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metals are followed by order cancellations, the loss in the
value of inventories may not be fully offset by the penalties
charged to customers for cancelling their orders.
(g) Employee benefit obligations
The present value of the pension plans reported in the
financial statements depends on an independent actuarial
calculation and on a number of different assumptions. Any
changes in assumptions and in the discount rate used are
duly reflected in the present value calculation and may
have a significant impact on the consolidated figures. The
assumptions used for the actuarial calculation are examined
by the Group annually.
Present value is calculated by discounting future cash flows
at an interest rate equal to that on high-quality corporate
bonds issued in the currency in which the liability will be
settled and which takes account of the duration of the
related pension plan.
Further information can be found in Note 15. Employee
benefit obligations and Note 21. Personnel costs.
(h) Incentive plans
The employee share purchase plan involves granting options
to almost all of the Group’s employees. The operation of this
plan is described in Note 21. Personnel costs.
The grant of options is subject to an employee’s continued
professional relationship with the Group in the months
between signing up to one of the plan’s purchase windows
and the purchase of the shares themselves on the stock
market. The plan’s financial and economic impact has
therefore been estimated on the basis of the best possible
estimates and information currently available.