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Royal Decree 1815 / 1991, Of 20 December, Laying Down The Rules For The Formulation Of Consolidated Annual Accounts.

Original Language Title: Real Decreto 1815/1991, de 20 de diciembre, por el que se aprueban las normas para formulación de las cuentas anuales consolidadas.

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TEXT

1. Article 2 of Law 19/1989 of 25 July 1989 on Partial Reform and Adaptation of Commercial Law to the Directives of the European Economic Community (EEC) on Societies has amended Title III of book I (Articles 25 to 49). of the Trade Code, relating to the accounting of employers; in the new wording, Section 3 (Articles 42 to 49), is devoted to the "presentation of the accounts of the groups of companies", moving to the national law the Seventh Community Directive, constituting a framework for the drawing up of consolidated annual accounts.

Notwithstanding the above, the variety of circumstances that can be produced, both in the configuration of the group of companies and in the application of the various consolidation procedures, collected in the legal text, thus as in the operations carried out by the Group's companies, requires the development of the legal standard.

2. The "Standards for the formulation of consolidated annual accounts", which complement the content of the General Accounting Plan, approved by Royal Decree 1643/1990 of 20 December, extending the regulatory development carried out in that text Commercial law on accounting matters is structured as follows:

Consolidation subjects.

Obligation to consolidate, consolidation methods, and matching procedure.

Global integration method.

Method of proportional integration and put-on-equivalence procedure.

Other rules applicable to consolidation.

Consolidated annual accounts.

3. Chapter I, subject to consolidation, is devoted to defining the companies of the group, dominant and dependent, as well as the other companies involved in the consolidation, that is, the multigroup and the associated. These last definitions have been made from the text of the Trade Code, although it does not include them in an express way, in this way concepts are needed and a terminology is fixed in order to allow for a more harmonious and synthetic development. of the Regulation.

4. In Chapter II, the obligation to consolidate and methods of consolidation is determined, first, by the commercial companies required to consolidate, which includes, although not expressly, the concept of a group of companies with a duty of consolidating; the subgroup constitutes a category of the broader group concept, so that the dominant companies of others have to formulate the consolidated accounts in any case even if they are in turn dependent on another company that has to draw up consolidated accounts. This provides consolidated data at different levels, respecting the information interests of the different groups of users of the economic and financial information.

In this chapter there are exceptions to the obligation to consolidate, either by reason of size, or by dealing with companies that are dependent on others required to formulate consolidated accounts under the law of any Member State of the European Economic Community. In the latter case, it is necessary that the external partners do not have or certain participation in the given social capital, provided that some of those external partners, holders of a minimum percentage of the share capital, do not require the formulation of the consolidated annual accounts.

Finally, this Chapter II sets out the applicable procedures, regulating when they are applied, as well as the possible exclusion of companies when they represent an insignificant interest; the application of the on equivalence.

5. The method of global integration is regulated in detail in Chapter III. The three stages of the consolidation methods are distinguished, that is, the homogenization, aggregation and eliminations are distinguished. The latter occupy an important area, since they are the fundamental core of the consolidation from a technical point of view. The development of the proportional integration method and the equivalence procedure is followed in Chapter IV.

6. Chapter V is intended for "other rules applicable to consolidation", addressing the problems arising from the change in the consolidation procedure applicable to a specific undertaking, the criteria for conversion into pesetas of the Member States. financial in foreign currency, as well as the Tax on Benefits.

7. Finally, Chapter VI is covered by the rules for drawing up the consolidated annual accounts, incorporating the models in the Annex.

8. This Royal Decree also contains a transitional provision which facilitates the application in time of these consolidation rules. Finally, in the final provisions, the powers laid down in the existing legislation on the adaptation and development of the rules for the formulation of consolidated annual accounts are collected.

In its virtue, on the proposal of the Minister of Economy and Finance, in agreement with the Council of State and after deliberation of the Council of Ministers at its meeting on 20 December 1991,

DISPONGO:

Article 1. º Approval of consolidation rules.

1. The rules for the formulation of consolidated annual accounts, the text of which is inserted below, are approved.

2. The provisions of this text do not affect the application of the tax rules on qualification, valuation or temporary imputation established for the different taxes and in particular to determine the tax base of the Company Tax.

Art. 2. º Obligation of the consolidation rules.

1. the rules for the formulation of consolidated annual accounts shall apply to:

(a) Groups of companies, including sub-groups, whose dominant company is a Spanish Mercantile Company.

(b) Cases in which any employer, natural or legal person or dominant legal person formulates and publishes consolidated accounts.

(c) Assumptions for the formulation and publication of consolidated accounts by any natural or legal person, other than those referred to in the preceding letters, as soon as possible.

2. The provisions of this Royal Decree shall not apply to groups of companies for which there are specific provisions for the consolidation of annual accounts which are applicable to them.

TRANSIENT DISPOSITION

Until the last financial year which is closed before 1 January 2000, the limits provided for in Article 8 of the rules for the formulation of the consolidated annual accounts shall be as follows:

Total balance sheet assets not exceeding 2,300,000,000 pesetas.

Net amount of the annual turnover of less than 4,800,000,000 pesetas.

Average number of workers not exceeding 500.

FINAL PROVISIONS

First.

The Minister of Economy and Finance, on a proposal from the Accounting and Audit Institute of Accounts and by Order, will be able to adapt the valuation rules and the elaboration of the consolidated annual accounts to the concrete of the accounting officer.

Second.

The Minister of Economy and Finance, on a proposal from the Accounting and Audit Institute of Accounts, will be able to approve by Order the adaptation to specific sectors of the rules for the formulation of annual accounts consolidated.

Third.

The Institute of Accounts and Audit of Accounts may approve, by way of Resolution, binding rules that develop this text and its adaptations to specific sectors of activity in relation to the standards of valuation and the rules for drawing up the consolidated annual accounts, without prejudice to the provisions of the first provision.

Fourth.

The obligation of the dominant commercial companies to formulate annual accounts and consolidated management report shall begin to apply to the accounts of those financial years whose closing date is later than 31 December 1990.

Fifth.

This rule shall enter into force on the day following that of its publication in the "Official State Gazette".

REPEAL PROVISION

The rules of equal or lower rank which are contrary to the provisions of this Royal Decree and in particular the Order of the Ministry of Finance of 15 July 1982, for which the rules on training are adopted, shall be repealed. of the accounts of the groups of companies.

Given in Madrid, 20 December 1991.

JOHN CARLOS R.

The Minister of Economy and Finance,

CARLOS SOLCHAGA CATALAN

ANNEX

Rules for the formulation of consolidated annual accounts

1. Established the obligation to consolidate by the Commercial Code and thus adapted our commercial law to the VII Company Law Directive, of 13 June 1983, a major deficiency disappears from our order, as is the adequate protection of the concurrent interests in the group of companies through consolidated information.

The first positive provisions appear in this way, which begin to shape a genuine right of the group of companies, although the rules regarding consolidation will have to continue other than management of the indicated protection in other respects, such as the safeguard mechanisms of the external partners, or those relating to the group's creditors through the communication of liability between dependent companies and dominant.

The present rules are intended to develop the provisions relating to consolidated financial information contained in Title III, Section III of the first book of the Commercial Code, according to the new drafting of legislation after Law 19/1989 of 25 July, of Partial Reform and Adaptation of Commercial Law to the Directives of the European Economic Community on Societies.

With this, this rule provides for a regulation, if not exhaustive, if at least sufficiently extensive of the aspects relating to the formulation and presentation of the consolidated accounts-including the necessary harmonisation of terminology and line items (accounts) to be used by the groups of companies. This establishes a unifying standard, called to allow such figures to fulfill their accounting obligations in this respect.

In addition to the provisions of the Seventh Directive, and the Trade Code, and, as is logical, as far as possible a sort of matter in line with the latter, they have been taken into account for the preparation of These rules are the pronouncements of other regulatory bodies, such as rules 27 and 28 of the International Accounting Standards Committee (IASC).

In any case, given the diversity of approaches to which consolidation can be addressed, especially as regards the technical standards that regulate it, the following have been considered as an inspiring criterion. less in its general lines, which the consolidated accounts constitute an extension of those of the parent company.

2. Chapter I delimits and defines the subjects to which the consolidation affects. In this respect, it must be borne in mind that the concepts laid down not only in this chapter but also in the rest of the rules are laid down only as regards consolidation and, consequently, without prejudice to the fact that the General Accounting and the subsequent provisions of company group law may be formulated other not entirely coincident-the definition of group itself, for example-, aimed at regulating additional obligations of these figures, as may be the already mentioned protection of interests of external partners, creditors or third parties general.

Thus, the fundamental concept of this chapter is that of the dominant Society, which, together with the dependent societies, configures the group of Societies, to the single effects, as has already been indicated, of the consolidation. The rules set out in this chapter, following the Trade Code, the assumptions that give rise to the relationship of domain and dependency and establish some rules for the computation of voting rights.

Special mention requires in this respect the case of the indirect domain, in which, in the determination of the voting rights held by the dominant in relation to the dependent indirectly, the situation of done above the domain that could result from multiplying the many partial ones.

It is not, therefore, the latter criterion that is adopted, but the one that most adequately defines that situation in fact: In this case, the number of votes corresponding to the dominant company in relation to the dependent societies indirectly, it will be the one that corresponds to the dependent Society that participates directly in the social capital of these. The rules have therefore given preference to the criterion of effective control above the level of participation which could result from the indicated product.

In this first chapter, the definitions of other figures that may also appear in the consolidated accounts are added: Multigroup Societies and Associated Societies.

3. Chapter II deals primarily with the obligation to consolidate. It is important to note that such an obligation to formulate consolidated accounts arises when there is a group of companies, that is, when at least one parent company and one or more dependents are present, as defined in Chapter I. the existence of a group that determines the obligation to consolidate and in no case exists such an obligation if the assumptions set out in Article 2 do not appear previously.

Therefore, the existence of associated or multi-group companies does not, on its own, give rise to the obligation to consolidate, unless there are also other dependent companies, irrespective of the fact that the latter may be excluded from the consolidation for the technical reasons to which we will refer later. That is, for example:

A holding company holding stakes only in several associated or multi-group companies, without any parent holding, is not required to consolidate.

A holding company that holds stakes in one or more dependents and one or more associates or multigroup, is required to consolidate, even if the dependent or dependent is excluded from the consolidation.

4. On the other hand, there are two single exceptions to the obligation to consolidate, determined by the small size of the group or sub-group, that is, when the dominant company is at the same time dependent on another and whenever a company the group has not issued securities admitted to official listing on a stock market and certain conditions are met.

In the first case, and by prescription of the Commercial Code, the limits that exonerate from the obligation to consolidate are those established by the recast text of the Law of Companies (a) loss and short-term gains, limits to be used for the date of the end of the exercise of the dominant company. It is governed here, as is the case in the aforementioned Law, that the obligation to maintain for two consecutive exercises the dimension required for the extension to operate.

When determining these stops, two procedures can be used. First, the part of the fact that only the data of the dominant company and all dependent companies, including those to which, for the technical reasons to which it will be referred, will not be applied, must be taken into account. method of global integration. Therefore, the amounts corresponding to the multi-group or associated companies are not included, nor in any case are the possible eliminations to be taken into account in the consolidation. Another supported procedure is similar to the previous one, but taking into account the eliminations to be performed by applying the method of global integration that is the one that is established in general. Where the calculation formula for the first indicated procedure is used, the figures shall be 20 per 100, except for the number of workers corresponding to the financial year.

The second case of exception is that of the dominant company which is at the same time dependent on another one governed by Spanish legislation or by that of another Community State.

it is of particular interest to point out at this point that, with this provision, a long-debated issue in the Community countries has been sold: the question of whether the obligation to consolidate the sub-groups of companies. The solution adopted by the rules establishes an identical regime for these figures, irrespective of whether the dependent is a Spanish or another EC country.

Therefore, the sub-groups, irrespective of the nationality of the parent, shall be exempt only from the obligation to consolidate when the latter holds the whole of the dependent's social interests or when, holding 50 per 100 or more of them, shareholders or external partners holding 10 per 100 of the shares have not applied for the formulation of consolidated annual accounts six months before the end of the financial year. In addition, it is necessary to ensure that the waiver is possible to meet the requirements set out in point 2 of Article 9. º, all of which are aimed at protecting the concurrent interests in the group.

5. Chapter II also deals with the consolidation methods applicable in each case: global integration and proportional integration. It also includes the provision of equivalence, a procedure which, rather than a method of consolidation itself, constitutes, as it is known, a procedure for the valuation of investments in subtenorations, although their use in information Consolidated and its application to a figure related to the group of Societies support the desirability of including it among the consolidation procedures.

Given the whole of the dominant company and its subsidiaries which, in principle, should be consolidated by applying the method of global integration, there are also some technical reasons that may justify exclusion. In the case of such a scheme, it is clear that the general rule is the inclusion in the consolidation and that the grounds for exclusion are therefore considered to be exceptional and always subject to the true image objective for consolidated accounts.

6. Of particular interest is the taking of the present rules in relation to the exclusion of dependent companies, when they are in competition with others whose activities are very different: Without prejudice to such exclusion it is recommended, in principle, the consolidation if the dependent companies have an activity linked to the group's performance.

It has therefore been understood that this rule, which in general and taking into account the objective of the faithful image, is preferable to the consolidation of these dependents, to the extent that their exclusion could steal useful information from the user, without prejudice to the particular attention to be paid to the proper presentation in the consolidated accounts of the items from each of these activities.

In any case and for obvious reasons to preserve the necessary information, the societies excluded from the method of global integration in order to compete with others whose activities are very different must be included in the consolidated accounts, applying the procedure for putting into equivalence. On the other hand, loans and debts to group, associated and multi-group companies, which have been excluded from the consolidation, shall be shown separately in the relevant asset and liability headings.

The method of proportional integration is applied to multi-group companies, so they can be included in the financial statements by this procedure or, alternatively, by the implementation procedure. equivalence.

With all this, the equivalence procedure is applicable not only to the associated companies, but also to the subsidiaries which, in the case of other activities whose activities are very different, are not consolidated by the method of global integration or multigroup to which the proportional integration method is not applied.

7. Chapter III is intended to collect the rules governing the method of global integration, which includes the necessary prior homogenization: Temporary, Valorative, to perform eliminations and to perform the aggregation.

It should be noted here that the inclusion in the consolidation of the accounts of a dependent company whose closing date does not coincide with the one corresponding to the dominant one is allowed in the temporary homogenization, provided that the The difference does not exceed three months, but in this case the appropriate adjustments must be made to incorporate the significant operations that could have occurred within the average time between the two dates.

8. Among the eliminations, preferential attention has been given to the one that is practiced in the first consolidation, this and, in general, all the eliminations are reflected in the norms that follow, from the perspective of the practical itinerary that there is (i) to continue to draw up consolidated annual accounts from the group's annual accounts. The alternative would have been the definition of the components of each of the headings of the consolidated annual accounts, a methodology that has not been the one that has taken precedence in the elaboration of these rules. As a consequence of this practical procedure used, especially in relation to the balance sheet and the consolidated profit and loss account, it is that the eliminations in some cases are qualified as differences in the recognition of results or the term adjustments are used.

In this sense, the elimination between the historical value of the investment and the own funds of the dependent in the first consolidation and, especially, the treatment of the difference that can arise is regulated in this sense. in such removal.

In logic congruence with its nature, such a difference, whether positive or negative, will be imputable, to the sole effects of consolidation, to the assets of the dependent Society, when the valuation of such elements results in the cause that originates it.

Non-imputable differences will be included in the consolidated balance sheet with the denominations "consolidation goodwill" if they are positive and "negative consolidation difference" in the opposite case. Given the different treatment to be given to each other, the principle of prudence advises that both items cannot be compensated, except where they correspond to the investment in the same dependent Society.

It is also the principle of prudence that dictates the rules governing the fate of these items. The "consolidation trade fund" is its consolidation, with the result of consolidated results, following the rules established by the recast of the Law on Limited Companies.

On the other hand, if the item is negative, it can only be taken to the consolidated profit and loss account in two single cases: Unfavourable developments or reasonable forecast of expenditure in the subtensioner, to the extent that the forecast is made, in which case this difference has the character of provision for risks and expenses, or where it corresponds to a realised gain, by disposal or inventory.

In relation to eliminations there is another topic frequently discussed in the scope of consolidation, namely the issue is the percentage by which they should be practiced when they affect the consolidated results, a question in which the rules have been taken by the elimination in its entirety of the result, the results of the exercise and the previous years produced from the moment of the first consolidation must be eliminated.

9. Chapter IV deals with the method of proportional integration and the procedure for putting in place equivalence. As for the first, it seems obvious to apply the same rules to the global integration, with only the differences that result from the aggregation-and therefore the eliminations-in function of the domain, with which the the item corresponding to the interests of external partners.

As is logical, in the implementation of equivalence, special attention has also been paid to the elimination of investments-own funds, considering for the resulting difference a treatment similar to that established in the global integration.

Thus, this difference, in so far as it is attributable to specific assets of the Company that is in equivalence, will be incorporated or deducted from the value of the participation in the consolidated balance sheet. this higher value will be reduced in subsequent years, with the result of consolidated results, and as the corresponding assets are depreciated or are disposed of to third parties.

The non-imputed differences shall be included as an independent item of the consolidated balance sheet and shall be treated according to the same criteria as those established for the differences resulting from the application of the integration method. global.

10. Chapter V of the rules provides for three subjects of no less interest: the regulation of the issues to be taken into account in the cases of changes in the methods of consolidation, the conversion of states expressed in foreign currency for the purposes of the consolidation and treatment of profit tax in consolidated accounts.

Among them, it is worth noting the conversion of states expressed in foreign currency, a question in which, once again pursuing the solution more in line with the objective of the faithful image, the current position of international accounting regulation.

Thus, the general rule is the method of the closing change, whereby such a criterion applies to all assets and liabilities payable, while the foreign company's own funds are valued using the monetary-non-monetary.

In this way, the method seeks to ascertain the net effects of the changes in the contribution of the dependent company's own funds. Therefore, the resulting differences are considered to be adjustments in the equity net, which are included in the equity, without prejudice to the amount attributable to the interests of external partners.

On the contrary, when the activities of the foreign company are closely linked to that of a Spanish company belonging to the group, in such a way that it can be considered as an extension of the activities of the the latter, in which case, the conversion, according to the objective of the faithful image, must show a Balance and an Account of Losses and Gains similar to those which would have been obtained from having kept the books of the Foreign Society in pesetas.

This implies using the monetary-non-monetary method for non-monetary items, and those in force at the closing date for monetary items-treasury and representative receivables and payment obligations- including the resulting differences in the consolidated profit and loss account, it is also allowed that these differences can be treated in accordance with the criterion followed by the dominant company in relation to the differences in exchange arising from foreign currency transactions.

Factors such as the origin of the sources of financing of the foreign society and the importance of the flows of funds and the commercial transactions carried out with the other societies of the group are, among others, aspects to consider to determine the method of conversion to be applied.

11. Of no less interest are cases in which foreign companies are affected by high inflation rates. In this situation, the rules are recommended to carry out, prior to conversion, the appropriate adjustments for inflation, in so far as this is necessary to preserve the objective of the faithful image.

12. Finally, Chapter VI deals with the consolidated annual accounts: Balance, Profit and Loss Account and Consolidated Memory, which includes, on a voluntary basis for all groups, the consolidated financing table.

For only this chapter refers to the annual accounts, the management report is not regulated, although it should be recalled that, by prescription of the Trade Code, it must be formulated when there is an obligation to consolidate, in addition, it is required to deposit it in the Commercial Register, together with the annual accounts and the audit report.

Logically, the rules regarding annual accounts are adapted to those existing in the current regulations-Trade Code, recast text of the Law of Companies and General Accounting Plan-to the circumstances. and details of the consolidated accounts.

13. These standards are accompanied by the corresponding annual accounts models which, in the same way, are similar to those provided for in the General Accounting Plan, which are suitably adapted to reflect the concepts resulting from consolidation. No abbreviated models have been foreseen, given the size of the groups of societies.

The models established for the Balance Sheet and the Profit and Loss Account, which appear as an annex to the rules, have the character of mandatory minimums. However, they may, in the light of the objective of the faithful image, add new items to those laid down in them, provided that their content is not provided for and a more detailed subdivision of the content mentioned in the above. model.

Similar considerations can be made of the model set for the Memory, although in this case, when the information requested is not significant, the corresponding sections will not be completed. On the other hand, it governs the criterion established by the Code of Commerce: any indication necessary to complete, expand and comment on the information contained in the Balance Sheet and the Loss and Earnings Account, which is necessary to satisfy the objective of the faithful image, it must appear in this document.

CHAPTER FIRST

Consolidation subjects

Section 1. Group of Societies

Article 1. Group of Societies.

The Group of Companies, for the sole purposes of the consolidation of accounts, consists of the dominant Company and one or more dependent Societies.

Art. 2. The dominant and dependent society.

1. A dominant company is the Mercantile Company which is a partner of another Company, whether or not Mercantil is located in any of the following cases:

a) Poses most voting rights.

b) Have the power to appoint or remove the majority of the members of the administrative body.

(c) To provide, pursuant to agreements concluded with other partners, the majority of voting rights.

(d) The majority of the members of the administrative body, acting at the time when the consolidated accounts are to be drawn up and during the two financial years immediately, shall be appointed by the majority of the members of the administrative body. above.

This assumption will not result in consolidation if the Company whose Administrators have been named is linked to another in any of the cases provided for in the first two letters.

2. It is understood by companies that are dominated or dependent those that are in relation to the dominant one in any of the assumptions set out in paragraphs (a) to (d) of the previous number, as well as the successively dominated by these, any that is its legal form and regardless of its registered office.

Art. 3. Computer of voting rights.

1. In order to determine voting rights, they will be added to those directly owned by the dominant company, which correspond to the companies dominated by the company or other persons acting in their own name but on behalf of some of the group's companies.

2. For the purposes of the preceding number, the number of votes corresponding to the dominant company, in relation to the companies which are indirectly dependent on it, shall be that which corresponds to the dependent company directly participating in the the social capital of these.

Section 2. Other Companies involved in consolidation

Art. 4. Multigroup societies.

1. They are multi-group companies, for the sole purposes of the consolidation of accounts, those companies, not included as dependent companies, which are managed by one or more of the group's companies, which participate in their share capital, jointly with another or other alien to it.

2. In any case, it is understood that there is joint management of another Company when, in addition to participating in the capital, one of the following circumstances occurs:

(a) That the joint management be established in the Social Statutes; or,

b) That there are agreements or agreements, that allow the partners to exercise the right of veto in the taking of social decisions.

Art. 5. Partner Societies.

1. They shall have the consideration of associated companies, for the sole purposes of consolidation, those which are not included in the consolidation, in which some or more of the group's companies have a significant influence on their management.

2. It is understood that there is significant influence on the management of another Company, when the following two requirements are met:

a) That one or more of the group's companies participate in the social capital of the Company; and,

b) A durable binding is created by contributing to its activity.

3. It is assumed that the requirements set out in the previous paragraph are met when one or more of the group's companies hold a stake in the capital of a non-group of a group of at least 20 per 100 or 3 per 100 if they are listed on the Stock Exchange.

CHAPTER II

Obligation to consolidate, consolidation methods, and put-on-equivalence procedure

Section 1. Obligation To Consolidate and Exceptions

Art. 6. º Obligation to consolidate.

1. Any dominant company shall be required to make the annual accounts and consolidated management report, in accordance with the provisions of the Trade Code, in the recast text of the Law on Limited Companies, in other legislation specifically applicable and in this provision.

2. Dependent companies that are in turn dominant have an obligation to formulate the annual accounts and consolidated management report, as provided for in this text.

3. The obligation to make the annual accounts and the consolidated management report does not exempt the companies from the group, from formulating their own annual accounts and the corresponding management report, in accordance with their specific arrangements.

Art. 7. Dispensa of the obligation to consolidate.

By way of derogation from the foregoing Article, the dominant companies shall not be required to carry out the consolidation, unless any Company of the group has issued securities admitted to trading on a stock market, in the following two cases:

a) When the set of the group or subgroup does not exceed the dimensions referred to in Article

.

(b) Where the dominant company, subject to Spanish legislation, is itself dependent on a commercial company subject to the legislation of a Member State of the European Economic Community and the provisions of the Article 9. º

Art. 8. "Dispensa" of the obligation to consolidate by reason of size.

1. Annual accounts and consolidated management reports shall not be required when, for two consecutive years on the date of the end of the exercise of the dominant company, the group of companies in the group does not exceed two of the The following limits:

Total assets of the Balance Sheet not exceeding 920 million pesetas.

Net amount of your annual business figure of less than 1.92 billion pesetas.

Average number of workers not greater than 250.

For the computation of these limits, the data of the parent shall be added to the data of the group of companies of the group, including those that would not be part of the consolidation for any of the reasons indicate in Article 11.

When a group at the closing date of the exercise of the dominant company becomes two of the above circumstances or ceases to comply with them, such a situation will only produce effects if repeated for two years. consecutive exercises.

For the first two social exercises of the dominant company closed after 31 December 1990, the groups of companies which, at the closing date of the first exercise of the dominant company, comply with the Circumstances referred to above shall be exempt from the obligation to draw up consolidated annual accounts.

2. For the purposes of calculating the limits provided for in the preceding paragraph, account shall be taken of the adjustments and removals which it would take to carry out the consolidation in accordance with the provisions of Chapter III of this Regulation. disposition.

3. Alternatively, the above number 2 may not apply and consider exclusively the sum of the nominal values that integrate the Balance Sheet and the Loss and Profit Account of all the Group's Companies. In this case, the total number of the assets in the balance sheet and the net amount of the annual turnover as set out in the previous number 1 increased by 20 per 100, while the average number of the average number of the assets in the balance sheet of workers will not suffer variation.

4. For the determination of the average number of workers, all persons who have or have had a working relationship with the group's companies during the financial year, averaged according to the time during which they have been employed, shall be considered their services.

Art. 9. "Dispensa" of the obligation to consolidate the subgroups of Societies.

1. It shall not be required to submit annual accounts and consolidated management report to the dominant company, subject to Spanish legislation, which is at the same time dependent on another company governed by that legislation or by that of another Member State. the European Economic Community, provided that the following conditions are met:

That this last Company owns 50 per 100 or more of the social stakes of that and

That shareholders or minority shareholders who hold 10 per 100 of the social units have not applied for the formulation of consolidated annual accounts six months before the end of the financial year.

2. In any case to benefit from the waiver set out in the preceding number, the following requirements shall be met:

a) That the Company dispensed from formulating the consolidated accounts as well as all its dependent Societies, are consolidated by the method of global integration into the accounts of a larger group.

b) That the Company dispensed from the formulation of consolidated accounts indicates in its annual accounts the statement that it is exempt from the obligation to formulate the consolidated accounts, the group to which it belongs, the social reason and the domicile of the dominant company.

(c) The consolidated accounts of the dominant company, as well as the management report and the auditors ' report, are deposited in the Mercantile Registry where the Company is domiciled.

Section 2. Consolidation Methods

Art. 10. Applicable methods.

The applicable consolidation methods are as follows:

a) Global integration.

b) Proportional Integration.

Art. 11. Application of the global integration method.

1. The method of global integration shall apply to the group's Societies.

2. By way of derogation from the preceding number, the following may be exempted from the application of this consolidation method to dependent companies in which one of the following conditions is present:

(a) When the dependent Company presents an insignificant interest in respect of the true and fair image to be expressed by the consolidated accounts. As a number of the group's companies in these circumstances, they cannot be excluded from the overall integration method rather than if they are of little significant interest in their entirety in relation to the purpose expressed.

(b) Where there are significant and permanent restrictions that substantially hinder the exercise by the dominant company of its rights to the equity or management of the subsidiary company, including the legally declared insolvency or to be subject to judicial or governmental intervention.

Other circumstances, such as limitations on the repatriation of government funds or interventions on certain assets, will not necessarily be grounds for exclusion, although reference should be made to the these extremes in consolidated memory, with the expression of their possible impact on the group's assets, financial situation and results.

(c) Where the information necessary to establish the consolidated accounts can be obtained only by incurring disproportionate costs or by requiring an unavoidable delay which makes it impossible to draw up such accounts within the period set out in Article 62, number 1.

(d) Where the shares in the dependent companies have been acquired and are held exclusively for the purpose of their subsequent disposal in the near future, which must not exceed the short-term limit from the date of acquisition.

e) When dependent companies have such different activities that their inclusion is contrary to the purpose of obtaining the own purpose of the consolidated annual accounts.

This paragraph shall not apply for the sole fact that the companies included in the consolidation are partially industrial, partially commercial and partially engaged in the provision of services or that they exercise Industrial or commercial activities or performance of different services.

For these purposes only the inclusion is considered to be contrary to the purpose expressed when companies are included in Article 1 of the Royal Decree of 28 June 1986 on adaptation of the (a) the law of the European Communities and Article 4.1 (a) of Law No 33/1984 of 2 August on the Management of Private Insurance, with others the social object of which is commercial, industrial and commercial activities; or services.

Different activities shall not be considered to be carried out in the case of companies of mere holding of goods or of portfolio. A company of mere holding of assets shall mean those in which more than half of its actual assets, for more than six months of the social year, continued or alternate, are not affected by business, professional or artistic activities. Portfolio companies shall mean those in which more than half of their actual assets, for more than six months of the social year, continued or alternate, are securities and provided that the holding of such securities is not It affects another statutory activity which is different from its mere possession.

In any event, when such consolidation occurs, special attention should be paid to the due presentation in the consolidated accounts, separately and with the appropriate denominations of the items from each of these accounts. activities.

In the event that any dependent Society is excluded for this reason, it must be indicated and justified in the Memory.

When the Excluded Company is not domiciled in Spain, the consolidated annual accounts, consolidated in its case, of that Excluded Company, may be attached to the consolidated annual accounts. the public by providing copies of such documents without the price exceeding the administrative cost of such a copy.

Art. 12. Application of the proportional integration method.

The proportional integration method can be applied to multi-group societies.

Art. 13. Consolidable Set.

Form the consolidated set of the Companies to which the method of global or proportional integration applies to them according to the above articles.

Section 3. First Equivalence Procedure

Art. 14. Application of the equivalence procedure.

1. The equivalence procedure shall apply in the preparation of consolidated accounts for investments in:

a) Associated Societies.

(b) Dependent companies which are not consolidated by the method of global integration pursuant to Article 11 (2) (e) and (c) Multigroup companies to which the method of integration is not applicable proportional.

2. The application of the provisions of this Article may be waived where the shares in the capital of the associated company do not have a significant interest in the fair image to be expressed by the consolidated accounts.

Art. 15. The perimeter of the consolidation.

The perimeter of the consolidation shall be made up of the companies that form the consolidated group and the companies to which the equivalence procedure applies.

CHAPTER III

Global Integration Method

Section 1. Method Description

Art. 16. Definition.

The application of the global integration method requires the incorporation into the Balance Sheet of the dominant Company of all the assets, rights and obligations that make up the assets of the dependent companies, and the Losses and profits of the first all the revenue and expenditure incurred in determining the outcome of the latter, without prejudice to the previous homogenizations and the eliminations that are relevant, in accordance with the provided in the following items.

Section 2. Previous Homogenization

Art. 17. Temporary homogenization.

1. The accounts of the group's companies to be consolidated shall relate to the same closing date and period as the consolidated annual accounts.

2. If a subsidiary company closes its financial year with a prior date of no more than three months at the date of the closing of the consolidated accounts, it may be included in the consolidation by the accounting values corresponding to the annual accounts of the last financial year, provided that the duration of the financial year coincides with that of the annual accounts. Where, between the date of the end of the financial year of the dependent company and the date of the consolidated accounts, transactions are significant, those transactions shall be incorporated; in this case, if the transaction has been carried out with a Group society, the consolidation eliminations that are relevant must be performed, reporting all of this in the Memory.

3. In the case of a subsidiary company which closes its financial year earlier in more than three months from the consolidated accounts, or where that circumstance does not exist, the period to which it relates does not coincide with that of the consolidated accounts, specific annual accounts shall be drawn up. Those specific accounts shall be drawn up for the same period and date of closure as those for the consolidated accounts.

However, when a Company becomes part of the group or falls outside of the group, the Individual Profit and Loss Account to be included in the consolidation shall be related only to the part of the financial year. that the Company has been part of the group.

Art. 18. Value homogenization.

1. The assets and liabilities items, as well as the revenue and expenditure of the companies included in the consolidation, should be valued according to uniform methods and in accordance with the principles and valuation rules laid down in the Code of Trade, recast text of the Companies Act and General Accounting Plan and other legislation that is specifically applicable.

2. If any element of the asset or liability or any income or expenditure has been valued according to non-uniform criteria for those applied in the consolidation, such an element should be valued again and for the sole purposes of consolidation, as the criteria of the dominant company, the necessary adjustments being made, unless the result of the new valuation offers an unimportant interest in order to achieve the group's true image.

3. The dominant company should apply the same valuation criteria in the consolidated accounts as those applied to its own annual accounts.

4. In exceptional cases, value criteria other than those indicated in the preceding number 3 may be applied, provided that those criteria, used by a subsidiary company, are more significant than those applied by the dominant company; such cases shall be duly indicated and justified in the Memory.

Art. 19. Homogenization by internal operations.

When the amounts of the items derived from internal transactions are not matched, or there are any pending records, the adjustments that proceed to practice the corresponding eliminations must be made. This homogenisation shall not be appropriate for the disposal provided for in Article 22 below.

Art. 20. Homogenization to perform aggregation.

When the structure of the annual accounts of a Group Company does not match that of the consolidated accounts, the necessary reclassifications must be made.

Section 3

Art. 21. Aggregation.

The preparation of the consolidated annual accounts shall be carried out by aggregation of the different items, according to their nature, of the homogenised individual annual accounts, without prejudice to eliminations and adjustments. mentioned in the following articles.

Section 4

Subsection 1. Disposal Investment-Own Funds

Art. 22. Investment disposal-own funds.

1. The elimination of investments-own funds is the offsetting of the accounting value representative of the direct or indirect participation of the dominant company in the capital of the dependent company with the proportional share of the equity capital of the company. referred to as a subsidiary, representing such participation on the date of the first consolidation and previously homogenised in accordance with Articles 17 to 20 above.

2. The date of first consolidation shall be defined for each dependent company in which it is incorporated into the group of companies.

3. By way of derogation from the preceding number, it may be considered that the incorporation of a subsidiary company into the group occurs on the date of commencement of the first financial year in which the group was obliged to draw up consolidated accounts; or (a) to make them voluntarily, provided that any of these dates are later than that of the effective incorporation into the group. Where a group is engaged in this number, it shall apply to all dependent societies.

Art. 23. Difference of first consolidation.

1. It is called a positive or negative difference of first consolidation between the accounting value of the direct or indirect holding of the dominant company in the capital of the subsidiary company and the value of the proportional share of the the own funds of the aforementioned subsidiary company attributable to that holding on the date of first consolidation.

2. For the purposes of the preceding number 1, the accounting value of the holding shall consist of the purchase price for such participation, determined in accordance with the valuation rules set out in the General Accounting Plan, minorised in value adjustments, provisions or losses, made prior to the time corresponding to the first consolidation and after the homogenisation provided for in Article 18.

3. They shall have the consideration of own funds defined as such in the General Accounting Plan under the amount of their own shares, without prejudice to the recalculation of the percentage of participation that corresponds to them.

4. Where the difference in consolidation is positive, and for the sole purposes of the formulation of the consolidated accounts, it shall be directly and as far as possible imputed to the assets of the dependent company, increasing the value of the the assets or the reduction of liabilities, and up to the limit that is attributable to the dominant company of the difference between the book value of the assets in question and its market value at the date of the first consolidation, calculated on the basis of the share of share in the share capital of the dependent company.

Once the indicated imputation has been made, the resulting amounts for the balance sheet items shall be amortised, where appropriate, with the same criteria as those applied to the same before the imputation.

5. Where the difference in consolidation is negative, and for the sole purposes of the formulation of the consolidated accounts, it shall be directly and as far as possible imputed to the assets of the dependent company, increasing the value of the the liabilities or the reduction of the assets, and up to the limit that is attributable to the dominant company of the difference between the book value of the assets in question and its market value on the date of the first consolidation, in role of the share in the share capital of the dependent company. After the indicated allocation is made, the resulting amounts for the balance sheet items shall be amortised, where appropriate, with the same criteria as those applied to the balance sheet items prior to the imputation.

6. The difference in the first consolidation which, following the application of the above numbers, is a subsidiary, shall be shown in the Balance Sheet as a 'consolidation trade fund' or 'a negative consolidation difference', corresponds.

7. The "consolidation trade fund" and the "negative consolidation difference" can only be offset when they correspond to investments in the same subsidiary company, reporting on the memory and performing the breakdown of the offset differences.

Art. 24. Consolidation Trading Fund.

1. A consolidation trade fund shall mean the positive difference referred to in paragraph 1 of the preceding article, which is reduced by the amount of the asset revaluations or the value reductions of liabilities in accordance with the provisions of the Number four of that Article.

2. The consolidation trade fund shall be entered under a heading of the consolidated balance sheet asset under this name.

3. The consolidation trade fund shall be amortised in a systematic manner, in so far as such a fund contributes to the collection of revenue for the group of companies with a maximum limit of ten years. Where the amortisation exceeds five years, the appropriate justification shall be collected in the memory.

Art. 25. Negative consolidation difference.

1. The negative difference in the negative difference referred to in Article 23 (1) shall be taken into account in the amount of revaluations of assets or liabilities made in accordance with the provisions of the Article 5 of that Article.

2. The negative consolidation difference shall be entered under a heading of the consolidated balance sheet liability under this name, whether it is in response to a provision for risks and expenses as well as the deferred revenue character.

3. This difference may only be taken to the Consolidated Profit and Loss Account in the following cases:

(a) Where it is based, with reference to the date of acquisition of the relevant share, in the unfavourable development of the results of the undertaking concerned, or in the reasonable forecast of corresponding expenditure to the same to the extent that this forecast is made.

b) When corresponding to a realised gain. For these purposes, the surplus value shall be deemed to be realised when the corresponding good is put in place or its inventory falls. Participation in the capital of the subsidiary company shall also be considered to be carried out in the corresponding proportion, in whole or in part.

4. Where the provisions of Article 22 (3) and the sole effects of consolidation are used, the negative differences shall be considered as reserves of the Company holding the holding.

Subdirection 2. External Partner Participations

Art. 26. Participation of external partners.

1. The proportional share of own funds, on the date of the first consolidation, corresponding to third parties outside the group, shall be in the 'interest of external partners' item of the consolidated balance sheet, this amount shall not be reduced by the part of the outstanding disbursements relating to actions which correspond to those third parties. Such outstanding disbursements shall be shown separately in the balance sheet asset.

2. For the purposes of the preceding number, the provisions of Article 43 (2) shall be taken into account.

Subdirection 3. Disposition Investment-own funds in subsequent consolidations

Art. 27. Subsequent consolidations.

1. In subsequent consolidations the investment elimination-own funds will be realized in the same terms as those established for the first consolidation. The reserves generated by the dependent companies from the date of the first consolidation, including those that have not been passed by their profit or loss accounts, shall be included as a specific item under the name 'Company reserves'. consolidated ", after deduction from the part of those reserves corresponding to the external partners to be entered in the corresponding liability item of the consolidated balance sheet.

2. For the purposes of the preceding paragraph, the variation in own funds shall be calculated:

a) Excluding the result of the exercise, and

(b) Taking into account the adjustments to the results of previous financial years relating to group company operations, as referred to in Articles 36 and following.

3. In any event, the value adjustments corresponding to the investment in the capital of the dependent company made after their membership of the group shall be eliminated in advance.

Art. 28. Additional investments and increases in the percentage of participation.

1. In the event of increases in the shares in the capital of the dependent companies, the rules laid down in Articles 22 to 26 above shall apply, taking into account the adjustment of results by regulated internal transactions. in Articles 36 and following.

2. Where the new investment does not imply an increase in the percentage of participation in the dependent company, no new differences will arise from the first consolidation initially determined.

3. The increase in the percentage of participation without an additional investment will not imply the modification of the consolidation trade fund or the negative consolidation differences, where appropriate, where necessary, to amend the reserves in Consolidated companies with express indication in the Memory.

Art. 29. Reductions in the percentage of domain and investment.

1. In the case of reductions in the share of the share in the capital of the dependent companies, the rules laid down in the preceding articles shall apply and the consolidation trade fund or the negative difference of consolidation, as the case may be, and reserves in consolidated companies in the proportion in which the book value of the holding in the capital of the dependent company is reduced.

The share of the reserves in consolidated companies shall be considered, for the purposes of consolidation, reserves of the Company which has reduced its share, also in the corresponding proportion, the the results of the trade fund or the negative consolidation difference shall be taken into account in determining the outcome of the operation to be reported under the heading of extraordinary results in the Loss Account and Consolidated earnings; for these purposes, the results will also be taken into account until the date of the transmission, from the dependent Society.

2. Where the reduction in the percentage of participation leads to significant losses, that circumstance shall be taken into account in order to assess the loss of value of the remaining consolidation trade fund and, consequently, to amend the depreciation system.

3. Where a reduction in investment is made without a reduction in the share percentage, neither the consolidation trade fund nor the negative consolidation differences shall be modified. Without prejudice to the adjustments that correspond to the reserves of consolidated societies, on which to report in the Memory.

Subdirection 4. Disposal Investment-own funds in particular cases

Art. 30. Indirect participations.

The investment elimination-own funds in the indirect participation assumptions will be made in stages. First, the investment elimination-own funds corresponding to the dependent Company that does not have direct participation in the capital of any other dependent Company.

thereafter, the successive investment eliminations will be carried out-own funds, in the order derived from the above, taking into account for the quantification of the own funds that will be part of the latter the reserves in consolidated societies arising in the preceding stages.

Art. 31. Transfers of units between Group companies.

1. In the case of transfers between undertakings of the group of shares in the capital of a company of that group, the amounts of revaluations of assets, of the consolidation trade fund or of the difference shall not be altered. (a) a negative amount of the existing consolidation, and the results of such a transfer should be deferred until they are made against third parties. A third party shall be deemed to be held when the subsidiary or the subsidiary is no longer part of the group.

2. For these purposes, the result to be deferred is that which would result on the basis of the value of the holding, taking into account the reserves in generated consolidated companies, including those generated in the current financial year without prejudice to the which are in consolidated results, up to the date of the transmission or the date on which the dependent Company ceases to be part of the group.

Art. 32. Holdings in the capital of the dominant company.

The shares in the capital of the dominant company shall be included in a balance sheet item of the consolidated balance sheet, with the name 'shares of the dominant company'; they shall be without prejudice to their accounting value. make the appropriate value homogenization adjustments.

Art. 33. Mutual interests between dependent companies.

1. In the case of reciprocal participations between dependent companies, the difference in the first consolidation shall be calculated in accordance with Articles 22 and the following and without affecting the calculation of own funds. interrelationship.

2. In order to calculate reserves in consolidated companies from reciprocated dependent companies, the net change in each of them, in order to apply Article 27, shall be calculated taking into account that interrelationship.

3. In any event, account must be taken of the timing of the participations; in the event that reciprocal investments occur prior to the takeover of the parent, it will be necessary to carry out the calculations resulting from the interrelationship which previously they had not been considered in the preparation of previous consolidated accounts.

Subsection 5. Reciprocal Item Removals

Art. 34. Reciprocal credits and debits.

The consolidated annual accounts shall be disposed of in the consolidated annual accounts of the group's undertakings, after the adjustments made in accordance with Articles 17 to 20 have been made.

Art. 35. Expenses and revenue from internal operations.

The expenses and income of the group's enterprises shall be eliminated in the consolidated annual accounts after the adjustments have been made in accordance with the provisions of Articles 17 to 20.

Subsection 6. Deletion Of Results

Art. 36. Elimination of results by internal operations.

1. Internal operations shall mean those carried out between two companies in the group from the time the two companies became part of the group.

2. The entire result produced by the internal operations must be removed and deferred until third parties are outside the group.

The results to be deferred are both those of the exercise and previous exercises produced from the time of the first consolidation.

3. The results shall be understood as against third parties, in accordance with Articles 38 to 41 or where one of the companies participating in the operation ceases to be part of the group. The imputation of results in the Consolidated Profit and Loss Account will look, where appropriate, as a lower or higher amount of expenses.

4. When a dominant Company becomes a dependent Society it will be considered internal operations for the new group those that have that consideration in the other group.

5. The provisions of the preceding paragraphs shall apply in cases where a third party acts on its own behalf and on behalf of a group company.

6. If any assets are subject, for the purposes of the consolidated annual accounts, to an adjustment of value, depreciation, provisions, losses and results of disposal shall be calculated, in the consolidated annual accounts, on the basis of the above adjusted value.

7. The provisions relating to assets which have previously been the subject of such corrections in accordance with Article 34 shall be deleted in the consolidated annual accounts. Provisions arising from guarantees or similar provisions in favour of other undertakings in the group shall also be eliminated. Both eliminations will result in the corresponding adjustment in results.

8. The elimination of results from internal transactions carried out in the financial year will affect the number of consolidated results, while the elimination of results from internal operations of previous years will change the amount of the results. reserves. The adjustment in results and in reserves will affect the situation of the Society that has the good or the service.

Art. 37. Elimination of results by internal stock operations.

1. An internal stock transaction shall be considered as all those in which a Company of the group buys stocks from another group as well as from the group, irrespective of whether it is for the Company that sells such stocks or fixed assets.

2. The results produced in these operations shall be deferred, until the year in which they are carried out, in accordance with the following rules:

a) The amount to be deferred shall be equal to the difference between the purchase price or production cost, net of provisions, and the sale price.

(b) The result shall be understood when the acquired goods or the products from which the raw materials acquired are part of the goods are sold to third parties. In the case of losses, the result shall be understood when there is a depreciation in relation to the purchase price or production cost of the stocks and up to the limit of that depreciation. corresponding provision.

(c) Where acquired stocks are integrated, as a cost, in frozen assets, the rules of Article 38 shall apply.

3. Where, as a result of an internal transaction, an element of the fixed assets is affected as a stock, this change in affectation shall be included in the consolidated profit and loss account in the fixed asset (a) the amount of the cost, net of the internal results. Where such operations are significant, it shall be reported in the Memory.

Art. 38. Elimination of results by internal quiescing operations.

1. Internal operations of fixed assets shall be considered to be all those in which a Company of the group purchases items of fixed assets from another group also of the group, irrespective of whether it is for the Company that it sells fixed assets or stocks.

2. The results produced in these operations shall be deferred, until the year in which they are carried out, in accordance with the following rules:

a) The amount to be deferred will be equal to the difference between the purchase price or production cost, net of redemptions, and the sale price.

b) The result will be understood when:

The acquired fixed assets are sold to third parties.

The asset, which has been incorporated as cost of the fixed asset, is sold to third parties.

In the case that is not incorporated as the cost of an asset, in proportion to the amortization or low in inventory for each financial year.

Dealing with losses shall be understood when there is a depreciation in the purchase price or production cost of the fixed asset, net of write-downs, and up to the limit of that depreciation.

(c) Where the depreciation of the fixed asset is incorporated, as a cost, the stock shall be applied in accordance with the rules of Article 37.

3. Where, as a result of an internal transaction, an element of the circulating to the fixed assets is affected, this change in affectation shall be included in the consolidated profit and loss account in the item ' work carried out by the group for its fixed assets ", for the amount of the cost, net of the internal results. When these operations are significant, it will be reported in the Memory.

Art. 39. Removing results from internal service operations.

1. Internal services shall be considered for services in respect of all those in which a Group Company acquires services to another group as well as financial services.

2. The results produced in these operations shall be deferred until the year in which they are carried out, where the services acquired are incorporated as a cost of stock or fixed assets, in accordance with the following rules:

a) The amount to be deferred will be equal to the difference between the acquisition price or the cost of production and the sale price.

(b) The result shall be understood in accordance with the provisions of Articles 37 and 38.

Dealing with losses the result shall be understood when there is a depreciation in the purchase price or production cost of the assets, possibly net of redemptions, and up to the limit of the depreciation. For these purposes the corresponding provision should be provided.

3. Where such services are incorporated as a cost of the fixed assets, they shall be recorded under the consolidated profit and loss account in the item 'work carried out by the group for fixed assets' in the amount of the net cost of the fixed assets. internal results. When these operations are significant, it will be reported in the Memory.

Art. 40. Elimination of results by internal operations of financial assets.

1. Internal transactions in financial assets shall be considered as transactions in which a group company acquires financial assets from another group of the group, excluding equity holdings in the group's capital.

2. The results produced in these operations shall be deferred, until the year in which they are carried out, in accordance with the following rules:

a) The amount to be deferred will be equal to the difference between the net purchase price of provisions and the sale price.

(b) The result shall be deemed to have been made when the said financial assets are sold to third parties. In the case of losses, the result shall be understood when there is a depreciation in the purchase price of the assets and up to the limit of that depreciation, so that the corresponding provision must be provided.

Art. 41. Third-party acquisition of financial assets.

1. For the exclusive purposes of the formulation of consolidated accounts in the acquisition of assets issued by group companies, excluding equity holdings of such companies, a result may be produced.

2. The result shall be determined, where appropriate, by the difference between the redemption value, deducted the financial costs to be distributed in several financial years, and the purchase price of the asset, which is undermined by the interest accrued. and not charged.

3. The result determined in accordance with the foregoing paragraphs shall be in the Account of Loss and Consolidated Earnings as extraordinary results, under the name "profit from operations with shares of the dominant company". with financial liabilities of the group "or" losses from operations with shares in the parent company and with financial liabilities of the group ", as appropriate.

Art. 42. Removal of internal dividends.

1. Internal dividends shall be considered as income for the financial year of a group of the group which has been distributed by another company belonging to the group.

2. These dividends will be eliminated as reserves of the Perceptive Society.

3. In the case of dividends on account, they shall be disposed of with the debtor account representative of them in the Company that distributed them.

Subsection 7. Results for external partners

Art. 43. Attribution of results to external partners.

1. Participation in the consolidated profit or loss of the financial year corresponding to external partners shall be included in an independent item of the Consolidated Profit and Loss Account. Such participation shall be calculated on the basis of the proportion representing the participation of external partners in the capital of each dependent company, excluding own shares, and taking into account the results of such companies once made the adjustments and eliminations regulated in this chapter. In any event, the corresponding profit tax should be taken into account, as provided for in Article 60.

2. Where there is an excess between the losses attributable to external partners of a dependent Company and the equity portion of the Company that is proportionally corresponding to those external partners, prior to the adjustments and removals provided for in this Chapter, such excess shall be attributed to the dominant company provided that the external partners limit their liability to the amounts provided and there are no covenants or agreements on additional contributions.

3. In order to calculate the share corresponding to external partners in the result of the reciprocated dependent companies, the result of each of them shall be calculated taking into account, in addition to the adjustments and eliminations regulated in this chapter, the interrelationship arising from such participation.

CHAPTER IV

Method of proportional integration and put-on-equivalence procedure

Section 1. Proportional Integration Method

Art. 44. Method definition.

1. The application of the proportional integration method involves the incorporation into the Balance of the dominant company of the goods, rights and obligations of the Multigroup Society and the Loss and Profit Account of the first income and expenses which are in the determination of the outcome of the second, in the proportion representing the shares of the group's companies in the capital of the multi-group company, without prejudice to prior homogenizations and adjustments; and the relevant removals.

2. The accounts of the Multigroup Company to be incorporated by application of the preceding number shall be the consolidated accounts of that Company.

Art. 45. Applicable criteria.

1. The rules laid down in Articles 17 to 43 shall apply to the method of proportional integration, taking into account the following:

(a) The aggregation to the consolidated accounts of the various items of the Balance Sheet and the Profit and Loss of the Multigroup Company shall be made in the proportion representing the participation of the group's companies in the the capital of the capital, excluding the part corresponding to its own and similar shares.

(b) Credit and debits, revenue and expenditure and results from internal transactions shall be disposed of in the ratio referred to in the preceding subparagraph, but the differences which have not been eliminated shall be included in items Independent of the Balance Sheet and the Consolidated Profit and Loss Account as appropriate.

(c) No item corresponding to external partners of the Multigroup Company shall be shown in the consolidated accounts.

Section 2.

Art. 46. Description of the equivalence procedure.

1. The procedure for putting into equivalence replaces the book value by which an investment is included in the accounts of a group company for the amount corresponding to the percentage of the equity held by the participating company corresponds. This percentage shall be that resulting from the capital of the Company placed in equivalence, excluding its own shares.

This amount will be included in the consolidated balance sheet asset under the name "equity stakes".

2. For the purposes of the preceding number 1, the accounting value of the investment shall be the purchase price, calculated in accordance with the valuation rules laid down in the General Accounting Plan, and deducted the value adjustments, provisions or losses, made prior to the consideration of the associated Company.

3. They shall have the consideration of own funds defined as such in the General Accounting Plan, which are based on the amount of own shares.

Art. 47. Homogenization of information.

1. If the participating undertaking uses valuation criteria other than the group, the necessary adjustments shall be made, in advance of the entry into equivalence, in accordance with the terms of Article 18, provided that the necessary information and where such differences are significant.

2. The annual accounts of the participating undertaking which are the subject of an equivalence must relate to the same date as the consolidated accounts, and Article 17 (2) shall apply.

Paragraph 3 of that Article shall also apply provided that the necessary information can be obtained.

Art. 48. Adjustment arising from the difference between the investment and the own funds of the Companies placed in equivalence.

1. The book value shown in the accounts of the Company of the group holding the holding shall be compared to the amount of own funds corresponding to the share of the capital of the participating Company, excluding own shares, which represent such participation. This comparison shall be made on the basis of the accounting values that exist on the date on which the associated Company has such consideration. However, this comparison may be made on the basis of the accounting values that exist at the start date of the financial year in which the associated company is included for the first time on the consolidation perimeter.

2. The part of the difference, positive or negative, resulting from the previous comparison, and which is attributable to specific assets of the Company put into equivalence whose book value does not match the market value, shall be incorporated or deducted from the value of the participation in the consolidated balance sheet, subject to the limits laid down in Article 23 (4

.

The higher value attributed to the holding, as a consequence of the above paragraph, shall be reduced in subsequent years, from consolidated results, and as it depreciates or is low. the relevant heritage elements or are put to third parties.

3. The positive or negative difference which subsidises shall be treated in accordance with Articles 24 and 25 and shall be explicitly included in the consolidated balance sheet, in the 'consolidation trade fund' grouping, if it is positive; and 'negative consolidation difference', if not, and with a separation from that which corresponds to consolidated companies by global or proportional integration.

4. The "consolidation trade fund" and the "negative consolidation difference" can only be offset when they correspond to investments in the same associated company, reporting on that and carrying out the corresponding breakdowns in the Memory.

Art. 49. Modification of participation.

1. In a new acquisition of securities, the entry into equivalence of the investment and the new consolidation difference shall be determined in the same way as the first investment and in the percentages on the capital corresponding to such investment. additional.

2. In a reduction in the percentage of the domain, the representative account of the investment shall be valued for the percentage of the share in the capital and reserves of the investee, and the provisions of Article 29 shall apply.

Art. 50. Subsequent consolidations.

For each financial year after which the Company has been included for the first time on the consolidation perimeter, the participation accounted for by the entry into equivalence shall be modified, increased or decreased, for collect the variations experienced in the net worth of the associated Society.

For the purposes of these adjustments, the following rules must be taken into account:

(a) The value of the share shall be corrected to recognise the share of the investor in the results of the year obtained by the associated company. This amount must be explicitly stated in the Consolidated Income and Loss Account, under the name "participation in losses of companies placed in equivalence", or " participation in profits of companies set up in equivalence ", as appropriate.

However, in the event that the Participating Company incurs losses, the reduction of the representative account of the investment shall be limited to the own accounting value of the investment, without prejudice to the additional losses when the Company of the group holding the holding is committed to absorbing such losses, reporting all of this in the Memory.

(b) The result referred to in the preceding paragraph shall be obtained once the eliminations of results that are the result of transactions between the associated Company and the other companies forming part of the The consolidated set, as long as they are not carried out in front of third parties; on this circumstance will have to be reported in the Memory.

Such disposal shall be carried out in accordance with Articles 36 to 41, although it shall be exclusively to the percentage that on the results of the associated Company corresponds to the Company of the group and to the extent that You can obtain the necessary information for this.

c) They will also correct the value of the share, in the percentage that corresponds to the investment, the reserves generated, taking into account the adjustments and eliminations in the results of the previous years, by the Society associated from the date on which that Company was incorporated into the consolidation perimeter, including those that have not passed through its profit or loss accounts. This reserve increase shall be shown in the own funds heading of the consolidated balance sheet under the heading 'reserves in companies placed in equivalence'.

(d) The profits distributed by a Company placed in equivalence shall be considered as reserves of the Company holding the stake, reducing the value of the stake. In the case of dividends on account, the accounting value of the holding shall be reduced from the results of the Company that has received them.

Art. 51. Societies placed in equivalence.

When a Company is applied to the equivalence procedure, the accounts of that Company shall, for the purposes of the application of the provisions of the foregoing Articles, be, if applicable, its accounts. consolidated.

CHAPTER V

Other rules applicable to consolidation

Section 1. Changes to consolidation methods or procedures

Art. 52. Put in equivalence.

When a Company placed in equivalence in previous years becomes consolidated by the method of global or proportional integration, account shall be taken of any adjustments and removals that would have been made, in application of the The invention

to a method for the use of said

Art. 53. Global or proportional integration.

When investment in a consolidated company in previous years by the method of global or proportional integration becomes equivalent, the adjustments and removals that would have been made shall be taken into account. in application of the above consolidation methods.

Section 2. Annual Foreign Currency Account Conversion

Art. 54. Conversion of annual accounts into foreign currency.

The balance sheet items and the profit and loss account of foreign companies included in the consolidation by the method of global or proportional integration shall be converted to pesetas by applying one of the methods following:

a) The method of the closing change type.

b) Monetary method-non-monetary.

The closing exchange rate method shall be applied in general, except where the activities of the foreign company are closely linked to those of a Spanish company belonging to the group, in such a way that can be considered as an extension of the activities of the latter, in which case conversion shall be carried out using the monetary-non-monetary method. Under this method the result of the conversion must show a Balance and an Account of Losses and Earnings similar to those that would have been obtained from having kept the books of the foreign company in pesetas.

Art. 55. Method of the closing change type.

1. When the method of the closing exchange rate is applied, the conversion will be performed according to the following rules:

(a) All goods, rights and obligations shall be converted into pesetas using the exchange rate in force at the closing date to which the accounts of the foreign company relate to the consolidation.

(b) The items in the Loss and Earnings Account shall be converted using the exchange rates existing on the dates on which the corresponding transactions were made. A medium exchange rate may be used provided that it is duly weighted, depending on the volume of transactions carried out for each period (monthly, quarterly, etc.), in order to avoid the occurrence of seasonality.

(c) The difference between the amount of the foreign company's own funds, including the balance of the Loss and Earnings Account under subparagraph (b) above, converted to the historical exchange rate and the situation net assets resulting from the conversion of the assets, rights and obligations under paragraph (a) above, shall be entered, with the positive or negative sign corresponding to it, in the own funds of the consolidated balance sheet in the item 'conversion differences' means the proportion of the difference between the external partners and the will look at the "interests of external partners".

2. Where shares or units of foreign companies are held, the differences in conversion shall be considered as reserves of the company which has alienated them in the proportion corresponding to that disposal.

Art. 56. Monetary-non-monetary method.

When the monetary-non-monetary method is applied the conversion will be performed taking into account the following rules:

(a) Non-monetary items in the Balance Sheet shall be converted into pesetas using historical exchange rates. For these purposes, they shall be regarded as a historical exchange rate on the date on which each element became part of the company's assets or, where appropriate, the existing one to the date of the first consolidation. The value adjustments of non-cash items shall be converted using the exchange rate applicable to the corresponding items.

(b) The monetary items in the Balance Sheet shall be converted to the exchange rate in force at the closing date to which the accounts of the foreign company relate to the consolidation. For these purposes, the Treasury shall be considered as monetary items and all those that are representative of payment entitlements and payment obligations.

(c) The items in the Loss and Earnings Account, with the exception of the following paragraph (d), shall be converted using the exchange rates in force on the dates on which the corresponding transactions were made. A medium exchange rate may be used provided that it is duly weighted, depending on the volume of transactions carried out for each period (monthly, quarterly, etc.), in order to avoid the occurrence of seasonality.

d) Income and expenses related to non-cash items, such as endowments to write-downs and provisions, imputation to results of expenses and income to be distributed in various financial years, the cost to be considered in the the determination of profits or losses in the disposal of such items shall be converted to the historical exchange rate applied to the corresponding non-cash items.

e) The difference arising from the application of this conversion method shall be imputed to the results, shown separately in the item "positive conversion results" or "negative conversion results" as corresponds, although, may be treated according to the criterion followed by the dominant company in relation to the exchange differences arising from foreign currency transactions.

Art. 57. Foreign companies subject to high inflation rates.

When foreign companies are affected by high inflation rates, the balance sheet items and the profit and loss account should be adjusted, prior to their conversion to pesetas, for the purposes of the of changes in prices, in accordance with the method of the exchange rate of exchange or should be converted to pesetas according to the monetary-non-monetary method provided that, in the light of the circumstances that are present, the accounts thus converted allow to reflect the true image.

Inflation adjustments will be made in accordance with the rules established for the effect in the country where the foreign company is radiating.

In any case, the Memory of the existence of such situations, the criteria adopted and the rules used to make the adjustments will be reported.

Art. 58. Removing internal results.

The elimination of results by internal transactions will be performed considering the exchange rate prevailing at the date of the transaction. However, where the monetary-non-monetary method is applied, the internal results of non-monetary asset sales of foreign companies shall be eliminated in order for that element to be reflected in the book value of the non-monetary company and as provided for in Article 56 (a).

Art. 59. Societies placed in equivalence.

1. The Balance and Profit and Loss Account of foreign corporations placed in equivalence shall be converted to pesetas according to the method of the closing exchange rate.

2. The provisions of Articles 55, 57 and 58 shall apply to them. However, in cases where the companies subject to high inflation rates do not have accounts adjusted for the effect of the price changes and no information is available to calculate such adjustments or to apply the monetary-non-monetary method, such companies shall be excluded from the consolidation, and should be provided with such information in the Memory.

3. The conversion differences corresponding to the participation of the dominant company shall be entered in the pool of own funds of the consolidated balance sheet under the name 'conversion differences'. The value in the participation put in equivalence shall be increased or decreased, as appropriate, by the differences in conversion.

Section 3. Benefits Tax

Art. 60. Tax on accrued benefits.

For the calculation of the profit tax to be shown in the Loss and Consolidated Earnings Account as expenditure, the General Accounting Plan number 16 valuation standard shall be applied. permanent and temporary differences arising as a result of the application of the consolidation methods, i.e. taking into account the adjustments resulting from the application of the consolidation methods.

CHAPTER VI

Consolidated Annual Accounts

Section 1. Definition of Consolidated Annual Accounts

Art. 61. Documents integrating the consolidated annual accounts.

1. The consolidated annual accounts include the consolidated balance sheet, the consolidated profit and loss account and the consolidated report. These documents form a unit.

2. The consolidated annual accounts must be clearly worded and show the true image of the assets, the financial situation and the results of the group, in accordance with the Trade Code, the recast of the Companies Act. Anonymous, the General Accounting Plan and this provision.

3. Where the application of the legal provisions is not sufficient to show the true image, the additional information required to achieve this result shall be provided.

4. In exceptional cases, if the application of a legal provision in the field of accounting is incompatible with the true picture to be provided by the consolidated annual accounts, that provision shall not apply. In such cases, the consolidated report should indicate this lack of implementation, give sufficient reasons for its influence on the assets, the financial situation and the results of the group.

Art. 62. Formulation of consolidated annual accounts.

1. The consolidated annual accounts shall be established on the same closing date and for the same period as the annual accounts of the dominant company.

2. The consolidated annual accounts shall be drawn up by the directors of the dominant company within the same time limit laid down for the formulation of the annual accounts of the dominant company. For these purposes, the consolidated annual accounts must be signed by all the directors of the dominant company, and if any of them fail to be signed, an indication of the cause will be expressed.

3. The Balance Sheet, the Loss and Earnings Account and the Consolidated Memory must be identified. The group of companies to which they correspond and the financial year to which they relate shall be clearly indicated in each of those states.

4. The consolidated annual accounts shall be drawn up by expressing their values in pesetas; however, the values may be expressed in thousands or in millions of pesetas when the size of the figures so advises, indicating this in the annual accounts cost-over.

Art. 63. Structure of the consolidated annual accounts.

The structure of the consolidated annual accounts shall be adjusted as set out in the Annex to this Standard.

Art. 64. Consolidated balance sheet.

1. The consolidated balance sheet shall comprise, with due separation, the assets, rights and obligations of the dominant company and of the dependents to which the method of global integration applies, without prejudice to the adjustments and removals that proceed as well as the separate own funds and separate separate funds from the party corresponding to the external partners to the group.

In addition, the assets, rights and obligations of the multi-group companies, to which the method of proportional integration applies, shall be integrated into the consolidated balance sheet, in the percentage representing the group's participation. in their share capital and without prejudice to the adjustments and removals that they carry out.

2. The consolidated balance sheet shall also include specific items resulting from the application of the various consolidation methods and the equivalence procedure.

3. The consolidated balance sheet shall be taken into account:

(a) In each item, in addition to the figures for the financial year, the figures for the preceding financial year shall be included. However, for the first financial year, the consolidated accounts may be omitted from the figures for the preceding financial year.

(b) Where the figures for the current financial year are not comparable to those of the preceding year, either because there has been a change in the balance sheet structure or a change in imputation is carried out, to adapt the amounts of the preceding financial year for the purposes of its presentation in the current financial year. Where it is not possible to make such an adaptation, the reasons for such adaptation and comparison shall be mentioned in the Report.

When the composition of the companies included in the consolidation would have varied considerably in the course of an exercise, the information necessary for the comparison of annual accounts should be included in the report. consolidated is realistic.

(c) The items to which no amount corresponding in the financial year or in the preceding year shall not be included.

(d) The structure from one financial year to another shall not be modified except exceptional cases to be reported in the Memory.

e) New items may be added to those provided for in the Consolidated Balance Sheet model provided that their content is not provided for in the existing Balance Sheet model and a more detailed subdivision of those listed in the above model.

(f) Credit and debt with undertakings included in the consolidation by the procedure for putting in equivalence, or proportional integration in the non-eliminated party, shall be shown separately in the relevant headings of the asset or passive.

(g) Credit and debt to group, associated and multi-group companies, as defined in the terms of the General Accounting Plan, not included in the consolidation perimeter shall be shown separately in the corresponding headings of the asset and liability.

(h) For the purposes of the classification of the various headings between the short and long term and the shares of the dominant company, it shall be in accordance with paragraphs (i) to (q) of Standard 5. annual accounts contained in the General Accounting Plan.

Art. 65. Consolidated Profit and Loss Account.

1. The consolidated profit and loss account shall comprise, with due separation, the income and expenses of the dominant company and dependent companies to which the method of global integration applies, without prejudice to the adjustments and (a) the resulting removals, and the consolidated result, with the expression of the part corresponding to partners outside the group to be included in a specific item.

In addition, the income and expenses of the multi-group companies to which the proportional integration method applies, in the percentage representing the participation of the group in its share capital and without prejudice to any adjustments and removals that may be made.

2. The consolidated profit and loss account shall also include specific items arising from the application of the various consolidation methods.

3. The consolidated profit and loss account shall be taken into account:

(a) In each item, the figures for the financial year ending, corresponding to the previous financial year, shall be included. However, for the first financial year, the consolidated accounts may be omitted from the figures for the preceding financial year.

(b) Where the figures for the current financial year are not comparable to those of the preceding year, either because there has been a change in the structure of the Loss and Profit Account or an imputation change is made, the amounts of the preceding financial year shall be adjusted for the purposes of their presentation in the current financial year. Where it is not possible to make such an adaptation, the reasons for such adaptation and comparison shall be mentioned in the Report.

When the composition of the companies included in the consolidation would have varied considerably in the course of an exercise, the information necessary for the comparison of annual accounts should be included in the Memory consolidated is realistic.

(c) The items to which no amount corresponding in the financial year or in the preceding year shall not be included.

d) The structure from one year to the other cannot be modified except for expectional cases to be indicated in the Memory.

e) New items may be added to those provided for in the profit and loss model, provided that their content is not provided for in the existing ones, and a more detailed subdivision of those appearing in that model is made. model.

(f) Income and expenses arising from transactions with companies included in the consolidation by the matching procedure, or by the method of proportional integration in the non-eliminated part, shall be clear separately in the relevant revenue or expenditure headings.

g) The income and expenses arising from transactions with Group, associated and multi-group companies, as defined in the terms of the General Accounting Plan, not included in the consolidation perimeter will be shown separately in the relevant revenue or expenditure headings.

(h) When an internal transaction of the group is produced for which an item of the fixed assets is affected as a stock, the item "Immobilised transformed into stock" shall be created to reflect the change of occurred.

Art. 66. Consolidated memory.

Consolidated Memory will complete, expand and comment on the information contained in the Balance Sheet, and on the Consolidated Profit and Loss Account. It will be formulated taking into account that:

a) The contents of the Memory will collect the minimum information to be complied with, however, when the information requested is not significant, the corresponding sections will not be completed.

(b) As set out in Note 4 to the Report, it shall be adapted for presentation, in any case, in a synthetic manner and in accordance with the requirement of clarity.

(c) Companies that present as many consolidated companies are not required to formulate the consolidated financing table included as Note 25 to the Report.

Art. 67. Consolidated financing table.

1. The consolidated financing table, which forms part of the Memory, shall describe the resources obtained in the financial year, as well as the application or use of the funds in fixed or in circulation.

2. For the preparation of the financing table, the rules laid down in the General Accounting Plan shall be taken into account, without prejudice to the following rules:

(a) In each item, in addition to the figures for the financial year, the figures for the preceding financial year shall be included. However, for the first financial year, the consolidated accounts may be omitted from the figures for the preceding financial year.

(b) Where the figures for the current financial year are not comparable to those of the preceding year, either because there has been a change in the structure of the financing table or a change in imputation is made, to adjust the amounts of the preceding financial year for the purposes of its presentation in the current financial year. Where it is not possible to make such an adaptation, the reasons for such adaptation and comparison shall be mentioned in the Report.

When the composition of the companies included in the consolidation would have varied considerably in the course of an exercise, the information necessary for the comparison of annual accounts should be included in the report. consolidated is realistic.

(c) In the financing table, the transactions formalised in the financial year between consolidated companies by means of the method of global integration shall not be included in the financing table, and in the corresponding proportion in the case of entities consolidated by the method of proportional integration, which constitute a reciprocal origin and application of funds.

d) For the determination of "Resources from or applied in operations" the consolidated result of the financial year shall be corrected to eliminate the amortisation of the consolidation trade fund or the allocation to the results of the negative consolidation difference, as well as the profits or losses of the companies placed in equivalence.

e) The effect on the change in consolidated working capital produced by the acquisition or disposal of holdings in companies which for the first time must be integrated or excluded from the consolidated set, respectively, shall be displayed as a single item in the financing table, as a source or application of funds, as appropriate, and with a separation from the effect caused by acquisitions and by disposal.

In these cases, and as an annex to the financing table, the following information concerning the date of acquisition or disposal must be mentioned for the set of acquired companies and for the set of companies:

Amount of frozen assets.

Amount of long-term liabilities.

Amount of working capital.

Purchase price or, where applicable, the disposal of the units.

f) When a Company put in equivalence becomes consolidated by the method of global or proportional integration, or vice versa, the effect of such a change in the variation of consolidated working capital shall be shown as a single item in the financing box within the sources or applications as appropriate.

For these purposes, the information set out in the preceding paragraph shall be displayed as an annex to the financing table.

g) The conversion to pesetas of the financing table of foreign companies included in the consolidation by the method of global or proportional integration shall be made using the exchange rates in force on the dates in that the corresponding transactions were made. A medium exchange rate could be used provided that it is duly weighted, depending on the volume of transactions carried out for each period (monthly, quarterly, etc.). In the financing table, the effect on the working capital produced by the change in the exchange rates shall be shown as the origin or application of funds, as appropriate.

Consolidated memory content

1. Dependent companies

Identification of dependent Societies included in the consolidation with mention of:

Name and address.

Amount of the nominal share and percentage of your capital held by the companies of the group or persons acting on their own behalf, but on behalf of them, specifying the holding company in both cases.

Item 2. of these rules, which determines your configuration as a dependent Society.

Activities performed.

Where appropriate, reason for exclusion from the application of the method of global integration, justifying the decision and indicating the effect of the application of the procedure for the equivalence of the assets, the the financial situation and the results of all the companies included in the consolidation.

Economic exercise and closing date of the last annual accounts and, in case, of the intermediate accounts drawn up for consolidation.

Identification of dependent Societies that are excluded from the consolidation perimeter, with mention of:

Name and address.

Amount of the share and percentage of your capital held by the group's companies or persons acting on their own behalf, but on behalf of them, specifying the holding company in both cases.

Supposed to determine your configuration as a Dependent Society.

Activities that you perform.

Reason for exclusion and justification.

Capital, reserves, and results of the last known exercise.

2. Associated and multi-group companies

Identification of associated and multi-group societies with mention of:

Name and address.

Amount of the nominal share and percentage of your capital held by the companies of the group or persons acting on their own behalf, but on behalf of them, specifying the holding company in both cases.

Supposed to determine your configuration as an associated or multigroup Society.

Activities performed.

In the case of multi-group companies: Identification of persons or entities managing jointly with the group, as well as the method of consolidation applied, justifying the use, where appropriate, of the method of equivalence.

Identification of the associated and multi-group societies excluded from the consolidation perimeter, indicating the same information as noted in note 1 above for the case of exclusion of dependent societies.

3. Basis for the presentation of consolidated annual accounts

a) Faithful image:

Exceptional reasons why, in order to show the true picture, no legal provisions have been applied in accounting matters and influence of such action on the group's assets, financial situation and results.

Further information that may be necessary to include when the application of the legal provisions is not sufficient to show the true image.

b) Accounting principles:

Exceptional reasons justifying the failure to implement a mandatory accounting principle, indicating the impact on the group's equity, financial position and results.

c) Comparison of information:

Exceptional reasons justifying the modification of the balance sheet structure and the consolidated profit and loss account of the previous year.

Explanation of the causes that prevent the comparison of the consolidated annual accounts of the current exercise with those of the precarious one.

Explanation of the adjustment of the amounts of the preceding year to facilitate the comparison, and otherwise, the impossibility of making this adaptation.

In the exercise of a change in the perimeter of the consolidation or in the consolidated set, the name and address of the Companies that have produced such changes shall be reported. and indicating overall the effect that such variation has had on the equity, financial situation and results of the consolidated group in the current year with respect to the preceding year.

(d) Information on significant transactions between companies in the consolidation perimeter, where the social exercise of one of them ends on a previous date in no more than three months to the date of the closing of the consolidated accounts.

4. Valuation rules

The accounting criteria applied for the following items shall be indicated:

a) Consolidation Trading Fund; indicating the criteria used in its calculation and amortization.

Justification, if any, for the amortization of the consolidation goodwill over a period of more than five years.

b) Negative difference of consolidation; indicating the criteria used in its calculation and imputation, where applicable, to the Consolidated Profit and Loss Account.

c) Transactions between companies included in the consolidation perimeter; indicating the criteria applied in the elimination of results and reciprocal credits and debits, by internal transactions.

d) Homogenisation of items in the individual accounts of the companies included in the consolidation perimeter; indicating the criteria applied for such homogenisation.

e) Conversion of annual accounts of foreign companies included in the consolidation perimeter; indicating the method applied, the option chosen among those permitted in Article 55 (b), or (c) of Article 56; and the treatment of conversion differences arising.

f) Establishment expenses; indicating the criteria used for capitalization and amortization.

g) Intangible fixed assets; indicating the criteria used for capitalization, amortization, provision of provisions and, where appropriate, sanitation.

Justification, where applicable, for the amortisation of the goodwill over a period of more than five years.

The criteria for accounting for leasing contracts will also be reported.

h) Fixed assets; indicating the criteria for:

Amortization and provision of provisions.

Capitalization of interest and exchange differences.

Accounting for extension, modernization, and enhancements costs.

Determining the cost of the jobs performed by the group for your quiescing.

The items of the fixed assets held in the asset for a fixed amount.

Value updates practiced under a law.

i) Short and long-term transferable securities; indicating the valuation criteria, and in particular specifying the criteria for valuation corrections.

j) Short-term and long-term non-commercial credits; indicating the valuation criteria, and in particular, specifying those followed in the valuation corrections.

k) Stocks; indicating the valuation criteria, and in particular, specifying the criteria for value adjustments.

In addition, the criteria for the valuation of the items on the asset for a fixed amount shall be specified.

l) Shares of the dominant company; indicating the valuation criteria.

m) Grants; indicating the criterion of imputation to results.

n) Provisions for pensions and similar obligations; indicating the accounting criterion and making a general description of the method of estimation and calculation of each of the risks covered.

(o) Other provisions for risks and expenses; indicating the accounting criterion and making a general description of the method of estimation and calculation of the risks or expenses included in those provisions.

p) Short-and long-term debts; indicating the valuation criteria, as well as the imputation criteria for deferred interest or interest expense.

q) Benefits tax; indicating the criteria used for accounting.

r) Foreign currency transactions; indicating the following:

Foreign Currency Balances Valuation Criteria.

Procedure used to calculate the exchange rate in pesetas of assets that are currently or at their origin expressed in foreign currency.

Accounting criteria for change differences.

s) Revenue and expenses.

Initial balance.

Entries or envelopes.

Outputs or reductions.

Short-term transfers.

Final Balance.

12.3 Information, distinguishing between short and long term, about:

Amount of foreign currency credits according to the currency types in which they are contracted and, where applicable, coverage of existing exchange differences.

Amount of credits that expire in each of the five years following the end of the financial year, and the remainder until its cancellation.

Credits affected by guarantees.

Characteristics and amount of any guarantees received in connection with the credits granted by the Company (such as hobbies, endorsements, garments, domain reserves, repurchase agreements, etc.).

Amounts of accrued and uncollected interest.

Any other substantial circumstance affecting the ownership, availability, or valuation of the credits, such as: Litigation and other such.

5. Consolidation Trading Fund

5.1 Analysis of the movement of the consolidated balance sheet items included in this grouping, indicating:

Initial balance.

Additions.

Reductions.

Amortization.

Final Balance.

The operations that have originated the additions and reductions must be synthetically described when they are significant.

5.2 Breakdown of the final balance based on the shareholdings that have been generated by the consolidation goodwill.

6. Negative consolidation differences

6.1 Analysis of the movement of the consolidated balance sheet items included in this grouping, indicating:

Initial balance.

Additions.

Reductions.

Imputation to results.

Final Balance.

The operations that have originated the additions, reductions, and imputations to results must be described, when they are significant.

6.2 Breakdown of the final balance based on the shareholdings that have generated the negative consolidation differences.

7. Holdings in companies placed in equivalence

Breakdown of this item, by Societies placed in equivalence, indicating the movement of the exercise and the causes that have originated it.

8. Establishment expenses

Analysis of the movement of this consolidated balance sheet item during the financial year; indicating the following:

Initial balance.

Additions.

Amortization.

Sanitation.

Final Balance.

If there is any significant departure, by its nature or by its amount, the relevant additional information shall be provided.

9. Intangible fixed assets

Analysis of the movement, during the financial year, of this consolidated balance sheet item and its corresponding accumulated write-downs and provisions, indicating the following:

Initial balance.

Entries or envelopes.

Increase by transfers or transfer of another account.

Outputs, casualties, or reductions.

Decreases by transfers or move to another account.

Final Balance.

The assets held under the financial leasing scheme shall be reported: Cost of the good at source, excluding the value of the option of purchase, duration of the contract, years after, quotas satisfied in previous years and in the exercise, pending fees, and value of the purchase option.

Significant elements that may exist under this heading will be detailed and additional information on their use (patents, concessions, etc.), expiry date and amortization period will be provided.

10. Tangible fixed assets

10.1 Analysis of the movement, during the financial year, of each item of the consolidated balance sheet included in this item and its corresponding accumulated write-downs and provisions; indicating the following:

Initial balance.

Entries or envelopes.

Increase by transfers or transfer of another account.

Outputs, casualties, or reductions.

Decreases by transfers or move to another account.

Final Balance.

When value updates are performed, the following must be indicated:

Act that authorizes it.

Companies in the consolidable aggregate that have received the Update and Percentage Act that represent the assets that are the subject of the revaluation on the total amount of the consolidated assets corresponding to the same category of goods.

Societies placed in equivalence that have been accepted into the update law.

Amount of the revaluation of each item, as well as the increase in accumulated amortization.

Effect of the update on the endowment to amortisation and, therefore, on the consolidated result of the next financial year.

10.2 Information about:

Amount of accumulated net revaluations, at the end of the financial year, carried out under a law and the effect of such revaluations on the allocation to amortisation and provisions in the financial year.

Amortization Coefficients used by item groups.

Characteristics and amount of investments in tangible fixed assets acquired from Group and multi-group companies or associated companies excluded from the consolidation perimeter and associated companies.

Characteristics of investments in tangible fixed assets located outside the Spanish territory, with an indication of their book value and the corresponding accumulated depreciation.

Amount of interest and exchange differences capitalized on the exercise.

Property characteristics did not directly affect the holding indicating its book value and the corresponding accumulated depreciation.

Amount and characteristics of fully amortized, technically obsolete or unused assets.

Collateral to collateral and reversion.

Grants and donations received related to the tangible fixed assets.

Firm commitments to purchase and predictable sources of financing, as well as firm commitments to sell.

Any other circumstance of a supporting nature affecting property of the fixed assets such as: Leases, insurance, litigation, liens and similar situations.

11. Transferable securities

11.1 Breakdown of transferable securities by term of maturity (short and long term), by type of securities (fixed and variable income) and by issuers (companies placed in equivalence, and other debtors), with an indication of corresponding provisions.

11.2 Analysis of the movement of the exercise of fixed income and long-term variable income securities; and their corresponding provisions, indicating:

Initial balance.

Entries or envelopes.

Outputs or reductions.

Short-term transfers.

Final Balance.

11.3 The name and address of other companies, not included in Notes 1 and 2, in which the companies which form the consolidated group and those referred to in Article 11 (2) and (e), hold directly or by a person acting on his own behalf, but on behalf of them, a percentage not less than 5 per 100 of his capital. Participation in the capital, as well as the amount of equity capital and the amount of the result of the financial year in the last approved accounts of the Company, shall also be indicated. Such information may be omitted where they are only of negligible interest in respect of the true image to be expressed by the consolidated accounts. The indication of own capital and the result may also be omitted where the Company concerned does not publish its balance sheet and at least 50 per 100 of its capital is held directly or indirectly by the abovementioned companies.

11.4 Information, distinguishing between short and long term, about:

Transferable securities delivered or affected by collateral.

Notifications made, in compliance with the provisions of Article 86 of the recast of the Law on Limited Companies, to the companies involved, directly or indirectly, in more than 10 per 100.

Firm commitments to purchase and predictable sources of financing, as well as firm commitments to sell.

Amount of fixed income securities, which are sold in each of the five years following the end of the financial year, and the remainder until their last maturity.

Breakdown of transferable securities according to the currency types in which they are instrumented and, where applicable, coverage of existing exchange differences.

Amount of accrued and uncollected interest.

Average rate of return on fixed income values, by homogeneous groups.

Any other substantive circumstances affecting transferable securities such as: Litigation, liens, etc.

12. Non-commercial credits

12.1 Breakdown of non-commercial credits distinguishing by term of maturity (short and long term) and debtor (Companies placed in equivalence and other debtors).

12.2 Analysis of the movement of the exercise of non-commercial long-term loans and their corresponding provisions, indicating:

Initial balance.

Entries or envelopes.

Outputs or reductions.

Short-term transfers.

Final Balance.

12.3 Information, distinguishing between short and long term, about:

Amount of foreign currency credits according to the currency types in which they are contracted and, where applicable, coverage of existing exchange differences.

Amount of credits that expire in each of the five years following the end of the financial year, and the remainder until its cancellation.

Credits affected by guarantees.

Characteristics and amount of any guarantees received in connection with the credits granted by the Company (such as hobbies, endorsements, garments, domain reserves, repurchase agreements, etc.).

Amounts of accrued and uncollected interest.

Any other substantial circumstance affecting the ownership, availability, or valuation of the credits, such as: Litigation and other such.

13. Stocks

13.1 Breakdown of stocks by homogeneous groups of activities and degree of termination with indication of corresponding provisions.

13.2 Information about:

Firm purchase and sales commitments, and future contracts relating to stocks.

Limitations on the availability of stocks by guarantees, pignorations, sureties and other similar reasons, indicating the items to which they affect and their temporary projection.

Amount of stocks that are listed in the asset by a fixed amount.

Any other substantive circumstances affecting the ownership, availability or valuation of stocks, such as: Litigation, insurance, liens, etc.

14. Own funds

14.1 Analysis of the movement of the exercise in the items included in this grouping, indicating the origins of the increases and the causes of the decreases.

14.2 Breakdown, by Companies included in the Perimeter Of Consolidation, of the headings "reserves in consolidated societies by global or proportional integration", "reserves in societies placed in equivalence" and " differences conversion ".

14.3 Information about:

Number of shares in the dominant company and nominal value of each of them, distinguishing by classes of shares, as well as the rights granted to them and the restrictions they may have. Also, where appropriate, the outstanding disbursements as well as the date of enforceability shall be indicated for each class of shares. The latter information will also include dependent companies.

Ongoing Capital Increases of Group Companies, indicating the time allowed for the subscription, the number of shares to subscribe, their nominal value, the issue premium, the initial disbursement, the rights that incorporate and restrictions that they will have, as well as the existence or non-preferential rights of subscription in favour of shareholders or debenture holders.

Amount of capital authorised by the shareholders ' meetings of the group's companies, indicating the period to which the authorisation is extended.

Rights incorporated into the founder's parties, enjoyment bonds, convertible bonds and similar securities or rights of the group's Societies, with an indication of their number and the extent of the rights they confer.

Specific Circumstances that restrict the availability of reservations.

Number, nominal value and average purchase price of the shares of the dominant company held by the companies of the group or of a third party on behalf of them, specifying their intended final destination and the amount of reserves for the acquisition of shares in the dominant company.

Indication of the Company's or related companies, in accordance with the provisions of Note 22, which, directly or through fililales, have a holding equal to or greater than 10 per 100 of the capital of some Group company.

Shares of Group Companies admitted to trading.

15. Interests of external partners

Breakdown of this grouping by indicating for each Dependent Society:

The movement that occurred in the exercise and the causes that originated it, and

The composition of the balance at the end of the exercise by concepts (capital, reserves, revaluation reserves, results, etc.).

16. Grants

Information about the amount and characteristics of the grants received.

Information about compliance or non-compliance with the conditions imposed for the perception and enjoyment of the grants.

17. Provisions for risks and expenses

17.1 Breakdown of the various items included in this pool.

17.2 Analysis of the movement of the exercise of pension provisions and similar obligations, corresponding to assets and liabilities, indicating:

Initial balance.

Envelopes, distinguishing from their origin (financial expenses, personnel expenses ...).

Applications.

Final Balance.

In addition, the risks covered and the type of capitalization used will be indicated.

17.3 Analysis of the movement of the exercise of the remainder of the items included in this pool, indicating:

Initial balance.

Envelopes.

Applications.

Final Balance.

The risks and expenses covered will also be indicated.

18. Non-commercial debts

Information, distinguishing between short and long term, about:

Amount of the debts that are due in each of the five years following the end of the financial year and the rest until its cancellation. These indications shall be separately for each of the debt items in accordance with the consolidated balance sheet model.

Amount of debts with collateral.

Breakdown of foreign currency debts according to the currency types in which they are engaged and, where applicable, coverage of existing exchange differences.

Amount available on discount lines, as well as credit policies granted to the group with their respective limits.

Amount of accrued and unpaid financial expenses.

Detail of bonds and bonds in circulation at the end of the financial year, with separation of the principal characteristics of each one (interest, maturity, guarantees, convertibility conditions, etc.).

19. Tax situation

Explanation of the difference that exists between the accounting result of the exercise and the tax result, according to the following scheme.

Reconciliation of the result with the tax base of the Corporate Tax

Consolidated accounting result of the financial year. ...............................................................

Augments

Decreases

Permanent Differences

From Individual Societies ....................

.........................

.........................

..........................

-Of the consolidation settings ..................

temporary:

- Individual societies:

● With source in exercise .........................

.........................

.........................

.........................

● With previous exercise source ..............

.........................

.........................

.........................

-From consolidation settings:

● With source in exercise ........................

.........................

.........................

.........................

● With previous exercise source ..............

.........................

.........................

.........................

Compensation of negative tax bases from previous exercises ...............

(........................)

Taxable Base (fiscal result) ...........................................................................

.........................

In addition, the following information must be indicated:

Application of the consolidated tax regime, with indication of the group companies to which it affects.

Balance and movement in the exercise of the deferred and anticipated benefit accounts and the tax credit for loss compensation.

Negative tax bases from previous exercises pending tax compensation, indicating the time and conditions to be able to do so.

Information about the nature and amount of tax incentives applied during the financial year, such as deductions and reliefs to investment, job creation, etc., as well as to deduct.

Commitments acquired in relation to tax incentives.

Any other substantive circumstances in relation to the tax situation.

20. Guarantees committed to third parties and other contingent liabilities

Overall amount of guarantees committed with third parties, as well as the amount of those included in the liabilities of the Balance Sheet. This information shall be broken down by class of guarantees.

Nature of the contingencies, system of assessment of the estimation and factors of which it depends, with indication of the eventual effects on the patrimony and on the results; if any, the reasons that prevent it will be indicated assessment as well as the existing maximum and minimum risks.

21. Revenue and expenditure

Information about:

Transactions made with Group and Multigroup Companies excluded from the consolidated set and with Associated Companies, detailing the following:

Purchases made and return of purchases and "rappels".

Sales made and sales return and "rappels".

Services received and provided.

Interest paid and loaded.

Dividends and other distributed profits.

Transactions made in foreign currency, with separate indication of purchases, sales and services received and provided, breaking down the information corresponding to foreign companies that are part of the whole consolidable.

The distribution of the net amount of the business figure corresponding to the group's ordinary activities, by categories of activities, as well as by geographic markets. The omission of the information required at this point must be justified where, by its nature, they may cause serious damage to the Company, in this case reporting on the net amount of the turnover corresponding to each Company which is part of the consolidable set.

Average number of persons employed during the year in Group Societies, distributed by category.

Extraordinary expenses and revenues, including revenue and expenses for previous years.

Breakdown by foreign societies of positive or negative conversion results.

Contribution of each Company included in the perimeter of consolidation to consolidated results, with indication of the share corresponding to external partners.

Results obtained in the disposal of:

Obligations issued by Companies included in the consolidated set.

Shares in the capital of companies included in the consolidation perimeter.

22. Relations with related companies

Information on transactions made during the financial year, by the group's companies, as well as debits and credits existing at the end of the financial year, with natural or legal persons directly or indirectly linked to the dominant company, in accordance with the criteria laid down in standard 11. of the rules for drawing up the annual accounts of the General Accounting Plan.

23. Other information

Information about:

Amount of salaries, allowances and remuneration of any kind accrued in the financial year by members of the management body of the dominant company, whatever their cause and the group's, multigroup or group required to satisfy it. This information shall be given in a comprehensive manner by means of remuneration.

Amount of advances and credits granted by any group of the group, multigroup or associated with the group of members of the management body of the dominant company, indicating the interest rate, characteristics essential and amounts returned, as well as the obligations assumed on behalf of them as collateral.

Amount of pension and life insurance obligations incurred by any group, multigroup or associated company in respect of the former and current members of the management body of the Company dominant. This information shall be given in a comprehensive manner and with separation of the benefits in question.

24. Post-shutdown events

Additional information on events occurring after the closure that do not affect the consolidated annual accounts to that date, but whose knowledge is useful to the user of the financial statements. The dependent societies which have ceased to be part of the group, as well as those which have been incorporated into it, shall be reported.

Additional information on events occurring after the closure of the consolidated annual accounts affecting the implementation of the operating business principle.

25. Consolidated financing table

When the consolidated financing table is formulated, the financial resources obtained in the financial year shall be described, as well as their application or employment and the effect of such operations on the capital. Consolidated working, based on the attached model.