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112 Unilever Annual Report & Accounts and Form 20-F 2003
Notes to the consolidated accounts
Unilever Group
24 Commitments and contingent liabilities
€ million € million
2003 2002
Long-term lease commitments under operating leases in respect of:
Land and buildings 1 462 1 399
Other tangible fixed assets 419 475
1 881 1 874
The commitments fall due as follows:
Within 1 year 321 321
After 1 year but within 2 years 283 301
After 2 years but within 3 years 244 260
After 3 years but within 4 years 227 226
After 4 years but within 5 years 205 204
After 5 years 601 562
1 881 1 874
Other commitments 655 516
Of which payable within one year 315 226
Other commitments principally comprise commitments under contracts to purchase materials and services.
Contingent liabilities amounted to some €550 million (2002: €511 million), of which €166 million (2002: €176 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.
The total value of guarantees which arose or were revised during 2003 was €82 million.
25 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 2003 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 2003 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 74.
The principal acquisition during the year was the purchase at the end of March of the remaining 50% share in Asian foods businesses from our
joint venture partner Ajinomoto of Japan. These businesses are now consolidated as subsidiaries.
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.
€ million € million € million € million
Provisional
adjustments Provisional
Balance sheets to align fair values
of acquired accounting Provisional at date of
businesses policies revaluations acquisition
2003 acquisitions
Fixed assets 98 (2) 66 162
Current assets 70––70
Creditors (58) (13) – (71)
Provisions for liabilities and charges (3) 4 – 1
Minority interest –13 –13
107 2 66 175
Adjustment to reflect 50% net assets previously owned (23)
Net assets acquired 152