The fair value of Resco Sotogrande, S.L. inventories has been calculated based on the sale prices offered in the negotiations with clients that were
ongoing at the time of the business combination.
In the event that that business combination had taken place on 1 January 2012, the total comprehensive loss for the Group in 2012 would have been
an additional €10,000.
a.1.2 Other corporate transactions
On 30 April 2012, the General Shareholders’ Meeting of Donnafugata Resort S.r.l. resolved to reduce capital by €7.082 million and charge it to
previous years’ losses, and to subsequently increase capital by approximately €6.152 million. Both transactions were notarised on 20 July 2012.
Given that the remaining shareholders did not participate in this capital increase, the Parent Company subscribed it entirely, thereby increasing its
percentage interest from 78.00% to 88.80%. As a result of the put option granted to the minority shareholders of Donnafugata Resort, S.r.l., described
in Note 26, the Group consolidates the annual accounts of this company considering the equity interest represented by said option in relation to
the share capital of this subsidiary. At 31 December 2012, the consolidated equity interest in Donnafugata Resort, S.r.l. stood at 97.61% (95.3% at 31
December 2011).
The effect of this operation reduced reserves by €58,000, as a result of which the minority shareholders did not subscribe to the aforementioned
capital increase.
a.2 Changes in the scope of consolidation in 2011
a.2.1 Additions
On 30 April 2011, the General Shareholders’ Meeting of Donnafugata Resort S.r.l. resolved to reduce capital by €6.784 million and charge it to prior
years’ losses, and to subsequently increase capital by approximately €6.294 million. Both transactions were recorded in public instruments on 3 May
2011.
Given that the remaining shareholders did not participate in this capital increase, the Parent Company subscribed it entirely, thereby increasing
its direct percentage interest from 58.82% to 78.00%.
a.2.2 Disposals
The company Jolly Hotels France, S.A., the owner of a hotel in Paris, was sold in 2011 for €89 million. The capital gain booked for this transaction
amounted to €19.94 million.
The effect of retiring the above mentioned company from the consolidated balance sheet at 31 December 2011 was as follows:
€ Thousand
Tangible fixed assets
84,550
Tax
(4,725)
Other long-term debts
(14,941)
Working capital
(1,103)
Net assets disposed of
63,781
Consideration
(89,687)
Profit before minority interests
(25,906)
Minority interests
5,966
Consolidated profit
(19,940)
3.
PROFITS AND LOSSES ALLOCATION AND DISTRIBUTION
At the Ordinary General Shareholders’ Meeting, the Parent Company’s directors will propose that the losses be applied to the “Previous year’s losses” account
to be offset in future financial years. In accordance with Article 273.4 of the Revised Text of the Capital Companies Act, the directors will propose to allocate
€418,000 as an unavailable reserve, as provided by such article, at the Ordinary General Shareholders’ Meeting and charge it to freely available reserves, because
the Parent Company has not generated any profits this year.
4.
VALUATION STANDARDS
The main principles, accounting policies and valuation standards applied by the Group to draw up these consolidated financial statements, which comply with
IFRS in force on the date of the relevant financial statements, have been the following:
4.1
Tangible fixed assets
Tangible fixed assets are valued at their original cost. They are subsequently valued at their reduced cost resulting from cumulative depreciation
and, as appropriate, from any impairment losses they may have suffered.
Due to the transition to IFRS, the Group reappraised the value of some land to its market value on the basis of appraisals made by an independent
expert for a total amount of €217 million. The reappraised cost of such land was considered as a cost attributed to the transition to the IFRS. The
Group followed the criterion of not re-valuing any of its tangible fixed assets at subsequent year-ends.
Enlargement, modernisation and improvement costs entailing an increase in productivity, capacity or efficiency or a lengthening of the assets’
useful life are booked as higher cost of such assets. Conservation and maintenance costs are charged against the consolidated comprehensive
profit and loss statement for the year in which they are incurred.
REPORT ON THE CONSOLIDATED
FINANCIAL STATEMENTS
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