Annual Report 2017

29. Provisions

in thousands of EUR

Legal and regulatory

Warranty

Employee-related

Share based payments

Other

Total

At 1 January 2016

21,673

8,632

4,294

876

1,990

37,465

Movements in 2016

Acquisitions

-

-

-

-

58

58

Addition to provision

4,373

2,692

3,759

95

580

11,499

Reversal of provision

- 1,237

- 1,215

- 491

-

- 238

- 3,181

Utilized during the year

- 3,134

- 2,134

- 928

- 755

- 594

- 7,545

Other movements

-

153

-

-

- 153

-

Exchange differences

130

- 7

- 49

-

5

79

At 31 December 2016

21,805

8,121

6,585

216

1,648

38,375

Non-current

1,987

5,055

4,871

-

419

12,332

Current

19,818

3,066

1,714

216

1,229

26,043

At 31 December 2016

21,805

8,121

6,585

216

1,648

38,375

At 1 January 2017

21,805

8,121

6,585

216

1,648

38,375

Movements in 2017

Addition to provision

2,798

3,090

3,342

76

1,974

11,280

Reversal of provision

- 1,209

-

- 1,019

-

- 432

- 2,660

Utilized during the year

- 2,914

- 2,420

- 1,105

- 292

- 293

- 7,024

Other movements

- 1,452

-

1,452

-

-

-

Exchange differences

- 351

- 7

- 224

-

- 147

- 729

At 31 December 2017

18,677

8,784

9,031

-

2,750

39,242

Non-current

12,298

5,197

4,501

-

692

22,688

Current

6,379

3,587

4,530

-

2,058

16,554

At 31 December 2017

18,677

8,784

9,031

-

2,750

39,242

Legal and regulatory

In June 2009, the French Competition Authority (“FCA”) investigated certain optical suppliers and optical retailers, including GrandVision, active in the branded sunglasses and branded frames sector in France, investigating whether these parties entered into vertical restraints in relation to the distribution of branded sunglasses and branded frames. In May 2015, the Company received a statement of objections (‘notification de griefs’) from the FCA. The Company responded to this statement of objections and booked an adequate provision determined by an assessment of the probability and amount of potential liability. The Company received an official report (“Rapport”) from the FCA on 22 July 2016, reconfirming the accusation and confirming GrandVision’s assumptions of the probability and amount of the potential liability. The Company timely responded to this report on 26 October 2016. On 15 December 2016 a hearing was held before the FCA during which all parties were given the opportunity to defend their case. The FCA had not yet made its decision following this hearing. As the Company expects that the procedure will continue beyond the initial anticipated period, the provision was reclassified from current to non-current provisions in 2017.

Secondly, the provision relates to the Group's ongoing tax risk management process in which it determines potential fiscal claims on VAT and other taxes in various countries. The additions in 2017 and 2016 mainly relate to VAT and other tax risks in Austria and Germany.

Warranty

The Group provides warranty along with the sales of its products. Warranty provision exists to cover possible future expenses that may be incurred rectifying defects in, or providing replacements for, products the Group has sold.

Employee-related

The additions in 2017 relate mainly to severance costs of certain employees as part of restructuring activities.

Share-based payment plans

Refer to note 30.

Other provisions

'Other provisions' mostly include decommissioning liabilities for returning a store or office to its original state.