LISI 2012 FINANCIAL REPORT
38
3
Consolidated financial statements
• Engines and critical parts Europe B.U.,
• Engines and critical parts North America B.U.,
• Aerostructure and Aviation equipment B.U.,
• Technical components B.U.
The LISI AUTOMOTIVE division is split into 3 CGUs:
• Threaded fasteners B.U.,
• Mechanical components B.U.,
• Clipped solutions B.U.
The MEDICAL division is composed of a single CGU.
2.2.8.6 LONG-TERM FINANCIAL ASSETS
This item is mainly comprised of capitalization contracts. It also
includes non-consolidated holdings. These are investments
in unlisted companies, for which fair value cannot be reliably
estimated. As a last resort, the Group values financial assets
at their historic cost less any potential loss of value, when no
reliable fair value estimate is possible through an evaluation
technique, in the absence of an active market.
2.2.9 Inventories
Stock is valued at whichever is the lower out of cost and net
realizable value.
The cost of materials and merchandise is calculated from their
acquisition cost plus the costs incurred to bring them to their
current location in their current condition. Finished products
and work in progress are valued at actual production cost over
the period, including an appropriate portion of general costs
based on normal production capacity.
The net realizable value equates to the estimated sales price
in the normal course of business, less the estimated cost of
completion and estimated costs necessary to make the sale.
Inventories are impaired when their net realization value is
less than their cost of production, when they are damaged,
obsolete, as well as each time there is a risk that they might not
be disposed of under normal conditions, or when there is a risk
that they will be disposed of over a period that is longer than
what is generally accepted.
2.2.10 Trade and other receivables
Trade receivables, loans and advances are recorded to the
balance sheet at their initial value. In the event of risk of non-
recovery, impairment is fixed on a case-by-case basis using
the probable collection flows; this risk takes the age of the
transaction into consideration.
2.2.11 Other short-term financial assets
Other short-term financial assets include marketable securities
and deposit certificates held by the Group. At each year-end,
these financial assets are recognized at fair value and offset
against the income statement.
2.2.12 Cash and cash equivalents
Cash and cash equivalents include current bank accounts,
cash in hand and on-call deposits. Adjustments of value are
recognized in the income statement.
2.2.13 Share capital
2.2.13.1 TREASURY SHARES
TheGroup implements a policy of buying back its own shares, in
accordance with authorizations provided by the Shareholders’
General Meeting to the Board of Directors. The main purposes
of the share buyback program are:
• to increase the activity of the stock on the market by
an Investment Services Provider via a liquidity contract
in accordance with the AFEI professional code of ethics
recognized by the AMF (the French stock markets authority),
• to grant stock options or free shares to employees and
corporate officers of the company and/or its consolidated
Group,
• to keep and use shares as consideration or payment for
potential future acquisitions,
• to cancel shares purchased, subject to the approval of the
Shareholders’ Extraordinary Meeting to be called at a later
date.
Repurchased shares are classified as treasury shares and
deducted from shareholders’ equity.
2.2.13.2 REMUNERATIONS IN SHARES (STOCKS OPTIONS AND
CONDITIONAL AWARD OF SO-CALLED PERFORMANCE SHARES)
Refer to note 2. .15 "Personnel benefits ».
2.2.14 Provisions
A provision is recognized on the balance sheet if the Group
has a current, legal commitment or an implicit one arising
from a past event and for which it is probable that there will
need to be an outflow of resources that represent economic
advantages in order to eliminate the commitment. They are
measured at the estimated payment amount. If the effect of
capitalizing provisions is not significant, capitalization is not
carried out.
2.2.14.1 LONG-TERM PROVISIONS
Long-term provisions are provisions not directly related to the
operating cycle, whose due date is generally within more than
one year. They also comprise provisions for environmental risks
and provisions for retirement.
2.2.14.2 SHORT-TERM PROVISIONS
Short-termprovisions cover the provisions directly related to the
operating cycle of each division, regardless of their estimated
