Registered Number 43520 NILEVER BESTFOODS UK LIMITED REPORT AND ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2010 CONTENTS Directors’ Report 1 Independent Auditors’ Report to the Members 5 Profit and Loss Account 7 Balance Sheet 8 Principal Accounting Poli 9 Notes to the Accounts u AHA PAAUSYRI" +3092011 COMPANIES HOUSE TUESDAYUnilever Bestfoods UK Limited 1 Directors’ Report for the Year ended 31 December 2010, The Directors present their report and the audited financial statements of the Company for the year ended 31 December 2010 Directors The Directors of the Company durng the period 1 January 2010 to the date of this report are as follows - Mr WJ M Bruce Mr DJ Lewis (Resigned as Chairman 21 May 2010) Mrs J A Sourry-Knox (Chairman - Appointed 21 May 2010) Mr JA Simmons Principal activities, review of business and future developments ‘The principal activity of the Company during the year was the sale of consumer products in food. The results of the Company show a profit on ordinary activities before tax of £13,095,000 (2009 £15,530,000) and turnover of £143, 197,000 (2009 £142,788.000) ‘The Directors consider that, in the conditions prevailing during the year, the development of the Company’s business and its financial position at the end of the year were satisfactory After the exeluston of tumover disposed of to fellow Unilever group companies in 2009, on a ke for like basis the retamed brands imereased turnover by 16%, with good growth on Bovril (+9 4%), Marmite (+3 2%) and Pot Noodle (+1 1%) beng offset by a slight decline on Pepperami (-1 8%) Gross profit margin improved from 34 7% in 2009 to 38 7% due to list price increases and some reduction in the cost of goods driven by favourable currency movements during the year Overall, the Company trends aligned with the UK market and saw some continued value growth alongside an increase in promotional volume The Directors do not expect any development in the Company's business in the coming year which is significantly different from sts present activities Key Performance Indicators The Untlever group operations are managed on a regional and category basis and the Company's Directors believe that analysis using key performance indicators for the Company 1 not necessary or appropriate as the performance and position of the Company 1s included in the performance indicators for Europe and the category information in the Unilever PLC. Annual Report which does not form part of this reportUnilever Bestfoods UK Limited 2 Directors’ Report for the Year ended 31 December 2010 (continued) Principal Risks and Uncertainties ‘The management of the business and the execution of the Company's strategy are subyect to a number of risks The key business risks and uncertainties affecting the Company are considered to relate to currency risks. competitive pricing commodity prices, raw and packaging material pricing. consumption levels, physical risks. legislative, fiscal and regulatory conditions Further discussion of these risks and uncertainties. and how they are managed. 1n the context of the Unilever group as a whole 1s provided in the published Unilever PLC Annual Report Post Balance Sheet Events A number of further changes to the UK Corporation tax system were announced in the March 2011 UK Budget Statement A resolution passed by Parliament on 29 March 2011 reduced the main rate of corporation tax to 26% from | Apnl 2011 Further legislation substantially enacted on 5 July 2011 reduced the main rate of corporation tax to 25% from | April 2012. Further reductions to the main rate are proposed to reduce the rate by 1% per annum to 23% by | April 2014 None of these further reductions have been substantially enacted The effect of the changes enacted by Parliament on 29 March 2011 and 5 July 2011, and the proposed changes in future years do not have a material impact on the 2010 Balance Sheet or Profit and Loss account and therefore the effect 1s not disclosed in these financial statements Dividend No dividend (2009 £60.000,000) has been declared or paid Political and Charitable Donations ‘The Company made no charitable donations (2009 £Nil) No political contributions were made (2009 ENil)Unilever Bestfoods UK Limited 3 Statement of Directors’ responsibilities in respect of the Directors’ Report and financial statements ‘The Directors are responsible for preparing the Directors’ Report and the financial statements, in accordance with applicable law and regulations. Company law requires the Directors to prepare financtal statements for each financial year Under that law the Directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law) Under Company law the Directors must not approve the financial staternemts unless they are satisfied that they grve a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period In preparmg those financial statements, the Directors are required to select sustable accounting policies and then apply them consistently, make judgements and estimates that are reasonable and prudent, and state whether applicable UK Accounting Standards have been followed. subject to any material departures disclosed and explained in the financial statements ‘The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any ‘ume the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006 They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularitiesUnilever Bestfoods UK Limited 4 Statement of Provision of Information to Auditors, Each of the persons who 1s a director at the date of approval of this report confirms that 1 so far as the Director 1s aware, there 1s no relevant audit information of which the ‘Company's auditors are unaware, and 2. the Director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the Company"s auditors are aware of that mformation ‘This confirmation 15 given and should be interpreted in accordance with the provisions of Section 418 of the Companies Act 2006 Going Concern ‘The Directors. having made appropriate enquiries. have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. and that st 1s therefore appropriate to prepare the financial statements on @ going ‘concem basis Independent Auditors The auditors, PricewaterhouseCoopers LLP, have indicated their willingness to continue in office and will remain in office as auditors of the Company in accordance with the provisions of Section 487(2yof the Companies Act 2006 By Order of ty BoardUnilever Bestfoods UK Limited Independent Auditors’ Report to the Members of Unilever Bestfoods UK Limited We have audited the financial statements of Unilever Bestfoods UK Limated for the year ended 31 December 2010, which comprise the Profit and Loss Account, the Balance Sheet, the Principal Accounting Policies and the related notes The financial reporting framework that has been applied in their preparation 1s applicable by law and according to United Kingdom Accounting Standards (United Kgdom Generally Accepted Accounting Practice) Respective responsibilities of directors and auditors As explained more fully in the Statement of Directors’ responsibilities (set out on page 3) the Directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view Our responsibility 1s to audit and express an ‘opmion on the financial statements in accordance with applicable law and Intemational Standards on Auditing (UK and Ireland) Those standards require us to comply with the Auditing Practices Board’s Ethical Standards for Auditors This report, including the opinions, has been prepared for and only for the Company's members as a body in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report 1s shown or into whose hands it may come save where expressly agreed by our prior consent in writing, Scope of the audit of the financial statements ‘An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from matertal misstatement, whether caused by fraud or error This includes an assessment of whether the accounting policies are appropriate to the Company's circumstances and have been consistently applied and adequately disclosed, the reasonableness of significant accounting estimates made by the Directors, and the overall presentation of the financial statements Option on the financial statements In our opinion the financial statements ‘© give a true and fair view of the state of the Company’s affairs as at 31 December 2010 and of its profit for the year then ended, # have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice, and © have been prepared in accordance with the requirements of the Companies Act 2006Unilever Bestfoods UK Limited 6 Independent Auditors’ Report to the Members of Unilever Bestfoods UK Limited (continued) Opinion on other matters prescribed by the Companies Act 2006 In our opinion the information given sn the Directors’ Report for the financial year for which the financial statements are prepared 1s consistent with the financial statements Matters on which we are required to report by exception We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if. in our opinion adequate accounting records have not been kept. or returns adequate for our audit have not been received from branches not visited by us; or the financial statements are not in agreement with the accounting records and returns, o certain disclosures of Directors’ remuneration specified by law are not made, or wwe have not received all the information and explanations we require for our audit. Nicholas Campbell-Lambert (Senior Statutory Auditor) For and on behalf of PricewaterhouseCoopers LLP Chartered Accountants and Statutory Auditors London Date @ Sepderber ZoUnilever Bestfoods UK Limited 7 Registered Number 43520 Profit and loss account for the year ended 31 December 2010 Not 2010 2009 £000 £000 Turnover oO 143,197 142.788 Cost of sales (88.255) 93.277) Gross profit 54.942 49.511 Administrative expenses (42,265) 34,991) Operating profit @ 12,677 14,520 Profit on ordinary activities before interest 12.677 Net interest receivable and similar come (6) 418, Profit on ordinary activities before taxation 73,095 30 Taxation on profit on ordinary activities © (5,804) (692) Profit for the finaneral year (13) 7291 All operations in the year and in the comparative year were continuing There are no material differences between the profit on ordinary activities before taxation and the profit for the financial year stated above and their historical cost equivalents The profit for each financial year represents the total recognised gains of that year and therefore no separate statement of total recognised gains and losses has been presented‘Unilever Bestfoods UK Limited 8 Balance sheet as at 31 December 2010 Notes 2010 2009 £000 £000 Fixed assets Goodwill (8) 82.130 Investments (9) 350 82.480 Current assets Debtors: amounts due in less than one year (10) 151.622 135,867 Creditors: amounts falling due within one year ay (4,149) (2.256) Net current assets 147.4 1 Total assets less current habulities 223.382 216,091 Creditors: amounts falling due after more than one year (11) (350) (850) Net assets, 223,032 215741 Capital and reserves Called up share capital (a2) 193.154 193 154 ‘Share premium account (13) 3,388 3388 Profit and loss account (18) 26,490 19 199 Total shareholders’ funds The financial statemenufon pages 7 to 15 were approved by the Board of Directors on BA-11 and wey signed on its behalf by WIM Bruce DirectorUnilever Bestfoods UK Limited 9 Principal Accounting Policies ‘The financial statements are prepared on the gomg concer basis. under the historical cost convention and in accordance with the Companies Act 2006 and the applicable accounting standards in the United Kingdom The principal accounting policies, which have been. applied consistently throughout the year. are set out below Basis of preparation ‘The financial statements contain information about Unilever Bestfoods UK. Limited as an individual Company and do not contain consolidated financial information as the parent of a group The Company 1s exempt under s400 of the Companies Act 2006 from the Fequirements to prepare consolidated financial statements as it and its substdrary undertakings are included in the full consolidation in the consolidated financral statements of its ultimate parent Company, Unilever PLC, a Company incorporated in England and Wales Cash Flow Statement ‘The Company 1s a subsidiary of Unilever PLC and its cash flows are mcluded in the consolidated financial statements of Unilever PLC. which are publicly avarlable ‘Consequently the Company 1s exempt under the terms of Financial Reporting Standard | “Cash flow statements’ (revised 1996) trom publishing a cash flow statement Goodwill and acquired Intangible Assets No value 1s attributable to internally generated intangible assets Goodwill 1s calculated as the difference between acquisition cost and the share of assets acquired at fanr value and amorused on a straight line basis in operating profit over a period of 20 years Acquired intangible assets are capitalised at purchased cost and amortised in operating profit on a straight line basis over the period of their useful life These time periods are surtable because management expects to derive economic benefits from the goodwill over this period ‘Goodwill and intangibles are monitored on a brand-by-brand basis for impairment indicators and, where indicators arise. an assessment of the carrying value 1s performed Investments Investments in subsidiaries are carried at cost. Where the value of an investment 1 considered to have been permanently impaired, a carrying value below cost is employed Current taxation ‘The charge for current income tax 1s based on the results for the year as adjusted for items which are not taxed or are disallowed It 1s calculated using tax rates in legislation that has been enacted or substantively enacted by the balance sheet dateUnilever Bestfoods UK Limited 10 Principal Accounting Policies (continued) Deferred Taxation Deferred tax 15 recognised in respect of all timing differences that have originated but not reversed at the balance sheet date, where transactions or events that result in an obligation to pay more tax in the future or a right to pay less tax in the future have occurred at the balance sheet date ‘A net deferred tax asset 1s recognised as recoverable only when it can be regarded as more likely than not that there will be sufficient taxable profits against which to recover carried forward tax losses and from which the future reversal of underlying timing differences can be deducted Deferred tax 1s measured atthe tax rates that are expected to apply in the periods in which the tuming differences are expected to reverse based on tax rates and laws that have been enacted or substantively enacted by the balance sheet date Deferred tax is measured on an undiscounted basis Foreign Currencies ' Trading transactions denomunated in foreign currencies are translated into sterling at the exchange rate ruling on the date of the transaction or at monthly average rates. Monetary assets and habilities denominated im foreign currencies have been translated into sterling at the rates current at the year end. and profits/losses are taken through the profit and loss account of the year Turnover ‘Tumover compnses the voiced value of the sales of goods and services after deduction of | discounts and sales taxes Turnover 1s recognised when the nisks and rewards of the underlying products have been substantially transferred to the customer Provisions Provistons are recognised when either a legal or constructive obligation. as a result of a past event. exists at the balance sheet date and where the obligation can be reasonably esumated Dividends Final dividends are only recognised as a liability when they have been approved by the shareholders and interim dividends are only recognised when paidUnilever Bestfoods UK Limited rt Notes to the Accounts for the year ended 31 December 2010 a @ @) “ (3) Turnover ‘Tumover includes third party sales of £143,197,000 (2009 £142,788,000) which represent sales at invoice vaiue. excluding value added tax and discounts There were 1no sales to fellow Unilever group companies in 2010 (2009 Nil) ‘The Company operates wholly within the food industry and 97% (2009 97%) of its sales are within the UK ‘The Company is engaged in the distribution of consumer products and, in the opinion of the Directors. does not carry on classes of business substantially different from each other Consequently. no segmental analysts of the business 1s included in these accounts Operating Profit Operating profit is arrived at after charging the following amounts = 2010 2009 £000 £000 Amortisation = Goodwill and intangibles (6571) (6,570) Auditors’ remuneration - audit services 29) (50) Directors’ Emoluments No remuneration was recerved by the Directors (2009. £N1I), including the Chairman, from the Company They are employed by other Unilever group companies and are remunerated by those compantes in respect of their services to the group as a whole Employee Information No persons were employed by the Company in either year Interest Receivable and Similar Income 2010 2009 £000 £000 Interest receivable on loans to group undertakings ala 1,010 Total interest recervable and similar mcome 418 Loo Interest earned im both years 1s from a loan relatronship with UK Central Resources Limited, a fellow group undertakingUnilever Bestfoods UK Limited 2 Notes to the Accounts for the year ended 31 December 2010 (6) Taxation on Profit on Ordinary Activities ‘The charge for taxation 1s made up as follows 2010 2009 £000 £000 £000 £000 On profit for the year Current tax: UK corporation tax (6.188) Adjustments in respect of prior years ¢ 5,496 Total current taxation (5.804) (692 Total taxation charge (5,804) (692) ‘The current tax assessed for the year 1s higher (2009 lower) than the standard rate of ‘conporation tax in the UK of 28% (2009 28%) ‘The differences are explained below 2010 2009 £000 £000 Profit on ordinary activities before tax 13.095 15.530 Profit on ordinary activities multiplied by standard rate of corporation tax tn UK of 28% (2009 28%) (3.667) (4,348) Effects of Permanent differences (1,825) (1.840) Adjustments to tax in respect of pnor years G12) 5496 Current tax charge for the year (5.804) 692) (7) Dividends Ordinary Shares, 2010 2009 £000 £000 Fimal paid nil per share (2009 31 Ip per share) = 60.000Unilever Bestfoods UK Limited 13 Notes to the Accounts for the year ended 31 December 2010 (continued) 8) 9) Goodwill Cost Amortisation Net Book ae Value £000 £000 £000 At I January 2010 131,925 (49,795) 82,130 Charged to profit and loss : (6571) (6571) At31 December 2010 131,925 (56.366) 75,559. The Company holds only Goodwill and no intangible assets The goodwill 1s being amorused over 20 years on a straight line basis This 1s the period over which the Direetors estimate that the value of the underlying business acquired 1s expected to exceed the value of the underlying assets Investments Shares in group Undertakings at £000 Cost 1 January and 31 December 2010 Net Book Value 1 January and 31 December 2010 0 ‘There are no investments in listed shares Investment in group Undertakings The investment 1s in a subsidiary undertaking of the Company Their name together with its country of incorporatton/registration 1s listed below A description of the shares and the proportion held 1s also shown below Name of Company Description Proportion of Nominal Principal and Country of of Shares Value of Shares held and of Activity Incorporation Held Voting Rights PRegistration Direct % Indirect % Thames Side Ordinary 100 Nil Dormant Properties Ltd Shares ENGLAND AND WALES,Unilever Bestfoods UK Limited 4 Notes to the Accounts for the year ended 31 December 2010 (continued) (10) Debtors 2010 2009 £000 £000 Amounts due from group undertakings 151,622 135,867 Total debtors 151.622 135.867 Amounts due from group undertakings include balances with Unilever UK Central Resources Limited which are interest bearmg at monthly LIBOR and are unsecured (1) Creditors 2010 2009 2000 £000 Amounts falling due within one year Corporation tax (4.120) (2,206) Accruals and deferred income 29) (50) Total (4,149) 2.256 2010 2009 £000 £000 Amounts falling due after more than one year Amounts due to group undertakings 350 350 Total (350) 350)Unilever Bestfoods UK Limited 15 Notes to the Accounts for the year ended 31 December 2010 (contmued) (12) Called up Share Capital 2010 2009 £000 £000 Authorised 193,154,000 Ordinary shares of £1 each 193,154 193,154 13,550,000 Ordinary shares of £0 25 each 3,388 3,388 196,542 196,542 Allotted and fully pai 193,154,000 Ordinary shares of £1 each 193,154, 193,154 (13) Reconesiation of movements in Total Shareholders’ Funds 2010 2009 £000 £000 Profit for the financial year 7.291 14,838 Dividends patd = (60,000) _ Net additton/(reduction) to shareholders” funds 7291 Opening shareholders’ funds 215,741 Closing shareholders’ funds 223,032 Reserves Share Profitand Total ‘Account £000 £000 £000 At | January 2010 3,388 19,199 22,587 Profit for the financial year : 7291 7291 At31 December 2010 88 26.490 (14) Related Party Transactions and Ultimate Parent Company The ultimate parent Company and controlling party 1s Unilever PLC and the immediate holding Company 1s Unilever UK Limited The Company has not disclosed transactions with fellow, wholly owned subsidiaries in accordance with the exemption under the terms of Financial Reporting Standard 8 as the ultimate parent Company produces publicly available consolidated accounts These accounts are both the smallest and largest group to consolidate these financial statements Copies of Unilever group accounts can be publicly obtained from Unilever PLC, Corporate Relations Department, 100 Victoria Embankment, London EC4Y ODYUnilever Bestfoods UK Limited 16 Notes to the Accounts for the year ended 31 December 2010 (continued) (15) Post Balance Sheet Events A number of further changes to the UK Corporation tax system were announced in the March 2011 UK Budget Statement A resolution passed by Parliament on 29 March. 2011 reduced the main rate of corporation tax to 26% from 1 April 2011 Further legislation substantially enacted on 5 July 2011 reduced the main rate of corporation tax to 25% from | Apni 2012 Further reductions to the main rate are proposed to reduce the rate by 1% per annum to 23% by 1 April 2014 None of these further reductions have been substantially enacted ‘The effect of the changes enacted by Parlament on 29 March 2011 and 5 July 2011, and the proposed changes in future years do not have a material impact on the 2010 Balance Sheet or Profit and Loss account and therefore the effect 1s not disclosed in these financial statements