Loreal 2011 Annual Report Download - page 131

129REGISTRATION DOCUMENT − L’ORÉAL 2011
2011 Consolidated Financial Statements
4
Notes to the consolidated  nancial statements
NOTE22 Provisions for liabilities and charges
22.1. Closing balances
€ millions 12.31.2011 12.31.2010 12.31.2009
Non-current provisions for liabilities and charges 226.1 181.3 125.6
Provisions for restructuring - - 0.4
Other non-current provisions(1) 226.1 181.3 125.2
Current provisions for liabilities and charges 500.7 536.9 510.0
Provisions for restructuring 93.6 90.6 179.8
Provisions for product returns 219.2 209.4 174.6
Other non-current provisions(1) (2) 187.9 236.9 155.6
Total 726.8 718.2 635.6
(1) This item includes provisions for tax risks and litigation, industrial, environmental and commercial risks relating to operations (breach of contract),
personnel-related costs and risks relating to investigations carried out by competition authorities.
(2) National competition authorities from several European countries have launched investigations focusing on the cosmetics industry. Notifications of
complaints were sent to the Group’s subsidiaries in Germany, the Netherlands, Spain and Switzerland. A decision was handed down by the national
competition authority regarding Italy on December15th, 2010, against which an appeal is in process.
At December31st, 2010 total provisions for competition disputes amounted to €91.3million.
In2011, investigations that had been initiated and/or financial sanctions adopted against our subsidiaries in the Netherlands and Switzerland were
abandoned. Spain received notification of a fine which it has provisioned and challenged on appeal. In Italy, the appeal is still in progress but the fine
was paid to avoid any late-payment interest. The provision was revised accordingly, to €35.1million at December31st, 2011.
Other requests for information have also been sent and investigations launched in Europe, although no notification of complaints had been received
at December31st, 2011.
In France on January26th, 2012 the Paris Court of Appeal, to which the case was referred back following a decision by the Cour de Cassation
(France’shighest civil court), upheld the decision of the French Competition Council of March13th, 2006 resulting from its investigation of 13suppliers
and 3distributors in the luxury perfumes and cosmetics industries between 1997 and 1999. The Appeal Court’s decision may be appealed against
before the Cour de Cassation. The financial sanctions adopted against L’Oréal have already been provisioned and paid.
22.2. Changes in provisions for liabilities and charges during the period
€ millions 12.31.2009 12.31.2010 Charges(2)
Reversals
used)(2)
Reversals
(not used)(2)
Impact
of change
in scope/
Exchange rate/
Other(1) 12.31.2011
Provisions for restructuring 180.2 90.6 44.2 -38.0 -6.7 3.4 93.6
Provisions for product returns 174.6 209.4 138.2 -100.7 -36.1 8.4 219.2
Other provisions for liabilities
and charges 280.8 418.2 140.2 -100.6 -54.9 11.2 414.0
Total 635.6 718.2 322.6 -239.3 -97.7 23.0 726.8
(1) Mainly resulting from translation differences
(2) These figures can be analysed as follows:
€ millions Charges Reversals (used) Reversals (not used)
♦Other income and expenses 47.4 -71.1 -33.2
♦Operating profit 229.3 -164.4 -56.9
♦Financial (income)/expense 0.4 -0.3 -0.1
♦Income tax 45.6 -3.5 -7.6