JOTUN GROUP
53
23 Related parties
Two parties are deemed to be related if one party can influence
the decisions of the other.
During 2018, goods and services were purchased and sold
to various related parties in which the Group holds a 50 per
cent, or less equity interest. Investments in associated and joint
venture companies are presented in note 3, shareholder and
dividend information is presented in note 18 and subsidiaries
are presented in note 19.
Terms and conditions of transactions with related parties
The transactions between related parties are sales and purchases
of finished goods, raw materials and technical services. Joint
expenses are distributed in accordance with agreed cost
contribution arrangements. Internal trading within the Group is
carried out in accordance with arm’s length principles.
For raw materials, the normal process for producing entities is
to place orders in accordance with frame agreements entered
into at a corporate level. Raw materials are regularly sold within
the Group (from large to small entities), but the majority of
raw material supplies comes directly from external suppliers.
Sales transactions between the Group, joint ventures and
associates are mainly related to sales of finished goods from
producing units to non-producing units. Other situations can be
levelling of stock between entities and coordination of deliveries
to customers around the world. Prices are based on fixed
intercompany price lists.
The Group lends funds to one joint venture company, Jotun
COSCO Marine Coatings (H.K.) Ltd. Outstanding balances at
the year-end are unsecured and there have been no guarantees
provided or received for any related party receivables or
payables. As of 31 December 2018, the Group has not recorded
any impairment of receivables relating to amounts owed by
related parties (2017: NOK 0). This assessment is undertaken
each financial year by examining the financial position of
the related party and the market in which the related party
operates. The amount of these transactions is shown in the
table below.
2018 Other Trade and
Purchases Interests on current other
(NOK THOUSAND) Sales to from Loans to loans to liabilities receivables
Joint ventures 875 132 434 903 26 332 891 144 769 202 637
Associated companies 70 534 97 122 1 361 728 246 369 78 005
Total 945 667 532 025 27 693 1 619 391 138 280 642
2017 Other Trade and
Purchases Interests on current other
(NOK THOUSAND) Sales to from Loans to loans to liabilities receivables
Joint ventures 879 385 485 418 24 679 379 90 521 232 265
Associated companies 25 400 174 032 1 286 119 167 820 24 594
Total 904 785 659 450 25 965 499 258 341 256 859
Aside from the transactions with joint ventures and associates,
described in the table above, there have been very few
transactions between the Jotun Group and other related parties
during 2018.
Compensation of key management personnel of the
Group and Board of Directors compensation
Details on remuneration and shares held for the Board of
Directors and Group Management is described in note 4 and
18. Besides remuneration and shares, the Group has not
identified any transactions with the Board of Directors or Group
Management during 2018.