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CONSOLIDATED FINANCIAL STATEMENTS

62

LISI 2015 FINANCIAL REPORT

2.6.4 Provisions

2.6.4.1

Changes in provisions break down as follows:

(in €'000)

At January 1

st

, 2014

Provisions (net of reversals)

At December 31, 2014

Provisions

Reversals (amounts used)

Reversals (non-used

amounts)

Actuarial gains/losses out of

shareholders' equity

Reclassifications

Entry into/exit from

consolidation scope

Translation differential

At December 31, 2015

Pensions and retirement

29,409 13,029 42,439 2,928 (2,950)

1 (5,442)

0 183 37,159

Long-service medals

3,885

696 4,581

168 (528)

(93)

6

0

0 4,133

Environment-related risks

13,706 1,349 15,056 3,036 (5,496)

(514)

(177)

0 381 12,286

Disputes and other risks

3,460 4,224 7,684 4,074 (4,726) (205)

250

0

34 7,111

Guarantees to clients

7,171 2,173 9,344 681

(142)

0

0

0

0 9,882

Industrial reorganization

2,200 (2,117)

83

0

(91)

0

0

0

8

0

For taxes

848 (160)

688

0 (320)

(368)

0

0

0

For loss on contract

0

3,600

0 (900)

0

0

2,700

Sub-total non-current

provisions

60,680 19,194 83,474 10,887 (15,153) (1,179) (5,436)

73

0 607 73,274

For loss on contract

448 156 605

137

(97)

644

Industrial reorganization

779 (253)

527

0

(33)

(141)

0

(13)

340

Restructuring

8,486 (2,618) 5,868

80 (3,333)

0

0

0

0 2,615

Environment-related risks

307 (23)

284 181

(79)

(107)

279

Disputes

432 434 866 533 (276) (465)

0

0

0 659

For taxes

39 (39)

0

0

0

0

0

0

Other risks

10,570 4,188 14,758 5,737 (5,752) (3,987)

0

0

0

57 10,814

Subtotal current provisions

21,061 1,846 22,907 6,668 (9,569) (4,700)

0

0

0

44 15,350

Grand total

81,741 21,039 106,381 17,555 (24,722) (5,879) (5,436)

73

0 651 88,623

of which as recurring operating

profit

14,379 (20,035) (5,266)

of which as non-recurring

operating profit

3,176 (4,687) (613)

The main provisions are in respect of:

- Pensions and retirement

Legally-imposed obligations in respect of staff salaries,

pension payments or compensation on retirement. Taken into

account were assumptions regarding the level of the discount

rate, the turnover, and the mortality tables. Some of these

commitments are backed with external funds.

In accordance with the revised IAS 19, all actuarial gains and

losses are recognized under "Other comprehensive income" as

a provision for pensions.

- Environment

Recognition of liabilities links to requirements to uphold

environmental standards in the various countries in which

the company operates and more specifically with regard to

soil pollution on industrial sites. The cost of monitoring and

compliance in concert with local authorities makes up a large

part of these provisions. The bulk of the provisions relates to

the decontamination risk of soils and buildings.

- Disputes and other risks

This covers litigation or disputes with partners and service

providers. Risk assessment has been calculated based on