50
JOTUN GROUP
20 CONTRACTUAL OBLIGATIONS AND GUARANTEES
PURCHASE OBLIGATIONS
The Group’s contractual purchase obligations are mainly related
to investments in new plants and buildings. There is a substantial
investment program ongoing in the Group. Out of the total
ongoing investment program NOK 631 million is contractual
committed capital expenditures (CAPEX) at year-end. These
contractual commitments mainly relate to Norway. For purchase
of raw materials there are no actual commitments for the Group.
In general, these contracts can be terminated more or less
without penalties.
OTHER OBLIGATIONS
On behalf of subsidiaries and joint ventures, Jotun A/S issued
Letters of Comfort amounting to NOK 1 708 million in 2017
(2016: NOK 2 324 million). Guarantees covering tax withholding
and other guarantees for subsidiaries amounted to approximately
NOK 290 million in 2017 (2016: NOK 301 million).
A subsidiary in China, Jotun Coatings (Zhangjiagang) Co. Ltd.,
has used bank drafts to pay some of its suppliers. The issuing
bank(s) is obligated to make unconditional payment to the
supplier (or bearer) on a designated date. If unforeseen events
occur and the issuing bank(s) is not able to meet its obligation,
then Jotun would still hold the final obligation towards its
suppliers. Unsettled bank drafts totalling NOK 448 million have
been used as payment as of 31 December 2017.
21 LEASES
Leasing commitments show the Jotun Group’s current and non-current commitments arising from leasing contracts for property, plant
and equipment. All leasing contracts included in this disclosure note are regarded as operating leases, and lease amounts are presented
as operating expenses in the income statement.
(NOK THOUSAND) 2017 2016
OPERATING LEASE EXPENSES
Machinery, vehicles and equipment 69 509 63 208
Factories, premises and buildings 42 429 53 616
Land 3 622 3 187
Total 115 560 120 011
OVERVIEW OF FUTURE MINIMUM LEASE PAYMENTS
RELATED TO OPERATING LEASES
Cost next year 108 373 123 280
Cost next 2-5 years 207 442 183 204
Cost after 5 years 75 475 71 605
Total 391 290 378 088