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LISI 2011 —
54
— financial report
Consolidated financial statements
The main provisions are in respect of:
– Pensions and retirement:
Legally-imposed obligations in respect of staff salaries, pension
payments or retirement indemnities. Taken into account were
assumptions regarding the level of the discount rate, the turnover, and
the mortality tables. Some of these commitments are backed with
external funds.
– Environment:
Recognitionof liabilities links to requirements touphold environmental
standards in the various countries in which the company operates and
more specifically with regard to soil pollution on industrial sites. The
cost of monitoring and compliance in concert with local authorities
makes up a large part of these provisions. No return is expected for
this liability category.
– Disputes and other risks:
This covers litigation or disputes with partners and service providers.
Risk assessment has been calculated based on the estimated cost of
the outcome of any dispute or possible transactions. Assessment of
expected returns cannot be calculated as of yet.
– Industrial reorganization:
This covers industrial reorganization based on assessments of the
cost of closing or redeploying certain sites or entities. The assessment
of the sums recognized takes account of specific local regulatory
stipulations.
– Other risks:
Liabilities recognized under this category take into account risks based
on various reports (industrial, regulatory, corporate, etc.) and concern
both of the Group’s main divisions.
This section covers the risks and expenses clearly specified as to
their purpose whose maturity remains likely and which will cause
an outflow of resources without consideration. The most significant
amounts reflect the unfavorable application for the Group of
contractual terms, the impact of the streamlining of production
structures and litigations with third party partners.
2.5.4.2 Personnel commitments
In accordance with the laws and practices of each country in which
the Group operates, it offers its employees and former employees,
subject to certain conditions of service, the payment of pensions or
compensation on retirement. Such benefits can be paid as part of
defined contributio≤n plans or defined benefit plans.
The geographic breakdown of the Group’s commitments to staff
as at December 31, 2011 for defined benefit plans and the main
assumptions employed in their assessment are as follows:
(In €’000)
Euro zone
USA
UK
Actuarial debt
21,460
10,478
14,870
Discount rate
4.27% 4.00% 4.70%
Inflation – Wage increase
3.00% N/A
3.65%
Long-termratesof returnexpected for the fundshavebeendetermined
taking into account the asset allocation and the rates of return
expected for each component. The rates of return thus employed are
equal to 6% for American insurance plans and 5.49% for British ones.
As at December 31, 2011, the allocation of hedging assets was
approximately 57% in shares and 43% in bonds.
The table below details the changes, during financial 2011, of the
actuarial debt, and the market value of the hedging assets (in €’000):
Changes in actuarial debt
2011
2010
Actuarial debt at year start
41,164
33,118
Cost of services rendered during the
year
779
643
Cost of accretion
1,983
1,938
Contributions paid by employees
Benefits paid
(939)
(1,008)
Discounts
Wind-ups
Scheme changes
624
Change in consolidation scope
61
2,435
Translation differential
1,526
195
Actuarial losses (gains)
2,235
3,220
Actuarial debt at year end
46,809
41,164
Change in market value of hedging
assets
2011
2010
Opening value
19,863
16,820
Contributions paid by the Group
355
338
Contributions paid by employees
Benefits withheld from fund
(273)
(217)
Wind-ups
Expected yield from assets
1,185
1,144
Translation differential
(101)
886
Actuarial gains (losses)
(980)
892
Value at year end
20,049
19,863