Unilever 2002 Annual Report Download - page 102

Notes to the consolidated accounts 99
Unilever Group
Unilever Annual Report & Accounts and Form 20-F 2002
Financial Statements
24 Commitments and contingent liabilities
million million million
2002 2001 2000
Long-term lease commitments under operating leases in respect of:
Land and buildings 1 399 1 419 1 777
Other tangible fixed assets 475 615 793
1 874 2 034 2 570
The commitments fall due as follows:
Within 1 year 321 392 488
After 1 year but within 2 years 301 330 414
After 2 years but within 3 years 260 273 347
After 3 years but within 4 years 226 249 308
After 4 years but within 5 years 204 217 266
After 5 years 562 573 747
1 874 2 034 2 570
Other commitments 516 407 310
Of which payable within one year 226 108 82
In addition to the above Unilever has long-term global and regional supply contracts for a variety of materials and services. Amounts
contracted under these arrangements are approximately 3 billion, including 750 million over seven years for global telecommunications
services and 500 million over four years for advertising in the UK.
Contingent liabilities amounted to some 511 million (2001: 443 million) of which 176 million (2001: 202 million) relates to
guarantees. These guarantees are not expected to give rise to any material loss. Guarantees given by parent or group companies relating to
liabilities included in the consolidated accounts are not included. Other contingent liabilities arise in respect of litigation against companies
in the Group, investigations by competition and regulatory authorities and obligations under environmental legislation in various countries.
These are not expected to give rise to any material loss.
25 Acquisition and disposal of group companies
Acquisitions
The net assets and results of acquired businesses are included in the consolidated accounts from their respective dates of acquisition.
The following tables set out the effect of acquisitions of group companies in 2002 on the consolidated balance sheet. Acquisition
accounting (purchase accounting) has been applied in all cases. The fair values currently established for all acquisitions made in 2002 are
provisional. The goodwill arising on these transactions has been capitalised and is being amortised over 20 years.
The following acquisition tables include the impact of the restructuring of the Bestfoods Robertsons (Holdings) Limited LLC joint venture
(‘Unilever Bestfoods Robertsons’). On 1 April 2002, Unilever disposed of its assets in Unifoods South Africa and Hudson & Knight South
Africa to Unilever Bestfoods Robertsons, a joint venture between Unilever and Robertsons in which Unilever had a 50% equity stake.
In exchange, Unilever received a 9% equity interest in Unilever Bestfoods Robertsons thereby obtaining control.
This transaction has been accounted for in accordance with United Kingdom Urgent Issues Task Force Abstract 31 (‘UITF 31’) ’Exchange of
businesses or other non-monetary assets for an interest in a subsidiary, joint venture or associate’. The net effect of this transaction was to
dispose of a 41% interest in the Unifoods South Africa and Hudson & Knight South Africa businesses in return for the acquisition of an
additional 9% interest in Unilever Bestfoods Robertsons. The unrealised gain on disposal of the 41% interest was 56 million and, in
accordance with UITF 31, has been recognised in the Statement of Total Recognised Gains and Losses.
million million million million
Provisional Provisional
Balance sheets adjustments to fair values
of acquired align accounting Provisional at date of
businesses policies revaluations acquisition
2002 acquisitions
Fixed assets 122 (4) – 118
Current assets 116 – (1) 115
Creditors (74) – (1) (75)
Provisions for liabilities and charges (10) (1) – (11)
Minority interest –(42) – (42)
154 (47) (2) 105
Adjustment to reflect 50% net assets previously owned (68)
Net assets acquired 37