LISI FINANCIALREPORT2013 I
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CONSOLIDATEDFINANCIALSTATEMENTS
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Thecostofmaterialsandmerchandise iscalculatedfromtheiracquisition
costplusthecosts incurredtobringthemtotheircurrent location intheir
current condition. Finishedproductsandwork inprogressarevaluedat
actualproductioncostover theperiod, includinganappropriateportion
ofgeneralcostsbasedonnormalproductioncapacity.
The net realizable value equates to the estimated sales price in the
normal course of business, less the estimated cost of completion and
estimatedcostsnecessarytomakethesale.
Inventories are impaired when their net realization value is less than
their cost of production, when they are damaged, obsolete, as well as
eachtimethere isariskthattheymightnotbedisposedofundernormal
conditions, or when there is a risk that theywill be disposed of over a
periodthat is longerthanwhat isgenerallyaccepted.
2.2.10Tradeandotherreceivables
Trade receivables, loansandadvancesare recorded to thebalancesheet
at their initial value. In the event of risk of non-recovery, impairment is
fixedonacase-by-casebasisusingtheprobablecollectionflows; thisrisk
takestheageofthetransaction intoconsideration.
2.2.11Cashandcashequivalents
Cashand cashequivalents include currentbankaccounts, cash inhand,
on-calldeposits, securitiesandnegotiablecertificatesofdepositheldby
theGroup.Adjustmentsofvaluearerecognized inthe incomestatement.
2.2.12Sharecapital
2.2.12.1Treasuryshares
The Group implements a policy of buying back its own shares, in
accordancewith authorizations provided by the Shareholders’ General
Meeting to the Board of Directors. The main purposes of the share
buybackprogramare:
n
to increase the activity of the stock on themarket by an Investment
Services Provider via a liquidity contract in accordancewith theAFEI
professional code of ethics recognizedby theAMF (the French stock
marketsauthority),
n
to grant stock options or free shares to employees and corporate
officersofthecompanyand/or itsconsolidatedGroup,
n
tokeepandusesharesasconsiderationorpaymentforpotentialfuture
acquisitions,
n
tocancelsharespurchased,subjecttotheapprovaloftheShareholders’
ExtraordinaryMeetingtobecalledata laterdate.
Repurchasedsharesareclassifiedas treasurysharesanddeducted from
shareholders’ equity.
2.2.12.2 Remunerations in shares (stocks options and conditional
awardof so-calledperformanceshares)
Refertonote2.2.14 "Personnelbenefits".
2.2.13Provisions
Aprovision isrecognizedon thebalancesheet if theGrouphasacurrent,
legal commitment or an implicit one arising from a past event and for
which it isprobablethattherewillneedtobeanoutflowofresourcesthat
represent economic advantages inorder to eliminate the commitment.
They aremeasured at the estimated payment amount. If the effect of
capitalizingprovisions isnotsignificant,capitalization isnotcarriedout.
2.2.13.1Long-termprovisions
Long-term provisionsareprovisionsnotdirectly related to theoperating
cycle, whose due date is generally within more than one year. They
also comprise provisions for environmental risks and provisions for
retirement.
2.2.13.2Short-termprovisions
Short-term provisions cover the provisions directly related to the
operatingcycleofeachdivision, regardlessof theirestimatedduedates.
Provisions for legal disputes concernmainly disputes with customers,
subcontractors, and suppliers. Provisions for other current risks are
mainly comprisedof provisions for latepenalties, provisions for layoffs,
andotheroperatingrisks.
2.2.14Personnelbenefits
2.2.14.1Commitments to thepersonnel
In accordancewith the laws andpracticesof each country inwhich
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 contributionsplansordefinedbenefitsplans.
Contributions indefinedcontributionsplansare recognizedasexpenses
fortheperiod inwhichtheyare incurred.
In respect of defined benefits plans, the Group’s commitments to its
staff are determined by independent actuaries using the Projected
UnitCreditMethod in accordancewith IAS19.This method takes into
account in particular the probabilityofkeeping staffwithin theGroup
until retirementage, futureremunerationdevelopmentsandadiscount
rate.
Such plans can be financed by investments in various instruments,
such as insurance policies, shares or bonds, to the exclusion of debt
instrumentsorshareholders’ equity issuedbytheGroup.
The requirementsof IFRIC 14donot fallwithin thescopeofadjustments
tobeappliedbytheGroup.
TheGrouphasoptedfortheearlyadoptionoftherevised IAS19standard
from January 1, 2012, actuarial gains and losses are recognizedas other
comprehensive income.
