LISI GROUP - 2015 Financial report

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CONSOLIDATED FINANCIAL STATEMENTS
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LISI 2015 FINANCIAL REPORT
the estimated cost of the outcome of any dispute or possible
transactions. Assessment of expected returns cannot be
calculated as of yet. The bulk of the provisions relates to various
quality, tax and wage risks.
Reversals for the period essentially concern the impacts of the
acquisition of the Manoir group.
- Industrial reorganization
This covers industrial reorganization based on assessments of
the cost of redeploying certain sites or entities. The assessment
of the sums recognized takes account of specific local
regulatory stipulations.
- Restructuring
The €3.3 million reversal results from the implications of the
transfer of the Thiant plant's business to two other French
sites.
- Other risks
Liabilities recognized under this category take into account
risks based on various reports (industrial, regulatory, corporate,
customer guarantees and products) and concern both of the
Group’s main divisions.
This section covers the risks and expenses clearly specified as
to their purpose whose maturity remains likely and which will
cause an outflow of resources without consideration. The most
significant amounts reflect the unfavorable application for the
Group of contractual terms, the impact of the streamlining of
production structures and litigations with third party partners.
The amounts of provisions and reversals primarily concern
quality, customer lead time, qualification of new products, tax
and wage risks.
2.6.4.2 Commitments to the personnel
Application of revised IAS 19 as at January 1st, 2012
As stated in note 2.2 Accounting policies, the LISI Group has
been applying revised IAS 19 from January 1st , 2012.
Characteristics
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 contribution plans or
defined benefit plans.
Defined benefit plans
General description of the plans
Retirement benefits (France):
Entitlements to retirement benefits are defined by applicable
laws or sectoral agreements when they are more favorable.
UK
BAI UK operates a defined benefit pension plan to which
all employees who joined the company before April 2007
are entitled. Plan assets are separate from the assets of the
company and managed by a trust administered by a board of
trustees.
The risks to which the plan exposes the Company include:
investment risk, inflation, longevity of pensioners, options,
and legislative risk.
USA
Hi Shear Corporation operates a defined benefit pension
plan to which all employees who joined the company before
February 1991 are entitled. The plan has been closed since that
date. Plan assets are separate from the assets of the Company
and managed by a trust administered by a board of trustees.
The risks to which the plan exposes the Company include:
investment risk, inflation, longevity of pensioners, options,
and legislative risk.
The geographic breakdown of the Group’s commitments to staff as at December 31, 2015 for defined benefit plans and the main
assumptions employed in their assessment are as follows:
(in €'000) France Germany USA England Other
Actuarial debt 25,481 7,704 8,604 22,605 1,910
Discount rate 1.97% 2.05% 3.50% 3.98% 3.70%
Inflation - Wage increase 1.20% 1.50% NA 3.26% NA
As per the revised IAS 19 standard, the rate of return on non-
current funds is identical to the discount rate for actuarial
liability. The rates of return thus employed are equal to 3.50%
for American insurance plans and 3.98% for English ones.
As at December 31, 2015, the allocation of plan assets was
approximately 51% in equities and 49% in bonds for the UK, and
24% in equities, 57% in bonds and 19% in other investments in
the USA.