Unilever 2004 Annual Report Download - page 137

134 Unilever Annual Report and Accounts 2004
Notes to the consolidated accounts
Unilever Group
25 Commitments and contingent liabilities
Under operating leases Under finance leases
€ million € million € million € million
2004 2003 2004 2003
Long-term lease commitments in respect of:
Land and buildings 1 485 1 462 91 –
Other tangible fixed assets 410 419 194 –
1 895 1 881 285 –
The commitments fall due as follows:
Within 1 year 334 321 55 –
After 1 year but within 2 years 280 283 53 –
After 2 years but within 3 years 250 244 49 –
After 3 years but within 4 years 231 227 47 –
After 4 years but within 5 years 193 205 6–
After 5 years 607 601 75 –
1 895 1 881 285 –
New finance leases mainly consist of sale and leaseback transactions.
€ million € million
2004 2003
Other commitments 964 655
Of which payable within one year 291 315
Other commitments principally comprise commitments under contracts to purchase materials and services.
Contingent liabilities are either possible obligations that will probably not require a transfer of economic benefits, or present obligations that
may, but probably will not, require a transfer of economic benefits. It is not appropriate to make provisions for contingent liabilities, but there is
a chance that they will turn into an obligation in the future.
Examples of the first type of contingent liability arise in respect of litigation against group companies, investigations by competition, regulatory
and fiscal authorities and obligations arising under environmental legislation. The estimated total of such contingent liabilities at 31 December
2004 was some €275 million (2003: €384 million).
Examples of the second type of contingent liability are guarantees issued by group companies. At 31 December 2004 these amounted to some
€143 million (2003: €166 million). Guarantees given by parent or group companies that relate to liabilities already included in these
consolidated accounts are excluded from this total.
The total value of guarantees which arose or were revised in 2004 was €80 million. The fair value of guarantees is not material.
26 Acquisition and disposal of group companies
Acquisitions
The net assets and results of acquired companies 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 2004 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 2004 are provisional.
The goodwill arising on these transactions has been capitalised and is being amortised over 20 years in accordance with our declared
accounting policies as set out on page 97.
During 2004 an additional investment into Langholm Capital Partners Fund was made and classified as an acquisition. We also purchased some
minority interests in subsidiary companies.
In 2003 the principal transaction was the acquisition at the end of March of the remaining shares in Asian food businesses from our joint
venture partner Ajinomoto of Japan. These businesses are now consolidated as subsidiaries.