sain t-gobain annu al report 2008 annual report

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The plan costs are calculated under IFRS 2 in the same way as for non-leveraged plans (see Note 1), but also take into account the advantage accruing to employees who have access to share prices with a volatility profile adapted to institutional investors (corresponding to the opportunity gain in the table below). The leveraged plan cost recorded in the income statement amounted to €8.5 million in 2008 (2007: €4.2 million), net of the lockup cost for employees and the opportunity gain of €29.9 million (2007: €14.2 million). The following table shows the main features of the leveraged plans, the amounts invested in the plans and the valuation assumptions applied in 2008 and 2007. 2008 2007 Plan characteristics Grant date February 22 February 23 Plan duration (in years) 5 5 Benchmark price (in €) 51.75 72.56 Purchase price (in €) 43.99 61.68 Discount (in %)) 15.00% 15.00% (a) Total discount on the grant date (in %) 17.18% 16.19% Employee investments (€ millions) 18.5 8.9 Total investment in the plan (€ millions) 184.8 89.0 Total number of shares purchased 4,199,902 1,442,584 Valuation assumptions Interest rate paid by employees (1) 7.57% 7.36% 5-year risk-free interest rate 3.61% 4.02% Repo rate 0.25% 0.25% Retail/institutional volatility spread (2) 5.50% 4.00% (b) Lock-up discount (in %) (3) 15.00% 15.00% (c) Opportunity gain (in %) 1.62% 1.65% (d) Total cost to the Group (in %) (a-b+c) 3.80% 2.84% (1) A 0.5-point decline in borrowing costs for the employee would have no impact on the 2008 cost as calculated in accordance with IFRS 2 because the lock-up cost exceeds the discount. (2) A 0.5-point increase in the retail/institutional rate spread would have an impact of €0.5 million on the 2008 cost as calculated in accordance with IFRS 2. (3) The interest rate used to calculate the lock-up cost is capped at the discount percentage. NOTE 13 Provisions for pensions and other employee benefits Dec. 31, Dec. 31, Dec. 31, (in € millions) 2008 2007 2006 154 Pensions 1,681 1,058 1,415 Length-of-service awards 207 233 236 Post-employment healthcare benefits 367 341 363 Total provisions for pensions and other post-employment benefit obligations 2,255 1,632 2,014 Healthcare benefits 50 44 51 Long-term disability benefits 38 38 45 Other long-term benefits 100 93 93 Provisions for pensions and other employee benefits 2,443 1,807 2,203 The following table shows projected benefit obligations under pension and other post-employment benefit plans and the related plan assets: Dec. 31, Dec. 31, Dec. 31, (in € millions) 2008 2007 2006 Projected benefit obligations 2,255 1,632 2,014 Plan assets 206 147 120 Net projected benefit obligations 2,049 1,485 1,894 Saint-Gobain – Financial Report 2008
Changes in pension and other post-employment benefit obligations are as follows: Pension Fair value Other Provisions for obligations of plan pensions and other assets post-employment (in € millions) benefits At January 1, 2006 8,765 (5,773) 211 3,203 Movements during the year Service cost 217 217 Interest cost/return on plan assets 417 (387) 30 Employer contributions (855) (855) Employee contributions (26) (26) Actuarial gains and losses and asset ceiling (225) (182) (17) (424) Translation adjustment (212) 132 (80) Benefit payments (446) 307 (139) Past service cost 0 Changes in group structure 36 (15) 21 Curtailments/settlements (3) (3) Other (5) (45) (50) Total (221) (1,026) (62) (1,309) At December 31, 2006 8,544 (6,799) 149 1,894 Movements during the year Service cost 200 200 Interest cost/return on plan assets 430 (451) (21) Employer contributions (157) (157) Employee contributions (25) (25) Actuarial gains and losses and asset ceiling (463) 195 61 (207) Translation adjustment (525) 468 (4) (61) Benefit payments (439) 350 (89) Past service cost 0 Changes in group structure (35) 14 (6) (27) Curtailments/settlements (13) (13) Other (9) (9) Total (845) 394 42 (409) At December 31, 2007 7,699 (6,405) 191 1,485 Movements during the year Service cost 167 167 Interest cost/return on plan assets 420 (431) (11) Employer contributions (172) (172) Employee contributions (22) (22) Actuarial gains and losses and asset ceiling (583) 1,147 83 647 Translation adjustment (560) 629 (27) 42 Benefit payments (440) 341 (99) Past service cost 0 Changes in group structure 137 (92) 45 Curtailments/settlements (3) (3) Other (34) 29 (25) (30) Total (896) 1,429 31 564 At December 31, 2008 6,803 (4,976) 222 2,049 155 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Saint-Gobain – Financial Report 2008
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2008 annual report
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Contents 05 • Strategy and busine
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3 STRATEGY AND BUSINESSES Jean-Loui
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Strategy and Businesses of Saint-Go
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Responding to recession by demonstr
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The High-Performance Materials Divi
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High-Performance Materials Business
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Insulation products are made from m
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Construction Products Businesses an
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Finland, Estonia, Lithuania and Pol
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ecovered glass can be recycled inde
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The “Germ-free Surfaces” progra
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24 2008 results dampened by the fin
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holders of the parent contracted 7.
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28 2008 business review 2008 sales
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30 The Division also continued to e
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32 In the Nordic countries, Dahl de
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Sustainable development 34 Sustaina
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Environment Challenges Action taken
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38 I. Products and services contrib
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40 Sun Saint-Gobain is a major supp
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42 a British trade association that
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44 Mobilizing resources to deploy t
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46 EHS auditors are drawn from a po
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48 Lastly, we make every effort to
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To help them to implement the plan,
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52 Wood dust is primarily an issue
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54 BRØDRENE DAHL’S PROGRAM FOR R
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56 2008-2010 OBJECTIVE Saint-Gobain
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58 warehouses and other similar spa
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product developed in 2006 by Lapeyr
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62 Internships during a student’s
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64 Geographical and job mobility is
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66 SAINT-GOBAIN AND THE BROAD-BASED
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68 Honest, open, high quality socia
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70 Construction Products The Constr
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72 IV. Values supporting responsibl
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74 INTERNATIONAL CORPORATE FOUNDATI
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76 In countries facing certain soci
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78 for example, 91% of the Group’
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ENVIRONMENTAL INDICATORS 2007 2008
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Trading volume since September 2007
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Trading volume since September 2007
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Changes in capital over the last fi
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88 The decision to grant stock opti
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Information Policy and 2009 Financi
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92 Yuko HARAYAMA Professor at Tohok
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Other directorships and positions h
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96 Director’s name and current ma
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98 • Committees of the Board. Thr
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100 The Committee’s remit, as def
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• The Annual General Meeting of J
Page 106 and 107: 4. Stock options granted to the Cha
Page 108 and 109: 106 Management compensation In Grou
Page 110 and 111: Fees paid by the Group to the Audit
Page 112 and 113: 110 Related party agreements Relate
Page 114 and 115: 112 The audits are based on a 20-st
Page 116 and 117: 114 being applied. The TAS framewor
Page 118 and 119: Statutory Auditors’ report Prepar
Page 120 and 121: Commitment concerning the payment o
Page 122 and 123: 120 Restructuring risks The Group h
Page 124 and 125: 122 • Volumes are not material, o
Page 126 and 127: 124 or any specific illness or phys
Page 128 and 129: The level of coverage is considered
Page 130 and 131: Consolidated balance sheet at 31 De
Page 132 and 133: Consolidated income statement (in
Page 134 and 135: Statement of recognized income and
Page 136 and 137: Notes to the consolidated financial
Page 138 and 139: 136 Non-current assets held for sal
Page 140 and 141: 138 asset’s fair value less costs
Page 142 and 143: 140 Fair value of financial instrum
Page 144 and 145: 142 Other business income and expen
Page 146 and 147: 2006 In 2005, the Group acquired th
Page 148 and 149: NOTE 4 Other intangible assets Pate
Page 150 and 151: NOTE 6 Investments in associates (i
Page 152 and 153: 150 NOTE 8 Inventories Dec. 31, Dec
Page 154 and 155: Movements relating to stock options
Page 158 and 159: The following tables show the funde
Page 160 and 161: Actuarial assumptions used to measu
Page 162 and 163: The effective tax rate paid by the
Page 164 and 165: Provisions for claims and litigatio
Page 166 and 167: isks is hedged wherever possible wi
Page 168 and 169: Bond issues On June 13, 2008, Saint
Page 170 and 171: NOTE 19 Financial instruments Deriv
Page 172 and 173: NOTE 21 Business income by expense
Page 174 and 175: The weighted average number of shar
Page 176 and 177: 174 In addition, as of December 31,
Page 178 and 179: NOTE 28 Related-party transactions
Page 180 and 181: Innovative Construction Building Pa
Page 182 and 183: Information by geographic area Fran
Page 184 and 185: 182 Principal fully consolidated co
Page 186 and 187: II - Justification of our assessmen
Page 188 and 189: Income statement at December, 31 (i
Page 190 and 191: Balance sheet at December, 31 ASSET
Page 192 and 193: Cash flow statement (in € thousan
Page 194 and 195: Risk management/Financial instrumen
Page 196 and 197: NOTE 5 Intangible assets Intangible
Page 198 and 199: Changes in Compagnie de Saint-Gobai
Page 200 and 201: Grant stock options exercisable for
Page 202 and 203: 9.4 Compagnie de Saint-Gobain Group
Page 204 and 205: NOTE 12 Debt and payables Total deb
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12.1 Perpetual bonds In 1985, Compa
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NOTE 14 Investment portfolio Countr
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COMPANIES Capital Reserves % Book v
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NOTE 18 Fees paid to the Statutory
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Asbestos-related litigation in Braz
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Statutory Auditors’ report on the
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Main subsidiaries by country and de
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Saint-Gobain Vetrotex Deutschland G
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Saint-Gobain Construction Products
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Saint-Gobain Building Distribution
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Subsidiaries: Saint-Gobain Technica
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CHINA €1 = CNY 10.227 Saint-Gobai
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Table of concordance 1 Person respo
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COMPAGNIE DE SAINT-GOBAIN France He
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Notes 232 Saint-Gobain - Financial
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Saint-Gobain photo library ; p1 ©
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sain t-gobain annu al report 2008 annual report

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