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Annual report
For the year ended 31 December 2017
Contents
Auditor's report
Corporate information
Annual report
Consolidated statement of comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the consolidated financial statements
Unilever New Zealand Limited
Page
3
4
5
6
7
8
9
ndeoendent Auditor's Reoort To the shareholders of Unilever New Zealand Limited
Report on the consolidated financial statements
OpinionIn our opInIon, tile ;,ccon1pm1yI11g consolidated
ti11a11c1al statements ot U11ilever New Zeala11d
L1rrnted ltl1e comp,myl ,md its subs1d1ar1es ltile
group) or1 paqes 5 TO 23
presenr ta111v 111 ;,II rn;,wr,al respects the Group·s
fr11crnc1al posItIon ;,s at 37 December 2017 and
its frm-111c1al pertorrnar1ce and casl1 tlows tor t11e
vear ended rn1 nrnt cJate. and
11 comply wItl1 Nr,w ZE,aland Equ1vale11ts to
l11term1tIonal F1r1nnc1;,I Report111q Standards
Reduced D1scloswe Reg1rne
� Basis for opinion
We have audited tile accor11pc1I 1yIng consolidated
trna11c1al statements which comprise
tile consolidated stiltcmerlt ot ti11anc1;,I posItI011
as at 3 7 Decembe1 20 l 7.
tile consolidated stilrnrnent of conHJrehe11sIve
I11corne. co11sol1datcd st,1WrneI11 ot changes 111
equity and consolldaWcJ statement ot casll
flows tor tl1e year tlwn emJed. a11d
notes. 111clud1ng a sLmirnc1rv o1 s1g11ificant
account111g policies and other expl,rnatory
1ntormat1or1
We conducted our audit in accordance with International Standards on Auditing (New Zealand) ('ISAs (NZ)'). We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
We are independent of the group in accordance with Professional and Ethical Standard 1 (Revised) Code of
Ethics for Assurance Practitioners issued by the New Zealand Auditing and Assurance Standards Board and the
International Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants (IESBA
Code), and we have fulfilled our other ethical responsibilities in accordance with these requirements and the
IESBA Code.
Our responsibilities under ISAs (NZ) are further described in the auditor's responsibilities for the audit of the
consolidated financial statements section of our report.
Other than in our capacity as auditor we have no relationship with, or interests in, the group.
·-
l _ Other informationThe Directors, on behalf of the group, are responsible for the other information included in the entity's Annual
Report. Our opinion on the consolidated financial statements does not cover any other information and we do
not express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with the
consolidated financial statements or our knowledge obtained in the audit or otherwise appears materially
misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
$
£fi Use of this independent auditor's report
This independent auditor's report is made solely to the shareholders as a body. Our audit work has been
undertaken so that we might state to the shareholders those matters we are required to state to them in the
independent auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept
or assume responsibility to anyone other than the shareholders as a body for our audit work, this independent
auditor's report, or any of the opinions we have formed.
A Responsibilities of the Directors for the consolidated financial statements The Directors, on behalf of the company, are responsible for:
- the preparation and fair presentation of the consolidated financial statements in accordance with generally
accepted accounting practice in New Zealand (being New Zealand Equivalents to International Financial
Reporting Standards Reduced Disclosure Regime);
- implementing necessary internal control to enable the preparation of a consolidated set of financial
statements that is fairly presented and free from material misstatement, whether due to fraud or error; and
- assessing the ability to continue as a going concern. This includes disclosing, as applicable, matters related
to going concern and using the going concern basis of accounting unless they either intend to liquidate or to
cease operations, or have no realistic alternative but to do so.
x,l,.. Auditor's responsibilities for the audit of the consolidated financial statements
Our objective is:
- to obtain reasonable assurance about whether the consolidated financial statements as a whole are free
from material misstatement, whether due to fraud or error; and
- to issue an independent auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with ISAs NZ will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error. They are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of these
consolidated financial statements.
A further description of our responsibilities for the audit of these consolidated financial statements is located at
the External Reporting Board (XRB) website at:
http://www. xrb.govt. nz/sta n da rds-for-ass u ra nce-p ractitioners/a ud itors-responsi bi I iti es/audit-re port-7 /
This description forms part of our independent auditor's report.
KPMG
Sydney
29 March 2018
2
Unilever New Zealand Limited
Corporate information
Company number:
Directors:
Shareholder:
Registered office:
Auditors:
2207
C Stiff
J Stepto
A Balarin
M Woodward (resigned 22 May 2017)
N Bangs (appointed 22 May 2017)
Unilever Overseas Holdings B.V.
Level 4, 103 Carlton Gore Road
Newmarket
Auckland 1023
KPMG
3
Unilever New Zealand Limited
Annual report For the year ended 31 December 2017
The Board of Directors present their Annual Report including the financial statements of the company for the
year ended 31 December 2017 and the auditor's report thereon.
The shareholders of the company have exercised their right under section 211 (3) of the Companies Act 1993
('the Act") and unanimously agreed that this Annual Report need not comply with any of paragraphs (a), and
(e) to (i) of section 211 (1) of the Act.
Signed on behalf of the
C Stiff
Director
J Stepto
Director
29 March 2018
of Directors:
4
Unilever New Zealand Limited
Consolidated statement of comprehensive income For the year ended 31 December 2017
Notes 2017 2016
$000 $000
Revenue 4 207,869 206,170
Other income 4 171
Other expenses from ordinary activities 5
Raw materials and consumables used (151,979) (152,205)
Distribution expense (5,133) (6,184) Advertising expense (13,293) (12,181)
Depreciation & amortisation (1,652) (1,609) Employee benefits (15,274) (14,097)
Other (11,738) (9,885)
Total expenses (199,069) (196,161)
Operating profit 8,800 10,180
Finance income 477 680
Finance expenses (126) (78)
Profit before income tax 9,151 10,782
Income tax expense 8 (2,578) (2,288)
Net profit for the year, attributable to equity holders 6,573 8.494
Other comprehensive income
Actuarial gains/(losses) on retirement benefits 16 (179)
Income tax relating to components of other
comprehensive income 8 50
Other comprehensive income for the period, net of tax (129)
Total comprehensive income for the year, attributable to
equity holders 6,573 8,365
The above statement of comprehensive income should be read in conjunction with the accompanying notes.
5
Unilever New Zealand Limited
Consolidated statement of financial position As at 31 December 2017
Notes 2017 2016
Current assets $000 $000
Cash and cash equivalents 31,326 30,373
Trade and other receivables 6 16,054 18,057
Inventories 7 2,206 1,759
Income tax refund due 124
49,586 50,313
Non-current assets
Property, plant and equipment 9 5,324 5,775
Intangible assets 10 22,534 22,916
Deferred income tax asset 8 1,316 922
29,174 29,613
Total assets 78,760 79,926
Current liabilities
Trade and other payables 11 16,426 17,544
Interest bearing liabilities 12 3,100 3,521
Income tax liabilities 1,829
Provisions 13 87 80
21,442 21,145
Non-current liabilities
Provisions 13 274 252
274 252
Total liabilities 21,716 21,397
Net assets 57,044 58,529
Equity
Contributed equity 14 48,684 48,684
Reserves 210 222
Retained earnings 8,150 9,623
Total equity 57,044 58,529
The above consolidated statement of financial position should be read in conjunction with the accompanying
notes.
For and on behalf
Director
Board who authorised these financial statements for issue on 29 March 2018:
J Stepto
Director
6
Unilever New Zealand Limited
Consolidated statement of changes in equity For the year ended 31 December 2017
Contributed Reserves Retained Total Equity
equity earnings
(Note 14)
$000 $000 $000 $000
Balance at 1 January 2017 48,684 222 9,623 58,529
Net profit for the year 6,573 6,573 Other comprehensive income
Total comprehensive income for the year 6,573 6,573
Dividends paid or proposed (8,000) (8,000) Share based payments (12) (46) (58)
Total transactions with owners in their capacity
as owners (12) (8,046) (8,058)
Balance at 31 December 2017 48,684 210 8,150 57,044
Balance at 1 January 2016 48,684 230 15,413 64,327
Net profit for the year 8.494 8.494
Other comprehensive income (129) (129)Total comprehensive income for the year 8,365 8,365
Dividends paid or proposed (14,000) (14,000) Share based payments (8) (30) (38) Pension contribution (125) (125)
Total transactions with owners in their capacity
as owners (8) (14,155) (14.163)
Balance at 31 December 2016 48,684 222 9,623 58,529
The above consolidated statement of changes in equity should be read in conjunction with the accompanying
notes.
7
Unilever New Zealand Limited
Consolidated statement of cash flows As at 31 December 2017
Operating activities
Income generated from trading
Interest received
Payments to suppliers and employees
Interest paid
Tax refund/(paid)
Net cash flows from operating activities
Investing activities Acquisition of property, plant & equipment
Net cash flows used in investing activities
Financing activities
Dividends paid Amounts (repaid to)/loaned from related parties
Net cash flows used in financing activities
Net increase in total cash and cash equivalents Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
Cash and cash equivalents comprise of:
Cash at bank and on hand
Deposits with related entity at call (Note 15)
2017
$000
209,884
477
(198,985)
(126)
(1,020)
10,230
(856)
(856)
(8,000)
(421)
(8,421)
953
30,373
31,326
871
30,455
31,326
2016
$000
224,782
680
(209,564)
(78)
766
16,586
(2,314)
(2,314)
(14,000)
1,007
(12,993)
1,279
29,094
30,373
886
29,487
30,373
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
8
Unilever New Zealand Limited
Notes to the consolidated financial statements For the year ended 31 December 2017
Corporate information
The consolidated financial statements of Unilever New Zealand Limited ("the company") and its subsidiaries (together
referred to as "the group") for the year ended 31 December 2017 were authorised for issue in accordance with a
resolution of directors.
Unilever New Zealand Limited is incorporated in New Zealand under the Companies Act 1993.
The nature of the operations and principal activities of the group during the year include the sale of detergents, personal
products, culinary foods, edible fats, ice cream, tea and other products. There has been no change in the principal
activities of the group during the year.
2 Summary of significant accounting policies
a) Basis of preparation
The consolidated financial statements have been prepared in accordance with generally acceptable accounting
practice (NZ GAAP) in New Zealand. They comply with New Zealand equivalents to International Financial Reporting
Standards - Reduced Disclosure Regime ("NZ IFRS RDR""), as appropriate for a Tier 2 for-profit entity.
The group is a Tier 2 for-profit entity and has elected to report in accordance with Tier 2 for-profit accounting
standards as issued by the External Reporting Board (XRB). The company is eligible to report in accordance with Tier
2 for-profit accounting standards on the basis it is not publicly accountable and it is not a large for-profit public
sector entity.
The consolidated financial statements are presented in New Zealand dollars and all values are rounded to the nearest
thousand dollars ($000) unless stated otherwise.
b) Statement of compliance
The financial statements have been prepared in accordance with New Zealand equivalents to International Financial
Reporting Standards Reduced Disclosure Regime (NZ IFRS RDR).
c) Basis of consolidation
The consolidated financial statements comprise the operations of the company and its subsidiaries as at 31
December each year.
Subsidiaries are consolidated from the date on which the group gains control and cease to be consolidated from the
date on which the group loses control. Subsidiaries use consistent accounting policies of the group to recognise
transactions and have the same balance date.
Subsidiaries are all those entities over which the group has the power to govern the financial and operating policies
so as to obtain benefits from their activities. The existence and effect of potential voting rights that are currently
exercisable or convertible are considered when assessing whether a group controls another entity.
All material transactions between subsidiaries or between the company and subsidiaries are eliminated on
consolidation. The results of subsidiaries acquired or disposed of during the year are included in the consolidated
statement of comprehensive income from the date of acquisition or the date of disposal.
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity
transaction.
9
Unilever New Zealand Limited
Notes to the consolidated financial statements For the year ended 31 December 2017
d) Business combinations
Business combinations are accounted for using the acquisition method. The acquisition method of accounting
involves recognising at acquisition date, separately from goodwill, the identifiable assets acquired, liabilities assumed
and any non-controlling interest in the acquiree. The identifiable assets acquired and liabilities assumed are
measured at their acquisition date fair values. Acquisition-related costs are expensed as incurred and recognised in
profit or loss.
The difference between the above items and the fair value of the consideration is recorded as either goodwill or
discount on acquisition. After initial recognition, goodwill is measured at cost less any accumulated impairment
losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition
date, allocated to each of the group's cash-generating units expected to benefit from the combination, irrespective of
whether other assets or liabilities of the acquiree are assigned to those units.
Goodwill is tested annually for impairment, or immediately if events or changes in circumstances indicate that it
might be impaired and carried at cost less accumulated impairment losses. Impairment losses on goodwill are not
reversed.
e) Foreign currency transactions
Transactions in foreign currencies are initially recorded in the functional currency by applying the exchange rates
ruling at the date of the transaction. Foreign exchange gains and losses resulting from the settlement of such
transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in
foreign currencies are recognised in profit or loss.
f) Revenue
Revenue is recognised and measured at the fair value of the consideration received or receivable. Amounts
disclosed as revenue are net of returns, trade allowances, rebates and duties and taxes paid. Sales are recorded
when goods have been delivered to a customer, pursuant to a sales order and the associated risks have been passed
to the customer.
Rental income
Income from rental and sub-leased property is recognised on a straight-line basis over the term of the lease.
Interest income
Interest income is recognised as interest accrues using the effective interest method.
g) Income tax
Income tax assets and liabilities are measured at the amount expected to be recovered from or paid to taxation
authorities. The tax rates and tax laws used to compute the amount are those enacted or substantively enacted at
balance date.
Deferred income tax is provided on all temporary differences at the balance date between the tax bases of assets and
liabilities and their carrying amounts for financial reporting purposes.
Deferred income tax is calculated using the liability method on temporary differences between the carrying amounts
of assets and liabilities and their tax bases. However, deferred tax is not provided on the initial recognition of
goodwill or on the initial recognition of an asset or liability unless the related transaction is a business combination or
affects tax or accounting profit or on the investment in subsidiaries where there is no probability in the foreseeable
future that the temporary difference will reverse and taxable profit will be available against which the temporary
difference can be utilised.
10
Unilever New Zealand Limited
Notes to the consolidated financial statements For the year ended 31 December 2017
g) Income tax (continued)Deferred tax assets are recognised to the extent it is probable the underlying tax loss or deductible temporarydifference will be able to be utilised against future taxable income. This is assessed based ·on the group's forecast offuture operating results, adjusted for significant non-taxable income and expenses and specific limits on the use ofany unused tax losses or credits.
Changes in deferred tax assets or liabilities are recognised as a component of tax income or expense in profit or loss,except where they relate to items that are recognised in other comprehensive income or directly in equity, in whichcase the related deferred tax is also recognised in other comprehensive income or equity, respectively.
h) Property, plant and equipmentProperty, plant and equipment are recorded at cost less accumulated depreciation and impairment. Initial costincludes purchase consideration and those costs attributable to bringing the asset to the location and conditionnecessary for its intended use.
Subsequent expenditure relating to an item of property, plant and equipment is added to its gross carrying amountwhen such expenditure either increases the future economic benefits, or is necessarily incurred to enable futureeconomic benefits to be obtained. The carrying amount of any replaced part is derecognised.
All other repairs and maintenance expenditure is recoqnised in profit or loss as incurred.
Depreciation is calculated on a straight line base over the estimated useful life of the asset. The residual value ofassets is reviewed and adjusted if appropriate at each balance date. The following rates have been used:
- Plant and equipment- Leasehold improvements
Disposal
7%- 25% 2.50%
An item of property, plant and equipment is derecognised upon disposal or when no further future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the year the asset is derecognised.
i) Impairment of non-financial assetsIntangible assets with an indefinite useful life are not subject to amortisation and are tested annually for impairment.
Intangible assets subject to amortisation and all other non-financial assets are reviewed for impairment wheneverevents or changes in circumstances indicate that the carrying amount may not be recoverable.
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 compared at the lowest levels for which there are separately identifiable cash inflows (cash-generating units).
If any such indication exists and where the carrying values exceed the estimated recoverable amount, the assets arewritten down to their recoverable amount.
Impaired non-financial assets, other than goodwill, are tested for possible reversal of the impairment wheneverevents or changes in circumstances indicate that the impairment may have reversed.
11
Unilever New Zealand Limited
Notes to the consolidated financial statements For the year ended 31 December 2017
j) Intangible assets (excluding goodwill)Intangible assets are carried at cost less any accumulated amortisation and impairment losses. Internally generatedintangible assets, excluding capitalised development costs, are not capitalised and expenditure is recognised in profitor loss in the year in which the expenditure is incurred.
The useful lives of intanQible assets are assessed to be either finite or indefinite.
Intangible assets with finite lives are amortised over the useful life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life is reviewed at least at each financial year-end. The amortisation expense on intangible assets with finite lives is recognised in profit or loss.
Intangible assets with indefinite useful lives are not amortised but are assessed for impairment annually either individually or at the cash-generating unit level. The assessment of indefinite life is reviewed annually to determine whether the indefinite life continues to be supportable. If not, the change in the useful life is made on a prospective basis.
A summary of the policies applied to the group's intangible assets is as follows: Computer software - finite, amortised on a straiqht line basis over 5 yearsDistribution riqhts - infinite
Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in profit or loss when the asset is derecognised.
Research and development
Research costs are expensed as incurred.
An intangible asset arising from development expenditure on an internal project is recognised only when the group can demonstrate the technical feasibility of completing the intangible asset so that it will be available for use or sale, its intention to complete and its ability to use or sell the asset, how the asset will generate future economic benefits, the availability of resources to complete the development and the ability to measure reliably the expenditure attributable to the intangible asset during its development. Following initial recognition of the development expenditure, the cost model is applied requiring the asset to be carried at cost less any accumulated amortisation and impairment losses. Any expenditure capitalised is amortised over the period of expected benefit from the related project.
Subsequent expenditure
Subsequent expenditure relating to intangible assets is added to its gross carrying amount when such expenditure either increases the future economic benefits, or is necessarily incurred to enable future economic benefits to be obtained.
12
Unilever New Zealand Limited
Notes to the consolidated financial statements For the year ended 31 December 2017
k) Inventories
Inventories are stated at the lower of cost or net realisable value.
Cost comprises the purchase price of finished goods and direct materials, on a weighted average basis, import duties,
transport and handling costs and, where applicable, direct labour and an appropriate proportion of variable and
fixed overhead expenditure, the later being allocated on the basis of normal operating capacity.
Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of
completion and the estimated costs necessary to make the sale.
I) Financial instruments
All financial instruments are initially recognised at the fair value of the consideration received/transferred less, in the
case of financial assets and liabilities not recorded at fair value through profit or loss, directly attributable
transaction costs. Subsequently the group applies the following accounting policies for financial instruments:
Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand and short-term deposits with an original maturity of
three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant
risk of changes in value.
Loans and receivables
Loans and receivables consist of trade and other receivables (note 6). Loans and receivables are carried at
amortised cost using the effective interest method. Gains and losses are recognised in profit or loss when the loans
and receivables are derecognised or impaired. These are included in current assets, except for those with maturities
greater than 12 months after balance date, which are classified as non-current.
Financial liabilities
Financial liabilities at amortised cost consist of trade and other payables (note 11) and interest-bearing liabilities
(note 12).
Trade payables and other payables are recognised when the group becomes obliged to make future payments
resulting from the purchase of goods and services. The amounts are unsecured and usually paid within 30 days of
recognition. Trade payables are not discounted given their short term nature.
Financial liabilities at amortised cost are measured using the effective interest rate (ElR) method. Gains and losses
are recognised in profit or loss when the liabilities are derecognised as well as through the ElR amortisation process.
Financial liabilities are classified as current liabilities unless the group has an unconditional right to defer settlement
of the liabilities for at least 12 months after balance date.
m) Impairment of financial assets
Financial assets are assessed for indicators of impairment at balance date. Financial assets are impaired where there
is objective evidence, as a result of one or more events occurring after initial recognition, the estimated future cash
flows have been impacted.
For financial assets carried at amortised cost, the amount of the impairment is the difference between the asset's
carrying amount and the present value of the estimated future cash flows, discounted at the original effective
interest rate.
13
Unilever New Zealand Limited
Notes to the consolidated financial statements For the year ended 31 December 2017
m) Impairment of financial assets (continued)
The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the
exception of trade receivables where the carrying amount is reduced through the use of an allowance provision.
When a trade receivable is uncollectible, it is written off against the allowance provision. A trade receivable is
deemed to be uncollectible upon notification of insolvency of the debtor or upon similar evidence the group will be
unable to collect the trade receivable. Changes in the carrying amount of the allowance account are recognised in
profit or loss.
If, in a subsequent period the amount of the impairment loss decreases and the decrease can be related objectively
to an event occurring after the impairment loss was recognised, the previously recognised impairment loss is
reversed.
n) Employee benefits
Wages, salaries, and annual leaveLiabilities for wages and salaries, including non-monetary benefits, and annual leave expected to be settled within 12
months of the reporting date are recognised in respect of employees' services up to the reporting date. They are
measured at the amounts expected to be paid when the liabilities are settled.
Long service leave
The liability for long service leave is measured as the present value of expected future payments to be made in
respect of services provided by employees up to the reporting date using the projected unit credit method.
Consideration is given to expected future wage and salary levels, experience of employee departures and periods of
service. Expected future payments are discounted using market yields at the reporting date on national government
bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.
Post-employment benefits
Contributions made on behalf of eligible employees to defined contribution funds are recognised in the period they
are _incurred. The defined contribution funds receive fixed contributions from the group whose legal, or constructive
obligation is limited to these contributions only.
The group operated an in-house pension scheme until the fund was closed in September 2016. The scheme was
funded through payments to a trustee-administered fund, determined by periodic actuarial calculations on a defined
benefit scheme. The defined benefit scheme defined the amount of retirement benefit that an employee would
receive that was dependent on one or more factors such as age, years of service and compensation.
The liability recognised in the consolidated statement of financial position in respect of defined benefit pension plans
was the present value of the defined benefit obligation at balance date less the fair value of plan assets, together
with adjustments for actuarial gains or losses and past service costs. Independent actuaries using the projected unit
credit method calculate the defined obligation every three years. The present value of the defined benefit obligation
was determined by discounting the estimated future cash flows using the interest rates of national government
bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity
approximating to the terms of the related pension liability.
Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions were charged
or credited to profit or loss.
14
Unilever New Zealand Limited
Notes to the consolidated financial statements For the year ended 31 December 2017
n) Employee benefits (continued)
Past-service costs were recognised immediately in profit or loss, unless the changes to the pension plan were
conditional on the employee remaining in service for a specified period of time (the vesting period). In that case, the
past-service costs were amortised on a straight-line basis over the vesting period.
Share-based payments
Share-based compensation benefits are provided to employees via the employee share schemes.
The fair value of shares granted under the employee share schemes is recognised as an employee benefit expense
with a corresponding increase in reserves. The fair value is measured at grant date and recognised over the period
during which the employees become unconditionally entitled to the share.
The fair value at grant date is determined using the closing price on the London stock exchange for Unilever PLC
shares and the Amsterdam stock exchange for Unilever NV shares.
At vesting date, the entity recognises any additional cost or releases any excess amortisation charged from grant
date. An invoice is issued from Unilever PLC or Unilever NV at vesting date for their respective shares to the entity
for payment.
o) LeasesFinance leases, which transfer to the group substantially all the risks and benefits incidental to ownership of the
leased item, are capitalised at the inception of the lease at the fair value of the leased asset or, if lower, at the
present value of the minimum lease payments. Lease payments are apportioned between the finance charges and
reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability.
Finance charges are recognised as an expense in profit or loss.
Operating lease payments are recognised as an expense in profit or loss on a straight line basis over the lease term.
Operating lease incentives are recognised as a liability when received and subsequently reduced by allocating lease
payments between rental expense and reduction of the liability.
p) Provisions
A provision is recognised when the group has a present legal or constructive obligation as a result of a past event, it
is probable that an outflow of economic benefits will be required to settle the obligation and the amount has been
reliably estimated. If the effect is material, provisions are determined by discounting the expected future cash flows
at a pre tax rate that reflects current market rates and, where appropriate, the risks specific to the entity.
The present value of non-current provisions is determined by discounting the balance using a risk free rate.
q) Contributed equity
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options
are shown in equity as a deduction, net of tax, from the proceeds.
r) Goods and Services Tax (GSTI
Revenues, expenses and assets are recognised net of the amount of GST except:where the GST incurred is not recoverable from the taxation authority; and receivables and payables are stated with the amount of GST included.
15
Unilever New Zealand Limited
Notes to the consolidated financial statements For the year ended 31 December 2017
s) Significant accountingjudgements, estimates and assumptions
The preparation of financial statements requires management to make judgements, estimates and assumptions
which effect the reported revenues, expenses, assets and liabilities and the accompanying disclosures. Uncertainty
about these assumptions and estimates could result in outcomes that may require a material adjustment to the
carryinQ amount of assets or liabilities in future periods.
Impairment of assets and goodwill
The group tests annually whether goodwill and other assets have suffered any impairment in accordance with the
accounting polices at 2 d) and 2 m).
Taxation
There may be transactions and calculations for which the ultimate tax determination is uncertain during the ordinary
course of business. Where the final tax outcome of these matters is different from the amounts initially recorded,
such differences impact the current and deferred tax provisions in the period in which such determination is made.
16
Unilever New Zealand Limited
Notes to the consolidated financial statements For the year ended 31 December 2017
2017 2016 Note $000 $000
4 Revenue & other income
Sale of goods 207,869 206,078 Rental income 92 Total revenue 207,869 206,170
Other income Royalty and service income 171
171
5 Expenses
Profit before taxation includes the following expenses:
Cost of goods sold from inventory (151,602) (151,861) Inventory write down recognised during the year (377) (344)
Post�emp!oyment benefits (349) 891 Share-based payments (158) (131)Depreciation 9 (1,270) (1,227) Amortisation 10 (382) (382)
Interest expense (126) (78) Operating lease expense (2,999) (2,207)
Bad debts (expense)/recovery 13 (62)(Loss)/gain on sale of property, plant and equipment (36) (47)Net foreign exchange losses (93) (136)
6 Trade and other receivables
Trade receivables 15,537 16,768 Receivables from related parties 15 113 729 Other debtors and prepayments 404 560
16,054 18,057
7 Inventories Finished goods 2,206 1,759
2,206 1,759
17
Unilever New Zealand Limited
Notes to the consolidated financial statements For the year ended 31 December 2017
8 Income tax
Current income tax
Current income tax charge Adjustments in respect of previous years
Deferred income tax
Origination and reversal of temporary differences Adjustments in respect of previous years
Total current and deferred income tax expense
Income tax expense reported in the statement of comprehensive income and equity Profit and loss Other comprehensive income Retained earnings
2017
$000
2,967 37
· 3,004
(394)
(394)2,610
2,578
32 2,610
A reconciliation of income tax expense for the period ended 31 December 2017 is as follows:
Accounting profit before income tax
At the statutory income tax rate of 28% (2016: 28%) Non-assessable income Non-deductible expenses Adjustments in respect of previous years
At effective income tax rate of:
Deferred income tax
9,151
2,562 (32)
11 37
2,578 28.17%
2016
$000
2,872 (701)
2,171
109 (12)
97 2,268
2,288 (50)
30 2,268
10,782
3,019 (38)
20
(713) 2,288
21.22%
2017 2016
Statement of Statement of Statement of Statement of
financial position comprehensive financial position comprehensive
income income
$000 $000 $000 $000
Deferred income tax assetl{liabilities)
Property, plant & equipment 301 15 286 175
Intangibles (300) 103 (403) 105
Employee entitlements 305 26 279 (1)
Retirement benefit obligations (430)
Other payables 1,010 250 760 54
Net deferred tax assetl(liability) 1,316 394 922 (97)
18
Unilever New Zealand Limited
Notes to the consolidated financial statement For the year ended 31 December 2017
9 Property plant and equipment
Plant and Leasehold Total
Equipment improvements
$000 $000 $000
Cost
Balance at beginning of the period 9,546 2,474 12,020
Additions 899 32 931
Transfers 253 253
Disposals (175) (68) (243)
Balance at 31 December 2017 10,270 2,691 12,961
Accumulated depreciation & impairment
Balance at beginning of the period (5,595) (650) (6,245)
Depreciation (979) (291) (1,270)
Transfers (253) (253)
Disposals 131 131
Balance at 31 December 2017 (6,443) (1,194) (7,637)
Net book value at 31 December 2017 3,827 1,497 5,324
Cost
Balance at 1 January 2016 8,480 1,559 10,039
Additions 1,399 915 2,314
Disposals (333) (333)
Balance at 31 December 2016 9,546 2,474 12,020
Accumulated depreciation & impairment
Balance at 1 January 2016 (5,002) (303) (5,305)
Depreciation (880) (347) (1,227)
Disposals 287 287
Balance at 31 December 2016 (5,595) (650) (6,245)
Net book value at 31 December 2016 3,951 1,824 5,775
19
Unilever New Zealand Limited
Notes to the consolidated financial statements For the year ended 31 December 2017
10
11
12
Intangibles
Goodwill Computer Other Total
software intangible assets
$000 $000 $000 $000
Cost
Balance at beginning of the period 12,148 5,876 9,250 27,274
Balance at 31 December 2017 12,148 5,876 9,250 27,274
Accumulated depreciation & impairment
Balance at beginning of the period (4,358) (4,358)
Amortisation (382) (382)
Balance at 31 December 2017 (4,740) (4,740)
Net book value as at 31 December 2017 12,148 1,136 9,250 22,534
Cost
Balance at 1 January 2016 12,148 5,876 9,250 27,274
Balance at 31 December 2016 12,148 5,876 9,250 27,274
Accumulated depreciation & impairment
Balance at 1 January 2016 (3,976) (3,976)
Amortisation (382) (382)
Balance at 31 December 2016 (4,358) (4,358)
Net book value at 31 December 2016 12,148 1,518 9,250 22,916
Impairment testing of goodwill
The group has determined recoverable amounts of its cash generating units (CGU's) under NZ IAS 36 2017 2016
Carrying amount of goodwill allocated to CGU's $000 $000
Unilever (New Zealand) Limited 12,148 12,148
Trade and other payables Trade payables 9,843 7,339
Employee benefits 1,572 1,510
Payables to related parties Note 15 5,011 8,695 16,426 17,544
Interest bearing liabilities Current
Related party loan 3,100 3,521 3,100 3,521
The group has a guarantee facility with HSBC of $760,000 (2016: $650,000). The unused facility at balance date was $45,185 (2016: $3,000).
The loans with related parties are unsecured at an interest rate of 2.98% (2016: 3.05%)
20
Unilever New Zealand Limited
Notes to the consolidated financial statements For the year ended 31 December 2017
13 Provisions Restructuring costs
Opening balance at beginning of year Reversed to profit or loss
Long service leave
Opening balance at beginning of year Recognised during the year Reversed to profit or loss
Recognised in the consolidated statement of financial position as: Current Non-current
For the nature and calculation of long service leave please refer to note 2n).
14 Contributed equity Share capital Ordinary shares - fully paid 24,342,137 (2016: 24,342,137 fully paid)
Ordinary shares have no par value. Each fully paid ordinary share confers on the holder the right to:
One vote on a poll at a meeting of the company on any resolution:
2017 $000
332 32
(3) 361
361
87 274 361
2017 $
48,684
An equal share in distributions (including dividends) approved by the Board of Directors; and An equal share in distribution of the surplus assets of the company on dissolution.
15 Related parties Ultimate and parent entities
2016 $000
396 (396)
355
(23) 332
332
80 252 332
2016 $
48,684
The company's shareholder is Unilever Overseas Holdings B.V, a company registered in the Netherlands. The ultimate parent company is Unilever PLC, a public company registered in the United Kingdom.
Subsidiaries The company has the following subsidiaries:
Name
Unilever New Zealand Superannuation Trustee Limited Unilever New Zealand Trading Limited T2 New Zealand Limited
Country of Nature of incorporation business
New Zealand New Zealand New Zealand
Superannuation Trading
Ben & Jerry's Franchising New Zealand Limited New Zealand Trading Non-Trading
% equity interest 2017 2016
100% 100% 100% 100% 100% 100% 100% 100%
21
Unilever New Zealand Limited
Notes to the consolidated financial statements For the year ended 31 December 2017
15 Related parties (continued)
Key management remuneration
Employee remuneration
2016
$000
1,120
1,120
Key management personnel includes key management personnel with the greatest authority for the strategic
direction and management of the group during the year.
Transactions with related parties
2015
$000
1,207
1,207
The following table provides details of transactions with related parties during the year. Transactions with the
ultimate parent include recovery of research and development costs and share-based transactions. Transactions
with subsidiaries of the ultimate parent include the sale and purchase of goods and services and recharges of
expenses incurred.
There have been no transactions with the parent company with the exception of dividends declared and paid.
Sales Purchases Interest Loans Payables Receivables
received/
(expense) $000 $000 $000 $000 $000 $000
31 December 2017
Ultimate parent 187 98
Subsidiaries of
ultimate parent 124 149,432 477 3,100 4,913 113
311 149,432 477 3,100 5,011 113
31 December 2016
Ultimate parent 30
Subsidiaries ot
ultimate parent 1,074 149,791 365 3,521 8,665 729
1,074 149,791 365 3,521 8,695 729
The group acquired services from subsidiaries of the ultimate parent of $4, 162 (2016: $5,094).
The group holds funds on interest bearing deposit of $30,455 (2016: $29,487) with a subsidiary of the ultimate
parent who manages the treasury functions of the Unilever Group.
Tenns and conditions of transactions with related parties.
Sales to, and purchases from, related parties are recorded on normal commercial terms. Outstanding balances at
year end are unsecured and settlement occurs in cash.
The terms of loans with related parties are disclosed in note 12.
For the year ended 31 December 2017, the company has not made any allowance for impairment loss relating to
amounts owed by related parties (2016: $nil).
22
Unilever New Zealand Limited
Notes to the consolidated financial statements For the year ended 31 December 2017
16 Defined benefit contribution scheme Unilever New Zealand operated a defined benefit superannuation fund providing benefits on retirement, death, disability and leaving service. The plan was wound up on 30 September 2016.
The following sets out details in respect of the defined benefit scheme only:
Reconciliations Reconciliation of the present value of the defined benefit obligation:
Balance at the beginning of the year Current service cost Settlements Interest cost Actuarial gains and (losses) Benefits paid Contributions tax on obligations Balance at the end of the period
Reconciliation of the fair value of plan assets:
Balance at the beginning of the year Expected return on plan assets Actuarial gains and (losses) Contributions by group companies Benefits paid Employee contributions Balance at the end of the period
Amounts recognised in profit or loss Current service cost Settlement Interest cost Expected return on plan assets Total included in employee benefits expense
Amounts recognised in other comprehensive income Actuarial gainl(Joss) recognised in the period
Cumulative actuarial (losses) recognised in other comprehensive income
17 Contingencies
2017 $000
A New Zealand IRD tax audit matter is ongoing and the outcome has not been determined at this time.
18 Commitments Capital commitments
2016 $000
(8,731) (44) 865
(200) (336)
7,983 463
7,346 176 157 288
(7,983) 16
44 (865)
200 (176) (797)
(179) (6,779)
Unilever New Zealand Ltd and its subsidiaries have capital commitments for future expenditure as at 31 December 2017 amounting to $2,617,009 (2016: $3,754).
Lease commitments under non-cancel/able operating lease payments
No later than one year Later than one year and not later than five years
19 Events after balance date
1,748 3,557 5,305
2,745 5,059 7,804
There have been no significant events occurring after balance date which may affect either the group's operations or results of those operations or the group's state of affairs.
23