Disclaimer Notes to the Annual Report & Accounts and Form 20-F 2002 This PDF version of the Unilever Annual Report & Accounts and Form 20-F 2002 is an exact copy of the document provided to Unilever’s shareholders. Certain sections of the Unilever Annual Report & Accounts and Form 20-F 2002 have been audited. Sections that have been audited are set out on pages 66 to 112, 118 to 133 and 135 to 136. The auditable part of the directors’ remuneration report as set out on page 60 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 2 of the Report. Unilever accepts no responsibility for any information on other websites that may be accessed from this site by hyperlinks. For more information: Meeting everyday needs www.unilever.com Unilever Annual Report & Accounts and Form 20-F 2002 of people everywhere Unilever N.V. Unilever PLC Weena 455, PO Box 760 PO Box 68, Unilever House Unilever Annual Report & Accounts 2002 3000 DK Rotterdam Blackfriars, London EC4P 4BQ T +31 (0) 10 217 4000 T +44 (0)20 7822 5252 and Form 20-F F +31 (0) 10 217 4798 F +44 (0)20 7822 5951 A truly multi-local multinational Unilever is dedicated to meeting the everyday needs of people everywhere. Around the world our Foods and Home & Personal Care brands are chosen by many millions of individual consumers each day. Earning their trust, anticipating their aspirations and meeting their daily needs are the tasks of our local companies. They bring to the service of their consumers the best in brands and both our international and local expertise. Unilever’s 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. Design: Fitch: London Typesetting: Pauffley Limited Printed by: St Ives Westerham Press Ltd 1 Contents Report of the Directors Report of the Directors (continued) General information 2 Corporate governance (continued) Financial highlights 3 Board Committees 43 Chairmen’s statement 5 Requirements in the Netherlands and the UK 44 Our code of business principles 7 Auditors 45 About Unilever 9 Relations with shareholders and other investors 45 Description of business 9 Reporting to shareholders 45 Business structure 9 Biographical details: Foods 9 Directors 46 Savoury and dressings 9 Advisory Directors 46 Spreads and cooking products 9 Business Presidents 47 Health & wellness 9 Corporate Officers 48 Beverages 9 Board changes 48 Ice cream and frozen foods 9 Advisory Directors’ changes 48 Home & Personal Care 10 Remuneration report 49 Home care and professional cleaning 10 Report to shareholders 49 Personal care 10 The Remuneration Committee 49 Other operations 10 Directors’ remuneration policy 49 Corporate venture activities 10 Remuneration package 50 Technology and innovation 10 Unilever’s position relative to broad based Information technology 11 equity indices 52 Environmental responsibility 11 Directors’ pensions 52 Responsible corporate behaviour 12 Directors’ service contracts 54 Competition 12 Directors’ shareholding requirements 55 Exports 12 Directors’ interests: share capital 55 Seasonality 13 Remuneration of directors and executive officers 56 People 13 Directors’ emoluments 56 Related party transactions 13 Directors’ share options 57 Intellectual property 13 Directors’ conditional share awards under Description of our properties 14 the TSR Long-Term Incentive Plan 59 Legal and arbitration proceedings and regulatory Advisory Directors 59 matters 14 Auditable part of remuneration report 60 Government regulation 14 Report of the Audit Committee 61 Operating review – highlights 15 Operating review by region 18 Financial Statements Europe 18 Contents listing for financial statements 62 North America 19 Africa, Middle East and Turkey 20 Shareholder information Asia and Pacific 21 Latin America 22 Control of Unilever 138 Operating review by category – Foods 24 Share capital 138 Savoury and dressings 24 Unity of management 138 Spreads and cooking products 26 Equalisation Agreement 138 Health & wellness and beverages 27 More information about our constitutional Ice cream and frozen foods 28 documents 139 Operating review by category – Home & Personal Care 31 General Meetings and voting rights 139 Home care and professional cleaning 31 Directors 140 Personal care 33 Mutual guarantee of borrowings 140 Financial review 35 Combined earnings per share 140 Critical accounting policies 35 Leverhulme Trust 141 Results – 2002 compared with 2001 35 N.V. Nederlandsch Administratie- en Results – 2001 compared with 2000 36 Trustkantoor (Nedamtrust) 141 Dividends and market capitalisation 37 Material modifications to the rights Balance sheet 37 of security holders 141 Cash flow 37 Analysis of shareholding 142 Finance and liquidity 37 Information about exchange controls Treasury and hedging policies 38 affecting security holders 143 Risk management 39 Nature of the trading market 143 Total Shareholder Return (TSR) 40 Taxation for US residents 145 Unilever’s position relative to the TSR reference group 41 Dividends 147 Significant changes 41 Cross reference to Form 20-F 148 Corporate governance 42 Glossary 149 Organisational structure of Unilever 42 Financial calendar and addresses 150 Legal structure of the Group 42 Website 151 Directors 42 Publications 151 Advisory Directors 43 Share registration 151 Unilever Annual Report & Accounts and Form 20-F 2002 2 General information The Unilever Group Abbreviations Unilever N.V. (NV) is a public limited company registered in Wherever used in this report, the abbreviation BEIA refers to the Netherlands, which has listings of shares or certificates profit measures before exceptional items and amortisation (depositary receipts) of NV on the stock exchanges in of goodwill and intangibles. Unilever believes that reporting Amsterdam, London and New York and in France, Germany profit measures before exceptional items and amortisation and Switzerland. of goodwill and intangibles (BEIA) provides additional information on underlying earnings trends to shareholders. Unilever PLC (PLC) is a public limited company registered Unilever uses BEIA measures primarily for internal in England which has shares listed on the London Stock performance analysis, performance targeting and incentive Exchange and, as American Depositary Receipts, on the awards. The term BEIA is not a defined term under New York Stock Exchange. Netherlands, UK, or US Generally Accepted Accounting Principles (GAAP), and may not therefore be comparable The two parent companies NV and PLC, together with with similarly titled profit measurements reported by other their group companies, operate as nearly as is practicable companies. It is not intended to be a substitute for or as a single entity (the Unilever Group, also referred to as superior to GAAP measurements of profit. Unilever or the Group). NV and PLC and their group companies constitute a single group under Netherlands € is used in this report to denote amounts in euros. and United Kingdom legislation for the purposes of presenting consolidated accounts. Accordingly, the £ and p are used in this report to denote amounts in accounts of the Unilever Group are presented by both pounds and pence sterling respectively. NV and PLC as their respective consolidated accounts. Fl. is used in this report to denote amounts in Dutch Publications guilders. This publication is produced in both Dutch and English and comprises the full Annual Report and Accounts for 2002 of $ is used in this report to denote amounts in United States NV and PLC. This document complies with the Netherlands dollars, except where specifically stated otherwise. and the United Kingdom regulations.