Commitments and Contingent Liabilities (Tables)

12 Months Ended

Dec. 31, 2017

Summary of Long-term Finance Lease Commitments


	€ million		€ million		€ million		€ million		€ million		€ million
Long-term finance lease commitments	Future minimum lease payments 2017		Finance Cost 2017		Present value 2017		Future minimum lease payments 2016		Finance cost 2016		Present value 2016
Buildings^(a)		195		75		120		202		75		127
Plant and machinery		11		-		11		18		2		16
		206		75		131		220		77		143
The commitments fall due as follows:
Within 1 year		20		9		11		24		15		9
Later than 1 year but not later than 5 years		68		23		45		69		28		41
Later than 5 years		118		43		75		127		34		93
		206		75		131		220		77		143
^(a)All leased land is classified as operating leases.

Summary of Net Book Value of Property Plant and Equipment Under Lease Agreement

The table below shows the net book value of property, plant and equipment under a number of finance lease agreements.
	€ million			€ million			€ million
Net book value	Buildings			Plant and equipment			Total
Cost		206			125			331
Accumulated depreciation		(84	)		(108	)		(192	)
31 December 2017		122			17			139
Cost		211			134			345
Accumulated depreciation		(79	)		(115	)		(194	)
31 December 2016		132			19			151

Summary of Operating Lease and Other Commitments

€ million

€ million

Long-term operating lease commitments

2017

2016

Land and buildings

1,885

2,149

Plant and machinery

569

692

2,454

2,841

€ million

€ million

€ million

€ million

Operating lease and other commitments fall due as follows:

Operating
leases

2017

Operating
leases

2016

Other
commitments
2017

Other
commitments

2016

Within 1 year

418

457

1,274

1,204

Later than 1 year but not later than 5 years

1,250

1,393

935

1,231

Later than 5 years

786

991

2,454

2,841

2,240

2,465

Summary of Contingent Liabilities

A summary of our contingent liabilities is shown in the table below.


	€ million 2017		€ million 2016
Corporate reorganisation – IPI, PIS and COFINS taxes and penalties ^(a)		2,092		1,464
Inclusion of ICMS in the tax base for PIS and COFINS taxes ^(b)		-		655
Inputs for PIS and COFINS taxes		16		113
Goodwill amortisation		121		36
Other tax assessments – over 600 cases		1,095		1,093
Total Brazil Tax		3,324		3,361
Brazil other		19		42
Contingent liabilities outside Brazil		324		224
Total contingent liabilities		3,667		3,627

^(a)

During 2004, and in common with many other businesses operating in Brazil, one of our Brazilian subsidiaries received a notice of infringement from the Federal Revenue Service in respect of indirect taxes. The notice alleges that a 2001 reorganisation of our local corporate structure was undertaken without valid business purpose. The 2001 reorganisation was comparable with restructurings done by many companies in Brazil. The original dispute was resolved in the courts in the Group’s favour. However, in 2013 a new assessment was raised in respect of a similar matter. Additionally, during the course of 2014 and again in December 2017 other notices of infringement were issued based on the same grounds argued in the previous assessments. The total amount of the tax assessments in respect of this matter is €2,092 million (2016: €1,464 million). The judicial process in Brazil is likely to take a number of years to conclude.

^(b)

During 2006, Unilever filed a judicial measure to obtain the right to exclude the Brazilian ICMS indirect tax from the taxable base for the Brazilian PIS and COFINS indirect taxes, and obtained a favourable decision in 2007. In November 2016, this favourable decision was reversed on appeal to a higher court, and the Group lodged a further appeal. In 2017, the Supreme Court published a favourable decision on the leading case, which we expect to be applied to the Group’s case. As such, we have assessed the risk of outflow in relation to this case to now be remote and therefore is not a contingent liability.