67 JOTUN A/S 18 CONTINGENT LIABILITIES Contingent liabilities are not recognised in the annual accounts. A contingent liability is a present obligation that arises from past events but is not recognised because it is not probable (less likely than not) that an outflow of resources embodying economic benefits will be required to settle the obligation or the amount of the obligation cannot be measured with sufficient reliability. DISPUTES AND CLAIMS Jotun A/S is, through its on-going business, involved in disputes and claims cases in connection with the company’s operational activities. Provisions have been made to cover the expected outcome of disputes insofar as negative outcomes are likely and reliable estimates can be made. In evaluating the size of the provisions, expected insurance cover is taken into account separately. Jotun acknowledges the uncertainty of the disputes, but believes that these cases will be resolved without significant impact on the company’s financial position. ENVIRONMENTAL MATTERS A number of production facilities and product storage sites have been inspected regarding environmental conditions in the soil. For clean-up projects where implementation is considered to be probable and for which reliable estimates have been done provisions are made accordingly (ref. note 17). Due to uncertainties inherent in the estimation process, it is possible that such estimates could be revised in the near term. In addition, conditions which could require future expenditures may be determined to exist for various sites. The amount of such future costs is not determinable due to the unknown timing and extent of corrective actions which may be required. All of Jotun’s activities are carried out in accordance with local laws and regulations, and Jotun HSE requirement. These laws and regulations are subject to changes, and such changes may require that the company make investments and/or incur costs to meet more stringent emission standards or to take remedial actions related to e.g. soil contamination. INVESTIGATION BY THE NORWEGIAN COMPETITION AUTHORITY The Jotun Group is subject to an investigation by the Norwegian Competition Authority related to its decorative paints operation in Norway. Jotun is of the opinion that no abuse of dominant market position (unilateral conduct) has taken place. Should the investigation from the Norwegian Competition Authority conclude otherwise, considerable fines could be imposed, depending on the gravity of the infringement. The potential amount involved, and the related timing of any outflow, is highly uncertain. 19 CONTRACTUAL OBLIGATIONS AND GUARANTEES OTHER OBLIGATIONS NOT ACCOUNTED FOR: NOK THOUSAND) GUARANTEES Guarantees for tax withholding 45 000 Letter of Comfort on behalf of subsidiaries 2 084 470 Letter of Comfort on behalf of joint ventures 411 597 Guarantees for subsidiaries 257 433 Sureties for customers etc. and guarantees for Jotun A/S 800 Total 2 799 300 20 LEASES (NOK THOUSAND) 2015 2014 OPERATING LEASE EXPENSES Vehicles 11 597 11 537 Cost current year 11 597 11 537 OVERVIEW OF FUTURE MINIMUM LEASE PAYMENTS RELATED TO OPERATING LEASES: Cost next year 14 068 11 826 Cost next 2 years 22 903 18 546 Future minimum lease payments 36 971 30 372 Jotun A/S is committed to the lease agreement for four years.
Jotun - Annual Report 2015
To see the actual publication please follow the link above