LISI GROUP - 2018 Financial report

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Inventories are impairedwhen their net realization value is less than their
costofproduction,whentheyaredamaged,obsolete,aswellaseachtime
there isariskthattheymightnotbedisposedofundernormalconditions,
or when there is a risk that they will be disposed of over a period that is
longer than what is generally accepted.
2.2.10 ITrade and other receivables
Tradereceivables, loansandadvancesarerecordedtothebalancesheet
at their nominal value. In the event of risk of non-recovery, impairment is
fixed on a case-by-case basis using the probable collection flows; this
risk takes the age of the transaction into consideration.
Customer and other debtors are recognized in accordance with the
provisions of IFRS 9 (see paragraph 2.2.1.1)
2.2.11 ICash and cash equivalents
Cash and cash equivalents include current bank accounts, cash in hand,
on-calldeposits,securitiesandnegotiablecertificatesofdepositheldby
theGroup.Adjustmentsofvaluearerecognized inthe incomestatement.
2.2.12 I Share capital
2.2.12.1 - Treasury shares
The Group implements a policy of buying back its own shares, in
accordance with authorizations provided by the Shareholders’ General
Meeting to the Board of Directors. The main purposes of the share
buyback program are:
−− to increase the activity of the stock on the market by an Investment
Services Provider via a liquidity contract in accordance with the AFEI
professionalcodeofethicsrecognizedbytheAMF(theFrenchfinancial
market authority);
−− to grant stock options or free shares to employees and corporate
officers of the company and/or its Group;
−− to retain and use shares as consideration or payment for potential
acquisitions;
−− to cancel shares purchased, subject to the approval of the
Extraordinary General Meeting to be called at a later date.
Repurchasedsharesareclassifiedastreasurysharesanddeductedfrom
shareholders’ equity.
2.2.12.2 - Remunerations in shares (stock options and conditional
award of so-called performance shares)
Refer to note 2.2.14 “Personnel benefits”.
2.2.13 IProvisions
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 aremeasured at the estimated
paymentamount.Iftheeffectofcapitalizingprovisions isnotsignificant,
capitalization is not carried out.
2.2.13.1 - Non-current provisions
Non-currentprovisionsareprovisionsnotdirectlyrelatedtotheoperating
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
cycleofeachdivision,regardlessoftheirestimatedduedates.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 I Personnel benefits
2.2.14.1 - Commitments to the personnel
In accordance with the laws and practices of each country in which the
Groupoperates, itoffers itsemployeesandformeremployees,subjectto
certain conditions of service, the payment of pensions or compensation
on retirement. Suchbenefits canbepaid as part of definedcontributions
plans or defined benefits plans.
Contributions in defined contributions plans are recognized as expenses
for the period in which they are incurred.
Inrespectofdefinedbenefitsplans,theGroup’scommitmentsto itsstaff
aredeterminedby independent actuaries or inhouseusing theProjected
Unit Credit Method in accordance with IAS 19. This method takes into
accountinparticulartheprobabilityofkeepingstaffwithintheGroupuntil
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
beenrecognizedas“Othercomprehensive income”sinceJanuary1,2012.
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.
TheLISIGrouphasnoplanopenedrelatingtodefined-contributionplans.
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 fromthese same advantages, but will receive their remuneration
in the formof a bonus payment for schemes prior to 2016 and in shares as
of the 2016 scheme.