Unilever 2008 Annual Report Download - page 128

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Notes to the consolidated accounts Unilever Group
Unilever Annual Report and Accounts 2008 125
Financial statements
25 Commitments and contingent liabilities
€ million € million € million € million € million € million
Future Future
minimum minimum
lease Finance Present lease Finance Present
payments cost value payments cost value
Long-term finance lease commitments 2008 2008 2008 2007 2007 2007
Buildings(a) 330 166 164 410 198 212
Plant and machinery 51 8 43 110 11 99
381 174 207 520 209 311
The commitments fall due as follows:
Within 1 year 37 13 24 82 17 65
Later than 1 year but not later than 5 years 102 52 50 125 59 66
Later than 5 years 242 109 133 313 133 180
381 174 207 520 209 311
(a) All leased land is classified as operating leases.
The Group has not sublet any part of the leased properties under finance leases.
€ million € million
Long-term operating lease commitments 2008 2007
Land and buildings 1 230 1 328
Plant and machinery 261 335
1 491 1 663
€ million € million € million € million
Other Other
Operating Operating commit- commit-
leases leases ments ments
Operating lease and other commitments fall due as follows 2008 2007 2008 2007
Within 1 year 344 363 722 646
Later than 1 year but not later than 5 years 730 859 1 339 955
Later than 5 years 417 441 79 152
1 491 1 663 2 140 1 753
The Group has sublet part of the leased properties under operating leases. Future minimum sublease payments of €66 million are expected to
be received.
Other commitments principally comprise commitments under contracts to purchase materials and services. They do not include commitments
for capital expenditure, which are reported in note 10 on page 99.
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 result in an obligation in the future. The Group does not believe that any of these contingent liabilities will result in a
material loss.
Contingent liabilities 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 2008 was some €355
million (2007: €430 million).
Contingent liabilities also arise from guarantees issued by group companies. At 31 December 2008 these amounted to some €45 million
(2007: €81 million). Included in this were discounted trade bills with a value of €1 million (2007: €4 million). We believe that any loss arising in
connection with these would not have a material effect on the Group’s financial condition or results of operations. 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 2008 was €4 million (2007: €4 million). The fair value of guarantees is not material
in either 2008 or 2007.