Consolidated financial statements
1
3
LISI 2014FINANCIALREPORT
I
41
2.2.18.4Costof financeandother financial chargesand income
Thecostof finance includes:
■■
Interest charges on loans calculated using the effective interest rate
method;
■■
Interest charges included in paymentsmade for a finance lease and
calculatedusingtheeffective interestratemethod;
■■
Interest incomegenerated fromshort-term investments;
■■
Variations in fairvalueof financial instruments;
■■
Income fromdividends of non-consolidated companies is recognized
in the income statementwhen theGroupbecomes entitled to receive
payments, i.e., inthecaseofquotedsecurities,onthecoupondate.
Other financial income and expenses mainly include exchange profits
and losses.
2.2.18.5 Income taxes
Corporate income tax (debit or credit) includes the tax to pay (the tax
credit) in respect of each financial year and the amount of deferred
taxation to pay (credit). The tax is recognized as income, except if it
relates to items thataredirectly recognizedasequity; inwhichcase it is
recognizedasequity.
Deferred taxation iscalculatedusing thevariablecarry forwardmethod
for all timing differences at year-end betweentaxableand accounting
values of assets and liabilities on the consolidated balance sheet.
Fiscally non-deductible goodwill does not give rise to a declaration of
deferredtax.
Deferred tax assets are only recognized if their recovery is probable.
Deferred taxdebitsandcreditsaremeasuredat the taxrates thatwillbe
applicablewhenthetimingdifferencesaresettled.
Theexaminationoftherecoverabilityofbroughtforward losses issubject
to particular scrutiny and shall only be recoverable if the subsidiary in
questionor itsconsolidationscopemakesprofits inthenear future.
RegardingFrenchcompanies,pursuanttotheremoval oftheprofessional
taxand its replacementby theCETandCVAEasof 2010, theGrouphas
decided to consider theCVAE in the contextof the IAS 12 standard. This
decisionwill thus lead to thepostingof this taxas "Taxes" in the income
statement.
2.2.18.6Earningsper share
Net earnings per share (before dilution) are calculated on the ratio
betweenthenetprofitfortheperiodandtheweightednumberofshares
in circulation during the period, after deduction of shares held by the
Group (treasury shares). Net diluted earnings per share are calculated
by including financial instruments that provide deferred access to the
Group’scapital (stockoptions, sharewarrants).
2.2.19Cashflowstatement
TheGrouphasopted topresent its consolidatedcash flow statement in
accordancewiththe IFRSmodel.
2.2.20Segmentinformation
TheLISIGrouppresents its segment information inaccordancewith the
criteriadefinedby IFRS8.
Anoperatingsegment isacomponentofanentity:
■■
that engages in business activities fromwhich it may earn revenues
and incur expenses (including revenues and expenses relating to
transactionswithothercomponentsofthesameentity);
■■
whoseoperating results are regularly reviewedby the chief operating
decisionmakertomakedecisionsaboutresourcestobeallocatedtothe
segmentandassess itsperformance;and
■■
forwhichdiscrete financial information isavailable.
TheGroup’sactivities in2014arespreadoverthreebusinesssegments, in
whichthethreedivisionsoperate:
■■
TheLISIAEROSPACEdivision,whichbrings togetherall activities in the
aerospacemarket,
■■
The LISI AUTOMOTIVE division, which brings together all activities in
theautomotivemarket,
■■
LISIMEDICAL,whichbringstogetherallactivities inthemedicalmarket.
OtheractivitiesmainlyincludetheactivitiesoftheGroup’smaincompany.
2.2.21Indicators
TheGroupusesthe indicatorsdefinedbelow.
FreeCashFlow:
Freecashflowafterdeductionofnetcapital investments
andchanges inworkingcapital (seeChapter3note2.5.2.3Cashandcash
equivalents).
Return on capital employed (ROCE):
Ratio of EBIT to average capital
employed (Shareholders' equity+Netdebt) foryearsNandN-1).
Return on equity (ROE):
Ratio of net earnings to total shareholders'
equity.
Gearing:
RatioofNetDebttotheGroupshareofconsolidatedequity.
Book tobill:
Ratio of orders takenduring the period to invoices issued
duringthatsameperiod.
RevaluedNetAssets(RNA):
Averageof[(0.95xGroupSales)+(6.5xGroup
EBITDA)+ (10xGroupEBIT)] -GroupNetDebt
