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LISI 2011 —
63
— financial report
Consolidated financial statements
2.7.2 Share-based payments
2.7.2.1 Share purchase options
Stock options are awarded to directors and certain employees of
the Group. In accordance with IFRS 2, “Share-Based Payment”, these
instruments result in the provision of shareholders’ equity instruments
and are measured at grant date. The Group uses the binomial method
to measure them.
2.7.2.2 Award of performance shares
Acting on the recommendation of the Compensation Committee,
LISI’s Board of Directors decided, on July 28, 2009, to allocate
performance shares to members of the Executive Committee and to
members of the principle Management Committees for the three LISI
Group divisions, subject to their meeting certain performance targets:
the achievement of these two criteria at the end of 2010, namely EBIT
and Free Cash Flow, resulted in the completion of 50% of that plan in
2011. The final cost was allocated to the divisions.
Acting on the recommendation of the CompensationCommittee, LISI’s
Board of Directors decided, on June 28, 2010, to allocate performance
shares to members of the Executive Committee and to members of
the main Management Committees for the three LISI Group divisions,
subject to their meeting certain performance targets. The same went
in 2011, insofar as the Board of Directors of October 26, 2011 renewed
the opening of a new plan under similar conditions.
The fair value of these benefits has been calculated by independent
actuaries and is recognized in the income statement on a straight-line
basis throughout the entitlement acquisition period.
The fair value of the benefits thus granted is recognized in 2011
in Personnel expenses for €0.8m for the employees of the French
companies, against shareholders’ equity, and for €0.8m for the
employees of foreign companies, against Social liabilities. This cost
was not allocated to divisions, and remains an expense at the LISI S.A.
level until the definitive realization of the plan.
2.7.3 Related-party information / Remuneration of members
of management bodies
2.7.3.1 Related-party information
Related parties include the parent company, company managers,
directors and board members. There is no other jointly-owned
entity or entity recognized by equity method, or joint shareholder, or
business under joint control or significant influence with which the
LISI Group may have carried out transactions worthy of investigation.
The only relationship of the Group with its parent company (CID)
is through the capital holding. On the other hand, LISI S.A. provides
support to its subsidiaries in the fields of accounting, finance, strategy
and law.
2.7.3.2 Remuneration of managers and Directors
(In €’000)
Expenses for the period
Liabilities
at 12/31/2011
2011
2010
Gross short-term benefits (salaries, bonuses, etc.)
759
720
Post-employment benefits (IFC)
229
197
229
Other long-term benefits
Termination benefits
Equity compensation benefits
43
33
43
Total compensation
1,030
951
271
The main directors will receive remuneration in the formof short-term
benefits, post-employment benefits and share-based payments. With
regard to this category, in 2009 and 2010 both directors of LISI S.A.
received performance shares in accordance with the same terms and
conditions as other members of the divisional Executive Committees;
Two additional conditions are also imposed in their case, namely, to
acquire 200 shares at the end of the acquisition period and to keep
a nominative portion of equity (200 shares) until the end of their
function as mandated chief executives of the mother company.
2.7.4 Commitments
The Group draws up annually a detailed list of all contractual
commitments, financial and commercial commitments, and
contingent liabilities to which LISI S.A. and/or its subsidiaries are
party or exposed. This list is regularly updated by the departments
concerned and reviewed by Group Management. In order to ensure
that the information on this list is complete, accurate and consistent,
special control procedures have been implemented, including in
particular:
– The regular examination of the minutes of Shareholders’ General
Meetings, Board Meetings, associated Committees that deal with
contractual commitments, disputes and authorizations for the
purchase or disposal of assets;
– Review of sureties and guarantees as well as loan agreements and
any other banking commitments, in conjunctionwith the banks and
financial institutions;
– Review, together with both internal and external legal counsels,
of dispute and legal proceedings before the courts, environmental
questions, and the measurement of liabilities that might arise;
– Examination of tax inspectors’ reports and reassessment notices
from previous financial years;