Pension Commitments
The Company participates in several pension plans for both
executive as well as non-executive employees, some of which are
underfunded. For information related to these plans, see “Notes
to the Consolidated Financial Statements (IFRS) — Note 25b:
Provisions for retirement plans”. Although the Company has
recorded a provision in its balance sheet for its share of the
underfunding based on current estimates, there can be no
assurance that these estimates will not be revised upward in the
future, leading the Company to record additional provisions in
respect of such plans.
Necessary adjustments of such provisions are driven by (i) the
discount factor (dependent in part on interest rates) and the
infl ation rate applied to calculate the net present value of the
pension liabilities, (ii) the performance of the asset classes
which are represented in the pension assets, and (iii) additional
cash injections contributed by the Company from time to time
to the pension assets. The Company has taken measures to
reduce potential losses on the pension assets and to better
match the characteristics of the pension liabilities with those of
the pension assets as a long-term objective. Nevertheless, any
required additional provisions would have a negative effect on the
Company’s total equity (net of deferred taxes), which could in turn
have a negative effect on its future fi nancial condition.