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FINANCIAL STATEMENTS
2.20 Leases
Leases are classified as finance leases provided their conditions substantially transfer the risks and rewards of ownership
to the Company and the lease offers the option of acquiring the asset at the end of the lease in accordance with the
terms agreed when the contract is concluded. All other leases are classified as operating leases.
Financial leases are presented at the lower amount, of the fair value and the present value of the minimum future
leased payments at the beginning of the lease, and decreased by the accumulated depreciation and any accumulated
impairment losses.
The depreciable amount of a leased asset is allocated to each accounting period during the period of expected use, on
a systematic basis, consistent with the depreciation policy the lessee adopts for similar assets that are owned. Should
the useful life of any asset or its components exceed the concession period, then its economic life is revised accordingly
that is, over the concession period.
2.21 Dividend Distribution
Dividend distribution to the Company’s shareholders is recognised as a liability in the Company’s financial statements in
the period in which the dividends are approved by the Company’s shareholders.
2.22 Fair Value Estimation
The fair value of financial instruments traded in active markets (such as trading and available-for-sale securities) is based
on quoted market prices at the balance sheet date. The quoted market price used for financial assets held by the Company
is the current bid price.
The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is
determined by using valuation techniques. The Company uses a variety of methods and makes assumptions that are based
on market conditions existing at each balance sheet date. Quoted market prices or dealer quotes for similar instruments
are used for long-term debt. Other techniques, such as estimated discounted cash flows, are used to determine fair value
for the remaining financial instruments. The fair value of interest rate swaps is calculated as the present value of the
estimated future cash flows. The fair value of forward foreign exchange contracts is determined using quoted forward
exchange rates at the balance sheet date.
The carrying value less impairment provision of trade receivables and payables are assumed to approximate their fair
values. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash
flows at the current market interest rate that is available to the Company for similar financial instruments.
2.23 Associates
Associates are all entities over which the Company has significant influence but not control, generally accompanying a
shareholding of between 20% and 50% of the voting rights. Investments in associates are initially recognised at cost
and subsequently at cost less any impairment losses. Dividend income is recognised when the right to such income is
established.
The Company’s investment in its associate amounts to €3,2m, as of 31 December 2009, and represents less than 1% of
total assets at that date. This investment has not been accounted for under the equity method of accounting on the
basis that it is not considered to be material to the Company’s operations and the departure from IAS 28 is unlikely to
influence the economic decision of the users of these financial statements.
Financial Statements as at 31 December 2009 (Amounts in Euros unless otherwise stated) PAGE 33 OF 69
2.20 Leases
Leases are classified as finance leases provided their conditions substantially transfer the risks and rewards of ownership
to the Company and the lease offers the option of acquiring the asset at the end of the lease in accordance with the
terms agreed when the contract is concluded. All other leases are classified as operating leases.
Financial leases are presented at the lower amount, of the fair value and the present value of the minimum future
leased payments at the beginning of the lease, and decreased by the accumulated depreciation and any accumulated
impairment losses.
The depreciable amount of a leased asset is allocated to each accounting period during the period of expected use, on
a systematic basis, consistent with the depreciation policy the lessee adopts for similar assets that are owned. Should
the useful life of any asset or its components exceed the concession period, then its economic life is revised accordingly
that is, over the concession period.
2.21 Dividend Distribution
Dividend distribution to the Company’s shareholders is recognised as a liability in the Company’s financial statements in
the period in which the dividends are approved by the Company’s shareholders.
2.22 Fair Value Estimation
The fair value of financial instruments traded in active markets (such as trading and available-for-sale securities) is based
on quoted market prices at the balance sheet date. The quoted market price used for financial assets held by the Company
is the current bid price.
The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is
determined by using valuation techniques. The Company uses a variety of methods and makes assumptions that are based
on market conditions existing at each balance sheet date. Quoted market prices or dealer quotes for similar instruments
are used for long-term debt. Other techniques, such as estimated discounted cash flows, are used to determine fair value
for the remaining financial instruments. The fair value of interest rate swaps is calculated as the present value of the
estimated future cash flows. The fair value of forward foreign exchange contracts is determined using quoted forward
exchange rates at the balance sheet date.
The carrying value less impairment provision of trade receivables and payables are assumed to approximate their fair
values. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash
flows at the current market interest rate that is available to the Company for similar financial instruments.
2.23 Associates
Associates are all entities over which the Company has significant influence but not control, generally accompanying a
shareholding of between 20% and 50% of the voting rights. Investments in associates are initially recognised at cost
and subsequently at cost less any impairment losses. Dividend income is recognised when the right to such income is
established.
The Company’s investment in its associate amounts to €3,2m, as of 31 December 2009, and represents less than 1% of
total assets at that date. This investment has not been accounted for under the equity method of accounting on the
basis that it is not considered to be material to the Company’s operations and the departure from IAS 28 is unlikely to
influence the economic decision of the users of these financial statements.
Financial Statements as at 31 December 2009 (Amounts in Euros unless otherwise stated) PAGE 33 OF 69
