Report - Kongsberg Gruppen 2007 - Kongsberg Maritime ...

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Non-current provisions
In the period from 1999 to 2007, Kongsberg sold properties in the Kongsberg
Industrial Park. The properties have subsequently been leased back on long-term
contracts that expire between 2014 and 2025. In connection with sale and leaseback,
subleases were signed at lower rents than the sum of the rent, maintenance
and renovation costs for the subleased buildings. In addition, the Group has under -
taken operational and maintenance responsibility for subleased buildings. This net
loss is considered a loss contract according to IAS 37 and the net current value of
future losses is provided for in the accounts. A provision has also been set aside
attached to the cessation of rent. The remaining need for provisions is considered
each year. The discounting effect has been recognised as operating costs.
Other provisions
Provisions are recognised when the Group has a commitment as a result of
a past event, it is probable that there will be a financial settlement as a result of
this commitment, and the size of that amount can be measured reliably. Provisions
are made when there is disagreement with contracting parties, agents, or as an
estimated settlement related to product liability.
Provisions for guarantees
Provisions for guarantees refer to guarantee liabilities on completed deliveries.
Unused provisions for guarantees are dissolved upon expiry of the guarantee
period. Provisions for guarantees are estimated on the basis of a combination of
historical figures, specific calculations and best estimate. Guarantee periods vary
from 1 to 2 years for Kongsberg Maritime. For Kongsberg Defence & Aerospace,
they normally extend from one to five years, but can last for 30 years under
certain circumstances.
The increase in guarantees is distributed equally between the business areas.
The increase within Kongsberg Maritime. has arisen as a result of general growth
in deliveries. The increase within Kongsberg Defence & Aerospace has aris en as a
result of strong growth in the number of remote weapons systems delivered.
29 Other liabilities
Other non-current liabilities
Amounts in MNOK 31 Dec 07 31 Dec 06
Liabilities related to the sale of property
(cf. Note 8 - Sale of property) 160 -
Estimated additional remuneration related to earn out in
connection with acquisitions (cf. Note 6 - Changes in
Group structure) 50 -
Other items 7 -
Total 217 -
Other current liabilities
Amounts in MNOK 31 Dec 07 31 Dec 06
Trade payables 444 456
Public duties payable 176 162
Payable tax 81 14
Provision for holiday pay 184 172
Liabilities related to the sale of property
(cf. Note 8 - Sale of property) 43 -
Other items 482 389
Total 1 410 1 193
30 Assets pledged as collateral and guarantees
Information on pledged assets shows which Group assets will be available to
pledgees in a bankruptcy or liquidation situation.
Assets pledged as collateral
The Group's loan contracts, i.e. the bond loan agreements and the agreement
for syndicated overdraft facilities, are based on negative pledges. The Group has
furnished no assets as collateral for loans.
Prepayment and completion guarantees
Consolidated companies have furnished guarantees for prepayments and performance
in connection with projects. The guarantees are issued by Norwegian and
foreign banks and insurance companies. Kongsberg Gruppen ASA is responsible
for all guarantees.
Amounts in MNOK 31 Dec 07 31 Dec 06
Prepayments and performance guarantees for customers 960 885
Kongsberg Gruppen ASA has non-committed framework agreements for
guarantees with banks and insurance companies.
"Other items" refers to total provisions of MNOK 129 for bonuses for managers
and other employees, incl. accrued social security expenses (MNOK 68 at
31 Dec. 2006).
Kongsberg – Annual Report and Sustainability Report 2007