SECTION 1 -

K. Pensions and other post‐employment benefits
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New Services: Pro forma Financial Statements and Notes
December, 31, 2009
The Group operates various supplementary pension, length‐of‐service award and other post‐employment benefit plans in
accordance with the laws and practices of the countries where it operates.
These plans are either defined contribution or defined benefit plans.
Under defined contribution plans, the Group pays fixed contributions into a separate fund and has no legal or constructive
obligation to pay further contributions if the fund does not hold sufficient assets to pay benefits. Contributions to these plans are
recognized immediately as an expense.
For defined benefit plans, the Group's obligation is determined in accordance with IAS 19 – Employee Benefits.
The Group's obligation is determined by the projected unit credit method based on actuarial assumptions related to future salary
levels, retirement age, mortality, staff turnover and the discount rate. These assumptions take into account the macroeconomic
situation and other specific circumstances in each host country.
Pension and other retirement benefit obligations recognized in the balance sheet correspond to the discounted present value of
the defined benefit obligation less the fair value of plan assets. Any surpluses, corresponding to the excess of the fair value of
plan assets over the projected benefit obligation, are recognized only when they represent the present value of economic
benefits available in the form of refunds from the plan or reductions in future contributions to the plan. For post‐employment
benefits, actuarial gains and losses arising from changes in actuarial assumptions and experience adjustments are recognized
immediately in equity.
The net defined benefit obligation is recognized in the balance sheet under "Long‐term provisions".
L. Translation of foreign currency transactions
Foreign currency transactions are recognized and measured in accordance with IAS 21 – Effects of Changes in Foreign Exchange
Rates. As prescribed by this standard, each Group entity translates foreign currency transactions into its functional currency at
the exchange rate on the transaction date.
Foreign currency receivables and payables are translated into euros at the exchange rate on the balance sheet date (closing
exchange rate). Foreign currency financial liabilities measured at fair value are translated at the exchange rate on the valuation
date. Gains and losses arising from translation are recognized in "Other financial income and expenses, net", except for gains and
losses on financial liabilities measured at fair value which are recognized in equity.
M. Deferred tax
In accordance with IAS 12 "Income Taxes", deferred taxes are recognized for temporary differences between the carrying amount
of assets and liabilities and their tax base using the liability method. This method consists of adjusting deferred taxes at each
period‐end, based on the tax rates (and tax laws) that have been enacted or substantively enacted by the balance sheet date. The
effects of changes in tax rates (and tax laws) are recognized in the income statement for the period in which the change is
announced.
A deferred tax liability is recognized for all temporary differences, except when the difference arises from the initial recognition
of non‐deductible goodwill or the initial recognition of an asset or liability in a transaction that is not a business combination and
which, at the time of the transaction, affects neither accounting profit nor taxable profit.
A deferred tax liability is recognized for all taxable temporary differences associated with investments in subsidiaries, associates
and joint ventures except when:
- The Group is able to control the timing of the reversal of the temporary difference, and
- It is probable that the temporary difference will not reverse in the foreseeable future.
A deferred tax asset is recognized for ordinary and evergreen tax loss carryforwards only when it is probable that the asset will be
recovered in the foreseeable future.
Income taxes are normally recognized in the income statement. However, when the underlying transaction is recognized in
equity, the related income tax is also recorded in equity.