Registration Document - Pernod Ricard

4 Notes
100
ANNUAL CONSOLIDATED FINANCIAL STATEMENTS
to the annual consolidated fi nancial statements
3. Provisions for pension benefits
The Group provides employee benefits such as pensions and
retirement bonuses and other post-employment benefits such as
medical care and life assurance:
◆ in France, benefit obligations mainly comprise arrangements for
retirement indemnities (non-funded) and supplementary pension
benefits (partly funded);
◆ in the United States and Canada, benefit obligations include funded
pension plans guaranteed to employees as well as unfunded postemployment
medical plans;
◆ in Ireland, the United Kingdom and the Netherlands, benefit
obligations mainly consist of pension plans granted to employees.
For its defined contribution plans, the Group’s commitments are
limited to the payment of periodic contributions. The amount of
contributions paid in the financial year ended 30 June 2009 was
€30 million.
The table below presents a roll-forward of the provision between 30 June 2008 and 30 June 2009:
PERNOD RICARD
Defined benefit plans in the Group relate mainly to subsidiaries in the
United Kingdom, in North America and in the rest of Europe. Defined
benefit plans are subject to an annual actuarial valuation on the basis
of assumptions depending on the country. Under these pension and
other benefit plan agreements, employees receive at the date of
retirement either a capital lump sum payment or an annuity. These
amounts depend on the number of years of employment, final salary
and the position held by the employee. At 30 June 2009, fully or partly
funded benefit obligations totalled €3,081 million, being 94.2% of
total benefit obligations.
Certain subsidiaries, mainly those located in North America, also
provide their employees with post-employment medical cover. These
benefit obligations are unfunded. They are measured using the same
assumptions as those used for the pension obligations in the country
in question.
Several subsidiaries, mainly in Europe, also provide their employees
with other long-term benefits. Benefit obligations of this type are
mainly in respect of long-service awards and jubilee awards.
The net expense (income) recognised in profit and loss in respect of pensions and other long-term employee benefits is broken down as follows:
Expense for the year
(in euro million)
Pension
benefits
30.06.2008 30.06.2009
Medical
expenses
and other
employee
benefits Total
Pension
benefits
Medical
expenses
and other
employee
benefits Total
Service cost 31 2 33 34 1 35
Interest cost (effect of unwinding of discount) 210 8 218 202 8 210
Expected return on plan assets (221) (0) (221) (193) (0) (193)
Amortisation of past service cost 1 (0) 1 1 3 4
Amortisation of actuarial (gains)/losses (70) (4) (74) (0) 1 0
Effect of ceiling on plan assets - - - - - -
Effect of settlements and curtailments (6) (0) (7) (6) 0 (5)
NET EXPENSE (INCOME)
RECOGNISED IN PROFIT AND LOSS
(56) 5 (51) 39 13 52
The Group has elected to adopt the corridor method under which
actuarial gains and losses are only recognised when they represent
30.06.2008 30.06.2009
Medical
Medical
expenses
expenses
and other
and other
Pension employee
Pension employee
In euro million
benefits benefits Total benefits benefits Total
Provision at beginning of period 600 173 773 328 149 478
Expenses (income) for the period (56) 5 (51) 39 13 52
Employer contributions (155) - (155) (108) 0 (108)
Benefits paid directly by the employer (6) (10) (16) (10) (9) (19)
Change in scope (0) (0) (0) 8 (1) 7
Foreign currency gains and losses (55) (19) (74) (8) 4 (4)
PROVISION, AT END OF PERIOD 328 149 478 249 156 405
more than 10% of the greater of the present value of the benefit
obligation and the fair value of corresponding plan assets.
I REFERENCE DOCUMENT 2008/2009 I