Hexagon Annual Report 2019

NOTE 19 PROVISIONS (NOK 1 000) 2019 2018 Balance 1 January 34 122 37 845 Additions from purchase of companies 19 940 0 Provisions for the year 28 957 18 737 Translation differences 181 606 Provisions used (and reversed) during the year -10 729 -23 066 Balance 31 December 72 471 34 122 The Group seeks to minimize the level of warranty or other claims from third parties through a diligent focus on quality. The Group also seeks to consistently recognize any potential impact of unanticipated events. Provisions are made for both general and, if required, specific warranty claims on Low-Pressure and High-Pressure cylinders or on delivered systems. Such provisions are typically based on i) historical warranty costs levels for equivalent products and services, ii) our assessment of any ongoing third-party legal disputes or quality related matters in the ordinary course of business. In such cases, including products liability cases, the Group prepares estimates based on experience, professional judgment of legal counsel, and other assumptions it believes to be reasonable. The Group also recognizes an asset if insurance covers all or part of any recorded liability. As additional information becomes available, potential liability related to pending litigation is reassessed and related estimates are updated., and iii) a forward view based on the changing levels and complexity of our business activities within cylinder and systems business areas respectively. Composites Scandinavia AB have appealed a decision from The Swedish Civil Contingencies Agency, MSB, regarding a withdrawal of specific cylinders. The cylinders are no longer in production and have not been sold since 2012. The products have met the relevant requirements when placed on the market and, according to MSB's investigation, still meet those requirements. As the decision is appealed, it has no legal effect as per 24 March 2020. Legal Processes CARRYING AMOUNT (NOK 1 000) INTEREST RATE CONDITIONS CURRENCY MATURITY 2019 2018 UNSECURED Bond loan Nibor 3 month + 3,75% NOK 15.03.2023 1 100 000 0 Total unsecured non-current liabilities 0 0 SECURED Bank loan (bullet) Euribor 3 month + margin EUR 30.09.2021 138 132 516 163 Bank loan (bullet) Libor 3 month + margin USD 30.09.2021 74 690 Vehicle loan Fixed interest rate USD 01.08.2019 0 13 Obligations under finance leases Libor USD+ margin USD 01.11.2019 0 3 437 Obligations under finance leases Euribor + margin EUR 30.09.2019 0 2 318 OTHER Amortized transaction costs loans NOK -14 765 Total secured and other non-current liabilities 198 057 521 932 Total non-current liabilities 1 298 058 521 932 1st year’s instalments, non-current liabilities 0 -5 769 Total non-current liabilities, not including 1st year’s instalments 1 298 058 516 163 Cross-currency swap of bond loan (note 12, 24) Pay Libor USD 3 month+/Receive Nibor 3m+ USD -44 859 NOTE 20 NON-CURRENT INTEREST-BEARING LIABILITIES 45 131 2019 AT A GLANCE FROM THE BOARD ROOM FINANCIAL STATEMENTS