LISI GROUP - 2018 Financial report

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Themain 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.
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 €2.1 million are for costs incurred for soil
decontamination.
This item is impactedby€0.9millionduetotheallocationoftheTermax
assets.
- Disputes and other risks:
This covers litigation or disputes with partners and service providers.
The risk has been assessed based on the estimated cost of the likely
outcomeofdisputesorpossibletransactions.Assessmentofexpected
returnscannotbecalculatedasofyet.Thebulkoftheprovisionsrelates
to various quality, tax and wage risks.
- Restructuring and industrial reorganization:
Thiscovers industrialreorganizationbasedonassessmentsofthecost
of redeploying certain sites or entities. The assessment of the sums
recognized takes account of specific local regulatory stipulations.
This item is impacted in the amount of €1.5 million due to the final
allocation of the Termax acquisition price.
- Other risks:
Liabilitiesrecognizedunderthiscategorytake intoaccountrisksbased
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
amountsreflecttheunfavorableapplicationfortheGroupofcontractual
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.
This item is impacted in the amount of €0.9 million due to the final
allocation of the Termax acquisition price.
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 fromJanuary 1, 2012.
Characteristics
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. 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 aremore 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 as follows: CAPEX,
inflation, retirees’ length of service, options, legislation.
USA:
Hi Shear Corporation operates a defined benefit pension plan towhich all
employeeswho joinedthecompanybeforeFebruary1991areentitled.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 as
follows: CAPEX, inflation, retirees’ length of service, options, legislation.