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p 84 / TomTom Annual Report and Accounts 2010
26. PROVISIONS (continued)
Claims, Litigation & Other provision
The group made a provision for potential legal and tax risks in various jurisdictions. The legal matters mainly consist of intellectual property
infringement issues. In the normal course of business, the group receives claims relating to allegations that we have infringed intellectual
property assets and the companies making the claims seek payments which may take the form of licences and/or damages. While these
claims will be resisted, some are likely to be settled by negotiation and others are expected to result in litigation.
The cases and claims against the group often raise difficult and complex factual and legal issues which are subject to many uncertainties
and complexities, including but not limited to the facts and circumstances of each particular case and claim, the jurisdiction in which each
suit is brought, and the differences in applicable law. In the normal course of business, management consults with legal counsel and
certain other experts on matters related to such claims and litigation. The group accrues a liability when it is determined that an adverse
outcome is more likely than not, and the amount of the loss can be reasonably estimated. If either the likelihood of an adverse outcome is
reasonably possible or an estimate is not determinable, the matter is disclosed, provided it is material. Management is of the opinion that
the provision is adequate to resolve these claims.
The methodology used to determine the amount of the liability requires significant judgments and estimates regarding the costs of settling
asserted claims. Due to the fact that there is limited historical data available, the estimated liability cannot be based upon recent
settlement experience for similar types of claims.
Analysis of total provisions
(€ in thousands) 2010 2009
Non-current 51,051 57,847
Current 58,237 56,503
109,288 114,350
27. TRADE PAYABLES
All trade payable balances are due within one year.
28. PENSION ACCRUALS
(€ in thousands) 2010 2009
Balance as at 1 January 5,216 5,012
Additions 1,608 1,412
Utilised -447 -1,208
Balance as at 31 December 6,377 5,216
Pension liabilities relate mainly to the Tele Atlas defined benefit plan in Germany and the staff leaving indemnity plan in Italy. There are no
plan assets in relation to these plans. The defined benefit plan assumes a discount rate of 5.0% (2009: 5.7%), a rate of salary increase of
1.2% (2009: 3.0%) and German mortality rates.
29. COMMITMENTS AND CONTINGENT LIABILITIES
The group has long-term financial commitments, which are not shown in the group’s balance sheet as at 31 December 2010.
Operating leases
These are operating leases for buildings, cars and office equipment, which consist of:
(€ in thousands) 2010 2009
Commitments less than 1 year 21,955 20,298
Commitments between 1 – 5 years 42,824 46,657
Commitments longer than 5 years 8,702 6,604
73,481 73,559
No discount factor is used in determining the operating lease commitments.
Notes to the Consolidated Financial Statements