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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.
A full analysis of these provisions appears in paragraph 2.5.4.2.
– 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. Reversals of
provisions amounting to €4.8million are for costs incurred for soil
decontamination.
– Disputes and other risks:
This covers litigation or disputes with partners and service
providers. Risk assessment has been calculated based on
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.
– Industrial reorganization:
This covers industrial reorganization based on assessments of
the cost of redeploying certain sites or entities. The assessment
ofthesumsrecognizedtakesaccountofspecific localregulatory
stipulations.
– 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. The amount of these risks is insignificant
individually.
2.5.4.2 Commitments to the personnel
Application of revised IAS 19 as at January 1, 2012
As stated in note 2.2 Accounting principles and policies, the LISI Group
has been applying revised IAS 19 from January 1, 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.
England:
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 are the following:
CAPEX, inflation, retirees’ longevity, options, legislation.
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 are the following: CAPEX, inflation, retirees’
longevity, options, legislation.
The pension plans concerning the majority of the employees was
wound up in 2016.
The geographic breakdown of the Group’s commitments to staff
as at December 31, 2017 for defined benefit plans and the main
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LISI 2017 FINANCIAL REPORT
CONSOLIDATED FINANCIAL STATEMENTS
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