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ending on January 1, 2018. The first two instalments
(short-term borrowings) will be equal to EUR 355
while the long-term borrowings is equal to EUR 1,802.
23 Employee cash-settled share-based compensation
The Company’s Board of Directors approved on June
18, 2007, a Stock Appreciation Right Plan (SARP 2007).
The plan involves assigning, by no later than December
31, 2008, to one or more recipients, an overall maximum
of 213,000 option rights granting the right to
obtain, at the exercise date, the payment of an amount
calculated on the basis of the differential variation of
the value of the ordinary shares of Newron S.p.A.
(“phantom options”).
The phantom options provide the recipient with the
right to obtain from the Group, at the exercise date,
payment of a gross amount equal to the positive differential
variation between the official price registered
on the SIX Swiss Exchange as at the exercise date, multiplied
by the number of granted options, provided that
in any event that the differential cannot be higher than
150% of the initial price. It should be highlighted that
the differential is usually taxable income for the recipients.
At the payment date, the Company will apply
the deductions and applicable welfare contribution, by
paying to the recipient the net amount. The differential
is calculated based on the variation (positive) of the
ordinary share price of Newron Pharmaceuticals S.p.A.
between the grant date and the exercise date.
Exercise of the phantom options by the recipients is
permitted solely following the date marking 3 years
following the grant date. The exercisable phantom
options can be exercised within two years from the
exercise start date but no later than December 31, 2012.
As a consequence of what has been approved by the
Group’s Board of Directors on March 24, 2011, all
recipients have waived their phantom options and
have been granted new options under the 2007 plan as
detailed in note 20. A summary of the granted phantom
option is as follows:
Option granted
At January 1, 2011 113,750
Waived (resignation) (1,500)
Waived (new options) (112,250)
At December 31, 2011 0
24 Employee severance indemnity
Some Group’s companies provide for its employee
severance indemnities (as required, for example, under
Italian legislation), which is considered to be a defined
benefit scheme.
The main assumptions used for the purpose of the
Company’s actuarial valuation were as follows:
Actuarial assumptions
December 31,
2011
Discount rate 4.75%
Inflation rate 2.00%
Future salary increase 1.50%
Future pension (TFR) increase 3.00%
Based on the present value of the estimated obligation,
the amount recognized on the balance sheet in respect
of the Group’s defined benefit plan amounted to EUR
633 in 2011 (2010: EUR 587) and the movements were
as follows:
(In thousand euro) As of December 31
Balance as at the beginning
of the year
Total expense charged in
the income statement
Indemnity paid during period,
leavers and transfers out
Balance as at the end
of the year
2011 2010
587 620
181 238
(135) (271)
633 587
Notes to the Consolidated Financial Statements – Newron Annual Report 2011 63