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Repurchased shares are classified as treasury shares and deducted
from shareholders’ equity.
2.2.12.2 Remunerations in shares (stocks options and conditional
award of so-called performance shares)
Refer to note 2.2.14 “Personnel benefits”.
2.2.13
I
Provisions
A provision is recognized on the balance sheet if the Group has a
current, legal commitment or an implicit one arising from a past
event and for which it is probable that there will need to be an
outflow of resources in order to eliminate the commitment. They
are measured at the estimated payment amount. If the effect of
capitalizing provisions is not significant, capitalization is not carried
out.
2.2.13.1 Non-current provisions
Non-current provisions are provisions not directly related to the
operating cycle, whose due date is generally within more than one
year. They also comprise provisions for environmental risks and
provisions for retirement.
2.2.13.2 Current provisions
Current provisions cover the provisions directly related to the
operating cycle of each division, regardless of their estimated due
dates. Provisions for legal disputes concern mainly disputes with
customers, subcontractors, and suppliers. Provisions for other
current risks are mainly comprised of provisions for late penalties,
provisions for layoffs, and other operating risks.
2.2.14
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Personnel benefits
2.2.14.1 Commitments to the personnel
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 contributions plans or defined benefits plans.
Contributions in defined contributions plans are recognized as
expenses for the period in which they are incurred.
In respect of defined benefits plans, the Group’s commitments to its
staff are determined by independent actuaries or in house using the
Projected Unit Credit Method in accordance with IAS 19. This method
takes into account in particular the probability of keeping staff within
the Group until retirement age, future remuneration developments
and a discount rate.
Such plans can be financed by investments in various instruments,
such as insurance policies, shares or bonds, to the exclusion of debt
instruments or shareholders’ equity issued by the Group.
The requirements of IFRIC 14 do not fall within the scope of
adjustments to be applied by the Group.
In accordance with the revised IAS 19, actuarial gains and losses have
been recognized as “Other comprehensive income” since January 1,
2012.
The excess or shortfall of the fair value of assets over the present
value of bonds is recognized as assets or liabilities on the balance
sheet. However, excess assets are only recognized on the balance
sheet if they represent a future economic advantage for the Group.
The LISI Group has no plan opened relating to defined-contribution
plans.
2.2.14.2 Share-based payments
The Group has implemented plans for the share-purchase options and
a plan for awarding shares as a bonus conditional on performance,
for certain employees and directors, whose objective is to create
additional incentive to improve the performance of the Group. As
part of this scheme, certain employees and managers of foreign
subsidiaries will benefit from these same advantages, but will receive
their remuneration in the form of a bonus payment for schemes prior
to 2016 and in shares as of the 2016 scheme.
The award of share purchase options and the award of shares based
on performance do represent a benefit available to such associates,
and thus constitute a supplement to their remuneration. The options
granted are recognized as personnel expenses based on the fair
value of the shares or equity derivatives assigned, on the date of
implementation of these plans throughout the vesting period of
these options.
In the case of plans for share-purchase options and bonus shares
based on performance, these benefits correspond to the fair market
value of the instruments issued.
As regards bonus commitments, these are recorded as social
liabilities at their fair value at year-end.
This compensation paid in LISI shares is recognized over a 2-year
period as from the allocation date, in accordance with the vesting
period of the rights given in the payment of the plans, as they concern
the allocation of shares based on performance.
A share purchase plan (Group Savings Plan) is also available for
Group employees, in which they may purchase LISI shares within the
framework of a capital increase reserved for employees or as part of
a share buyback program. Shares acquired by employees within the
framework of these programs are subject to certain sale and transfer
restrictions. In the case of capital increases reserved for employees
as part of the Group Savings Plan, the benefit offered to employees is
the discount on the subscription price, being the difference between
the subscription price of the shares and the share price at the award
date (with a maximum of 20% in accordance with French law). This
expense is recognized in its entirety at subscription date in the case
of the Group Savings Plan.
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LISI 2017 FINANCIAL REPORT
CONSOLIDATED FINANCIAL STATEMENTS
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