Annual Report 2009 Royal BAM Group nv

3.15 Equity attributable to the Company’s shareholders
a) Share capital
Ordinary shares are classified as equity. Convertible and non-convertible financing preference shares are classified as
liabilities. The equity component of the convertible financing preference shares is represented by the difference between
the issue price and the fair value of the liability component, and is recognised as such in equity.
Costs directly attributable to the issue of new shares are presented in equity as a deduction (net of tax) from the
proceeds.
If the Group or any subsidiary purchases shares in the Company’s share capital, the consideration paid – net of any
directly attributable costs and taxes – will be deducted from equity. If such shares are subsequently sold or reissued, any
consideration received will be included in equity, net of any directly attributable and taxes.
b) Reserves
These include reserves for cash-flow hedges and currency translation adjustments.
c) Retained earnings
These relate to cumulative prior-year earnings less dividends payable to holders of ordinary shares in the Company.
Dividends are recognised as liabilities upon declaration. Dividends on financing preference shares are recognised as
interest expenses in the income statement and as liabilities in the balance sheet.
3.16 Borrowings
The principal amount of the subordinated loan is subordinated to all other creditors. Interest payments are not
subordinated.
Financing preference shares are classified as liabilities, less the equity component recorded under reserves in equity.
Dividends on financing preference shares are recognised as an interest expense in the income statement.
Non-recourse loans directly relate to the corresponding assets (PPP concessions, PPP receivables and property
development).
Other project financing also directly relates to the corresponding assets but with limited additional securities.
The AM shares held by third party shareholders are classified as liabilities. Dividend is recognised as an interest expense in
the income statement.
Financial lease obligations (net of finance charges) are classified as liabilities. The interest element in lease payments is
recognised as an expense in the income statement.
Bank overdrafts are classified as current liabilities and recognised at fair value.
Borrowings are initially recognised at fair value (net of incurred transaction costs) and subsequently measured at
amortised cost.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the
liability until at least 12 months after the balance sheet date.
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2009