91
2013
Annual Report
27
13.5.
Valuation adjustments
This heading primarily reflects income tax deductions in relation to investments in fixed assets, which, in
application of the principle of matching income and expenses, the Company takes to the income statement
based on the useful lives of the investments related to these deductions.
Movement has been as follows:
NOTE 14
.- Share-based Payment Transactions
The Company has awarded certain incentives (the Plan) to members of the management committee, board
members and other key employees, which will entitle them to participate in any appreciation in the Company's
share value between 10 July 2013 and 31 December 2025, with the possibility of extending the vesting date by
another five years upon the request of the board of directors. Beneficiaries' participation in the Plan is
conditional on payment of certain amounts in respect of an initial price which may be partially financed
through the granting of loans that accrue the legal rate of interest. At 31 December 2013 the balance of the
liabilities related to the amounts paid by the beneficiaries of the Plan and the loans extended amounted to
Euros 2.8 million and Euros 1.9 million, respectively. The principal and interest on these loans fall due on 31
January 2026, unless the settlement event described in section b) below takes place.
The amount to be paid to the Plan beneficiaries is subject to them still being in the Company's employ when
the agreed amounts are paid, which will be quantified as follows:
a)
When the Plan vests, the beneficiaries will receive a percentage based on the underlying net book value
of the Company, adjusted for any dividends distributed, transaction costs and other items stipulated in
the agreements signed by the parties.
b)
If a settlement event takes place between the date the Plan was awarded and the date it vests, which
the Company's directors consider likely, the amount to be paid would be equivalent to the difference
between the percentage of fair value, adjusted for any changes to the price described in the preceding
section, and the initial price paid. For this purpose, a settlement event is understood to be the transfer
of shares by shareholders with more than a 5% interest that would represent over 50% of their interest in
the Company, provided that the cash consideration agreed were over 50% or the public offering of over
50% of traded shares.
If the business or labour relationship with the beneficiary were to terminate, the final price to be paid will be
reduced based on the agreed terms.
The directors of the Company consider that the settlement event will take place prior to the vesting of the
Plan, and therefore the conditions to determine its classification as cash-settled, share-based payments are
deemed to have been met.
2013
2012
Opening balance
72,115
80,158
Limited deductions taken to the income statement
(7,798)
(8,043)
Hedging transactions
(577)
-
Closing balance
63,740
72,115
