36
I LISI FINANCIALREPORT2013
CONSOLIDATEDFINANCIALSTATEMENTS
3
Theexcessorshortfallof the fairvalueofassetsover thepresentvalueof
bonds isrecognizedasassetsor liabilitiesonthebalancesheet.However,
excessassetsareonly recognizedon thebalancesheet if they represent
a futureeconomicadvantage fortheGroup.
The LISI Group has no plan opened relating to defined-contribution
schemes.
2.2.14.2Share-basedpayments
TheGrouphas implementedplans for the share-purchase options and
a plan for awarding shares as a bonus conditional onperformance, for
certainemployeesanddirectors,whoseobjective is to createadditional
incentive to improve the performance of the Group. As part of this
scheme, certain employees and managers of foreign subsidiaries will
benefit from thesesameadvantages,butwill receive their remuneration
inthe formofabonuspayment.
Theawardof sharepurchaseoptions and theawardof sharesbasedon
performancedorepresentabenefitavailabletosuchassociates,andthus
constitutea supplement to their remuneration. Theoptionsgrantedare
recognizedaspersonnelexpensesbasedonthefairvalueofthesharesor
equityderivativesassigned,onthedateof implementationoftheseplans
throughoutthevestingperiodoftheseoptions.
In the caseof plans for share-purchaseoptionsandbonus sharesbased
onperformance,thesebenefitscorrespondtothefairmarketvalueofthe
instrumentsawarded,andarevaluedusingabinomialmodel.
Asregardsbonuscommitments, thesearerecordedassocial liabilitiesat
their fairvalueatyear-end.
Thisremunerationpaid inLISIsharesorstockoptions isrecognized:
n
overaperiodoffouryearsfromtheallocationdate, inaccordancewith
thevestingperiodoftherightscontained intheplanrules,withregard
tocalloptionplans;
n
overaperiodof twoyear from theallocationdate, inaccordancewith
thevestingperiodoftherightscontained intheplanrules,withregard
totheallocationofperformanceshares.
A share purchase plan (Group Savings Plan) is also available for Group
employees, inwhichtheymaypurchaseLISIshareswithintheframework
ofacapital increasereserved foremployeesoraspartofasharebuyback
program. Shares acquiredby employeeswithin the frameworkof these
programsaresubject tocertainsaleand transfer restrictions. In thecase
of capital increases reserved foremployeesaspartof theGroupSavings
Plan, thebenefitofferedtoemployees isthediscountonthesubscription
price, being thedifferencebetween the subscriptionpriceof the shares
and the share price at the award date (with a maximum of 20% in
accordancewithFrench law).Thisexpense is recognized in itsentiretyat
subscriptiondate inthecaseoftheGroupSavingsPlan.
2.2.15Debt
Interest-bearing loans are initially recognized at their fair value less
costs attributable to the transaction. They are thenmeasured at
depreciated cost; the difference between the cost and the repayment
value isrecognized inthe incomestatementfortheperiodofthe loans, in
accordancewiththeeffectiverateof interestmethod.
2.2.16Tradeandotheraccountspayable
Trade and other accounts payable are valued at fair value at first
recognition, and then at depreciated cost.When thematurity of such
financial assets is short, the sums obtained from applying thismethod
are very close to the nominal value of the payables, which is then the
valueemployed.
2.2.17Definitionoftheconcepts"current"and"non-current"inthe
balancesheet
Assets and liabilities whose maturity is less than the operating cycle,
which is generally 12 months, are classified as current assets and
liabilities. Ifmaturity is later than this, theyare classifiedasnon-current
assetsand liabilities.
2.2.18Overviewoftheincomestatement
TheGrouphas optedtocontinueshowingthefollowing totals,whichare
not strictlyaccountingones,andwhosedefinitionsareas follows:
n
Current Gross Operating Profit (EBITDA) includes added value,
administrative and sales expenses, costs of pensions and the cost of
remuneration in shares. It does not include contributions andwrite-
offs fromdepreciationandprovisions.
n
CurrentOperatingProfit(EBIT) includesCurrentGrossOperatingProfit
(EBITDA)aswellas contributionsandwrite-offsfromdepreciationand
provisions.
n
OperatingProfit includes EBIT, other non-recurringoperating income
and expenses. These non-recurring items are strictly defined as
income and expenses resulting from events or transactions that are
clearlydistinctfromthecompany’sordinaryactivities,andthatarenot
expectedtoreoccuronaregularbasis,owingto:
–theirunusualnatureand
–their random occurrence, such as expenses or compensation
received for losses, costs resulting from shutdowns, restructurings,
or site relocations, goodwill amortization, and capital gains and
lossesonthesaleofnon-operating, tangibleand intangibleassets.
2.2.18.1Saleofgoodsandprovisionof services
Income from the sale of goods is recognized in the income statement
when the significant risks and advantages inherent inownershipof the
goodshavebeentransferredtothebuyer.
Sales revenues are shown after deduction of discounts. Sums from
royalties,patentfeesanduseoftrademarksarepostedtosalesrevenues.
2.2.18.2Payments foroperating leasecontracts
Payments foroperating leasesare recognizedasexpensesona straight-
linebasisovertheperiodofthe lease.
