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Consolidated financial statements as at December 31, 2010
Share-based payment plans (stock options)
The Group has applied the standard set out by IFRS 2 “Share-based payment”. Pursuant to the transitional standards,
IFRS 2 has been applied to all the stock options granted after November 7, 2002 and that have not yet vested
as at January 1, 2005. The Group stock option plans foresee only the physical delivery of the share when exercised.
Share-based payments are measured at fair value at granting date. Such amount is recognized in the income statement
over a straight-line basis and over the vesting period.
The fair value of the option, measured at grating date, is assessed through actuarial calculations, taking into account
the terms and conditions of the options granted.
Provisions and reserves for risks
Provisions for risks and liabilities are costs and liabilities having an established nature and the existence of which
is certain or probable that at the reporting date the amount cannot be determined or the occurrence of which is
uncertain. Such provisions are recognized when a commitment actually exists arising from past events of legal or
contractual nature or arising from statements or company conduct that determine valid expectations from the persons
involved (implicit obligations).
Provisions are recognized when the Group has a present commitment arising from a past event and it is probable that
it will be required to fulfill the commitment. Provisions are accrued at the best estimate of the expenditure required
to settle the liability at the balance sheet date, and are discounted when the effect is significant.
Revenue recognition
Revenue is recognized if it is probable that the economic benefits associated with the transaction will flow to the
Group and the revenue can be measured reliably.
Revenue from sales and services is recognized when the transfer of all the risks and benefits arising from the passage
of title takes place or upon execution of a service.
Revenues from sales of products are recognized when the risks and rewards of ownership of goods are transferred to
the customer. Revenues are recorded net of discounts, allowances, settlement discounts and rebates and charged
against profit for the period in which the corresponding sales are recognized.
Government grants
Government grants are recognized in the financial statements when there is reasonable assurance that the company
concerned will comply with the conditions for receiving such grants and that the grants themselves will be received.
Government grants are recognized as income over the periods necessary to match them with the related costs which
they are intended to compensate.
Taxation
Income tax represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit defers from the profit as reported in the
income statement because it excludes items of income or expense that are taxable or deductible in other years and it
further excludes items that are never taxable or deductible.
Current income tax is entered for each individual company based on an estimate of taxable income in compliance
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