BIC - 2018 Registration document

FINANCIAL STATEMENTS

Consolidated financial statements

PROVISIONS NOTE 17

Accounting policies Provisions are recognized when the Group has a present obligation as a result of a past event, and it is probable that an outflow ● will be required to settle said obligation and such outflow can be reliably measured. Provisions are measured at the best estimate of the expenditure required to settle the obligation at the balance sheet date, and are discounted to present value where the effect is material. In accordance with IAS 12, tax provisions relate to uncertain situations assuming a detection risk of 100% and retaining the most ● likely amount.

Tax and social risks and litigation

Product liability

Other risks and charges

Llitigation

Total

(in thousand euros)

At January 1, 2017

25,560

5,477

1,075

3,447

35,560

Additional provisions

12,839 (1,422) (10,427)

7,802

138

2,222

23,001 (4,371) (12,040)

Reversals of provisions utilized

(1,074) (1,602)

(134)

(1,741)

Reversals of provisions not utilized

(8)

(4)

Exchange differences

(734)

(624)

(144)

(261)

(1,763)

Non-current liabilities held for sale at December 31, 2016 not sold in 2017 and reclassified

1,236

150

223

174

1,783

At January 1, 2018

27,052

10,129

1,151

3,837

42,170 17,390 (8,291) (7,496)

Additional provisions

7,055

8,301

1,014

1,021

Reversals of provisions utilized

(3,573) (4,610)

(2,508) (2,410)

(985)

(1,225)

Reversals of provisions not utilized

-

(476) (570)

Exchange differences

(79)

(177) (180)

25

(801) (215)

Bic Sport divestiture

-

- -

(35) 777

Reclassification

(8)

(19)

750

At December 31, 2018

25,837

13,136

1,205

3,329

43,507

As of December 31, 2018, it was not deemed necessary to book provisions for the risks described in the Part 1 “Group Presentation” that could affect: the Company’s personnel, assets, environment or reputation; ● the Group’s ability to reach its objectives and abide by its ● values, ethics or the laws and regulations. Tax and social risks and litigation Provisions for tax and social risks and litigation relate mainly to: tax risks; ● U.S. workers’ compensation. ● Tax audits are carried out regularly by local tax authorities which may dispute positions taken by Group subsidiaries. In accordance with the Group’s accounting policies, it may be decided to record

provisions when tax-related risks are considered likely to generate a payment to local tax authorities. The Group reviews the evaluation of all its tax positions on a regular basis, using external counsels and considers that its tax positions are adequately provided for. However, the Group cannot predict the ultimate outcome of future audits. Litigation. As of December 31, 2018, the litigation provision mainly represents distributor and commercial agent risks for 2.2 million euros (1.9 million euros at December 31, 2017).

Product liability Product liability mainly relates to U.S. cases.

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• BIC GROUP - 2018 REGISTRATION DOCUMENT •