4.17
Share-based remuneration schemes
These schemes are valued at the time of granting, using a financial method based on a binomial model which takes into consideration the strike price, volatility, the
exercise period, the expected dividends, the risk-free interest rate and the hypotheses made concerning the financial year.
In accordance with IFRS 2, above-mentioned valuation is attributed to profit or loss under personnel expenses during the period established for the employee to remain
in the company before exercising the option. Said value is imputed on a straight-line basis to the consolidated comprehensive profit and loss statement from the date the
scheme was implemented to the exercise date.
Plans settled in shares
The expense for the year is offset against equity. On each subsequent closing date, the Group reviews the estimates regarding the number of options expected to be
exercisable, adjusting the equity figure, as applicable..
Cash-settled plans
Thevaluationobtainedisrecognisedwithacorrespondingentryasaliabilityinfavourofemployees.Furthermore,theGroupre-estimatestheinitialvaluationmentioned
above every year by recognising in the year’s profit or loss both the part corresponding to the year in question and those corresponding to previous years.
Subsequently, the difference between the settlement price and the recognised liability, as described above, for any transactions settled, is recognised in the consolidated
comprehensive profit and loss statement once the required permanence period for the employee has elapsed. Ongoing transactions at year-end are likewise charged to
the consolidated comprehensive profit and loss statement for the amount of the difference between the recognised liability to date and the corresponding updated value.
Lastly, as detailed in Note 20 to the accompanying consolidated annual report, in order to hedge possible financial liabilities arising from said remuneration scheme, the
Group arranged a financial instrument to hedge the future cash flows required to settle this remuneration system. This financial instrument (equity swap) is considered
to be a derivative and is accounted for in accordance with general rules applicable thereto (Note 4.7).
4.18
Treasury shares
Pursuant to IAS 32, treasury shares are presented by reducing the Group’s equity.
The gains and losses obtained by the Group on the disposal of these treasury shares are booked in the “Share premium” item of the consolidated balance sheet.
4.19
Provisions
The Group follows the policy of provisioning for the estimated amounts arising fromongoing litigation, indemnities or obligations, as well as for any surety or guarantees
granted by Group companies which could involve a the Group in a payment obligation (either legal or implicit), provided the amount can be reliably estimated.
4.20
Severance payments
In accordance with current employment regulations and certain employment contracts, the Group is obliged to pay indemnities to employees who are dismissed under
certain conditions. The Group recorded expenses of EUR 5,838 thousand for this item in 2013 (2012: EUR 25,257 thousand).
The consolidated financial statement at 31 December 2013 includes, pursuant to the International Financial Reporting Standards (IAS 37), a provision of EUR 4,864
thousand for this item (31 December 2012: EUR 19,981 thousand).
4.21
Business combinations
The business combinations by which the Group acquires control of an entity are accounted for using the acquisition cost method, calculating goodwill as the difference
between the sum of the consideration transferred, the minority interests and the fair value of any previous stake in the acquired entity, less the identifiable net assets of
the acquired entity, measured at fair value.
In the event that the difference between these items is negative, an income is booked in the consolidated comprehensive profit and loss statement.
In the case of business combinations carried out in stages, goodwill is only measured and recorded once control of a business has been acquired. To do this, any holdings
are measured subject to fair value and the corresponding profit or loss is recognised.
4.22
Environmental policy
Investments arising from environmental activities are valued at their original cost and activated as increased fixed asset or inventory costs in the financial year in which
they are incurred.
Any expenses arising from environmental protection and improvement are attributed to the profit or loss for the year when they are incurred, irrespective of themoment
when the cash or financial flows arising from them arise.
REPORT ONTHE CONSOLIDATED FINANCIAL STATEMENTS
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