Annual Report 2008 – Financial Section - Quilvest

Significant Accounting Policies (continued)
Deposits, Interest-bearing liabilities and Other liabilities
Deposits, interest-bearing liabilities and other liabilities are recognized initially at cost, being the fair value of the consideration
received less attributable transaction costs. Subsequent to initial recognition, liabilities are measured at amortized cost
with any differences between cost and redemption value being recognized in the income statement over the period of the
liabilities on an effective interest rate basis.
Convertible bonds
Quilvest S.A. issued in 2003 a convertible loan that was converted to share capital at a fixed predetermined conversion
ratio at the option of the holder at the maturity date of June 30, 2008. Until maturity date this loan was accounted for as a
compound financial instrument, net of attributable transaction costs.The equity component of the convertible loan was
calculated till the conversion date as the excess of the issue proceeds over the present value of the future interest and principal
payments, discounted at the market rate of interest applicable to similar liabilities that do not have a conversion option.This
component was included in equity.The interest expense recognized in the income statement was calculated using
the effective interest rate method.
Employee benefit obligations
The Group sponsors pension plans according to the national regulations of the countries in which it operates.The significant
pension plans in France and Switzerland qualify as defined benefit plans under IAS 19.The respective employee benefit
costs are determined in accordance with the Projected Unit Credit Method.Actuarial calculations are conducted on an
annual basis.Any excess of the defined benefit obligation over the fair value of plan assets is initially recognized and presented
under employee benefit obligations.A pension asset is recognized only to the extent that it represents economic benefits
in the form of refunds or reductions in future contributions.Actuarial gains and losses arising from subsequent calculations
are recognized to the extent that they exceed 10% of the greater of the defined benefit and the fair value of the plan assets.
The amount exceeding this corridor is amortized over the average remaining working lives of the employees participating
in the plan.
The pension plan in Luxembourg is a defined contribution plan.The pension costs recognized during a period for such plans
equal the contributions paid or due for that period.
Provisions
A provision is recognized on the balance sheet when the Group has a legal or constructive obligation as a result of a past event,
and it is probable that an outflow of economic benefits will be required to settle the obligation.
If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects
current market assessments of the time value of money and, where appropriate, the risks specific to the liability.
Equity
Ordinary shares with discretionary dividends are classified as equity. Dividends on ordinary shares are recognized in equity
in the period in which they are declared. External costs directly attributable to the issuance of new shares are presented net
of the related tax, as a deduction from the proceeds in equity.
When the Group purchases the Company's own shares, the consideration paid, including any attributable transaction cost,
net of income tax, is presented as treasury shares and deducted from equity.When such shares are subsequently sold or reissued,
any consideration received is included in equity.
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