UCL Annual Report 2008

Transcription

Financial Highlights
Year ended 31 December
TT$ ‘000
2008
2007 Increase/
Decrease
Results
Turnover:
461,934
416,390
10.9
Profit Before Tax
60,081
51,521
16.6
Profit for the year
37,290
36,233
2.9
Dividends:
24,407
26,244
(7)
Per share
Earnings:
Dividends:
Interim
Final
Total
142
138
3
28
65
93
35
65 100
(20)
0
(7)
Key Indicators
Operating Profit as % of Turnover: 10.8
Net Profit as % of Turnover:8.1
Turnover
TT$ ‘000
2008
2007
461,934
416,390
Profit for the Year
TT$ ‘000
2008
2007
37,290
36,233
Dividends
TT$
2008
2007
$0.93
$1.00
Our Brands
Personal Care Brands
Lux, Dove, Sunsilk, Rexona, Axe, Vaseline,
Lifebuoy, Suave, Pond’s
Home Care Brands
Cif, Skip, Breese, Radiante,
Comfort, Quix
Food Brands
I Can’t Believe It’s Not Butter, Blue Band,
Flora, Becel, Lipton, Wishbone, Hellman’s,
Golden Ray, Cookeen
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Annual Report 2008
Unilever Caribbean Limited
Chairman’s Report
OUTLOOK
I am pleased to report that despite the
shocks and uncertainties taking place
in both the local and global economies,
which are increasingly being reflected
in declining consumer confidence
throughout the Caribbean, the Company had another satisfactory year.
OVERVIEW
As has been the trend for some time, the origin of the Company’s
products reflects a shifting balance between local manufacture and
sourcing from associated Unilever companies abroad. In 2008 own
manufacture still however represented some 70% of goods sold,
the remainder being imported. This balance continues to be under
constant review, in the light of changing factors such as shipping
costs, tariff levels and the comparative costs of products made locally and elsewhere. The current level of manufacturing activity at
Champs Fleurs can only be maintained if factory costs are lowered
and production efficiencies optimised - should this not be achieved,
the outlook is for further restructuring costs in the short term, in
order to ensure future profitability.
In terms of the Company’s market prospects, it is clear that many
of our Caribbean economies will continue to suffer as a result of
deteriorating global economic conditions, particularly with respect
to reduced tourism levels and remittances from nationals abroad.
We are however confident that our range of basic home, personal
care and food products, offering top quality and value for money to
Caribbean consumers, will maintain or even increase market share,
particularly as consumers turn away from expensive luxury items
imported from metropolitan markets.
Turnover increased by 11% over the previous year, to a new record
level of $462 million, and despite the many challenges faced, both
internal and external, Profit after Taxation increased by 3% over the
level achieved in 2007, to $37.3 million. This year’s improvements
in both Turnover and Profitability reflect the steady upward trend
achieved over the past four years, reinforcing our conviction that the
changes made in the preceding period have correctly positioned the
Company for continuing consistent growth.
BOARD APPOINTMENT
DIVIDENDS
ACKNOWLEDGEMENT
The Board of Directors has declared a final dividend of 65 cents per
share, bringing the Total Dividend for the year to $0.93 per share.
This represents a dividend payout of 65% of Net Profit, which while
still high by market standards, is lower than in previous years. While
there are indeed many factors which might determine future dividends, including the required level of Company borrowing, it is the
Board’s intention to maintain future dividend payouts at the current
level.
I would like to express my sincere appreciation to our Managing
Director Mrs. Roxane De Freitas, who has in this her first full year
stepped up to the arduous task of managing the Company. Roxane,
together with her management team and the entire Unilever workforce have shown courage and resilience in what have often been
very demanding conditions, and in the circumstances have produced
very satisfactory results indeed. Well done !
I am pleased to report the appointment during the year 2008 of Mr.
Seamus J. Clarke, who brings to our Board a wealth of experience
in accounting and finance, and will assume the chairmanship of our
Audit Committee. Mr. Clarke’s appointment is particularly pleasing
in that his father, Mr. Clem Clarke, served for many years as a senior
manager at Unilever (formerly Lever Brothers), prior to his death in
1981.
Gary N. Voss
Chairman.
Unilever Caribbean Limited Annual Report 2008
2
Managing Director’s Report
Everyone, everyday, everywhere is the
theme of this year’s annual report
and this is the message that Unilever
Caribbean Limited delivers to our
stakeholders by our reach and our
impact on society.
Our products meet consumer needs everywhere in the Southern
Caribbean, on an everyday basis to mothers, children and families,
the old and the young, everyone. Our commitment to our mission
“Adding Vitality to life” guides our interaction with our customers,
consumers, employees and the communities in which we operate.
Our focus is on distributing to all places where consumers want to
find our brands – from the small corner shop to large supermarkets
across all territories.
2008 was a year of opportunities and challenges for the business,
the most positive aspect being an increase in Company turnover by
11% over 2007. Operational highlights included a good year in
terms of Safety with zero Lost Time Accidents, the commissioning
of an Effluent Waste Water Treatment Plant as well an enhanced
Training and Development programme for our employees. We
did, however, face quite a few challenges as the global impact
on inflation drove up costs for raw and packaging materials, and
we continued to grapple with IR issues as a result of the ongoing
negotiation process for a new wage agreement for our unionized
employees. In spite of these challenges, I remain confident that
Unilever Caribbean is a resilient business that will continue to grow
and deliver improved shareholder value in the years to come.
Review of Operations
The strategic operational plan that has been implemented over the
past few years has positioned UCL to better meet the challenges of
an increasingly competitive environment. We have made ourselves a
fitter and leaner organization that can better respond to changes in
the current consumer climate. There is no doubt that our region will
feel the impact of the contraction of the global economy, due to the
high levels of dependency of our markets on tourism and remittances
for their economic revenue. We however believe that our brands are
3
positioned to meet the varying needs that our consumers require at
this time, delivering value for money which is key at this time.
We produced Gross Profit of 36% for full year 2008. This was a
decline of 3% versus 2007. The source of this decline came from
increases in raw and packaging material costs, and lower than
average productivity levels in the plants as a result of the ongoing
industrial relations issues.
To increase productivity levels in our powders plant, we completed
the automation of our detergent powders processing in the first
quarter of 2008. This involved a three week shut-down of the
powder detergents plant. The upgrade was however, safely and
successfully completed.
Our challenge in 2008 was to manage costs, of which raw and
packaging materials were the most significant, along with increases
in cost of freight and distribution and general administration. These
challenges will continue into 2009 and with the global economic
downturn facing us, we will need the support of all our stakeholders
to sustain our growth momentum.
Everyday brands, for everyday people
In 2008, sales grew by 11% - 15% in the domestic market and
7% within export. Our reach in the Southern Caribbean markets
is growing and we hope to sustain this growth in both sales and
volumes in 2009.
Our brands have become part of every day life in the Caribbean.
Through superb product quality, attractive packaging, and
advertising and marketing that reaches deep into the marketplace,
Unilever’s brands will continue to produce good sales and maintain
their market leadership.
In 2008 the Personal Care portfolio was enhanced by several
Annual Report 2008
Managing Director’s Report (continued)
As a manufacturer of high-quality
products, we need to constantly
invest in and monitor our production
processes with regards to health and
safety, the impact on the environment
and the consistent quality of our final
products.
exciting innovations in our markets with the introduction of Axe
Dark Temptation, Dove Go Fresh, Soap and Beauty Body Washes,
the relaunch of Lux Skin and new variants of Vaseline. Consumers
responded well to these innovations positively impacting sales
growth for this category.
In our Home Care portfolio, we utilized several innovative campaigns
throughout the year to reinforce to consumers the value for money
offered by our brands such as Breeze, Radiante, Quix, and Cif.
In the Foods category, sales grew in excess of 25%, driven largely
by Blue Band, Golden Ray, Flora, Cookeen and Lipton, all wellestablished household names in Caribbean kitchens. Our Healthy
Choices Foods products will continue to provide consumers with
healthier options that are in line with the US Dietary Guidelines.
Living safely everyday
As a manufacturer of high-quality products, we need to constantly
invest in and monitor our production processes with regards to
health and safety, the impact on the environment and the consistent
quality of our final products. During the year under review, Unilever
Caribbean Limited underwent a series of audits and controls such as
the inspection by the OSH Agency, the Hazard Analysis and Critical
Control Points (HACCP) Quality and Hygiene Assessment, and the
annual Quality Verification Assessment of the Liquids, Foods and
the Detergent plants. I am very happy to report that the Company
passed all the checks and balances with good results. We also again
recorded Zero Lost Time Accidents in 2008.
Reaching out to everyone
As part of the Unilever Group, we are indeed fortunate that our
products and the culture of our Company are bound by a mission of
“Adding Vitality to life”—it is indeed a wonderful, positive message
that we strive to embody in all our interactions as a corporate
citizen.
In 2008, we continued to strengthen our relationship with our
neighbouring community of Mt. D’Or with emphasis on three main
pillars of development – education, environmental awareness and
health and wellness.
For the second year in a row, the company partnered with local
organizers of the World Food Programme to support the Walk the
World event in Rio Claro which raises awareness for child hunger in
Trinidad and across the world.
Employee development was high on the corporate agenda in 2008.
Unilever’s Learning Management System was made available to all
employees in August, which offers E-Learning and instructor-led
programmes to our staff. We also re-launched our management
trainee programme, hiring nine trainees to work in different areas
of the business.
While Unilever Caribbean Limited had some industrial relations
issues that persisted throughout 2008, I am confident that in 2009
these will be resolved to the satisfaction of all stakeholders.
For 2009, we can expect a slower
rate of growth for UCL, taking
into consideration the global
financial crisis, credit crunch and
the expectation that our Caribbean
markets will slow as a result.
Outlook
For 2009, we can expect a slower rate of growth for UCL, taking
into consideration the global financial crisis, credit crunch and the
expectation that our Caribbean markets will slow as a result. Key
to continued positive returns will be increasing our productivity,
managing our costs and driving volume growth. Unilever Caribbean
Limited will continue to look after our people, both inside our
company and in the communities in which we operate.
I would like to thank our Board of Directors and the Unilever
Management Committee for their support and guidance throughout
the Year. These two teams have played a key role in shaping the
direction of Unilever Caribbean Limited which is well positioned for
growth.
I want to also emphasize the role of our employees who continue
to be the driving force of this business. It is thanks to them that
we have experienced an increase in earning per share of about 3%
over 2007. We know the challenges which lie ahead. Nevertheless, I
am confident that the measures gained during 2008 will be realised
as we reach out to everyone, everywhere, everyday in the years to
come.
Roxane de Freitas
Managing Director
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Our Board of Directors
Gary Voss
Andre des Vignes
Seamus Clarke
GARY N. VOSS
Non-Executive Chairman
Nationality: Trinidad & Tobago. B.Sc. (Hons.),
Chemical Engineering. Mr. Voss has been with
Unilever since 1982, first as Technical Director of
Lever Brothers West Indies Ltd. then from 1987
as Chairman and Managing Director, positions
he held until his retirement at the end of 2001,
retaining the position of non-executive Chairman.
Previous posts: Texaco Trinidad Refinery, Caribbean
Industrial Research Institute — Head of Engineering Division. ISCOTT steel mill — Superintendent,
Direct Reduction.
Roxane de Freitas
Rafael White Matos
tergents, rejoined in 2001 in the post of Marketing
Manager Personal Care Caribbean, 2004 appointed Customer Development Director, and member
of the Management Committee, appointed Company Secretary to the Board of Directors Unilever
Caribbean 2006, appointed Managing Director
2007. Previous posts: Sales position in 3M InterAmerica Inc., Smith Kline Beecham, Corporate Affairs, Vice President BPTT.
Andréa Pirie
Pablo Garrido
Commercial Director Unilever de Puerto Rico in
2006.Appointed Company Vice President and
Treasurer in 2006. Previous Posts: Key financialbased posts at Chiquita Brands International, USA
and Banco Improsa, S.A, Costa Rica
PABLO GARRIDO
Chairman of Unilever Greater Caribbean
Nationality: Dominican Republic. Joined Unilever
Dominican Republic S.A. in 1999 as Customer
RAFAEL WHITE MATOS
Management Director North Caribbean. AppointSupply Chain Director
ed Managing Director of Unilever Caribbean LimNationality: Dominican Republic. Joined Unilever ited in Trinidad 2001, and Chairman of Unilever
Dominicana S.A. in 1999 as manufacturing man- Caribe (Dominican Republic and Trinidad) 2006,
ager; in 2003 was appointed Supply Chain Man- appointed Chairman of the Greater Caribbean
ANDRE GERARD DES VIGNES
ager for Home and Personal Care and Foods. In business unit (Trinidad and Tobago, Dominican ReNon-Executive Director
Nationality: Trinidad & Tobago. Advocate Attorney- 2005 appointed National Supply Chain Director public and Puerto Rico) 2007. Previous posts: Vice
at-Law in private practice in the areas of Civil Liti- for the Unilever Caribe business (Dominican Re- President – Sales, Mercasid, Dominican Republic.
gation, Labour and Commercial Law, Trinidad Pre- public and Trinidad), appointed Logistics Director,
vious posts: Partner, J.D. Sellier & Co., Lecturer and Unilever Caribbean Limited in Trinidad in 2006, Not in picture:
Tutor at Hugh Wooding Law School 1996–1999. appointed to the Board of Directors of Unilever SAIDA MARTINEZ
Caribbean Limited in 2006. Appointed Caribbean Finance Director, Unilever Caribbean Limited
Supply Chain Director in 2007 (Trinidad, Domini- Nationality: Colombian
Seamus Clarke
can Republic and Puerto Rico) Previous posts: Joined Unilever 1995 as Management Trainee, held
Non-Executive Director
Supply Planner, Production Manager Colgate- posts of Head of Accounts, Planning Manager,
Nationality: Trinidad & Tobago
Chartered Accountant (FCCA, CA, BSc) in private Palmolive 1991, Home and Personal Care Plant Marketing Accountant, Supply Chain Accounts
practice in areas of Financial and Business Con- Manager 2001, Logistics and Sourcing Manager Manager and Projects Manager Colombia, Chile,
sulting. Previous Posts: Executive Director, Aegis 2002, Sociedad Industrial Dominicana.
Argentina, appointed Finance Director Unilever
Business Solutions Ltd. and Aegis Management
Caribbean Limited 2005, appointed Company
Solutions Ltd. 2001-2008; Finance Director, Price- Andréa Pirie
Secretary 2007. Previous Posts: Key posts in corFinance Director, Unilever Greater Caribbean
waterhouseCoopers Ltd. 1997-2001.
porations in the Financial sector, Post Graduate
Nationality: Costa Rica. Joined Unilever in 1998 and University level Lecturer in Business, author
as Commercial Manager, Ice Cream. Held posts of of two publications.
ROXANE DE FREITAS
Management Accountant in HPC & Foods, Supply
Managing Director
Nationality: Trinidad & Tobago. Joined Unilever in Chain Accountant, Finance Director (Foods), Cor1985 as Brand Manager, Industrial Food and De- porate Comptroller, Central America. Appointed
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Annual Report 2008
Directors’ Report
Financial Results for the year ended 31 December 2008
Directors and Substantial Interests
Directors’ Interest
Number of shares
as at 31.12.08
Number of shares
Gary Voss
Roxane de Freitas
André des Vignes
Seamus Clarke
Pablo Garrido
Saida Martinez
Rafael White Matos
Andrea Pirie
3,196
1,000 250
0
0
0
0
0
3,196
1,000
250
0
0
0
0
0
Turnover
Profit before Taxation
After charging/(crediting) the following:
Depreciation
Audit Fees
$’000
461,934
50,081
(5,590) (386)
Staff Costs
Directors’ Fees
Foreign Exchange loss
Finance Costs - Net
Taxation
Profit after Taxation
(62,077)
(17)
(572)
(3,471)
(12,791)
37,290
Dividends paid and proposed
Interim
Final
7,348
17,059
Total Dividend
24,407
Dividend
The Directors have declared dividends of $24,407 for the
year, amounting to $0.93 per share. The final dividend of
65 cents, will be paid on Friday 26 June 2009 to Shareholders
on the Register of Members at the close of business on Friday
5 June 2009.
On 15 August 2008 Mr. Roberto Perez was re-assigned to
Brazil and consequently resigned as a Director of the company. To fill the vacancy created by Mr. Perez’ departure,
Mrs. Andrea Pirie was appointed to the Board.
On 18 November 2008, Mr. Seamus Clarke was appointed to
the Board and also as a member of the Audit Committee.
In accordance with Section 4.3.2. of the Company Bye-Laws
whereby Directors so appointed shall hold office only until
the next following general meeting of the company and shall
be eligible for re-election, Mrs. Andrea Pirie and Mr. Seamus
Clarke, being eligible, offers themselves for re-election until
the close of the next third Annual Meeting.
as at 31.03.09
Substantial Interest
In accordance with the Listing Agreement of the Trinidad and
Tobago Stock Exchange, the following are the holders of 5%
or more shares as at 31st December 2008:
Number
of Shares Held
Unilever Overseas Holdings AG
RBTT Trust Limited T964
13,123,194
1,873,374
% of Total
50
7.14
Capital & Membership
Grouping of shares according to size of shareholding as at
31st December 2008.
Size of
Shareholding
Number of
Shareholders
1 - 10,000
10,001 - 20,000
20,001 - 50,000
50,001 - 100,000
100,001 - 500,000
500,001 and upwards
2,099
48
31
11 21
6
Size of % of Total
ShareholdingShareholding
2,087,309
672,544
918,875
681,768
4,017,307
17,866,029
7.95
2.56
3.50
2.60
15.31
68.08
On behalf of the Board,
Auditors
The Auditors, PricewaterhouseCoopers, will retire at the Eightieth Annual General Meeting and being eligible, offer themselves for re-appointment.
Gary Voss
Director
Roxane de Freitas
Director
6
The Management Committee
Ian Lewis
Zaida Allie
Rafael White Matos
Roxane de Freitas
Nazma Hosein
Zaida Martinez
Shelly-Ann Simon-McKell
Ronnie Sankar
Through our very diverse portfolio and far-reaching sales
through the Caribbean, UCL has spent the last year reaching
millions of people everyday, including the company’s 400
employees through continued improvement projects.
Left-right:
Ian Lewis - Human Resource Manager
Zaida Allie - S&OP & Planning Manager
Rafael White Matos - Supply Chain Director (Caribbean)
Roxane de Freitas - Managing Director
Nazma Hosein - Marketing Manager
Zaida Martinez - Finance Director
Shelly-Ann Simon-McKell - Customer Marketing Manager
Ronnie Sankar - Logistics, Distribution & Customer Service Manager
Setting the Pace/Winning Together 2008
The Management Team at Unilever Caribbean Limited meets together at
least once a year to review the Strategy Into Action (SIA) where the Company objectives and goals are rolled out by senior management for execution throughout the year. In 2008, the events were held at the beginning and mid-way through the year to roll-out and review achievements
against the SIA. This activity is one that aims to strengthen the bond of
the team, while ensuring that the Company objectives are consistently
measured and met.
7
Annual Report 2008
Marketing and Brand Review
8
Marketing and Brand Review (continued)
Personal Care
WAKE UP WITH DOVE GO FRESH
AXE DARK TEMPTATION TAKES OVER TRINIDAD
Since women like chocolate, they will find men
who smell of chocolate just as irresistible!
Chocolate-inspired fragrance Axe Dark
Temptation, a new body spray fragrance,
combines the subtle aroma of chocolate with
fresh gourmet scents, including musk, hot
chocolate amber and patchouli. Axe Dark
Temptation has been developed by an expert
in fine fragrances, Ann Gotlieb, the designer of
CK ONE, on which it found inspiration. The packaging design
creates signs of chocolate in a fresh and attractive way,
making it sophisticated and distinctive.
This unique fragrance was launched in August with a strong
communication campaign.
In 2008, Unilever Caribbean Ltd
launched the Dove ‘Go Fresh’
range. The mix complemented
the existing core range of the
brand with a re-launch of the
Cool Moisture Bar and the
introduction of the Energize Bar.
The new Energize bar contains
a light formula with invigorating beads that awaken your
skin with the sparkling scent of grapefruit & lemongrass
to give you a boost in the morning! The ‘Go Fresh’ range
opened up the Dove brand to women in their 20s with
attractive communication focused on the three main drivers
of freshness: great fragrances, strong & vibrant colors, and
fresh ingredients.
Activations took place on beaches as well as at events, creating
awareness of the new platform. During university orientation
week, our Go Fresh ambassadors sampled the products with
the crowd.
SUNSILK STYLE
Life can’t wait! Under this campaign slogan,
Unilever Caribbean Limited launched
Sunsilk in Trinidad and Tobago and the
South Caribbean in 2007 with a range
consisting of shampoo, conditioner and
combing crème. After great success both
locally and regionally, Sunsilk launched 4
new styling aids in 2008: Daring Volume
Spray on Mousse, Volumizing Spray,
Captivating Curls Gel & Cream Twist and
Scrunching Mousse. This innovation was
supported by sampling, activations, print and TV advertising
featuring Sunsilk’s icon Madonna and her latest hit “4 minutes
to save the world”.
DOVE
BEAUTY
WASHES
BODY
Indulge your skin and your
senses! The Dove brand
expanded
its
portfolio,
introducing four new body
washes: Gentle Exfoliating,
Deep Moisture, Cool Moisture
and Energize. Dove body
washes are filled with ¼ moisturizing cream and the mildest
cleansers leaving your skin noticeably softer and smoother
after just one wash – and ultimately more beautiful. It
contains genuine moisturizing ingredients at active levels to
protect and moisturize your skin as you shower.
Show this to your teenage daughter!
A Dove advert challenges our concept of beauty - showing
a girl being transformed from bedhead to cover girl using
all the tricks of the trade. Evolution has won two Grand
Prix Cannes Advertising Awards. To view the video, go to
www.unilever.com/brands/ouradvertising/dove/Dove_
evolution.aspx
9
Annual Report 2008
LUX SKIN CARE RANGE – GET READY TO TEMPT
Caress your body with the
intimate blend of luscious fruits
and moisturizing Chantilly that
melt into your skin. Get ready to
have smooth and kissable skin!
In 2008, Lux re-launched its Skin
Care range, expressing its benefits
of soft skin in a more sensorial
way without referring to skin types but rather to the sensorial
skin effect. The relaunch aimed to bring to life the brand idea
of ‘Selfsuality’ with Soft and Sensual variant names.
New Lux skin care range combines a blend of luscious fruits
& moisturizing Chantilly (whipped cream) with five new
variants on two platforms. Get ready to tempt with the new
Lux Kissably Soft range!
VASELINE LOTIONS
Vaseline has been keeping skin amazing for over 130 years
and in 2008 continued to deliver superior moisturizing
protection and fulfill consumer needs by launching three new
innovations – Intensive Rescue Fragranced, Cocoa Butter Gel
Body Oil and the Men’s Range.
VASELINE INTENSIVE RESCUE FRAGRANCED
The core range of the Vaseline portfolio
was expanded with the introduction of
the Intensive Rescue Fragranced lotion.
This formulation complements the existing
Intensive Rescue Un-fragranced variant,
offering the same benefit to consumers
who already experience the highest level of
moisturization associated with the product,
but now with a great fragrance.
VASELINE COCOA BUTTER GEL OIL - BRING OUT YOUR
NATURAL RADIANCE!
Daily activities and the environment strip
natural protecting oils from skin allowing
essential moisture to evaporate. Vaseline
Cocoa Butter Vitalizing Gel Body Oil was
introduced to address this need and to ignite
the skin’s natural glow. Used after bathing, it
replenishes and locks in moisture for naturally
radiant skin. The combination of Brazilian Nut
oil and almond oil not only make the formula
smell divine, but are rich in essential nutrients, providing the
skin with natural minerals and antioxidants to boost the skin’s
moisture barrier.
VASELINE MEN’S RANGE:
HEALTHY SKIN = HEALTHY BODY
Male skin is thicker and more susceptible to
dryness than female skin and lotions designed
for women’s skin are not optimized for male
skin. To fulfill this consumer need, Vaseline
introduced Vaseline MEN. An effective range
of lotions specially formulated with 18%
hydrating complex specially fortified for
body and face to help skin perform more
efficiently.
In 2008, this two-in-one formulation was launched in a fast
absorbing pump and an extra strength bottle.The fast absorbing
formulation accommodates men who want to address the
symptoms of skin dryness, yet they have little tolerance for
greasy sensories, and the Extra Strength formulation was
designed for men who experience more intense skin dryness
and want something highly efficacious that will resolve the
problem with long-lasting moisture.
EDGE – “Every Day Great Execution”
is a Unilever term that was embodied at the Sales Convention and
Training Conference hosted by the Customer Development Team, which
ran for 4 days in April 2008. Over 60 participants represented both local and export customers of Unilever Caribbean Limited. The team was
trained by an overseas Unilever expert on the fundamentals of “winning at the point of purchase”. The conference provided the perfect
opportunity to recognize performance among the teams and develop
each other’s potential.
10
Foods
UNILEVER HEALTHY CHOICES PROGRAMME (2007 -2008)
In 2008, Unilever Caribbean
Limited rolled out the global
‘Unilever Choices’ campaign
in Trinidad and Tobago. This
campaign is based on the
insight
that
‘Consumers
around the globe want to eat
healthier, but find it difficult’.
It consisted of a Nutrition
Enhancement Program as well
as a Communication element.
All Unilever Food products
were analyzed based on their
adherence to international dietary guidelines for saturated fats,
trans fats, sugars and sodium. Products meeting all guidelines
were given a front of pack logo to highlight to the consumer
that they were making a healthy choice. The logos were either
‘Eat Smart’ or ‘Drink Smart’ based on whether the item was
Food or beverage. This front of pack logo was also supported
by back of pack explanatory information. The brands showing
the logos are Blue Band, Flora, Lipton, Hellmann’s and Ragu.
The communication plan was supported by trade activities,
traditional media, outdoor, event sponsorships and seminars.
A Choices Village was developed at leading supermarkets that
featured product expositions, free health services, sampling
and fun activities for kids.
Key opinion formers were reached through participation in
a number of events directed to nutritionists and persons
involved in public health including: Launch to Trinidad &
Tobago Association of Nutritionists and Dieticians (TTANDI),
participation in a two day conference by the Pan American
Health Organization (PAHO) and the Caribbean Association
of Industry and Commerce (CAIC) as well as presentations to
health care practitioners.
11
LIPTON PREMIUM PYRAMID TEAS ARE HERE
For more than 100 years, Lipton
has served tea to all corners of
the globe, bringing exotic flavours
and new techniques to tea
drinkers everywhere. Now, Lipton
has reinvented the tea bag itself!
The tea bag has been redesigned
in a shape that is not only elegant
but constructed to allow those
flavoured pieces to be seen by tea
drinkers. These uniquely shaped
bags made from gossamer mesh
give our long-leaf tea maximum
room to infuse, resulting in pure tea flavour, colour and
aroma.
In 2008, Lipton launched this exciting new range of Pyramid
Teas with 4 variants: Black Pearl, Vanilla Caramel Truffle, Green
Tea with Mandarin Orange and Bavarian Wild Berry.
Annual Report 2008
The Year in Review
BREEZE MULTIACTIVE CLEAN
Breeze continued its Dirt is Good (DiG)
message with a re-launch of the brand and
a new campaign where Multiactive Breeze
got a boost and was re-launched as “Breeze
Multiactive Active Clean.” The new Multiactive
Active Clean, in Regular and Lemon, now
has microcapsules that are able to penetrate
fabrics and remain there after washing. The
result is a longer lasting feeling of cleanness
that you can see and smell throughout the day! The re-launch
of Breeze also saw an exciting change to the packaging for
the entire line of products.
Home Care
Multiactive Clean Breeze was introduced with a new media
campaign, using the idea that all kids have a favourite outfit
that they never want to take off. The campaign asked mothers
to “Try the Hug Test” to see how their kids clothes felt and
smelled. This was the inspiration behind the Breeze Consumer
promotion that was launched in 2008.
BREEZE – EVERY CHILD HAS THE RIGHT
Breeze believes that for children to develop and grow, they
need to be free to experience the world for themselves. Moms
shouldn’t have to worry about their little ones getting dirty,
because with Breeze, it will all come out in the wash.
In 2008, Breeze launched the Every Child Has the Right
(ECHTR) campaign, designed to start a conversation with
mothers about the importance of play in their children’s
development. With the ECHTR campaign, Breeze reminded
mothers about the power of unstructured play - what the
experts call ‘learning by doing’.
Breeze joined forces with a local organization, Trinidad &
Tobago Innovative Parenting Support (T.T.I.P.S), whose Child
Development experts acted as spokeswomen for the campaign.
The facilitators appeared on several local talk shows discussing
the topic of play and child development. Radio aired “tips”
for parents gave helpful insights into why play is important
and even some examples of games that parents could use to
help stimulate their children’s imagination. The campaign also
launched the first “Breeze” website dedicated to the ECHTR
message with tons of helpful information for parents as well
as advice from our experts, www.everychild.co.tt.
QUIX POWER GEL
Quix proved itself as a brand at the leading
edge of technology in 2008 with the launch
of the Quix Power Gel dishwashing liquid.
This sleek looking new addition to the Quix
family is the brand’s first entry into the “Ultra
Concentrated” segment of the dishwashing
category. The new Quix Power Gel with its
fresh lemon fragrance is formulated with a
superior “gel” technology.
When the dishwashing liquid comes into contact with water, it
transforms into a gel inside your sponge and is trapped there
because the gel does not rinse off as other liquids would.
The trapped gel releases foam continuously ensuring Quix’s
degreasing power lasts for much longer during washing
without the need to “recharge” the sponge again and again.
12
Corporate Social Responsibility Report
Unilever Caribbean Limited lives its mission of “Adding Vitality to
life” everyday to everyone, everywhere by positively impacting the
communities in which we operate and beyond.
We strongly feel a part of our surroundings and of the world we live
in, so our community involvement comes from the heart, and often
involves individual employees in a hands-on manner.
And while we are conscious that our products do their part to add
vitality to every person’s life everywhere in the Caribbean every day,
we still want to add to the quality of life for the less fortunate in
our towns and villages, support the elderly and the needy, and give
children a much-needed leg-up.
13
Annual Report 2008
Corporate Social Responsibility Report (continued)
Mt. D’Or School Activities
Global Handwashing Day
MT. D’OR
Our outreach activities in our neighbouring community of
Mt. D’Or are founded on a partnership that was established
in 2002. In 2008, we focused on three main pillars of
development – education, environmental awareness and
health and wellness.
Home Work Club
Form 6 students of the nearby St. Joseph’s Convent School.
Mt. D’Or Government Primary School Home Work Club.
In 2002, Unilever Caribbean Limited furthered its ongoing
commitment to the Mt. D’Or Government Primary School by
launching a “Home Work Club” for the Standard Five students
(ages 11-13) of the school. The Home Work Club aimed at
providing the students of the school with an appropriate facility
to do their home-work in a supportive environment outside
of school hours. The pupils were assisted by Form 6 students
of the nearby St. Joseph’s Convent School. The programme
ran from January to March, at which point the students sat
their Secondary Entrance Assessment examinations for which
they had been preparing. The programme received a great
response from both sets of students, giving the younger ones
a good start to life and offering the more mature students an
opportunity to give back to society and an appreciation of the
value of being a socially responsible citizen.
On October 15th, Unilever sites across the global recognised
Global Handwashing Day as part of the Company’s hygiene
platform. In Trinidad, Unilever Caribbean Limited recognised
the day by visiting the Mt. D’Or Government Primary School
where the Company Health & Wellness team hosted informative
classroom sessions on the importance of good hygiene with
a special focus on the importance of washing hands to the
school’s 200 students. The pupils also received bars of Rexona
anti-bacterial soap, stickers and a fun activity sheet with
the message and posters for the school. The Company also
expanded its reach to 10 schools near the Unilever site by
donating cases of soap along with stickers and posters with
the message “Washing Hands Saves Lives”.
Erase Your Carbon Footprint
Mt. D’Or Government Primary School, Principal, Claudette Bell, with
some of the winners with their bins.
“Erasing Your Carbon Footprint”
put into practice.
Mt. D’Or Government Primary School students felt proud that their pictures were
put on bins which encouraged fellow pupils to preserve the environment by keeping the school clean.
200 students of the Mt. D’Or Government Primary School
were invited to create a piece of artwork that best brought
the environmental message “Erasing Your Carbon Footprint”
to life. An overwhelming 102 entries were received from the
student groups, ages 5 to 13. Three winners of each class
14
grouping, 21 in all, were awarded gift vouchers towards the
purchase of school supplies at the prize-giving ceremony in
July. And as a special touch, the Company produced bins
decorated with the artwork of the 1st place winners which
were distributed in the school at the start of the new school
term in September.
Other Activities
Walk the World
Dove boosts Self Esteem in Mt. D’Or
Cross section of Unilever Caribbean Limited’s Walk the World 2008 in
Rio Claro.
“Dove Real Beauty” Workshop for Standard 5 girls of the Mt. D’Or
Government Primary School.
Many young people don’t feel confident about themselves
and their bodies. Dove’s mission is to change that! To boost
positive self esteem and positive body imaging among
adolescents, Unilever Caribbean Limited held a special “Dove
Real Beauty” Workshop for Standard 5 girls at the Mt. D’Or
Government Primary School. Our “Real Beauty Ambassadors”
(employees who had been trained in fostering self-esteem
and positive body imaging among 11-14 year-olds) left the
girls feeling re-energized. and even more positive about their
self-esteem; as well as the facilitators who left with a great
feeling of satisfaction and willingness to spread the message
of Dove Real Beauty everywhere!
Unilever is one of the principal partners of “Walk the World”,
a global event that is organised by the United Nations World
Food Programme. For the second year in a row, Unilever
Caribbean Limited sponsored the event in Trinidad, which
took place in the rural community of Rio Claro and was
attended by over 2000 adults and children, including Unilever
employees. The event contributes to raising awareness and
funds to combat child hunger, a global problem affecting
more than 59 million children worldwide.
General Philanthropy
Unilever Caribbean Limited is committed to supporting
communities, non-governmental organisations, schools and
clubs on a daily basis with requests on behalf of the socially
disadvantaged in our society. The Company will continue to
do its part to alleviate social disparity and works closely to
assist these types of organisations where necessary.
UWI – World of Work Recruitment Fair
In 2008, Unilever Caribbean Limited participated in the University of the West Indies “World of Work” Recruitment Fair,
which targets students for potential employment with a number of various companies. Through an interactive booth, UCL
recruited 18 second year students for the Company’s annual
“UWI Summer Internship Programme”.
15
Annual Report 2008
Employee Relations
TAKE OUR KIDS TO WORK
Training
In 2008, Unilever’s Learning Management System (LMS) was
made available to all employees, offering over 100 E-learning
courses. The Company established a computer room to
accommodate employee learning on their personal time, and
employees can also access courses from the comfort of their
home. A number of Instructor-led programmes in 2008 included
‘Understanding the Motives and Actions of the Customer’,
‘Leading Teams’ and ‘Time & Priority Management’.
In June, nine candidates were selected for 2-year Management
Trainee Programme, after which they will be placed in specific
positions that best matches their strongest abilities. The
trainees were selected from a pool of over 500 applicants,
following a rigorous interview process.
Other training offered to employees at Unilever Caribbean
Limited included Defensive Driving Training for Company
drivers, Crisis Management, Emergency Response Training,
Incident Command, Forklift Driving and Permit to Work.
Over 50 programmes were held in 2008 with almost half of
the employee population benefitting from one or more of
these very exciting and rewarding sessions.
Participants of “Take Our Kids to Work” day 2008.
In 2008, UCL introduced the Equilibrium Vitality programme,
which focused on 4 pillars – Work-Life Balance, Just for
you and the Kids, Health and Well Being and Doing Well
by Doing Good. One of the highlights of the programme
in 2008 was a “Take Our Kids to Work” Day as part of the
“Just for You and the Kids” pillar where thirty employees’
children between the ages of 10 and 18 were treated to
an day at the Unilever Caribbean Limited office where
they were able to partake in a day of learning and fun
activities while interacting with their parents in their place
of work.
International Women’s Day
International Women’s Day was celebrated on March 8th in
2008 and globally, is recognised as a special day dedicated
to recognising the contribution of women to global development. At Unilever Caribbean Limited, we celebrated our
beautiful women by distributing roses as well as a Pond’s Moisturiser kit.
16
Factory Improvements &
Safety, Health, Environment
and Quality (SHEQ)
Regional Virtual Sites
Unilever continues to manage its global Supply Chain functions through Regional Virtual Sites (RVS) operating through a seamless sharing of resources.
Plant sites, regardless of geographic location, size, complexity or cultural heritage, come together virtually to identify and utilise best practices from within
the group. Information is rapidly and efficiently shared to improve operational
effectiveness while ensuring synergies are maximised.
17
Annual Report 2008
Factory Improvements and SHEQ (continued)
Safety, Health, Environment & Quality
Unilever Caribbean Limited regards safety as an essential
element of our business practices and we take our responsibility
seriously in providing a safe working environment for our
employees. The Company is committed to improving the
Safety, Health & Environment (SHE) of its operations by
working in par with the global Unilever guidelines. Safety is at
the forefront of everything we do and 2008 was no different
as the Company’s focus on ensuring a safe environment
remained a top priority.
Safety, Health and Environment (S.H.E.)
Safety, Health and Envirnoment (S.H.E.) continues to be
one of our key business priorities and remains the focus of
attention for every Unilever employee. The outstanding S.H.E.
achievers for 2008 were the Edibles Department and the
Non-Manufacturing Division, who recorded zero recordable
accidents in 2008.
As a global company, we are subject to extensive regulation
surrounding health and safety of our people and the
environment via stringent audits.
OSHA Visit
In November 2008, the Occupational Safety and Health (OSH)
Agency visited Unilever Caribbean Limited (UCL) to assess
the safety standards of the company. The outcome of this
inspection was very satisfactory. We are pleased to report
that the site (both Manufacturing and Non-Manufacturing)
conforms to the stringent regulations of the OSH
Agency. This demonstrates the organisation’s ability to
maintain a high safety standard that meets both local and
international requirements.
Factory Improvement
Effluent Plant Update
Unilever is committed to operating in an environmentally sound
and sustainable manner through continuous improvement in
environmental performance in all its activities. The effluent
treatment plant is now completed. The plant operates
within the local Noise Pollution Rules, 2001 and the Water
Pollution Rules (Amendment) 2006 in addition to the more
stringent Unilever Environmental Care Framework Standard.
The Company is committed to providing a safe
and clean environment for its employees and the
surrounding communities.
Quality Update
Unilever also keeps a keen
eye on adherence to quality
standards. In 2008, the Liquids
Plant, Stores, Warehouse and
the Laboratory were subjected to
the Hazard Analysis and Critical
Control Points (HACCP) Quality
and Hygiene Assessment. This
assessment sought to address the entry of physical, chemical
and microbial contamination of the process and end product,
and also evaluated good manufacturing practices. We are
pleased to report that these areas achieved scores exceeding
the requirement (green status). This is considered to be an
outstanding achievement by Unilever standards.
In 2008, the Liquids, Edibles and the Detergent plants were
also subjected to the annual Quality Verification Assessment.
Each received green status indicating that the plants were
operating at the required quality standard.
Additionally, the Detergent laboratory was assessed for their
level of accuracy with respect to dust and enzyme monitoring,
which is an essential component of ensuring a safe and
healthy work environment for our plant employees achieving
green status.
Unilever’s Global Village
In 2008, UCL had support of
resources from the Unilever
North Americas Region to
support the local team’s effort in
continuous improvement of the
site’s operations. Personnel from
the the sister plants throughout
the region spent time during the
year both locally and remotely
lending assistance in various
areas of plant improvements.
This is a prime example of everyone working together everyday
and everywhere in alignment with the One Unilever culture.
18
Independent Auditor’s Report
To the shareholders of Unilever Caribbean Limited
Report on the financial statements
We have audited the accompanying financial statements
of Unilever Caribbean Limited, which comprise the balance
sheet as of 31 December 2008 and the income statement,
statement of changes in equity and cash flow statement for
the year then ended and a summary of significant accounting
policies and other explanatory notes.
Management’s responsibility for the financial statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards. This responsibility
includes: designing, implementing and maintaining internal
control relevant to the preparation and fair presentation of
financial statements that are free from material misstatement,
whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates
that are reasonable in the circumstances.
Auditor’s responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in
accordance with International Standards on Auditing. Those
standards require that we comply with ethical requirements
and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit
evidence about the amounts and disclosures in the financial
statements. The procedures selected depend on the auditor’s
19
judgement, including the assessment of the risks of material
misstatement of the financial statements, whether due to
fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entity’s preparation
and fair presentation of the financial statements in order to
design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on
the effectiveness of the entity’s internal control. An audit also
includes evaluating the appropriateness of accounting policies
used and the reasonableness of accounting estimates made
by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the accompanying financial statements present
fairly, in all material respects, the financial position of Unilever
Caribbean Limited as of 31 December 2008, and its financial
performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards.
PricewaterhouseCoopers
Port of Spain,
Trinidad, West Indies
23 March 2009
Annual Report 2008 Unilever Caribbean Limited
Income Statement
Balance Sheet
(Expressed in Trinidad and Tobago Dollars)
Notes
Cost of Sales
(296,043) (252,007)
31 December
2008
2007
Notes $’000 $’000
ASSETS
Non-current Assets
Property, plant and equipment
12 77,474 78,402
Retirement benefit asset
13 59,837 55,532
Intangible asset
14
827
--
Gross Profit
Expenses
Selling and distribution costs
Administrative expenses
165,891
164,383
138,138 133,934
(84,442)
(25,399)
Current Assets
Inventories
16
Trade and other receivables
17
Due from related companies
18
Taxation recoverable
Cash at bank and in hand
58,708 55,792
84,367 65,802
3,357 3,303
3,153 2,067
7,257 21,521
Turnover
Year Ended
31 December
2008
2007
$’000
$’000
461,934
5
(84,453)
(27,886)
416,390
(112,339) (109,841)
Operating Profit 53,552
54,542
156,842 148,485
Finance Costs – Net
8
(3,471)
(3,021)
Total Assets
294,980 282,419
Profit Before Taxation
50,081
51,521
Taxation
9
(12,791)
(15,288)
Profit For The Year
37,290
36,233
Earnings Per Share For Profit
Attributable To The
Equity Holders Of The
Company During The Year
- Basic and diluted
10
$ 1.42
$ 1.38
EQUITY AND LIABILITIES
Capital And Reserves Attributable To Equity Holders
Of The Company
Share capital
19 26,244 26,244
Property revaluation surplus
21,294 21,294
Retained earnings
63,129 50,246
Total Equity
110,667 97,784
Non-current Liabilities
Retirement and termination obligations 13
Deferred taxation
20
27,192 26,938
16,364 14,532
43,556 41,470
Current Liabilities
Trade and other payables
21
Provisions for other liabilities
Due to parent and related companies 18
Bankers’ acceptances
22
Bank overdraft
23
Taxation payable
48,327 51,099
9,491 8,892
33,315 20,924
48,939 54,043
685 3,837
-- 4,370
140,757 143,165
Total Liabilities
184,313 184,635
Total Equity And Liabilities
294,980 282,419
The notes on pages 24 to 40 are an integral part of these financial
statements.
On 23 March 2009, the Board of Directors of Unilever Caribbean
Limited authorised these financial statements for issue.
______________________ Director
______________________ Director
The notes on pages 22 to 38 are an integral part of these financial statements.
20
Statement of Changes in Equity
Cash Flow Statement
Property
Share Revaluation Retained Total
Note Capital Surplus Earnings Equity
$’000
$’000
$’000 $’000
Notes
Operating Activities
Profit before taxation
Adjustments for:
Depreciation
12
Loss on disposal of plant
and equipment
Retirement and termination benefits
Operating profit before working capital changes
Year ended
31 December 2008
Balance at
1 January 2008
Profit for the year
Dividends 11
26,244
--
--
21,294
--
--
50,246 97,784
37,290 37,290
(24,407) (24,407)
Balance at
31 December 2008
26,244
21,294
63,129 110,667
Year ended
31 December 2007
Balance at
1 January 2007
26,244
22,029
42,881 91,154
Profit for the year
--
--
36,233 36,233
Deferred tax
on revaluation
--
(735)
Dividends
--
--
11
Balance at
31 December 2007
26,244
21,294
--
Increase in inventories
(Increase)/decrease in trade
and other receivables (Increase)/decrease in due
from related companies
Decrease in trade and other payables
Increase/(decrease) in
provision for other liabilities
Increase/(decrease) in
due to parent and related companies
Year Ended
31 December
2008
2007
$’000 $’000
50,081 51,521
5,590
5,022
15
(4,051)
152
(685)
51,635 56,010
(2,916) (5,832)
(18,565)
3,358
(54) 1,070
(2,772) (4,971)
599
(2,587)
12,391
(5,075)
(735)
(28,868) (28,868)
Net Cash Inflows From Operating Activities Taxation paid
Taxation refund
40,318 41,973
(16,415) (7,628)
--
855
Net Cash Inflows From Operating Activities
23,903 35,200
Investing Activities
Purchase of plant and equipment
Investment in other projects
(4,677) (4,134)
(827)
--
50,246 97,784
12
14
Net Cash Outflows From Investing Activities
Financing Activity
Dividends paid
(5,504) (4,134)
11 (24,407) (28,868)
(Decrease)/Increase In Cash
And Cash Equivalents
(6,008)
2,198
Cash And Cash Equivalents
At Beginning Of Year
(36,359) (38,557)
Cash And Cash Equivalents
At End Of Year
(42,367) (36,359)
Represented By:
7,257 21,521
Bank overdraft
(685) (3,837)
22 (48,939) (54,043)
(42,367) (36,359)
The notes on pages 22 to 38 are an integral part of these financial statements.
21
Annual Report 2008
Notes to the Financial Statements
31 December 2008 (Expressed in Trinidad and Tobago Dollars)
1 General Information
(ii)
Unilever Caribbean Limited was incorporated in the Republic of
Trinidad and Tobago in 1929, and its registered office is located at
Eastern Main Road, Champs Fleurs. The principal business activities
are the manufacture and sale of homecare, personal care and food
products. The Company is a subsidiary of Unilever Overseas Holdings
AG, which is a wholly owned subsidiary of Unilever PLC, a company
incorporated in the United Kingdom.
2 Summary of Significant Accounting Policies
The principal accounting policies applied in the preparation
of these financial statements are set out below. These policies
have been consistently applied to all the years presented, unless
otherwise stated.
2.1
Basis of preparation
These financial statements have been prepared in accordance with
International Financial Reporting Standards under the historical cost
convention, as modified by the revaluation of freehold properties.
The preparation of financial statements in conformity with
International Financial Reporting Standards requires the use of
certain critical accounting estimates. It also requires management
to exercise its judgement in the process of applying the Company’s
accounting policies. The areas involving a higher degree of judgment
or complexity, or areas where assumptions and estimates are
significant to the financial statements, are disclosed in Note 4.
(i)
Interpretations effective in 2008
• IFRIC 14, ‘IAS 19 – The limit on a defined benefit asset,
minimum funding requirements and their interaction’,
provides guidance on assessing the limit in IAS 19 on the
amount of the surplus that can be recognised as an asset.
It also explains how the pension asset or liability may be
affected by a statutory or contractual minimum funding
requirement. This interpretation does not have any impact
on the Company’s financial statements, as it is not subject
to any minimum funding requirements.
• IFRIC 11, ‘IFRS 2 – Group and treasury share transactions’,
provides guidance on whether share-based transactions
involving treasury shares or involving group entities
(for example, options over a parent’s shares) should
be accounted for as equity-settled or cash-settled
share-based payment transactions in the stand-alone
accounts of the parent and group companies. This
interpretation does not have an impact on the Company’s
financial statements.
Standards, amendments and interpretations effective in
2008 but not relevant to the Company
The following interpretations to published standards is
mandatory for accounting periods beginning on or after
1 January 2008 but is not relevant to the Company’s
operations.
• IFRIC 12, ‘Service concession arrangements’; and
• IFRIC 13, ‘Customer loyalty programmes’.
(iii)
Standards, amendments and interpretations to existing
standards that are not yet effective and have not been early
adopted by the Company
The following standards and amendments to existing
standards have been published and are mandatory for the
Company’s accounting periods beginning on or after 1
January 2009 or later periods but the Company has not early
adopted them:
• IAS 23 (Amendment), ‘Borrowing costs’ (effective from
1 January 2009). The amendment requires an entity to
capitalise borrowing costs directly attributable to the
acquisition, construction or production of a qualifying
asset (one that takes a substantial period of time to get
ready for use or sale) as part of the cost of that asset.
The option of immediately expensing those borrowing
costs will be removed. The Company will apply IAS
23 (Amendment) retrospectively from 1 January
2009 but it is currently not applicable as there are no
qualifying assets.
• IAS 1 (Revised), ‘Presentation of financial statements’
(effective from 1 January 2009). The revised standard will
prohibit the presentation of items of income and expenses
(that is, ‘non-owner changes in equity’) in the statement
of changes in equity, requiring ‘non-owner changes in
equity’ to be presented separately from owner changes in
equity. All non-owner changes in equity will be required
to be shown in a performance statement, but entities can
choose whether to present one performance statement (the
statement of comprehensive income) or two statements
(the income statement and statement of comprehensive
income). Where entities restate or reclassify comparative
information, they will be required to present a restated
balance sheet as at the beginning comparative period in
addition to the current requirement to present balance
sheets at the end of the current period and comparative
period. The Company will apply IAS 1 (Revised) from 1
January 2009. It is likely that both the income statement
and statement of comprehensive income will be presented
as performance statements.
22
Notes to the Financial Statements (continued)
2 Summary of Significant Accounting Policies (continued)
2.1
Basis of preparation (continued)
(iii)
Standards, amendments and interpretations to existing
standards that are not yet effective and have not been early
adopted by the Company (continued)
• IFRS 2 (Amendment), ‘Share-based payment’ (effective
from 1 January 2009). The amended standard deals
with vesting conditions and cancellations. It clarifies
that vesting conditions are service conditions and
performance conditions only. Other features of a sharebased payment are not vesting conditions. These features
would need to be included in the grant date fair value
for transactions with employees and others providing
similar services; they would not impact the number of
awards expected to vest or valuation thereof subsequent
to grant date. All cancellations, whether by the entity
or by other parties, should receive the same accounting
treatment. The Company will apply IFRS 2 (Amendment)
from 1 January 2009. It is not expected to have a
material impact on the Company’s financial statements.
• IAS 23 (Amendment), ‘Borrowing costs’ (effective from
1 January 2009). The amendment is part of the IASB’s
annual improvements project published in May 2008.
The definition of borrowing costs has been amended so
that interest expense is calculated using the effective
interest method defined in IAS 39 ‘Financial instruments:
Recognition and measurement’. This eliminates the
inconsistency of terms between IAS 39 and IAS 23. The
Company will apply the IAS 23 (Amendment) prospectively
to the capitalisation of borrowing costs on qualifying
assets from 1 January 2009.
• IAS 38 (Amendment), ‘Intangible assets’ (effective from
A prepayment may only be recognised in the event that
payment has been made in advance of obtaining right of
access to goods or receipt of services. The Company will
apply the IAS 38 (Amendment) from 1 January 2009.
• IAS 19 (Amendment), ‘Employee benefits’ (effective from
– The definition of return on plan assets has been amended
to state that plan administration costs are deducted in the
calculation of return on plan assets only to the extent that
such costs have been excluded from measurement of the
defined benefit obligation.
– The distinction between short term and long term
employee benefits will be based on whether benefits are
due to be settled within or after 12 months of employee
service being rendered.
– IAS 37, ‘Provisions, contingent liabilities and contingent
assets, requires contingent liabilities to be disclosed, not
recognised. IAS 19 has been amended to be consistent.
The Company will apply the IAS 19 (Amendment) from 1
January 2009.
• IAS 1 (Amendment), ‘Presentation of financial statements’
(effective from 1 January 2009). The amendment is part
of the IASB’s annual improvements project published in
May 2008. The amendment clarifies that some rather
than all financial assets and liabilities classified as held for
trading in accordance with IAS 39, ‘Financial instruments:
Recognition and measurement’ are examples of current
assets and liabilities respectively. The Company will
apply the IAS 39 (Amendment) from 1 January 2009.
It is not expected to have an impact on the Company’s
financial statements.
• There are a number of minor amendments to IFRS 7,
‘Financial instruments: Disclosures’, IAS 8, ‘Accounting
policies, changes in accounting estimates and errors’, IAS
10, ‘Events after the reporting period’, IAS 18, ‘Revenue’
and IAS 34, ‘Interim financial reporting’, which are part
of the IASB’s annual improvements project published in
May 2008 (not addressed above). These amendments are
unlikely to have an impact on the Company’s accounts
and have therefore not been analysed in detail.
• IAS 38 (Amendment), ‘Intangible assets’ (effective from
The amendment deletes the wording that states that
there is ‘rarely, if ever’ support for use of a method that
results in a lower rate of amortisation than the straightline method. The amendment will not have an impact on
the Company’s operations, as all intangible assets are
amortised using the straight-line method.
– The amendment clarifies that a plan amendment that
results in a change in the extent to which benefit promises
are affected by future salary increases is a curtailment,
while an amendment that changes benefits attributable
to past service gives rise to a negative past service cost if
it results in a reduction in the present value of the defined
benefit obligation.
23
Annual Report 2008
2.1
Basis of preparation (continued)
(iv)
Interpretations and amendments to existing standards
that are not yet effective and not relevant for the
Company’s operations
The following amendment to an existing standard has been
published and is mandatory for the Company’s accounting
period beginning on 1 January 2009 but is not relevant for
the Company’s operations:
2.2
assets and liabilities denominated in foreign currencies are
recognised in the income statement.
2.4 Property, plant and equipment
Cost or revaluation
Freehold land and buildings are stated at valuation or, for additions
subsequent to the date of revaluation, at cost. All other assets are
stated at historical cost less depreciation. Historical cost includes
expenditure that is directly attributable to the acquisition of items.
Freehold land and buildings are professionally valued every five
years by independent valuers.
• IAS 16 (Amendment), ‘Property, plant and equipment’ (and
consequential amendment to IAS 7, ‘Statement of cash
flows’) (effective from 1 January 2009). The amendment is
part of the IASB’s annual improvements project published
in May 2008. Entities whose ordinary activities comprise
renting and subsequently selling assets present proceeds
from the sale of those assets as revenue and should
transfer the carrying amount of the asset to inventories
when the asset becomes held for sale. A consequential
amendment to IAS 7 states that cash flows arising from
purchase, rental and sale of those assets are classified
as cash flows from operating activities. The amendment
will not have an impact on the Company’s operations
because none of its ordinary activities comprise renting
and subsequently selling assets.
Increases in the carrying amount arising on revaluation are credited
to the revaluation reserve in shareholders’ equity. Decreases that
offset previous increases in the same asset are charged against the
revaluation reserve; all other decreases are charged to the income
statement.
Segment reporting
Land and capital work in progress are not depreciated.
A business segment is a group of assets and operations engaged
in providing products or services that are subject to risks and
returns that are different from those of other business segments. A
geographical segment is engaged in providing products or services
within a particular economic environment that are subject to risks
and returns that are different from those of segments operating in
other economic environments.
2.3
Foreign currency translation
(i)
Functional and presentation currency
(ii)
Transactions and balances
Items included in the financial statements of the Company
are measured using the currency of the primary economic
environment in which the entity operates (‘the functional
currency’). The financial statements are presented in Trinidad
and Tobago dollars, which is the Company’s functional and
presentation currency.
Subsequent costs are included in the asset’s carrying amount or
recognised as a separate asset, as appropriate, only when it is
probable that future economic benefits associated with the item
will flow to the Company and the cost of the item can be measured
reliably. The carrying amount of the replaced part is derecognised. All
other repairs and maintenance are charged to the income statement
during the financial period in which they are incurred.
Depreciation
Depreciation is calculated on the straight line basis using the
following rates:
Freehold buildings
Plant and equipment Motor vehicles
-
-
-
2.5% per annum
7% to 33 1/3% per annum
20% per annum
Where the carrying amount of an asset is greater than its estimated
recoverable amount, it is written down to its recoverable amount.
Gains and losses on disposal of property, plant and equipment are
determined by reference to their carrying amounts and are taken
into account in determining operating profit. On disposal of revalued
assets, amounts in the revaluation reserve relating to that asset are
transferred to retained earnings.
Foreign currency transactions are translated into the
functional currency using the exchange rates prevailing at
the dates of the transactions. Foreign exchange gains and
losses resulting from the settlement of such transactions and
from the translation at year-end exchange rates of monetary
24
2.5
Intangible assets
Computer software
Computer software development costs recognised as assets are
amortised over their estimated useful lives, which do not exceed
five years.
2.6
Impairment of non-financial assets
Assets that are subject to amortisation are reviewed for impairment
whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. An impairment loss is
recognised for the amount by which the asset’s carrying amount
exceeds its recoverable amount. The recoverable amount is the
higher of an asset’s fair value less costs to sell and value in use.
For the purposes of assessing impairment, assets are grouped at
the lowest levels for which there are separately identifiable cash
flows (cash-generating units). Non-financial assets that suffered an
impairment are reviewed for possible reversal of the impairment at
each reporting date.
2.7
Financial assets
The Company classifies its financial assets as loans and receivables.
The classification depends on the purpose for which the financial
assets were acquired. Management determines the classification of
its financial assets at initial recognition.
Loans and receivables are non-derivative financial assets with fixed
or determinable payments that are not quoted in an active market.
They are included in current assets, except for maturities greater
than 12 months after the balance sheet date. These are classified as
non-current assets. The Company’s loans and receivables comprise
‘trade receivables and prepayments’ and cash and cash equivalents
in the balance sheet.
Impairment testing of trade receivables is described in Note 2.9.
2.8
Inventories
Inventories are stated at the lower of weighted average cost or
net realisable value. The cost of raw and packaging materials and
finished goods are determined on a weighted average cost basis.
Finished goods include a proportion of attributable production
overheads. Work in progress comprises direct costs of raw and
packaging materials and related production overheads.
Net realisable value is the estimated selling price in the
ordinary course of business, less the costs of completion and
selling expenses.
2.9 Trade receivables
Trade receivables are recognised at fair value less provision for
impairment. A provision for impairment of trade receivables is
established when there is objective evidence that the Company will
not be able to collect all amounts due according to the original
terms of the receivables. Significant financial difficulties of the
debtor, probability that the debtor will enter bankruptcy or financial
reorganisation, and default or delinquency in payments (more than
30 days overdue) are considered indicators that the trade receivable
is impaired. The amount of the provision is the difference between
the asset’s carrying amount and the present value of estimated
future cash flows. The carrying amount of the asset is reduced
through the use of an allowance account, and the amount of the
loss is recognised in the income statement. When a trade receivable
is uncollectible, it is written off against the allowance account for
trade receivables. Subsequent recoveries of amounts previously
written off are credited to the income statement.
2.10 Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand and
bankers’ acceptances.
2.11 Share capital
Ordinary shares are classified as equity.
2.12 Trade payables
Trade payables are recognised fair value.
2.13 Current and deferred income taxes
The current income tax charge is calculated on the basis of the tax
laws enacted or substantively enacted at the balance sheet date.
Management periodically evaluates positions taken in tax returns
with respect to situations in which applicable tax regulations
are subject to interpretation and establishes provisions where
appropriate on the basis of amounts expected to be paid to the tax
authorities.
Deferred income tax is provided in full, using the liability method, on
temporary differences arising between the tax bases of assets and
liabilities and their carrying values in the financial statements.
Engineering and general stores are valued at weighted
average cost.
Goods in transit are valued at suppliers’ invoice cost.
25
Annual Report 2008
The expected costs of these benefits are accrued over the
period of employment, using an accounting methodology
similar to that for defined benefit pension plans. Valuations
of these obligations are carried out by independent
qualified actuaries.
(iii)
Termination benefits
(iv)
Profit-sharing and bonus plans
2.13 Current and deferred income taxes (continued)
Deferred income tax is determined using tax rates that have been
enacted or substantially enacted by the balance sheet date and are
expected to apply when the related deferred income tax asset is
realised or the deferred income tax liability is settled.
The principal temporary differences arise from depreciation
on property, plant and equipment, revaluation of certain noncurrent assets and provisions for pensions and other post
retirement benefits.
2.14 Employee benefits
(i)
Pension obligations
The Company operates a defined benefit final salary pension
plan covering certain regular full time employees. The funds
of the plan are administered by trustees and are separate
from the Company’s assets.
The pension accounting costs are assessed using the
projected unit credit method. Under this method, the cost of
providing pensions is charged to the income statement so as
to spread the regular cost over the service lives of employees
in accordance with the advice of qualified actuaries who
carry out a full valuation of the plan every three years. The
pension obligation is measured as the present value of the
estimated future cash outflows using a rate of 8.75% (2007:
8.75%) for active members, deferred pensioners and current
pensioners.
Actuarial gains and losses are only recognised when they fall
outside a corridor equal to 10% of the larger of the value of
the plan’s assets and the value of the plan’s liabilities. These
gains and losses are recognised over the average remaining
service lives of employees.
The Company also operates a supplementary pension
scheme. This is a closed scheme providing ex-gratia pensions
for which no additional employees are expected to qualify.
The expected costs of these benefits are accrued over the
period of employment, using an accounting methodology
similar to that for defined benefit pension plans. Valuations
of these obligations are carried out by independent qualified
actuaries.
(ii)
Other post retirement obligations
The industrial agreement covering the hourly rated employees
provides for a termination benefit which functions as a
retirement benefit for those employees who are not in the
pension plan.
Termination benefits for employees excluding hourly rated
employees are payable when employment is terminated
by the Company before the normal retirement date, or
whenever an employee accepts voluntary redundancy
in exchange for these benefits. This entitlement is
calculated from inception of employment and this liability is
provided for.
The Company recognises a liability and an expense for
bonuses and profit-sharing, based on a formula that takes
into consideration the profit attributable to the Company’s
shareholders after certain adjustments.
2.15 Provisions
Provisions are recognised when: the Company has a
present legal or constructive obligation as a result of past
events; it is probable that an outflow of resources will be
required to settle the obligation; and the amount has been
reliably estimated. Provisions are not recognised for future
operating losses.
Where there are a number of similar obligations, the likelihood that
an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised
even if the likelihood of an outflow with respect to any one item
included in the same class of obligations may be small.
Employee entitlements to annual leave are recognised when they
accrue to employees. A provision is made for the estimated liability
for annual leave as a result of services rendered by employees up to
the balance sheet date.
2.16 Revenue recognition
Revenue comprises the fair value of the consideration received
or receivable for the sale of goods in the ordinary course of
the Company’s activities. Revenue is shown net of valueadded tax, rebates and discounts. Revenue is recognised
as follows:
Sales of goods
Sales of goods are recognised when the Company has delivered
products to the customer, the customer has accepted the products
and collectibility of the related receivables is reasonably assured.
26
by the Board of Directors. The Board provides written principles for
overall risk management, as well as written policies covering specific
areas, such as foreign exchange risk, credit risk and liquidity risk.
2.16 Revenue recognition (continued)
(a)
Market risk
Interest income
(i) Foreign exchange risk
Interest income is recognised on a time proportion basis, taking
account of the principal outstanding and the effective rate over
the period to maturity, when it is determined that such income will
accrue to the Company.
2.17 Accounting for leases - where the company is the lessee
The Company operates internationally and is exposed to
foreign exchange risk arising from various currency exposures,
primarily with respect to the United States dollar. Foreign
exchange risk arises from future commercial transactions and
when recognised assets or liabilities are denominated in a
currency that is not the Company’s functional currency.
Leases of assets under which all the risks and benefits of ownership
are effectively retained by the lessor are classified as operating
leases. Payments made under operating leases are charged to the
income statement on a straight-line basis over the period of the
lease.
The Company monitors its exposure to fluctuations in foreign
currencies. If it is determined that there is a need to hedge
this exposure the appropriate instrument is used.
At 31 December 2008, if the TT dollar had weakened/
strengthened by 5% against the US dollar with all other
variables held constant, post tax profit for the year would
have been $101,447 (2007: $966,286) lower/higher, mainly
as a result of foreign exchange losses/gains on translation of
US dollar denominated balances.
When an operating lease is terminated before the lease period
has expired, any payment required to be made to the lessor by
way of penalty is recognised as an expense in the period in which
termination takes place.
2.18 Dividend distribution
(ii)Cash flow and fair value interest rate risk
Dividend distribution to the Company’s shareholders is recognised
as a liability in the Company’s financial statements in the period in
which the dividends are approved by the Company’s directors.
As the Company has no significant interest-bearing assets, the
Company’s income and operating cash flows are substantially
independent of changes in market interest rates.
2.19 Comparatives
The Company’s interest rate risk arises from borrowings.
These are at variable rates and expose the Company to cash
flow interest rate risk. During 2008 and 2007, the Company’s
borrowings at variable rates were denominated in the
functional currency and United States dollars.
At 31 December 2008, if interest rates on borrowings had
been 1% higher/lower with all other variables held constant,
post tax profit for the year would have been $494,333
(2007: $561,632) lower/higher, mainly as a result of higher/
lower interest expense on floating rate borrowings. Where necessary, comparative figures have been adjusted to
conform with changes in presentation in the current year.
3Financial Risk Management
3.1
Financial risk factors
The Company’s activities expose it to a variety of financial risks:
market risk (including currency risk, fair value interest rate risk,
cashflow interest rate risk and price risk), credit risk and liquidity
risk. Risk management is carried out in line with policies approved
27
Annual Report 2008
3Financial Risk Management (continued)
3.1
Financial risk factors (continued)
(b)
Credit risk
Capital risk management
The Company’s objectives when managing capital are to safeguard
its ability to continue as a going concern, in order to provide returns
for shareholders and benefits for other stakeholders and to maintain
an optimal capital structure to reduce the cost of capital.
Credit risk arises from cash and cash equivalents as well as
credit exposures to customers. The Company has credit risk,
however the Company has policies in place to ensure that
sales of products are made to customers with an appropriate
credit history. Credit risk arises primarily from credit exposures
from sales to distributors and retail customers, including
outstanding receivables. (See Notes 15 (b) and 17).
The credit quality of customers, their financial position, past
experience and other factors are taken into consideration in
assessing credit risk and are regularly monitored through the
use of credit terms. Management does not expect any losses
from non-performance by counterparties in excess of the
provision made.
Cash and deposits are held with reputable financial
institutions, with amounts varying between $96,985 and
$3,407,597 (2007: $94,026 and $8,963,092) at the
individual institutions.
(c)
3.2
The Company monitors capital on the basis of the gearing ratio. This
ratio is calculated as net debt divided by total capital. Net debt is
calculated as bankers’ acceptances and bank overdraft less cash at
bank and in hand. Total capital is calculated as ‘equity’ as shown in
the balance sheet plus net debt.
The gearing ratios at 31 December 2008 and 2007 were as
follows:
2008
2007
$’000
$’000
Bankers’ acceptances and bank overdraft 49,624
Less: cash at bank and in hand
(7,257)
57,880
(21,521)
42,367
36,359
Total equity
110,048
97,784
Total capital
152,415
134,143
28%
27%
Net debt
Liquidity risk
Gearing ratio
Prudent liquidity risk management implies maintaining
sufficient cash and short-term funds and the availability of
funding through an adequate amount of committed credit
facilities. Due to the dynamic nature of the underlying
business, the Company aims at maintaining flexibility in
funding by keeping committed credit lines available.
3.3
The table below analyses the Company’s financial liabilities
based on the remaining period at the balance sheet date to
the contractual maturity date. The amounts disclosed are the
contractual undiscounted cash flows. Balances due within
one year equal their carrying balances.
Less than one year
2008
2007
$’000
$’000
Principal Interest
Due to parent and
related companies
Bank overdraft
48,939
468
48,327
54,043
404
51,099
33,315
685
20,924
3,837
Fair value estimation
The carrying amount of short-term financial assets and liabilities
comprising: cash and bank balances, due from related companies,
trade and other receivables, trade and other payables and due to
parent and related companies are a reasonable estimate of their fair
values because of the short maturity of these instruments.
4 Critical Accounting Estimates
and Judgements
Estimates and judgments are continually evaluated and are based
on historical experience and other factors, including expectations
of future events that are believed to be reasonable under the
circumstances.
Critical accounting estimates and assumptions
The Company makes estimates and assumptions concerning the
future. The resulting accounting estimates will, by definition, rarely
equal the related actual results. The estimates and assumptions
that have a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the next financial
year are outlined below.
28
4 Critical Accounting Estimates
and Judgements (continued)
7Employee Benefit Expense
(i)
Income taxes
There are some transactions and calculations for which the
ultimate tax determination is uncertain during the ordinary
course of business. The Company recognises liabilities for
anticipated tax audit issues based on estimates of whether
additional taxes will be due. Where the final tax outcome
of these matters is different from the amounts that were
initially recorded, such differences will impact the income
tax and deferred tax provisions in the period in which such
determination is made.
(ii)
Pension benefits
The present value of the pension obligations depends on a
number of factors that are determined on an actuarial basis
using a number of assumptions. The assumptions used in
determining the net cost (income) for pensions include the
discount rate. Any changes in these assumptions will impact
the carrying amount of pension obligations.
5Turnover
2008
$’000
2007
$’000
Third party sales
Sales to related companies
440,167
21,767
388,936
27,454
461,934
416,390
2008
$’000
2007
$’000
56,291
2,475
54,300
2,075
431
2,880
2,882
4,158
62,077
63,415
Bankers’ acceptances interest expense 3,573
Finance income –
interest income on short term deposits (102)
3,541
3,471
3,021
Current tax
Deferred tax charge (Note 20)
Green fund levy
Prior year under provision
10,492
1,832
462
5
11,588
1,284
410
2,006
12,791
15,288
Wages and salaries
National insurance
Retirement and
termination benefits (Note 13)
Severance costs
8Finance Costs – Net
Net finance costs
9Taxation
T he Company’s effective rate varies from the statutory rate of
25% as a result of the differences shown below:
50,081
51,521
Tax calculated at 25%
12,520
Adjustment for previously
unrecognised timing differences
276
Green fund levy
462
Income not subject to tax
(806)
Expenses not deductible for tax purposes 334
Prior year under provision
5
12,880
12,791
15,288
6Expenses by Nature
2008
$’000
Changes in inventories of finished
goods and work in progress
124,050
Raw materials and packaging
materials used
110,077
Other expenses
81,249
Employee benefit expense (Note 7) 62,077
Advertising and promotional costs
19,120
Depreciation (Note 12)
5,590
Information technology costs
4,233
Market research
1,414
Foreign exchange loss
572
Total cost of sales,
distribution costs and
administrative and marketing expenses 408,382
29
2007
$’000
105,787
91,689
73,091
63,415
16,762
5,022
4,905
976
201
(520)
Tax charge
749
410
(796)
39
2,006
361,848
Annual Report 2008
10Earnings per Share – Basic and Diluted
11Dividends per Share
B asic earnings per share is calculated by dividing the profit attributable to equity holders of the company by the weighted
average number of ordinary shares in issue during the year.
2008
$’000
2007
$’000
On 23 March 2009, the Board of Directors declared a final dividend of $0.65 per share bringing the total dividend in respect
of the current year to $0.93 per share. These financial statements do not reflect the final dividend which will be accounted
for as an appropriation of retained earnings in the year ending
31 December 2009.
Profit attributable to equity holders 37,290
36,233
Dividends accounted for as an appropriation of retained earnings are as follows:
Weighted average number of
ordinary shares in issue (‘000)
26,244
26,244
Basic and diluted earnings per share $1.42
$1.38
2008
$’000
Final dividend for 2007 - $0.65
per share (2006 - $0.75 per share) 17,059
Interim dividend - $0.28
per share (2007 - $0.35 per share) 7,348
24,407
2007
$’000
19,683
9,185
28,868
30
12Property, Plant and Equipment
Year ended 31 December 2008
Freehold
Land
$’000
Freehold
Buildings
$’000
Plant and
Equipment
$’000
Work in
Progress
$’000
Opening net book amount
Additions
Transfers
Disposals
Depreciation charge
21,000
--
--
--
--
14,935
--
--
--
(410)
40,426
--
3,286
(15)
(5,180)
2,041
4,677
(3,286)
--
--
78,402
4,677
-(15)
(5,590)
Closing net book amount
21,000
14,525
38,517
3,432
77,474
21,000
--
15,318
(793)
105,870
(67,353)
3,432
--
145,620
(68,146)
21,000
14,525
38,517
3,432
77,474
Opening net book amount
Additions
Transfers
Disposals
Depreciation charge
21,000
--
--
--
--
14,000
--
1,318
--
(383)
30,034
--
15,183
(152)
(4,639)
14,408
4,134
(16,501)
--
--
79,442
4,134
-(152)
(5,022)
21,000
14,935
40,426
2,041
78,402
21,000
--
15,318
(383)
102,631
(62,205)
2,041
--
140,990
(62,588)
21,000
14,935
40,426
2,041
78,402
21,000
--
14,000
--
87,799
(57,765)
14,408
--
137,207
(57,765)
21,000
14,000
30,034
14,408
79,442
Total
$’000
At 31 December 2008
Cost or valuation
Accumulated depreciation
Net book amount
Year ended 31 December 2007
At 31 December 2007
Cost or valuation
Net book amount
At 31 December 2006
Cost or valuation
Net book amount
The freehold properties were revalued on an open market basis by Linden Scott & Associates Limited, professional valuers on 17 October
2006.
Depreciation expense of $4,655,000 (2007: $3,298,000) has been charged in cost of sales, $245,000 (2007: $403,000) in distribution
costs and $690,000 (2007: $1,321,000) in administrative expenses.
31
Annual Report 2008
12Property, Plant and Equipment (continued)
(a) Pension Benefits (continued)
Retirement Benefit Asset (continued)
If freehold land and buildings were stated on the historical cost
basis, the amounts would be as follows:
2008
$’000
2007
$’000
Cost
18,166
(7,269)
18,166
(6,875)
Net book amount
10,897
11,291
13Retirement and Termination Benefit Asset/
(Obligations)
(a) Pension Benefits
Retirement Benefit Asset
Monthly paid staff
Hourly paid staff
59,858
(21)
55,570
(38)
59,837
55,532
Amounts recognised in the balance sheet are as follows:
(191,805)
209,032
17,227
42,631
(178,632)
234,041
55,409
161
59,858
55,570
Movement in the asset recognised in the balance sheet:
Asset as at 1 January
Net pension income
Contributions paid
55,570
2,932
1,356
53,759
453
1,358
Asset as at 31 December
59,858
55,570
4,581
15,359
(20,621)
-228
(2,932)
(453)
Expected return on plan assets 23,248
Actuarial (loss)/return
on plan assets
(45,223)
20,621
(21,975)
29,540
2007
$’000
Present value of funded obligations(3,501)
Fair value of plan assets
3,480
(2,519)
2,481
(21)
(38)
Retirement benefit obligation
ovement in the obligation recognised in the
M
balance sheet:
Asset as at 1 January
Net pension cost
Contributions paid
Asset as at 31 December
(38)
(702)
719
(45)
(736)
743
(21)
(38)
Current service cost
Interest on benefit obligation
Expected return on plan assets
752
220
(270)
789
97
(150)
Net pension cost
702
736
Expected return on plan assets
270
Actuarial (loss)/return on plan assets (470)
150
3
(200)
153
Actual return on plan assets
Retirement and Termination Obligations
Supplementary pension scheme (2,038)
Termination benefits hourly paid employees
(25,154)
(27,192)
(2,049)
(24,889)
(26,938)
4,865
Interest on benefit obligation 15,395
Expected return on plan assets (23,248)
Past service cost
56
Amortised net loss
--
Actual return on plan assets
2008
$’000
Supplementary Pension Scheme
Amounts recognised in the income statement:
Net pension income
Retirement Benefit Asset (Monthly Paid Staff)
Present value of
funded obligations
Unrecognised actuarial loss
Retirement Benefit Asset (Hourly Paid Staff)
8,919
Unrecognised actuarial loss
226
(2,277)
228
(2,038)
(2,049)
Liability as at 31 December
Movement in the liability recognised in the balance sheet:
Liability as at 1 January
Net pension cost
Benefit payments
(2,049)
(228)
239
(2,039)
(240)
230
(2,038)
(2,049)
32
13Retirement and Termination Benefit Asset/
(Obligations) (continued)
Retirement and Termination Obligations (continued)
Supplementary Pension Scheme (continued)
2008
$’000
2007
$’000
189
Amortisation of transitional liability 39
188
52
228
240
Net pension cost
2007
%
8.75
8.75
8.75
7
6.5
6.5
10
10
(b)Post-Employment Benefits (Monthly Paid Staff)
Termination Benefits - Hourly Paid Employees
Plan assets are comprised as follows:
Unrecognised actuarial gain
(3,163)
The principal assumptions are as follows:
2008
%
Discount rate
- Actives and deferred
8.75
- Pensioners
8.75
- Terminations/lump sum benefits8.75
Salary increases
- Monthly paid employees
7
- Weekly paid employees
6.5
NIS ceiling/pension increases
- Pension increases
6.5
- Rate of return on pension
plan assets (monthly)
10
- Rate of return on pension
plan assets (hourly-rated)
8.75
(22,802)
(2,087)
(25,154)
(24,889)
Movement in the liability recognised in the balance sheet:
Liability as at 1 January
Net pension cost
Benefit payments
(24,889)
(2,489)
2,224
(23,767)
(2,359)
1,237
(25,154)
24,889
Amortised net gain
589
1,900
--
528
1,834
(3)
Net pension cost
2,489
2,359
2008
$’000
%
2007
$’000
%
Equity instruments
56,032 27 100,638 43
Debt instruments
104,541 50
93,616 40
Other
48,459 23
39,787 17
209,032 100 234,041 100
The expected return on plan assets is determined by considering the expected returns available on the assets underlying the current investment policy. Expected yields on
fixed interest investments are based on gross redemption
yields as at the balance sheet date. Expected returns on
equity reflect long-term real rates of return experienced in
the market.
Total Amounts Recognised in the Income Statement:
6,206
Interest on benefit obligation 17,704
Expected return on plan assets (23,518)
Amortised net loss
39
5,898
17,478
(20,771)
277
431
2,882
Net pension expense
Pension expense of ($4,005,000) (2007: ($2,070,000))
has been charged in cost of sales, ($1,092,000) (2007:
($564,000)) in distribution costs and $5,528,000 (2007:
$5,516,000) in administrative expenses.
33
Annual Report 2008
13Retirement and Termination Benefit Asset/(Obligations) (continued)
(b) P ost-Employment Benefits (Monthly Paid Staff) (continued)
As at 31 December
2008
$’000
2007
$’000
2006
$’000
2005
$’000
2004
$’000
191,805
(209,032)
178,632
(234,041)
178,487
(208,030)
168,320
(217,094)
144,000
(211,676)
(17,227)
(55,409)
(29,543)
(48,774)
(67,676)
Experience adjustments
on plan liabilities
(2,753)
(14,908)
(2,200)
392
--
Experience adjustments
on plan assets
(45,223)
8,919
(24,824)
(9,586)
--
Present value of defined
benefit obligation
Surplus
Expected contributions to the monthly paid staff plan for the year ending 31 December 2009 are $1,434,000.
14Intangible Asset
15(a) Financial Instruments By Category
2008
$’000
Opening net book amount Additions
-827
827
Cost
Accumulated amortisation
827
--
Net book amount
827
This balance represents money paid to IBM Brazil and IBM New
York, in respect of expenses related to the Business Transformation Outsourcing Project. This is a regional project spanning
South and Central America and the Caribbean, aimed at leveraging IBM’s innovation, technology expertise and worldwide
network of Supply Management Centres to enhance Unilever’s
business processes through Strategic Sourcing, Supply Management Operations and Information Technology Management. It
is expected that this project will yield significant savings for the
Company, and will be amortised over the life of the expected
savings (five years). The final cost of this project is expected to
be approximately $5 million.
The accounting policies for financial instruments have been applied
to the line items below:
Loans and receivables
2008
2007
$’000
$’000
Assets as per balance sheet
Trade and other receivables,
excluding prepayments
82,457
65,342
7,257
21,521
3,357
3,303
93,071
90,166
Other financial liabilities
2008
2007
$’000
$’000
Liabilities as per balance sheet
Due to parent and
related companies
Bank overdraft
48,327
48,939
51,099
54,043
33,315
685
20,924
3,837
131,266
129,903
34
15(b) Credit Quality of Financial Assets
Included in the other receivables balance for 2008 is an
amount of $15,537,000 for value added tax recoverable (2007:
$6,914,000).
The credit quality of financial assets that are neither past due
nor impaired can be assessed by reference to external credit
ratings (if available) or to historical information about counterparty
default rates:
2008
$’000
2007
$’000
464
22,658
24,991
106
21,783
24,102
48,113
45,991
Trade receivables
Counterparties without
external credit rating
Group 1
Group 2
Group 3
Group 1 - new customers (less than 2 months)
Group 2 - existing customers (less than 2 months) with no default in the past
Group 3 - existing customers (less than 2 months) with some
defaults in the past. All defaults were fully recovered.
16Inventories
Finished goods Raw materials and supplies Goods in transit Engineering and general stores Work in progress 2008
$’000
2007
$’000
30,295
16,949
2,975
6,203
2,286
33,058
10,823
3,292
6,400
2,219
58,708
55,792
The cost of inventories recognised as expense and included in cost of sales amounted to $234,127,000 (2007:
$197,476,000).
65,952
60,123
(727)
65,225
17,232
1,910
(2,361)
57,762
7,580
460
84,367
65,802
As at 31 December 2008, trade receivables of $48,113,000
(2007: $45,991,000) were fully performing.
35
17,112
11,771
As of 31 December 2008, trade receivables of $727,000 (2007:
$2,361,000) were impaired and fully provided for. The individually impaired receivables mainly relate to wholesalers, which are
in unexpectedly difficult economic situations. It was assessed
that a portion of the receivables is expected to be recovered.
The ageing of these receivables is as follows:
3 to 6 months
Over 6 months
--
727
58
2,303
727
2,361
The carrying amounts of trade and other receivables are denominated in the following currencies:
Trinidad and Tobago dollars
United States dollars
59,728
24,639
42,999
22,803
84,367
65,802
Movements on the Company’s provision for impairment of
trade receivables are as follows:
17Trade And Other Receivables
Trade receivables
Less: Provision for impairment
of trade receivables
Trade receivables – net
Other receivables
Prepayments
Trade receivables that are less than 1 month past due are not
considered impaired. The creation and release of provision for
impaired receivables have been included in ‘selling and distribution costs’ in the income statement. Trade receivables of
$17,112,000 (2007:$11,771,000) were past due but not impaired. These relate to a number of independent customers for
whom there is no recent history of default. The ageing analysis
of trade receivables in arrears is as follows:
2008
2007
$’000
$’000
Up to 1 month
15,178
10,084
1 to 3 months
1,934
1,687
At 1 January
2,361
Provision for receivables impairment
98
Receivables written off during the
year as uncollectible
(1,595)
Unused amounts reversed
(137)
3,596
688
727
2,361
At 31 December
(956)
(967)
The fair value of trade and other receivables amounts to
$84,367,000 (2007: $65,802,000).
The maximum exposure to credit risk at the reporting date is
the fair value of each class of receivable mentioned above. The
Company does not hold any collateral as security.
Annual Report 2008
18Related Party Transactions
20Deferred Taxation
The Company is controlled by Unilever Overseas Holdings AG
(Incorporated in Switzerland) which owns 50% of the Company’s shares, the remaining 50% are held widely.
Deferred income taxes are calculated on all temporary differences under the liability method using a principal tax rate of
25%.
T he following transactions were carried out with related parties:
2008
2007
$’000
$’000
Deferred tax assets and liabilities and the deferred tax charge
in the income statement account are attributable to the following items:
Charge/
(Credit) to
Income
2007
Statement 2008
$’000
$’000
$’000
Deferred income
tax liabilities
Accelerated tax
depreciation 6,649
819
7,468
Retirement
benefit asset
13,883
1,076
14,959
Building
revaluation surplus
735
--
735
21,267
1,895
23,162
21,767
27,454
ii)Purchases from related companies 69,683
57,649
iii)Royalties and service fees
charged to the company
22,418
18,735
3,580
4,744
i) Sales to related companies
iv)Key management compensation:
Salaries and other short-term
employee benefits
v) Year end balances arising from
sales/purchases of goods/services:
Due to related companies
Due to parent company
3,357
3,303
33,315
--
16,397
4,527
33,315
20,924
Deferred income
tax asset
Retirement
benefit obligation
(6,735)
(63)
(6,798)
Net deferred
income tax liability
14,532
1,832
16,364
R elated party transactions during the year were conducted in
accordance with established Unilever group policy.
19Share Capital
Authorised
An unlimited number of ordinary
shares of no par value
Issued and fully paid
26,243,832 ordinary shares of
no par value
26,244
26,244
36
20Deferred Taxation (continued)
Charge
to
2006
Equity
$’000
$’000
Deferred income tax liabilities
Accelerated tax depreciation 5,536
--
13,429
--
Building revaluation surplus
--
735
18,965
735
Deferred income tax asset
Retirement benefit obligation
(6,452)
--
Net deferred income tax liability
12,513
2008
$’000
2007
$’000
Trade payables
Other payables and accruals
29,594
18,733
27,691
23,408
48,327
51,099
6,649
13,883
735
1,567
21,267
(283)
(6,735)
1,284
14,532
T he Company has overdraft facilities with RBTT Bank Limited
to a maximum of TT$12,020,000 (2007 - $12,020,000) on its
TTD denominated accounts, with interest at the commercial
prime rate of 13% (2007- 11.75%).
24Contingent Liabilities
2008
$’000
2007
$’000
48,939
54,043
4,703
25Capital and Lease Commitments
Capital Commitments
The bankers’ acceptances held at 31 December 2008 were for
terms ranging between 59 and 60 days and at interest rates
varying between 5% and 9% (2007: 6.09% and 9%).
Authorised and contracted for
and not provided for in
the financial statements
The carrying amounts of the Company’s bankers’ acceptances
are denominated in the following currencies:
At 31 December 2008, the Company had capital commitments
of $4,171,000 related to the Business Transformation Outsourcing (BTO) project.
TT dollar
US dollar
22,500
26,439
31,500
22,543
48,939
54,043
The Company has the following undrawn facilities:
Floating rate:
- Expiring beyond one year
24,750
76,776
37
1,113
454
--
Custom bonds and other guarantees 4,760
22Bankers’ Acceptances
735
2007
$’000
23Bank Overdraft
21Trade and Other Payables
Charge/
(Credit) to
Income
Statement
$’000
4,944
667
Lease Commitments
The Company’s commitment as at 31 December 2008 under
the terms of non-cancellable operating leases is $30,903,000
(2007: $16,333,000).
Not later than one year
Later than one year and not
later than five years
12,296
7,123
18,607
9,210
30,903
16,333
Annual Report 2008
26Financial Information by Segment
26.1 Business
Turnover
Home and
Personal Care
2008
2007
$’000
$’000
Foods
Total
2008
$’000
2007
$’000
2008
$’000
2007
$’000
276,982
268,771
184,952
147,619
461,934
416,390
29,629
34,296
20,452
17,225
50,081
51,521
Inventories
42,604
36,378
16,104
19,414
58,708
55,792
Unallocated assets
236,272
226,627
Total assets
294,980
282,419
Depreciation
(3,893)
(3,465)
(1,697)
(1,557)
(5,590)
(5,022)
Current assets
102,628
97,858
54,214
50,627
156,842
148,485
Current liabilities
(92,083)
(94,400)
(48,674)
(48,765)
(140,757)
(143,165)
Property, plant and
equipment
50,364
50,961
27,110
27,441
77,474
78,402
Additions to property,
plant and equipment
3,257
2,845
1,420
1,289
4,677
4,134
The Company is organised into two main business segments:
• Home and personal care – manufacture and sale of a range of laundry detergents, other household products and a range of
skin care, oral care and personal hygiene products.
• Foods – manufacture and sale of a wide range of general food items.
There are no sales or other transactions between the business segments. Segment assets consist of inventories.
Turnover
Total Assets
2008
2007
2008
2007
$’000
$’000
$’000
$’000
Capital
Expenditure
2008
2007
$’000
$’000
26.2 Geographical
Trinidad and Tobago
255,352
222,922
266,300
252,463
4,677
4,134
Other
206,582
193,468
28,680
29,956
--
--
461,934
416,390
294,980
282,419
4,677
4,134
Other
This segment includes revenue and receivables from sales to other Caribbean countries including CARICOM, Aruba and the
Netherlands Antilles.
38
Notice of Annual Meeting
To all Shareholders
Notice is hereby given that the Eightieth Annual General Meeting of Shareholders of Unilever Caribbean Limited will be held in the Ballroom of the Crowne Plaza Hotel, Wrightson Road, Port of Spain on Thursday 21 May
2009 at 2:00 p.m. for the following purposes:
Ordinary Business
1. To receive and consider the Report of the Directors and Auditors, and the Financial Statements for the year
ended 31 December 2008.
2. To sanction the final dividend for the year ended 31 December 2008.
3. To elect Directors.
4. To appoint Auditors, PricewaterhouseCoopers and authorise the Directors to fix their remuneration for the
ensuing year.
By order of the Board
Ian Lewis
Secretary
Notes
1. No service contracts were entered into between the company and any of its Directors.
2. The Transfer Book and Register of Members will be closed on 11 and 12 June 2009, for payment of dividend due on 29 June 2009 to all shareholders whose names appear on the Register of Members as at the
close of business on 6 June 2009.
3. A member of the company entitled to attend and vote is entitled to appoint one or more proxies to attend
and, on a poll, to vote instead of him. A proxy need not also be a member of the company.
39
Annual Report 2008
Management Proxy Circular
For the year ended 31 December 2008
REPUBLIC OF TRINIDAD & TOBAGO
THE COMPANIES ACT, 1995
(Section 144)
1. Name of Company: UNILEVER CARIBBEAN LIMITED
2. Company No. U 464 ( C )
3. Particulars of Meeting:
Eightieth Annual General Meeting of Shareholders of Unilever Caribbean Limited to be held on Thursday 21 May
2009 in the Ballroom of the Crowne Plaza Hotel, Wrightson Road, Port of Spain at 2.00 pm
2. Solicitation:
It is intended to vote the Proxy hereby solicited by the Management of the Company (unless the Shareholder directs otherwise) in favour of all resolutions specified in the Proxy Form sent to the shareholders with this circular,
and, in the absence of a specific direction, in the discretion of the Proxy holder in respect of any other resolution.
3. Any Director’s statement submitted pursuant to Section 76 (2):
No statement has been received from any Director pursuant to Section 76 (2) of the Companies Act, 1995.
4. Any Auditor’s statement submitted pursuant to Section 171 (1):
No proposal has been received from the Auditors of the Company pursuant to Section 171 (1) of the Companies
Act, 1995.
5. Any Shareholder’s proposal and/or statement submitted pursuant to Section 116 and 117 (2):
No proposal has been received from any shareholder pursuant to Section 116 (a) and 117 (2) of the Companies
Act, 1995.
Date
Name and Title
13 March 2009
Secretary
Signature
40
Proxy Form
Name of Company:
UNILEVER CARIBBEAN LIMITED Company No. U 464 (C)
I/We (Block Capitals, please)
being a member/members of the above Company, hereby appoint Mr. Gary
Voss, or failing him, Mrs. Roxane de Freitas, Directors of the Company, or Mr./
to be my/our proxy to
Ms.
vote for me/us on my/our behalf as indicated below on the Resolutions to be proposed at the
Annual General Meeting of the Company to be held on Thursday 21 May 2009. As witness my
day of
2009.
hand this
Signature of Shareholder/s
Please indicate with an ‘X’ in the spaces below how you wish your proxy to vote on the Resolutions referred to. If no such indication is given, the proxy will exercise his discretion as to how he
votes or whether he abstains from voting.
Resolution 1:
FOR
To receive and consider the Audited Financial Statements of the Company
for the year ended 31 December 2008, together with the Reports of the
Directors and the Auditors thereon.
Resolution 2:
To sanction the final dividend for the year ended 31st December 2008.
Resolution 3:
To re-elect Directors according to the following schedule:-
In accordance with Section 4.3.2. of the Company Bye-Laws whereby directors so appointed shall hold office only until the next following general
meeting, Mrs. Andrea Pirie being eligible, offers herself for re-election until
the close of the next third Annual Meeting.
In accordance with Section 4.3.2 of Bye Laws No. 1, Mr. Seamus Clarke,
being eligible, offers himself for re-election until the close of the next third
Annual Meeting.
Resolution 4: To appoint Auditors, PricewaterhouseCoopers and authorise the Directors
to fix their remuneration.
41
AGAINST
Annual Report 2008
Proxy Form (continued)
NOTES:
1. If it is desired to appoint a proxy other than the named Directors, the necessary deletions must be
made and initialled and the name inserted in the space provided.
2. If the appointor is a corporation, this form must be under the hand of some officer or attorney duly
authorised in that behalf.
3. In the case of joint holders, the signatures of all holders are required.
4. To be valid, the form must be completed and deposited at the office of the Secretary of the Company not less than 48 hours before the time fixed for holding the meeting or adjourned meeting.
Mail to: The Secretary Unilever Caribbean Limited
Box 295
Port of Spain
Or deposit to:
The Secretary
Eastern Main Road
CHAMPS FLEURS
42

UCL Annual Report 2008

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