Unilever 2012 Annual Report Download - page 129

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126 Unilever Annual Report and Accounts 2012Financial statements
NOTES TO THE ONSOLIDATED FINANIAL STATEMENTS UNILEVER ROUP continued
20 ommtments and contngent labltes continued
Operatng lease and other commtments fall due as follows
 mllon
Operatng
leases
2012
€ million
Operating
leases
2011
 mllon
Other
commt-
ments
2012
€ million
Other
commit-
ments
2011
Within 1 year 383 381 1,159 1,087
Later than 1 year but not later than 5 years 1,015 836 1,009 1,078
Later than 5 years 549 411 75 99
1,947 1,628 2,243 2,264
The Group has sublet part of the leased properties under operating leases. Future minimum sublease payments of €50 million
(2011: €58 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 108.
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 2012 was €236 million (2011: €246 million). The Group does not believe that any of these contingent liabilities will
result in a material loss.
Legal proceedngs
The Group is involved from time to time in legal and arbitration proceedings arising in the ordinary course of business.
Ongoing compliance with competition laws is of key importance to Unilever. As the approach to enforcement of competition authorities
globally continues to evolve, it is possible that our industry may on occasions be the focus of investigations. It is Unilever’s policy to
co-operate fully with competition authorities whenever questions or issues arise. In addition the Group continues to reinforce and
enhance our internal competition law compliance programme on an ongoing basis. Where specific issues arise provisions are made
and contingent liabilities disclosed to the extent appropriate.
Details of the significant outstanding legal proceedings and ongoing regulatory investigations are as follows:
Tax case n Brazl
During 2004 in Brazil, and in common with many other businesses operating in that country, one of our Brazilian subsidiaries received
a notice ofinfringement from the Federal Revenue Service. The notice alleges that a 2001 reorganisation of our local corporate
structure was undertaken without valid business purpose. The dispute is in court and, if upheld, will result in a tax payment relating
to years from 2001 to the present day. The 2001 reorganisation was comparable with restructurings done by many companies in Brazil.
The Group believes that the likelihood of a successful challenge by the tax authorities is remote, however, there can be no guarantee
of success in court.
21 Acqustons and dsposals21 Acqustons and dsposals
Business combinations are accounted for using the acquisition accounting method as at the acquisition date, which is the date
at which control is transferred to the Group.
Goodwill is measured at the acquisition date as the fair value of consideration transferred, plus non-controlling interests and the
fair value of any previously held equity interests less the net recognised amount (which is generally fair value) of the identifiable
assets and liabilities assumed. Consideration transferred does not include amounts related to settlement of pre-existing
relationships. Such amounts are generally recognised in net profit.
Transaction costs are expensed as incurred, other than those incurred in relation to the issue of debt or equity securities.
Any contingent consideration payable is measured at fair value at the acquisition date. Subsequent changes in the fair value
of contingent consideration are recognised in net profit.
Changes in ownership that do not result in a change of control are accounted for as equity transactions and therefore do not have
any impact on goodwill. The difference between consideration and the non-controlling share of net assets acquired is recognised
within equity.