow from/(used in) investing activities |
(1,005 | ) | 231 | (729 | ) | (2,955 | ) | 919 | (3,539 | ) | ||||||||||||||
Net cash flow from/(used in) financing activities |
1,000 | 558 | 871 | (4,542 | ) | (919 | ) | (3,032 | ) | |||||||||||||||
Net increase/(decrease) in cash and cash equivalents |
(6 | ) | 90 | 2 | 673 | - | 759 | |||||||||||||||||
Cash and cash equivalents at beginning of year |
- | 5 | (3 | ) | 1,908 | - | 1,910 | |||||||||||||||||
Effect of foreign exchange rates |
6 | (91 | ) | - | (456 | ) | - | (541 | ) | |||||||||||||||
Cash and cash equivalents at end of year |
- | 4 | (1 | ) | 2,125 | - | 2,128 | |||||||||||||||||
million | million | million | million | million | million | |||||||||||||||||||
Unilever | Unilever | |||||||||||||||||||||||
Capital | United | |||||||||||||||||||||||
Corporation | Unilever | (a) | States Inc. | Non- | ||||||||||||||||||||
Cash flow statement | subsidiary | parent | subsidiary | guarantor | Unilever | |||||||||||||||||||
for the year ended 31 December 2014 | issuer | entities | guarantor | subsidiaries | Eliminations | Group | ||||||||||||||||||
Net cash flow from/(used in) operating activities |
- | 579 | (764 | ) | 5,728 | - | 5,543 | |||||||||||||||||
Net cash flow from/(used in) investing activities |
(1,038 | ) | (2,284 | ) | (662 | ) | 2,606 | 1,037 | (341 | ) | ||||||||||||||
Net cash flow from/(used in) financing activities |
1,033 | 1,676 | 1,426 | (8,288 | ) | (1,037 | ) | (5,190 | ) | |||||||||||||||
Net increase/(decrease) in cash and cash equivalents |
(5 | ) | (29 | ) | - | 46 | - | 12 | ||||||||||||||||
Cash and cash equivalents at beginning of year |
- | 3 | (2 | ) | 2,043 | - | 2,044 | |||||||||||||||||
Effect of foreign exchange rates |
5 | 31 | - | (182 | ) | - | (146 | ) | ||||||||||||||||
Cash and cash equivalents at end of year |
- | 5 | (2 | ) | 1,907 | - | 1,910 |
(a) | The term Unilever parent entities includes Unilever N.V. and Unilever PLC. Though Unilever N.V. and Unilever PLC are separate legal entities, with different shareholder constituencies and separate stock exchange listings, they operate as nearly as practicable as a single economic entity. Debt securities issued by entities in the Unilever Group are fully and unconditionally guaranteed by both Unilever N.V. and Unilever PLC. |
174 | Annual Report on Form 20-F 2016 |
Annual Report on Form 20-F 2016 | 175 |
ADDITIONAL INFORMATION FOR US LISTING PURPOSES CONTINUED
176 | Annual Report on Form 20-F 2016 |
Annual Report on Form 20-F 2016 | 177 |
ADDITIONAL INFORMATION FOR US LISTING PURPOSES CONTINUED
178 | Annual Report on Form 20-F 2016 |
CAUTIONARY STATEMENT
This document may contain forward-looking statements, including forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995. Words such as will, aim, expects, anticipates, intends, looks, believes, vision, or the negative of these terms and other similar expressions of future performance or results, and their negatives, are intended to identify such forward-looking statements. These forward-looking statements are based upon current expectations and assumptions regarding anticipated developments and other factors affecting the Unilever Group (the Group). They are not historical facts, nor are they guarantees of future performance.
Because these forward-looking statements involve risks and uncertainties, there are important factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements. Among other risks and uncertainties, the material or principal factors which could cause actual results to differ materially are: Unilevers global brands not meeting consumer preferences; Unilevers ability to innovate and remain competitive; Unilevers investment choices in its portfolio management; inability to find sustainable solutions to support long-term growth; customer relationships; the recruitment and retention of talented employees; disruptions in our supply chain; the cost of raw materials and commodities; the production of safe and high quality products; secure and reliable IT infrastructure; successful execution of acquisitions, divestitures and business transformation projects; economic and political risks and natural disasters; the effect of climate change on Unilevers business; financial risks; failure to meet high and ethical standards; and managing regulatory, tax and legal matters.
These forward-looking statements speak only as of the date of this document. Except as required by any applicable law or regulation, the Group expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Groups expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.
Further details of potential risks and uncertainties affecting the Group are described in the Groups filings with the London Stock Exchange, Euronext Amsterdam and the US Securities and Exchange Commission, including in the Unilever Annual Report and Accounts 2016.
This document is not prepared in accordance with US GAAP and should not therefore be relied upon by readers as such.
In addition, a printed copy of the Annual Report on Form 20-F 2016 is available, free of charge, upon request to Unilever, Investor Relations Department, 100 Victoria Embankment, London EC4Y 0DY, United Kingdom.
This document comprises regulated information within the meaning of Sections 1:1 and 5:25c of the Act on Financial Supervision (Wet op het financieel toezicht (Wft)) in the Netherlands.
The brand names shown in this report are trademarks owned by or licensed to companies within the Group.
References in this document to information on websites (and/or social media sites) are included as an aid to their location and such information is not incorporated in, and does not form part of, the Annual Report on Form 20-F 2016.
Designed and produced by Unilever Communications.
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This document is printed on Revive 100% Recycled Silk. These papers have been exclusively supplied by Denmaur Independent Papers which has offset the carbon produced by the production and delivery of them to the printer.
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SIGNATURES
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorised the undersigned to sign this Annual Report on its behalf.
Unilever PLC.
(Registrant)
/s/ T. E. Lovell |
T. E. LOVELL, |
Group Secretary |
Date: 28 February 2017
UNILEVER PLC 20-F EXHIBIT LIST
Exhibit Number | Description of Exhibit | |
1.1 | Articles of Association of Unilever PLC 1 | |
2.1 | Trust Deed dated as of July 22, 1994, among Unilever N.V., Unilever PLC, Unilever Capital Corporation, Unilever United States, Inc. and The Law Debenture Trust Corporation p.l.c., relating to Guaranteed Debt Securities 2 | |
2.2 | Twenty-first Supplemental Trust Deed as of April 22, 2016, incorporating the Trust Deed as of July 22, 1994, as Amended and Restated on April 22, 2016 | |
2.3 | Amended and Restated Indenture as of September 22, 2014, among Unilever Capital Corporation, Unilever N,V. Unilever PLC, Unilever United States, Inc. and The Bank of New York Mellon, as Trustee, relating to Guaranteed Debt Securities 3 | |
2.4 | Second Amended and Restated Deposit Agreement dated as of July 1, 2014 by and among Unilever PLC and Deutsche Bank Trust Company Americas, as Depositary, and the Holders and Beneficial Owners of American Depositary Shares issued thereunder 4 | |
4.1(a) | Equalisation Agreement between Unilever N.V. and Unilever PLC 5 | |
4.1(b) | Deed of Mutual Covenants 6 | |
4.1(c) | Agreement for Mutual Guarantees of Borrowing 7 | |
4.2 | Service Contracts of the Executive Directors of Unilever PLC 8 | |
4.3 | Letters regarding compensation of Executive Directors of Unilever PLC | |
4.4 | Unilever North America 2002 Omnibus Equity Compensation Plan as Amended and Restated as of November 1, 2012 9 | |
4.5 | The Unilever PLC International 1997 Executive Share Option Scheme 10 | |
4.6 | The Unilever Long Term Incentive Plan 11 | |
4.7 | Global Share Incentive Plan 2007 12 | |
4.8 | The Management Co-Investment Plan 13 | |
7.1 | Calculation of Ratio of Earnings to Fixed Charges | |
8.1 | List of Subsidiaries 14 | |
12.1 | Certifications of the Chief Executive Officer and Financial Director/Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
13.1 | Certifications of the Chief Executive Officer and Financial Director/Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
15.1 | Consent of KPMG LLP and KPMG Accountants N.V. |
Certain instruments which define rights of holders of long-term debt of the Company and its subsidiaries are not being filed because the total amount of securities authorized under each such instrument does not exceed 10% of the total consolidated assets of the Company and its subsidiaries. The Company and its subsidiaries hereby agree to furnish a copy of each such instrument to the Securities and Exchange Commission upon request.
1 | Incorporated by reference to Exhibit 1.1 of Form 20-F (File No: 001-04546) filed with the SEC on March 08, 2013. | |
2 | Incorporated by reference to Exhibit 2.2 of Form 20-F (File No: 001-04546) filed with the SEC on March 28, 2002. | |
3 | Incorporated by reference to Exhibit 2.3 of Form 20-F (File No: 333-196985) filed with the SEC on March 6, 2015. | |
4 | Incorporated by reference to Exhibit 99(A) of Form F-6 (File No: 001-04546) filed with the SEC on June 24, 2014. | |
5 | Incorporated by reference to Exhibit 4.1 of Form 20-F (File No: 001-04546) filed with the SEC on March 5, 2010. | |
6 | Incorporated by reference to Exhibit 4.1(b) of Form 20-F (File No: 001-04546) filed with the SEC on March 6, 2015. | |
7 | Incorporated by reference to Exhibit 4.1(c) of Form 20-F (File No: 001-04546) filed with the SEC on March 6, 2015. | |
8 | Incorporated by reference to Exhibit 4.2 of Form 20-F (File No: 001-04546) filed with the SEC on March 4, 2011. | |
9 | Incorporated by reference to Exhibit 99.1 of Form S-8 (File No: 333-185299) filed with the SEC on December 6, 2012. | |
10 | Incorporated by reference to Exhibit 4.5 of Form 20-F (File No: 001-04546) filed with the SEC on March 28, 2002. | |
11 | Incorporated by reference to Exhibit 4.7 of Form 20-F (File No: 001-04546) filed with the SEC on March 28, 2002. | |
12 | Incorporated by reference to Exhibit 4.7 of Form 20-F (File No: 001-04546) filed with the SEC on March 26, 2008. | |
13 | Incorporated by reference to Exhibit 4.8 of Form 20-F (File No: 001-04546) filed with the SEC on March 4, 2011. | |
14 | The required information is set forth on pages 131 to 143 of the Annual Report on Form 20-F 2016. |
Exhibit 2.2
CONFORMED COPY
Dated 22 April 2016
UNILEVER N.V.
and
UNILEVER PLC
and
UNILEVER JAPAN HOLDINGS K.K.
and
UNILEVER UNITED STATES, INC.
and
THE LAW DEBENTURE TRUST CORPORATION P.L.C.
TWENTY-FIRST SUPPLEMENTAL TRUST DEED
relating to a U.S.$15,000,000,000
Debt Issuance Programme
Ref: EXM/SW
Linklaters LLP
This Twenty-First Supplemental Trust Deed is made 22 April 2016 between:
(1) | UNILEVER N.V. (N.V.), a company incorporated under the laws of The Netherlands, whose corporate seat is in Rotterdam and its address at Weena 455, 3013 AL, Rotterdam, The Netherlands, UNILEVER PLC (PLC), a company incorporated under the laws of England, whose registered office is at Port Sunlight, Wirral, Merseyside CH62 4UJ, United Kingdom, UNILEVER JAPAN HOLDINGS K.K., a company incorporated under the laws of Japan, whose registered office is at 1-1, Kamimeguro 2-chome, Meguro-ku, Tokyo 153-8578, Japan and UNILEVER UNITED STATES, INC. (UNUS), a company incorporated under the laws of the State of Delaware, United States of America, whose registered office is at 1209 Orange Street, Wilmington, Delaware 19801, United States of America; and |
(2) | THE LAW DEBENTURE TRUST CORPORATION p.l.c., a company incorporated under the laws of England, whose registered office is at Fifth Floor, 100 Wood Street, London EC2V 7EX, United Kingdom (the Trustee, which expression shall, wherever the context so admits, include any other trustee or trustees for the time being of these presents). |
Whereas:
(A) | This Deed is supplemental to the Trust Deed dated 22 July 1994 made between the parties hereto (the Principal Trust Deed) as amended by the First Supplemental Trust Deed dated 24 July 1995, the Second Supplemental Trust Deed dated 11 July 1996, the Third Supplemental Trust Deed dated 13 November 1997, the Fourth Supplemental Trust Deed dated 11 November 1998, the Fifth Supplemental Trust Deed dated 4 July 2000, the Sixth Supplemental Trust Deed dated 2 July 2001, the Seventh Supplemental Trust Deed dated 1 July 2002 the Eighth Supplemental Trust Deed dated 27 June 2003, the Ninth Supplemental Trust Deed dated 2 June 2004, the Tenth Supplemental Trust Deed dated 10 August 2005, the Eleventh Supplemental Trust Deed dated 15 May 2007, the Twelfth Supplemental Trust Deed dated 13 May 2008, the Thirteenth Supplemental Trust Deed dated 11 May 2009, the Fourteenth Supplemental Trust Deed dated 6 May 2010, the Fifteenth Supplemental Trust Deed dated 5 May 2011, the Sixteenth Supplemental Trust Deed dated 4 May 2012, the Seventeenth Supplemental Trust Deed dated 3 May 2013, the Nineteenth Supplemental Trust Deed dated 2 May 2014 and the Twentieth Supplemental Trust Deed dated 1 May 2015. |
(B) | The parties of the first part hereto desire to modify certain provisions of the Principal Trust Deed, as amended. |
Now this Twenty-First Supplemental Trust Deed witnesses and it is agreed and declared as follows:
1 | Definitions |
All expressions defined in the Principal Trust Deed shall, unless there is anything in the subject or context inconsistent therewith, have the same meanings in this Twenty-First Supplemental Trust Deed.
2 | The Trust Deed |
(A) | The Principal Trust Deed is hereby amended and restated as of the effective date hereof and as set out in Clause 3 below and shall henceforth be read and construed as one document in the form set out in the Schedule to this Twenty-First Supplemental Trust Deed. |
2 |
(B) | Save to the extent specifically referred to in this Twenty-First Supplemental Trust Deed, nothing contained in this Twenty-First Supplemental Trust Deed shall be construed as a waiver, variation, modification or amendment of the provisions of the Principal Trust Deed and the Principal Trust Deed, all issued Notes, all issued Coupons and all issued Receipts shall continue in full force and effect. For the avoidance of doubt, this Twenty-First Supplemental Trust Deed only governs Notes issued after the date hereof. |
3 | Effectiveness |
The amendments to the Principal Trust Deed effected by this Twenty-First Supplemental Trust Deed shall take effect on the date of execution by the last party to this Twenty-First Supplemental Trust Deed.
4 | Notices |
Pursuant to Clause 17(A) of the Principal Trust Deed, the Trustee hereby agrees that notice of the execution of this Twenty-First Supplemental Trust Deed need not be given to the Noteholders in accordance with Condition 14 of the Notes.
5 | Counterparts |
This Twenty-First Supplemental Trust Deed may be executed in any number of counterparts, each of which shall be identical and all of which, when taken together, shall constitute one and the same instrument and any one of the parties hereby may execute this Twenty-First Supplemental Trust Deed by signing any such counterpart.
6 | Rights of Third Parties |
The parties to this Twenty-First Supplemental Trust Deed do not intend that any term of this Twenty-First Supplemental Trust Deed should be enforceable, by virtue of the Contracts (Rights of Third Parties) Act 1999, by any person who is not a party to this Twenty-First Supplemental Trust Deed.
7 | Governing Law |
This Twenty-First Supplemental Trust Deed, and any non-contractual obligations arising out of or in connection with it, is governed by, and shall be construed in accordance with, the laws of England and the provisions relating to jurisdiction contained in Clause 34 of the Principal Trust Deed shall apply, mutatis mutandis, hereto.
3 |
In witness whereof this Twenty-First Supplemental Trust Deed has been executed as a deed by the parties hereto and is intended to be and is hereby delivered on the date first above written.
EXECUTED as a DEED by UNILEVER PLC acting by: |
/s/ R C Hazell R.C. HAZELL | |||
in the presence of:
Witnesss signature |
||||
Name | /s/ Spenta Magol SPENTA MAGOL | |||
Address | 100 VICTORIA EMBANKMENT BLACKFRIARS LONDON EC4Y 0DY | |||
Occupation | CHARTERED SECRETARY |
EXECUTED as a DEED UNILEVER N.V. (having its corporate seat in Rotterdam, The Netherlands) acting by |
||||
in the capacity as Duly Authorised Attorney under its authority acting by: |
/s/ R C Hazell R.C. HAZELL |
4 |
EXECUTED as a DEED by the said UNILEVER JAPAN HOLDINGS K.K. |
||||
acting by
under its authority: |
/s/ R C Hazell R.C. HAZELL |
EXECUTED as a DEED by the said UNILEVER UNITED STATES, INC. |
||||
acting by
under its authority: |
/s/ R C Hazell R.C. HAZELL |
5 |
THE COMMON SEAL of THE LAW DEBENTURE TRUST CORPORATION P.L.C. was affixed to this deed |
|
|||
in the presence of: | ||||
Director: |
/s/ Julian Mason-Jebb JULIAN MASON-JEBB | |||
Authorised signatory: |
/s/ Sonal Ambasna SONAL AMBASNA |
6 |
SCHEDULE
Dated 22 July 1994
as amended and restated on 22 April 2016
UNILEVER N.V.
and
UNILEVER PLC
and
UNILEVER JAPAN HOLDINGS K.K.
and
UNILEVER UNITED STATES, INC.
and
THE LAW DEBENTURE TRUST CORPORATION P.L.C.
TWENTY FIRST SUPPLEMENTAL TRUST DEED
relating to a U.S.$15,000,000,000 Debt Issuance Programme
(as amended by the First Supplemental Trust Deed dated
24 July 1995 the Second Supplemental Trust Deed
dated 11 July 1996, the Third Supplemental Trust Deed
dated 13 November 1997, the Fourth Supplemental Trust Deed
dated 11 November 1998, the Fifth Supplemental
Deed dated 4 July 2000, the Sixth Supplemental Trust
Deed dated 2 July 2001, the Seventh Supplemental
Trust Deed dated 1 July 2002, the Eighth Supplemental
Trust Deed dated 27 June 2003, the Ninth Supplemental
Trust Deed dated 2 June, 2004, the Tenth Supplemental
Trust Deed dated 10 August 2005, the Eleventh
Supplemental Trust Deed dated 15 May 2007, the
Twelfth Supplemental Trust Deed dated 13 May 2008, the
Thirteenth Supplemental Trust Deed dated 11 May 2009,
the Fourteenth Supplemental Trust Deed dated 6 May
2010, the Fifteenth Supplemental Trust Deed dated 5 May
2011, the Sixteenth Supplemental Trust Deed dated
4 May 2012, the Seventeenth Supplemental Trust Deed
dated 3 May 2013, the Nineteenth Supplemental Trust Deed
dated 2 May 2014, the Twentieth Supplemental Trust Deed dated 1 May 2015
and the Twenty-First Supplemental Trust Deed dated 22 April 2016)
Ref: EXM/SW
Linklaters LLP
i |
Table of Contents
Contents | Page | |||||
1 | Definitions | 1 | ||||
2 | Amount of the Notes | 11 | ||||
3 | Covenant to repay and to pay interest | 12 | ||||
4 | Issue and constitution of Notes | 14 | ||||
5 | Forms and issue of the Notes | 15 | ||||
6 | Stamp Duties | 17 | ||||
7 | Covenant to observe provisions of the Trust Deed and Schedules | 18 | ||||
8 | Guarantee | 18 | ||||
9 | Application of moneys received by the Trustee | 20 | ||||
10 | Power to retain and invest less than 10 per cent. | 21 | ||||
11 | Authorised investments | 21 | ||||
12 | Indemnification of the Trustee upon enforcement | 21 | ||||
13 | Payment to Noteholders, Receiptholders and Couponholders | 22 | ||||
14 | Production of Notes, Receipts and Coupons | 22 | ||||
15 | Covenants by the Issuers and the Guarantors | 22 | ||||
16 | Remuneration of the Trustee | 25 | ||||
17 | Modifications and Substitution | 27 | ||||
18 | Redemption, Purchase and Cancellation | 31 | ||||
19 | Noteholders to be treated as holding all Receipts and Coupons | 32 | ||||
20 | No notice to Receiptholders or Couponholders | 33 | ||||
21 | Trustee may enter into other transactions with N.V., PLC or any of their group companies | 33 | ||||
22 | Provisions supplemental to the Trustee Act 1925 and the Trustee Act 2000 in favour of the Trustee | 33 | ||||
23 | Disapplication | 36 | ||||
24 | Trustee entitled to assume due performance | 36 | ||||
25 | Waiver | 37 | ||||
26 | Power to delegate | 37 |
i |
27 | Competence of a majority of Trustees | 37 | ||||
28 | Appointment of New Trustees | 38 | ||||
29 | Retirement of Trustees | 38 | ||||
30 | Powers of the Trustee are additional | 39 | ||||
31 | Currency Indemnity | 39 | ||||
32 | Notices | 39 | ||||
33 | Contracts (Rights of Third Parties) Act 1999 | 41 | ||||
34 | Governing Law | 41 | ||||
The First Schedule Form of Temporary Global Note | 43 | |||||
The Second Schedule Form of Permanent Global Note | 56 | |||||
The Third Schedule Form of Definitive Note | 64 | |||||
The Fourth Schedule Terms and Conditions of the Notes | 80 | |||||
The Fifth Schedule Form of Supplemental Deed increasing Programme Limit | 113 | |||||
The Sixth Schedule Form of Supplemental Deed joining a New Issuer | 114 | |||||
The Seventh Schedule Form of Supplemental Deed releasing an Issuer | 118 | |||||
The Eighth Schedule Provisions for Meetings of Holders of Notes | 120 |
ii |
This Trust Deed is made on the 22nd day of July, 1994 and amended and restated on 22 April 2016 between:
(1) | UNILEVER N.V. (N.V.), a company incorporated under the laws of The Netherlands, whose corporate seat is in Rotterdam and its address at Weena 455, 3013 AL, Rotterdam, The Netherlands, UNILEVER PLC (PLC), a company incorporated under the laws of England, whose registered office is at Port Sunlight, Wirral, Merseyside CH62 4UJ, United Kingdom, UNILEVER JAPAN HOLDINGS K.K. (UJH), a company incorporated under the laws of Japan, whose registered office is at 1-1, Kamimeguro 2-chome, Meguro-ku, Tokyo 153-8578, Japan and UNILEVER UNITED STATES, INC. (UNUS), a company incorporated under the laws of the State of Delaware, United States of America, whose registered office is at 1209 Orange Street, Wilmington, Delaware 19801, United States of America; and |
(2) | THE LAW DEBENTURE TRUST CORPORATION p.l.c., a company incorporated under the laws of England, whose registered office is at Fifth Floor, 100 Wood Street, London EC2V 7EX, United Kingdom (hereinafter called the Trustee, which expression shall, wherever the context so admits, include any other trustee or trustees for the time being of these presents). |
Whereas:
(A) | N.V., PLC, UJH and UNUS have authorised the establishment of a programme for the issuance of debt instruments (the Programme) to be constituted in the manner hereinafter appearing. |
(B) | N.V., PLC, UJH and UNUS have duly authorised the issue of a maximum aggregate principal amount of U.S.$15,000,000,000 (or its equivalent in other currencies) (or such greater amount as shall be established pursuant to Clause 2(B) hereof) of notes outstanding under the Programme (the Programme Limit). |
(C) | Each issue will be represented by notes issued in bearer form. |
(D) | Pursuant to powers contained in their constitutional documents, N.V., PLC, UJH and UNUS have duly authorised the execution of these presents as the principal instrument subject to which Notes (as defined below) may from time to time be issued by any of the Issuers (as defined below) and constituted. |
(E) | Each of the Guarantors (as defined below) has agreed to guarantee in the manner hereinafter appearing such obligations of the Issuers as are hereinafter specified and in respect of whose obligations under these presents and under the Notes the relevant Guarantor has given its guarantee hereunder. |
(F) | The Law Debenture Trust Corporation p.l.c. has agreed to act as trustee of these presents for the Noteholders and the Couponholders upon the terms and subject to the conditions hereinafter contained. |
Now this deed witnesseth and it is hereby declared as follows:
1 | Definitions |
(A) | In these presents (including the recitals), unless there is something in the subject or context inconsistent therewith, the expressions following shall have the meanings hereinafter mentioned (that is to say): |
1 |
Auditors means the auditors for the time being respectively of N.V., PLC, UJH and UNUS as the case may be, and, in the case of joint auditors, the joint auditors thereof or in the event of their being unable or unwilling to carry out any action requested of them pursuant to the terms of these presents, such other firm of accountants as may be nominated or approved by the Trustee for the purpose;
Calculation Agency Agreement means any agreement made between the relevant Issuer, the relevant Guarantors, the Trustee and the Calculation Agent in the form, or substantially in the form of the Calculation Agency Agreement set out in the first schedule to the Paying Agency Agreement;
Calculation Agent means the institution appointed as such by the relevant Issuer and relevant Guarantors with the prior approval of the Trustee for any Series of Notes issued by such Issuer and specified in the relevant Final Terms;
CGN means a Note in global form which is not a New Global Note, as so specified in the Final Terms relating to the applicable Tranche;
Clearstream, Luxembourg means Clearstream Banking, société anonyme;
Common Safekeeper means an ICSD or such person as may be nominated by the ICSDs to act as common safekeeper;
Conditions means:
in relation to any Tranche of Notes issued prior to the First Effective Date, the terms and conditions applicable thereto, in the form or substantially in the form set out in the Fourth Schedule to this Trust Deed prior to its amendment by the First Supplemental Trust Deed;
in relation to any Tranche of Notes issued on or after the First Effective Date but before the Second Effective Date, the terms and conditions applicable thereto, in the form or substantially in the form set out in the Schedule to the First Supplemental Trust Deed;
in relation to any Tranche of Notes issued on or after the Second Effective Date but before the Third Effective Date, the terms and conditions applicable thereto, in the form or substantially in the form set out in the Fourth Schedule to this Trust Deed as amended and restated on the Second Effective Date;
in relation to any Tranche of Notes issued on or after the Third Effective Date but before the Fourth Effective Date, the terms and conditions applicable thereto, in the form or substantially in the form set out in the Fourth Schedule to this Trust Deed as amended and restated on the Third Effective Date;
in relation to any Tranche of Notes issued on or after the Fourth Effective Date but before the Fifth Effective Date, the terms and conditions applicable thereto, in the form or substantially in the form set out in the Fourth Schedule to this Trust Deed as amended and restated on the Fourth Effective Date;
in relation to any Tranche of Notes issued on or after the Fifth Effective Date but before the Sixth Effective Date, the terms and conditions applicable thereto, in the form or substantially in the form set out in the Fourth Schedule to this Trust Deed as amended and restated on the Fifth Effective Date;
in relation to any Tranche of Notes issued on or after the Sixth Effective Date but before the Seventh Effective Date, the terms and conditions applicable thereto, in the form or substantially in
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the form set out in the Fourth Schedule to this Trust Deed as amended and restated on the Sixth Effective Date;
in relation to any Tranche of Notes issued on or after the Seventh Effective Date but before the Eighth Effective Date, the terms and conditions applicable thereto, in the form or substantially in the form set out in the Fourth Schedule to this Trust Deed as amended and restated on the Seventh Effective Date;
in relation to any Tranche of Notes issued on or after the Eighth Effective Date but before the Ninth Effective Date, the terms and conditions applicable thereto, in the form or substantially in the form set out in the Fourth Schedule to this Trust Deed as amended and restated on the Eighth Effective Date;
in relation to any Tranche of Notes issued on or after the Ninth Effective Date, but before the Tenth Effective Date, the terms and conditions applicable thereto, in the form or substantially in the form set out in the Fourth Schedule to this Trust Deed as amended and restated on the Ninth Effective Date;
in relation to any Tranche of Notes issued on or after the Tenth Effective Date, but before the Eleventh Effective Date, the terms and conditions applicable thereto, in the form or substantially in the form set out in the Fourth Schedule to this Trust Deed as amended and restated on the Tenth Effective Date;
in relation to any Tranche of Notes issued on or after the Eleventh Effective Date, but before the Twelfth Effective Date, the terms and conditions applicable thereto, in the form or substantially in the form set out in the Fourth Schedule to this Trust Deed as amended and restated on the Eleventh Effective Date;
in relation to any Tranche of Notes issued on or after the Twelfth Effective Date, but before the Thirteenth Effective Date, the terms and conditions applicable thereto, in the form or substantially in the form set out in the Fourth Schedule to this Trust Deed as amended and restated on the Twelfth Effective Date;
in relation to any Tranche of Notes issued on or after the Thirteenth Effective Date, but before the Fourteenth Effective Date, the terms and conditions applicable thereto, in the form or substantially in the form set out in the Fourth Schedule to this Trust Deed as amended and restated on the Thirteenth Effective Date;
in relation to any Tranche of Notes issued on or after the Fourteenth Effective Date, but before the Fifteenth Effective Date, the terms and conditions applicable thereto, in the form or substantially in the form set out in the Fourth Schedule to this Trust Deed as amended and restated on the Fourteenth Effective Date;
in relation to any Tranche of Notes issued on or after the Fifteenth Effective Date, but before the Sixteenth Effective Date, the terms and conditions applicable thereto, in the form or substantially in the form set out in the Fourth Schedule to this Trust Deed as amended and restated on the Fifteenth Effective Date;
in relation to any Tranche of Notes issued on or after the Sixteenth Effective Date, but before the Seventeenth Effective Date, the terms and conditions applicable thereto, in the form or substantially in the form set out in the Fourth Schedule to this Trust Deed as amended and restated on the Sixteenth Effective Date;
in relation to any Tranche of Notes issued on or after the Seventeenth Effective Date, but before the Eighteenth Effective date, the terms and conditions applicable thereto, in the form or
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substantially in the form set out in the Fourth Schedule to this Trust Deed as amended and restated on the Seventeenth Effective Date;
in relation to any Tranche of Notes issued on or after the Eighteenth Effective Date, but before the Nineteenth Effective date, the terms and conditions applicable thereto, in the form or substantially in the form set out in the Fourth Schedule to this Trust Deed as amended and restated on the Eighteenth Effective Date; and
in relation to any Tranche of Notes issued on or after the Nineteenth Effective Date, the terms and conditions applicable thereto, in the form or substantially in the form set out in the Fourth Schedule to this Trust Deed as amended and restated on the Nineteenth Effective Date,
in each case, as the same may have been or may be supplemented as described in the Final Terms relating to such Tranche, and as the same may, from time to time, be altered in accordance with the provisions of these presents, and any reference in these presents to a particular numbered Condition shall be construed in relation to such Tranche as a reference to the provision (if any) in the Conditions thereof which corresponds to the particular numbered Condition in the Conditions applicable to such Tranche;
Couponholders means the several persons who are for the time being Holders of Coupons;
Coupons means the bearer interest coupons (if any) appertaining to Notes or, as the context may require, a specific number thereof and includes any replacement Coupon or Coupons issued pursuant to Condition 13 and, unless the context otherwise requires, includes the Talons, such Coupons being, if appertaining to a Fixed Rate Note, substantially in the form set out in Part B of the Third Schedule or, if appertaining to a Floating Rate Note, substantially in the form set out in Part C of the Third Schedule;
Dealer means any person or institution appointed as such pursuant to the Dealer Agreement;
Dealer Agreement means the dealer agreement dated 22 July 1994 between, inter alia, the Issuers, the Guarantors and the Dealers, the terms of which (as novated, amended, amended and restated, varied or supplemented from time to time) are incorporated into any sale and purchase agreement relating to Notes reached between the relevant Issuer, the relevant Guarantors and any Dealer(s);
Definitive Note means a definitive Note issued or, as the case may require, to be issued by the relevant Issuer in exchange for a Temporary Global Note or a Permanent Global Note or part thereof, such Definitive Note being substantially in the form set out in Part A of the Third Schedule hereto with such modifications as may be agreed between the relevant Issuer, the relevant Guarantors, the Principal Paying Agent, the Trustee and the relevant Dealer(s) and having (where so specified in the relevant Final Terms) Coupons attached thereto on issue;
Eighteenth Effective Date means 1 May 2015;
Eighth Effective Date means 2 June 2004;
Eleventh Effective Date means 13 May 2008;
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euro means the currency introduced at the start of the third stage of European economic and monetary union pursuant to the Treaty establishing the European Community, as amended;
Euroclear means Euroclear Bank S.A./N.V.;
Eurosystem means the central banking system for the Euro;
Eurosystem-eligible NGN means a NGN which is intended to be held in a manner which would allow Eurosystem eligibility, as stated in the Final Terms relating to the applicable Tranche;
Event of Default means any of the events listed in Condition 10 upon the happening of which any Series of the Notes would (subject only to notice by the Trustee as provided in that Condition) become immediately due and repayable;
Extraordinary Resolution has the meaning set out in paragraph 20 of the Eighth Schedule;
Fifteenth Effective Date means 4 May 2012;
Fifth Effective Date means 2 July 2001;
Final Terms means, in relation to a Tranche, a Final Terms or Pricing Supplement duly executed by the relevant Issuer, referring to this Trust Deed and specifying the relevant provisions of such Tranche (including any changes to the Conditions);
First Effective Date means 24 July 1995;
First Supplemental Trust Deed means the first supplemental trust deed dated 24 July 1995 and made between the same parties as are party hereto;
Fixed Rate Notes means Notes on which interest is calculated at a fixed rate payable in arrear on such dates as are specified in the relevant Final Terms;
Floating Rate Notes means Notes on which interest is calculated at a floating rate payable at intervals of such period of months as are specified in the relevant Final Terms;
Fourteenth Effective Date means 5 May 2011;
Fourth Effective Date means 4 July 2000;
Group Company means, in relation to N.V. and PLC, those companies required to be consolidated in accordance with Netherlands and United Kingdom legislative requirements relating to consolidated accounts and, for the avoidance of doubt, N.V. and PLC together constitute a single group for the purpose of meeting Netherlands and United Kingdom requirements for consolidated accounts;
Guarantee means the guarantees contained in these presents pursuant to which the Notes issued by (i) N.V. are guaranteed unconditionally and irrevocably on a joint and several basis by PLC and UNUS, (ii) PLC are guaranteed unconditionally and irrevocably on a joint and several basis by N.V. and UNUS and (iii) UJH are guaranteed unconditionally and irrevocably on a joint and several basis by PLC and N.V.;
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Guarantors means N.V., PLC and UNUS and any company which, pursuant to Clause 17, has become a Guarantor but excluding any such company which has ceased to be a Guarantor, and Guarantor means any of them;
ICSD Direct Agreement means an agreement between the ICSDs and an Issuer in respect of New Global Notes that such Issuer may request be made eligible for settlement with the ICSDs;
ICSDs means Euroclear and Clearsteam, Luxembourg;
Instalment Note means a Note, the principal amount of which is repayable by instalments;
Interest Basis means the basis on which the relevant Notes will bear interest (which may be a fixed or floating rate or on a zero coupon basis);
Issue Date means, in respect of any Note, the date of issue and purchase thereof pursuant to, and in accordance with, the Paying Agency Agreement, being, in the case of any Note in the form of a Permanent Global Note or a Definitive Note, the same date as the date of issue of the Temporary Global Note which initially represented such Note;
Issuers means, at any time, the Original Issuers and any other company which, pursuant to Clause 17, has become an Issuer but excluding any such company which has ceased to be an Issuer, and Issuer means any of them;
Maturity Date means, in respect of any Note, the date (if any) on which it is due to be redeemed in accordance with the provisions of Condition 7;
month means calendar month;
Ninth Effective Date means 10 August 2005;
Nineteenth Effective Date means 22 April 2016;
NGN or New Global Note means a Note in global form which is a new global note, as so specified in the applicable Final Terms;
Non-eligible NGN means a NGN which is not intended to be held in a manner which would allow Eurosystem eligibility, as stated in the applicable Final Terms;
Note means a note in bearer form (provided that the minimum maturity and/or the maximum maturity (as the case may be) shall comply with all applicable legal and regulatory requirements of the jurisdiction of the currency in which the relevant Notes are denominated), the actual maturity (if any) being specified in the relevant Final Terms, issued or to be issued by any of the Issuers pursuant to the Dealer Agreement and shall be in, or substantially in, the relevant form set out in the relevant Schedule, which shall initially be represented by, and comprised in, a Temporary Global Note. Any Temporary Global Note may (in accordance with the terms of such Temporary Global Note) be exchanged for Definitive Notes (if so specified in the relevant Final Terms) and otherwise for a Permanent Global Note which, in turn, may (in accordance with the terms of such Permanent Global Note) be exchanged for Definitive Notes;
Noteholders means the several persons who are for the time being Holders of outstanding Notes save that, in respect of the Notes of any Series, so long as such
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Notes or any part thereof are represented by Notes in global form, each person who is for the time being shown in the records of an ICSD or any other relevant clearing system (other than Clearstream, Luxembourg, if Clearstream, Luxembourg shall be an accountholder of Euroclear or such other relevant clearing system, and Euroclear, if Euroclear shall be an accountholder of Clearstream, Luxembourg or such other relevant clearing system) as the Holder of a particular nominal amount of the Notes of such Series (in which regard any certificate or other document or such other evidence and/or information and/or certification issued by an ICSD or such other relevant clearing system or any form of record made by any of them as to the nominal amount of such Notes standing to the account of any person shall be conclusive and binding for all purposes save in the case of manifest or proven error) shall, for the purpose only of the exercise by the Trustee of all rights, duties, discretions, powers and authorities imposed or conferred on the Trustee which are to be exercised or performed by reference to, or in favour of, the Noteholders but not for any other purpose, be deemed to be and shall be treated as the Holder of such nominal amount of such Notes; and the expressions Noteholder, Holder of Notes and related expressions shall be construed accordingly;
Notes in global form means Notes represented by a Temporary Global Note or a Permanent Global Note;
Original Issuers means N.V., PLC and UJH and Original Issuer means any of them;
outstanding means, in relation to the Notes, all the Notes other than:
(i) | those which have been redeemed in accordance with these presents or the Conditions; |
(ii) | those in respect of which the date for redemption (including, but not limited to, the due date for payment of the final instalment in respect of an Instalment Note) in accordance with the provisions of these presents or the Conditions has occurred and the redemption moneys wherefore (including premium (if any) and all interest in respect thereof) have been duly paid to the Trustee in the manner provided in these presents, or to the Principal Paying Agent in the manner provided in the Paying Agency Agreement (and, where appropriate, notice to that effect has been given to the relative Noteholders in accordance with Condition 14) and remain available for payment against presentation of those Notes, Receipts and/or Coupons (as the case may be); |
(iii) | those which have become void under Condition 12; |
(iv) | those which have been purchased by any of the Issuers, the Guarantors or any Group Company as provided in Condition 7 and not resold; |
(v) | those mutilated or defaced Notes which have been surrendered and cancelled and in respect of which replacement Notes have been issued pursuant to Condition 13; |
(vi) | (for the purpose only of ascertaining the amount of the Notes outstanding and without prejudice to the status for any other purpose of the Notes) those Notes which are alleged to have been lost, stolen or destroyed and in respect of which replacements have been issued pursuant to Condition 13; |
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(vii) | any Temporary Global Note to the extent that it has been exchanged for the relative Permanent Global Note or, as the case may be, the relative Definitive Notes pursuant to its provisions; and |
(viii) | any Permanent Global Note to the extent that it has been exchanged for the relative Definitive Notes pursuant to its provisions; |
Paying Agency Agreement means the paying agency agreement dated 22 July 1994 made between the Issuers, the Guarantors and the various agents named therein and the Trustee (as amended, restated or supplemented from time to time) and includes any other agreement the terms of which have been previously approved by the Trustee in writing appointing further or other Paying Agents or appointing any other Principal Paying Agent or amending the terms of any such appointment;
Paying Agents means the several institutions (including, where the context permits or requires, the Principal Paying Agent) at their respective specified offices named as such in the Third Schedule or at such other offices as are notified to the Noteholders in accordance with the Paying Agency Agreement or such other or further specified paying agents for all or any Series of Notes, Receipts or Coupons as may from time to time be appointed in respect thereof by the relevant Issuer and the relevant Guarantors with the prior approval of the Trustee in writing and (in respect only of any Series already issued and remaining outstanding at the time of such appointment) notice of whose appointment is given to the Noteholders of such Series in accordance with Condition 14;
Permanent Global Note means a global note substantially in the form set out in the Second Schedule with such modifications (if any) as may be agreed between the relevant Issuer, the relevant Guarantors, the Principal Paying Agent, the Trustee and the relevant Dealer(s), comprising Notes of a single Tranche issued or, as the case may require, to be issued by the relevant Issuer pursuant to the Dealer Agreement or any other agreement and these presents in exchange for the whole or part of the Temporary Global Note issued in respect of the Notes of such Tranche;
Principal Paying Agent means Deutsche Bank AG, London Branch at its office at Winchester House, 1 Great Winchester Street, London EC2N 2DB, United Kingdom or such other principal paying agent for Notes, Receipts and Coupons of all or any Series as may from time to time be appointed by the relevant Issuer and the relevant Guarantors with the prior approval of the Trustee in writing and (in respect only of any Series already issued and remaining outstanding at the time of such appointment) notice of whose appointment has been given to the Noteholders of such Series in accordance with Condition 14;
Procedures means the written administrative procedures and guidelines relating to the terms of Notes which may be issued and the settlement of issues of Notes as shall be agreed upon from time to time by the Issuers, the Guarantors, the Dealers, the Principal Paying Agent and the Trustee;
Receipt means a receipt for payment of instalments of principal attached to an Instalment Note, such Receipt being in, or substantially in, the form set out in Part E of the Third Schedule hereto or in such form as the relevant Issuer, the relevant
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Guarantors, the Principal Paying Agent, the Trustee and the relevant Dealer(s) may agree and includes any replacement Receipt issued pursuant to Condition 13;
Relevant Date means, in respect of any payment, the date on which such payment first becomes due and payable, but if the full amount of the moneys payable has not been made available to the Trustee or the Principal Paying Agent, as the case may be, on or prior to such due date, it means the first date on which, the full amount of such moneys having been so made available, notice to that effect shall have been duly given to the Holders of Notes of the relevant Series in accordance with Condition 14;
Relevant Guarantors means, in respect of an issue of Notes (i) by N.V., PLC and UNUS, (ii) by PLC, N.V. and UNUS and (iii) by UJH, N.V. and PLC;
repay shall include redeem and vice versa and repaid, repayable and repayment and redeemed, redeemable and redemption shall be construed accordingly;
Requisite Currency means, in relation to any Notes, the currency in which such Notes are denominated;
Second Effective Date means 13 November 1997;
Securities Act means the United States Securities Act of 1933, as amended;
Series means all Notes which are denominated in the same currency and which have the same Maturity Date (if any or otherwise which are Undated Notes) and Interest Basis (both as indicated in the relevant Final Terms) and interest payment dates (if any) and the terms of which (save for the Issue Date, denomination, issue price and first interest payment (all as indicated in the relevant Final Terms)) are otherwise identical (including listing) and the expressions Notes of the relevant Series, Holders of Notes of the relevant Series and kindred expressions shall be construed accordingly;
Seventeenth Effective Date means 2 May 2014;
Seventh Effective Date means 27 June 2003;
Sixteenth Effective Date means 3 May 2013;
Sixth Effective Date means 1 July 2002;
Sterling means the lawful currency for the time being of the United Kingdom;
stock exchange means the stock exchange or stock exchanges upon which the Notes of any Series are for the time being or are to be listed;
successor in business means, in relation to any Issuer or any Guarantor, any company which, as the result of any amalgamation, merger, reconstruction or transfer, either:
(i) | owns beneficially the major part of the undertaking, property and assets owned by such Issuer or Guarantor immediately prior thereto; or |
(ii) | carries on, as successor to such Issuer or Guarantor, the major part of the business carried on by such Issuer or Guarantor immediately prior thereto; |
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Talon means a bearer talon for further Coupons or, as the case may be, Receipts in the form set out in Part D of the Third Schedule and includes any replacement talon issued pursuant to Condition 13;
Temporary Global Note means a global note substantially in the form set out in the First Schedule with such modifications (if any) as may be agreed between the relevant Issuer, the relevant Guarantors, the Principal Paying Agent, the Trustee and the relevant Dealer(s), comprising Notes of a single Tranche, issued by any of the Issuers pursuant to the Dealer Agreement or any other agreement and these presents;
Tenth Effective Date means 15 May 2007;
Third Effective Date means 11 November 1998;
Thirteenth Effective Date means 6 May 2010;
Tranche means all Notes of the same Series with the same Issue Date;
these presents means this Trust Deed and the Schedules (as from time to time modified in accordance with the provisions herein contained) and includes any deed or other document executed in accordance with the provisions hereof (as from time to time modified as aforesaid) and expressed to be supplemental hereto;
trust corporation means a corporation entitled by rules made under the Public Trustee Act 1906 to act as a custodian trustee;
Twelfth Effective Date means 11 May 2009;
Undated Notes means Notes which are specified in the relevant Final Terms as having no fixed maturity date;
United States means the United States of America (including the States and the District of Columbia) and its possessions include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana Islands;
U.S. Person means (i) any person who is a citizen or resident of the United States; (ii) a domestic partnership; (iii) a domestic corporation or other entity taxable as a corporation; (iv) any estate the income of which is subject to United States federal income taxation regardless of its source; or (v) a trust if it (x) is subject to the primary supervision of a court within the United States and one or more United States persons within the meaning of the Internal Revenue Code of 1986, as amended, have the authority to control all of its substantial decisions or (y) has made a valid election under applicable Treasury Regulations to be treated as a domestic trust provided that the term U.S. Person shall not include foreign branches of United States financial institutions (as defined in U.S. Treasury Regulations Section 1.165-12(c)(1)(iv)) purchasing for their own account or for resale;
Words denoting the masculine gender only shall include the feminine gender also; and
Words denoting persons only shall include companies, corporations, partnerships and all other legal entities.
(B) | In these presents references to: |
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(i) | any provision of any statute shall be deemed also to refer to any statutory modification or re-enactment thereof or any statutory instrument, order or regulation made thereunder or under such modification or re-enactment; |
(ii) | principal and/or interest in respect of the Notes shall be deemed also to include references to any additional amounts which may be payable under Condition 9 or under any obligation undertaken pursuant to Clause 6; |
(iii) | costs, charges or expenses shall include any value added tax or similar tax charged or chargeable in respect thereof; and |
(iv) | principal in the context of the payment of principal on a Note shall be deemed to include a reference to the redemption amount (if any) payable on such Note. |
(C) | References in this Trust Deed to Schedules, Clauses, sub-clauses, paragraphs and sub-paragraphs shall be construed as references to the Schedules to this Trust Deed and to the Clauses, sub-clauses, paragraphs and sub-paragraphs of this Trust Deed respectively. |
(D) | Unless the context otherwise requires, words and expressions contained in these presents shall bear the same meanings as in the Companies Acts 1985 and 1989. |
(E) | The headings are inserted herein only for convenience and shall not affect the construction hereof. |
2 | Amount of the Notes |
(A) | The Notes will be issued in Series in an aggregate principal amount from time to time outstanding which shall not exceed U.S.$15,000,000,000 or such greater amount as shall be established pursuant to sub-clause (B) of this Clause, and for this purpose: |
(i) | each Note denominated in a currency other than U.S. dollars shall be converted into U.S. dollars using the spot rate of exchange for the purchase of the relevant currency against payment of U.S. dollars being quoted by the Principal Paying Agent on the date on which the agreement for the issuance of such Notes was made; |
(ii) | the principal amount of each Note with a zero coupon and other Notes issued at a discount shall be the net proceeds receivable by the relevant Issuer for the particular Tranche pursuant to the Dealer Agreement; and |
(iii) | the currency in which any Notes are payable, if different from the currency of their denomination, shall be disregarded, |
(iv) | and otherwise, subject to these presents, subject to such provisions and on such terms and conditions and at such time or times as the relevant Issuer and the relevant Guarantors shall determine and the Trustee shall not be responsible for such conversion or the receipt or application of the proceeds of issue by the relevant Issuer. |
(B) | The amount specified in sub-clause (A) of this Clause may be increased from time to time by a deed expressed to be supplemental hereto executed by the Issuers, |
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the Guarantors and the Trustee substantially in the form set out in the Fifth Schedule. |
3 | Covenant to repay and to pay interest |
(A) | Each Issuer (in respect of Notes issued by it) covenants with the Trustee that it will, as and when the Notes of any Series or any of them become due to be redeemed or any principal or redemption amount on the Notes of any Series or any of them becomes due to be repaid in accordance with the Conditions, unconditionally pay or procure to be paid to, or to the order of, the Trustee in immediately available funds and/or same day funds, as the case may be, in the relevant currency the principal amount (or instalment thereof) or, as the case may be, redemption amount of the Notes of such Series becoming due for redemption or repayment on that date and (where such Notes bear interest) shall (subject to the provisions of the Conditions) until such payment (as well after as before any judgment or other order of any court of competent jurisdiction) is duly made, unconditionally pay or procure to be paid to or to the order of the Trustee as aforesaid on the dates provided for in the Conditions interest on the principal amount (or such other amount as may be specified in the relevant Final Terms) (or, in the case of Instalment Notes, on each instalment of principal) of the Notes of such Series outstanding from time to time in the relevant currency at the rate calculated from time to time in accordance with, and at the times, provided in the Conditions; provided that: |
(i) | every payment of principal, redemption amount or interest in respect of such Notes made to or to the order of the Principal Paying Agent in the manner provided in the Paying Agency Agreement shall be in satisfaction pro tanto of the relevant covenant by such Issuer contained in this Clause and shall be deemed for the purposes of this Clause to have been paid to the order of the Trustee except to the extent that there is default in the subsequent payment thereof to the Holders of the Notes, Receipts and/or Coupons of such Series (as the case may be) in accordance with the Conditions in which event interest will again commence to accrue from the date of such default until the date upon which payment is duly made in accordance with this Clause; |
(ii) | in the case of any payment of principal, redemption amount or interest in respect of the Notes of such Series made after the due date, payment shall be deemed not to have been made until the full amount due has been received by the Trustee or the Principal Paying Agent (as the case may be) and, unless the Trustee otherwise agrees, notice to that effect has been given to the Holders of Notes of such Series in accordance with Condition 14; |
(iii) | in any case where interest on the Notes of such Series falls to be paid in respect of a period of less than a full year interest will be calculated on the basis of 360 days (or 365 days, or 366 days in the case of an Interest Period falling in a leap year, in respect of (i) Fixed Rate Notes of which euro is the Requisite Currency or (ii) Floating Rate Notes of which Sterling is the Requisite Currency) and the actual number of days elapsed or on such |
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other basis as may be specified in the Conditions or in the relevant Final Terms; and |
(iv) | in any case where payment of the whole or any part of the principal amount (or instalment thereof) or redemption amount due in respect of any Note of such Series is improperly withheld or refused upon due presentation of such Note, interest shall accrue at the rate aforesaid on the whole or such part of the principal amount (or instalment thereof) or redemption amount (as the case may be) from the date of such withholding or refusal until the date on which notice is given to the Holders of Notes of such Series either in accordance with Condition 14 or individually that the full amount payable in respect of the amount of principal (or instalment thereof) or redemption amount in the relevant currency has been paid to the Principal Paying Agent and the relevant Issuer covenants that it shall unconditionally pay the interest so accrued to or to the order of the Trustee as aforesaid. |
(B) | Each Issuer may, from time to time without the consent of the Noteholders of any Series, create and issue further notes, bonds or debentures having the same terms and conditions as the Notes of such Series ranking pari passu in all respects (or in all respects except for the first payment of interest, if any, on them and/or the denomination thereof) so as to form a single series with any previously existing Series of Notes. |
(C) | At any time after an Event of Default shall have occurred in respect of the Notes of any Series, the Trustee may: |
(i) | by notice in writing to the relevant Issuer, the relevant Guarantors, the Principal Paying Agent, the other Paying Agents and the relevant Calculation Agent require the Principal Paying Agent, the other Paying Agents and the relevant Calculation Agent or any of them: |
(a) | to act thereafter as Principal Paying Agent, Paying Agents and relevant Calculation Agent respectively of the Trustee in relation to payments to be made by or on behalf of the Trustee under the terms of these presents and on the terms provided in the Paying Agency Agreement or, as the case may be, the relevant Calculation Agency Agreement mutatis mutandis in relation to such Notes (save that the Trustees liability under any provisions thereof for the indemnification of the Paying Agents or any Calculation Agent shall be limited to amounts for the time being held by the Trustee on the terms of these presents in relation to such Notes which are available to the Trustee for such purpose) and thereafter to hold all such Notes and the relative Receipts and Coupons (if any) and all sums, documents and records held by them in respect of such Note and Coupons (if any) on behalf of the Trustee; and/or |
(b) | to deliver up all Notes, Receipts and Coupons (if any) of such Series and all sums, documents and records held by them in respect of such Notes and Coupons to the Trustee or as the Trustee shall direct in such notice provided that such notice shall be deemed not to apply to any document or record which the relative Paying Agent or |
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relevant Calculation Agent is obliged not to release by any law or regulation; and |
(ii) | by notice in writing to the relevant Issuer and the relevant Guarantors require each of them to make all subsequent payments in respect of the Notes, Receipts and Coupons of the relevant Series to or to the order of the Trustee and not to the Principal Paying Agent or relevant Calculation Agent (as the case may be) and, with effect from the issue of any such notice until such notice is withdrawn, proviso (i) to sub-clause (A) of this Clause shall cease to have effect. |
(D) | If any Series of Floating Rate Notes becomes immediately due and repayable pursuant to Condition 10, the rate of interest and interest amounts in respect of them shall continue to be calculated in accordance with the Conditions until all such Floating Rate Notes of such Series shall have been repaid, except that the rates of interest and interest amounts need not be notified in accordance with the Conditions. |
(E) | All payments in respect of, under and in connection with these presents and the Notes, Receipts and Coupons of any Series shall be made to the relevant Noteholders, Receiptholders and Couponholders in the relevant currency as specified in the applicable Final Terms. |
(F) | The Notes of each Series shall form a separate Series and accordingly, unless for any purpose the Trustee at its absolute discretion shall otherwise determine, all the provisions of these presents shall apply separately to the Notes of each Series and, in these presents, the expressions Notes, Noteholders, Receipts, Receiptholders, Coupons, and Couponholders and, in each case, kindred expressions shall be construed accordingly. |
4 | Issue and constitution of Notes |
(A) | By not later than the close of business (London time) on the second day (excluding Saturdays, Sundays and bank holidays) on which banks are open for business in the City of London preceding each proposed Issue Date, the relevant Issuer shall: |
(i) | procure that the Trustee receives a copy of the relevant Final Terms; and |
(ii) | deliver to the Trustee a certificate signed (where either N.V. or PLC is the Issuer) by a director of N.V. or PLC, as the case may be, or some other person duly authorised in that behalf or (where UJH is the Issuer) by a Representative Director of UJH or some other person duly authorised in that behalf certifying to the best of the knowledge and belief of the giver of the certificate having made all reasonable enquiries the absence of any event listed in Condition 10 (whether or not applicable to the Notes of such Tranche) or any event which, with the lapse of time and/or the giving of notice and/or the issue of a certificate would constitute an Event of Default and compliance with the Programme Limit. The relevant Issuer shall also procure that there is delivered to the Trustee an executed copy of the relevant Final Terms prior to the Issue Date in the case where the copy of such Final Terms referred to in (i) above was unexecuted. |
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Forthwith upon the issue of, and full payment for, the relevant Temporary Global Note(s), the Notes of the Tranche to which it or they relate(s) shall become constituted by these presents without further formality.
(B) | None of the Issuers shall be entitled to, and each Issuer hereby covenants with the Trustee that it will not, issue any Notes pursuant to these presents unless the appropriate Guarantee applies to such Notes. |
(C) | Each of the Issuers and the Guarantors shall procure that legal opinions shall be delivered to the Trustee in any of the following circumstances: |
(i) | on such occasions as the Trustee so requests after consultation with the relevant Issuers and the relevant Guarantors, on the occurrence of either a change or a proposed change in any applicable law or regulation (or interpretation thereof) affecting any of the Issuers, the Guarantors, the Notes, or these presents or on the Trustee having any other reasonable grounds; and |
(ii) | on any occasion on which the Dealers receive any legal opinion in accordance with the Dealer Agreement. |
If, notwithstanding the preceding provisions of this Clause 4, the Trustee is not satisfied with any legal opinion delivered to it pursuant to this Clause 4(C) (not being a legal opinion substantially in the form of the legal opinion delivered to the Trustee on the date hereof) the Trustee shall thereafter be entitled not to approve any new Final Terms in respect of which such legal opinion may, at any time, relate or be connected in any way whatsoever.
5 | Forms and issue of the Notes |
(A) | The Notes of each Tranche will be represented on issue by a Temporary Global Note and, if so specified in the Final Terms, such Temporary Global Note shall be a NGN. Each Temporary Global Note shall be exchangeable, in accordance with its terms, for a Permanent Global Note or Definitive Notes having, if so specified in the relevant Final Terms, Receipts or (as the case may be) Coupons attached all as set out in such Temporary Global Note. Each Permanent Global Note shall be exchangeable, in accordance with its terms, for Definitive Notes having, if so specified in the relevant Final Terms, Receipts or (as the case may be) Coupons attached all as set out in such Permanent Global Note. All Notes in global form shall be signed manually on behalf of the relevant Issuer (where N.V. or PLC is the Issuer) by a director of N.V. or PLC or, as the case may be, some other person duly authorised in that behalf or (where UJH is the Issuer) by a Representative Director of UJH, any duly authorised attorney or some other person duly authorised in that behalf and may be a master Note in global form supplied by the relevant Issuer under the provisions of the Paying Agency Agreement, authenticated by the Principal Paying Agent and, in the case of each Eurosystem-eligible NGN or Non-eligible NGN in respect of which the Issuer has notified the Principal Paying Agent that effectuation is to be applicable, effectuated by or on behalf of the specified Common Safekeeper. Each Note in global form which is a CGN, shall be delivered to a bank depositary common to the ICSDs or any other relevant clearing system or, in the case of a Note in global form which is a NGN, shall be delivered to the specified Common Safekeeper in accordance with the provisions of the Paying |
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Agency Agreement. All Definitive Notes shall, unless otherwise specified in the relevant Final Terms, be security printed in accordance with any applicable regulatory requirements from time to time (and Notes shall be security printed in accordance with the requirements of the applicable stock exchange and any other applicable regulatory requirements from time to time), shall be serially numbered and shall, if interest bearing, have attached thereto Coupons or, if so specified in the relevant Final Terms, have endorsed thereon a grid for recording the payment of interest and shall, in the case of Instalment Notes, have attached thereto Receipts. The Notes in global form, the Definitive Notes and the relative Receipts, and Coupons (if any) shall be in bearer form and shall have the Conditions endorsed thereon, attached thereto or incorporated by reference therein. Title to the Notes in global form, the Definitive Notes and the relative Receipts and Coupons shall pass by delivery. |
(B) | The Definitive Notes, the Receipts and the Coupons shall be signed manually or in facsimile on behalf of the relevant Issuer (where N.V. or PLC is the Issuer) by a director of N.V. or PLC, as the case may be, or some other person duly authorised in that behalf or (where UJH is the Issuer) by a Representative Director of UJH, any duly authorised attorney or some other person duly authorised in that behalf. Any Issuer may use on any Definitive Note or any Receipt or Coupon facsimile signatures of each of the authorised signatories of the relevant Issuer set out in this sub-clause notwithstanding the fact that when such Definitive Note, Receipt or Coupon shall be issued any such person shall have ceased to hold such office. The Definitive Notes, Receipts or Coupons so executed (and, in the case of the Definitive Notes, authenticated) and issued shall be valid and binding obligations of the relevant Issuer. The master Temporary Global Note and the master Permanent Global Note for an Issuer shall be signed manually by or on behalf of such Issuer in accordance with Clause 5(A). Any Issuer may adopt and use the signature of any person who, at the date of signing a master Temporary Global Note or master Permanent Global Note, is authorised to sign on behalf of the relevant Issuer for such purpose notwithstanding that such person may have ceased to hold such office at the time of the creation and issue of the relevant Tranche or the issue and delivery of the relevant Notes. |
(C) | The relevant Issuer shall procure that, prior to their issue and delivery, the Notes in global form and the Definitive Notes shall be authenticated manually by an authorised signatory on behalf of the Principal Paying Agent and, in the case of each Eurosystem-eligible NGN or Non-eligible NGN in respect of which the Issuer has notified the Principal Paying Agent that effectuation is to be applicable, effectuated by or on behalf of the specified Common Safekeeper. Notes in global form and Definitive Notes, as the case may be, shall not be valid for any purpose unless and until so authenticated and, in the case of Eurosystem-eligible NGNs or Non-eligible NGNs in respect of which the Issuer has notified the Principal Paying Agent that effectuation is to be applicable, so effectuated and any Receipts or Coupons appertaining to the relevant Definitive Notes shall not be valid for any purpose unless and until the Definitive Notes to which they appertain shall have been authenticated but, subject thereto, Notes in global form, Definitive Notes and, as the case may be, Receipts or Coupons so executed shall be binding and valid obligations of the relevant Issuer. |
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(D) | The Trustee shall be entitled to rely on the records of the ICSDs in relation to any determination of the principal amount outstanding of each NGN. For this purpose, records means the records that each ICSD holds for its customers which reflect the amount of such customers interest in the Notes. |
6 | Stamp Duties |
(A) | The relevant Issuer will pay all stamp duties and other similar duties or taxes (if any) payable in The Netherlands, the United States, Japan or the United Kingdom on (i) the constitution and issue of the Notes, the Receipts and/or the Coupons and (ii) the initial delivery of the Notes. The Issuers will pay all stamp duties and other similar duties or taxes (if any) payable in the aforesaid countries on the execution of these presents. If in consequence of an Event of Default the Trustee (or any Noteholder, Receiptholder or Couponholder where permitted under these presents so to do) shall take any proceedings against the relevant Issuer or the relevant Guarantors and/or any proceedings to wind up the relevant Issuer or the relevant Guarantors in The Netherlands and/or the United Kingdom and/or the United States and/or Japan and if for the purposes of any such proceedings these presents or any Notes, Receipts or Coupons are taken into such jurisdiction and any stamp duties or other similar duties or taxes become payable thereon in any such jurisdiction, the relevant Issuer will pay (or reimburse the person making payment of) such stamp duties or other similar duties or taxes. |
(B) | Covenant to give substitute tax undertaking |
If the relevant Issuer or the relevant Guarantors shall become subject generally to the taxing jurisdiction of any territory other than or in addition to The Netherlands, in the case of N.V., the United Kingdom, in the case of PLC, Japan in the case of UJH or the United States or any political sub-division thereof, in the case of UNUS, or any authority in such other territory having power to tax, then the relevant Issuer or the relevant Guarantors (as the case may be) shall (unless the Trustee shall otherwise agree), but only if by virtue of becoming so subject it shall be necessary in order that the net amounts received by the Holder of any Note or, as the case may be, Receipt or Coupon after withholding or deduction for or on account of taxes or duties imposed or levied by or on behalf of such territory or authority, shall equal the respective amounts of principal and/or redemption amount and/or interest as would have been receivable in respect of the Notes or, as the case may be, Receipts or Coupons in the absence of such withholding or deduction, give to the Trustee an undertaking or covenant in form and manner reasonably satisfactory to the Trustee in terms corresponding to the terms of Condition 9 with the substitution for, or (as the case may require) the addition to, the references therein to The Netherlands, the United Kingdom, Japan or the United States or any authority in The Netherlands, the United Kingdom, Japan or the United States having power to tax of references to that other or additional territory or any authority therein having power to tax to whose taxing jurisdiction the relevant Issuer or, as the case may be, the relevant Guarantors shall have become subject as aforesaid and in such event the provisions of these presents shall be read accordingly and the provisions of parts (i) to (iv) of Condition 7(c) shall be amended accordingly.
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7 | Covenant to observe provisions of the Trust Deed and Schedules |
(A) | Each of the Issuers and each of the Guarantors hereby covenants with the Trustee to comply with those provisions of these presents which are expressed to be binding on each of them and to perform and observe the same. The Notes, the Receipts and the Coupons shall be held subject to the provisions contained in these presents, all of which shall be binding upon each of the Issuers, the Guarantors, the Noteholders, the Receiptholders and the Couponholders and all persons claiming through or under them respectively. The issue of any Series of Notes shall constitute confirmation of the fact that the Notes of such Series carry the benefit of the Guarantee. |
(B) | The provisions contained in the Schedules shall have full effect in the like manner as if the same had been incorporated herein. |
8 | Guarantee |
(A) |
(i) | N.V. and UNUS, jointly and severally, in respect of any Notes issued by PLC; |
(ii) | PLC and UNUS, jointly and severally, in respect of any Notes issued by N.V.; and |
(iii) | N.V. and PLC, jointly and severally, in respect of any Notes issued by UJH, |
hereby irrevocably and unconditionally guarantee to the Trustee the due and punctual payment by the relevant Issuer of any moneys payable from time to time by the relevant Issuer in respect of the Notes, the Receipts and the Coupons and under or pursuant to these presents, as the case may be, in the manner hereinafter provided, namely:
(i) | if and whenever the relevant Issuer shall make default in the payment of any moneys payable by the relevant Issuer in respect of the Notes, the Receipts or the Coupons or under or pursuant to these presents, as the case may be, the relevant Guarantors shall forthwith upon written demand therefor made by the Trustee unconditionally pay to or to the order of the Trustee in the relevant currency the amount in respect of which such default has been made and any payment so made shall pro tanto cure such default by the relevant Issuer provided that every payment of such moneys as aforesaid made by the relevant Guarantors to the Noteholders, the Receiptholders and/or the Couponholders, as the case may be, or to, or to the order of, the Principal Paying Agent in the manner provided in the Paying Agency Agreement shall be satisfaction pro tanto of the covenants by the Guarantors in this Clause contained (and shall be deemed for the purposes of this Clause to have been paid to or to the order of the Trustee) except, in the case of payment to or to the order of the Principal Paying Agent as aforesaid, to the extent that there is default in the subsequent payment thereof to the Noteholders, the Receiptholders or the Couponholders, as the case may be, in accordance with the Conditions. The provisions of Condition 9 shall apply with respect to payments by any of the Guarantors made hereunder; |
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(ii) | without prejudice to the provisions of paragraph (i) of this sub-clause (A), each of the Guarantors shall, as between the Trustee and itself, be liable as if it were the principal debtor and not merely a surety and none of the Guarantors shall be exonerated or discharged from liability under the Guarantee by time being given to the relevant Issuer or the relevant Guarantors or any of them by the Trustee or by the Noteholders, Receiptholders or Couponholders or any of them, by any other indulgence or concession to the relevant Issuer granted by the Trustee or by the Noteholders, Receiptholders or Couponholders or any of them or by anything done by the Trustee in exercise of any of the trusts, powers, authorities or discretions vested in it by these presents or by anything which the Noteholders, Receiptholders or Couponholders or the Trustee or any of them may omit or neglect to do or by any other dealing or thing which, but for this provision, might operate to exonerate or discharge any of the relevant Guarantors from their covenants herein contained or by the illegality, invalidity or unenforceability of or any defect in the provisions of any Note, Receipt or Coupon or these presents or any of the relevant Issuers obligations thereunder or hereunder; |
(iii) | the Guarantee is to be a continuing guarantee and accordingly shall remain in operation until all moneys owing in respect of the Notes, the Receipts and the Coupons and under these presents have been paid or satisfied and is in addition to and not in substitution for any other rights which the Trustee or the Noteholders, Receiptholders or Couponholders or any of them may have under or by virtue of these presents and may be enforced without first having recourse to any such rights and without taking any steps or proceedings against the relevant Issuer. In particular, the Guarantee may be enforced on each and every occasion on which default is made by the relevant Issuer in payment notwithstanding that any call under this Guarantee may have been made previously by the Trustee or that any proceedings may have been commenced against any of the relevant Guarantors in respect of sums already due under the Guarantee; |
(iv) | the Trustee may from time to time make any arrangement or compromise with the relevant Guarantors or any of them in relation to the Guarantee which the Trustee may think fit; |
(v) | the relevant Guarantors or any of them shall not, without the consent of the Trustee, at any time after default has been made by the relevant Issuer in the payment of any moneys payable by the relevant Issuer in respect of the Notes, the Receipts or the Coupons or under or pursuant to these presents and so long as any moneys payable by the relevant Guarantors in respect of such defaulted moneys remain unpaid, exercise in respect of any amounts paid under the Guarantee any right of subrogation or any other right or remedy which may accrue to the relevant Guarantors in respect of or as a result of such payment; and |
(vi) | if any payment received by the Trustee or any Noteholder, Receiptholder or Couponholder pursuant to the provisions of these presents shall, on the subsequent bankruptcy or insolvency of the relevant Issuer or the relevant Guarantors or any of them, be avoided under any laws relating to |
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bankruptcy or insolvency, such payment shall not be considered as having discharged or diminished the liability of the relevant Guarantors or any of them, and the Guarantee shall continue to apply as if such payment had at all times remained owing by the relevant Issuer and the relevant Guarantors shall indemnify the Trustee and the Noteholders, Receiptholders and Couponholders, as the case may be, in respect thereof. |
(B) | If any moneys shall become payable by any of the Guarantors under the Guarantee, the relevant Issuer shall not, without the consent of the Trustee, so long as such moneys remain unpaid, pay any moneys for the time being due by the relevant Issuer to any of the Guarantors. |
(C) | In this Clause 8, the expression relevant Issuer shall mean the Issuer in respect of which the relevant Guarantors have given their Guarantee. |
9 | Application of moneys received by the Trustee |
(A) | The Trustee shall apply all moneys received by it under these presents in respect of the Notes of any Series: |
(i) | first, in payment or satisfaction of the reasonable costs, charges, expenses and liabilities incurred by the Trustee in or about the preparation and execution of, or in carrying out the terms of, or enforcing the trusts of these presents (including remuneration of the Trustee); |
(ii) | secondly, in or towards payment pari passu and rateably of all arrears of interest remaining unpaid in respect of the Notes of the relevant Series and all principal moneys, redemption amounts and premium (if any) due on or in respect of such Notes; provided that where Notes of more than one Series have become so due and payable, such moneys shall be applied as between the amounts outstanding in respect of the different Series pari passu and rateably (except where such moneys are paid in respect of a specific Series or several specific Series, in which event such moneys shall be applied solely to the amounts outstanding in respect of that Series or those Series respectively); and |
(iii) | thirdly, in payment of the balance (if any) to the relevant Issuer or, in the event that any moneys were received from the relevant Guarantors, to the extent of such moneys, to the relevant Guarantors (provided that the Trustee shall not have regard as to how any such moneys are apportioned between the Guarantors). |
Without prejudice to the provisions of this Clause, if the Trustee shall hold any moneys which represent principal, redemption amount, premium or interest in respect of Notes, Receipts or Coupons which have become void under Condition 12, the Trustee shall (subject to no sums being then overdue to the Trustee in respect of any Notes, Receipts or Coupons of any Series and to the payment or provision for the payment or satisfaction of the said costs, charges, expenses and liabilities, including the remuneration of the Trustee) pay the same forthwith to the relevant Issuer (without prejudice to any question as to how such surplus should be dealt with as between the relevant Issuer and any other person for the time being entitled thereto in priority to the relevant Issuer).
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(B) | If more than one Series of Notes has become due and payable, the Trustee shall apportion between the relevant Noteholders the payment of the costs, charges, expenses and liabilities referred to in paragraph (i) of sub-clause (A) of this Clause out of moneys received and held upon trust by the Trustee as aforesaid, in such manner and in such amounts as it shall, in its absolute discretion, consider appropriate. |
(C) | The Trustee shall give not less than 14 days notice to Noteholders in accordance with the Conditions of the day fixed for any payment to the Noteholders under this Clause 9. |
10 | Power to retain and invest less than 10 per cent. |
If the amount of the moneys at any time available for payment in respect of the Notes of any Series under Clause 9 shall be less than one-tenth of the principal amount of the Notes of such Series then repayable, the Trustee may, at its discretion, invest such moneys on behalf of the persons entitled thereto under Clause 9 upon some or one of the investments hereinafter authorised with power from time to time, at the like discretion, to vary such investments. The income resulting from such investments shall be applied in accordance with Clause 9. However, upon such income reaching an amount such that, if that amount were added to the investment and any other funds for the time being under the control of the Trustee and applicable for the purpose, the total sum would be sufficient to pay at least one tenth of the principal amount of the Notes of such Series then repayable, then such investment and funds shall also be applied under Clause 9.
11 | Authorised investments |
Any moneys which under the trusts herein contained ought to, or may be, invested by the Trustee may be invested in the name or under the control of the Trustee in any of the investments for the time being authorised by English law for the investment by trustees of trust moneys or in any other investments, whether similar to those aforesaid or not, which may be selected by the Trustee or by placing the same on deposit in the name or under the control of the Trustee with such bank or other financial institution as the Trustee may think fit and in such currency as the Trustee may think fit (in the case of any currency other than the Requisite Currency), with the approval of the relevant Issuer (such approval not to be unreasonably withheld) and the Trustee may at any time vary or transfer any of such investments for or into other such investments, subject to the proviso in Clause 22, neither it nor the relevant Issuer nor the relevant Guarantors shall be responsible for any loss occasioned by reason of any such investments or such deposit whether by depreciation in value, fluctuation in exchange rates or otherwise.
12 | Indemnification of the Trustee upon enforcement |
(A) | The Trustee shall not be bound to take any steps to enforce the performance of any of the provisions of these presents, the Notes, the Receipts or the Coupons unless (i) it shall have been directed to do so by an Extraordinary Resolution or so requested in writing by the Holders of at least one-fourth in principal amount of the Notes of the relevant Series then outstanding and (ii) it shall have been indemnified and/or secured and/or prefunded to its satisfaction against all liabilities, proceedings, claims and demands to which it may thereby become liable and all costs, charges and expenses which may be incurred by it in connection therewith. |
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(B) | Should the Trustee take any proceedings against any Issuer and/or any Guarantor: |
(i) | proof therein that as regards any specified Note of a particular Series, default has been made in paying any principal, redemption amount, premium and/or, where the same is not paid against presentation of a Note in global form or, as the case may be, a Coupon, interest due in respect of such Note shall (unless the contrary be proved) be sufficient evidence that like default has been made as regards all other Notes of such Series in respect of which a corresponding payment is then due; and |
(ii) | proof therein that as regards any specified Coupon appertaining to a Note of a particular Series, default has been made in paying any interest due to the relevant Couponholders shall (unless the contrary be proved) be sufficient evidence that like default has been made as regards all other Coupons appertaining to the Notes of such Series in respect of which a corresponding payment is then due. |
13 | Payment to Noteholders, Receiptholders and Couponholders |
Any payment to be made in respect of the Notes of any Series or the Receipts or the Coupons appertaining thereto by the relevant Issuer or relevant Guarantors or the Trustee may be made in the manner provided in the Conditions and any payment so made shall be a good discharge, pro tanto, to such Issuer, or, as the case may be, such Guarantor or the Trustee. Any payment in full of interest made in respect of a Coupon shall extinguish any claim of a Noteholder which may arise directly or indirectly in respect of such interest.
14 | Production of Notes, Receipts and Coupons |
Upon any payment to Noteholders, Receiptholders or Couponholders under Condition 8 the Note, Receipt or Coupon in respect of which such payment is made shall, if the Trustee so requires, be produced to the Trustee, or the Paying Agent by or through whom such payment is made and the Trustee shall, in the case of part payment, enface or cause such Paying Agent to enface (other than in the case of a Temporary Global Note or Permanent Global Note in NGN form) a memorandum of the amount and date of payment on such Note, Receipt or Coupon or, in the case of payment in full, shall cancel or procure the same to be cancelled and shall certify or procure the certification of such cancellation but such Paying Agent may, in any particular case, dispense with the production and enfacement of a Note, Receipt or Coupon upon such indemnity being given as it shall reasonably think sufficient.
15 | Covenants by the Issuers and the Guarantors |
Each of the Issuers and the Guarantors (provided that UNUS shall have no liability or obligation under this Clause 15 in respect of any of sub-clauses (B), (C), (E), (R) and (S) below) hereby covenants with the Trustee that, so long as any of the Notes issued or guaranteed by it remains outstanding, it shall:
(A) | at all times maintain, while any Notes are outstanding, a Paying Agent (in accordance with the Conditions) and at all times maintain any other agents (including but not limited to any Calculation Agent) required by the Conditions relating to any outstanding Notes all in accordance with the Conditions; |
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(B) | maintain a paying agent in a European Union member state that is not obliged to withhold or deduct tax pursuant to any law implementing or complying with, or introduced in order to conform to European Council Directive 2003/48/EC or any other Directive implementing the conclusions of the ECOFIN Council meeting of 26th to 27th November, 2000, provided that under no circumstances shall any Issuer or any Guarantor be obliged to maintain a paying agent in such a European Union member state unless at least one European Union member state does not require a paying agent making payments in that European Union member state to withhold or deduct tax pursuant to such law; |
(C) | upon becoming aware of the same, give notice in writing to the Trustee of the occurrence of any Event of Default in relation to it or any event which, with the lapse of time and/or the giving of notice and/or the issue of a certificate would constitute an Event of Default in relation to it; |
(D) | within 14 days of any written request by the Trustee and at least once in every year (if practicable at the same time as copies of the balance sheet and accounts mentioned under paragraph (f) below are sent) deliver to the Trustee (i) (in the case of N.V. and PLC) a certificate signed by a director of N.V. or PLC, as the case may be, or some other person duly authorised in that behalf and (ii) (in the case of UJH) a certificate signed by a Representative Director of UJH or some other person duly authorised in that behalf to the effect that to the best of the knowledge, information and belief of such person having made all reasonable enquiries: |
(i) | there did not exist as at a date not more than five days prior to the date of the certificate nor had there existed at any other time prior thereto since the date hereof or since the date as of which the last such certificate was given any Event of Default or any event which, with the lapse of time and/or the giving of notice and/or the issue of a certificate would constitute an Event of Default or, if such an Event of Default or event did then exist or had existed, specifying the same; and |
(ii) | during the preceding financial year (or during such period as the Trustee may specify in such request) and since the completion thereof up to the date mentioned in (i) above each of the Issuers and the Guarantors complied in all material respects with its obligations contained in these presents or, if such is not the case, specifying the respects in which it has not so complied; |
(E) | so far as permitted by law, at all times give to the Trustee such other information as it shall reasonably require for the purpose of the discharge of the duties and discretions vested in it hereunder or by operation of law; |
(F) | send to the Trustee four copies in the English language of every publicly available balance sheet, profit and loss account, report or other notice, statement or circular which is (in each case) issued to its members or stockholders, or as soon as practicable after, the time of the issue thereof; |
(G) | so far as permitted by law, at all times execute all such further documents and do all such further acts and things as may be necessary at any time or times to give effect to the terms and conditions of these presents; |
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(H) | oblige the Principal Paying Agent to notify the Trustee forthwith if it does not on or before the due date for repayment of the Notes of any Series or any of them or the due date for payment of the relevant Receipts and/or the Coupons (if any), receive unconditionally the full amount in the relevant currency of the moneys payable on such due date in respect of all such Notes, Receipts or Coupons, as the case may be; |
(I) | as soon as reasonably practicable and before the time of publication send, or procure to be sent, to the Trustee four copies of the form of all notices to be given to Noteholders; |
(J) | at all times use their reasonable endeavours to maintain a listing of the Notes on such stock exchange as the Notes are, for the time being, quoted or listed or, if it is unable to do so having used such reasonable endeavours or if the maintenance of such listing is agreed by the Trustee to be unduly onerous, use its reasonable endeavours to obtain and maintain a quotation or listing of the Notes on such other stock exchange or exchanges as they may (with the written approval of the Trustee) decide and shall also use its reasonable endeavours to procure that there will at all times be furnished to any stock exchange on which the Notes are for the time being quoted or listed on the application of the relevant Issuer such information as such stock exchange may require in accordance with its normal requirements or in accordance with any arrangements for the time being made with any such stock exchange; |
(K) | not less than 45 days prior to the redemption date in respect of the Notes of any Series give the Trustee notice of the proposed redemption of the Notes pursuant to Condition 7(c) or 7(d); |
(L) | comply with its obligations under the Paying Agency Agreement and any other agreement (including but not limited to any Calculation Agency Agreement) appointing other agents for the purpose of the Programme and the Dealer Agreement, and use its reasonable endeavours to procure that (i) the Principal Paying Agent and the relevant Calculation Agent comply with all their respective obligations thereunder; and (ii) in respect of each Temporary Global Note which is a NGN or Permanent Global Note which is a NGN, the ICSDs maintain their records in accordance with the relevant ICSD Direct Agreement; |
(M) | if, in accordance with the provisions of Condition 8, interest, principal, premium or other redemption amount in respect of Notes becomes payable at the specified office in the United States of any Paying Agent, promptly give notice thereof to the Noteholders in accordance with Condition 14; |
(N) | in the event of the existence of a serious threat as referred to in Clause 5(c) of the Paying Agency Agreement, when satisfactory arrangements pursuant to Clause 5(c) of the Paying Agency Agreement have been put in place, forthwith, unless the Trustee otherwise agrees, give notice to the relevant Noteholders in accordance with Condition 14 of such arrangements; |
(O) | furnish a copy of the Procedures from time to time in effect to the Trustee; |
(P) | ensure that each Note to be issued or other transaction to be effected hereunder shall comply with all applicable laws and regulations of any governmental or other regulatory authority of the country of any relevant currency for the purposes of any |
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relevant Note and that all necessary consents and approvals of, and registrations and filings with, any such authority in connection therewith are obtained and maintained in full force and effect and copies thereof are supplied promptly to the Trustee; |
(Q) | forthwith give notice to the Trustee of the appointment of any new Dealer pursuant to the Dealer Agreement or of any modification to the Dealer Agreement; |
(R) | forthwith give notice to the Trustee of the Issuers intention to redenominate Notes in accordance with Condition 8C or exchange Notes in accordance with Condition 8D; and |
(S) | in the event of any Issuer giving any notice to redenominate the Notes of any Series pursuant to Condition 8C(1) or for the exchange of any Notes of any Series for Notes denominated in euro pursuant to Condition 8D, such Issuer shall (unless the Trustee otherwise agrees in writing), not later than the date on which the redenomination will become effective or, as the case may be, the Notes become exchangeable enter into a deed with the Trustee supplemental to these presents in a form satisfactory to the Trustee which records the terms of any amendments to the Conditions which will arise from such redenomination or exchange and effect any other consequential amendments to these presents which, in the opinion of the Trustee, require to be made to give effect to such redenomination or exchange. |
16 | Remuneration of the Trustee |
(A) | The relevant Issuer, failing whom the relevant Guarantors, shall (subject as hereinafter provided) pay to the Trustee such remuneration as shall be agreed from time to time between the Issuers and the Trustee as remuneration for its services as Trustee under these presents. Such remuneration shall, unless otherwise agreed, be deemed to accrue from day to day and shall be paid annually in arrear. At any time after the occurrence of an Event of Default or in the event of the Trustee finding it necessary or being required to undertake any exceptional duties (or duties otherwise outside the scope of the normal duties of the Trustee under these presents) in the performance of its trusteeship under these presents the relevant Issuer, failing whom the relevant Guarantors, shall pay such additional remuneration as shall be agreed between the Trustee and the relevant Issuer (and which may be calculated by reference to the Trustees normal hourly rates in force from time to time). In the event of the Trustee and the relevant Issuer failing to agree upon whether such duties are of an exceptional nature or otherwise outside the scope of the normal duties of the Trustee under these presents, or failing to agree upon such increased or additional remuneration, such matters shall be determined by an investment bank (acting as an expert and not as an arbitrator) selected by the Trustee and approved by the relevant Issuer or, failing such approval, nominated by the President for the time being of The Law Society of England and Wales (the expenses involved in such nomination and the fee of such investment bank being shared equally between the Trustee and the relevant Issuer), and the decision of any such investment bank shall be conclusive and binding on the relevant Issuer, the relevant Guarantors and the Trustee. |
(B) | The Trustee shall not be entitled to remuneration in respect of any period after the date on which, all the Notes of any Series having become due for redemption, the redemption moneys (including accrued interest thereon) have been paid to the |
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Trustee, the Principal Paying Agent or otherwise duly provided for to the satisfaction of the Trustee unless, upon due presentation of any Note, Receipt or Coupon, payment of the moneys due in respect thereof is improperly withheld or refused, in which event remuneration will commence again to accrue.
(C) | In addition to remuneration hereunder the relevant Issuer, failing whom the relevant Guarantors, shall, on written request, pay all other reasonable costs, charges and expenses including travelling expenses which the Trustee may properly incur in relation to the preparation and execution of these presents and the exercise of the powers or the execution of the trusts vested in it by or pursuant to these presents and in any other manner in relation to these presents, including but not limited to legal and travelling expenses and any stamp, issue, registration, documentary and other taxes or duties paid or payable by the Trustee in connection with any action taken or contemplated by or on behalf of the Trustee for enforcing, or resolving any doubt concerning, or for any other purpose in relation to, these presents. |
(D) | The relevant Issuer, failing whom the relevant Guarantors, shall indemnify the Trustee (i) in respect of all liabilities and expenses properly incurred by it or any liability or expense properly incurred by any person appointed by it to whom any trust, power, authority or discretion may be delegated by it in the execution or purported execution of the trusts, powers, authorities or discretions vested in it by these presents, provided that in the case of any such delegate the Trustee shall have exercised reasonable care in the selection of such delegate and (ii) against all liabilities, actions, proceedings, costs, claims and demands in respect of any matter or thing properly done or omitted in relation to these presents but shall not be liable to indemnify the Trustee or the Noteholders, Receiptholders or Couponholders, as the case may be, against any income tax (or similar taxes) which the Trustee pays or for which the Trustee is liable to account by reason of fees payable in respect of its acting as Trustee pursuance to these presents. |
(E) | All sums payable under sub-clauses (C) and (D) of this Clause shall be payable within 30 days of demand. All sums payable by the relevant Issuer, failing whom the relevant Guarantors, under this Clause shall carry interest at a rate equal to two per cent. per annum over the base rate of National Westminster Bank PLC from time to time from the date 30 days after the date of the same being demanded to the day of payment or (where a demand by the Trustee specifies that payment by the Trustee will be made on an earlier date) from 30 days after such earlier date. If practicable, the Trustee will notify the relevant Issuer, failing which the relevant Guarantors, of any expenditure prior to incurring the same but the absence of such notice shall not deprive the Trustee of the right to be reimbursed by the relevant Issuer or the relevant Guarantors to the same extent as the Trustee would be entitled to if prior notification had been given. |
(F) | The relevant Issuer, failing whom the relevant Guarantors, shall in addition pay to the Trustee (if so required) an amount equal to the amount of any value added tax or similar tax properly charged in respect of its remuneration hereunder. |
(G) | The Trustee shall be entitled in its absolute discretion to determine in respect of which Series of Notes any costs, charges, expenses or liabilities incurred under these presents have been incurred or to allocate any such costs, charges, expenses or liabilities between the different Series of Notes. |
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(H) | Unless otherwise specifically stated in any discharge of these presents the provisions of this Clause 16 shall continue in full force and effect notwithstanding such discharge. |
(I) | All payments to be made by the relevant Issuer, failing whom the relevant Guarantors, to the Trustee under these presents shall be made free and clear of, and without withholding or deduction for, any taxes, duties, assessments or governmental charges of whatever nature imposed, levied, collected, withheld or assessed by or within any relevant jurisdiction or any authority therein or thereof having power to tax, unless such withholding or deduction is required by law. In that event, the Obligor shall pay such additional amount as will, after such deduction or withholding has been made, leave the Trustee with the full amount which would have been received by it had no such withholding or deduction been required. |
17 | Modifications and Substitution |
(A) | The Trustee may from time to time and at any time without any consent of the Noteholders, the Receiptholders or the Couponholders (or, as the case may be, the Holders of the Notes, Receipts or Coupons of any one or more Series) agree with the relevant Issuer (a) to any modification (other than of the provisos to paragraphs 5 and 6 of the Eighth Schedule hereto or any provision of these presents referred to in those provisos) of these presents which in the opinion of the Trustee is not materially prejudicial to the interests of the Holders of the Notes or, as the case may be, the Holders of the Notes of the relevant Series or (b) to any modification of these presents which is of a formal, minor or technical nature or made to correct a manifest error. Any such modification or any substitution pursuant to sub-clause (B) of this Clause shall be binding on the Noteholders, the Receiptholders and the Couponholders and, unless the Trustee otherwise agrees, the relevant Issuer shall cause any such modification or substitution to be notified to the Noteholders as soon as practicable thereafter in accordance with Condition 14. |
(B) | The Trustee may, without the consent of the Noteholders, the Receiptholders or the Couponholders (or, as the case may be, the Holders of Notes, Receipts or Coupons of any one or more Series), agree to the substitution (i) in place of the relevant Issuer (or of any previous substitute under this sub-clause (B)) as the principal debtor in respect of the Notes, the Receipts, the Coupons and these presents of any Group Company (incorporated in any such case in any country in the world) or (ii) in place of the relevant Issuer as principal debtor or of any of the relevant Guarantors (or any of the previous substitute under this sub-clause (B)) of any successor in business of the relevant Issuer or, as the case may be, any such relevant Guarantors or of any previous substitute hereunder (any substitute under this sub-clause being hereinafter in this sub-clause (B) referred to as the Substituted Company) provided that: |
(i) |
a trust deed is executed or some other form of undertaking is given by the Substituted Company to the Trustee, in form and manner reasonably satisfactory to the Trustee, agreeing to be bound by the terms of these presents, the Notes, the Receipts and the Coupons, with any consequential amendments which the Trustee may deem appropriate, as fully as if the Substituted Company had been named in these presents and on the Notes, the Receipts and the Coupons as the principal
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debtor in place of any such relevant Issuer (or of any such previous Substituted Company) or, as the case may be, as a guarantor in place of the relevant Guarantor (or of any such previous Substituted Company);
the Trustee shall be satisfied that the Substituted Company has obtained all necessary governmental and regulatory approvals and consents necessary for its assumption of the obligations and liability as the principal debtor or, as the case may be, a guarantor under these presents and in respect of the Notes, the Receipts and the Coupons in place of the relevant Issuer or any such relevant Guarantor (or of any such previous Substituted Company);
in the case of a substitution of a new principal debtor an unconditional and irrevocable guarantee of (a) N.V. and PLC or, (b) where N.V. or PLC becomes the principal debtor, PLC or, as the case may be, N.V. and UNUS (in each case), shall have been given in form and substance satisfactory to the Trustee of the payment of all moneys payable by the Substituted Company under these presents, the Notes, the Receipts and the Coupons;
the relevant Issuer and the relevant Guarantors (or, where appropriate, any such previous Substituted Company) and the Substituted Company comply with such other requirements as the Trustee may reasonably direct in the interests of the Holders of the Notes of the relevant Series;
if the directors of the Substituted Company (or other officers acceptable to the Trustee) shall certify to the Trustee that it is solvent at the time at which the said substitution is proposed to be effected, the Trustee may rely absolutely on such certificate and shall not be bound to have regard to its financial condition, profits or prospects or to compare the same with those of the relevant Issuer or such relevant Guarantor (or of any previous Substituted Company); and
(without prejudice to the generality of sub-paragraphs (a) to (e) inclusive of this paragraph (i)), where the Substituted Company is incorporated, domiciled or resident in, or is otherwise subject generally to the taxing jurisdiction of, or of any authority in, a territory or territories other than The Netherlands, the United Kingdom, Japan, the United States or the territory applicable in respect of any previous Substituted Company, undertakings or covenants are given in terms corresponding to the provisions of Condition 9 containing, in substitution for or in addition to (as the case may require) the references to The Netherlands, the United Kingdom, Japan, the United States or such territory, as the case may be, references to the territory or territories in which the Substituted Company is incorporated, domiciled or resident or the taxing jurisdiction of which, or of any authority of or in which, the Substituted Company is otherwise subject generally and in the event of any such undertaking or covenant being given the provisions of these presents shall be read and construed accordingly and the provisions of parts (i) to (iv) of Condition 7(c) shall be amended accordingly.
(ii) | Upon the execution of such documents and compliance with the said requirements: |
(a) | the Substituted Company shall be deemed to be named in these presents and on the Notes, the Receipts and the Coupons as principal debtor or, as the case may be, as a guarantor in place of the relevant Issuer or such relevant Guarantor (or of any previous Substituted Company) and these presents and the Notes, the Receipts and the Coupons shall thereupon be deemed to be amended in such manner as expressly specified in any supplement to these presents or, failing which, as shall be necessary to give effect to the substitution and the giving of any guarantee; and |
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in the case of a valid substitution of any of the Issuers (or any such previous Substituted Company), the relevant Issuer (or any such previous Substituted Company) shall be released from any or all of its obligations under these presents and the Notes, the Receipts and the Coupons, but without prejudice to the obligations of the relevant Guarantors (or the successor company of any such Guarantors) under the Guarantee or their guarantee; and (y) in the case of the valid substitution of any of the Guarantors (or any such previous Substituted Company), the relevant Guarantor (or any such previous Substituted Company) shall be released from all of its obligations under the Guarantee or such guarantee but without prejudice to the obligations of the remaining Guarantors (or the successor company of any such Guarantors) under the Guarantee or their guarantee. Not later than 15 days after the execution of any such undertaking and guarantee and such other deeds, documents and instruments as aforesaid and compliance with the said requirements of the Trustee, the relevant Issuer or the relevant Guarantor or the previous Substituted Company shall, unless the Trustee agrees otherwise, give notice thereof to the Noteholders in accordance with Condition 14.
(iii) | In connection with any proposed substitution the Trustee may agree, without consent of the Noteholders (or, as the case may be, the Holders of Notes of the relevant Series) to a change of the law governing the Notes (or, as the case may be, the Notes of the relevant Series) and/or these presents Provided that such change would not in the opinion of the Trustee be materially prejudicial to the interests of the Holders of the Notes (or, as the case may be, the Holders of the Notes of the relevant Series). |
(C) | The relevant Issuer, N.V. and PLC each hereby covenants with the Trustee that, so long as any of the Notes, the Receipts or the Coupons is outstanding, it will not, except where the relevant Issuer, N.V. or PLC, as the case may be, is the continuing company, merge into, or transfer all or substantially all of its assets or undertaking to, another company (New Company) unless, inter alia, a trust deed is executed or some other form of undertaking is given by the New Company in form and manner reasonably satisfactory to the Trustee, agreeing to be bound by the terms of these presents, the Notes, the Receipts and the Coupons, with any consequential amendments which the Trustee may deem appropriate as fully as if the New Company had been named in these presents and on the Notes, the Receipts and the Coupons in place of the relevant Issuer, N.V. or PLC, as the case may be (or of any previous substitute under this Clause), and the following further conditions apply: |
(i) | the relevant Issuer, N.V. or PLC, as the case may be (or any previous substitute under this Clause), and the New Company shall comply with such other requirements as the Trustee may reasonably direct in the interests of the Notes of the relevant Series; |
(ii) | where the New Company is incorporated, domiciled or resident in, or is otherwise subject generally to the taxing jurisdiction of, or of any authority in, a territory or territories other than, in the case of N.V., The Netherlands, in the case of PLC, the United Kingdom, in the case of UJH, Japan or, in the case of any previous substitute under this Clause, the applicable territory, undertakings or covenants shall be given by the New Company in terms corresponding to the provisions of Condition 9 with the substitution for the references to The Netherlands, the United Kingdom, Japan or such territory, as the case may be, of references to the territory or territories in |
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which the New Company is incorporated, domiciled or resident or to whose taxing jurisdiction it is subject generally and in the event of any such undertaking or covenant being given the provisions of these presents shall be read and construed accordingly and the provisions of parts (i) to (iv) of Condition 7(c) shall be amended accordingly; |
(iii) | in the case of the merger of, or transfer by, the relevant Issuer or any previous substitute under this Clause, an unconditional and irrevocable guarantee is given by the relevant Guarantors in form and substance satisfactory to the Trustee of the payment of all moneys payable by the New Company under these presents and the Notes of the relevant Series; and |
(iv) | if the directors of the New Company (or other officers acceptable to the Trustee) shall certify to the Trustee that it is solvent at the time at which the said merger or transfer is proposed to be effected, the Trustee may rely absolutely on such certificate and shall not be bound to have regard to the financial condition, profits or prospects of the New Company or to compare the same with those of the relevant Issuer, N.V. or PLC, as the case may be (or of any previous substitute under this Clause). |
Any such trust deed or undertaking shall, if so expressed, operate to release the relevant Issuer, N.V. or PLC, as the case may be, or any such previous substitute as aforesaid, from all of its obligations under the Notes, the Receipts, the Coupons and these presents. Not later than 15 days after the execution of any such documents as aforesaid and after compliance with the said requirements of the Trustee, the relevant Issuer, N.V. or PLC, as the case may be, or such previous substitute shall give notice thereof to the Noteholders in accordance with Condition 14. Upon the execution of such documents and compliance with the said requirements the New Company shall be deemed to be named in these presents and on the Notes, the Receipts and the Coupons in place of the relevant Issuer, N.V. or PLC, as the case may be (or of any previous substitute under this sub-clause), under these presents, the Notes, the Receipts and the Coupons, and these presents, the Notes, the Receipts and the Coupons shall be deemed to be amended in such manner as shall be necessary to give effect to the above provisions and without prejudice to the generality of the foregoing references in these presents, in the Notes, the Receipts or in the Coupons to the relevant Issuer, N.V. or PLC, as the case may be, or such previous substitute shall, where the context so requires, be deemed to be references to the New Company.
(D) | In connection with any proposed substitution, merger or transfer as aforesaid, the Trustee shall, without prejudice to the generality of the foregoing, not have regard to the consequences of such substitution, merger or transfer for individual Noteholders of the relevant Series resulting from their being for any purpose domiciled or resident in, otherwise connected with, or subject to the jurisdiction of, any particular territory or any political subdivision thereof. |
(E) | N.V. and PLC may, at any time, appoint any Group Company to become an Issuer of Notes in accordance with the following provisions of this sub-clause without the consent of the Noteholders, the Receiptholders or the Couponholders. Any Group Company that is to become an Issuer shall do so under the terms of a supplemental deed in or substantially in the form set out in the Sixth Schedule or in |
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such other form as may be approved in writing by the Trustee (which shall take effect in accordance with its terms), whereby such Group Company agrees to be bound as an Issuer under these presents and the Paying Agency Agreement. Each of N.V. and PLC undertakes to use all reasonable efforts to procure that all such acts and things are done as may be necessary or desirable to ensure the due execution and delivery of such supplemental deed by each such Group Company and that each such Group Company becomes bound by such provisions of these presents and the Paying Agency Agreement as are expressed to be assumed by it in such supplemental deed. The Trustee shall be entitled to rely on the legal opinions referred to in such supplemental deed but otherwise shall not be bound to enquire into the financial condition of any such Group Company or to make any investigation into, or to satisfy itself in any way in relation to the valid existence of, any such Group Company, its power or capacity to enter into such supplemental deed or to perform its obligations under these presents or the Paying Agency Agreement, the due authorisation, execution or delivery of such supplemental deed or performance of any such obligations by such Group Company, the obtaining of any necessary consents or authorisations for such execution, delivery or performance, the taking of any action (including any necessary registration or filing) required to ensure the enforceability as against such Group Company of any obligations expressed to be assumed by it under these presents or the Paying Agency Agreement. |
(F) | If (i) the Trustee does not have actual knowledge or express notice that any Event of Default or any event which, with the lapse of time and/or the giving of notice and/or the issue of a certificate, would constitute an Event of Default has occurred and is continuing and (ii) the relevant Issuer has outstanding Notes issued by it, the Substituted Company (which if not an Issuer shall have become an Issuer pursuant to sub-clause (B) of this Clause) shall have assumed the obligations of such Issuer pursuant to sub-clause (B) of this Clause, the Trustee shall forthwith execute and deliver a supplemental deed in or substantially in the form set out in the Seventh Schedule or in such other form as may be approved by the Trustee whereby such Issuer is released from its covenants and other obligations under these presents. |
18 | Redemption, Purchase and Cancellation |
(A) | All Notes redeemed or purchased by or on behalf of any of the Issuers, the Guarantors or any Group Company together with all unmatured Coupons attached thereto or surrendered therewith (and, in the case of Instalment Notes, with all unmatured Receipts attached thereto or surrendered therewith), and all Coupons paid in accordance with and in the manner provided in the Conditions, shall be cancelled forthwith by or on behalf of the relevant Issuer save that the purchaser may elect in the case of Notes so purchased to hold or resell such Notes, together with all unmatured Coupons (or, as the case may be, Receipts) attached thereto. The relevant Issuer shall, within seven days after being so requested in writing by the Trustee, procure that a certificate stating (i) the amounts paid in respect of Notes, Receipts and Coupons so redeemed or paid and cancelled, (ii) the certificate numbers of Notes so redeemed, purchased and cancelled and (iii) the total number and maturity dates of such cancelled Coupons shall, within such seven day period, be given to the Trustee by the Principal Paying Agent provided, other than where such Notes are represented by a NGN, delivery thereof to the |
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Principal Paying Agent has been made by any such purchaser as soon as reasonably practicable after the date of such redemption, purchase and cancellation or payment (as the case may be). In the case of purchase and/or cancellation of a Temporary Global Note which is a NGN or a Permanent Global Note which is a NGN, the relevant Issuer shall procure, in accordance with the terms of the Paying Agency Agreement, that the Principal Paying Agent instructs the ICSDs to make appropriate entries in their respective records to reflect such purchase and/or cancellation. N.V. or PLC shall, within seven days after being so requested in writing by the Trustee, deliver a certificate in writing signed by a duly authorised signatory thereof setting out the total numbers and aggregate nominal amount of Notes of each Series which up to and including the date of such certificate are held beneficially at such date by the Issuers, the Guarantors or any Group Company, but which have not been cancelled. Such certificates may be accepted by the Trustee as conclusive evidence of: |
repayment or discharge pro tanto of the Notes and of payment of Receipts or Coupons respectively; or
beneficial ownership of the relevant Notes by the Issuers, the Guarantors or any Group Company.
(B) | The relevant Issuer shall procure that there shall be kept a full and complete record of all Notes, Receipts and Coupons (other than certificate numbers of Coupons) and their redemption, payment, purchase and cancellation and of all replacement Notes, Receipts or Coupons issued in substitution for mutilated, lost, stolen or destroyed Notes, Receipts or Coupons and the relevant Issuer shall further procure that such record shall be made available to the Trustee, within seven days after being so requested in writing by the Trustee. |
19 | Noteholders to be treated as holding all Receipts and Coupons |
(A) | Wherever in these presents the Trustee is required or entitled to exercise a trust, power, authority or discretion by reference to the interests of the Noteholders or any of the same (or, as the case may be, the Holders of the Notes of the relevant Series or any of the same), the Trustee shall assume that each Noteholder is the Holder of all Receipts (or, as the case may be, Coupons) appertaining to each Note of such Series of which he is the Holder. |
(B) | Each of the Trustee, the Paying Agents, the relevant Issuer and the relevant Guarantors (whether or not it is overdue and regardless of any notice of ownership or writing thereon, or notice of any previous theft or loss thereof) shall for the purpose of making payments and for all other purposes (save as provided in (ii) below) be entitled to deem and treat: |
(i) | the bearer of any Note in global form or Definitive Note or the relative Receipt or Coupon; and |
(ii) | in the case of any Notes in global form, for the purpose only of the exercise by the Trustee of all rights, duties, discretions, powers and authorities imposed or conferred on the Trustee which are to be exercised or performed by reference to or in favour of Noteholders but not for any other purpose, each person for the time being shown in the records of an ICSD or any other relevant clearing system as having a particular nominal amount of any Notes in global form credited to his securities account, |
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as the absolute owner thereof and of all rights thereunder free from encumbrances and shall not be required to obtain proof of such ownership (other than, in the case of any person for the time being so shown in the records of an ICSD or any other relevant clearing system, a certificate or letter of confirmation signed on behalf of an ICSD or the relevant clearing system, or any such certificate or document which may comprise a statement or print-out of electronic records provided by Euroclears EUCLID or Clearstream, Luxembourgs Cedrom System or any other relevant clearing system) as to the identity of the bearer of any Definitive Notes or Coupon. |
20 | No notice to Receiptholders or Couponholders |
None of the relevant Issuer, the relevant Guarantors, nor the Trustee shall be required to give any notice to the Receiptholders or, as the case may be, the Couponholders for any purpose under these presents and the Receiptholders or, as the case may be, the Couponholders shall be deemed for all purposes to have notice of the contents of any notice given to the Noteholders in accordance with Condition 14.
21 | Trustee may enter into other transactions with N.V., PLC or any of their group companies |
No Trustee and no director or officer of any corporation being a trustee of these presents shall by reason of the fiduciary position of such trustee be in any way precluded from making any contracts or entering into any transactions in the ordinary course of business with N.V. or PLC or any of their respective group companies, whether directly or through any other Group Company or associated company, or from accepting the trusteeship of any other debenture stock, debentures or securities of N.V. or PLC or any of their respective group companies or any company in which N.V., PLC, UJH or UNUS, as the case may be, is interested and without prejudice to the generality of these provisions it is expressly declared that such contracts and transactions may include any contract or transaction in relation to the placing, underwriting, purchasing, subscribing for or dealing with or lending money upon or making payments in respect of the Notes or any other stock, shares, debenture stock, debentures or other securities of N.V. or PLC or any of their respective group companies or any company in which N.V., PLC, UJH or UNUS, as the case may be, is interested or any contract or banking or insurance with N.V. or PLC or any of their respective group companies and neither the Trustee nor any such director or officer shall be accountable to the Noteholders, the Receiptholders or Couponholders or N.V. or PLC or any of their respective group companies for any profit, fees, commissions, interest, discounts or share of brokerage earned, arising or resulting from any such contracts or transactions and the Trustee and any such director or officer shall also be at liberty to retain the same for its or his own benefit.
22 | Provisions supplemental to the Trustee Act 1925 and the Trustee Act 2000 in favour of the Trustee |
By way of supplement to the Trustee Act 1925 and the Trustee Act 2000 (the Trustee Acts) it is expressly declared as follows:
(A) | the Trustee may in relation to these presents act on the opinion or advice of or a certificate or any information obtained from any lawyer, banker, valuer, surveyor, broker, auctioneer, accountant or other expert in The Netherlands, the United |
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Kingdom, Japan, the United States or elsewhere (whether obtained by the Trustee, N.V., PLC, UJH, UNUS, any Group Company of N.V. or PLC or any Paying Agent) and shall not be responsible for any loss occasioned by so acting; any such opinion, advice, certificate or information may be sent or obtained by letter or facsimile copy and the Trustee shall not be liable for acting on any opinion, advice, certificate or information purporting to be so conveyed although the same shall contain some error or shall not be authentic; |
(B) | the Trustee shall be at liberty to accept a certificate signed by (i) any Director or other person duly authorised of N.V. or PLC (as the case may be) (ii) a Representative Director or other person duly authorised of UJH or (iii) the President, any Vice President or the Treasurer or other person duly authorised of UNUS as to any fact or matter prima facie within the knowledge of N.V., PLC, UJH or, as the case may be, UNUS as sufficient evidence thereof and a like certificate to the effect that any particular dealing or transaction or step or thing is, in the opinion of the person so certifying, expedient as sufficient evidence that it is expedient and the Trustee shall not be bound in any such case to call for further evidence or be responsible for any loss that may be occasioned by its failing so to do; |
(C) | the Trustee shall (save as expressly otherwise provided herein) as regards all the trusts, powers, authorities and discretions vested in it by these presents or by operation of law have absolute and uncontrolled discretion as to the exercise or non-exercise thereof and, provided it shall not have acted fraudulently, the Trustee shall not be responsible for any loss, costs, damages, expenses or inconvenience that may result from the exercise or non-exercise thereof; |
(D) | the Trustee may appoint and pay any person to act as a custodian or nominee on any terms in relation to such assets of the trust as the Trustee may determine, including for the purpose of depositing with a custodian these presents and all deeds and other documents relating to these presents or the notes of any series, and the Trustee shall not be responsible for any loss, liability, expense, demand, cost, claim or proceedings incurred by reason of the misconduct, omission or default on the part of any person appointed by it hereunder, or be bound to supervise the proceedings or acts of any such person; the Trustee is not obliged to appoint a custodian if the Trustee invests in securities payable to bearer; |
(E) | the Trustee as between itself, the Noteholders, the Receiptholders and the Couponholders shall have full power to determine all questions and doubts arising in relation to any of the provisions of these presents and every such determination, whether made upon a question actually raised or implied in the acts or proceedings of the Trustee, shall be conclusive and shall bind the Trustee, the Noteholders, the Receiptholders and the Couponholders; |
(F) | the Trustee shall not be responsible for acting upon any resolution purporting to have been passed at any meeting of the Noteholders (or, as the case may be, the Noteholders of any Series) in respect whereof minutes have been made and signed even though it may subsequently be found that there was some defect in the constitution of the meeting or the passing of the resolution or that for any reason the resolution was not valid or binding upon the Noteholders, the Receiptholders and/or the relative Couponholders (or, as the case may be, the Noteholders of any Series, the Receiptholders and the Couponholders (if any)); |
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(G) | the Trustee may, in the conduct of the trust business, instead of acting personally, employ and pay an agent on any terms, whether or not a lawyer or other professional person, to transact or conduct, or concur in transacting or conducting, any business and to do or concur in doing all acts required to be done by the Trustee (including the receipt and payment of money) and the Trustee shall not be responsible for any misconduct on the part of any person appointed by it hereunder or be bound to supervise the proceedings or acts of any such person; |
(H) | any trustee being a banker, lawyer, broker or other person engaged in any profession or business shall be entitled to charge and be paid all usual professional and other charges for business transacted and acts done by him or his partner or firm on matters arising in connection with the trusts of these presents and also his reasonable and properly incurred charges in addition to disbursements for all other work and business done and all time spent by him or his partner or firm on matters arising in connection with these presents, including matters which might or should have been attended to in person by a trustee not being a banker, lawyer, broker or other professional person; |
(I) | the Trustee shall not be responsible for the receipt or application by the relevant Issuer of the proceeds of the issue of the Notes of any Series, the exchange of any Temporary Global Note for a Permanent Global Note or, as the case may be, Definitive Notes or the exchange of any Permanent Global Note for Definitive Notes or for the delivery of the Definitive Notes to the persons entitled thereto; |
(J) | the Trustee shall not be liable to the relevant Issuer or the relevant Guarantors or any Noteholder, Receiptholder or Couponholder by reason of having accepted as valid or not having rejected any Note, Receipt or Coupon purporting to be such and subsequently found to be forged or not authentic; |
(K) | the Trustee shall not (unless ordered so to do by a court of competent jurisdiction) be required to disclose to any Noteholder, Receiptholder or Couponholder confidential, financial or other information made available to the Trustee by any Issuer and/or any Guarantor in connection with these presents and no Noteholder, the Receiptholder or Couponholder shall be entitled to take any action to obtain from the Trustee any such information; |
(L) | where it is necessary or desirable for any purpose in connection with these presents to convert any sum from one currency to another it shall (unless otherwise provided by these presents or required by law) be converted at such rate or rates, in accordance with such method and as at such date for the determination of such rate of exchange, as may be specified by the Trustee in its absolute discretion but having regard to current rates of exchange, if available, and any rate, method and date so specified shall be binding on the relevant Issuer, the relevant Guarantors, the Noteholders, the Receiptholders and the Couponholders; |
(M) | any consent given by the Trustee for the purposes of these presents may be given on such terms and subject to such conditions (if any) as the Trustee thinks fit; |
(N) | whenever in these presents the Trustee is required in connection with any exercise of its powers, trusts, authorities or discretions to have regard to the interests of the Noteholders, (or, as the case may be, the Holders of the Notes of any one or more Series) it shall have regard to the interests of such Noteholders as a class and in particular, but without prejudice to the generality of the foregoing, shall not be |
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obliged to have regard to the consequences of such exercise for any individual Noteholder resulting from his or its being for any purpose domiciled or resident in, or otherwise connected with, or subject to the jurisdiction of, any particular territory and the Trustee shall not be entitled to require, nor shall any Noteholder, Receiptholder or Couponholder be entitled to claim from the relevant Issuer or the relevant Guarantors any indemnification or payment in respect of any tax consequence of any such exercise upon any individual Noteholder, Receiptholder or Couponholder; |
(O) | the Trustee may call for and shall be at liberty to accept and place full reliance on as sufficient evidence thereof and shall not be liable to any Issuer, any Guarantor or any Noteholder, Receiptholder or Couponholder by reason only of either having accepted as valid or not having rejected an original certificate or letter of confirmation purporting to be signed on behalf of an ICSD or any other relevant clearing system or any form of record made and verified by either of them to the effect that at any particular time or throughout any particular period any particular person is, was or will be shown in its records as having a particular nominal amount of Notes of a particular Series credited to his securities account; and |
(P) | no provision of the Trust Deed or the Conditions shall require the Trustee to do anything which may in its opinion be illegal or contrary to applicable law or regulation. |
Provided nevertheless that none of the provisions of these presents shall in any case in which the Trustee has failed to show the degree of care and diligence required of it, having regard to the provisions of these presents conferring on the Trustee any powers, authorities or discretions, relieve or indemnify the Trustee against any liabilities which by virtue of any rule of law would otherwise attach to it in respect of any negligence, default, breach of duty or breach of trust of which it or any of its employees, agents or delegates may be guilty in relation to its duties under these presents.
23 | Disapplication |
Section 1 of the Trustee Act 2000 shall not apply to the duties of the Trustee in relation to the trusts constituted by these presents. Where there are any inconsistencies between the Trustee Acts and the provisions of these presents, the provisions of these presents shall, to the extent allowed by law, prevail and, in the case of any such inconsistency with the Trustee Act 2000, the provisions of this Trust Deed shall constitute a restriction or exclusion for the purposes of that Act.
24 | Trustee entitled to assume due performance |
Except as herein otherwise expressly provided the Trustee shall be and is hereby authorised to assume without enquiry, in the absence of knowledge or express notice to the contrary, that each of the Issuers and the Guarantors is duly performing and observing all the covenants and provisions contained in these presents relating to the Issuers and/or the Guarantors (as the case may be) and on their respective parts to be performed and observed and that no event has happened upon the happening of which any of the Notes of any Series may become repayable.
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25 | Waiver |
The Trustee may, without prejudice to its rights in respect of any subsequent breach, condition, event or act, from time to time and at any time, but only if and in so far as in its opinion the interests of the Noteholders (or, as the case may be, the Holders of Notes of the relevant Series) shall not be materially prejudiced thereby, authorise or waive, on such terms and conditions (if any) as shall seem expedient to it, any proposed breach or breach of any of the covenants or provisions contained in these presents or the Notes, the Receipts or Coupons (or, as the case may be, the Notes of such Series and the relative Receipts and/or Coupons) or determine, in relation to any Series, that any condition, event or act which constitutes, or which with the giving of notice and/or the lapse of time and/or the issue of a certificate would constitute, but for such determination, an Event of Default for the purposes of these presents shall not do so provided always that the Trustee shall not exercise any powers conferred upon it by this Clause in respect of the Notes of any Series in contravention of any express direction by an Extraordinary Resolution of the Notes of such Series then outstanding (but so that no such direction or request shall affect any authorisation, waiver or determination previously given or made). Any such waiver, authorisation or determination shall be binding on the Noteholders, the Receiptholders and the Couponholders (or, as the case may be, the Holders of the Notes, Receipts and Coupons of such Series) and if, but only if, the Trustee shall so require, shall be notified by the relevant Issuer to the Noteholders (or, as the case may be, the Holders of Notes of such Series) in accordance with Condition 14 as soon as practicable thereafter.
26 | Power to delegate |
The Trustee may, in the execution and exercise of all or any of the trusts, powers, authorities and discretions vested in it by these presents, act by responsible officers or a responsible officer for the time being of the Trustee and the Trustee may also whenever it thinks fit, whether by power of attorney or otherwise, delegate to any person or persons all or any of the trusts, powers, authorities and discretions vested in it by these presents and any such delegation may be made upon such terms and conditions and subject to such regulations (including power to sub-delegate) as the Trustee may think fit in the interests of the Noteholders (or, as the case may be, the Holders of Notes of any one or more Series) and provided that the Trustee shall have exercised reasonable care in the selection of such delegate and subject to the proviso in Clause 22, it shall not be bound to supervise the proceedings and shall not in any way or to any extent be responsible for any loss incurred by any misconduct or default on the part of such delegate or sub-delegate. The Trustee shall give prompt notice to the relevant Issuer of the appointment of any delegate as aforesaid and shall procure that any delegate shall also give prompt notice to the relevant Issuer or any sub-delegate.
27 | Competence of a majority of Trustees |
Whenever there shall be more than two trustees hereof the majority of such trustees shall (provided such majority includes a trust corporation) be competent to execute and exercise all the trusts, powers, authorities and discretions vested by these presents in the Trustee generally.
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28 | Appointment of New Trustees |
(A) | The power of appointing new trustees shall be vested in the Issuers but, subject to sub-clause (B) of this Clause, no person shall be appointed as Trustee in relation to any Series who shall not previously have been approved by an Extraordinary Resolution of the Holders of Notes of that Series. A trust corporation may be appointed sole trustee of the presents but subject thereto there shall be at least two trustees of these presents one at least of which shall be a trust corporation. Any appointment of a new trustee hereof shall as soon as practicable thereafter be notified by the Issuers to the Paying Agents and to the Noteholders. The Noteholders shall together have the power, exercisable by Extraordinary Resolution, to remove any trustee or trustees for the time being of these presents. The removal of any trustee shall not become effective unless there remains a trustee of these presents (being a trust corporation) in office after such removal. |
(B) | Notwithstanding the provisions of sub-clause (A) of this Clause, the Trustee may, upon giving prior notice to but without the consent of the Issuers or the Guarantors or the Noteholders, Receiptholders or Couponholders (or, as the case may be, the Holders of Notes, Receipts or Coupons of any one or more Series), appoint any person established or resident in any jurisdiction (whether a trust corporation or not) to act either as a separate trustee or as a co-trustee jointly with the Trustee (i) if the Trustee considers such appointment to be in the interests of the Holders of the Notes of the relevant Series or (ii) for the purposes of conforming to any legal requirements, restrictions or conditions in any jurisdiction in which any particular act or acts are to be performed. The Issuers hereby irrevocably appoint the Trustee to be their attorney in their name and on their behalf to execute any such instrument of appointment. Such person shall (subject always to the provisions of these presents) have such trusts, powers, authorities and discretions (not exceeding those conferred on the Trustee by these presents) and such duties and obligations as shall be conferred on or imposed by the instrument of appointment (which shall include all relevant obligations which are imposed on the Trustee). The Trustee shall have power in like manner to remove any such person. Such reasonable remuneration as the Trustee may pay to any such person, together with any attributable costs, charges and expenses incurred by it in performing its function as such separate trustee or co-trustee, shall for the purposes of these presents be treated as costs, charges and expenses incurred by the Trustee. |
29 | Retirement of Trustees |
(A) | Any Trustee for the time being of these presents may retire at any time upon giving not less than three months notice in writing to each Issuer and each Guarantor without assigning any reason and without being responsible for any costs occasioned by such retirement. The retirement of any Trustee shall not become effective unless there remains a trustee of the presents (being a trust corporation) in office after such retirement. Each of the Issuers covenants that in the event of a trustee giving such notice under this Clause it shall use its best endeavours to procure a new trustee to be appointed. |
(B) | Where there are outstanding separate Series of Notes constituted by this Deed the powers conferred upon the Issuers and the Guarantors, the Noteholders and the Trustee by Clause 28 and sub-clause (A) of this Clause 29 shall, at the discretion |
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of the person exercising such power, be capable of being exercised, and shall be effective where so expressed to be exercised, to enable a new trustee to be appointed, a trustee to be removed, a trustee to retire and a separate trustee or co-trustee to be appointed separately in relation to each such separate Series of Notes as aforesaid, and Trustee as used in this Deed shall be construed accordingly. In the event of the foregoing provisions of this sub-clause (B) resulting in there being more than one Trustee at any one time, executed originals of this Deed and all other original documentation shall be held by or to the order of The Law Debenture Trust Corporation p.l.c. if still trustee of any of the said separate Series of the Notes, or by such one of the trustees as the Issuers or Guarantors may, subject to any contrary direction of the Noteholders of the relevant Series by Extraordinary Resolution, from time to time designate. |
30 | Powers of the Trustee are additional |
The powers conferred by these presents upon the Trustee shall be in addition to any powers which may from time to time be vested in it by general law or as the Holder of any of the Notes, Receipts or Coupons.
31 | Currency Indemnity |
(A) | If a judgment or order is rendered by a court of any particular jurisdiction for the payment of any amounts owing to the Trustee or any of the Noteholders, Receiptholders or, as the case may be, Couponholders under these presents or any of the Notes, Receipts or Coupons or under a judgment or order of a court of any other jurisdiction in respect thereof or for the payment of damages in respect of either thereof and any such judgment or order is expressed in a currency (in this Clause referred to as the Judgment Currency) other than the currency in which such amounts are so owing (the relevant currency) and the Trustee or the Noteholders, Receiptholders or, as the case may be, Couponholders do not have an option to have such judgment or order of such court expressed in the relevant currency, the relevant Issuer (failing which the relevant Guarantors) shall be liable, as a separate and independent obligation, to indemnify and hold the Trustee and the Noteholders, Receiptholders and Couponholders harmless against any deficiency arising or resulting from any variation between (1) the rate of exchange applied in converting any amount expressed in the relevant currency into the Judgment Currency for the purposes of such judgment or order and (2) the rate of exchange of the Judgment Currency for the relevant currency as at the date or dates of discharge of the said judgment or order. |
(B) | If as a result of any judgment expressed in a Judgment Currency as is referred to in sub-clause (A) of this Clause and a variation in rates of exchange as therein mentioned the amount received by the Trustee, if converted on the date of payment into the relevant currency, would yield a sum in excess of the sum (expressed in the relevant currency) due to the Trustee, the Trustee shall hold such excess to the order of the relevant Issuer. |
32 | Notices |
Any notice or demand to any Issuer, or any Guarantor or the Trustee or any approval or certificate of the Trustee required to be given, made or served for any purpose of these
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presents shall be given, made or served by sending the same by pre-paid post (first-class if inland, airmail if overseas), telex or by facsimile copy or by delivering the same by hand as follows:
if to Unilever N.V.:
Address: | Weena 455 3013 AL Rotterdam The Netherlands | |||
Fax: | +31 10 217 4287 | |||
Attention: | Group Secretary |
if to Unilever PLC:
Address: | Unilever House 100 Victoria Embankment London EC4Y 0DY | |||
Fax: | +44 20 7822 6108 | |||
Attention: | Group Secretary |
if to Unilever Japan Holdings K.K.
Address: | Nakameguro GT Tower 1-1, Kamimeguro 2-chome Meguro-ku Tokyo 153-8578 Japan | |||
Fax: | +81 3 3719 4462 | |||
Attention: | Treasury |
if to Unilever United States, Inc.
Address: | 700 Sylvan Avenue, Englewood Cliffs, New Jersey 07632 | |||
United States of America | ||||
Fax: | +1 (201) 894 2775 | |||
Attention: | General Counsel |
if to the Trustee to:
Address: | Fifth Floor 100 Wood Street London EC2V 7EX | |||
Fax: | +44 20 7606 0643 |
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Attention: | The Manager, Commercial Trusts |
or at such other address as shall have been notified (in accordance with this Clause) by the party in question to the other parties hereto for the purposes of this Clause and any notice sent by post as provided in this Clause shall be deemed to have been given, made or served 48 hours (in the case of inland post) or 14 days (in the case of overseas post) after despatch, any notice sent by telex as provided in this Clause shall be deemed to have been given, made or served at the time the answerback is received and any notice sent by facsimile copy as provided in this Clause shall be deemed to have been given, made or served upon receipt in complete and legible form. A notice given under this Trust Deed but received on a day which is not a Business Day (as defined in the Fourth Schedule to this Trust Deed) or after business hours in the place of receipt will only be deemed to be given on the next Business Day in that place. In the case of a notice or demand to any Issuer, a copy of such notice or demand shall, in addition, be given, made or served hereunder to each of the Guarantors.
33 | Contracts (Rights of Third Parties) Act 1999 |
The parties to this Trust Deed do not intend that any term of this Trust Deed should be enforceable, by virtue of the Contracts (Rights of Third Parties) Act 1999, by any person who is not a party to this Trust Deed.
34 | Governing Law |
These presents, the Notes, the Receipts and the Coupons, and any non-contractual obligations arising out of or in connection with them, shall be governed by, and construed in accordance with, English law and, in relation to all claims arising hereunder, whether contractual or non-contractual, N.V., UJH and UNUS severally agree that the courts of England are to have jurisdiction to settle any such claim and that accordingly any suit, action or proceedings arising hereunder (together referred to as Proceedings) may be brought in such courts save that, in respect of Notes, Receipts and Coupons issued under this Trust Deed which are denominated in the lawful currency of Switzerland and in respect of which it is specified in the relevant Final Terms that such Notes are to be listed on the SIX Swiss Exchange, each of the parties hereto irrevocably agrees, for the benefit only of the Trustee and the holders of such Notes, Receipts or Coupons that the ordinary courts of the Canton of Zurich, place of jurisdiction being Zurich 1, Switzerland, shall have non-exclusive jurisdiction to hear and determine Proceedings. Nothing contained in this Clause shall limit any right to take Proceedings against N.V., UJH, UNUS or PLC in any other court of competent jurisdiction, nor shall the taking of Proceedings in one or more jurisdictions preclude the taking of Proceedings in any other jurisdiction, whether concurrently or not. Each of N.V., UJH and UNUS irrevocably agrees that any Proceedings in England or any demand or any notice in respect of Notes may be made or served on it by the same being posted in a prepaid registered or recorded delivery letter addressed to it at the address set out in Clause 32 for the time being of PLC (or at such other office as it may have notified in writing to the Trustee and as the Trustee shall from time to time have approved) and marked for the attention of the Group Secretary of PLC or such other official of PLC as N.V., UJH or, as the case may be UNUS may have notified in writing to the Trustee and the Trustee shall from time to time have approved.
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In witness whereof this Trust Deed has been executed as a deed by the parties hereto and is intended to be and is hereby delivered on the date first above written.
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The First Schedule
Form of Temporary Global Note
Series Number: [] | Serial Number: [] |
[ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.]1
THIS GLOBAL NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES ACT), AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT IN CERTAIN TRANSACTIONS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ALL APPLICABLE STATE SECURITIES LAWS. TERMS USED HEREIN HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
[PAYMENT OF INTEREST ON THE NOTES TO AN INDIVIDUAL RESIDENT OF JAPAN OR A JAPANESE CORPORATION (EXCEPT FOR (I) A FINANCIAL INSTITUTION DESIGNATED BY THE CABINET ORDER RELATING TO THE SPECIAL TAXATION MEASURES LAW OF JAPAN (CABINET ORDER NO. 43 OF 1957) (AS AMENDED) (THE CABINET ORDER) WHICH HAS COMPLIED WITH THE REQUIREMENTS UNDER ARTICLE 6 OF THE SPECIAL TAXATION MEASURES LAW OF JAPAN AND (II) A PUBLIC CORPORATION, A FINANCIAL INSTITUTION OR A FINANCIAL INSTRUMENTS FIRM AS PROVIDED IN ARTICLE 3-3, PARAGRAPH 6 OF THE SPECIAL TAXATION MEASURES LAW WHICH RECEIVES THE INTEREST PAYMENTS THROUGH ITS PAYMENT HANDLING AGENT IN JAPAN AND COMPLIES WITH THE REQUIREMENT FOR TAX EXEMPTION UNDER THAT PARAGRAPH), OR TO AN INDIVIDUAL NON-RESIDENT OF JAPAN OR A NON-JAPANESE CORPORATION FOR JAPANESE TAX PURPOSES WHO OR WHICH IS A PERSON HAVING A SPECIAL RELATIONSHIP (AS DESCRIBED IN ARTICLE 3-2-2, PARAGRAPHS 5 THROUGH 7 OF THE CABINET ORDER) WITH THE ISSUER WILL BE SUBJECT TO JAPANESE INCOME TAX ON THE AMOUNT OF SUCH INTEREST.]2
[NAME OF ISSUER]
(incorporated in 3[] with limited liability)
TEMPORARY GLOBAL NOTE
representing up to
[Aggregate principal amount of Series]
[Title of Notes]
irrevocably and unconditionally guaranteed by
4[]
1 | Include bracketed language on all Notes with maturities of more than 365 days. |
2 | Include bracketed language on all Notes issued by (a) UJH or (b) N.V. or PLC, in circumstances where any interest on the Notes is attributable to a business in Japan conducted by such Issuer of the Notes in the manner provided for in the Special Taxation Measures Law of Japan. |
3 | Insert jurisdiction of incorporation of Issuer and, if Unilever N.V. is Issuer, include and having its corporate seat in Rotterdam, The Netherlands. |
4 | Insert name of Guarantors. |
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This Temporary Global Note is issued in respect of [principal amount of Temporary Global Note] in principal amount of an issue of [aggregate principal amount of Series] in aggregate principal amount of [title of Notes] (the Notes) by [name of Issuer] (the Issuer) and has the benefit of the guarantee of [] (the Guarantors) contained in the Trust Deed as defined below. The Notes are constituted by a trust deed dated 22 July 1994 (the Trust Deed, which expression shall include any amendments or supplements thereto) made between the Issuer and the other parties named therein as issuers, the Guarantors and the other parties named therein as guarantors and The Law Debenture Trust Corporation p.l.c. (the Trustee, which expression shall include any successor to The Law Debenture Trust Corporation p.l.c. in its capacity as such for the holders of Notes from time to time).
The Issuer for value received promises, all in accordance with the Conditions (as defined in the Trust Deed) and the final terms or the pricing supplement (as applicable) (the Final Terms) prepared in relation to the Notes to pay to the bearer upon surrender hereof on [maturity date] [by [] [equal] successive [semi-annual/quarterly/other] instalments on the dates specified in the Conditions]5 or on such earlier date as the same may become payable in accordance therewith the principal sum of [denomination in words and numerals] [(as reduced from time to time in accordance with the Conditions)] or such other redemption amount as may be specified therein [and to pay in arrear on the dates specified therein interest on such principal amount at the rate or rates specified therein] all subject to and in accordance with the Conditions.
If the relevant Final Terms indicates that this Temporary Global Note is intended to be a New Global Note, the nominal amount of Notes represented by this Temporary Global Note shall be aggregate amount from time to time entered in the records of both Euroclear Bank S.A./N.V. and Clearstream Banking, société anonyme (together, the ICSDs). The records of the ICSDs (which expression in this Temporary Global Note means the records that each ICSD holds for its customers which reflect the amount of such customers interests in the Notes represented by this Temporary Global Note) shall be conclusive evidence of the nominal amount of Notes represented by this Temporary Global Note and, for these purposes, a statement issued by an ICSD stating the nominal amount of Notes represented by this Temporary Global Note at any time shall be conclusive evidence of the records of such ICSD at that time.
If the relevant Final Terms indicates that this Temporary Global Note is not intended to be a New Global Note, the nominal amount of the Notes represented by this Temporary Global Note shall be the amount stated in the applicable Final Terms or, if lower, the nominal amount most recently entered by or on behalf of the Issuer in the relevant column in the Schedule hereto.
Except as specified herein, the bearer of this Temporary Global Note is entitled to the benefit of the same obligations on the part of the Issuer as if such bearer were the bearer of the Notes represented hereby, and all payments under and to the bearer of this Temporary Global Note shall be valid and effective to satisfy and discharge the corresponding liabilities of the Issuer in respect of the Notes.
On or after the date (the Exchange Date) which is 40 days after the original issue date of the Notes, upon notice being given to the Principal Paying Agent, not earlier than the Exchange Date in substantially the form set out in Annex 1 hereto, by an ICSD acting on the instructions of any holder of an interest in this Temporary Global Note, this Temporary Global Note is exchangeable in whole or in part for, as specified in the relevant Final Terms, either (a) either, if the relevant Final Terms indicates that this Temporary Global Note is intended to be a New Global Note, interests recorded in the records of the ICSDs in a Permanent Global Note or, if the relevant Final Terms
5 | Insert only where Notes are Instalment Notes. |
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indicated this Temporary Global Note is not intended to be a New Global Note, a permanent global note (the Permanent Global Note) representing the Notes and in substantially the form (subject to completion) set out in the Second Schedule to the Trust Deed or (b) definitive notes (Definitive Notes) in substantially the form (subject to completion) set out in the Third Schedule to the Trust Deed.
On an exchange of the whole of this Temporary Global Note, this Temporary Global Note shall be surrendered to or to the order of Deutsche Bank AG, London Branch as principal paying agent (the Principal Paying Agent, which expression shall include any successor to Deutsche Bank AG, London Branch in its capacity as such at its specified office in relation to the Notes). The Issuer shall procure that:
(a) | if the relevant Final Terms indicates that this Temporary Global Note is intended to be a New Global Note and this Temporary Global Note is to be exchanged for a Permanent Global Note, on an exchange of the whole or part only of this Temporary Global Note, details of such exchange shall be entered pro rata in the records of the ICSDs such that the nominal amount of Notes represented by this Temporary Global Note shall be reduced by the nominal amount of this Temporary Global Note so exchanged; or |
(b) | if the relevant Final Terms indicates that this Temporary Global Note is not intended to be a New Global Note or if the relevant Final Terms indicate that this Temporary Global Note is intended to be a New Global Note and this Temporary Global Note is to be exchanged for Definitive Notes, on an exchange of part only of this Temporary Global Note details of such exchange shall be entered by or on behalf of the Issuer in the Schedule hereto, whereupon the nominal amount of this Temporary Global Note and the Notes represented by this Temporary Global Note shall be reduced by the nominal amount of this Temporary Global Note so exchanged. On any exchange of this Temporary Global Note for a Permanent Global Note, details of such exchange shall be entered by or on behalf of the Issuer in the Schedule to the Permanent Global Note. |
If interests in a Temporary Global Note are exchanged for a Permanent Global Note as provided above, interests in such Permanent Global Note may thereafter be exchanged for Definitive Notes, as provided above.
[Payments of interest otherwise falling due before the Exchange Date will be made only:
(a) | upon presentation of the Temporary Global Note to the Principal Paying Agent at its specified office in relation to the Notes provided that no such presentation shall be required if the relevant Final Terms indicates that this Temporary Global Note is intended to be a New Global Note; and |
(b) | upon or to the extent of delivery to the Principal Paying Agent of a certificate or certificates issued by Euroclear Bank S.A./N.V. or Clearstream Banking, société anonyme or the operator of any other relevant clearing system and dated not earlier than the relevant interest payment date in substantially the form set out in Annex II hereto.] |
[On any occasion on which a payment of interest is made in respect of this Temporary Global Note, the Issuer shall procure that either:
(a) | if the relevant Final Terms indicates that this Temporary Global Note is intended to be a New Global Note, details of such payment shall be entered in the records of the ICSDs; or |
(b) | if the relevant Final Terms indicate that this Temporary Global Note is not intended to be a New Global Note, the same is noted on the Schedule hereto.] |
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On any occasion on which a payment of principal or redemption amount is made in respect of this Temporary Global Note or on which Notes represented by this Temporary Global Note are to be cancelled, the Issuer shall procure that:
(a) | if the relevant Final Terms indicates that this Temporary Global Note is intended to be a New Global Note, details of such payment, redemption or cancellation (as the case may be) shall be entered pro rata in the records of the ICSDs and, upon any such entry being made, the nominal amount of the Notes recorded in the records of the ICSDs and represented by this Temporary Global Note shall be reduced by the aggregate nominal amount of the Notes so redeemed and cancelled or by the aggregate amount of the Notes in respect of which such payment is made (or, in the case of partial payment, the corresponding part thereof); and |
(b) | if the relevant Final Terms indicates that this Temporary Global Note is not intended to be a New Global Note, (i) the aggregate principal amount of the Notes in respect of which such payment is made (or, in the case of a partial payment, the corresponding part thereof) or which are delivered in definitive form or which are to be cancelled and (ii) the remaining principal amount of this Temporary Global Note (which shall be the previous principal amount hereof less the amount referred to at (i) above) are noted on the Schedule hereto, whereupon the principal amount of this Temporary Global Note shall for all purposes be as most recently so noted. |
Payments due in respect of Notes for the time being represented by this Temporary Global Note shall be made to the bearer of this Temporary Global Note and each payment so made will discharge the Issuers obligations in respect thereof. Any failure to make the entries referred to above shall not affect such discharge.
This Temporary Global Note, and any non-contractual obligations arising out of or in connection with it, is governed by, and will be construed in accordance with, English law.
[The Issuer has, in the Trust Deed, agreed, for the benefit of the Trustee and the Holders of the Notes that the courts of England shall have jurisdiction to hear and determine any suit, action or proceedings which may arise out of or in connection with the Trust Deed or the Notes (including a claim or dispute relating to any non-contractual obligations arising out of or in connection with the Trust Deed or the Notes) (Proceedings) and, for such purposes, irrevocably submitted to the jurisdiction of such courts. The Issuer has, in the Trust Deed, agreed that the process by which any Proceedings in England are begun may be served on it by being posted in a prepaid registered or recorded delivery letter addressed to it at the address set out in Clause 32 of the Trust Deed of Unilever PLC. Nothing contained herein or in the Trust Deed shall affect the right to serve process in any other manner permitted by law. The submission to the jurisdiction of the courts of England shall not (and shall not be construed so as to) limit the right of the Trustee or Holders of the Notes or any of them to take Proceedings in any other court of competent jurisdiction nor shall the taking of Proceedings in any one or more jurisdictions preclude the taking of Proceedings in any other jurisdiction (whether concurrently or not) if and to the extent permitted by applicable law preclude the taking of proceedings in any other jurisdiction.]6
[The Issuer has, in the Trust Deed, agreed, for the benefit of the Trustee and the Holders of the Notes that the courts of England shall have jurisdiction to hear and determine any suit, action or proceedings which may arise out of or in connection with the Trust Deed or the Notes (including a claim or dispute relating to any non-contractual obligations arising out of or in connection with the Trust Deed or the Notes) (Proceedings) and, for such purposes, irrevocably submitted to the
6 | Insert where Issuer is not incorporated in England and Wales. |
46 |
jurisdiction of such courts, save that in respect of Notes issued under the Trust Deed which are denominated in the lawful currency of Switzerland and in respect of which it is specified in the relevant Final Terms that such Notes are to be listed on the SIX Swiss Exchange, each of the parties hereto irrevocably agrees, for the benefit only of the Trustee and the holders of such Notes that the ordinary courts of the Canton of Zurich, place of jurisdiction being Zurich 1, Switzerland, shall have non-exclusive jurisdiction to hear and determine Proceedings. The Issuer has, in the Trust Deed, agreed that the process by which any Proceedings in England are begun may be served on it by being posted in a prepaid registered or recorded delivery letter addressed to it at the address set out in Clause 32 of the Trust Deed of Unilever PLC. Nothing contained herein or in the Trust Deed shall affect the right to serve process in any other manner permitted by law. The submission to the jurisdiction of the courts of England shall not (and shall not be construed so as to) limit the right of the Trustee or Holders of the Notes or any of them to take Proceedings in any other court of competent jurisdiction nor shall the taking of Proceedings in any one or more jurisdictions preclude the taking of Proceedings in any other jurisdiction (whether concurrently or not) if and to the extent permitted by applicable law.]7
This Temporary Global Note shall not be valid for any purpose until authenticated for and on behalf of Deutsche Bank AG, London Branch as Principal Paying Agent and, if the relevant Final Terms indicate that this Temporary Global Note is intended to be a New Global Note (i) which is intended to be held in a manner which would allow Eurosystem eligibility or (ii) in respect of which the Issuer has notified the Principal Paying Agent that effectuation is to be applicable, effectuated by the entity appointed as common safekeeper by the ICSDs.
As witness the manual signature of a duly authorised officer on behalf of the Issuer.
[Name of Issuer]
By |
| |
[manual signature] | ||
(duly authorised) | ||
Name: | ||
Title: |
ISSUED in London as of [] []
AUTHENTICATED for and on
behalf of
DEUTSCHE BANK AG,
LONDON BRANCH
as Principal Paying Agent
without recourse, warranty or
liability
7 | Insert where Notes are denominated in Swiss Francs and are to be listed on the SIX Swiss Exchange. |
47 |
By |
| |
[manual signature] | ||
(duly authorised) | ||
Name: | ||
Title: |
[EFFECTUATED without
recourse, warranty or liability by
By |
| |
as common safekeeper [manual signature]8 | ||
Name: | ||
Title: |
8 | Effectuation is only required if this Temporary Global Note is a New Global Note (i) which is intended to be a Eurosystem-eligible New Global Note, as specified in the relevant Final Terms or (ii) in respect of which the Issuer has instructed the Principal Paying Agent that effectuation is to be applicable. |
48 |
The Schedule9
Payments, Delivery of Definitive Notes,
Exchange for Permanent Global Note and Cancellation of Notes
Date of payment, delivery or cancellation |
Amount of interest then paid |
Amount of principal or, as the case may be, redemption amount then paid |
Aggregate principal amount of Definitive then delivered |
Aggregate principal amount of this Temporary Global Note then exchanged for the Permanent Global Note |
Aggregate principal amount of Note then cancelled |
Remaining principal amount of this Temporary Global Note |
Authorised Signatory | |||||||
9 | This Schedule should only be completed where the relevant Final Terms indicates that this Temporary Global Note is not intended to be a New Global Note. |
49 |
Annex I
[Form of certificate to be given in relation to exchanges of this Temporary Global Note for the Permanent Global Note or Definitive Notes:]
[Name of Issuer]
[Aggregate principal amount and title of Notes]
This is to certify that, based solely on certifications we have received in writing, by tested telex or by electronic transmission from member organisations appearing in our records as persons being entitled to a portion of the principal amount set forth below (our Member Organisations) substantially to the effect set forth in the Trust Deed dated 22 July 1994 as amended, restated or supplemented from time to time, as of the date hereof [] principal amount of the above-captioned Securities (i) is owned by persons that are not (a) citizens or residents of the United States, (b) domestic partnerships, (c) domestic corporations or other entities taxable as corporations, (d) estates, the income of which is subject to United States federal income taxation regardless of its source, or (e) trusts if they (x) are subject to the primary supervision of a court within the United States and one or more United States persons within the meaning of the Internal Revenue Code of 1986, as amended, have the authority to control all of each such trusts substantial decisions or (y) have made a valid election under applicable Treasury Regulations to be treated as domestic trusts (United States persons), (ii) is owned by United States persons that (a) are foreign branches of United States financial institutions (as defined in U.S. Treasury Regulations Section 1.165-12(c)(1)(iv) (financial institutions)) purchasing for their own account or for resale, or (b) acquired the Securities through and are holding through on the date hereof (as such terms acquired through and holding through are described in U.S. Treasury Regulations Section 1.163-5(c)(2)(i)(D)(6)) foreign branches of United States financial institutions (and in either case (a) or (b), each such United States financial institution has agreed, on its own behalf or through its agent, that we may advise the issuer or the issuers agent that it will comply with the requirements of Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code of 1986, as amended, and the regulations thereunder), (iii) is owned by United States or foreign financial institutions for purposes of resale during the restricted period (as defined in U.S. Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7)), or (iv) is beneficially owned either by non-U.S. persons or U.S. persons who purchased such securities in a transaction that did not require registration under the U.S. Securities Act of 1933 (the Securities Act) (terms used in this clause (iv) shall have the meanings assigned to them in Regulation S under the Securities Act) or state securities laws, and to the further effect that United States or foreign financial institutions described in clause (iii) above (whether or not also described in clause (i), (ii) or (iv)) have certified that they have not acquired the Securities for purposes of resale directly or indirectly to a United States person or to a person within the United States or its possessions.
We further certify (i) that we are not making available herewith for exchange (or, if relevant, exercise of any rights or collection of any interest) any portion of the temporary global security excepted in such certifications and (ii) that as of the date hereof we have not received any notification from any of our Member Organisations to the effect that the statements made by such Member Organisations with respect to any portion of the part submitted herewith for exchange (or, if relevant, exercise of any rights or collection of any interest) are no longer true and cannot be relied upon as at the date hereof.
As used herein, United States means the United States of America (including the States and the District of Columbia); and its possessions include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana Islands.
50 |
We understand that this certification is required in connection with certain tax laws and, if applicable, certain securities laws of the United States. In connection therewith, if administrative or legal proceedings are commenced or threatened in connection with which this certification is or would be relevant, we irrevocably authorise you to produce this certification to any interested party in such proceedings.
Dated: 10[]
[Euroclear Bank S.A./N.V./ Clearstream Banking, société anonyme]
By |
| |
[authorised signature] | ||
Name: | ||
Title: |
10 | To be dated not earlier than the Exchange Date. |
51 |
Annex II
[Form of certificate to be given in relation to payments of interest
falling due before the Exchange Date:]
[Name of Issuer]
[Aggregate principal amount and title of Notes]
This is to certify that, based solely on certifications we have received in writing, by tested telex or by electronic transmission from member organisations appearing in our records as persons being entitled to a portion of the principal amount set forth below (our Member Organisations) substantially to the effect set forth in the Trust Deed dated 22 July 1994, as of the date hereof [] principal amount of the above-captioned Securities (i) is owned by persons that are not (a) citizens or residents of the United States, (b) domestic partnerships, (c) domestic corporations or other entities taxable as corporations, (d) estates, the income of which is subject to United States federal income taxation regardless of its source, or (e) trusts if they (x) are subject to the primary supervision of a court within the United States and one or more United States persons within the meaning of the Internal Revenue Code of 1986, as amended, have the authority to control all of each such trusts substantial decisions or (y) have made a valid election under applicable Treasury Regulations to be treated as domestic trust (United States persons), (ii) is owned by United States persons that (a) are foreign branches of United States financial institutions (as defined in U.S. Treasury Regulations Section 1.165-12(c)(1)(iv) (financial institutions)) purchasing for their own account or for resale, or (b) acquired the Securities through and are holding through on the date hereof (as such terms acquired through and holding through and described in U.S. Treasury Regulations Section 1.163-5(c)(2)(i)(D)(6)) foreign branches of United States financial institutions (and in either case (a) or (b), each such United States financial institution has agreed, on its own behalf or through its agent, that we may advise the issuer or the issuers agent that it will comply with the requirements of Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code of 1986, as amended, and the regulations thereunder), or (iii) is owned by United States or foreign financial institutions for purposes of resale during the restricted period (as defined in U.S. Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7)), and to the further effect that United States or foreign financial institutions described in clause (iii) above (whether or not also described in clause (i) or (ii)) have certified that they have not acquired the Securities for purposes of resale directly or indirectly to a United States person or to a person within the United States or its possessions.
As used herein, United States means the United States of America (including the States and the District of Columbia); and its possessions include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana Islands.
We further certify (i) that we are not making available herewith for exchange (or, if relevant, exercise of any rights or collection of any interest) any portion of the temporary global security excepted in such certifications and (ii) that as of the date hereof we have not received any notification from any of our Member Organisations to the effect that the statements made by such Member Organisations with respect to any portion of the part submitted herewith for exchange (or, if relevant, exercise of any rights or collection of any interest) are no longer true and cannot be relied upon as at the date hereof.
We understand that this certification is required in connection with certain tax laws and, if applicable, certain securities laws of the United States. In connection therewith, if administrative or legal proceedings are commenced or threatened in connection with which this certification is or would be relevant, we irrevocably authorise you to produce this certification to any interested party in such proceedings.
52 |
Dated: 11[]
[Euroclear Bank S.A./N.V./ Clearstream Banking, société anonyme]
By |
| |
[authorised signature] | ||
Name: | ||
Title: |
11 | To be dated not earlier than the relevant interest payment date. |
53 |
Annex III
[Form of account-holders certification referred to in preceding certificates:]
[Name of Issuer]
[Aggregate principal amount and title of Notes]
This is to certify that as of the date hereof, and except as set forth below, the above-captioned Securities held by you for our account (i) are owned by persons that are not (a) citizens or residents of the United States, (b) domestic partnerships, (c) domestic corporations or other entities taxable as corporations, (d) estates, the income of which is subject to United States federal income taxation regardless of its source, or (e) trusts if they (x) are subject to the primary supervision of a court within the United States and one or more United States persons within the meaning of the Internal Revenue Code of 1986, as amended, have the authority to control all of each such trusts substantial decisions or (y) have made a valid election under applicable Treasury Regulations to be treated as domestic trust (United States persons), (ii) are owned by United States person(s) that (a) are foreign branches of a United States financial institution (as defined in U.S. Treasury Regulations Section 1.165-12(c)(1)(iv) (financial institutions)) purchasing for their own account or for resale, or (b) acquired the Securities through and are holding through on the date hereof (as such terms acquired through and holding through are described in U.S. Treasury Regulations Section 1.163-5(c)(2)(i)(D)(6)) foreign branches of United States financial institutions (and in either case (a) or (b), each such United States financial institution hereby agrees, on its own behalf or through its agent, that you may advise the issuer or the issuers agent that it will comply with the requirements of Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code of 1986, as amended, and the regulations thereunder), or (iii) are owned by United States or foreign financial institution(s) for purposes of resale during the restricted period (as defined in U.S. Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7)), and in addition if the owner of the Securities is a United States or foreign financial institution described in clause (iii) above (whether or not also described in clause (i) or (ii)) this is further to certify that such financial institution has not acquired the Securities for purposes of resale directly or indirectly to a United States person or to a person within the United States or its possessions.
As used herein, United States means the United States of America (including the States and the District of Columbia); and its possessions include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana Islands.
We undertake to advise you promptly by tested telex on or prior to the date on which you intend to submit your certification relating to the Securities held by you for our account in accordance with your operating procedures if any applicable statement herein is not correct on such date, and in the absence of any such notification it may be assumed that this certification applies as of such date.
This certification excepts and does not relate to [] of such interest in the above Securities in respect of which we are not able to certify and as to which we understand exchange and delivery of definitive Securities (or, if relevant, exercise of any rights or collection of any interest) cannot be made until we do so certify.
We understand that this certification is required in connection with certain tax laws and, if applicable, certain securities laws of the United States. In connection therewith, if administrative or legal proceedings are commenced or threatened in connection with which this certification is or would be relevant, we irrevocably authorise you to produce this certification to any interested party in such proceedings.
54 |
Dated: 12 []
[Account-holder] as or as agent for the beneficial owner of the Notes.
By |
| |
[authorised signature] | ||
Name: | ||
Title: |
12 | To be dated not earlier than 15 days before the Exchange Date or, as the case may be, the relevant interest payment date. |
55 |
The Second Schedule
Form of Permanent Global Note
Series Number: [] | Serial Number: [] |
[ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.]1
THIS GLOBAL NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES ACT), AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT IN CERTAIN TRANSACTIONS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ALL APPLICABLE STATE SECURITIES LAWS. TERMS USED HEREIN HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
[PAYMENT OF INTEREST ON THE NOTES TO AN INDIVIDUAL RESIDENT OF JAPAN OR A JAPANESE CORPORATION (EXCEPT FOR (I) A FINANCIAL INSTITUTION DESIGNATED BY THE CABINET ORDER RELATING TO THE SPECIAL TAXATION MEASURES LAW OF JAPAN (CABINET ORDER NO. 43 OF 1957) (AS AMENDED) (THE CABINET ORDER)WHICH HAS COMPLIED WITH THE REQUIREMENTS UNDER ARTICLE 6 OF THE SPECIAL TAXATION MEASURES LAW OF JAPAN AND (II) A PUBLIC CORPORATION, A FINANCIAL INSTITUTION OR A FINANCIAL INSTRUMENTS FIRM AS PROVIDED IN ARTICLE 3-3, PARAGRAPH 6 OF THE SPECIAL TAXATION MEASURES LAW WHICH RECEIVES THE INTEREST PAYMENTS THROUGH ITS PAYMENT HANDLING AGENT IN JAPAN AND COMPLIES WITH THE REQUIREMENT FOR TAX EXEMPTION UNDER THAT PARAGRAPH), OR TO AN INDIVIDUAL NON-RESIDENT OF JAPAN OR A NON-JAPANESE CORPORATION FOR JAPANESE TAX PURPOSES WHO OR WHICH IS A PERSON HAVING A SPECIAL RELATIONSHIP (AS DESCRIBED IN ARTICLE 3-2-2, PARAGRAPHS 5 THROUGH 7 OF THE CABINET ORDER) WITH THE ISSUER WILL BE SUBJECT TO JAPANESE INCOME TAX ON THE AMOUNT OF SUCH INTEREST.]2
1 | Include bracketed language on all Notes will maturities of more than 365 days. |
2 | Include bracketed language on all Notes issued by (a) UJH or (b) N.V. or PLC, in circumstances where any interest on the Notes is attributable to a business in Japan conducted by such Issuer of the Notes in the manner provided for in the Special Taxation Measures Law of Japan. |
56 |
[NAME OF ISSUER]
(incorporated in3 [] with limited liability)
PERMANENT GLOBAL NOTE
in respect of
[principal amount of Global Note]
representing up to
[Aggregate principal amount of Series]
[Title of Notes]
unconditionally and irrevocably guaranteed by
4[]
This Permanent Global Note is issued in respect of [principal amount of Permanent Global Note] in principal amount of an issue of [aggregate principal amount of Series] in aggregate principal amount of [title of Notes] (the Notes) by [NAME OF ISSUER] (the Issuer) and has the benefit of the guarantee (the Guarantee) of [] (the Guarantors) contained in the Trust Deed as defined below. The Notes are constituted by a trust deed dated 22 July 1994 (the Trust Deed, which expression shall include any amendments or supplements thereto) made between the Issuer and the other parties named therein as issuers, the Guarantor[s] and the other parties named therein as guarantors and The Law Debenture Trust Corporation p.l.c. as trustee (the Trustee, which expression shall include any successor to The Law Debenture Trust Corporation p.l.c. in its capacity as such for the holders of the Notes from time to time).
The Issuer for value received promises, all in accordance with the Conditions (as defined in the Trust Deed) of the Notes and the final terms or the pricing supplement (as applicable) (the Final Terms) prepared in relation to the Notes, to pay to the bearer upon surrender hereof on [maturity date] [by [] [equal] successive [semi-annual/quarterly/other] instalments on the dates specified in the Conditions]5 or on such earlier date as the same may become payable in accordance therewith the principal sum of [denomination in words and numeral] [(as reduced from time to time in accordance with the Conditions)] or such other redemption amount as may be specified therein [and to pay in arrear on the dates specified therein interest on such principal amount at the rate or rates specified therein], all subject to and in accordance with the Conditions.
If the relevant Final Terms indicates that this Permanent Global Note is intended to be a New Global Note, the nominal amount of Notes represented by this New Global Note shall be aggregate amount from time to time entered in the records of both Euroclear Bank S.A./N.V. and Clearstream Banking, société anonyme (together, the ICSDs). The records of the ICSDs (which expression in this Permanent Global Note means the records that each ICSD holds for its customers which reflect the amount of such customers interests in the Notes represented by this Permanent Global Note) shall be conclusive evidence of the nominal amount of Notes represented by this Permanent Global Note and, for these purposes, a statement issued by an ICSD stating the nominal amount of Notes represented by this Permanent Global Note at any time shall be conclusive evidence of the records of such ICSD at that time.
3 | Insert jurisdiction of incorporation of Issuer and, if Unilever N.V. is Issuer, include and having its corporate seat in Rotterdam, The Netherlands. |
4 | Insert name of Guarantors. |
5 | Insert only where Notes are Instalment Notes. |
57 |
If the relevant Final Terms indicates that this Permanent Global Note is not intended to be a New Global Note, the nominal amount of the Notes represented by this Permanent Global Note shall be the amount stated in the applicable Final Terms or, if lower, the nominal amount most recently entered by or on behalf of the Issuer in the relevant column in the Schedule hereto.
The bearer of this Permanent Global Note is entitled to the benefit of the same obligations on the part of the Issuer as if such bearer were the bearer of the Notes represented hereby, and all payments under and to the bearer of this Permanent Global Note shall be valid and effective to satisfy and discharge the corresponding liabilities of the Issuer in respect of the Notes.
If so specified in the relevant Final Terms, this Permanent Global Note is exchangeable in whole (but not in part only) for definitive Notes (Definitive Notes) in substantially the form (subject to completion) set out in the Third Schedule to the Trust Deed upon the exercise of the relevant option by the bearer hereof and, unless otherwise specified in the relevant Final Terms, at the cost of the Issuer. In order to exercise such option, the bearer hereof must, not less than forty-five days before the date upon which the delivery of such Definitive Notes is required, deposit this Permanent Global Note with Deutsche Bank AG, London Branch as principal paying agent (the Principal Paying Agent), which expression shall include any successor to Deutsche Bank AG, London Branch in its capacity as such) at its specified office with the form of exchange endorsed hereon duly completed. This Permanent Global Note will, in any event, be exchangeable in whole, but not in part, (at the cost of the Issuer) for Definitive Notes if any Note becomes due and repayable following an Event of Default (as defined in Condition 10A) and is not duly redeemed (and the funds required for such redemption are not available to the Principal Paying Agent for the purposes of affecting such redemption) by 6.00 p.m. (London time) on the thirtieth day after the time at which such Notes become immediately redeemable, or if either Euroclear Bank S.A./N.V. or Clearstream Banking société anonyme or the operator of any other relevant clearing system should cease to operate as a clearing system (other than by reason of public holidays) or should announce an intention permanently to cease business, and it shall not be practicable to transfer the Notes to another clearing system within 90 days.
[On any occasion on which a payment of interest is made in respect of this Permanent Global Note, the Issuer shall procure that either:
(a) | if the relevant Final Terms indicates that this Permanent Global Note is intended to be a New Global Note, details of such payment shall be entered in the records of the ICSDs; or |
(b) | if the relevant Final Terms indicates that this Permanent Global Note is not intended to be a New Global Note, the same is noted on the Schedule hereto.] |
On any occasion on which a payment of principal or redemption amount is made in respect of this Permanent Global Note or on which this Permanent Global Note is exchanged as aforesaid or on which any Notes represented by this Permanent Global Note are to be cancelled, the Issuer shall procure that:
(a) | if the relevant Final Terms indicates that this Permanent Global Note is intended to be a New Global Note, details of such payment, redemption, exchange or cancellation (as the case may be) shall be entered pro rata in the records of the ICSDs and, upon any such entry being made, the nominal amount of the Notes recorded in the records of the ICSDs and represented by this Permanent Global Note shall be reduced by the aggregate nominal amount of the Notes so redeemed and cancelled or by the aggregate amount of the Notes in respect of which such payment is made (or, in the case of a partial payment, the corresponding part thereof); and |
58 |
(b) | if the relevant Final Terms indicates that this Permanent Global Note is not intended to be a New Global Note, (i) the aggregate principal amount of the Notes in respect of which such payment is made (or, in the case of a partial payment, the corresponding part thereof) or which are delivered in definitive form or which are to be cancelled and (ii) the remaining principal amount of this Permanent Global Note (which shall be the previous principal amount hereof less the amount referred to at (i) above) are noted on the Schedule hereto, whereupon the principal amount of this Permanent Global Note shall for all purposes be as most recently so noted. |
Payments due in respect of Notes for the time being represented by this Permanent Global Note shall be made to the bearer of this Permanent Global Note and each payment so made will discharge the Issuers obligations in respect thereof. Any failure to make the entries referred to above shall not affect such discharge.
Insofar as the Temporary Global Note by which the Notes were initially represented has been exchanged in part only for this Permanent Global Note and is then to be further exchanged as to the remaining principal amount or part thereof for this Permanent Global Note, then upon presentation of this Permanent Global Note to the Principal Paying Agent at its specified office in relation to the Notes and to the extent that the aggregate principal amount of such Temporary Global Note is then reduced by reason of such further exchange, the Issuer shall procure that:
(a) | if the applicable Final Terms indicates that this Permanent Global Note is intended to be a New Global Note, details of such exchange shall be entered in the records of the ICSDs; or |
(b) | if the applicable Final Terms indicates that this Permanent Global Note is not intended to be a New Global Note, details of such exchange shall be entered by or on behalf of the Issuer in the Schedule hereto. Upon any such exchange, the nominal amount of the Notes represented by this Permanent Global Note shall be increased by the nominal amount of the Notes so exchanged. |
This Permanent Global Note, and any non-contractual obligations arising out of or in connection with it, is governed by, and will be construed in accordance with, English law.
[The Issuer has, in the Trust Deed, agreed for the benefit of the Trustee and the Holders of the Notes that the courts of England shall have jurisdiction to hear and determine any suit, action, proceedings which may arise out of or in connection with the Trust Deed or the Notes (including a claim or dispute relating to any non-contractual obligations arising out of or in connection with the Trust Deed or the Notes) (Proceedings) and, for such purposes, irrevocably submitted to the jurisdiction of such courts. The Issuer has, in the Trust Deed, agreed that the process by which any Proceedings in England are begun may be served on it by being posted in a prepaid registered or recorded delivery letter addressed to it at the address set out in Clause 32 of the Trust Deed for the time being of Unilever PLC. Nothing contained herein or in the Trust Deed shall affect the right to serve process in any other manner permitted by law. The submission to the jurisdiction of the courts of England shall not (and shall not be construed so as to) limit the right of the Trustee or the holders of the Notes or any of them to take Proceedings in any other court of competent jurisdiction nor shall the taking of Proceedings in any one or more jurisdictions preclude the taking of Proceedings in any other jurisdiction (whether concurrently or not) if and to the extent permitted by applicable law.]6
[The Issuer has, in the Trust Deed, agreed for the benefit of the Trustee and the Holders of the Notes that the courts of England shall have jurisdiction to hear and determine any suit, action,
6 | Insert where Issuer is not incorporated in England or Wales. |
59 |
proceedings which may arise out of or in connection with the Trust Deed or the Notes (including a claim or dispute relating to any non-contractual obligations arising out of or in connection with the Trust Deed or the Notes) (Proceedings) and, for such purposes, irrevocably submitted to the jurisdiction of such courts, save that, in respect of Notes issued under the Trust Deed which are denominated in the lawful currency of Switzerland and in respect of which it is specified in the relevant Final Terms that such Notes are to be listed on the SIX Swiss Exchange, each of the parties hereto irrevocably agrees, for the benefit only of the Trustee and the holders of such Notes that the ordinary courts of the Canton of Zurich, place of jurisdiction being Zurich 1, Switzerland, shall have non-exclusive jurisdiction to hear and determine Proceedings. The Issuer has, in the Trust Deed, agreed that the process by which any Proceedings in England are begun may be served on it by being posted in a prepaid registered or recorded delivery letter addressed to it at the address set out in Clause 32 of the Trust Deed of Unilever PLC. Nothing contained herein or in the Trust Deed shall affect the right to serve process in any other manner permitted by law. The submission to the jurisdiction of the courts of England shall not (and shall not be construed so as to) limit the right of the Trustee or the Holders of the Notes or any of them to take Proceedings in any other court of competent jurisdiction nor shall the taking of Proceedings in any one or more jurisdictions preclude the taking of Proceedings in any other jurisdiction (whether concurrently or not) if and to the extent permitted by applicable law.]7
This Permanent Global Note shall not be valid for any purpose until authenticated for and on behalf of Deutsche Bank AG, London Branch as Principal Paying Agent and, if the relevant Final Terms indicate that this Permanent Global Note is intended to be a New Global Note (i) which is intended to be held in a manner which would allow Eurosystem eligibility or (ii) in respect of which the Issuer has notified the Principal Paying Agent that effectuation is to be applicable, effectuated by the entity appointed as common safekeeper by the ICSDs.
AS WITNESS the manual signature of a duly authorised officer on behalf of the Issuer.
[NAME OF ISSUER]
By |
| |
[manual signature] | ||
(duly authorised) | ||
Name: | ||
Title: |
ISSUED in London as of [] []
AUTHENTICATED for and on
behalf of
DEUTSCHE BANK AG,
LONDON BRANCH
as Principal Paying Agent
without recourse, warranty or
7 | Insert where Notes are denominated in Swiss Francs and are to be listed on the SIX Swiss Exchange. |
60 |
liability
By |
| |
[manual signature] | ||
(duly authorised) | ||
Name: | ||
Title: |
[EFFECTUATED without
recourse, warranty or liability by
By |
| |
as common safekeeper [manual signature]8 | ||
Name: | ||
Title: |
8 | Effectuation is only required if this Permanent Global Note is a New Global Note (i) which is intended to be a Eurosystem-eligible New Global Note, as specified in the relevant Final Terms or (ii) in respect of which the Issuer has instructed the Principal Paying Agent that effectuation is to be applicable. |
61 |
Exchange Notice
....................., being the bearer of this Permanent Global Note at the time of its deposit with the Principal Paying Agent at its specified office for the purposes of the Notes, hereby exercises the option to have this Permanent Global Note exchanged in whole for Notes in definitive form and directs that such Notes in definitive form be made available for collection by it from the Principal Paying Agents specified office.
By |
| |
(duly authorised) | ||
Name: | ||
Title: |
62 |
The Schedule9
Payments, Delivery of Definitive Notes, further exchanges
of the Temporary Global Note and Cancellation of Notes
Date of payment, delivery, further exchange of Temporary Global Note or cancellation |
Amount of interest then paid |
Amount of principal or, as the case may be, redemption amount then paid |
Aggregate principal amount of Definitive then delivered |
Aggregate principal amount of further exchanges of Temporary Global Note |
Current principal amount of this Permanent Global Note |
Authorised Signatures | ||||||
9 | The Schedule should only be completed where the relevant Final Terms indicates that this Global Note is not intended to be a New Global Note. |
63 |
The Third Schedule
Form of Definitive Note
Part A
[On the face of the Notes:]
[Denomination]
[ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.]1
THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES ACT), AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT IN CERTAIN TRANSACTIONS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ALL APPLICABLE STATE SECURITIES LAWS. TERMS USED HEREIN HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
[PAYMENT OF INTEREST ON THE NOTES TO AN INDIVIDUAL RESIDENT OF JAPAN OR A JAPANESE CORPORATION (EXCEPT FOR (I) A FINANCIAL INSTITUTION DESIGNATED BY THE CABINET ORDER RELATING TO THE SPECIAL TAXATION MEASURES LAW OF JAPAN (CABINET ORDER NO. 43 OF 1957) (AS AMENDED) (THE CABINET ORDER) WHICH HAS COMPLIED WITH THE REQUIREMENTS UNDER ARTICLE 6 OF THE SPECIAL TAXATION MEASURES LAW OF JAPAN AND (II) A PUBLIC CORPORATION, A FINANCIAL INSTITUTION OR A FINANCIAL INSTRUMENTS FIRM AS PROVIDED IN ARTICLE 3-3, PARAGRAPH 6 OF THE SPECIAL TAXATION MEASURES LAW WHICH RECEIVES THE INTEREST PAYMENTS THROUGH ITS PAYMENT HANDLING AGENT IN JAPAN AND COMPLIES WITH THE REQUIREMENT FOR TAX EXEMPTION UNDER THAT PARAGRAPH), OR TO AN INDIVIDUAL NON-RESIDENT OF JAPAN OR A NON-JAPANESE CORPORATION FOR JAPANESE TAX PURPOSES WHO OR WHICH IS A PERSON HAVING A SPECIAL RELATIONSHIP (AS DESCRIBED IN ARTICLE 3-2-2, PARAGRAPHS 5 THROUGH 7 OF THE CABINET ORDER) WITH THE ISSUER WILL BE SUBJECT TO JAPANESE INCOME TAX ON THE AMOUNT OF SUCH INTEREST.]2
[UNILEVER N.V., a company having its corporate seat in Rotterdam, The
Netherlands/UNILEVER PLC/UNILEVER JAPAN HOLDINGS K.K.]3
[Aggregate principal amount of Series]
[Title of Notes]
unconditionally and irrevocably guaranteed by
[UNILEVER PLC AND UNILEVER UNITED STATES, INC. on a joint and several basis
/UNILEVER N.V., a company having its corporate seat in Rotterdam, The Netherlands AND
1 | Include bracketed language on all Notes with maturities of more than 365 days. |
2 | 2 Include bracketed language on all Notes issued by (a) UJH or (b) N.V. or PLC, in circumstances where any interest on the Notes is attributable to a business in Japan conducted by such Issuer of the Notes in the manner provided for in the Special Taxation Measures Law of Japan. |
3 | Amend as appropriate. |
64 |
UNILEVER UNITED STATES, INC. on a joint and several basis/UNILEVER N.V., a company
having its corporate seat in Rotterdam, The Netherlands AND UNILEVER PLC on a joint and
several basis]3
This [title of Notes] forms one of a series of [title of Notes] (the Notes) in an aggregate principal amount of [insert aggregate principal amount of series] issued by [Unilever N.V./Unilever PLC/Unilever Japan Holdings K.K.]3 as issuer (the Issuer) and has the benefit of the guarantee of [Unilever PLC and Unilever United States, Inc./ Unilever N.V. and Unilever United States, Inc./Unilever N.V. and Unilever PLC]3 (the Guarantors contained in the trust deed defined below) on a joint and several basis and is issued pursuant to a trust deed (the Trust Deed which expression shall include any amendments or supplements thereto) dated 22 July 1994 and made between, inter alios, the Issuer and the other companies named therein as issuers, the Guarantors and The Law Debenture Trust Corporation p.l.c., as trustee.
The Issuer for value received promises, all in accordance with the terms and conditions [endorsed hereon/attached hereto/incorporated by reference herein] and the Final Terms referred to therein and prepared in relation to the Notes and the Trust Deed, to pay to the bearer upon surrender hereof on [maturity date] [by [] [equal] successive [semi-annual/quarterly/other] instalments on the dates specified in the Final Terms]4 or on such earlier date as the same may become payable in accordance therewith the principal amount of:
[denomination in words and numerals]
[(as reduced from time to time in accordance with such terms and conditions)]3 or such other redemption amount as may be specified therein [and to pay in arrear on the dates specified therein interest on the principal amount hereof [(as reduced from time to time in accordance with such terms and conditions)]5 at the rate or rates specified therein]6.
[Pursuant to the Dutch Saving Certificates Act (Wet inzake spaarbewijzen), each transfer and acceptance of this Note (other than between individuals who do not act in the conduct of a profession or trade):
(a) | must be made through the mediation of either the Issuer or a Member of Euronext Amsterdam N.V.; and |
(b) | if it involves its physical delivery, must be recorded in a transaction note which includes the name and address of each party, the nature of the transaction and the number and serial numbers of the Notes transferred.]7 |
[Pursuant to the Dutch Saving Certificates Act (Wet inzake spaarbewijzen), each transfer and acceptance of this Note (other than between individuals who do not act in the conduct of a profession or trade):
(a) | must be made through the mediation of either the Issuer or a Member of Euronext Amsterdam N.V.; and |
(b) | it if involves its physical delivery and unless it is made between a professional borrower and a professional lender, must be recorded in a transaction note which includes the name |
4 | Insert only where Notes are Instalment Notes. |
5 | Amend as appropriate. |
6 | Insert only where Notes are interest bearing. |
7 | Include if the Notes (i) are Zero Coupon Notes or other Notes which qualify as savings certificates as defined in the Dutch Savings Certificates Act (Wet inzake spaarbewijzen), (ii) are physically issued in the Netherlands or distributed in the Netherlands in the course of primary trading or immediately thereafter, (iii) are not listed on the stock exchange of Euronext Amsterdam N.V. and (iv) do not qualify as commercial paper or certificates of deposit. |
65 |
and address of each party, the nature of the transaction and the number and serial numbers of the Notes transferred.]8 |
[This Note shall not]9 [Neither this Note nor any of the interest coupons appertaining hereto shall10 be valid for any purpose until this Note has been authenticated for and on behalf of as principal paying agent.
This Note, and any non-contractual obligations arising out of or in connection with it, is governed by, and shall be construed in accordance with, English law.
As witness the facsimile signature of a duly authorised officer on behalf of the Issuer.
[UNILEVER N.V./UNILEVER PLC/UNILEVER JAPAN HOLDINGS K.K.]11
[Name of Issuer]
By |
| |
[manual or facsimile signature] | ||
(duly authorised) | ||
Name: | ||
Title: |
ISSUED in London as of [] []
AUTHENTICATED for and on
behalf of DEUTSCHE BANK
AG, LONDON BRANCH
as Principal Paying Agent
without recourse, warranty or
liability
By |
| |
[manual signature] | ||
(duly authorised) | ||
Name: | ||
Title: |
[Where no provision is made for separate coupons for the payment of interest the appropriate grid to record payments of principal and/or interest, as the case may be, should be included.]
8 | Include if the Notes (i) are Zero Coupon Notes or other Notes which qualify as saving certificates as defined in the Dutch Savings Certificates Act (Wet inzake spaarbewijzen), (ii) are physically issued in the Netherlands or distributed in the Netherlands in the course of primary trading or immediately thereafter, (iii) are not listed on the stock exchange of Euronext Amsterdam N.V. and (iv) qualify as commercial paper or certificates of deposit. |
9 | Insert only where Notes are not interest bearing. |
10 | Insert only where Notes are interest bearing. |
11 | Amend as appropriate. |
66 |
[On the reverse of the Notes:]
TERMS AND CONDITIONS
[As set out in the Fourth Schedule and as supplemented by the relevant Final Terms]
[At the foot of the Terms and Conditions:]
PRINCIPAL PAYING AGENT
Deutsche Bank AG, London Branch
Winchester House
1 Great Winchester Street
London EC2N 2DB
PAYING AGENT
ABN AMRO Bank N.V.
Gustav Mahlerlaan 10
P.O. Box 283 (HQ7050)
1000 EA Amsterdam
The Netherlands
67 |
Part B
Forms of Coupon
[Attached to the Notes (interest-bearing, fixed rate and having Coupons):]
[ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.]12
[PAYMENT OF INTEREST ON THE NOTES TO AN INDIVIDUAL RESIDENT OF JAPAN OR A JAPANESE CORPORATION (EXCEPT FOR (I) A FINANCIAL INSTITUTION DESIGNATED BY THE CABINET ORDER RELATING TO THE SPECIAL TAXATION MEASURES LAW OF JAPAN (CABINET ORDER NO. 43 OF 1957) (AS AMENDED) (THE CABINET ORDER) WHICH HAS COMPLIED WITH THE REQUIREMENTS UNDER ARTICLE 6 OF THE SPECIAL TAXATION MEASURES LAW OF JAPAN AND (II) A PUBLIC CORPORATION, A FINANCIAL INSTITUTION OR A FINANCIAL INSTRUMENTS FIRM AS PROVIDED IN ARTICLE 3-3, PARAGRAPH 6 OF THE SPECIAL TAXATION MEASURES LAW WHICH RECEIVES THE INTEREST PAYMENTS THROUGH ITS PAYMENT HANDLING AGENT IN JAPAN AND COMPLIES WITH THE REQUIREMENT FOR TAX EXEMPTION UNDER THAT PARAGRAPH), OR TO AN INDIVIDUAL NON-RESIDENT OF JAPAN OR A NON-JAPANESE CORPORATION FOR JAPANESE TAX PURPOSES WHO OR WHICH IS A PERSON HAVING A SPECIAL RELATIONSHIP (AS DESCRIBED IN ARTICLE 3-2-2, PARAGRAPHS 5 THROUGH 7 OF THE CABINET ORDER) WITH THE ISSUER WILL BE SUBJECT TO JAPANESE INCOME TAX ON THE AMOUNT OF SUCH INTEREST.]13
12 | Include bracketed language on all Notes with maturities of more than 365 days. |
13 | Include bracketed language on all Notes issued by (a) UJH or (b) N.V. or PLC, in circumstances where any interest on the Notes is attributable to a business in Japan conducted by such Issuer of the Notes in the manner provided for in the Special Taxation Measures Law of Japan. |
68 |
[UNILEVER N.V., a company having its corporate seat in Rotterdam, The Netherlands/UNILEVER PLC/ UNILEVER JAPAN HOLDINGS K.K.]14
Unconditionally and irrevocably guaranteed by
[UNILEVER PLC AND UNILEVER UNITED STATES, INC. on a joint and several basis /UNILEVER N.V., a company having its corporate seat in Rotterdam, The Netherlands AND UNILEVER UNITED STATES, INC. on a joint and several basis/UNILEVER N.V., a company having its corporate seat in Rotterdam, The Netherlands AND UNILEVER PLC on a joint and several basis]15
[Amount and title of Notes]
[Serial Number: []]
Coupon for [] due on []
This Coupon is payable to bearer (subject to the terms and conditions [endorsed on/attached to/incorporated by reference to] the [title of Notes] (the Note) to which this Coupon appertains and the Final Terms referred to therein, which shall be binding on the Holder of this Coupon whether or not it is for the time being attached to such Note) at the office of the Principal Paying Agent or any of the Paying Agents set out on the reverse hereof (or any other or further paying agents and/or specified offices from time to time duly appointed and notified to the Noteholders).
[The Note to which this Coupon appertains may, in certain circumstances specified in such terms and conditions, fall due for redemption before the due date in relation to this Coupon. In such event, this Coupon will become void and no payment will be made in respect hereof.]16
[]
[UNILEVER N.V./UNILEVER PLC/UNILEVER JAPAN HOLDINGS K.K.]16
By |
| |
[manual or facsimile signature]17 | ||
(duly authorised) | ||
Name: | ||
Title: |
[On the reverse of each Coupon]
14 | Amend as appropriate. |
15 | Amend as appropriate |
16 | Delete if the Coupons are not to become void upon early redemption of the Note(s). |
17 | In the case of Unilever N.V., include the name and the title of the signatory. |
69 |
PRINCIPAL PAYING AGENT
Deutsche Bank AG, London Branch
Winchester House
1 Great Winchester Street
London EC2N 2DB
PAYING AGENT
ABN AMRO Bank N.V.
Gustav Mahlerlaan 10
P.O. Box 283 (HQ7050)
1000 EA Amsterdam
The Netherlands
70 |
Part C
[Attached to the Notes (interest-bearing, floating rate and having Coupons):]
[ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.] 18
[PAYMENT OF INTEREST ON THE NOTES TO AN INDIVIDUAL RESIDENT OF JAPAN OR A JAPANESE CORPORATION (EXCEPT FOR (I) A FINANCIAL INSTITUTION DESIGNATED BY THE CABINET ORDER RELATING TO THE SPECIAL TAXATION MEASURES LAW OF JAPAN (CABINET ORDER NO. 43 OF 1957) (AS AMENDED) (THE CABINET ORDER)WHICH HAS COMPLIED WITH THE REQUIREMENTS UNDER ARTICLE 6 OF THE SPECIAL TAXATION MEASURES LAW OF JAPAN AND (II) A PUBLIC CORPORATION, A FINANCIAL INSTITUTION OR A FINANCIAL INSTRUMENTS FIRM AS PROVIDED IN ARTICLE 3-3, PARAGRAPH 6 OF THE SPECIAL TAXATION MEASURES LAW WHICH RECEIVES THE INTEREST PAYMENTS THROUGH ITS PAYMENT HANDLING AGENT IN JAPAN AND COMPLIES WITH THE REQUIREMENT FOR TAX EXEMPTION UNDER THAT PARAGRAPH), OR TO AN INDIVIDUAL NON-RESIDENT OF JAPAN OR A NON-JAPANESE CORPORATION FOR JAPANESE TAX WHO OR WHICH IS A PERSON HAVING A SPECIAL RELATIONSHIP (AS DESCRIBED IN ARTICLE 3-2-2, PARAGRAPHS 5 THROUGH 7 OF THE CABINET ORDER) WITH THE ISSUER WILL BE SUBJECT TO JAPANESE INCOME TAX ON THE AMOUNT OF SUCH INTEREST.]19
[UNILEVER N.V., a company having its corporate seat in Rotterdam, The Netherlands/UNILEVER PLC/ UNILEVER JAPAN HOLDINGS K.K.]20
Unconditionally and irrevocably guaranteed by
[UNILEVER PLC AND UNILEVER UNITED STATES, INC. on a joint and several basis /UNILEVER N.V., a company having its corporate seat in Rotterdam, The Netherlands AND UNILEVER UNITED STATES, INC. on a joint and several basis/UNILEVER N.V., a company having its corporate seat in Rotterdam, The Netherlands AND UNILEVER PLC on a joint and several basis]21
[Amount and title of Notes]
Coupon for the amount of interest due on []
Such amount is payable (subject to the terms and conditions [endorsed on/attached to/incorporated by reference to] the [title of Notes] (the Notes) to which this Coupon appertains and the Final Terms referred to therein, which shall be binding on the Holder of this Coupon whether or not it is for the time being attached to such Note) at the office of the Principal Paying Agent or any of the Paying Agents set out on the reverse hereof (or any other or further paying agents and/or specified offices from time to time duly appointed and notified to the Noteholders).
18 | Include bracketed language on all Notes with maturities of more than 365 days. |
19 | Include bracketed language on all Notes issued by (a) UJH or (b) N.V. or PLC, in circumstances where any interest on the Notes is attributable to a business in Japan conducted by such Issuer of the Notes in the manner provided for in the Special Taxation Measures Law of Japan. |
20 | Amend as appropriate. |
21 | Amend as appropriate. |
71 |
[The Note to which this Coupon appertains may, in certain circumstances specified in such terms and conditions, fall due for redemption before the due date in relation to this Coupon. In such event, this Coupon will become void and no payment will be made in respect hereof.]22
[]
[UNILEVER N.V./UNILEVER PLC/ UNILEVER JAPAN HOLDINGS K.K.]23
By |
| |
[manual or facsimile signature]24 | ||
(duly authorised) | ||
Name: | ||
Title: |
22 | Delete if the Coupons are not to become void upon early redemption of the Notes. |
23 | Amend as appropriate. |
24 | In the case of Unilever N.V., include the name and the title of the signatory. |
72 |
[On the reverse of each Coupon:]
PRINCIPAL PAYING AGENT
Deutsche Bank AG, London Branch
Winchester House
1 Great Winchester Street
London EC2N 2DB
PAYING AGENT
ABN AMRO Bank N.V.
Gustav Mahlerlaan 10
P.O. Box 283 (HQ7050)
1000 EA Amsterdam
The Netherlands
73 |
Part D
Form of Talon
[Attached to the Notes (interest-bearing and having Coupons or, as the case may be, being Instalment Notes):]
[ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.]25
[PAYMENT OF INTEREST ON THE NOTES TO AN INDIVIDUAL RESIDENT OF JAPAN OR A JAPANESE CORPORATION (EXCEPT FOR (I) A FINANCIAL INSTITUTION DESIGNATED BY THE CABINET ORDER RELATING TO THE SPECIAL TAXATION MEASURES LAW OF JAPAN (CABINET ORDER NO. 43 OF 1957) (AS AMENDED) (THE CABINET ORDER) WHICH HAS COMPLIED WITH THE REQUIREMENTS UNDER ARTICLE 6 OF THE SPECIAL TAXATION MEASURES LAW OF JAPAN AND (II) A PUBLIC CORPORATION, A FINANCIAL INSTITUTION OR A FINANCIAL INSTRUMENTS FIRM AS PROVIDED IN ARTICLE 3-3, PARAGRAPH 6 OF THE SPECIAL TAXATION MEASURES LAW WHICH RECEIVES THE INTEREST PAYMENTS THROUGH ITS PAYMENT HANDLING AGENT IN JAPAN AND COMPLIES WITH THE REQUIREMENT FOR TAX EXEMPTION UNDER THAT PARAGRAPH), OR TO AN INDIVIDUAL NON-RESIDENT OF JAPAN OR A NON-JAPANESE CORPORATION FOR JAPANESE TAX PURPOSES WHO OR WHICH IS A PERSON HAVING A SPECIAL RELATIONSHIP (AS DESCRIBED IN ARTICLE 3-2-2, PARAGRAPHS 5 THROUGH 7 OF THE CABINET ORDER) WITH THE ISSUER WILL BE SUBJECT TO JAPANESE INCOME TAX ON THE AMOUNT OF SUCH INTEREST.]26
[UNILEVER N.V., a company having its corporate seat in Rotterdam, The Netherlands/UNILEVER PLC/UNILEVER JAPAN HOLDINGS K.K.]27
Unconditionally and irrevocably guaranteed by
[UNILEVER PLC AND UNILEVER UNITED STATES, INC. on a joint and several basis /UNILEVER N.V., a company having its corporate seat in Rotterdam, The Netherlands AND UNILEVER UNITED STATES, INC. on a joint and several basis/UNILEVER N.V., a company having its corporate seat in Rotterdam, The Netherlands AND UNILEVER PLC on a joint and several basis]29
[Amount and title of Notes]
Talon for further [Coupons/Receipts]28
After all the [Coupons/Receipts] appertaining to the Note to which this Talon appertains have matured, further [Coupons/Receipts] [(including a Talon for further [Coupons/Receipts])] will be issued at the specified office of the Principal Paying Agent or any of the Paying Agents set out on the reverse hereof (or any other or further paying agents and/or specified offices from time to time duly given in accordance with the terms and conditions [endorsed on/attached to/incorporated by
25 | Include bracketed language on all Notes with maturities of more than 365 days. |
26 | Include bracketed language on all Notes issued by (a) UJH or (b) N.V. or PLC, in circumstances where any interest on the Notes is attributable to a business in Japan conducted by such Issuer of the Notes in the manner provided for in the Special Taxation Measures Law of Japan. |
27 | Amend as appropriate. |
28 | Amend as appropriate. |
74 |
reference to] the [title of Notes] (the Notes) to which this Talon appertains and the Final Terms referred to therein (which shall be binding on the Holder of this Talon whether or not it is for the time being attached to such Note) upon production and surrender of this Talon. The initial Paying Agents and their specified offices are set out on the reverse hereof.
Under the said terms and conditions, such Notes may, in certain circumstances, fall due for redemption before the original due date for exchange of this Talon and in any such event this Talon shall become void and no exchange shall be made in respect hereof.
[]
[UNILEVER N.V./UNILEVER PLC/UNILEVER JAPAN HOLDINGS K.K.]29
By |
| |
[manual or facsimile signature]30 | ||
(duly authorised) | ||
Name: | ||
Title: |
29 | Amend as appropriate. |
30 | In the case of Unilever N.V., include the name and the title of the signatory. |
75 |
[On the reverse of each Talon:]
PRINCIPAL PAYING AGENT
Deutsche Bank AG, London Branch
Winchester House
1 Great Winchester Street
London EC2N 2DB
PAYING AGENT
ABN AMRO Bank N.V.
Gustav Mahlerlaan 10
P.O. Box 283 (HQ7050)
1000 EA Amsterdam
The Netherlands
76 |
Part E
Form of Receipt
[Attached to Instalment Notes:]
[ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.] 31
[PAYMENT OF INTEREST ON THE NOTES TO AN INDIVIDUAL RESIDENT OF JAPAN OR A JAPANESE CORPORATION (EXCEPT FOR (I) A FINANCIAL INSTITUTION DESIGNATED BY THE CABINET ORDER RELATING TO THE SPECIAL TAXATION MEASURES LAW OF JAPAN (CABINET ORDER NO. 43 OF 1957) (AS AMENDED) (THE CABINET ORDER) WHICH HAS COMPLIED WITH THE REQUIREMENTS UNDER ARTICLE 6 OF THE SPECIAL TAXATION MEASURES LAW OF JAPAN AND (II) A PUBLIC CORPORATION, A FINANCIAL INSTITUTION OR A FINANCIAL INSTRUMENTS FIRM AS PROVIDED IN ARTICLE 3-3, PARAGRAPH 6 OF THE SPECIAL TAXATION MEASURES LAW WHICH RECEIVES THE INTEREST PAYMENTS THROUGH ITS PAYMENT HANDLING AGENT IN JAPAN AND COMPLIES WITH THE REQUIREMENT FOR TAX EXEMPTION UNDER THAT PARAGRAPH), OR TO AN INDIVIDUAL NON-RESIDENT OF JAPAN OR A NON-JAPANESE CORPORATION FOR JAPANESE TAX PURPOSES WHO OR WHICH IS A PERSON HAVING A SPECIAL RELATIONSHIP (AS DESCRIBED IN ARTICLE 3-2-2, PARAGRAPHS 5 THROUGH 7 OF THE CABINET ORDER) WITH THE ISSUER WILL BE SUBJECT TO JAPANESE INCOME TAX ON THE AMOUNT OF SUCH INTEREST.]32
[UNILEVER N.V., a company having its corporate seat in Rotterdam, The Netherlands/UNILEVER PLC/UNILEVER JAPAN HOLDINGS K.K.]33
Unconditionally and irrevocably guaranteed by
[UNILEVER PLC AND UNILEVER UNITED STATES, INC. on a joint and several basis /UNILEVER N.V., a company having its corporate seat in Rotterdam, The Netherlands AND UNILEVER UNITED STATES, INC. on a joint and several basis/UNILEVER N.V., a company having its corporate seat in Rotterdam, The Netherlands AND UNILEVER PLC on a joint and several basis]34
Receipt of the sum of [] being the instalment of principal payable in accordance with the terms and conditions [endorsed on/attached to/incorporated by reference to] the [title of Notes] (the Notes) to which this Receipt appertains and the Final Terms referred to therein (the Conditions).
This Receipt is issued subject to and in accordance with the Conditions which shall be binding upon the Holder of this Receipt (whether or not it is for the time being attached to such Note) and is payable against presentation and surrender of this Receipt, at the office of the Principal Paying Agent or any of the Paying Agents set out on the reverse of the Note to which this Receipt appertains (or any other or further paying agents and/or specified offices from time to time duly appointed and notified to the Noteholders).
31 | Include bracketed language on all Notes with maturities of more than 365 days. |
32 | Include bracketed language on all Notes issued by (a) UJH or (b) N.V. or PLC, in circumstances where any interest on the Notes is attributable to a business in Japan conducted by such Issuer of the Notes in the manner provided for in the Special Taxation Measures Law of Japan. |
33 | Amend as appropriate. |
34 | Amend as appropriate. |
77 |
This Receipt must be presented for payment together with the Note to which it appertains. If the Note to which this Receipt appertains shall have become due and payable on or before the maturity date of this Receipt, this Receipt shall become void and no payment shall be made in respect of it. The Issuer shall have no obligation in respect of this Receipt if it is presented without the Note to which it appertains.
[UNILEVER N.V./UNILEVER PLC/UNILEVER JAPAN HOLDINGS K.K.]35
By |
| |
[facsimile signature]36 | ||
(duly authorised) | ||
Name: | ||
Title: |
35 | Amend as appropriate. |
36 | In the case of Unilever N.V., include the name and the title of the signatory. |
78 |
[On the reverse of each Receipt:]
PRINCIPAL PAYING AGENT
Deutsche Bank AG, London Branch
Winchester House
1 Great Winchester Street
London EC2N 2DB
PAYING AGENT
ABN AMRO Bank N.V.
Gustav Mahlerlaan 10
P.O. Box 283 (HQ7050)
1000 EA Amsterdam
The Netherlands
79 |
The Fourth Schedule
Terms and Conditions of the Notes
The Notes are constituted by a trust deed dated 22 July 1994 (the Trust Deed, which expression shall include any amendments or supplements thereto or any restatement thereof) made between Unilever N.V. (N.V.), Unilever PLC (PLC) and Unilever Japan Holdings K.K. (UJH) as issuers (the Issuers and each an Issuer, which expression shall include any Group Company (as defined below) which becomes an Issuer as contemplated by Condition 15), N.V., PLC and Unilever United States, Inc. (UNUS) as guarantors of the Notes as hereinafter described (the Guarantors and each a Guarantor) and The Law Debenture Trust Corporation p.l.c. (the Trustee, which expression shall include any successor to The Law Debenture Trust Corporation p.l.c. in its capacity as such) as trustee for the holders of each Series of the Notes (the Noteholders). Pursuant to the Trust Deed, the Notes issued by (i) N.V. are guaranteed unconditionally and irrevocably on a joint and several basis by PLC and UNUS, (ii) PLC are guaranteed unconditionally and irrevocably on a joint and several basis by N.V. and UNUS and (iii) UJH are guaranteed unconditionally and irrevocably on a joint and several basis by N.V. and PLC.
Certain statements herein are summaries of, and are subject to, the detailed provisions of the Trust Deed, which includes the form of the Notes and of the interest coupons, if any, appertaining to the Notes (the Coupons) and the receipts, if any, in respect of instalments of principal (the Receipts). The Notes, the Coupons and the Receipts also have the benefit of a paying agency agreement dated 22 July 1994 (the Paying Agency Agreement, which expression shall include any amendments or supplements thereto or any restatement thereof) made between N.V., PLC, UJH and UNUS in their capacities as Issuers and Guarantors (as applicable), Deutsche Bank AG, London Branch as principal paying agent (the Principal Paying Agent, which expression shall include any successor to Deutsche Bank AG, London Branch in its capacity as such and any substitute or additional principal paying agent appointed in accordance with the Paying Agency Agreement), the paying agents named therein (the Paying Agents, which expression shall, unless the context otherwise requires, include the Principal Paying Agent and any substitute or additional paying agents appointed in accordance with the Paying Agency Agreement) and the Trustee. Noteholders and the holders of the Coupons (the Couponholders) and the holders of Receipts (the Receiptholders) are entitled to the benefit of, are bound by, and are deemed to have notice of, all the provisions of the Trust Deed and the Paying Agency Agreement. Copies of the Trust Deed and the Paying Agency Agreement are available for inspection during normal business hours at the registered office for the time being of the Trustee (being at the date of this Information Memorandum at Fifth Floor, 100 Wood Street, London EC2V 7EX) and at the specified office of each of the Paying Agents.
For the purposes of Notes denominated in Swiss Francs (Swiss Notes) only, the relevant Issuer will, together with the Principal Paying Agent and the Swiss paying agent specified in the Final Terms relating to the relevant issue of Swiss Notes as principal Swiss paying agent (the Principal Swiss Paying Agent), enter into a supplemental paying agency agreement and all references to the Paying Agency Agreement shall include such agreement as so supplemented from time to time. In addition, all references in the Terms and Conditions of the Notes to the Principal Paying Agent and the Paying Agents shall, so far as the context permits, be construed as references only to the relevant Swiss paying agents, as set out in the relevant Final Terms relating to the Swiss Notes. References in the Terms and Conditions of the Notes to Euroclear and/or Clearstream, Luxembourg shall, so far as the context permits, be construed as including references to SIX SIS AG in Olten, Switzerland (SIX SIS AG), or to any other Intermediary (as
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defined below) clearing system through which the Swiss Notes are to be cleared, which shall be considered an additional or alternative clearing system for the purposes of the Swiss Notes.
The Notes are issued in series (each a Series), and each Series may comprise one or more tranches (Tranches and each a Tranche) of Notes. Each Tranche will be the subject of final terms or a pricing supplement (Final Terms) prepared by, or on behalf of, the Issuer, a copy of which will, in the case of a Tranche of Notes which is to be listed on the Official List (the Official List) of the United Kingdom Financial Conduct Authority acting under Part VI of the Financial Services and Markets Act 2000, as amended (the UK Listing Authority) and/or NYSE Euronext in Amsterdam (Euronext Amsterdam) and/or the SIX Swiss Exchange and/or the Stock Exchange of Hong Kong and/or the Singapore Exchange, be lodged with the UK Listing Authority and the London Stock Exchange plc and/or Euronext Amsterdam and/or the SIX Swiss Exchange and/or the Stock Exchange of Hong Kong and/or the Singapore Exchange and be available for inspection at the specified office of each of the Paying Agents appointed in respect of such Notes.
In these Terms and Conditions, unless otherwise expressly stated, references to Notes are to Notes of the relevant Series (and, where the context permits, shall be deemed to include Receipts appertaining to such Notes), references to Receipts are references to Receipts appertaining to Notes of the relevant Series, references to Coupons are to Coupons appertaining to Notes of the relevant Series, references to the Issuer are to the Issuer of such Notes, references to the Guarantors are references to the Guarantors of such Issuers obligations under such Notes and references to the Paying Agents are references to the Paying Agents appointed in respect of such Notes. Subject thereto, capitalised terms shall, unless defined herein, have the meanings ascribed thereto in the Trust Deed.
1 | Form and Denomination |
(a) | Notes are issued in bearer form. Each Note is a Fixed Rate Note, a Floating Rate Note or a Zero Coupon Note or a combination of any of the foregoing. All payments in respect of each Note shall be made in the currency shown on its face. |
Form of Notes |
(b) | Each Tranche of Notes will be represented upon issue by a temporary global note (a Temporary Global Note) in substantially the form (subject to amendment and completion) scheduled to the Trust Deed and, if so specified in the Final Terms, such Temporary Global Note shall be a New Global Note. On or after the date (the Exchange Date) which is 40 days after the completion of distribution of the Notes of the relevant Tranche and provided certification as to the beneficial ownership thereof as required by U.S. Treasury regulations (in the form set out in the Temporary Global Note or such other form as may replace it) has been received, interests in the Temporary Global Note may be exchanged for: |
(i) | interests in a permanent global note (a Permanent Global Note) representing the Notes of that Tranche and in substantially the form (subject to amendment and completion) scheduled to the Trust Deed; or |
(ii) | definitive Notes in bearer form (Definitive Notes) which will be serially numbered and in substantially the form (subject to amendment and completion) scheduled to the Trust Deed. |
If interests in the Temporary Global Note are exchanged for interests in a Permanent Global Note pursuant to clause (i) above, interests in such Permanent
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Global Note may thereafter be exchanged for Definitive Notes described in clause (ii) above.
Each exchange of an interest in a Temporary Global Note for an interest in a Permanent Global Note or for a Definitive Note, and each exchange of an interest in a Permanent Global Note for a Definitive Note, shall be made outside the United States.
(c) | If any date on which a payment of interest is due on the Notes of a Tranche occurs while any of the Notes of that Tranche are represented by the Temporary Global Note, the related interest payment will be made on the Temporary Global Note only to the extent that certification as to the beneficial ownership thereof as required by U.S. Treasury regulations (in the form set out in the Temporary Global Note or such other form as may replace it) has been received by Euroclear Bank S.A./N.V. (Euroclear), Clearstream Banking, société anonyme (Clearstream, Luxembourg) or any other relevant clearing system. Payments of principal or interest (if any) on a Permanent Global Note will be made through Euroclear or Clearstream, Luxembourg without any requirement for certification. |
(d) | If so specified in the relevant Final Terms, interests in a Permanent Global Note will be exchangeable in whole (but not in part only), at the option of the Holder of such Permanent Global Note and in accordance with the rules and procedures for the time being of Euroclear, Clearstream, Luxembourg and/or any other relevant clearing system and, unless otherwise specified in the relevant Final Terms, at the Issuers cost, for Definitive Notes. In order to exercise such option, the Holder must, not less than 45 days before the date on which delivery of Definitive Notes in global or definitive form is required, deposit the relevant Permanent Global Note with the Principal Paying Agent with the form of exchange notice endorsed thereon duly completed. Interests in a Permanent Global Note will, in any event, be exchangeable in whole (but not in part only) at the cost of the Issuer, for Definitive Notes (i) if any Note of the relevant Series becomes due and repayable following a Default (as defined in Condition 10A), or (ii) if either Euroclear or Clearstream, Luxembourg or any other relevant clearing system should cease to operate as a clearing system (other than by reason of public holiday) or should announce an intention permanently to cease business and it shall not be practicable to transfer the relevant Notes to another clearing system within 90 days. |
(e) | Interest-bearing Definitive Notes will have attached thereto at the time of their initial delivery Coupons presentation of which will be a prerequisite to the payment of interest in certain circumstances specified below. Interest-bearing Definitive Notes will also, if applicable, have attached thereto, at the time of their initial delivery, a talon (a Talon) for further coupons and the expression Coupons shall, where the context so permits, include Talons. Definitive Notes, the principal amount of which is repayable by instalments (Instalment Notes), will have endorsed thereon a grid for recording the repayments of principal or have attached thereto at the time of their initial delivery Receipts presentation of which will be a prerequisite to the repayment of the relevant instalment in certain circumstances specified below. |
(f) | The following legend will appear on all Notes with maturities of more than 365 days and (in the case of Definitive Notes) on Receipts, Coupons and Talons appertaining thereto: |
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Any United States person who holds this obligation will be subject to the limitations under the United States income tax laws, including the limitations provided in Sections 165(j) and 1287(a) of the Internal Revenue Code.
The Internal Revenue Code sections referred to above provide that United States Holders, with certain exceptions, will not be entitled to deduct any loss on Notes, Receipts or Coupons and will not be entitled to capital gains treatment in respect of any gain recognised on any sale, disposition, redemption or payment of principal in respect of Notes, Receipts or Coupons.
Denomination of Notes |
(g) | Subject to any then applicable legal and regulatory requirements, (i) Notes will be in the denomination or denominations (each of which denominations must be integrally divisible by either the smallest denomination or by the smallest increment between denominations, whichever is smaller) specified in the relevant Final Terms and (ii) Notes may not be issued under the Programme which have a minimum denomination of less than 100,000 (or its equivalent in another currency). Notes of one denomination will not be exchangeable, after their initial delivery, for Notes of any other denomination. |
Currency of Notes |
(h) | Notes may be denominated in any currency (including, without limitation, euro (as defined in Condition 8C(3)) subject to compliance with all applicable legal or regulatory requirements. |
References to Notes |
(i) | For the purposes of these Terms and Conditions, references to Notes shall, as the context may require, be deemed to be to Temporary Global Notes, Permanent Global Notes or Definitive Notes. |
2 | Status of the Notes |
Subject to Condition 4, the Notes constitute direct, unconditional and unsecured obligations of the Issuer and (subject as aforesaid) rank and will rank pari passu without any preference among themselves with all other present and future unsecured and unsubordinated obligations of the Issuer (other than obligations preferred by law).
3 | Status of the Guarantee |
Subject to Condition 4, the obligations of each Guarantor under the guarantee constitute unsecured obligations of such Guarantor and (subject as aforesaid) rank and will rank (subject to any obligations preferred by law) pari passu with all other present and future unsecured and unsubordinated obligations of such Guarantor.
4 | Negative Pledge |
So long as any Notes remain outstanding (as defined in the Trust Deed), neither N.V. nor PLC will create or have outstanding any mortgage, charge, lien, pledge or other security interest upon the whole or any substantial part of its undertaking or assets (including any uncalled capital), present or future, to secure any Indebtedness of any person (or any guarantee or indemnity given in respect thereof) unless the Notes and the Coupons shall
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be secured by such mortgage, charge, lien, pledge or other security interest equally and rateably therewith in the same manner or in a manner satisfactory to the Trustee or such other security for the Notes and Coupons shall be provided as the Trustee shall, in its absolute discretion, deem not less beneficial to the Noteholders or as shall be approved by an Extraordinary Resolution (as defined in the Trust Deed) of Noteholders provided that the restriction contained in this Condition shall not apply to:
(i) | any mortgage, charge, lien, pledge or other security interest arising solely by mandatory operation of law; and |
(ii) | any security over assets of N.V. or, as the case may be, PLC arising pursuant to the Algemene Voorwaarden (general terms and conditions) of the Nederlandse Vereniging van Banken (Dutch Bankers Association) and/or similar terms applied by financial institutions, if and insofar as applicable. |
For the purposes of this Condition:
Indebtedness means any loan or other indebtedness in the form of, or represented by, bonds, notes, debentures or other securities which at the time of issue thereof either is, or is intended to be, quoted, listed or ordinarily dealt in on any stock exchange, over-the-counter or other recognised securities market and which by its terms has an initial stated maturity of more than one year; and
substantial means, in relation to each of N.V. and PLC, an aggregate amount equal to or greater than 25 per cent. of the aggregate value of the fixed assets and current assets of N.V., PLC and their group companies (being those companies required to be consolidated in accordance with Netherlands and United Kingdom legislative requirements relating to consolidated accounts) (the Unilever Group, and any company within the Unilever Group being referred to herein as a Group Company), such value and such assets being determined by reference to the then most recently published audited consolidated balance sheet of the Unilever Group. A report by the Auditors (as defined in the Trust Deed) that, in their opinion, (1) the amounts shown in a certificate provided by N.V. and PLC (showing the fixed assets and current assets of the relevant part and those fixed assets and current assets expressed as a percentage of the fixed assets and current assets of the Unilever Group) have been accurately extracted from the accounting records of the Unilever Group, and (2) the percentage of the fixed assets and current assets of that part to the fixed assets and the current assets of the Unilever Group has been correctly calculated, shall, in the absence of manifest error, be conclusive evidence of the matters to which it relates.
5 | Title |
(a) | Title to Notes and Coupons will pass by delivery. References herein to the Holders of Notes, Receipts or Coupons signify the bearers of such Notes, Receipts or such Coupons. |
(b) | The Issuer, the Guarantors, the Trustee and the Paying Agents may deem and treat the Holder of any Note, Receipt or Coupon as the absolute owner thereof (whether or not such Note, Receipt or Coupon shall be overdue and notwithstanding any notice of any previous loss or theft thereof or any express or constructive notice of any claim by any other person of any interest therein) for the purpose of making payments and for all other purposes. |
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6 | Interest |
Notes may be interest-bearing or non-interest-bearing, as specified in the relevant Final Terms. The Final Terms in relation to each Tranche of interest-bearing Notes shall specify which one (and one only) of Conditions 6A, 6B or 6C shall be applicable and Condition 6D will be applicable to each Tranche of interest-bearing Notes as specified therein. Condition 6G shall be applicable to Zero Coupon Notes.
(A) | Interest Fixed Rate |
Notes, in relation to which this Condition 6A is specified in the relevant Final Terms as being applicable, shall bear interest from their date of issue (the Issue Date) (as specified in the relevant Final Terms) or from such other date as may be specified in the relevant Final Terms at the rate or rates per annum (or otherwise) (the Fixed Rate of Interest) specified in the relevant Final Terms. Such interest will be payable in arrear on such dates (the Fixed Interest Payment Dates) as are specified in the relevant Final Terms and on the date of final maturity thereof (the Maturity Date). The amount of interest payable in respect of any Note in relation to which this Condition 6A is specified in the relevant Final Terms as being applicable shall be calculated by multiplying the product of the Fixed Rate of Interest and:
(i) | in the case of any such Note in global form, the principal amount of such Note; or |
(ii) | in the case of any such Note in definitive form, the Calculation Amount, |
in each case, by the applicable Day Count Fraction (as defined in Condition 6E(6)) as specified in the relevant Final Terms and rounding the resultant figure to the nearest sub-unit of the relevant Specified Currency, half of any such sub-unit being rounded upwards or otherwise in accordance with applicable market convention. Where the Denomination of a Note in relation to which this Condition 6A is specified in the relevant Final Terms as being applicable and which is in definitive form comprises more than one Calculation Amount, the amount of interest payable in respect of such Note shall be the aggregate of the amounts (determined in the manner provided above) for each Calculation Amount comprising the Denomination without any further rounding. If no Day Count Fraction is specified in the relevant Final Terms then, in the case of Notes denominated in any currency other than U.S. dollars, the applicable Day Count Fraction shall be Actual/Actual (ICMA) (as defined in Condition 6E(6)(ii)) and, in the case of Notes denominated in U.S. dollars, the applicable Day Count Fraction shall be 30/360 (as defined in Condition 6E(6)(v)).
(B) | Interest Floating Rate (Screen Rate Determination) |
(1) | Notes, in relation to which this Condition 6B is specified in the relevant Final Terms as being applicable, shall bear interest at the rates per annum (or otherwise) determined in accordance with this Condition 6B. |
(2) | Such Notes shall bear interest from their Issue Date (as specified in the relevant Final Terms) or from such other date as may be specified in the relevant Final Terms. Such interest will be payable on each Interest Payment Date (as defined in Condition 6E(1)) and on the date of the final maturity thereof (the Maturity Date) (if any). |
(3) | The relevant Final Terms, in relation to Notes in relation to which this Condition 6B is specified as being applicable, shall specify which page (the Relevant Screen Page), on the Reuters Screen or any other information vending service, shall be |
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applicable. For these purposes, Reuters Screen means the Reuters Money Market Rates Service (or such other service as may be nominated as the information vendor for the purpose of displaying comparable rates in succession thereto). The reference rate for such Notes shall be the London interbank offered rate (LIBOR) or the Euro interbank offered rate (EURIBOR), in each case for the relevant period, as specified in the relevant Final Terms (the Reference Rate). |
(4) | The rate of interest (the Rate of Interest) for each Interest Period (as defined in Condition 6E(1)) in relation to Notes in relation to which this Condition 6B is specified as being applicable shall be determined by the Determination Agent (being the Principal Paying Agent or any other party named in the applicable Final Terms) on the following basis: |
(i) | the Determination Agent will determine the rate for deposits (or, as the case may require, the arithmetic mean of the rates for deposits rounded (if necessary) to the fourth decimal place, with 0.00005 being rounded upwards) in the relevant currency for a period of the duration of the relevant Interest Period according to the rate (or rates) appearing for the Reference Rate on the Relevant Screen Page as at the Relevant Time on the Interest Determination Date (as defined in Condition 6B(6)). If five or more rates for deposits appear for the Reference Rate on the Relevant Screen Page as at the Relevant Time on the Interest Determination Date, the highest (or, if there is more than one such highest quotation, one only of such quotations) and the lowest (or, if there is more than one such lowest quotation, one only of such quotations) shall be disregarded by the Determination Agent for the purpose of determining the arithmetic mean (rounded as provided above) of such rates for deposits; |
(ii) | if, on any Interest Determination Date, no such rate for deposits so appears (or, as the case may require, if fewer than three such rates for deposits so appear) or if the Relevant Screen Page (or any replacement therefor) is unavailable or if the Reference Rate is unavailable on the Relevant Screen Page, the Determination Agent will request appropriate quotations and will determine the arithmetic mean of the rates at which deposits in the relevant currency are offered by four major banks in, in the case of Notes denominated in any currency other than euro, the London interbank market or, in the case of Notes denominated in euro, the Euro-zone interbank market, selected by the Determination Agent, at the Relevant Time on the Interest Determination Date to prime banks in, in the case of Notes denominated in any currency other than euro, the London interbank market or, in the case of Notes denominated in euro, the Euro-zone interbank market for a period of the duration of the relevant Interest Period and in an amount that is representative for a single transaction in the relevant market at the relevant time. If two or more of such banks provide the Determination Agent with such quotations, the Rate of Interest for such Interest Period shall be the arithmetic mean (rounded (if necessary) to the fourth decimal place, with 0.00005 being rounded upwards) of such quotations. Euro-zone means the zone comprising the member states of the European Union that from time to time have the euro as their currency; |
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(iii) | if, on any Interest Determination Date, only three such rates for deposits are so quoted by such banks, the Determination Agent will determine the arithmetic mean (rounded as aforesaid) of the rates so quoted; or |
(iv) | if fewer than three or no rates are so quoted by such banks, the Determination Agent will determine the arithmetic mean of the rates quoted by four major banks in the Relevant Financial Centre (as defined in Condition 8B(1)) (or, in the case of Notes denominated in euro, in such financial centre or centres as the Determination Agent may select), selected by the Determination Agent, at approximately 11.00 a.m. (Relevant Financial Centre time (or local time at such other financial centre or centres as aforesaid)) on the Interest Determination Date for loans in the relevant currency to leading European banks for a period of the duration of the relevant Interest Period and in an amount that is representative for a single transaction in the relevant market at the relevant time, |
and the Rate of Interest applicable to such Notes during each Interest Period will be the sum of the relevant margin (the Relevant Margin) specified in the relevant Final Terms and the rate (or, as the case may be, the arithmetic mean) so determined; provided that, if the Determination Agent is unable to determine a rate (or, as the case may be, an arithmetic mean) in accordance with the above provisions in relation to any Interest Period, the Rate of Interest applicable to such Notes during such Interest Period will be the sum of the Relevant Margin and the rate (or, as the case may be, the arithmetic mean) last determined in relation to such Notes in respect of the preceding Interest Period; and provided always that, if there is specified in the relevant Final Terms a minimum interest rate or a maximum interest rate, then the Rate of Interest shall in no event be less than or, as the case may be, exceed such minimum or maximum interest rate.
(5) | The Determination Agent will, as soon as practicable after determining the Rate of Interest in relation to each Interest Period, calculate the amount of interest (the Interest Amount) payable in respect of the principal amount of each denomination of such Notes specified in the relevant Final Terms for the relevant Interest Period. The Interest Amount will be calculated by multiplying the product of the Rate of Interest for such Interest Period and: |
(i) | in the case of such Notes in global form, the principal amount of such Notes; or |
(ii) | in the case of such Notes in definitive form, the Calculation Amount, |
in each case, by the applicable Day Count Fraction specified in the relevant Final Terms and rounding the resultant figure to the nearest sub-unit of the relevant Specified Currency, half of any such sub-unit being rounded upwards or otherwise in accordance with applicable market convention. Where the Denomination of a Note to which this Condition 6B is specified in the relevant Final Terms as being applicable and which is in definitive form comprises more than one Calculation Amount, the Interest Amount payable in respect of such Note shall be the aggregate of the amounts (determined in the manner provided above) for each Calculation Amount comprising the Denomination without any further rounding. If no Day Count Fraction is specified in the relevant Final Terms then, in the case of Notes denominated in any currency other than sterling, the applicable Day Count
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Fraction shall be Actual/360 (as defined in Condition 6E(6)) and, in the case of Notes denominated in sterling, the applicable Day Count Fraction shall be Actual/Actual (ISDA) (as defined in Condition 6E(6)).
(6) | For the purposes of these Terms and Conditions: |
(i) | Interest Determination Date means, in respect of any Interest Period, the date falling such number (if any) of London Banking Days or, as the case may be, TARGET Days as may be specified in the relevant Final Terms prior to the first day of such Interest Period or, if none is specified: |
(a) | in the case of Notes denominated in sterling, the first day of such Interest Period; or |
(b) | in the case of Notes denominated in euro, the date falling two TARGET Days prior to the first day of such Interest Period; or |
(c) | in any other case, the date falling two London Banking Days prior to the first day of such Interest Period; |
(ii) | London Banking Day means a day on which commercial banks are open for business (including dealings in foreign exchange and foreign currency deposits) in London; |
(iii) | Relevant Time means the time as of which any rate is to be determined as may be specified in the relevant Final Terms or, if none is specified: |
(a) | in the case of Notes denominated in euro, approximately 11.00 a.m. (Brussels time); or |
(b) | in any other case, approximately 11.00 a.m. (London time); |
(iv) | TARGET Day means a day on which the TARGET System (as defined in Condition 8B(1)(iii)) is open; and |
(v) | sub-unit means, with respect to any currency other than euro, the lowest amount of such currency that is available as legal tender in the country of such currency and, with respect to euro, means one cent. |
(C) | Interest Floating Rate (ISDA Determination) |
(1) | Notes, in relation to which this Condition 6C is specified in the relevant Final Terms as being applicable, shall bear interest at the rates per annum (or otherwise) determined in accordance with this Condition 6C. |
(2) | The Rate of Interest for such Notes for each Interest Period shall be determined by the Calculation Agent as a rate equal to the relevant ISDA Rate. For the purposes of this sub-paragraph, ISDA Rate for an Interest Period means a rate equal to the Floating Rate that would be determined by the Calculation Agent under a Swap Transaction under the terms of an agreement incorporating the ISDA Definitions and under which: |
(x) | the Floating Rate Option is as specified in the relevant Final Terms |
(y) | the Designated Maturity is a period specified in the relevant Final Terms and |
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(z) | the relevant Reset Date is the first day of that Interest Period unless otherwise specified in the relevant Final Terms. |
(3) | For the purposes of this sub-paragraph, Floating Rate, Calculation Agent, Floating Rate Option, Designated Maturity, Reset Date and Swap Transaction have the meanings given to those terms in the ISDA Definitions. |
(D) | Interest - Supplemental Provision |
Conditions 6E(1), 6E(2), 6E(3) and 6E(5) shall be applicable to all Notes which are interest-bearing in the manner specified therein and, as appropriate, in the relevant Final Terms.
(E) | Interest Payment Date Conventions |
(1) | The Final Terms in relation to each Tranche of Notes to which Condition 6B is applicable shall specify which of the following conventions shall be applicable, namely: |
(i) | the FRN Convention, in which case interest shall be payable in arrear on each date (each, an Interest Payment Date) which numerically corresponds to their Issue Date or such other date as may be specified in the relevant Final Terms or, as the case may be, the preceding Interest Payment Date in the calendar month which is the number of months specified in the relevant Final Terms after the calendar month in which such Issue Date or such other date as aforesaid or, as the case may be, the preceding Interest Payment Date occurred provided that: |
(a) | if there is no such numerically corresponding day in the calendar month in which an Interest Payment Date should occur, then the relevant Interest Payment Date will be the last day which is a Business Day in that calendar month; |
(b) | if an Interest Payment Date would otherwise fall on a day which is not a Business Day, then the relevant Interest Payment Date will be the first following day which is a Business Day unless that day falls in the next calendar month, in which case it will be the first preceding day which is a Business Day; and |
(c) | if such Issue Date or such other date as aforesaid or the preceding Interest Payment Date occurred on the last day in a calendar month which was a Business Day, then all subsequent Interest Payment Dates will be the last day which is a Business Day in the calendar month which is the specified number of months after the calendar month in which such Issue Date or such other date as aforesaid or, as the case may be, the preceding Interest Payment Date occurred; or |
(ii) | the Modified Following Business Day Convention, in which case interest shall be payable in arrear on such dates (each, an Interest Payment Date) as are specified in the relevant Final Terms; provided that, if any Interest Payment Date would otherwise fall on a date which is not a Business Day, the relevant Interest Payment Date will be the first following day which is a Business Day unless that day falls in the next calendar |
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month, in which case the relevant Interest Payment Date will be the first preceding day which is a Business Day. |
Each period beginning on (and including) such Issue Date or such other date as aforesaid and ending on (but excluding) the first Interest Payment Date and each period beginning on (and including) an Interest Payment Date and ending on (but excluding) the next Interest Payment Date is herein called an Interest Period.
Notification of Rates of Interest, Interest Amounts and Interest Payment Dates
(2) | The Determination Agent will cause each Rate of Interest, floating rate, Interest Payment Date, final day of an interest calculation period, Interest Amount, floating amount or other item, as the case may be, determined or calculated by it to be notified to the Issuer, the Guarantors, the Trustee and the Principal Paying Agent (from whose respective specified offices such information will be available) and, in the case of Notes listed on the Official List and/or Euronext Amsterdam and/or the SIX Swiss Exchange and/or the Stock Exchange of Hong Kong and/or the Singapore Exchange (as specified in the relevant Final Terms), cause each such Rate of Interest, floating rate, Interest Payment Date, final day of an interest calculation period, Interest Amount, floating amount or other item, as the case may be, to be notified to the UK Listing Authority and/or Euronext Amsterdam and/or the SIX Swiss Exchange and/or the Stock Exchange of Hong Kong and/or the Singapore Exchange (as specified in the relevant Final Terms) as soon as practicable after such determination but in any event not later than the fourth London Banking Day thereafter. The Determination Agent will be entitled (with the prior written consent of the Trustee) to amend any Interest Amount, floating amount, Interest Payment Date or final day of an interest calculation period (or to make appropriate alternative arrangements by way of adjustment) without prior notice in the event of the extension or abbreviation of the relevant Interest Period or an interest calculation period and such amendment or adjustment will be notified in accordance with the first sentence of this Condition 6E(2). |
(3) | The determination or calculation by the Determination Agent (or, failing such determination or calculation by the Determination Agent, the Trustee, pursuant to Condition 6E(4)) of all rates of interest and amounts of interest and other items falling to be determined or calculated by it for the purposes of this Condition 6 shall, in the absence of manifest error, be final and binding on all parties. |
Determination or Calculation by Trustee
(4) | If the Determination Agent does not at any time for any reason determine the Rate of Interest or calculate any Interest Amount for an Interest Period, the Trustee shall do so and such determination or calculation shall be deemed to have been made by the Determination Agent. In doing so, the Trustee shall determine or calculate the relevant matter in such manner as, in its absolute discretion, it shall deem fair and reasonable in the circumstances (having such regard as it shall think fit to the procedures described above), but subject always to any maximum or minimum interest rate which may be specified in the relevant Final Terms, or, subject as aforesaid, apply the foregoing provisions of this Condition, with any necessary consequential amendments, to the extent that, in its sole opinion, it can do so and in all other respects it shall do so in such manner as it shall, in its absolute discretion, deem fair and reasonable in the circumstances. |
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Accrual of Interest
(5) | Interest shall accrue on the principal amount of each Note or, in the case of an Instalment Note, on each instalment of principal or, in the case of a partly paid Note, on the paid-up principal amount of such Note or otherwise as indicated in the relevant Final Terms. Interest will cease to accrue as from the due date for redemption therefor (or, in the case of an Instalment Note, in respect of each instalment of principal, on the due date for payment thereof) unless (except in the case of any payment where presentation and/or surrender of the relevant Note is not required as a precondition of payment), upon due presentation or surrender thereof, payment in full of the principal amount or the relevant instalment or, as the case may be, redemption amount is improperly withheld or refused, in which case interest shall continue to accrue thereon as provided in the Trust Deed. |
(6) | The applicable Day Count Fraction means, in respect of the calculation of an amount for any period of time (from and including the first day of such period to but excluding the last day of such period) whether or not constituting an Interest Period (a Calculation Period), such Day Count Fraction as may be specified in the relevant Final Terms or, if no Day Count Fraction is specified in the relevant Final Terms, such Day Count Fraction as is specified in Condition 6A or Condition 6B(5), as the case may be, and: |
(i) | if Actual/Actual (ISDA) or Actual/Actual is so specified, means the actual number of days in such Calculation Period divided by 365 (or, if any portion of such Calculation Period falls in a leap year, the sum of (a) the actual number of days in such portion of such Calculation Period falling in a leap year divided by 366 and (b) the actual number of days in such portion of such Calculation Period falling in a non-leap year divided by 365); |
(ii) | if Actual/Actual (ICMA) is so specified: |
(a) | if such Calculation Period falls within a single Determination Period, means the actual number of days in such Calculation Period divided by the product of the number of days in the Determination Period in which it falls and the number of Determination Periods in any year; and |
(b) | if such Calculation Period does not fall within a single Determination Period, means the sum of (x) the actual number of days in such Calculation Period falling in the Determination Period in which it begins divided by the product of the actual number of days in that Determination Period and the number of Determination Periods in any year and (y) the actual number of days in such Calculation Period falling in the subsequent Determination Period divided by the product of the actual number of days in the subsequent Determination Period and the number of Determination Periods in any year; |
Determination Period means, in the case of Notes in relation to which Condition 6A is specified in the relevant Final Terms, the period from, and including, a Fixed Interest Payment Date in any year to, and excluding, the next Fixed Interest Payment Date; |
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(iii) | if Actual/365 (Fixed) is so specified, means the actual number of days in such Calculation Period divided by 365; |
(iv) | if Actual/360 is so specified, means the actual number of days in such Calculation Period divided by 360; |
(v) | if 30/360, 360/360 or Bond Basis is so specified, means the number of days in such Calculation Period divided by 360, calculated on a formula basis as follows: |
Day Count Fraction = |
where:
Y1 is the year, expressed as a number, in which the first day of such Calculation Period falls;
Y2 is the year, expressed as a number, in which the day immediately following the last day of such Calculation Period falls;
M1 is the calendar month, expressed as a number, in which the first day of such Calculation Period falls;
M2 is the calendar month, expressed as a number, in which the day immediately following the last day of such Calculation Period falls;
D1 is the first calendar day, expressed as a number, of such Calculation Period, unless such number is 31, in which case D1 will be 30; and
D2 is the calendar day, expressed as a number, immediately following the last day included in such Calculation Period, unless such number would be 31 and D1 is greater than 29, in which case D2 will be 30;
(vi) | if 30E/360 or Eurobond Basis is so specified, means the number of days in such Calculation Period divided by 360, calculated on a formula basis as follows: |
Day Count Fraction = |
where:
Y1 is the year, expressed as a number, in which the first day of such Calculation Period falls;
Y2 is the year, expressed as a number, in which the day immediately following the last day of such Calculation Period falls;
M1 is the calendar month, expressed as a number, in which the first day of such Calculation Period falls;
M2 is the calendar month, expressed as a number, in which the day immediately following the last day of such Calculation Period falls;
D1 is the first calendar day, expressed as a number, of such Calculation Period, unless such number would be 31, in which case D1 will be 30; and
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D2 is the calendar day, expressed as a number, immediately following the last day included in such Calculation Period, unless such number would be 31, in which case D2 will be 30; and
(vii) | if 30E/360 (ISDA) is so` specified, means the number of days in such Calculation Period divided by 360, calculated on a formula basis as follows: |
Day Count Fraction = |
where:
Y1 is the year, expressed as a number, in which the first day of such Calculation Period falls;
Y2 is the year, expressed as a number, in which the day immediately following the last day of such Calculation Period falls;
M1 is the calendar month, expressed as a number, in which the first day of such Calculation Period falls;
M2 is the calendar month, expressed as a number, in which the day immediately following the last day of such Calculation Period falls;
D1 is the first calendar day, expressed as a number, of such Calculation Period, unless (i) that day is the last day of February or (ii) such number would be 31, in which case D1 will be 30; and
D2 is the calendar day, expressed as a number, immediately following the last day included in such Calculation Period, unless (i) that day is the last day of February but not the Maturity Date or (ii) such number would be 31 and in which case D2 will be 30.
(F) | Interest Floating Rate Linear Interpolation |
Where Linear Interpolation is specified in the relevant final terms as applicable in respect of an Interest Period, the Rate of Interest for such Interest Period shall be calculated by the Determination Agent by straight line linear interpolation by reference to two rates based on the relevant Reference Rate (where Condition 6B (Screen Rate Determination) is specified hereon as applicable) or the relevant Floating Rate Option (where Condition 6C (ISDA Determination) is specified hereon as applicable), one of which shall be determined as if the Applicable Maturity were the period of time for which rates are available next shorter than the length of the relevant Interest Period and the other of which shall be determined as if the Applicable Maturity were the period of time for which rates are available next longer than the length of the relevant Interest Period provided however that if there is no rate available for the period of time next shorter or, as the case may be, next longer, then the Determination Agent shall determine such rate at such time and by reference to such sources as it determines appropriate.
Applicable Maturity means: (a) in relation to Screen Rate Determination, the period of time designated in the Reference Rate, and (b) in relation to ISDA Determination, the Designated Maturity.
(G) | Zero Coupon Notes |
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Where a Note the interest basis of which is specified in the relevant final terms to be Zero Coupon is repayable prior to the Maturity Date and is not paid when due, the amount due and payable prior to the Maturity Date shall be the early redemption amount of such Note. As from the Maturity Date, the Rate of Interest for any overdue principal of such a Note shall be a rate per annum (expressed as a percentage) equal to the Amortisation Yield (as described in Condition 7(j)).
7 | Redemption and Purchase |
(a) | Final Redemption |
Unless previously redeemed, or purchased and cancelled, Notes shall be redeemed at their principal amount (or at such other redemption amount as may be specified in the relevant Final Terms) (or, in the case of Instalment Notes, in such amounts as may be specified in the relevant Final Terms) on the date or dates (or, in the case of Notes which bear interest at a floating rate, on the date or dates upon which interest is payable) specified in the relevant Final Terms. Notes may be redeemed before such date or dates in accordance with Condition 7(c). If stated as being applicable in the relevant Final Terms, Notes may also be redeemed before such date or dates in accordance with Condition 7(d) and/or Condition 7(g). The Issuer may also purchase Notes in accordance with Condition 7(h).
(b) | No Fixed Maturity |
This Condition 7(b) is applicable to Notes with no specified maturity date (Undated Notes). There is no fixed date for redemption of Undated Notes and the Issuer shall (without prejudice to the provisions of Condition 10 and the Issuers right to purchase Notes in accordance with Condition 7(h)) only redeem Undated Notes in accordance with Condition 7(c) and/or, if stated as being applicable in the relevant Final Terms, in accordance with Condition 7(d) and/or Condition 7(g).
(c) | Redemption for taxation reasons |
The Issuer may, at its option, redeem the Notes in whole, but not in part, upon not more than 60 days nor less than 30 days notice (specifying, in the case of Notes which bear interest at a floating rate, a date for such redemption which is an Interest Payment Date) to the Holders of such Notes at their principal amount (or such other redemption amount as may be specified in these Terms and Conditions) less, in the case of any Instalment Note, the aggregate amount of all instalments which shall have become due and payable prior to the date specified for such redemption in respect of such Note under any other Condition and which remain unpaid at such date, together with interest accrued (if any) thereon (calculated as provided in these Terms and Conditions and the Trust Deed) and, in the case of Undated Notes, arrears of interest (if any) in respect thereof to but excluding the date fixed for redemption, and, in any case, any additional amounts payable under Condition 9 or under any additional or substitute undertaking given pursuant to the Trust Deed (each a Tax Early Redemption Amount) provided that the Issuer or a Guarantor shall provide to the Trustee an opinion in writing of a reputable firm of lawyers of good standing (such opinion to be in a form, and such firm to be a firm, to which the Trustee shall have no reasonable objection) to the effect that there is a substantial likelihood that the Issuer or such Guarantor would be required to pay Additional Amounts in accordance with Condition 9 or under any additional or substitute undertaking given pursuant to the Trust Deed upon the next due date for a payment in respect of the Notes by reason of:
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(i) | any actual or proposed change in or amendment to the laws, regulations or rulings of The Netherlands, the United Kingdom, Japan or the United States or any political subdivision or taxing authority thereof or therein; or |
(ii) | any actual or proposed change in the official application or interpretation of such laws, regulations or rulings; or |
(iii) | any action which shall have been taken by any taxing authority or any court of competent jurisdiction of The Netherlands, the United Kingdom, Japan or the United States or any political subdivision or taxing authority thereof or therein, whether or not such action was taken or brought with respect to the relevant Issuer or Guarantor; or |
(iv) | any actual or proposed change in the official application or interpretation of, or any actual or proposed execution of, or amendment to, any treaty or treaties affecting taxation to which The Netherlands, the United Kingdom, Japan or the United States is or is to be a party, |
which change, amendment or execution becomes effective, taking of action occurs, or proposal is made, on or after the Issue Date of such Notes.
(d) | Optional Early Redemption (Call) |
If this Condition 7(d) is specified in the relevant Final Terms as being applicable, then the Issuer may, upon the expiry of the appropriate notice (as specified in Condition 7(e)) redeem all (but not, unless and to the extent that the relevant Final Terms specifies otherwise, some only) of the Notes at their call early redemption amount (which shall be their principal amount or such other call early redemption amount as may be specified in the relevant Final Terms) less, in the case of any Instalment Note, the aggregate amount of all instalments which shall have become due and payable prior to the date specified for such redemption in respect of such Note under any other Condition and which remain unpaid at such date, together with accrued interest (if any) thereon (calculated as provided in these Terms and Conditions and the Trust Deed) and, in the case of Undated Notes, arrears of interest (if any) in respect thereof to but excluding the date fixed for redemption (each, a Call Early Redemption Amount).
(e) | The Appropriate Notice |
The appropriate notice referred to in Condition 7(d) is a notice given by the Issuer to the Trustee and the Principal Paying Agent which notice shall be signed by an authorised signatory of the Issuer and shall specify:
| the Notes subject to redemption; |
| (if the relevant Final Terms specifies that some only of the Notes may be redeemed) whether Notes are to be redeemed in whole or in part only and, if in part only, the aggregate principal amount of the Notes which are to be redeemed; |
| the due date for such redemption, which shall be a Business Day (as defined in Condition 8B(1)) which shall be not less than 30 days after the date on which such notice is validly given, which shall be, in the case of Notes which bear interest at a floating rate, an Interest Payment Date; and |
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| the Call Early Redemption Amount at which such Notes are to be redeemed. |
Any such notice shall be given not more than 60 days and not less than 30 days prior to the date fixed for redemption, shall also be given to the Holders of the Notes in accordance with Condition 14, shall be irrevocable (unless the Trustee otherwise agrees), and the delivery thereof shall oblige the Issuer to make the redemption therein specified.
(f) | Partial Redemption |
If the Notes are to be redeemed in part only on any date in accordance with Condition 7(d) the Notes to be redeemed shall be drawn by lot in such European city as the Issuer and the Trustee may agree, or identified in such other manner or in such other place as the Trustee may, in its absolute discretion, approve and deem appropriate and fair, subject always to compliance with all applicable laws and the requirements and procedures of any stock exchange on which the relevant Notes may be listed and of any clearing system in which the Notes are held and, in the case of such clearing system being Euroclear and Clearstream, Luxembourg, such redemption to be reflected in the records of Euroclear and Clearstream, Luxembourg as either a pool factor or a reduction in nominal amount, at their discretion.
(g) | Optional Early Redemption (Put) |
If this Condition 7(g) is specified in the relevant Final Terms as being applicable, then the Issuer shall, upon the exercise of the relevant option by the Holder of any Note, redeem such Note on the date or the next of the dates specified in the relevant Final Terms at its principal amount (or such other redemption amount as may be specified in the relevant Final Terms) less, in the case of any Instalment Note, the aggregate amount of all instalments which shall have become due and payable prior to the date specified for such redemption in respect of such Note under any other Condition and which remain unpaid at such date, together with accrued interest (if any) thereon (calculated as provided in these Terms and Conditions and the Trust Deed) and, in the case of Undated Notes, arrears of interest (if any) in respect thereof to, but excluding, the date fixed for redemption (each, a Put Early Redemption Amount). In order to exercise such option, the Holder must, not less than 45 days before the date so specified, deposit the relevant Note (together, in the case of an interest-bearing Definitive Note, with any unmatured Coupons appertaining thereto) with any Paying Agent together with a duly completed redemption notice in the form which is available from the specified office of any of the Paying Agents.
(h) | Purchase of Notes |
The Issuer, each Guarantor and any Group Company may at any time purchase Notes at any price in the open market or otherwise. If purchases are made by tender, tenders must be made available to all Noteholders alike.
(i) | Cancellation |
All Notes (together, in the case of interest-bearing Definitive Notes, with unmatured Coupons attached thereto or surrendered therewith and, in the case of Instalment Notes, with all unmatured Receipts attached thereto or surrendered therewith) redeemed in accordance with this Condition 7 shall be cancelled forthwith and may not be reissued or resold, and Notes (together, in the case of interest-bearing Definitive Notes, with unmatured Coupons attached thereto or surrendered therewith and, in the case of Instalment Notes, with all unmatured Receipts attached thereto or surrendered therewith)
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purchased in accordance with this Condition 7 may, at the option of the purchaser, be cancelled, held or resold.
(j) | Zero Coupon Notes |
(a) | The early redemption amount payable in respect of any Zero Coupon Note, upon redemption of such Note pursuant to Condition 7(c), Condition 7(d) or Condition 7(g) or upon it becoming due and payable as provided in Condition 10 shall be the Amortised Face Amount (calculated as provided below) of such Note unless otherwise specified in the relevant final terms. |
(b) | Subject to the provisions of sub-paragraph (c) below, the Amortised Face Amount of any such Note shall be the scheduled Final Redemption Amount of such Note on the Maturity Date discounted at a rate per annum (expressed as a percentage) equal to the Amortisation Yield (which, if none is shown hereon, shall be such rate as would produce an Amortised Face Amount equal to the issue price of the Notes if they were discounted back to their issue price on the Issue Date) compounded annually. |
(c) | If the early redemption amount payable in respect of any such Note upon its redemption pursuant to Condition 7(c), Condition 7(d) or Condition 7(g) or upon it becoming due and payable as provided in Condition 10 is not paid when due, the early redemption amount due and payable in respect of such Note shall be the Amortised Face Amount of such Note as defined in sub-paragraph (B) above, except that such sub-paragraph shall have effect as though the date on which the Note becomes due and payable were the Relevant Date. The calculation of the Amortised Face Amount in accordance with this sub-paragraph shall continue to be made (both before and after judgment) until the Relevant Date, unless the Relevant Date falls on or after the Maturity Date, in which case the amount due and payable shall be the scheduled Final Redemption Amount of such Note on the Maturity Date together with any interest that may accrue in accordance with Condition 6(G). |
Where such calculation is to be made for a period of less than one year, it shall be made on the basis of the Day Count Fraction shown in the final terms.
8 | Payments |
(A) | Payments |
(1) | Payment of amounts (whether principal, redemption amount or otherwise and including accrued interest other than interest due against surrender of matured Coupons) due in respect of a Note will be made against presentation and (in the case of payments of instalments of principal other than on the due date for redemption) surrender of the relevant Receipts (provided that the Receipt is presented for payment together with its relative Note) or, in any other case, of the relevant Note at the specified office of any of the Paying Agents outside (unless Condition 8A(3) applies) the United States provided that such payment is not made into the United States or into an account maintained in the United States. |
(2) | Payment of amounts due in respect of interest on Notes will be made: |
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(i) | in the case of a Temporary Global Note or Permanent Global Note, against presentation of the relevant Temporary Global Note or Permanent Global Note at the specified office of any of the Paying Agents outside (unless Condition 8A(3) applies) the United States and, in the case of a Temporary Global Note, upon due certification as required therein; |
(ii) | in the case of Definitive Notes without Coupons attached thereto at the time of their initial delivery, against presentation of the relevant Definitive Notes at the specified office of any of the Paying Agents outside (unless Condition 8A(3) applies) the United States; and |
(iii) | in the case of Definitive Notes initially delivered with Coupons attached thereto, against surrender of the relevant Coupons at the specified office of any of the Paying Agents outside (unless Condition 8A(3) applies) the United States. |
(3) | Payments of amounts due in respect of interest on Notes and exchanges of Talons for Coupon sheets in accordance with Condition 8A(6) will not be made at the specified office of any Paying Agent in the United States (as defined in the United States Internal Revenue Code of 1986, as amended, and U.S. Treasury regulations thereunder) unless: |
(i) | payment in full of amounts due or, as the case may be, the exchange of Talons in respect of interest on such Notes when due at all the specified offices of the Paying Agents outside the United States is illegal or effectively precluded by exchange controls or other similar restrictions; |
(ii) | such payment or, as the case may be, exchange is permitted by applicable United States law; and |
(iii) | the Notes are denominated in and payable in United States Dollars. |
If paragraphs (i) to (iii) above apply, the Issuer and the Guarantors shall forthwith appoint a further Paying Agent with a specified office in New York City.
(4) | If the due date for payment of any amount due in respect of any Note is not both a Relevant Financial Centre Day and a local banking day, then the Holder thereof will not be entitled to payment thereof until the next day which is such a day and, thereafter, will be entitled to receive payment by cheque on any local banking day, and will be entitled to payment by transfer to a designated account, on any day which is a local banking day, a Relevant Financial Centre Day and a day on which commercial banks and foreign exchange markets settle payments in the relevant currency in the place where the relevant designated account is located. No further payment on account of interest or otherwise shall be due in respect of such postponed payment unless there is subsequent failure to pay in accordance with these Terms and Conditions in which event interest shall continue to accrue as provided in Condition 6E(5). For the purpose of this Condition 8A(4), Relevant Financial Centre Day means, in the case of a currency other than euro, a day on which commercial banks and foreign exchange markets settle payments in the Relevant Financial Centre and any other place specified in the relevant Final Terms and, in the case of payment in euro, a TARGET Day and a local banking day means a day (other than a Saturday or Sunday) on which commercial banks are |
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open for business in the place of presentation of the relevant Note or, as the case may be, Coupon. |
(5) | Each Definitive Note initially delivered with Coupons attached thereto shall be presented and, save in the case of partial redemption of such Note (including, in the case of an Instalment Note, payment of any instalment other than the final instalment), surrendered for final redemption together with all unmatured Coupons appertaining thereto, failing which: |
(i) | in the case of Definitive Notes which bear interest at a fixed rate or rates, the amount of any missing unmatured Coupons (or, in the case of a payment not being made in full, that portion of the amount of such missing unmatured Coupon which that redemption amount paid bears to the total redemption amount due) (excluding for this purpose Talons) will be deducted from the amount otherwise payable on such final redemption, the principal amount so deducted being payable against surrender of the relevant Coupon at the specified office of any of the Paying Agents at any time within 10 years of the Relevant Date applicable to payment of such final redemption amount; and |
(ii) | in the case of Definitive Notes which bear interest at, or at a margin above or below, a floating rate, all unmatured Coupons relating to such Notes (whether or not surrendered therewith) shall become void and no payment shall be made thereafter in respect of them. |
The provisions of paragraph (i) of this Condition 8A(5) notwithstanding, if any Definitive Notes which bear interest at a fixed rate or rates should be issued with a maturity date and a fixed rate or fixed rates such that, on the presentation for payment of any such Definitive Note without any unmatured Coupons attached thereto or surrendered therewith, the amount required by paragraph (i) to be deducted would be greater than the amount otherwise due for payment, then, upon the due date for redemption of any such Definitive Note, such unmatured Coupons (whether or not attached) being Coupons representing an amount in excess of the relevant redemption amount shall become void (and no payment shall be made in respect thereof) as shall be required so that, upon application of the provisions of paragraph (i) in respect of such Coupons as have not so become void, the amount required by paragraph (i) to be deducted would not be greater than the amount otherwise due for payment. Where the application of the foregoing sentence requires some but not all of the unmatured Coupons relating to a Definitive Note to become void, the relevant Paying Agent shall determine which unmatured Coupons are to become void, and shall select for such purpose Coupons maturing on later dates in preference to Coupons maturing on earlier dates.
(6) | In relation to Definitive Notes initially delivered with Talons attached thereto, on or after the due date for the payment of interest on which the final Coupon comprised in any Coupon sheet matures, the Talon comprised in the Coupon sheet may be surrendered at the specified office of any Paying Agent outside (unless Condition 8A(3) applies) the United States in exchange for a further Coupon sheet (including any appropriate further Talon), subject to the provisions of Condition 12 below. Each Talon shall, for the purpose of these Terms and Conditions, be deemed to mature on the due date for the payment of interest on which the final Coupon comprised in the relative Coupon sheet matures. |
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(7) | Payments of amounts due (whether principal, redemption amount, interest or otherwise) in respect of Notes will be made by (a) transfer to an account in the relevant currency specified by the payee or (b) cheque in the relevant currency drawn on a bank in the Relevant Financial Centre provided, however, that in the case of (a), payment shall not be made to an account within the United States unless permitted by applicable U.S. tax law requirements. |
(8) | The receipt by the Principal Swiss Paying Agent of the due and punctual payment of funds in Swiss francs in Switzerland shall release the Issuer from its obligations under the Swiss Notes (and any Coupons appertaining to them) for the payment of principal and interest to the extent of such payment. Payment of principal and/or interest under Swiss Notes (and any Coupons appertaining to them) shall be payable in freely transferable Swiss francs without collection costs in Switzerland (at, in the case of definitive Swiss Notes, the specified offices located in Switzerland of the Principal Swiss Paying Agent upon their surrender) without any restrictions and whatever the circumstances may be, irrespective of nationality, domicile or residence of the holders of the Swiss Notes (and any Coupons) and without requiring any certification, affidavit or the fulfilment of any other formality. |
(B) | Payments - General Provisions |
(1) | Save as otherwise specified herein, for the purposes of these Terms and Conditions: |
(i) | Business Day means: |
| in relation to Notes payable in euro, a TARGET Day; |
| in relation to Notes payable in any other currency, a day on which commercial banks are open for business and foreign exchange markets settle payments in the Relevant Financial Centre in respect of the relevant currency; and |
| a day on which commercial banks are open for business and foreign exchange markets settle payments in any place specified in the relevant Final Terms; |
(ii) | Relevant Financial Centre means, in relation to the Notes denominated in a currency other than euro, such financial centre or centres as may be specified in relation to the relevant currency for the purposes of the definition of Business Day in the ISDA Definitions and, in relation to Notes denominated in euro, the principal financial centre of any of the member states in the Euro-zone; and |
(iii) | TARGET System means the Trans-European Automated Real-Time Gross Settlement Express Transfer (known as TARGET2) System which was launched on 19 November 2007, or any successor thereto. |
(2) | Payments will, without prejudice to the provisions of Condition 9, be subject in all cases to: (i) any applicable fiscal or other laws and regulations; and (ii) any withholding or deduction required pursuant to an agreement described in Section 1471(b) of the U.S. Internal Revenue Code of 1986, as amended (the Code) or otherwise imposed pursuant to Sections 1471 through 1474 of the Code, any |
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regulations or agreements thereunder, any official interpretations thereof or any law implementing an intergovernmental approach with respect thereto (FATCA). |
(C) | Redenomination |
(1) | Unless disapplied in the relevant Final Terms, the Issuer may, without the consent of the Noteholders, the Receiptholders and the Couponholders, on giving prior notice to the Trustee, the Principal Paying Agent, Euroclear and Clearstream, Luxembourg and at least 30 days prior notice to the Noteholders in accordance with Condition 14, elect that, in the case of Notes denominated in the currency of a member state of the European Union that has not adopted the single currency in accordance with the Treaty, with effect from the Redenomination Date specified in the notice, Notes denominated in the currency of such member state of the European Union that adopts the single currency in accordance with the Treaty shall be redenominated in euro. |
(2) | The election will have effect as follows: |
(i) | each Specified Denomination and, in the case of Fixed Rate Notes, each amount of interest specified in the Coupons will be deemed to be such amount of euro as is equivalent to its denomination or the amount of interest so specified in the Specified Currency at the Established Rate, rounded down to the nearest 0.01 (any fraction arising therefrom shall be paid on the Redenomination Date to the Noteholder in addition to the payment of interest otherwise payable on such Redenomination Date); |
(ii) | if definitive notes are required to be issued after the Redenomination Date they shall be issued at the expense of the Issuer in denominations of at least 100,000, or such higher denominations as the Agent shall determine and notify to the Noteholders; |
(iii) | after the Redenomination Date, all payments in respect of the Notes, the Receipts and the Coupons, other than payments of interest in respect of periods commencing before the Redenomination Date, will be made solely in euro as though references in the Notes to the Specified Currency were to euro. Payments will be made in euro by credit or transfer to a euro account (or any other account to which euro may be credited or transferred) specified by the payee or, at the option of the payee, by a euro cheque; |
(iv) | if the Notes are Fixed Rate Notes and interest for any period ending on or after the Redenomination Date is required to be calculated for a period ending other than on an Interest Payment Date it will be calculated: |
(A) | in the case of the Notes in global form, by applying the Rate of Interest to the principal amount of such Notes; and |
(B) | in the case of Notes in definitive form, by applying the Rate of Interest to the Calculation Amount, |
and, in each case, multiplying such sum by the applicable Day Count Fraction, which, in this case, shall be Actual/Actual (ICMA) and rounding the resultant figure to the nearest sub-unit of the relevant Specified Currency, half of any such sub-unit being rounded upwards or otherwise in accordance with the applicable market convention. Where the
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Denomination of a Fixed Rate Note in definitive form comprises more than one Calculation Amount, the amount of interest payable in respect of such Fixed Rate Note shall be the aggregate of the amounts (determined in the manner provided above) for each Calculation Amount comprising the Denomination without any further rounding; |
(v) | if the Notes are Floating Rate Notes the relevant Final Terms will specify any relevant changes to the provisions relating to interest; and |
(vi) | such other changes shall be made to these Terms and Conditions as the Issuer may decide, after consultation with the Principal Paying Agent, and as may be specified in the notice, to conform them to conventions then applicable to instruments denominated in euro to the satisfaction of the Trustee. |
(3) | For the purposes of these Terms and Conditions: |
(i) | Established Rate means the rate for the conversion of the Specified Currency (including compliance with rules relating to roundings in accordance with applicable European Community regulations) into euro established by the Council of the European Union pursuant to Article 123 of the Treaty; |
(ii) | euro means the currency introduced at the start of the third stage of European economic and monetary union pursuant to the Treaty; |
(iii) | Redenomination Date means (in the case of interest-bearing Notes) any date for payment of interest under the Notes or (in the case of Zero Coupon Notes) any date, in each case specified by the Issuer in the notice given to the Noteholders pursuant to paragraph 8C(1) above and which falls on or after the date on which the relevant member state of the European Union that has not adopted the single currency in accordance with the Treaty, adopts the single currency in accordance with the Treaty; |
(iv) | Specified Currency means the currency specified in the relevant Final Terms; |
(v) | Specified Denomination means the denomination (of the relevant Notes in the Specified Currency) specified in the relevant Final Terms; and |
(vi) | Treaty means the Treaty establishing the European Community as amended. |
(D) | Exchange |
The Issuer may, without the consent of the Noteholders, the Receiptholders and the Couponholders, on giving prior notice to the Trustee, the Principal Paying Agent, Euroclear and Clearstream, Luxembourg and not less than 30 days prior notice to the Noteholders in accordance with Condition 14, elect that, with effect from the Redenomination Date specified in the notice, the Notes shall be exchangeable for Notes expressed to be denominated in euro in accordance with such arrangements as the Issuer may decide, after consultation with the Principal Paying Agent, and as may be specified in the notice, including arrangements under which Receipts and Coupons unmatured at the date so specified become void.
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(E) | The Paying Agents |
(1) | The Issuer and the Guarantors together reserve the right, in accordance with the provisions of the Paying Agency Agreement, to vary or terminate the appointment of any Paying Agent (including the Principal Paying Agent) and to appoint additional or other Paying Agents provided that they will at all times maintain (i) a Principal Paying Agent, (ii) so long as any Notes are listed on any stock exchange, a Paying Agent in such place as may be required by such relevant stock exchange, (iii) in the circumstances described in Condition 8A(3), a Paying Agent with a specified office in New York City and (iv) so long as any Notes are listed on the SIX Swiss Exchange (as specified in the relevant Final Terms), a Paying Agent in Switzerland, which agent shall have an office in Switzerland and be a duly licensed Swiss bank or securities dealer or otherwise be subject to supervision by the Swiss Financial Market Supervisory Authority FINMA, to perform the functions of a Swiss paying agent. The Paying Agents reserve the right at any time to change their respective offices to some other specified office in the same city. Notice of all changes in the identities or specified offices of the Paying Agents will be notified promptly by the Issuer to the Holders of the Notes in accordance with Condition 14. |
(2) | The Paying Agents act solely as agents of the Issuer and the Guarantors or, following the occurrence of a Default (as defined in Condition 10), the Trustee and, save as provided in the Paying Agency Agreement, do not assume any obligations towards or relationship of agency or trust for any Holder of any Note, Receipt or Coupon and each of them shall only be responsible for the performance of the duties and obligations expressly imposed upon them in the Paying Agency Agreement or incidental thereto. |
(3) | The initial Paying Agents and their respective initial specified offices are specified below. |
9 | Taxation |
All payments of principal of, and interest on, Notes by the Issuer or, as the case may be, a Guarantor will be made without withholding or deduction for or on account of any present or future taxes or duties of whatever nature imposed or levied by or on behalf of The Netherlands (in the case of payment by N.V.), the United Kingdom (in the case of payment by PLC), Japan (in the case of payment by UJH) or the United States (in the case of payment by UNUS) or (in any such case) any political subdivision or taxing authority thereof or therein, unless such withholding or deduction is required by law. In such event, except to the extent that the withholding or deduction is made in respect of FATCA, the Issuer or, as the case may be, such Guarantor, will pay such additional amounts (Additional Amounts) as shall be necessary in order that the net amounts received by the holder of any Note, Receipt or, as the case may be, Coupon, after such withholding or deduction, shall equal the respective amounts of principal and interest which would have been receivable in respect of the Notes, Receipts or, as the case may be, Coupons in the absence of such withholding or deduction, provided however that no such Additional Amounts shall be payable:
(A) | by N.V. or PLC with respect to: |
(i) | any Note, Receipt or Coupon presented for payment by, or on behalf of, a Holder who is liable to such taxes or duties in respect of such Note, Receipt |
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or Coupon by reason of his having some connection with The Netherlands or, as the case may be, the United Kingdom other than the mere holding of such Note, Receipt or Coupon; or |
(ii) | any payment in respect of a Note, Receipt or Coupon where the Holder thereof would be able to avoid such withholding or deduction by making a declaration of non-residence or other similar claim for exemption to the relevant tax authority; or |
(iii) | if presentment is required, any Note, Receipt or Coupon presented for payment more than 30 days after the Relevant Date except to the extent that the holder thereof would have been entitled to such Additional Amounts on presenting the same for payment on such thirtieth day; or |
(iv) | any tax, assessment or other governmental charge required to be withheld or deducted by any Paying Agent from any payment by N.V. or, as the case may be, PLC if such payment can be made without such withholding or deduction by any other Paying Agent; or |
(v) | any estate, inheritance, gift, sales, transfer, excise, personal property or any similar tax, assessment or other governmental charge; or |
(vi) | any tax, assessment or other governmental charge which is payable otherwise than by withholding from payment of principal, premium, if any, or interest, if any, with respect to such Note, Receipt or Coupon; or |
(vii) | any payment in respect of a Note, Receipt or Coupon to any Holder who is not the sole beneficial owner of such Note, Receipt or Coupon to the extent that a beneficial owner thereof would not have been entitled to payment thereof had such beneficial owner been the Holder of such Note, Receipt or Coupon; or |
(viii) | any such taxes, duties, assessments or other governmental charges imposed on a payment in respect of a Note required to be made pursuant to laws enacted by Switzerland providing for the taxation of payments according to principles similar to those laid down in the draft legislation of the Swiss Federal Council of December 17, 2014, or otherwise changing the Swiss federal withholding tax system from an issuer-based system to a paying-agent-based system pursuant to which a person other than the issuer is required to withhold tax on any interest payments; or |
(ix) | any combination of (i) to (viii); |
(B) | by UJH with respect to: |
(i) | any Note, Receipt or Coupon presented for payment by, or on behalf of, a Holder who is liable to such taxes or duties in respect of such Note, Receipt or Coupon by reason of its being connected with Japan otherwise than merely by holding or ownership of the Note, Receipt or Coupon or by the receipt of principal or interest in respect of such Note, Receipt or Coupon; or |
(ii) | any payment in respect of a Note, Receipt or Coupon where the Holder thereof would otherwise be exempted from any such withholding or deduction but who fails to comply with any applicable requirement to |
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provide Exemption Information (as defined below) or to submit a Claim for Exemption (as defined below) to the Paying Agent to whom the relevant Note, Receipt or Coupon is presented, or whose Exemption Information is not duly communicated through the Participant (as defined below) and the relevant international clearing organisation to such Paying Agent; or |
(iii) | any payment in respect of a Note, Receipt or Coupon where the Holder thereof is for Japanese tax purposes treated as a resident of Japan, a Japanese corporation or a person having a special relationship with the Issuer as described in the Law (as defined below) (except for (A) as a Designated Financial Institution (as defined below) who complies with the requirement to provide Exemption Information or to submit a Claim for Exemption to the Paying Agent to whom the relevant Note, Receipt or Coupon is presented or (B) a resident of Japan or a Japanese corporation who duly notifies (directly or through the Participant (as defined below) or otherwise) the relevant Paying Agent of its status as exempt from Japanese national or local taxes to be withheld or deducted by the Issuer by reason of such resident of Japan or Japanese corporation, as the case may be, receiving interest on the relevant Note, Receipt or Coupon through a paying handling agent in Japan appointed by it). |
Where a Note, Receipt or Coupon is held through a participant of an international clearing organisation or a financial intermediary (each a Participant), in order to receive payments free of withholding or deduction by the Issuer for, or on account of, Japanese taxes, if the relevant Holder is (A) a non-resident of Japan or a non-Japanese corporation or (B) a Japanese financial institution falling under certain categories prescribed by the Special Taxation Measures Law (Law No. 26 of 1957) and the cabinet order (Cabinet Order No. 43 of 1957) thereunder as amended (together with the ministerial ordinance and other regulation thereunder, the Law) (a Designated Financial Institution), all in accordance with the Law, such Holder shall, at the time of entrusting a Participant with the custody of the relevant Note, Receipt or Coupon, provide certain information prescribed by the Law to enable the Participant to establish that such Holder is exempted from the requirement for Japanese taxes to be withheld or deducted (Rishi Juryosha Joho) (the Exemption Information) and advise the Participant if the Holder ceases to be so exempted.
Where a Note, Receipt or Coupon is not held through a Participant, in order to receive payments free of withholding or deduction by the Issuer for, or on account of, Japanese taxes, if the relevant Holder is (A) a non-resident of Japan or a non-Japanese corporation or (B) a Designated Financial Institution, all in accordance with the Law, such Holder shall, on or prior to each time on which it receives interest, submit to the relevant Paying Agent a claim for exemption from withholding tax (Hikazei Tekiyo Shinkokusho) (a Claim for Exemption) stating, inter alia, the name, address and any other required information of the Holder, the title of the Notes, the relevant Interest Payment Date, the amount of interest and the fact that the Holder is qualified to submit the Claim for Exemption, together with documentary evidence regarding its identity and residence; or
(C) | by UNUS with respect to: |
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(i) | any Note, Receipt or Coupon presented for payment by, or on behalf of, a Holder who is liable for such taxes or duties in respect of such Note, Receipt or Coupon by reason of his having some connection with the United States other than the mere holding of such Note, Receipt or Coupon; or |
(ii) | any payment in respect of a Note, Receipt or Coupon where the Holder thereof would be able to avoid such withholding or deduction by making a declaration of non-residence or other similar claim for exemption to the relevant tax authority; or |
(iii) | if presentment is required, any Note, Receipt or Coupon presented for payment more than 30 days after the Relevant Date except to the extent that the holder thereof would have been entitled to such Additional Amounts on presenting the same for payment on such thirtieth day; or |
(iv) | any tax, assessment or other governmental charge required to be withheld or deducted by any Paying Agent from any payment by UNUS in its capacity as Guarantor if such payment can be made without such withholding or deduction by any other Paying Agent; or |
(v) | any estate, inheritance, gift, sales, transfer, excise, personal property or any similar tax, assessment or other governmental charge; or |
(vi) | any tax, assessment or other governmental charge which is payable otherwise than by withholding from payment of principal, premium, if any, or interest, if any, with respect to such Note, Receipt or Coupon; or |
(vii) | any payment in respect of a Note, Receipt or Coupon to any Holder who is not the sole beneficial owner of such Note, Receipt or Coupon to the extent that a beneficial owner thereof would not have been entitled to payment thereof had such beneficial owner been the Holder of such Note, Receipt or Coupon; or |
(viii) | any combination of (i) to (vii). |
As used herein, Relevant Date means whichever is the later of (i) the date on which such payment first becomes due and (ii) if the full amount of the moneys payable has not been made available to the Principal Paying Agent on or prior to such date, the date on which, the full amount of such moneys having been made available, notice to that effect shall have been given to the Noteholders in accordance with Condition 14.
References herein to principal of, or interest on, the Notes shall be deemed also to refer to any Additional Amounts which may be payable with respect thereto under this Condition or any undertakings given in addition thereto or in substitution therefor pursuant to the Trust Deed.
The provisions of this Condition shall be without prejudice to the rights of substitution conferred by Condition 15.
10 | Repayment Upon Event of Default |
(A) | The following events or circumstances (each, a Default) shall be acceleration events in relation to the Notes of a Series: |
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(a) | there is a default in the payment of any principal of, or for more than 15 days in the payment of any interest due on, any of the Notes; or |
(b) | there is a default in the performance or observance by the Issuer, N.V. or PLC of any other obligation under the Trust Deed or the Notes and such default continues for 30 days after written notice thereof shall have been given to the Issuer and the Guarantors by the Trustee requiring the same to be remedied; or |
(c) | (i) any other indebtedness in respect of borrowed money (amounting in aggregate principal amount to not less than U.S.$100,000,000 or the equivalent thereof in any other currency or currencies) of either N.V. or PLC becomes prematurely repayable as a result of a default under the terms thereof, or (ii) either N.V. or PLC defaults in the repayment of any indebtedness in respect of borrowed money (amounting in aggregate principal amount to not less than U.S.$100,000,000 or the equivalent thereof in any other currency or currencies) at the maturity thereof (taking into account any applicable grace period therefor), or (iii) any guarantee or indemnity given by either N.V. or PLC in respect of any indebtedness in respect of borrowed money (amounting in aggregate principal amount to not less than U.S.$100,000,000 or the equivalent thereof in any other currency or currencies) shall not be honoured when due and called upon (taking into account any applicable grace period therefor) save where the Trustee is satisfied that liability under such guarantee or indemnity is being contested in good faith; or |
(d) | an order is made or a decree or an effective resolution is passed for the winding-up, liquidation or dissolution of the Issuer or N.V. or PLC or an administration order is made or an administrator is appointed in relation to PLC (except for the purpose of a merger, reconstruction or amalgamation, under the terms of Condition 15 or the terms of which have previously been approved in writing by the Trustee or, where UJH is the Issuer, for the purpose of a merger, reconstruction or amalgamation, under the terms of Condition 15 or a merger, reconstruction or amalgamation not involving bankruptcy or insolvency) and (except where such order, decree or resolution is initiated or consented to by the relevant company or its shareholders) such order, decree or resolution is not discharged or stayed within a period of 60 days; or |
(e) | the Issuer or N.V. or PLC (except in the case of N.V. or PLC for the purpose of a merger, reconstruction or amalgamation, under the terms of Condition 15 or the terms of which have previously been approved in writing by the Trustee or, where UJH is the Issuer, for the purpose of a merger, reconstruction or amalgamation under the terms of Condition 15 or a merger, reconstruction or amalgamation not involving bankruptcy or insolvency) ceases or threatens to cease to carry on the whole or substantially the whole of its business; or |
(f) | an administrative receiver or other receiver, trustee, assignee or like officer is appointed of (where the Issuer is UJH) the whole or a substantial part of the undertaking or assets of UJH or (in any case) the whole or a substantial part of the undertaking or assets of PLC or (in any case) an administrator |
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(bewindvoerder) is provisionally or definitively appointed by the District Court in the event of a moratorium (surséance van betaling) over the whole or a substantial part of the undertaking or assets of N.V. and (except where any such appointment is made by or at the instigation or motion of the relevant company or its shareholders) such appointment is not discharged within 30 days; or |
(g) | a trustee in bankruptcy (curator) is appointed by the District Court in the event of bankruptcy (faillissement) affecting the whole or a substantial part of the undertaking or assets of N.V. and such appointment is not discharged within 30 days; or |
(h) | a distress or execution is levied or enforced upon or sued out against a substantial part of the assets of either N.V. or PLC (being, in the case of N.V., either an executory attachment (executoriaal beslag) or a conservatory attachment (conservatoir beslag)) and is not removed, discharged, cancelled or paid out within 30 days after the making thereof or any encumbrancer takes possession of (where the Issuer is UJH) the whole or a substantial part of the undertaking or assets of UJH or (in any case) the whole or a substantial part of the undertaking or assets of N.V. or PLC and is not discharged within 30 days; or |
(i) | for any reason the guarantee of either N.V. or PLC in respect of the Notes ceases to be in full force and effect. |
For the purposes of paragraphs (f), (g) and (h) the expression a substantial part means a part whose value is equal to or greater than 25 per cent. of the aggregate value of the fixed assets and current assets of the Unilever Group, such value and such assets being determined by reference to the then most recently published audited consolidated balance sheet of the Unilever Group. A report by the auditors of the relevant company that, in their opinion, (i) the amounts shown in a certificate provided by N.V. and PLC (showing the fixed assets and current assets of the relevant part and those fixed assets and current assets expressed as a percentage of the fixed assets and current assets of the Unilever Group) have been correctly extracted from the accounting records of the Unilever Group and (ii) the percentage of the fixed assets and current assets of that part to the fixed assets and the current assets of the Unilever Group has been correctly calculated, shall, in the absence of manifest error, be conclusive evidence of the matters to which it relates.
(B) | If any Default shall occur in relation to the Notes of a Series, the Trustee in its discretion may, and (subject to its rights under the Trust Deed to be indemnified and/or secured and/or prefunded to its satisfaction), if so directed by an Extraordinary Resolution of the Holders of the Notes of the relevant Series or if so requested in writing by the Holders of not less than 25 per cent. in principal amount of the Notes of the relevant Series, shall, but, in the case of the happening of any of the events referred to in paragraphs (b), (c), (e), (f), (g) or (h) of Condition 10A, only if the Trustee shall have certified to the Issuer and the Guarantors that such event is, in its opinion, materially prejudicial to the interests of the Holders of the Notes of the relevant Series, by written notice to the Issuer and the Guarantors declare that such Notes are immediately repayable whereupon the same shall become immediately repayable at their default early redemption amount (which |
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shall be their principal amount or such other default early redemption amount as may be specified in the relevant Final Terms) less, in the case of any Instalment Note, the aggregate amount of all instalments which shall have become due and payable in respect of such Note prior to the date fixed for redemption under any other Condition and which remains unpaid at such date together with all interest (if any) accrued thereon (calculated as provided in these Terms and Conditions and in the Trust Deed) and, in the case of Undated Notes, arrears of interest (if any) in respect thereof. |
11 | Enforcement |
At any time after the Notes of a Series shall have become repayable, the Trustee may, at its discretion and without further notice, institute such proceedings against the Issuer and the Guarantors as it may think fit to enforce repayment of such Notes together with accrued interest and to enforce the provisions of the Trust Deed, but it shall not be bound to take any such proceedings unless (i) it shall have been so directed by an Extraordinary Resolution or so requested in writing by the holders of at least 25 per cent. in principal amount of the Notes of the relevant Series then outstanding and (ii) it shall have been indemnified and/or received security to its satisfaction. Only the Trustee may enforce the provisions of the Notes or the Trust Deed and no Holder, Receiptholder or Couponholder shall be entitled to proceed directly against the Issuer or the Guarantors unless the Trustee, having become bound so to proceed, fails to do so within a reasonable time and such failure is continuing.
12 | Prescription |
(a) | Claims against the Issuer and/or any Guarantors in respect of Notes, Receipts and Coupons will become void unless presented for payment within a period of 10 years, in the case of Notes and Receipts and five years, in the case of Coupons, from the Relevant Date (as defined in Condition 9) relating thereto. |
(b) | In relation to Definitive Notes initially delivered with Talons attached thereto, there shall not be included in any Coupon sheet issued upon exchange of a Talon pursuant to Condition 8A(6) any Coupon which would be void upon issue or the due date for payment of which would fall after the due date for the redemption of the relevant Note or which would be void pursuant to this Condition 12. |
13 | Replacement of Notes, Receipts and Coupons |
If any Note, Receipt or Coupon is lost, stolen, mutilated, defaced or destroyed, it may be replaced at the specified office of the Principal Paying Agent upon payment by the claimant of all expenses incurred in connection with such replacement and upon such terms as to evidence, security, indemnity and otherwise as the Issuer or the Principal Paying Agent may require. Mutilated or defaced Notes, Receipts and Coupons must be surrendered before replacements will be delivered.
14 | Notices |
Notices to Holders of Notes will be deemed to be validly given if published in one leading English language daily newspaper with circulation in London (which is expected to be the Financial Times) or, if this is not possible, in one other leading English language daily newspaper with circulation in Europe or, in the case of a Temporary Global Note or
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Permanent Global Note, if delivered to Euroclear and/or Clearstream, Luxembourg and/or any other applicable clearing system for communication by them to the persons shown in their respective records as having interests therein provided that the requirements of the relevant stock exchange(s) have been complied with. All notices in respect of a Note listed on Euronext Amsterdam shall be published in the Euronext Amsterdam Daily Official List (Officiële Prijscourant). Any such notice shall be deemed to have been given on the date of such publication or, if so published more than once, on the date of first publication or, as the case may be, on the fourth day after the date of such delivery to Euroclear and/or Clearstream, Luxembourg and/or such other clearing system. If publication is not practicable in any such newspaper, notice will be validly given if made in such other manner, and shall be deemed to have been given on such date, as the Trustee may in each case approve in writing.
Holders of Coupons and Receipts will be deemed for all purposes to have notice of the contents of any notice given to Holders of Notes in accordance with this Condition.
In the case of Notes listed on the SIX Swiss Exchange, notices will be published in electronic form on the website of the SIX Swiss Exchange (www.six-swiss-exchange.com, where notices are currently published under the address www.six-swiss-exchange.com/news/official_notices/search_en.html) or otherwise in compliance with the regulations of the SIX Swiss Exchange.
15 | Meetings of Noteholders; Modification; Waiver; Substitution |
The Trust Deed contains provisions for convening meetings of Holders of any Series of Notes to consider any matter affecting their interests, including the modification by Extraordinary Resolution of these Terms and Conditions or the provisions of the Trust Deed. The quorum at any such meeting for passing an Extraordinary Resolution will be two or more persons holding or representing a clear majority in principal amount of the Notes of that Series for the time being outstanding or, at any adjourned meeting, two or more persons being or representing Noteholders whatever the principal amount of the Notes of that Series so held or represented, except that, at any meeting the business of which includes the modification of certain of these Terms and Conditions or provisions of the Trust Deed, the necessary quorum for passing an Extraordinary Resolution will be two or more persons holding or representing not less than 66 per cent., or at any adjourned such meeting not less than 33 per cent., of the principal amount of the Notes of that Series for the time being outstanding. An Extraordinary Resolution passed at any meeting of Noteholders of any Series of Notes will be binding on all Noteholders of that Series, whether or not they are present at the meeting, and on all Couponholders of that Series.
The Trust Deed contains provisions for the convening of a single meeting of Holders of Notes of more than one Series where the Trustee so decides.
The Trustee may agree, without the consent of the Noteholders or Couponholders of any Series, to any modification (subject to certain exceptions) of, or to the waiver or authorisation of any breach or proposed breach of, any of these Terms and Conditions or any of the provisions of the Trust Deed which, in the opinion of the Trustee, is not materially prejudicial to the interests of the Holders of such Notes or to any modification which is of a formal, minor or technical nature or is made to correct a manifest error. The Trustee may also determine that any event which would or might otherwise constitute a Default under Condition 10 shall not do so, provided that, in the opinion of the Trustee, such event is not materially prejudicial to the interests of the Holders of the Notes of the
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relevant Series. Any such modification, waiver, authorisation or determination shall be binding on the Holders of the Notes of such Series and of the Receipts and of the Coupons (if any) relating thereto and (unless the Trustee agrees otherwise) any such modification shall be notified to the Noteholders as soon as practicable thereafter in accordance with Condition 14.
The Trustee may also agree, subject to certain conditions set out in the Trust Deed, but without the consent of the Holders of the Notes of such Series and of the Receipts and of the Coupons (if any) relating thereto, (i) to the substitution of any Group Company in place of the Issuer as principal debtor in respect of the Notes of any Series or (ii) to the substitution in place of the Issuer as principal debtor, or of any Guarantor, of any successor in business (as defined in the Trust Deed) of the Issuer or, as the case may be, that Guarantor. It is a condition of any such substitution that such Notes, Receipts and Coupons (if any) relating thereto thereupon become or remain, as the case may be, unconditionally and irrevocably guaranteed on a joint and several basis by N.V. (except where N.V. is the new principal debtor), PLC (except where PLC is the new principal debtor) and UNUS (except where UJH is the new principal debtor).
So long as any Notes remain outstanding (as defined in the Trust Deed), neither UJH nor N.V. nor PLC will merge with, or transfer all or substantially all of its assets or undertaking to, another company (except where UJH, N.V. or PLC, as the case may be, is the continuing company) unless that other company agrees, in form and manner reasonably satisfactory to the Trustee, to be bound by the terms of the Notes, Receipts and the Coupons (if any) appertaining thereto and the Trust Deed in place of UJH or, as the case may be, N.V. or PLC and the Trustee is satisfied that the conditions set out in the Trust Deed are complied with.
In considering the interests of the Noteholders for the purposes of any substitution, merger or transfer as aforesaid the Trustee shall not have regard to the consequences for individual Noteholders resulting from their being for any purpose domiciled or resident in, or otherwise connected with, or subject to the jurisdiction of, any particular territory or any political subdivision thereof.
16 | Indemnification of the Trustee |
The Trust Deed contains provisions for the indemnification of the Trustee and for its relief from responsibility, including provisions relieving it from taking proceedings to enforce repayment unless indemnified to its satisfaction. The Trustee is entitled to enter into business transactions with N.V., PLC, UJH, UNUS and/or any Group Company without accounting to any Noteholders, Receiptholders or Couponholders for any profit resulting therefrom.
17 | Further Issues and Additional Issuers |
(A) | The Issuer may, from time to time, without the consent of the Holders of any Notes, Receipts or Coupons of any Series, create and issue further notes, bonds or debentures having the same terms and conditions as the Notes of an existing Series in all respects (or, in all respects except for the first payment of interest, if any, on them and/or the denomination thereof) so as to form a single series with the Notes of the existing Series. |
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(B) | Subject as provided in the Trust Deed, N.V. and PLC may designate any Group Company to become an Issuer of Notes under the Trust Deed. As provided in the Trust Deed, any such Group Company which is to become an Issuer of any Series of Notes shall become such under the terms of a supplemental deed in or substantially in the form scheduled to the Trust Deed (or in such other form as may be approved by the Trustee in writing) (which shall take effect in accordance with its terms) whereby such Group Company agrees to be bound as an Issuer under the Trust Deed and the Paying Agency Agreement, all as more fully provided in the Trust Deed. |
18 | Governing Law |
The Trust Deed, the Paying Agency Agreement, the Notes, the Receipts and the Coupons, and any non-contractual obligations arising out of or in connection with them, are governed by, and will be construed in accordance with, English law.
19 | Jurisdiction |
The Issuer and the Guarantors (other than PLC) have, in the Trust Deed, submitted to the jurisdiction of the English courts, save that where the Notes, Receipts or Coupons are denominated in the lawful currency of Switzerland and in respect of which it is specified in the relevant Final Terms that such Notes, Receipts or Coupons are to be listed on the SIX Swiss Exchange the Issuers and the Guarantors have, in the Trust Deed, submitted to the non-exclusive jurisdiction of the ordinary courts of the Canton of Zurich, place of jurisdiction being Zurich 1, Switzerland, for all purposes in connection with the Trust Deed, the Notes, the Receipts and the Coupons.
20 | Rights of Third Parties |
No person shall have any right to enforce any term or condition of the Notes under the Contracts (Rights of Third Parties) Act 1999.
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The Fifth Schedule
Form of Supplemental Deed increasing Programme Limit
This deed made the [] day of [], [] between:
(1) | UNILEVER N.V., UNILEVER PLC, UNILEVER JAPAN HOLDINGS K.K. and UNILEVER UNITED STATES, INC.; and |
(2) | THE LAW DEBENTURE TRUST CORPORATION p.l.c. as Trustee. |
Supplemental to a Trust Deed dated 22 July 1994 made between the parties hereto relating to a Programme for the Issuance of Debt Instruments witnesses that the limit of U.S.$15,000,000,000 imposed by Clause 2(A) of the said Trust Deed as amended by Deeds supplemental thereto dated 24 July 1995, 11 July 1996, 13 November 1997, 11 November 1998, 4 July 2000, 2 July 2001, 1 July 2002, 27 June 2003, 2 June 2004, 10 August 2005, 15 May 2007, 13 May 2008, 11 May 2009, 6 May 2010, 5 May 2011, 4 May 2012, 3 May 2013, 2 May 2014, 1 May 2015 and 22 April 2016 is hereby increased to U.S.$[].
In witness thereof the parties hereto have executed this Deed as a deed the day and year first above written.
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The Sixth Schedule
Form of Supplemental Deed joining a New Issuer
This Supplemental Deed is made this [] day of [], [] by:
(1) | [] a company incorporated in [] having its registered office at [] (the New Issuer); |
(2) | UNILEVER N.V., a company incorporated under the laws of The Netherlands, whose corporate seat is in Rotterdam and its address at Weena 455, 3013 AL, Rotterdam, The Netherlands, UNILEVER PLC, a company incorporated under the laws of England, whose registered office is at Port Sunlight, Wirral, Merseyside CH62 4UJ, United Kingdom, UNILEVER JAPAN HOLDINGS K.K., a company incorporated under the laws of Japan, whose registered office is at 1-1, Kamimeguro 2-chome, Meguro-ku, Tokyo 153-8578, Japan and UNILEVER UNITED STATES, INC., a company incorporated under the laws of the State of Delaware, United States of America, whose registered office is at 1209 Orange Street, Wilmington, Delaware 19801, United States of America; |
(3) | THE LAW DEBENTURE TRUST CORPORATION p.l.c., a company incorporated under the laws of England, whose registered office is at Fifth Floor, 100 Wood Street, London EC2V 7EX (the Trustee); |
(4) | [] in its capacity as principal paying agent (the Principal Paying Agent, which expression shall include any successor to [] in its capacity as such); and |
(5) | [] and [] in their capacities as paying agents (the Paying Agents, which expression shall include the Principal Paying Agent and any substitute or additional paying agents so appointed). |
Whereas:
(A) | This Supplemental Deed is supplemental to the trust deed dated 22 July 1994 made between Unilever N.V., Unilever PLC and Unilever Japan Holdings K.K. as issuers (the Original Issuers), Unilever PLC, Unilever N.V. and Unilever United States, Inc. as guarantors (the Original Guarantors) and the Trustee (such trust deed, as from time to time amended and restated or supplemented in accordance with its terms being referred to herein as the Trust Deed) and to the paying agency agreement dated 22 July 1994 made between the Original Issuers, the Original Guarantors, the Trustee, the Principal Paying Agent and the Paying Agents (such paying agency agreement, as from time to time amended and restated or supplemented with the prior consent of the Trustee being referred to herein as the Paying Agency Agreement). |
(B) | The New Issuer is a Group Company of Unilever N.V. and Unilever PLC. |
(C) | At the request of [], the New Issuer wishes to execute this Supplemental Deed (being a deed supplemental to the Trust Deed in order to become an Issuer as defined in the Trust Deed) and pursuant to the provisions therein contained, and pursuant to the provisions contained in the Paying Agency Agreement. |
(D) | Each of the Agents (as defined in Clause 1 hereof) wishes, pursuant to the terms of the Paying Agency Agreement to act as an agent (in the capacity in which it has been appointed under the Paying Agency Agreement and in accordance with the terms thereof) of [] which becomes an Issuer pursuant to, and in the manner provided in, Clause 17(E) of the Trust Deed. |
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(E) | [] has agreed to guarantee the payment of all moneys payable by the New Issuer under the Trust Deed and in respect of any Notes issued by the New Issuer in the manner appearing hereunder and under the Trust Deed. |
(F) | [The Trustee has received legal opinion(s) from legal counsel in the country of incorporation of the New Issuer and of [] and from legal counsel in England, reasonably satisfactory to it, to the effect, inter alia, that the New Issuer and [] each have the capacity and power to enter into this supplemental deed and that, when executed and delivered by such New Issuer and [], this supplemental deed will constitute valid and legally binding obligations of such New Issuer.]37 |
Now therefore this Supplemental Deed witnesseth and it is hereby declared as follows:
1 | Definitions and Interpretations |
(A) | In this Supplemental Deed, any reference to Agents is to the Principal Paying Agent and the other Paying Agents. |
(B) | To the extent to which the same are applicable and unless otherwise defined herein, the definitions and provisions contained in Clause 1 of the Trust Deed shall apply to and be incorporated in this Supplemental Deed (including the recitals hereto). |
Acknowledgement by New Issuer
The New Issuer hereby appoints the Trustee (and the Trustee hereby accepts such appointment) to act as Trustee on the same terms as set out in the Trust Deed.
Guarantee
[] hereby confirms that the guarantee contained in Clause 8 of the Trust Deed applies to all amounts owing by the New Issuer under or pursuant to the Trust Deed and any Notes, Receipts or Coupons appertaining thereto.
Appointment of Agents
The New Issuer hereby appoints each of the Agents as its agent on the same terms set out in the Paying Agency Agreement and each of the Agents accepts its appointment as agent of the New Issuer in relation to any Notes issued by the New Issuer and shall comply with the terms and conditions applicable thereto, the provisions of the Paying Agency Agreement and, in connection therewith, shall take all such action as may be incidental thereto.
Incorporation of Terms
It is declared that there shall be deemed to be incorporated in this Supplemental Deed all the covenants, undertakings, powers, obligations and/or other provisions of the Trust Deed, the Schedules thereto, the Conditions and the Paying Agency Agreement relating to or affecting the Issuers in the same manner and to the same extent as if the same had been, mutatis mutandis, set out in full in this Supplemental Deed and made applicable to
37 | Recital (F) and Clause 6 of this Supplemental Deed are alternatives, one of which (to be determined by the Trustee) should be deleted. |
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the New Issuer, and (without prejudice to the generality of the foregoing) the New Issuer accordingly covenants:
(i) | in favour of the Trustee to duly perform and observe and be bound by the said covenants, undertakings, powers, obligations and/or other provisions imposed on or relating to or affecting it by or under the Trust Deed or the Schedules or the Conditions; and |
in favour of the Trustee and each of the Agents, to duly perform and observe and be bound by the said covenants, undertakings, powers, obligations and/or other provisions imposed on or relating to or affecting it by or under the Paying Agency Agreement.
[Conditions
This Supplemental Deed shall not take effect unless and until the Trustee shall have received opinions of legal counsel in the country of incorporation of the New Issuer and of [] and in England, reasonably satisfactory to it, to the effect, inter alia, that the New Issuer and [] each have the capacity and power to enter into this Supplemental Deed and that this Supplemental Deed constitutes valid and legally binding obligations of the New Issuer and [].]
Counterparts
This Supplemental Deed may be executed in any number of counterparts, each of which shall be identical and all of which, when taken together, shall constitute one and the same instrument and any one of the parties hereby may execute this Supplemental Deed by signing any such counterpart.
Governing Law
This Supplemental Deed, and any non-contractual obligations arising out of or in connection with it, is governed by, and shall be construed in accordance with, the laws of England.
[Jurisdiction
In relation to all claims arising hereunder (including a claim relating to any non-contractual obligations arising out of or in connection with this Supplemental Deed) [] severally agree that the courts of England are to have jurisdiction to settle any such claim and that accordingly any suit, action or proceedings (together referred to as Proceedings) arising hereunder may be brought in such courts, save that in respect of Notes issued under the Trust Deed which are denominated in the lawful currency of Switzerland and in respect of which it is specified in the relevant Final Terms that such Notes are to be listed on the SIX Swiss Exchange, each of the parties hereto irrevocably agrees, for the benefit only of the Trustee and the holders of such Notes that the ordinary courts of the Canton of Zurich, place of jurisdiction being Zurich 1, Switzerland, shall have non-exclusive jurisdiction to hear and determine Proceedings. Nothing contained in this Clause shall limit any right to take proceedings against [] in any other court of competent jurisdiction, nor shall the taking of Proceedings in one or more jurisdictions preclude the taking of Proceedings in any other jurisdiction, whether concurrently or not. Each of [] irrevocably agrees that any legal proceedings or any demand or any notice may be made or served on it by the same being posted in a prepaid registered or recorded delivery letter addressed to it at the
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address set out in Clause 32 of the Trust Deed for the time being of Unilever PLC (or at such other office as it may have notified in writing to the Trustee and as the Trustee shall from time to time have approved) and marked for the attention of the Group Secretary of Unilever PLC or such other official of Unilever PLC as [] may have notified in writing to the Trustee and the Trustee shall from time to time have approved.]
In witness where of this Supplemental Deed has been executed as a deed by the parties hereto and is intended to be and is hereby delivered on the date first above written.
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The Seventh Schedule
Form of Supplemental Deed releasing an Issuer
This Supplemental Deed is made this [] day of [],[] by:
(1) | [] a duly incorporated company having its [registered office at []]1 [corporate seat in Rotterdam, The Netherlands]2 (the Retiring Issuer); |
(2) | THE LAW DEBENTURE TRUST CORPORATION p.l.c., a company incorporated under the laws of England, whose registered office is at Fifth Floor, 100 Wood Street, London EC2V 7EX (the Trustee); |
(3) | [] in its capacity as principal paying agent (the Principal Paying Agent, which expression shall include any successor to [] in its capacity as such); |
(4) | [] and [] in their capacities as paying agents (the Paying Agents, which expression shall include the Principal Paying Agent and any substitute or additional paying agents so appointed). |
Whereas:
(A) | This supplemental deed is supplemental to the trust deed dated 22 July 1994 made between Unilever N.V., Unilever PLC and Unilever Japan Holdings K.K. as Issuers (the Original Issuers), Unilever PLC and Unilever N.V. and Unilever United States, Inc. as Guarantors (the Original Guarantors) and the Trustee (such trust deed, as from time to time amended and restated or supplemented in accordance with its terms being referred to herein as the Trust Deed) and to the paying agency agreement dated 22 July 1994 made between the Original Issuers, the Original Guarantors, the Trustee, the Principal Paying Agent and the other Paying Agents (such paying agency agreement, as from time to time amended and restated or supplemented with the prior consent of the Trustee being referred to herein as the Paying Agency Agreement). |
(B) | [There are not outstanding any Notes issued by the Retiring Issuer.]/[] has assumed the obligations under the Notes.]3 |
(C) | At the request of the Retiring Issuer, the Trustee has agreed to execute this supplemental deed in order to release the Retiring Issuer from its obligations, undertakings and covenants under the Trust Deed. |
(D) | The Trustee and each of the Agents (as defined in Clause 1 of these presents) have agreed that the Retiring Issuer shall be released from its obligations, undertakings and covenants under the Paying Agency Agreement upon the execution and delivery of this supplemental deed. |
Now therefore this Supplemental Deed witnesseth and it is hereby declared as follows:
1
(A) | In this supplemental deed, any reference to Agents is to the Principal Paying Agent and the other Paying Agents as such expressions are defined in the Paying Agency Agreement. |
1 | Delete if N.V. is the Retiring Issuer. |
2 | Include if N.V. is the Retiring Issuer. |
3 | Delete as applicable. |
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(B) | To the extent to which the same are applicable, the definitions and provisions contained in Clause 1 of the Trust Deed shall apply to and be incorporated in this supplemental deed (including the recitals hereto). |
At the request of the Retiring Issuer:
(a) | the Trustee hereby releases the Retiring Issuer from its obligations, undertakings and covenants under the Trust Deed; and |
the Trustee and each of the Agents hereby releases the Retiring Issuer from its obligations, undertakings and covenants under the Paying Agency Agreement.
The release of the Retiring Issuer shall not affect any accrued rights and liabilities as between the Retiring Issuer, the Trustee and the Agents pursuant to the Trust Deed and the Paying Agency Agreement.
This supplemental deed may be executed in any number of counterparts, each of which shall be identical and all of which, when taken together, shall constitute one and the same instrument and any one of the parties hereby may execute this supplemental deed by signing any such counterpart.
This supplemental deed, and any non-contractual obligations arising out of or in connection with it, is governed by, and shall be construed in accordance with, the laws of England.
In witness whereof this supplemental deed has been executed as a deed by the parties hereto and is intended to be and is hereby delivered on the date first above written.
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The Eighth Schedule
Provisions for Meetings of Holders of Notes
1
(A) | As used in this Schedule, the following expressions shall have the meanings hereinafter mentioned unless the context otherwise requires: |
(1) | voting certificate shall mean a certificate in the English language issued by any Paying Agent and dated, in which it is stated: |
(a) | that on the date thereof, Notes of any Series (not being Notes in respect of which a block voting instruction has been issued and is outstanding in respect of the meeting specified in such voting certificate or any adjournment thereof) of the principal amount(s) specified and bearing specified serial numbers have been deposited with such Paying Agent and that no such Notes will be released until the first to occur of: |
(i) | the conclusion of the meeting specified in such certificate or if applicable any adjournment thereof or any poll taken on any resolution proposed thereat (whichever is the later); and |
(ii) | the surrender of the voting certificate to the Paying Agent who issued the same; or |
that until the release of the Notes represented thereby the bearer thereof is entitled to attend and vote at such meeting or any adjournment thereof in respect of the Notes represented by such certificate;
(2) | block voting instruction shall mean a document in the English language issued by any Paying Agent and dated, in which: |
(a) | it is certified that Notes of the relevant Series (not being Notes in respect of which a voting certificate has been issued and is outstanding in respect of the meeting specified in such block voting instruction or any adjournment thereof) have been deposited with such Paying Agent and that no such Bearer Notes will be released until the first to occur of: |
(i) | the conclusion of the meeting specified in such document or if applicable any adjournment thereof or any poll taken on any resolution proposed thereat (whichever is the later); and |
(ii) | the surrender, not less than 48 hours before the time for which such meeting or adjourned meeting is convened or poll called, of the respective receipts to the Paying Agent who issued the same in respect of each such deposited Note which is to be released coupled with notice from the Paying Agent to the relevant Issuer of such surrender; |
it is certified that each depositor of such Notes has instructed such Paying Agent that the vote(s) attributable to his or its Notes so deposited should be cast in a particular way in relation to the resolution or resolutions to be put to such meeting or any adjournment thereof and that all such
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instructions are, during the period of 48 hours prior to the time for which such meeting or adjourned meeting is convened, neither revocable nor subject to amendment;
the total number, the principal amounts and the certificate numbers of the Notes so deposited are listed, distinguishing with regard to principal amount and with regard to each such resolution between those in respect of which instructions have been given as aforesaid that the votes attributable thereto should be cast in favour of the resolution, and those in respect of which instructions have been given that the votes attributable thereto should be cast against the resolution; and
one or more persons named in such document (hereinafter called a proxy) is or are authorised and instructed by such Paying Agent to cast the votes attributable to the Notes so listed in accordance with the instructions referred to in (c) above as set out in such document.
(B) | Voting certificates and block voting instructions shall only be issued in respect of Notes deposited with any Paying Agent not less than 48 hours before the time for which the meeting or the poll to which the same relate has been convened or called and shall be valid only for so long as the relevant Notes will not be released pursuant to this paragraph 1 hereof and during the validity thereof the Holder of any such voting certificate or (as the case may be) the proxy or proxies named in any block voting instruction shall, for all purposes in connection with any meeting of Holders of Notes, be deemed to be the Holder of the Notes of the relevant Series to which such voting certificate or block voting instruction relates and the Paying Agent with which such Notes have been deposited shall nevertheless be deemed for such purposes not to be the Holder of those Notes. |
The Trustee, the relevant Issuer or the relevant Guarantors at any time may, and the Trustee shall (subject to its being indemnified to its satisfaction against all costs and expenses thereby occasioned) upon a request in writing at the time by Holders of Notes holding not less than one-tenth of the principal amount outstanding of the Notes of any particular Series for the time being outstanding shall, convene a meeting of the Holders of Notes of such Series. Whenever the relevant Issuer or the relevant Guarantors is or, as the case may be, are about to convene any such meeting it shall forthwith give notice in writing to the Trustee of the day, time and place thereof and of the nature of the business to be transacted thereat. Every such meeting shall be held at such place as the Trustee may approve.
At least 21 days notice (exclusive of the day on which the notice is given and of the day on which the meeting is held) specifying the day, time and place of meeting shall be given to the Holders of the Notes of the relevant Series in the manner provided in the Conditions. A copy of the notice shall be given to the Trustee unless the meeting shall be convened by the Trustee, and to the relevant Issuer or the relevant Guarantors unless the meeting shall be convened by such relevant Issuer or the relevant Guarantors. Such notice shall be given in the manner provided in these presents and shall, unless in any particular case the Trustee otherwise agrees, specify the terms of the resolutions to be proposed and shall include to the extent applicable to the relevant Series, inter alia, statements to the effect that Notes of the relevant Series may be deposited with any Paying Agent for the purpose of obtaining voting certificates or appointing proxies until 48 hours before the time fixed for the meeting but not thereafter.
A person (who may, but need not, be the Holder of a Note of the relevant Series) nominated in writing by the Trustee shall be entitled to take the chair at every such meeting but if no such nomination is made or if at any meeting the person nominated shall not be present within 15 minutes after the time appointed for the holding of such meeting the Holders of Notes present shall
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choose one of their number to be chairman and, failing such choice, the relevant Issuer may appoint a chairman who may, but need not, be the Holder of a Note.
At any such meeting two or more persons present in person holding Notes of the relevant Series and/or voting certificates and/or being proxies or representatives and being or representing in the aggregate a clear majority in principal amount of the Notes of the relevant Series for the time being outstanding shall form a quorum for the action of business and no business (other than the choosing of a chairman) shall be transacted at any meeting unless the requisite quorum be present at the commencement of business. The quorum at any such meeting for passing an Extraordinary Resolution shall (subject as provided below) be two or more persons present in person holding Notes of the relevant Series or voting certificates or being proxies and holding or representing in the aggregate a clear majority in principal amount of the Notes of the relevant Series for the time being outstanding; PROVIDED THAT at any meeting the business of which includes any of the following matters (each of which shall only be capable of being effected after having been approved by Extraordinary Resolution) namely:
(i) | varies the date of maturity or any date of redemption of any of the Notes of the relevant Series or any date for payment of any principal or interest in respect thereof; or |
reduces or cancels the principal amount of the Notes of the relevant Series, varies any provision regarding the calculation of the amount or the rate of interest payable thereon or varies the rate of discount, rate of amortisation or any other rate of return applicable thereto or reduces the amount of principal or interest payable on any date; or
modifies the provisions contained in this Schedule concerning the quorum required at any meeting of Holders of Notes in respect of the Notes of the relevant Series or any adjournment thereof or concerning the majority required to pass an Extraordinary Resolution; or
varies the currency in which any payment (or other obligation) in respect of the Notes of the relevant Series is to be made; or
amends this proviso in any manner,
the quorum shall be two or more persons present holding Notes or voting certificates or being proxies and holding or representing in the aggregate not less than 66 per cent. of the principal amount of the Notes of the relevant Series for the time being outstanding.
If within half an hour from the time appointed for any such meeting a quorum is not present the meeting shall, if convened upon the requisition of Holders of Notes, be dissolved. In any other case it shall be adjourned for such period, not being less than fourteen days nor more than 42 days, and to such time and place as may be appointed by the chairman. Save as otherwise provided in the proviso to this paragraph, at such adjourned meeting two or more persons present in person holding Notes of the relevant Series and/or voting certificates and/or being proxies or representatives (whatever the principal amount of the Notes so held or represented) shall form a quorum and shall have the power to pass any resolution and to decide upon all matters which could properly have been dealt with at the meeting from which the adjournment took place had a quorum been present at such meeting Provided that at any adjourned meeting the business of which includes any of the matters specified in the proviso to paragraph 5 above, the quorum shall be two or more persons present holding Notes or voting certificates or being proxies or representatives and holding or representing in the aggregate no less than 33 per cent. of the principal amount of the Notes of the relevant Series for the time being outstanding.
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The chairman may with the consent of (and shall if directed by) any meeting adjourn the same from time to time and from place to place but no business shall be transacted at any adjourned meeting except business which might lawfully have been transacted at the meeting from which the adjournment took place.
At least fourteen days notice of any meeting adjourned through want of a quorum shall be given in the same manner as for an original meeting and such notice shall state the quorum required at such adjourned meeting. Subject as aforesaid, it shall not be necessary to give any notice of an adjourned meeting.
Every question submitted to a meeting shall be decided in the first instance by a show of hands and in case of equality of votes the chairman shall both on a show of hands and on a poll have a casting vote in addition to the vote or votes (if any) to which he may be entitled as a Holder of a Note or as a Holder of a voting certificate and/or as a proxy.
At any meeting, unless a poll is (before or on the declaration of the result of the show of hands) demanded by the chairman or the relevant Issuer or the relevant Guarantors or by one or more persons holding one or more Notes of the relevant Series or voting certificates and/or being proxies or representatives and holding or representing in the aggregate not less than one-fiftieth part of the principal amount outstanding of the Notes of the relevant Series for the time being outstanding, a declaration by the chairman that a resolution has been carried or carried by a particular majority or lost or not carried by any particular majority shall be conclusive evidence of the fact without proof of the number or proportion of the votes recorded in favour of or against such resolution.
If at any meeting a poll is so demanded, it shall be taken in such manner and (subject as hereinafter provided) either at once or after such an adjournment as the chairman directs and the result of such poll shall be deemed to be the resolution of the meeting at which the poll was demanded as at the date of the taking of the poll. The demand for a poll shall not prevent the continuance of the meeting for the transaction of any business other than the question on which the poll has been demanded.
Any poll demanded at any meeting on the election of a chairman or on any question of adjournment shall be taken at the meeting without adjournment.
The Trustee, the relevant Issuer and the relevant Guarantors (through their respective representatives) and their respective financial and legal advisers shall be entitled to attend and speak at any meeting of the Holders of Notes. Save as aforesaid, no person shall be entitled to attend or vote at any meeting of the Holders of Notes or to join with others in requesting the convening of such a meeting unless he is the Holder of a voting certificate or is a proxy or representative.
Neither the relevant Issuer nor the relevant Guarantors nor any of their group companies shall be entitled to vote in respect of Notes held by or on its behalf but this shall not prevent any proxy or representative named in the block voting instructions from being a director, officer or representative of, or otherwise connected with, the relevant Issuer, the relevant Guarantors or any of their group companies.
(a) | Subject as provided in paragraph 13 above, at any such meeting (a) on a show of hands every person who is present in person or who produces his appointment as a representative or a Note or a voting certificate or who is a proxy, shall have one vote and (b) on a poll every person who is so present shall have one vote in |
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respect of each U.S.$1 (a Unit) of Notes of the relevant Series so produced or represented by the voting certificate so produced or in respect of which he is a proxy. Without prejudice to the obligations of the proxies named in any block voting instruction or form of proxy, any person entitled to more than one vote need not use all his votes or cast all the votes to which he is entitled in the same way. |
If any Issuer shall have issued and have outstanding Notes which are not denominated in U.S. dollars, in the case of any meeting of holders of Notes of more than one currency, the amount of such Notes shall (i) for the purposes of paragraph 22 below be the equivalent in U.S. dollars at the spot rate of a bank nominated by the Trustee for the conversion of the relevant currency or currencies to U.S. dollars on the day on which the request in writing or instrument in writing is received by the Trustee or if that is not a day on which banks and foreign exchange markets are open in London, the next following such day and (ii) for the purposes of paragraphs 5, 6, 10 and 14(a) above and paragraph 17 below (whether in respect of the meeting, or any adjournment thereof or any poll resulting therefrom) be the equivalent at such spot rate on the Business Day (as defined in Condition 8B(1)) prior to the day of such meeting. In such circumstances, and where Notes denominated in U.S. dollars but of different amounts are to be treated together for the purposes of this Schedule, on any poll each person present shall have one vote for every U.S.$1 in principal amount of the Notes (converted as above) held.
A proxy named in any block voting instruction need not be a Holder of any Note.
Each block voting instruction and each form of proxy, together (if so required by the Trustee) with proof satisfactory to the Trustee of its due execution on behalf of the relevant Paying Agent, shall be deposited at the registered office of the relevant Issuer (or at such other place as the Trustee shall designate or approve) not less than 24 hours before the time appointed for holding the meeting or adjourned meeting or for the taking of the poll at which the proxy named in the block voting instruction or form of proxy proposes to vote and in default the block voting instruction or form of proxy shall not be treated as valid unless the chairman of the meeting decides otherwise before such meeting or adjourned meeting or poll proceeds to business. A notarially certified copy of each such block voting instruction and form of proxy and satisfactory proof as aforesaid (if applicable) shall be deposited with the Trustee before the commencement of the meeting, adjourned meeting or poll but the Trustee shall not thereby be obliged to investigate or be concerned with the validity of, or the authority of the proxy named in, any such block voting instruction or form of proxy.
Any vote given in accordance with the terms of a block voting instruction or form of proxy shall be valid notwithstanding the previous revocation or amendment of the block voting instruction or form of proxy or of any of the Noteholders instructions pursuant to which it was executed; provided that no intimation in writing of such revocation or amendment shall have been received from the Principal Paying Agent by the relevant Issuer at its registered office or by the chairman of the meeting in each case not less than 24 hours before the commencement of the meeting or adjourned meeting at which the block voting instruction or form of proxy is intended to be used.
A meeting of the Holders of Notes shall, in respect of the Notes of the relevant Series and subject to the provisions contained in the Conditions, in addition to the powers hereinbefore given, but without prejudice to any powers conferred on other persons by these presents, have the following powers exercisable by Extraordinary Resolution namely:
(a) | to sanction any proposal by the relevant Issuer or the relevant Guarantors for any modification, abrogation, variation or compromise of, or arrangement in respect of, the rights of the Holders of Notes and/or the Receiptholders and/or the |
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Couponholders in respect of the Notes of the relevant Series, against the relevant Issuer and/or Guarantors whether such rights shall arise under these presents, the Notes, the Receipts or Coupons (if any) of that Series or otherwise; |
power to sanction any scheme or proposal for the exchange or sale of the Notes of any Series, for the conversion of the Notes of any Series, into or the cancellation of the Notes of any Series, in consideration of, shares, stock, bonds, notes, debentures, debenture stocks and/or other obligations and/or securities of the relevant Issuer or any other company formed or to be formed, or for or into or in consideration of cash, or partly for or into or in consideration of such shares, stock, bonds, notes, debentures, debenture stock and/or other obligations and/or securities as aforesaid and partly for or into or in consideration of cash;
to assent to any modification or alteration of the provisions contained in the Notes or the Coupons of the relevant Series, the Conditions thereof or these presents which shall be proposed by the relevant Issuer, the relevant Guarantors or the Trustee;
to waive or authorise any breach or proposed breach by the relevant Issuer or the relevant Guarantors of its or their obligations under the Conditions applicable to the Notes of the relevant Series or these presents or determine that any act or omission which might otherwise constitute an Event of Default under the Conditions applicable to the Notes of the relevant Series shall not be treated as such;
to authorise the Trustee to concur in and execute and do all such documents, acts and things as may be necessary to carry out and give effect to any Extraordinary Resolution;
to give any authority, direction or sanction which under these presents or the Conditions applicable to the Notes of the relevant Series is required to be given by Extraordinary Resolution;
to appoint any persons (whether Holders of Notes or not) as a committee or committees to represent the interests of the Holders of Notes in respect of the Notes of the relevant Series and to confer upon such committee or committees any powers or discretions which such Holders of Notes could themselves exercise by Extraordinary Resolution;
to approve a person proposed to be appointed a new Trustee under these presents and to remove any Trustee or Trustees for the time thereof; and
to discharge or exonerate the Trustee from any liability in respect of any act or omission for which the Trustee may have become responsible under these presents or under the Notes of the relevant Series.
An Extraordinary Resolution passed at a meeting of the Holders of Notes in respect of the Notes of the relevant Series duly convened and held in accordance with these presents shall be binding upon all the Holders of Notes of the relevant Series, whether present or not present at such meeting, and upon all the Receiptholders and Couponholders in respect of Notes of the relevant Series and each of the Holders of Notes and Receiptholders and Couponholders shall, in respect of the Notes of that Series, be bound to give effect thereto accordingly. The passing of any such resolution shall be conclusive evidence that the circumstances of such resolution justify the passing thereof.
The expression Extraordinary Resolution when used in these presents means a resolution passed at a meeting of the Holders of Notes in respect of the Notes of the relevant Series duly convened and held in accordance with the provisions contained herein by a majority consisting of not less than three-fourths of the votes cast thereon or an instrument or instruments in writing
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signed by the Holder or Holders of not less than 75 per cent. of the Notes of the relevant Series for the time being outstanding.
If and whenever an Issuer shall have issued and have outstanding any Notes which do not form one single Series then the foregoing provisions of this Schedule shall have effect subject to the following modifications:
(i) | a resolution which in the opinion of the Trustee affects one Series only of the Notes shall be deemed to have been duly passed if passed at a separate meeting of the Holders of the Notes of the relevant Series; |
a resolution which in the opinion of the Trustee affects more than one Series of the Notes but does not give rise to a conflict of interest between the Holders of Notes of any of the Series affected shall be deemed to have been duly passed if passed at a single meeting of the Holders of the Notes of all Series so affected;
a resolution which in the opinion of the Trustee affects more than one Series of Notes and gives or may give rise to a conflict of interest between the Holders of the Notes of one Series or group of Series so affected and the Holders of the Notes of another Series or group of Series so affected shall be deemed to have been duly passed only if in lieu of being passed at a single meeting of the Holders of the Notes of all such Series it shall be duly passed at separate meetings of the Holders of the Notes of each Series so affected; and
to all such meetings as aforesaid all preceding provisions of this Schedule shall, mutatis mutandis, apply as if references therein to Notes and Noteholders or Holders of Notes of the relevant Series were references to the Notes of the Series or group of Series in question and to the Holders of such Notes respectively.
Minutes of all resolutions and proceedings at every such meeting as aforesaid shall be made and duly entered in books to be from time to time provided for that purpose by the relevant Issuer or the Trustee and any such minutes as aforesaid, if purporting to be signed by the chairman of the meeting at which such resolutions were passed or proceedings transacted or by the chairman of the next succeeding meeting of the Holders of Notes in respect of the Notes of the relevant Series, shall be conclusive evidence of the matters therein contained and until the contrary is proved every such meeting in respect of the proceedings of which minutes have been made and signed as aforesaid shall be deemed to have been duly held and convened and all resolutions passed or proceedings transacted thereat to have been duly passed and transacted.
Subject to all other provisions contained in these presents, the Trustee may by agreement with N.V. and PLC, without the consent of the Noteholders, the Receiptholders or the Couponholders, prescribe such further regulations regarding the holding of meetings of Noteholders and attendance and voting thereat as the Trustee may in its discretion determine.
So long as the Notes of the relevant Series are represented by any Notes in global form, the Holder of the relevant Notes in global form shall for the purposes of this Schedule be deemed to be two persons and, at any such meeting, as having one vote in respect of each Unit for which such Notes in global form may be exchanged.
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Exhibit 4.3
Unilever PLC Unilever House Blackfriars London EC4P 4BQ
T: +44 (0)20 7822 5252 F: +44 (0)20 7822 5951 www.unilever.com |
STRICTLY PERSONAL AND CONFIDENTIAL
Mr Graeme Pitkethly
14 March 2016
Dear Graeme,
Your reward package effective 1 January 2016
This letter is to confirm your reward package as from 1 January 2016 as approved by the Compensation Committee (the Committee). The Committee set your reward package prior to your appointment with effect from 1 October 2015, and has agreed that no changes will be made for 2016.
2016 base salary
Your annual base salary for 2016 will remain unchanged at £625,000.
2015 annual bonus
Your total bonus of £470,867 gross for 2015 was calculated as follows:
Period as WL5
In respect of the period from 1 January 2015 to 30 September 2015, your gross bonus award is £298,992. This figure is based on a target bonus of 70%, a PDP rating of 3 (Personal Performance Multiplier of 110%) and a Business Differentiation Factor of 132% applied to your pro-rated grossed up WL5 salary of GBP 392,224.
Period as WL6
In respect of the period from 1 October 2015 to 31 December 2015, your gross bonus award is £171,875 (110% of your pro-rated salary i.e. 100% of salary (target bonus) x 100% (individual multiplier) x 110% (business differentiation factor)).
The cash portion of your pro-rated WL5 annual bonus and your WL6 annual bonus is payable in the March 2016 payroll.
2016 annual bonus
Your target bonus for 2016 will continue to be 100% of base salary and your maximum bonus continues to be 150% of your base salary.
The performance measures for 2016 for the annual bonus plan are:
Page 1 of 12
Performance measure |
Weighting | |||
Underlying Sales Growth |
1/3 | |||
Free Cash Flow |
1/3 | |||
Core Operating Margin (vs PY) |
1/3 |
Details of the performance targets for the annual bonus plan as approved by the Committee will be communicated to you separately. The Committee will assess Unilevers 2016 business performance not only against these performance targets but also relative to the overall quality and competitiveness of our performance delivery.
Your personal bonus will then be based both on the Committees assessment of overall business performance and your personal achievement against your stretching, ambitious, and output-oriented 3+1 goals.
2016 long-term incentives
For executive directors, our long term incentive program consists of two vehicles:
| The Management Co-Investment Plan (MCIP), and |
| The Global Share Incentive Plan (GSIP). |
2016 MCIP
Under this plan, 25% of your gross annual bonus will be invested in Unilever shares, although you may elect to invest up to 60% of your earned bonus.
The invested shares must be held for a period of three years and Unilever will match this investment with an award of an equal number of performance shares. The vesting of these matching performance shares will be between 0% and 150% contingent on the achievement of the same three-year performance targets as exist under our GSIP. The value of this award may be further enhanced by earning dividends / dividend equivalents during the vesting period.
2016 GSIP
Under the 2016 GSIP, you have been made a conditional award of shares worth £937,500 (150% of your 2016 base salary) which will vest between 0% and 200% three years from the award date based on company performance.
The performance measures for the Unilever Leadership Executive Team for 2016 are:
Performance measure |
Weighting | |||
Underlying Sales Growth (USG) |
25% | |||
Core Operating Margin (vs PY) (COM) |
25% | |||
Operating Cash Flow (Cumulative) |
25% | |||
Relative Total Shareholder Return |
25% |
The minimum of the performance range for USG and COM must be reached before any shares subject to either metric can vest. Details of the performance targets for the 2016 MCIP and GSIP awards as approved by the Committee will be communicated to you separately.
Fixed allowance in lieu of perquisites and benefits
Your annual fixed allowance for 2016 will remain unchanged at £200,000.
You also receive medical cover for you and your family via Unilever BUPA International medical arrangement.
You will continue to receive life insurance at GBP 2,955,680. The company will provide cover at three times your base salary and the excess cover of GBP 1,080,680 will be paid for by you.
You will continue to be provided with actual and reasonable costs of tax return preparation via Unilevers global Tax Advisor.
Pension
With effect from 1 October 2015, you have not been entitled to participate in any Unilever pension scheme.
Malus and clawback
Going forward, all performance-related remuneration awarded to you, including but not limited to your annual bonuses and awards granted under the MCIP and GSIP, will be subject to malus and clawback as set out below and subject to the rules of both the MCIP and the GSIP where applicable.
Malus
If the Committee considers:
(i) | there is a significant downward restatement of the financial results of Unilever; and/or |
(ii) | there is reasonable evidence of gross misconduct or gross negligence by you; and/or |
(iii) | there is reasonable evidence of material breach by you of Unilevers Code of Business Principles or Code Policies; and/or |
(iv) | there is reasonable evidence of conduct by you which results in significant losses or reputational damage to Unilever, |
the Committee may, in its discretion, at any time prior to your performance-related remuneration vesting or being paid, decide that some or all of your performance-related remuneration (which is subject to this malus and clawback provision) will be reduced, lapsed, will not vest or will only vest in part.
Clawback
If the Committee considers there is a significant downward restatement of the financial results of Unilever, it may in its discretion, within two years of your performance-related remuneration being paid or vesting:
(i) | require you to repay to Unilever (or as Unilever directs) an amount equal to the after-tax value of some or all of any cash bonus you were paid (as determined by the Commitee); and/or |
(ii) | require you to transfer to Unilever (or as Unilever directs) for nil consideration, some or all of the after-tax number of Unilever shares which have previously vested, or pay to Unilever (or as Unilever directs) an amount equal to the value of those shares (as determined by the Committee); and/or |
(iii) | require Unilever to withhold from, or offset against, any other remuneration to which you may be or become entitled in connection with your employment with Unilever such an amount as the Committee considers appropriate. |
Where you are notified you must transfer shares or pay an amount in accordance with this clawback provision, any shares or cash must be transferred or paid (in the manner directed by Unilever) within 30 days of the notification.
For the avoidance of doubt, in exercising its powers under this malus and clawback provision, the Committee, in its discretion, may apply different treatments to: (i) different employees; and/or (ii) different remuneration, and may apply such different treatment in combination.
Personal shareholding requirement
As previously communicated, in this role you are required to demonstrate a significant personal shareholding commitment to Unilever.
Within five years from 1 October 2015, you are required to raise and then maintain your personal shareholding in Unilever to at least three times your base salary.
As Executive Director you are required to hold shares to the value of 100% of your minimum shareholding requirement for 12 months post cessation of your employment at Unilever and 50% of these shares for 24 months post cessation of your employment with Unilever.
You will be deemed to have accepted the terms and conditions of this letter, including the operation of clawback and malus, and consent to any repayments, withholdings or deductions made in accordance with it, unless you provide written notice to Peter Newhouse, SVP Global Head of Reward by no later than 31 March 2016 (email to peter.newhouse@unilever.com) that you do not accept such terms.
With kind regards
/s/ Paulus Gerardus Josephus Maria Polman
Paul Polman
Chief Executive Officer
Appendix Application of personal shareholding requirement
Personal shareholding requirement
As part of Unilevers long-term incentive arrangements, it is a requirement that Board members and certain other managers build up a personal shareholding in Unilever. The following principles on shareholding have been agreed:
Date of commencement:
The personal shareholding must be built up over a period of five years commencing from the individuals first grant from the Global Share Incentive Plan (GSIP). Once the required level of personal shareholding has been achieved, this shareholding must be maintained (and increased, as necessary, as base salary levels increase or where shares are clawed back).
Qualifying shares:
Shares in either Unilever PLC or Unilever NV (or a combination of both) will qualify provided they are personally owned by the Director or by a member of his/her (immediate) family.
Shares purchased from the annual bonus (variable pay) programme will qualify as from the moment of purchase. Shares acquired under a restricted share/stock arrangement will qualify on a net of tax basis.
Shares awarded on a conditional basis by way of the GSIP, including those by way of the MCIP, will not qualify until the moment of vesting (i.e. once the precise number of shares is fixed after the three-year vesting period has elapsed).
Share options will not qualify until the shares in question have eventually been acquired (and retained) following the exercise of the option.
Value of shares to be taken into account:
The shares will be valued on the date of measurement, or if that outcome fails the personal shareholding test, on the date of acquisition. The share price for the relevant measurement date will be based on the average closing share prices and the euro/sterling/US dollar exchange rates from the 60 calendar days prior to the measurement date.
Salary on which shareholding requirement to be based:
The level of base salary at the date of measurement shall be used to assess the level of personal shareholding.
Level of personal shareholding:
The level of personal shareholding for you is three times base salary.
As an Executive Director you are required to hold shares to the value of 100% of your minimum shareholding requirement for 12 months post cessation of your employment at Unilever and 50% of these shares for 24 months post cessation of your employment with Unilever.
Monitoring of personal shareholding target:
Global Reward will monitor the level of personal shareholding.
The consequence of not having achieved the required shareholding will be that no awards under the GSIP will be made until the necessary shareholding has been built up.
Other matters:
It is not permitted to trade in options or derivatives over Unilever shares as this would be in conflict with our Share Dealing Standard.
Unilever PLC Unilever House Blackfriars London EC4P 4BQ
T: +44 (0)20 7822 5252 F: +44 (0)20 7822 5951 www.unilever.com |
STRICTLY PERSONAL AND CONFIDENTIAL
Mr Paul Polman
14 March 2016
Dear Paul,
Your reward package effective 1 January 2016
This letter is to confirm your reward package as from 1 January 2016 as approved by the Compensation Committee (the Committee).
2016 base salary
At your request, your annual base salary has remained unchanged at £1,010,000.
2015 annual bonus
In respect of 2015, your annual gross bonus award is £1,866,480 (185% of salary i.e. 120% of salary (target bonus) x 140% (individual multiplier) x 110% (business differentiation factor).
The cash portion of your annual bonus is payable in the March 2016 payroll.
2016 annual bonus
Your target bonus for 2016 will continue to be 120% of base salary and your maximum bonus continues to be 200% of your base salary.
The performance measures for 2016 for the annual bonus plan are:
Performance measure |
Weighting | |||
Underlying Sales Growth |
1/3 | |||
Free Cash Flow |
1/3 | |||
Core Operating Margin (vs PY) |
1/3 |
Details of the performance targets for the annual bonus plan as approved by the Committee will be communicated to you separately. The Committee will assess Unilevers 2016 business performance not only against these performance targets but also relative to the overall quality and competitiveness of our performance delivery.
Your personal bonus will then be based both on the Committees assessment of overall business performance and your personal achievement against your stretching, ambitious, and output-oriented 3+1 goals.
2016 long-term incentives
For executive directors, our long term incentive program consists of two vehicles:
| The Management Co-Investment Plan (MCIP), and |
| The Global Share Incentive Plan (GSIP). |
2016 MCIP
Under this plan, 25% of your gross annual bonus will be invested in Unilever shares, although you may elect to invest up to 60% of your earned bonus.
The invested shares must be held for a period of three years and Unilever will match this investment with an award of an equal number of performance shares. The vesting of these matching performance shares will be between 0% and 150% contingent on the achievement of the same three-year performance targets as exist under our GSIP. The value of this award may be further enhanced by earning dividends / dividend equivalents during the vesting period.
2016 GSIP
Under the 2016 GSIP, you have been made a conditional award of shares worth £2,020,000 (200% of your base salary) which will vest between 0% and 200% three years from the award date based on company performance.
The performance measures for the Unilever Leadership Executive Team for 2016 are:
Performance measure |
Weighting | |||
Underlying Sales Growth (USG) |
25% | |||
Core Operating Margin (vs PY) (COM) |
25% | |||
Operating Cash Flow (Cumulative) |
25% | |||
Relative Total Shareholder Return |
25% |
The minimum of the performance range for USG and COM must be reached before any shares subject to either metric can vest. Details of the performance targets for the 2016 MCIP and GSIP awards as approved by the Committee will be communicated to you separately.
Fixed allowance in lieu of perquisites and benefits
Your annual fixed allowance for 2016 will remain unchanged at £250,000, and will continue to be paid to you in lieu of car allowance, partner travel, entertainment allowance and company pension contribution.
You also receive medical cover for you and your family via the Allianz International medical arrangement when you and your family are outside of Switzerland. You will be covered by the Swiss Sanitas scheme when resident in Switzerland. You will also continue to receive life insurance cover at three times the salary used to calculate your pension benefit.
Pension
The company will continue to accrue on your behalf the supplemental conditional pension provision of 12% salary, with investment returns replicating those of the International Pension Plan. Accordingly, with effect from 1 January 2016, the base salary for this provision remains unchanged at £976,025 along with the corresponding maximum annual contribution of £117,123.
Malus and clawback
Going forward, all performance-related remuneration awarded to you, including but not limited to your annual bonuses and awards granted under the MCIP and GSIP, will be subject to malus and clawback as set out below and subject to the rules of both the MCIP and the GSIP where applicable.
Malus
If the Committee considers:
(i) | there is a significant downward restatement of the financial results of Unilever; and/or |
(ii) | there is reasonable evidence of gross misconduct or gross negligence by you; and/or |
(iii) | there is reasonable evidence of material breach by you of Unilevers Code of Business Principles or Code Policies; and/or |
(iv) | there is reasonable evidence of conduct by you which results in significant losses or reputational damage to Unilever, |
the Committee may, in its discretion, at any time prior to your performance-related remuneration vesting or being paid, decide that some or all of your performance-related remuneration (which is subject to this malus and clawback provision) will be reduced, lapsed, will not vest or will only vest in part.
Clawback
If the Committee considers there is a significant downward restatement of the financial results of Unilever, it may in its discretion, within two years of your performance-related remuneration being paid or vesting:
(i) | require you to repay to Unilever (or as Unilever directs) an amount equal to the after-tax value of some or all of any cash bonus you were paid (as determined by the Commitee); and/or |
(ii) | require you to transfer to Unilever (or as Unilever directs) for nil consideration, some or all of the after-tax number of Unilever shares which have previously vested, or pay to Unilever (or as Unilever directs) an amount equal to the value of those shares (as determined by the Committee); and/or |
(iii) | require Unilever to withhold from, or offset against, any other remuneration to which you may be or become entitled in connection with your employment with Unilever such an amount as the Committee considers appropriate. |
Where you are notified you must transfer shares or pay an amount in accordance with this clawback provision, any shares or cash must be transferred or paid (in the manner directed by Unilever) within 30 days of the notification.
For the avoidance of doubt, in exercising its powers under this malus and clawback provision, the Committee, in its discretion, may apply different treatments to: (i) different employees; and/or (ii) different remuneration, and may apply such different treatment in combination.
Personal shareholding requirement
As previously communicated, you are required to build and maintain a personal shareholding in Unilever of at least four times your base salary within five years from the later of 2010 or when you were granted your first GSIP award to attain your shareholding requirement. I am pleased to note that you currently satisfy this requirement.
As Executive Director you are required to hold shares to the value of 100% of your minimum shareholding requirement for 12 months post cessation of your employment at Unilever and 50% of these shares for 24 months post cessation of your employment with Unilever.
You will be deemed to have accepted the terms and conditions of this letter, including the operation of clawback and malus, and consent to any repayments, withholdings or deductions made in accordance with it, unless you provide written notice to Peter Newhouse, SVP Global Head of Reward by no later than 31 March 2016 (email to peter.newhouse@unilever.com) that you do not accept such terms.
With kind regards
/s/ Michael Treschow
Michael Treschow
Chairman
Appendix Application of personal shareholding requirement
Personal shareholding requirement
As part of Unilevers long-term incentive arrangements, it is a requirement that Board members and certain other managers build up a personal shareholding in Unilever. The following principles on shareholding have been agreed:
Date of commencement:
The personal shareholding must be built up over a period of five years commencing from the individuals first grant from the Global Share Incentive Plan (GSIP). Once the required level of personal shareholding has been achieved, this shareholding must be maintained (and increased, as necessary, as base salary levels increase or where shares are clawed back).
Qualifying shares:
Shares in either Unilever PLC or Unilever NV (or a combination of both) will qualify provided they are personally owned by the Director or by a member of his/her (immediate) family.
Shares purchased from the annual bonus (variable pay) programme will qualify as from the moment of purchase. Shares acquired under a restricted share/stock arrangement will qualify on a net of tax basis.
Shares awarded on a conditional basis by way of the GSIP, including those by way of the MCIP, will not qualify until the moment of vesting (i.e. once the precise number of shares is fixed after the three-year vesting period has elapsed).
Share options will not qualify until the shares in question have eventually been acquired (and retained) following the exercise of the option.
Value of shares to be taken into account:
The shares will be valued on the date of measurement, or if that outcome fails the personal shareholding test, on the date of acquisition. The share price for the relevant measurement date will be based on the average closing share prices and the euro/sterling/US dollar exchange rates from the 60 calendar days prior to the measurement date.
Salary on which shareholding requirement to be based:
The level of base salary at the date of measurement shall be used to assess the level of personal shareholding.
Level of personal shareholding:
The level of personal shareholding for you is four times base salary.
As an Executive Director you are required to hold shares to the value of 100% of your minimum shareholding requirement for 12 months post cessation of your employment at Unilever and 50% of these shares for 24 months post cessation of your employment with Unilever.
Monitoring of personal shareholding target:
Global Reward will monitor the level of personal shareholding.
The consequence of not having achieved the required shareholding will be that no awards under the GSIP will be made until the necessary shareholding has been built up.
Other matters:
It is not permitted to trade in options or derivatives over Unilever shares as this would be in conflict with our Share Dealing Standard.
Exhibit 7.1
Calculation of Ratio of Earnings to Fixed Charges (times)
The ratio of earnings to fixed charges is determined using the following applicable factors:
Earnings available for fixed charges are calculated, first, by determining the sum of: (a) net profit before taxation and the Unilever Groups share of net profit/(loss) of joint ventures and associates; (b) dividend income receivable from joint ventures and associates; and (c) fixed charges, as defined below.
Fixed charges are calculated as the sum of: (a) finance costs (both expensed and capitalized); and (b) one-third of lease costs (e.g., that portion of rental expense that is representative of the interest factor).
Earnings to Fixed Charges |
million 2016 |
million 2015 |
million 2014 |
million 2013 |
million 2012 |
|||||||||||||||
Earnings |
||||||||||||||||||||
Net profit |
5,547 | 5,259 | 5,515 | 5,263 | 4,836 | |||||||||||||||
Add: Taxation |
1,922 | 1,961 | 2,131 | 1,851 | 1,697 | |||||||||||||||
(Less)/Add: Share of net profit/(loss) of joint ventures and associates |
(127 | ) | (107 | ) | (98 | ) | (113 | ) | (105 | ) | ||||||||||
Add: Dividend income receivable from joint ventures and associates |
144 | 124 | 131 | 110 | 119 | |||||||||||||||
Add: Fixed charges |
761 | 694 | 678 | 663 | 712 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
8,247 | 7,931 | 8,357 | 7,774 | 7,259 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Fixed charges |
||||||||||||||||||||
Finance costs |
584 | 516 | 500 | 500 | 526 | |||||||||||||||
Add: One-third of lease costs |
177 | 178 | 178 | 163 | 186 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
761 | 694 | 678 | 663 | 712 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Ratio of earnings to fixed charges (times) |
10.8 | 11.4 | 12.3 | 11.7 | 10.2 |
Exhibit 12.1
Section 302 Certification
CERTIFICATIONS
I, PAUL POLMAN, certify that:
1. | I have reviewed this annual report on Form 20-F of UNILEVER PLC; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report; |
4. | The companys other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the companys disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the companys internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the companys internal control over financial reporting; and |
5. | The companys other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the companys auditors and the audit committee of the companys board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the companys ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the companys internal control over financial reporting. |
Date: 28 February 2017
/s/ Paulus Gerardus Josephus Maria Polman
Chief Executive Officer
Section 302 Certification
CERTIFICATIONS
I, GRAEME PITKETHLY, certify that:
1. | I have reviewed this annual report on Form 20-F of UNILEVER PLC; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report; |
4. | The companys other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the companys disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the companys internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the companys internal control over financial reporting; and |
5. | The companys other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the companys auditors and the audit committee of the companys board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the companys ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the companys internal control over financial reporting. |
Date: 28 February 2017
/s/ Graeme David Pitkethly
Chief Financial Officer
Exhibit 13.1
Certification Pursuant to 18 U.S.C. Section 1350
As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the Annual Report on Form 20-F of Unilever PLC, a corporation organized under the laws of the United Kingdom (the Company) for the period ending December 31, 2016 as filed with the Securities and Exchange Commission on the date hereof (the Report), each of the undersigned officers of the Company certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that:
1. the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Dated: 28 February 2017 |
/s/ Paulus Gerardus Josephus Maria Polman |
Paulus Gerardus Josephus Maria Polman |
Chief Executive Officer |
Dated: 28 February 2017 |
/s/ Graeme David Pitkethly |
Graeme David Pitkethly |
Chief Financial Officer |
Exhibit 15.1
Consent of Independent Registered Public Accounting Firms
The Board of Directors
Unilever PLC
We consent to the incorporation by reference in the registration statements on Form F-3 (No. 333-199023-02) and Form S-8 (No. 333-185299) of Unilever PLC of our report dated 24 February 2017, with respect to the consolidated balance sheets of the Unilever Group (Unilever N.V. and Unilever PLC, together with their subsidiaries) as at 31 December 2016 and 2015, and the related consolidated income statements, consolidated statements of comprehensive income, consolidated statements of changes in equity, and consolidated cash flow statements for each of the years in the three-year period ended 31 December 2016, and the Guarantor Statements, and the effectiveness of internal control over financial reporting as at 31 December 2016, which report appears in the 31 December 2016 annual report on Form 20-F of Unilever PLC.
KPMG LLP | KPMG Accountants N.V. | |
London, United Kingdom
/s/ KPMG LLP |
Amsterdam, Netherlands
/s/ KPMG Accountants N.V. |
28 February 2017
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