Consolidated Financial Statements - 25 CONSOLIDATED FINANCIAL STATEMENTS DETAILED SUMMARY OF NOTES TO THE FINANCIAL STATEMENTS NOTE 1 SIGNIFICANT ACCOUNTING POLICIES --------- 26 1.1 ACCOUNTING STANDARDS .................................................... 26 1.2 BASIS OF PREPARATION AND PRESENTATION OF THE CONSOLIDATED FINANCIAL STATEMENTS ......................................... 27 1.3 CHANGES IN ACCOUNTING METHODS AND RESTATEMENT OF COMPARATIVE INFORMATION ........................................................... 28 NOTE 2 SIGNIFICANT EVENTS OF THE YEAR ----------- 34 NOTE 3 SCOPE OF CONSOLIDATION ----------------------- 37 3.1 TRANSACTIONS AFFECTING THE SCOPE OF CONSOLIDATION IN 2019 ............................................................................................... 39 3.2 TRANSACTIONS AFFECTING THE SCOPE OF CONSOLIDATION IN 2018 ............................................................................................... 40 3.3 INVESTMENTS IN EQUITY-ACCOUNTED INVESTEES ............... 41 3.4 COMMITMENTS RELATED TO THE SCOPE OF CONSOLIDATION44 3.5 NON-CURRENT ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS ..................................................................................... 46 NOTE 4 ADDITIONAL CASH FLOW DISCLOSURES ---- 48 4.1 RECONCILIATION OF PROVISION EXPENSE ........................... 48 4.2 RECONCILIATION OF CHANGES IN WORKING CAPITAL TO THE STATEMENT OF FINANCIAL POSITION................................................ 49 4.3 RECONCILIATION OF ACQUISITIONS OF NON-CURRENT ASSETS49 4.4 RECONCILIATION OF DISPOSALS OF NON-CURRENT ASSETS 49 4.5 EFFECT ON CASH AND CASH EQUIVALENTS OF CHANGES IN SCOPE OF CONSOLIDATION RESULTING IN ACQUISITION OR LOSS OF CONTROL .......................................................................................... 50 4.6 EFFECT OF CHANGES IN SCOPE OF CONSOLIDATION RELATED TO EQUITY-ACCOUNTED INVESTEES ................................................ 50 4.7 RECONCILIATION OF DIVIDENDS PAID TO NON-CONTROLLING INTERESTS ........................................................................................ 50 4.8 EFFECT ON CASH AND CASH EQUIVALENTS OF TRANSACTIONS WITH NON-CONTROLLING INTERESTS ............................................... 50 4.9 RECONCILIATION BETWEEN CHANGE IN CASH AND CASH EQUIVALENTS AND CHANGE IN NET DEBT ......................................... 51 4.10 RECONCILIATION OF NET INTEREST PAID .............................. 51 4.11 CASH OUTFLOWS RELATED TO ACQUISITIONS OF FINANCIAL ASSETS ............................................................................................. 51 NOTE 5 SEGMENT INFORMATION ---------------------------- 52 5.1 KEY INDICATORS BY REPORTABLE SEGMENT ....................... 52 5.2 KEY INDICATORS BY GEOGRAPHICAL AREA .......................... 53 NOTE 6 ACTIVITY DATA ------------------------------------------- 53 6.1 TOTAL REVENUE .................................................................... 53 6.2 COST OF GOODS SOLD .......................................................... 55 6.3 EXPENSES BY NATURE AND FUNCTION ................................. 56 6.4 DEPRECIATION AND AMORTISATION ...................................... 56 6.5 OTHER OPERATING INCOME AND EXPENSES ........................ 57 6.6 INVENTORIES ......................................................................... 58 6.7 TRADE RECEIVABLES ............................................................. 58 6.8 OTHER CURRENT ASSETS ..................................................... 59 6.9 OTHER NON-CURRENT ASSETS ............................................. 60 6.10 OTHER LIABILITIES ................................................................. 60 6.11 OFF-BALANCE SHEET COMMITMENTS ................................... 61 NOTE 7 LEASES ------------------------------------------------------ 62 7.1 GROUP AS LESSEE ................................................................ 64 7.2 GROUP AS LESSOR ................................................................ 65 NOTE 8 EMPLOYEE BENEFITS EXPENSE ----------------- 66 8.1 EMPLOYEE BENEFITS EXPENSE............................................. 66 8.2 PROVISIONS FOR PENSIONS AND OTHER POST-EMPLOYMENT BENEFITS .......................................................................................... 66 8.3 SHARE-BASED PAYMENT ........................................................ 69 8.4 GROSS REMUNERATION AND BENEFITS OF THE MEMBERS OF THE GROUP EXECUTIVE COMMITTEE AND THE BOARD OF DIRECTORS ....................................................................................... 71 8.5 AVERAGE NUMBER OF GROUP EMPLOYEES .......................... 72 NOTE 9 INCOME TAXES ------------------------------------------- 72 9.1 INCOME TAX EXPENSE ............................................................ 73 9.2 DEFERRED TAXES .................................................................. 74 NOTE 10 INTANGIBLE ASSETS, PROPERTY, PLANT AND EQUIPMENT, AND INVESTMENT PROPERTY ----------- 75 10.1 GOODWILL .............................................................................. 75 10.2 OTHER INTANGIBLE ASSETS ................................................... 76 10.3 PROPERTY, PLANT AND EQUIPMENT ...................................... 78 10.4 INVESTMENT PROPERTY ......................................................... 80 10.5 IMPAIRMENT OF NON-CURRENT ASSETS (INTANGIBLE ASSETS, PROPERTY, PLANT AND EQUIPMENT, INVESTMENT PROPERTY AND GOODWILL) .............................................................. 81 NOTE 11 FINANCIAL STRUCTURE AND FINANCE COSTS -------------------------------------------------------------------- 83 11.1 NET CASH AND CASH EQUIVALENTS ....................................... 85 11.2 LOANS AND BORROWINGS ...................................................... 86 11.3 NET FINANCIAL INCOME/(EXPENSE) ....................................... 90 11.4 FAIR VALUE OF FINANCIAL INSTRUMENTS .............................. 92 11.5 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES ... 95 NOTE 12 EQUITY AND EARNINGS PER SHARE --------- 105 12.1 CAPITAL MANAGEMENT ........................................................ 106 12.2 SHARE CAPITAL .................................................................... 106 12.3 SHARE EQUIVALENTS ........................................................... 106 12.4 TREASURY SHARES .............................................................. 106 12.5 DEEPLY-SUBORDINATED PERPETUAL BONDS (TSSDI) ....... 106 12.6 BREAKDOWN OF OTHER RESERVES ..................................... 107 12.7 OTHER INFORMATION ON ADDITIONAL PAID-IN CAPITAL, RETAINED EARNINGS AND RESERVES ............................................. 107 12.8 NON-CONTROLLING INTERESTS ........................................... 109 12.9 DIVIDENDS ............................................................................ 110 12.10 EARNINGS PER SHARE ......................................................... 111 NOTE 13 OTHER PROVISIONS ---------------------------------- 112 13.1 BREAKDOWN OF PROVISIONS AND MOVEMENTS ................. 112 13.2 BREAKDOWN OF GPA PROVISIONS FOR CLAIMS AND LITIGATION ....................................................................................... 112 13.3 CONTINGENT ASSETS AND LIABILITIES ................................. 113 NOTE 14 RELATED-PARTY TRANSACTIONS ------------- 115 NOTE 15 SUBSEQUENT EVENTS ------------------------------ 115 NOTE 16 STATUTORY AUDITORS' FEES ------------------- 116 NOTE 17 MAIN CONSOLIDATED COMPANIES ----------- 117 NOTE 18 STANDARDS, AMENDMENTS AND INTERPRETATIONS PUBLISHED BUT NOT YET MANDATORY --------------------------------------------------------------- 120
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