LISI 2012 FINANCIAL REPORT
39
3
Consolidated financial statements
due dates. Provisions for legal disputes concernmainly disputes
with customers, subcontractors, and suppliers. Provisions for
other current risks are mainly comprised of provisions for late
penalties, provisions for layoffs, and other operating risks.
2.2.15 Personnel benefits
2.2.15.1 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 contributions plans or
defined benefits plans.
Contributions in defined contributions plans are recognized as
expenses for the period in which they are incurred.
In respect of defined benefits plans, the Group’s commitments
to its staff are determined by independent actuaries using
the Projected Unit Credit Method in accordance with IAS 19.
This method takes into account in particular the probability
of keeping staff within the Group until retirement age, future
remuneration developments and a discount rate.
Such plans can be financed by investments in various
instruments, such as insurance policies, shares or bonds, to the
exclusion of debt instruments or shareholders’ equity issued by
the Group.
The requirements of IFRIC 14 do not fall within the scope of
adjustments to be applied by the Group.
The Group has opted for the early adoption of the revised IAS
19 standard from January 1, 2012, actuarial gains and losses are
recognized as other comprehensive income.
The excess or shortfall of the fair value of assets over the
present value of bonds is recognized as assets or liabilities on
the balance sheet. However, excess assets are only recognized
on the balance sheet if they represent a future economic
advantage for the Group.
The LISI Group has no plan opened relating to defined-
contribution schemes.
2.2.15.2 SHARE-BASED PAYMENTS
The Group has implemented plans for the share-purchase
options and a plan for awarding shares as a bonus conditional
on performance, for certain employees and directors,
whose objective is to create additional incentive to improve
the performance of the Group. As part of this scheme,
certain employees and managers of foreign subsidiaries will
benefit from these same advantages, but will receive their
remuneration in the form of a bonus payment.
The award of share purchase options and the award of shares
based on performance do represent a benefit available to
such associates, and thus constitute a supplement to their
remuneration. The options granted are recognized as personnel
expenses based on the fair value of the shares or equity
derivatives assigned, on the date of implementation of these
plans throughout the vesting period of these options.
In the case of plans for share-purchase options and bonus
shares based on performance, these benefits correspond to the
fair market value of the instruments awarded, and are valued
using a binomial model.
As regards bonus commitments, these are recorded as social
liabilities at their fair value at year-end.
This remuneration paid in LISI shares or stock options is
recognized:
• over a period of four years from the allocation date, in
accordance with the vesting period of the rights contained in
the plan rules, with regard to call option plans;
• over a period of two years from the allocation date, in
accordance with the vesting period of the rights contained in
the plan rules, with regard to the allocation of performance
shares.
A share purchase plan (Group Savings Plan) is also available
for Group employees, in which they may purchase LISI shares
within the framework of a capital increase reserved for
employees or as part of a share buyback program. Shares
acquired by employees within the framework of these
programs are subject to certain sale and transfer restrictions.
In the case of capital increases reserved for employees as part
of the Group Savings Plan, the benefit offered to employees
is the discount on the subscription price, being the difference
between the subscription price of the shares and the share
price at the award date (with amaximumof 20% in accordance
with French law). This expense is recognized in its entirety at
subscription date in the case of the Group Savings Plan.
2.2.16 Debt
Interest-bearing loans are initially recognized at their fair
value less costs attributable to the transaction. They are then
measured at depreciated cost; the difference between the
cost and the repayment value is recognized in the income
statement for the period of the loans, in accordance with the
effective rate of interest method.
2.2.17 Trade and other accounts payable
Trade and other accounts payable are valued at fair value
at first recognition, and then at depreciated cost. When the
maturity of such financial assets is short, the sums obtained
from applying this method are very close to the nominal value
of the payables, which is then the value employed.
