Annual report 2010 - Imperial Tobacco Group

23 CommitmentsCapital commitments£ million 2010 2009Contracted but not provided for:Property, plant and equipment 114 69Operating lease commitmentsTotal future minimum lease payments under non-cancellable operating leases consist of leases where payments fall due:£ million 2010 2009PropertyWithin one year 21 18Between one and five years 66 69Beyond five years 7 494 91Plant and equipment (including fixtures and motor vehicles)Within one year 7 5Between one and five years 11 1118 1624 Legal ProceedingsThe Group is currently involved in a number of legal cases in which claimants are seeking damages for alleged smokingand health-related effects. In the opinion of the Group’s lawyers, the Group has meritorious defences to these actions,all of which are being vigorously contested. Although it is not possible to predict the outcome of the pending litigation,the Directors believe that the pending actions will not have a material adverse effect upon the results of the operations,cash flow or financial condition of the Group. Consequently, the Group has not provided for any amounts in respect ofthese cases in the consolidated financial statements.In 2003 the Office of Fair Trading (OFT) commenced an investigation under the Competition Act 1998 into the operation ofthe UK tobacco supply industry in the period from 2000 and 2003. In a decision dated 15 April 2010, the OFT concludedthat certain of the Group’s promotional arrangements with tobacco retailers had the object of restricting competition andimposed a fine of £112.3 million on the Group. At the same time it confirmed that two other allegations included in its 2008statement of objections had been dropped.The Group takes compliance with competition law very seriously and continues to reject any suggestion that it actedin breach of the Competition Act or in any way contrary to the interests of consumers. On 15 June 2010 the Groupsubmitted an appeal to the Competition Appeal Tribunal against the OFT’s findings of infringement and the level of thefine. Five tobacco retailers have also submitted appeals against the OFT’s decision. The Competition Appeal Tribunalmay uphold, quash or vary the OFT’s decision or the fine that has been imposed. As part of its appeal the Group has askedfor the fine to be quashed in its entirety. Consequently, the Group has not provided for any amount in the consolidatedfinancial statements.149