BIC - 2019 Universal Registration Document

FINANCIAL STATEMENTS

Consolidated financial statements

NOTE 17

PROVISIONS

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 economic outflow will be required to settle said obligation and such outflow can be reliably mesured. 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.

Tax and social risks and litigation

Product liability

Other risks and charges

Llitigation

Total

(in thousand euros)

At January 1, 2018

27,052

10,129

1,151

3,837

42,170

Additional provisions

7,055

8,301

1,014

1,021

17,390

Reversals of provisions utilized

(3,573)

(2,508)

(985)

(1,225)

(8,291)

Reversals of provisions not utilized

(4,610)

(2,410)

-

(476)

(7,496)

IFRS 16 implementation

-

-

-

(8)

-

Exchange differences

(79)

(177)

25

(562)

(801)

BIC Sport divestiture

-

(180)

-

(35)

(215)

Reclassification

(8)

(19)

-

777

750

At December 31, 2018

25,837

13,136

1,205

3,329

43,507

Impact of first application of IFRIC 23 “Uncertainty over income tax treatments” (see Note 13)

(19,930)

- 

- 

- 

(19,930)

At January 1, 2019

5,907

13,136

1,205

3,329

23,577

Additional provisions

1,942

 2,509

( 3)

 5,289

 9,737

Reversals of provisions utilized

(2,267)

(552)

  -

(610)

(3,429)

Reversals of provisions not utilized

(234)

(3,152)

(900)

(422)

(4,708)

Exchange differences

(718)

(594)

  37

(316)

(1,591)

Reclassification

  389

(389)

  -

(1,000)

(1,000)

At December 31, 2019

 5,019

 10,958

  339

 6,270

 22,586 

As of December 31, 2019, it was not deemed necessary to book provisions for the risks described in 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, 2019, the litigation provision mainly represents distributor and commercial agent risks for 2.6 million euros (2.2 million euros as at December 31, 2018). Other risks and charges As of December 31, 2019, other provisions for risks and charges are mainly related to the restructuring provisions for an amount of 3.9 million euros (see Note 5).

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

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• BIC GROUP - 2019 UNIVERSAL REGISTRATION DOCUMENT •