Disclaimer Notes to the Annual Report & Accounts and Form 20-F 2003 This PDF version of the Unilever Annual Report & Accounts and Form 20-F 2003 is an exact copy of the document provided to Unilever's shareholders. Certain sections of the Unilever Annual Report & Accounts and Form 20-F 2003 have been audited. Sections that have been audited are set out on pages 73 to 125, 131 to 147 and 149 to 150. The auditable part of the Directors' Remuneration report as set out on page 68 has also been audited. The maintenance and integrity of the Unilever website is the responsibility of the Directors; the work carried out by the auditors does not involve consideration of these matters. Accordingly, the auditors accept no responsibility for any changes that may have occurred to the financial statements since they were initially placed on the website. Legislation in the United Kingdom and the Netherlands governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. Disclaimer Except where you are a shareholder, this material is provided for information purposes only and is not, in particular, intended to confer any legal rights on you. This Annual Report & Accounts and Form 20-F does not constitute an invitation to invest in Unilever shares. Any decisions you make in reliance on this information are solely your responsibility. The information is given as of the dates specified, is not updated, and any forward-looking statements are made subject to the reservations specified on page 3 of the Report. Unilever accepts no responsibility for any information on other websites that may be accessed from this site by hyperlinks. 2003 Unilever Annual Report & Accounts and Form 20–F Meeting everyday needs of people everywhere Our corporate purpose Our purpose in Unilever is to meet the everyday needs of people everywhere – to anticipate the aspirations of our consumers and customers and to respond creatively and competitively with branded products and services which raise the quality of life. Our deep roots in local cultures and markets around the world are our unparalleled inheritance and the foundation for our future growth. We will bring our wealth of knowledge and international expertise to the service of local consumers – a truly multi-local multinational. Our long-term success requires a total commitment to exceptional standards of performance and productivity, to working together effectively and to a willingness to embrace new ideas and learn continuously. We believe that to succeed requires the highest standards of corporate behaviour towards our employees, consumers and the societies and world in which we live. This is Unilever’s road to sustainable, profitable growth for our business and long- term value creation for our shareholders and employees. Contents Report of the Directors Report of the Directors (continued) General information 02 Relations with shareholders and other investors 51 Key performance measures 04 Reporting to shareholders 51 Financial highlights 06 Biographical details 52 Chairmen’s statement 07 Directors 52 About Unilever 09 Advisory Directors 52 Description of business 09 Business Presidents 53 Business structure 09 Corporate Officers 53 Foods 09 Board changes 53 Home & Personal Care 09 Business President changes 53 Other operations 10 Remuneration report 54 Corporate venture activities 10 Remuneration report – policy 54 Technology and innovation 10 Introduction 54 Information technology 11 Remuneration commentary 54 Environmental responsibility 11 Directors 55 Responsible corporate behaviour 12 Remuneration policy 55 Competition 12 Remuneration committee 55 Distribution and selling 13 Remuneration package 55 Exports 13 Other items 58 Seasonality 13 Advisory Directors 59 People 13 Remuneration report – detailed information 60 Related party transactions 13 Detailed information on Directors’ remuneration 2003 60 Intellectual property 14 Table of aggregate remuneration for Directors 60 Description of our properties 14 Table of remuneration for individual Directors 61 Legal and arbitration proceedings and regulatory Directors’ share matching plan 62 matters 14 Directors’ conditional share awards under Government regulation 14 the TSR Long-Term Incentive Plan 63 Financial review 15 Directors’ share options 64 Basis of reporting and discussion 15 Directors’ pensions 65 Reporting currency and exchange rates 15 Directors’ interests: share capital 66 International Financial Reporting Standards 15 Summary information in respect of Directors Critical accounting policies 15 and Executive Officers 67 Results – 2003 compared with 2002 16 Directors’ service contracts 67 Results – 2002 compared with 2001 17 Advisory Directors 67 Acquisitions and disposals 17 Report of the Audit Committee 69 Dividends and market capitalisation 18 Balance sheet 18 Financial Statements Cash flow 19 Contents listing for financial statements 70 Finance and liquidity 19 Treasury 20 Shareholder information Pensions investment strategy 20 Control of Unilever 152 Total Shareholder Return (TSR) 20 Share capital 152 Significant changes 20 Unity of management 152 Operating review 21 Equalisation Agreement 152 Operating review by region 21 More information about our constitutional documents 153 Europe 21 General Meetings and voting rights 153 North America 23 Directors 154 Africa, Middle East and Turkey 25 Mutual guarantee of borrowings 154 Asia and Pacific 27 Combined earnings per share 154 Latin America 29 Leverhulme Trust 154 Operating review by category – Foods 31 N.V. Nederlandsch Administratie- en Savoury and dressings 32 Trustkantoor (Nedamtrust) 155 Spreads and cooking products 34 Material modifications to the rights Health & wellness and beverages 36 of security holders 155 Ice cream and frozen foods 38 Other shareholder information Operating review by category – Home & Personal Care 40 Analysis of shareholding 156 Home care 41 Information about exchange controls Personal care 43 affecting security holders 157 Risk management 45 Nature of the trading market 157 Corporate governance 47 Taxation for US residents holding shares in NV 159 Organisational structure of Unilever 47 Taxation for US residents holding shares in PLC 160 Legal structure of the Group 47 Dividends 161 Corporate governance developments 47 Cross reference to Form 20-F 162 Directors 47 Glossary 163 Advisory Directors 48 Financial calendar and addresses 164 Board Committees 48 Website 165 Requirements 49 Publications 165 Auditors 50 Share registration 165 Unilever Annual Report & Accounts and Form 20-F 2003 01 General information The Unilever Group Reporting currency and exchange rates Unilever N.V. (NV) is a public limited company registered in the Details of key exchange rates used in preparation of these Netherlands, which has listings of shares or certificates (depositary accounts are given on page 130, together with Noon Buying receipts) of NV on the stock exchanges in Amsterdam, New York, Rates in New York for the equivalent dates. Frankfurt and Zürich. Basis of Discussion and Analysis Unilever PLC (PLC) is a public limited company registered in In parts of this document, notably the Chairmen’s statement England which has shares listed on the London Stock Exchange on pages 7 and 8 and the review of operations by region and and, as American Depositary Receipts, on the New York Stock category on pages 21 to 44, discussion of performance is based Exchange. on constant rates of exchange. This removes the impact of currency movements and more clearly portrays the underlying The two parent companies, NV and PLC, together with their performance of the operations themselves. The constant rate used group companies, operate as nearly as is practicable as a single is the annual average rate for the prior year. For each two-year entity (the Unilever Group, also referred to as Unilever or the period, the year-on-year trends in euros are the same as those Group). NV and PLC and their group companies constitute a which would arise if the results were shown in sterling or US single group under Netherlands and United Kingdom legislation dollars at constant exchange rates. for the purposes of presenting consolidated accounts. Accordingly, the accounts of the Unilever Group are presented by Wherever used in this document, the abbreviation BEIA refers both NV and PLC as their respective consolidated accounts. to profit measures before exceptional items and amortisation of goodwill and intangible assets. Unilever believes that reporting Publications profit measures before exceptional items and amortisation of This publication is produced in both Dutch and English and goodwill and intangible assets (BEIA) provides valuable additional comprises the full Annual Report and Accounts for 2003 of NV information on underlying earnings trends to shareholders. The and PLC. This document complies with the Netherlands and the term BEIA is not a defined term under Netherlands, UK, or US United Kingdom regulations. It also forms the basis of the NV and Generally Accepted Accounting Principles (GAAP), and may not PLC Annual Reports on Form 20-F to the Securities and Exchange therefore be comparable with similarly titled profit measurements Commission in the United States for the year ended 31 December reported by other companies. It is not intended to be a substitute 2003, and cross references to Form 20-F are set out on page 162. for or superior to GAAP measurements of profit. 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