ANNUAL REPORT / MEMORIA · 2016. 6. 1. · El año 2015 acabó con la publicación del Reglamen-to...
Transcript of ANNUAL REPORT / MEMORIA · 2016. 6. 1. · El año 2015 acabó con la publicación del Reglamen-to...
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ANNUAL REPORT / MEMORIA
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ANNUAL REPORTMEMORIA2015
www.geroa.eus
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ÍNDICE INDEX
INFORME DE GESTIÓN / MANAGAMENT REPORT..................DICTAMEN ACTUARIAL / ACTUARY’S REPORT........................AUDITORÍA / AUDITOR’S REPORT.........................................CUENTAS ANUALES / ANNUAL ACCOUNTS..........................
05313741
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ANNUAL REPORTMEMORIA2015
www.geroa.eus
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INFORME DE GESTIÓN MANAGAMENT REPORT
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INFORME DE GESTIÓN CORRESPONDIENTE AL EJERCICIO 2015 DE GEROA PENTSIOAK E.P.S.V
MANAGEMENT REPORT FOR FISCAL YEAR 2015 FOR GEROA PENTSIOAK Voluntary Social Welfare Institution
Estimado Socio/a:
En el año 2015 y fruto del afán por conjugar las nece-sidades de nuestros socios con los objetivos de la Enti-dad, en GEROA hemos procedido a introducir una serie de cambios tanto en nuestra operativa de prestaciones como en la forma de comunicarnos con vosotros.
Tras el análisis de los resultados de las encuestas de satisfacción en los que observábamos que el pago de las prestaciones en forma de renta vitalicia no era del agrado de nuestros socios, hemos pasado a un sistema basado en rentas temporales donde cada socio tiene la certeza de que cobrará todos sus aho-rros. Por ello, hemos modificado nuestros Estatutos y Reglamento de Prestaciones.
Adicionalmente, y de acuerdo con los bajos tipos de interés, hemos adaptado el tipo de interés técnico para calcular los compromisos por pensiones que se tenían a 31/12/2014 pasando al 2,5%, todo ello sin menoscabo para los socios y manteniendo los más altos niveles de solvencia, que a cierre del ejercicio se sitúan en el 41,17%.
GEROA PENTSIOAK lleva realizadas desde su inicio en 1996, 35.855 prestaciones por un importe de casi 333 millones de euros.
Destacable ha sido también la acogida del envío de una carta a aquellos socios mayores de 65 años que no habían solicitado la prestación, ya que de las
Dear Member,
In 2015, as a result of our desire to balance the needs or our members with the goals of the Institution, here at GEROA, we have implemented a series of changes both in our benefits operations and the way we communicate with you.
After analysing the results of the satisfaction surveys in which we observed that a lifetime annuity was not to our members’ liking, we changed to a system based on temporary annuities wherein each member can be certain that he will receive all his savings. We have therefore amended our Statutes and Benefits Regulation.
Additionally, and in accordance with the low interest rates, we have adjusted the technical interest rate to calculate the pension commitments as of 31/12/2014 changing to 2.5%, all without any loss for members, while still maintaining the highest solvency levels, which at the end of the last fiscal year were at 41.17%.
Since its inception in 1996, GEROA PENTSIOAK has granted 35,855 benefits amounting to almost 333 million euros.
The response to a letter sent to members older than 65 years old who still hadn’t requested the benefit was also remarkable. Of the 2,802
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2.802 cartas enviadas, 1.019 han cobrado ya sus derechos.
Por otro lado, y de acuerdo con el compromiso de mejorar nuestra comunicación, también en 2015 he-mos actualizado nuestra página web www.geroa.eus, haciéndola más amigable, funcional y adaptada a las nuevas tecnologías, lo que permite su perfecto uso en las diferentes clases de dispositivos.
Sin perder de vista otro de nuestros valores como es el compromiso con la sociedad, hemos estado tra-bajando en la adhesión a los Principios de Inversión Responsable de las Naciones Unidas, lo que conse-guimos en Diciembre, siendo uno de los 10 fondos fi rmantes a nivel del Estado.
En lo que respecta a nuestro compromiso por la me-jora continua, un año más nos ha sido otorgado el certifi cado ISO 9001 demostrando nuestros están-dares de calidad.
El año 2015 acabó con la publicación del Reglamen-to de la Ley 5/2012 de EPSV por lo que durante el 2016 GEROA volverá a modifi car sus Estatutos y Reglamento para adecuarlos a esta nueva normativa.
El 2016 es un año especial para nosotros no sólo por todos estos cambios normativos y organizativos que nos esperan sino porque GEROA cumple ya 20 años ahorrando contigo y pagando complementos de pensiones públicas.
letters sent, 1,019 are already enjoying their rights.
In addition, and in accordance with our commitment to improve our communication, in 2015, we updated our website www.geroa.eus to make it more user-friendly, functional and adapted to the new technologies, so that it can be used on different types of devices.
Without losing sight of other values such as our commitment to society, we have been working on the membership of the Principles for Responsible Investment of the United Nations. This we attained in December, being one of the 10 signatory funds at State level.
To top it off, we were awarded the ISO 9001 certifi cate for yet another year as a testament to our quality standards.
2015 ended wi th the publ icat ion of the Regulations of Law 5/2012 on Voluntary Social Welfare Agencies, for which GEROA will amend its Statutes and Regulations once again in 2016 to adapt them to these new guidelines.
2016 is a very special year for us, not only because of all these regulatory and organisational changes that await us, but also because it has been 20 years now since GEROA fi rst started saving with you and paying supplements to public pensions.
Manuel Guerrero IgeaPresidente de GEROA PENTSIOAK EPSV Chairman of GEROA PENTSIOAK EPSV
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GEROA PENTSIOAK es una EPSV de empleo consti-tuida paritariamente entre Patronal y Sindicatos, cuyo objetivo es complementar la pensión pública de los trabajadores de las empresas de los sectores adhe-ridos. Para ello las aportaciones realizadas paritaria-mente durante la vida laboral de los trabajadores se gestionan por un equipo técnico involucrado y cuya labor es realizarlo de manera independiente, eficiente y sostenible a largo plazo, tratando de reducir la pér-dida de poder adquisitivo de los pensionistas.
COLECTIVO DE LA ENTIDAD
A fecha 31/12/2015 20 sectores y 29 empresas se encuentran adheridos a la Entidad. El detalle de los sectores es el que se muestra a continuación:
GEROA PENTSIOAK is a Voluntary Social Welfare employment Institution, constituted equally between the Employers and the Unions, which aims to complement the public pensions of workers in companies belonging to adhering sectors. In order to do this, the contributions made over the employees working life are managed by a committed technical team who work independently, efficiently and sustainably in the long-term, to reduce the loss of purchasing power of the pensioners.
COLLECTIVES FORMING THE INSTITUTION
On 31/12/2015 20 sectors and 29 companies be-long to the Institution. The breakdown may be seen below:
NUESTRA MISIÓN ANNUAL REPORT 2015
METALMETAL
VIDRIOGLASS
COMERCIO PIELLEATHER TRADE
TRANSP. MERCANCÍACARRETERA
ROAD HAULAGE
CERÁMICACERAMICS
CONSTRUCCIÓNCONSTRUCTION
COMERCIO METALMETAL TRADE
LOCALES ESPEC. Y DEPORTESPECIALIST SHOPS AND
SPORT
INDUSTRIA MADERAWOOD INDUSTRY
PAPEL CARTÓNPAPER-CARD
LIMPIEZASCLEANING
OFICINAS Y DESPACHOSOFFICES
TRANSITARIOSFREIGHT
INDUSTRIA MUEBLEFURNITURE INDUSTRY
ESTACIONES DE SERVICIOSERVICE STATIONS
COMERCIO GENERALGENERAL TRADE
PANADERÍASBAKERIES
COMERCIO TEXTILTEXTILE INDUSTRY
MAYORISTAS DE FRUTASWHOLESALE FRUIT SELLERS
INSTAL. POLID. DE TIT PÚBLICAPUBLIC SPORTS CENTRES
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Por otro lado, la distribución del nº de socios es la siguiente:
Furthermore, the distribution of the number of members is as follows:
PIRAMIDE DE POBLACIÓN POPULATION PYRAMID
ACTIVOSACTIVE
SUSPENSOINACTIVE
PASIVOSPASSIVE
BENEFICIARIOSBENEFICIARIES
103.362 146.416 1.653 569
La Edad Media del colectivo de activos es de 42,72 años.
The average age of the actives is 42.72
BENEFICIARIES - MEN BENEFICIARIES - WOMENPASSIVE MENACTIVE MEN
INACTIVE MEN
PASSIVE WOMENACTIVE WOMEN
INACTIVE WOMEN
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En el ejercicio 2015 no se han producido incremen-tos en los porcentajes de aportación de ninguno de los 20 sectores incorporados.
Los porcentajes de aportación referenciados a la base de contingencias comunes del trabajador que se han aplicado durante el ejercicio son los siguientes:
The 2015 fiscal year saw no increase in the percentages of contributions of any of the 20 sectors.
The percentages of contributions referenced to the workers common contingencies base applied over the year are as follows:
EVOLUCIÓN DE LAS APORTACIONES
EVOLUTION OF CONTRIBUTIONS
MetalCerámicaMadera
TransitariosPanaderías
VidrioConstrucción
PapelMueble
Comercio TextilComercio Piel
Comercio MetalLimpiezas
Estaciones de ServicioMayoristas de FrutasTpte. Mcias. por Crtra.
Locales Espc. y DeportesOficinas y Despachos
Comercio GeneralInst. Polidep. Tit. Pública
MetalCeramics
WoodFreight
BakeriesGlass
ConstructionPaper
FurnitureTextile IndustryLeather TradeMetal Trade
CleaningService Stations
Wholesale Fruit SellersRoad Haulage
Specialised shops and SportsOffices
General TradePublic Sports Centres
4,60%3,50%2,00%3,00%1,20%3,50%4,00%1,20%1,00%1,60%1,60%2,00%2,50%4,00%3,00%1,50%1,00%0,40%0,40%1,00%
SECTOR SECTOR2015
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El total de aportaciones brutas según criterio contable a 31 de diciembre de 2015, alcanza los 82,63 millones de euros, lo que supone un incremento del 0,82% respecto al año anterior.
Gross contributions according to the accounting criterion up to and including the 31st December 2015 totalled 82.63 million euros, representing a 0.82% increase with regards to the previous year.
EVOLUCIÓN DE APORTACIONES POR IMPORTE
EVOLUTION OF CONTRIBUTIONS BY AMOUNT
El siguiente gráfico muestra la evolución de las aportaciones a la Entidad (en millones).
The following graph shows the evolution of contributions to the Institution (millions).
50
40
30
20
10
0
80
70
60
90
100
10,314,3
22,4
29,8
44,3
51,054,9
58,862,7
67,8
80,3
86,0
95,6 93,189,6 90,6
87,282,8 81,9 82,6
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
MetalCerámicaMadera
TransitariosPanaderías
VidrioConstrucción
PapelMueble
Comercio GeneralComercio TextilComercio Piel
Comercio MetalLimpiezas
Estaciones de ServicioMayoristas de FrutasyTpte. Mcias. por Crtra.p p
Locales Espc. y Deportesp y pOficinas y Despachosy p
Inst. Polidep. Tit. PúblicapVarios
TOTALES
MetalCeramics
WoodFreight
BakeriesGlass
ConstructionPaper
FurnitureGeneral TradeTextile IndustryLeather TradeMetal Trade
CleaningService Stations
Wholesale Fruit SellersRoad Haulageg
Specialised shops and Sportsp p pOffices
Public Sports CentrespVariousTOTALS
201562.691.118
264.509593.213531.970455.251160.590
5.848.817480.82087.369
246.389537.969117.766
2.650.2882.216.335568.976106.551
1.227.188225.234522.49344.493
3.051.24582.628.585
61.750.048249.335588.814490.807437.926158.414
6.466.511472.11084.317235.681539.601122.363
2.597.1232.204.178561.943112.674
1.241.083220.944513.92534.745
2.866.84981.949.390
% 1,50%5,74%0,74%7,74%3,81%1,35%
-10,56%1,81%3,49%4,35%
-0,30%-3,90%2,01%0,55%1,24%
-5,75%-1,13%1,90%1,64%
21,91%6,04%0,82%
IMPORTE / AMOUNT
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El número de Socios Ordinarios que han realizado apor-taciones al menos una vez en el año 2015, se sitúa al finalizar el año en 103.362 trabajadores, lo que supone un incremento del 0,41% respecto al ejercicio anterior.
En el siguiente cuadro se presenta el número de tra-bajadores que han realizado aportaciones en cada uno de los años y por sectores.
The number of Ordinary Members making regular contributions at least once a year at the end of 2015 was 103,362 representing an increase of 0.41% with respect to the previous year.
The following Table shows the number of employees making contributions in each of the years and by sector.
EVOLUCIÓN DEL Nº DE TRABAJADORES
EVOLUTION OF NUMBER OF WORKERS
En el siguiente gráfico se muestra la evolución del nº de socios activos en la Entidad.
The following graph shows the evolution of the number of active members in the Organisation:
80
120
160
140
100
60
40
20
0
4552
60
86
103109 111
120 122 125 130133
143
130124 121
113106 103 103
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
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A su vez, el número medio de Socios Protectores que han realizado aportaciones al menos una vez en el ejer-cicio, es de 9.824 empresas, lo que representa un incre-mento del 0,36% respecto del ejercicio anterior.
En el siguiente cuadro se presenta el número de empre-sas que han realizado aportaciones en cada uno de los años y por sectores.
In turn, the average number of Supporting Members making contributions at least once a year was 9,824 companies, representing an increase of 0.36% when compared to the previous fiscal year.
The following Table represents the number of companies that have made contributions in each of the years and by sector:
EVOLUCIÓN DEL Nº DE EMPRESAS
EVOLUTION OF THE NUMBER OF COMPANIES
En el siguiente gráfico se muestra la evolución del nº de empresas en la Entidad.
The following graph shows the evolution of the numbers of companies in the Institution:
4
2
0
8
6
10
14
12
2,73,2 3,6
6,7
7,8 8,1 8,2
9,2 9,4 9,6 9,9 10,1
12,612,2
11,8 11,511,0
10,89,8 9,8
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
MetalCerámicaMadera
TransitariosPanaderías
VidrioConstrucción
PapelMueble
Comercio GeneralComercio TextilComercio Piel
Comercio MetalLimpiezas
Estaciones de ServicioMayoristas de FrutasyTpte. Mcias. por Crtra.pp
Locales Espc. y Deportespy pOficinas y Despachosyp
Inst. Polidep. Tit. PúblicapVarios
TOTALES
20152.819
1026956189279281448
1.1885171059353426124590183
1.4392060
9.824
20142.802
1026550196299661253
1.1375251159163186025590171
1.4761954
9.789
% 0,60%0,00%1,49%
10,71%-3,70%-7,41%-4,09%14,29%
-10,42%4,29%
-1,55%-9,52%2,03%7,02%1,64%
-4,17%0,00%6,56%
-2,57%5,00%
10,00%0,36%
EMPRESAS / COMPANIES
MetalCeramics
WoodFreight
BakeriesGlass
ConstructionPaper
FurnitureGeneral TradeTextile IndustryLeather TradeMetal Trade
CleaningService Stations
Wholesale Fruit SellersRoad Haulage
Specialised shops and SportsOffices
Public Sports CentrespVariousTOTALS
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A lo largo de 2015 se han producido las siguientes prestaciones:
Over 2015 the following provisions have been made:
EVOLUCIÓN DE LAS PRESTACIONES DE LA ENTIDAD
EVOLUTION OF THE BENEFITS PAID
En el siguiente cuadro se presentan por tipología el número e importe de las prestaciones generadas en 2015:
The following Table shows the benefits generated in 2015 by number and amount:
GRAN INVALIDEZ / IMPORTANT DISABILITY; 10
FALLECIMIENTO / DEATH; 220
TRASPASOS / TRANSFERS; 55
I.P. TOTAL / PERMANENT TOTAL DISABILITY;323
JUBILACIÓN / RETIREMENT; 2.808
I.P ABSOLUTA / A PERMANENT ABSOLUTE DISABILITY; 180
CAPITALLUMP SUMDERECHOS
ECONOMICOSECONOMIC
RIGHTS
PREST.ADICIONALADDITIONALPROVISIONS
NNo. ECONOMIC ADDITIONAL
PROVISIONS
JUBILACIÓNRETIREMENT
INCAP. PERMANENTE TOTALPERMANENT TOTAL DISABILITY
INCAP. PERMANENTE ABSOLUTAPERMANENT ABSOLUTE DISABILITY
IMPORTANT DISABILITY
FALLECIMIENTODEATHSÓ
LO D
EREC
HOS
ECON
ÓMIC
OSON
LY E
CONO
MIC
RIG
HTS
NNo.
2.798
138
91
5
158
35.931.798
1.292.543
774.711
-
-
-
-
-
10
3
256.133
32.832
-
-
-
-
-
CON
PRES
TACI
ÓN
WIT
H AD
DIOT
IONA
L 2.571.145INCAP. PERMANENTE TOTALPERMANENT TOTAL DISABILITYINCAP. PERMANENTE ABSOLUTA
PERMANENT ABSOLUTE DISABILITY
IMPORTANT DISABILITY
163
86
5
50
1.514.669
1.359.419
879.851
22
3
9
709.139
68.651
229.974
401.706
110.395
170.256
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El importe total de las prestaciones abonadas en el ejer-cicio ha ascendido a 46,52 millones de euros, habiéndo-se además comprometido en renta en el mismo período un importe que alcanza los 1,98 millones de euros.
De las 733 prestaciones pagadas o comprometidas en invalidez y fallecimiento, 338 se han realizado con cobertura adicional, de las cuales 304 se han abona-do en forma de capital, mientras que las 34 restantes se han abonado en forma de renta financiera.
De acuerdo con el artículo “9.3.1. Forma de Pago de las Prestaciones”, el importe mínimo para el cobro en forma de renta correspondiente a 2015 ha sido de 166 €.
En el siguiente gráfico se muestra la evolución de las prestaciones generadas por año desde Febrero de 1996:
The total amount of benefits paid out over the fiscal year amounted to 46.52 million euros, having additionally committed a total of 1.98 million euro in annuities for the same period.
Of the 733 benefits paid out or committed for disability or death, 338 were made with additional provision and 304 of said benefits were paid in a lump sum whilst the remaining 34 have been paid as financial annuities.
In accordance with article “9.3.1. Payment of Benefits”, the minimum amount to be paid in order to receive an annuity for 2015 was 166 €.
The fol lowing graph shows the evolution of benef i ts generated by year and tota l s ince February 1996:
SOLVENCIA DE LA ENTIDAD INSTITUTION’S SOLVENCY
La Junta de Gobierno de la Entidad, decidió en Di-ciembre de 2.002 crear una provisión para riesgos de rentas vitalicias, situando en un 25% de los com-promisos, la cantidad máxima de la provisión a crear.
In December 2002, the Institution’s Board of Governors decided to create a provision for annuity liability, placing in 25% of the commitments the maximum amount of created provision.
Derechos Economicos cobrados en capital / Economic Rights paid in lump sum
Derechos Economicos cobrados en renta / Economic Rights paid in annuities
Prestacion Adicional cobrada en capital / Additional Provision paid in lump sum
Prestacion Adicional cobrada en renta / Additional Provision paid in annuities
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En este sentido se ha propuesto dotar este concepto en 3,04 millones de euros con cargo a los resultados no afectos, de tal manera que se alcancen los 8,39 millones de euros.
En Junio de 2015 la Junta de Gobierno cambió el tipo de interés técnico pasando de un 3,5% al 2,5% lo que supuso dotar la Provisión Matemática 10,5 millones de euros con cargo a resultados.
Los compromisos asumidos para hacer frente a las rentas vitalicias con las nuevas bases técnicas as-cienden a 71,84 millones de euros, habiendo sido valorados por la Universidad del País Vasco.
In this way, it was proposed that this concept be provided with 3.04 million euros from non-affected results, in such a way that 8.39 million euros be accrued.
In June 2015, the technica l in terest ra te changed f rom 3.5% to 2.5% which meant providing 10.5 million euros to the Mathemat ica l Prov is ion coming f rom the resu l ts.
C o m m i t m e n t s m a d e t o a d d r e s s t h e a n n u i t ies, evaluated by the Univers i ty of the Basque Country, amounted to 71.84 mi l l ion euros.
PATRIMONIO DE LA ENTIDAD INSTITUTION’S EQUITY
El patrimonio afecto a participaciones de la Entidad al-canza a 31 de diciembre de 2015 un total de 1.683 millones de euros. El incremento del patrimonio res-pecto del ejercicio anterior ha sido de un 7,60%.
Tal y como se muestra en el siguiente gráfico, el 39% del patrimonio proviene de los resultados acumulados hasta la actualidad.
Equity subject to the Institution’s shares by the 31st December 2015 amounted to a total of 1,683 million euros. The increase in equity with respect to the previous fiscal year was 7,60%.
As can be seen from the following graph, 39% of the equity comes from results accumulated up to the present day.
Resultados no afectos para dotar margen de solvencia
Voluntary Reserves/ MUTUAL FUND
TOTAL PROVISIONES / TOTAL PROVISIONS
PROVISIÓN MATEMÁTICA / MATHEMATICAL PROVISIONA / MATHEMATICAL PROVISION
% PROVISIONES SOBRE PROV. MATEMÁTICA% PROVISIONS OVER MATHEMATICAL PROVISIONS
2015 2014
29,58
71,84
41,17%
35,83
63,39
56,53%
5,353,04
5,2815,91
14,681,17
4,0715,91
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Lo ocurrido en los mercados financieros durante el año 2015 se podría resumir en un empeoramiento paulatino y generalizado de las condiciones macro-económicas inicialmente previstas. El crecimiento eco-nómico global no se ha cumplido y en el horizonte se divisan problemas motivados por el exceso de ca-pacidad generado tras años de inversión en merca-dos emergentes que necesariamente van a provocar ajustes en activos relacionados con estos países y con materias primas.
El crecimiento ha sido muy desigual entre los diferen-tes países; EE.UU. lo ha liderado, con Europa y Japón algo más rezagados, China creciendo menos que lo que crecía hasta ahora y unos países emergentes que se encuentran en recesión en la mayoría de los casos. Pero incluso en los países con PIB positivo hay que destacar que este crecimiento ha sido muy débil y muy lejos del potencial. La deflación no ha sido aparcada definitivamente en los países desarrollados. Los bancos
What happened in financial markets in 2015 can be summarised as a gradual and generalised w o r sen ing o f t he i n i t i a l l y an t i c i pa ted macroeconomic conditions. Global economic growth has fallen short of expectations, and p r o -blems arising from overcapacity after years of investing in emerging markets—which wi l l inev i tab ly lead to adjustments in the assets related to these countries and to raw materials—can be seen on the horizon.
Growth has been very uneven among the different countries; it has been led by the US, with Europe and Japan slightly lagging behind, China growing much less than it had been growing until now, and some emerging markets going into recession in most cases. But even in those countries with positive GDP, it is worth highlighting that this growth has been very weak and far removed from its potential. Deflation has not yet stopped in developed countries. The central banks—mainly
EVALUACIÓN DE LOS
MERCADOS FINANCIEROS
EVALUATION OF FINANCIAL
MARKETS
EVOLUCIÓN DEL PATRIMONIO EVOLUTION OF EQUITY
0
800
600
400
200
1.800
1.600
1.400
1.200
1.000
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
92 5 49 81129
182237
313394
486
591
695 737
873
970990
1.189
1.396
1.564
1.683
APOR-PRES / CONTRIB-PROV RESULTADOS / PROFITS
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centrales, principalmente el Banco Central Europeo, el Banco de Japón y el Banco de Inglaterra en el mundo desarrolla-do, se encuentran totalmente involucrados con las medidas expansivas, además, en el mundo emergente, países como China han empezado a implementarlas. Únicamente la Re-serva Federal americana las ha retirado, pero la posibilidad de subir tipos de manera escalonada se ha desvanecido como consecuencia de la fortaleza del dólar y de la debilidad del crecimiento económico mundial. La inflación no ha lle-gado, ni de lejos, a su nivel objetivo del 2%, motivado por la caída del precio del petróleo.
La crisis generada en los países emergentes amenaza una nueva ola deflacionaria que podría terminar en una guerra de divisas. Las perspectivas para 2016 contemplan un mundo con bajo crecimiento y como consecuencia de ello una baja inflación.
Los bancos centrales van a seguir siendo los principales protagonistas de las medidas expansivas, principalmente en Europa, y por lo tanto los tipos de interés van a permanecer excepcionalmente bajos.
Los mercados financieros comenzaron el año en Europa con la noticia de que, por fin, el Banco Central Europeo después de muchas dudas, se lanzó a implementar un programa de recompra de activos con el fin de estimular la economía y mantener los tipos de interés lo más bajo posible.
Este plan ha estado pivotando durante todo el año e incluso al final de ejercicio se ha ampliado ante la de-bilidad de la economía europea. El plan contempla un aumento de más de 1 billón de euros reales en ex-pansión cuantitativa en diferentes programas de deuda pública y otros activos. En la implementación de este plan se tuvieron en cuenta las reticencias alemanas de proporcionabilidad y compartición de riesgos por parte de los bancos centrales de cada país. Este programa ha creado un efecto cascada en otros países europeos que no tienen al euro como moneda de referencia, de-jando los tipos de interés de toda su curva en negativo. Es de destacar el caso suizo, que tuvo que abandonar el soporte de su divisa y dejarla apreciarse con respecto al Euro.
the European Central Bank, the Bank of Japan and the Bank of England in the developed world—are fully implementing expansionary policies, and in the developing world, countries such as China have begun to put these into practice as well. Only the US Federal Reserve has moved away from them, but the possibility of gradually raising interest rates has faded away as a result of the strength of the dollar and the weakness of global economic growth. Inflation has not reached—not even close—its target level of 2%, due to the drop in oil prices.
The crisis started in developing countries threatens to spark off a new deflationary spiral which could end up in a currency war. The outlook for 2016 forecasts a world with low growth, and as a result of this, low inflation.
The central banks will continue to play key roles in the expansionary policies—mainly in Europe—and therefore, interest rates will continue to be exceptionally low.
The financial markets started the year in Europe with the news that, at last, the European Central Bank, after much hesitation, had decided to implement an asset purchase programme for the purpose of stimulating the economy and keeping interest rates as low as possible.
This plan was in the pipeline during the entire year and was further expanded at the end of the fiscal year due to the weakness of the European economy. The plan involves an increase of more than 1 billion real euros in quantitative easing among the different public debt programmes and other assets. The implementation of this plan took into account German reticence on proportionality and risk sharing by the central banks of each country. This programme has created a cascading effect on other European countries that do not have the euro as their currency, leaving interest rates in their yield curve negative. The Swiss case is worth mentioning here, as Switzerland decided to forego its currency cap to let it appreciate with respect to the euro.
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A principios de año, se celebraron elecciones en Gre-cia con la victoria de Syriza, que, como era de esperar, generaron una crisis institucional importante durante el primer semestre, que se saldó con un referéndum y la dimisión de varios ministros, la celebración de nuevas elecciones y la aceptación de los principales puntos del rescate, ya que de otro modo Grecia se quedaba sin recibir los diversos tramos de ayuda.
En las primeras semanas del año la Unión Europea aumentó en unas décimas las expectativas de creci-miento para 2015 hasta el 1,3%. China redujo sus tipos de interés con objeto de estimular su economía y de generar inflación a costa de deflación en otros paí-ses principalmente europeos. En la reunión de Marzo el Banco Central Europeo mejoró las perspectivas de crecimiento para el conjunto de la Eurozona y la renta-bilidad del bono a 10 años alemán marcó un mínimo del 0,07%.
En la mitad del año hubo elecciones en el Reino Unido, en las que el partido conservador obtuvo una cómoda mayoría absoluta y prometió la celebración de un re-feréndum en 2016 para decidir sobre la permanencia del país en la Unión Europea.
Los riesgos de salida del Reino Unido de la Unión Europea son altos y se está a la espera de negociaciones previas.
Pero lo que verdaderamente marcó el devenir del año y parece que el de 2016, ha sido toda la repercusión del ajuste económico de China. Durante el verano, Chi-na comenzó a implementar medidas de estímulo eco-nómico ante la mayor debilidad de su economía; re-cortó los tipos de interés e inyectó dinero a los bancos. Lo que subyace en el fondo es un problema de ajuste de un modelo que parece agotado y que se ha forjado en grandes inversiones en capital y que ha provocado un exceso de capacidad para un mundo que no crece lo esperado. Este ajuste que las autoridades chinas se han comprometido a realizar, implica una mayor par-ticipación del factor consumo en el PIB en detrimento de la inversión y de la industria. Como consecuencia de todo ello, el ajuste en las materias primas ha sido, y está
At the beginning of the year, elections were held in Greece, with Syriza emerging victorious. As was to be expected, this victory led to a major institutional crisis in the first quarter, resulting in a referendum and the resignation of several ministers, the holding of new elections and the acceptance of the main points of the bailout, as Greece would otherwise have ended up not receiving the other tranches of aid payments.
In the first weeks of the year, the European Union increased the growth forecast for 2015 by a few tenths to 1.3%. China decreased its interest rates with a view to stimulating its economy and creating inflation at the expense of deflation in other mainly European countries. During the mee-ting in March, the European Central Bank improved growth perspectives for the entire eurozone, and the German 10-year bond yield reached an all-time low of 0.07%.
During the middle of the year, elections were held in the United Kingdom, in which the conservative party secured a comfortable absolute majority and promised to hold a referendum in 2016 to decide on the country’s permanence in the European Union.
The chances are high that the United Kingdom will leave the European Union, and prior negotiations are pending.
But what really determined the course of the year and possibly that of 2016 as well were the repercussions of China’s economic adjustment. In summer, China be-gan to implement measures to stimulate its economy to counteract its increased weakness; it lowered inte-rest rates and injected money into its banking system. What lies at the core is an adjustment problem in a model that apparently no longer works, which was for-ged using large-scale capital investments and which has led to overcapacity in a world that is no longer growing as expected. This adjustment that the Chinese authorities have committed to implementing involves a greater share of the consumption factor in GDP at the expense of investment and industry. As a result of all of this, the adjustment in terms of raw materials has
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siendo enorme, ya que China es el principal consumidor de mineral de hierro, cobre y otros minerales y uno de los más importantes de petróleo. En el caso del petróleo las repercusiones son más amplias ya que la caída en la demanda, unida a un exceso de producción provoca-do por la extracción de manera no convencional en los Estados Unidos, la negativa de Arabia Saudí a recortar la producción en el seno de la OPEP, y el levantamiento de las sanciones a Irán, han dado como resultado que el petróleo se haya desplomado hasta los 35 dólares por barril. Las repercusiones negativas en crecimiento, balanzas fiscales, reservas internacionales y divisas, en otros países como son los del Golfo Pérsico, Brasil, Ru-sia, Canadá, están siendo muy acusadas. El riesgo de una devaluación, para ganar en competitividad, de la divisa china, gana fuerza para el ejercicio 2016.
Las turbulencias en los mercados emergentes han provocado que la Reserva Federal estadounidense se encuentre muy dubitativa a la hora de subir los tipos de interés. En la reunión de Septiembre, aplazó la subida que parecía clara, ésta al final se produjo en Diciembre, con 25 puntos básicos y supuso la primera subida en más de 9 años. Pero para el ejercicio 2016 las expec-tativas se han reducido a dos únicas subidas. De todos modos, todo depende de las condiciones de mercado.
Al terminar el verano, se desató una crisis humanitaria con la llegada de más de 1 millón de refugiados pro-cedentes en su mayor parte de Siria. Esta crisis aparte de generar un importante drama social, está poniendo y va a poner durante 2016 a prueba la fortaleza de las instituciones europeas. Se piensa en la posible sus-pensión de la libre circulación de personas y el cie-rre de fronteras, además algunos estados receptores han tenido que revisar sus cifras de déficit público. La amenaza islamista, además, ha incrementado el gasto en defensa y en seguridad en países como Francia, que ya ha anunciado que no cumplirá el compromiso en déficit público.
La empresa Volkswagen destapó un escándalo de imprevisibles consecuencias para el sector de la au-tomoción europeo, al revelar que trucó los programas
been—and is—colossal, as China is the top consu-mer of iron ore, copper and other materials and one of the largest consumers of oil. In the case of oil, the repercussions are even more wide-reaching as the drop in demand, together with the production surplus caused by the unconventional extraction techniques of the United States, the refusal of Saudi Arabia to reduce production in the context of the OPEC and the lifting of sanctions on Iran, have resulted in oil prices nosediving to 35 dollars per barrel. The negative repercussions on growth, balance sheets, international reserves and cu-rrencies in other countries such as those in the Persian Gulf, Brazil, Russia and Canada are unmistakable. The risk of devaluation—to gain a competitive edge—of the Chinese currency is gaining momentum for fiscal year 2016.
The turbulence of emerging markets has made the US Federal Reserve extremely hesitant about raising interest rates. During the meeting in September, it postponed the hike that seemed imminent, which finally happened in December at 25 basic points—the first increase in more than 9 years. But for fiscal year 2016, expectations have been lowered to only two increases. In any case, everything depends on market conditions.
At the end of summer, a humanitarian crisis, due to the arrival of more than 1 million refugees—the majority of whom are from Syria—broke out. This crisis, aside from creating considerable social drama, is putting, and will continue to put, the strength of European institutions to the test in 2016. The possible suspension of the free circulation of people and the closing of borders are being contemplated. In addition, some refugee-receiving states have had to review their government deficit figures. Likewise, the threat from Islamic militants has increased spending on defence and security in countries such as France, which has already announced its inability to meet its commitment with regard to the budget deficit.
The Volkswagen company unleashed a scandal with unpredictable consequences for the European automotive industry, by revealing that it had tampered
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de verificabilidad en las emisiones de gases. Toda la industria europea de la automoción ha sufrido un im-portante varapalo aunque se espera que las inversio-nes no se vean afectadas.
El ejercicio terminó en el campo político con la celebra-ción de elecciones en Portugal y España. En Portugal la candidatura de derechas se proclamó vencedora, pero el partido socialista, junto con otros partidos de izquierda, arrebataron la jefatura de gobierno. El primer ministro se ha comprometido con los requisitos euro-peos de estabilidad presupuestaria. En España ha ocu-rrido algo parecido, pero la situación está mucho más enrevesada, al no tener ningún grupo mayorías claras. La única mayoría estable sería una gran coalición pero de momento parece no muy factible. De lo contrario, se tendrán que repetir las elecciones.
Para terminar y como resumen, el ejercicio ha ido de más a menos con un claro empeoramiento de las condiciones macroeconómicas principalmente en países emergentes. La duda que se cierne sobre el mercado al cierre de ejercicio, es que al estar la bol-sa estadounidense y los márgenes empresariales en máximos, se pueda estar ante una corrección bursátil de calado que genere mercados bajistas o ante una corrección técnica. Por otro lado como la renta fija se encuentra con unos rendimientos muy bajos, es muy difícil encontrar activos que generen algo de rentabi-lidad con un riesgo controlado. En cuanto a los datos macroeconómicos europeos, éstos han comenzado a mejorar muy levemente como consecuencia de la actividad del BCE. Si hay una corrección importante a la baja en países emergentes y en sectores básicos como acero y las mineras, la incipiente recuperación europea puede fallar.
La evolución durante 2015 de los principales índices bursátiles, del mercado de bonos, materias primas y divisas ha sido la siguiente:
with exhaust emissions control software. The entire European automotive industry has suffered a serious setback although it is expected that investments will remain unaffected.
The fiscal year ended on a political note, with the holding of elections both in Portugal and in Spain. In Portugal, the right-wing candidate emerged victorious, but the socialist party, together with other left-wing parties, wrested control of the government. The prime minister has committed to meeting the European requirements on budget stability. Something similar happened in Spain, although the situation is even more complex, as no single party has a clear majority. The only stable majority would be a large coalition, which at the moment does not seem viable at all. Otherwise, new elections will be have to be held.
To conclude and to summarise, the fiscal year has gone from bad to worse, with a clear worsening of the macroeconomic conditions, mainly in developing countries. At the end of the fiscal year, the question that looms over the market—as the US stock market and business margins are at an all-time high—is whether this is a stock market correction of such magnitude that it will lead to bear markets or if this is merely a technical correction. In addition, as fixed-income securities currently offer very low returns, it is very difficult to find assets that earn an acceptable return with controlled risk. In terms of European macroeconomic data, this has only begun to show a slight improvement as a result of the ECB’s efforts. If there is significant downward correction in developing countries and in core sectors such as steel production and mining, incipient European recovery may be nipped in the bud.
The development of the main stock-market, bond markets, commodities and currency indexes during 2015 has been as follows:
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(Saldo negativo lo que la divisa se ha depreciado contra el euro, y positivo lo que el euro se ha depreciado contra esa divisa).
(Negative balance as currency depreciates against the euro and positive when the euro depreciates against this currency).
La rentabilidad del año 2015 se ha situado en un 5,13%, por otro lado, la rentabilidad compuesta desde el inicio de actividad de la Entidad se sitúa en el 6,51%.
El activo que ha generado la mayor rentabilidad es la Renta Variable con un 3,57%. La evolución de la Renta Fija, también ha sido positiva pero mucho menor, debido a que los tipos de interés se encuentran en niveles extre-madamente bajos. La parte de la rentabilidad generada por la Renta Fija ha ascendido a 1,47%. La volatilidad del valor liquidativo durante el ejercicio ha sido del 7,28%.
El detalle de la contribución a la rentabilidad por tipología de activos es la siguiente:
Profitability for the year 2015 stood at 5.13%, and conversely the compound profitability from the beginning of the Organisation’s activity stands at 6.51%.
The asset that has earned the highest return has been Variable Income at 3.57%. Fixed-Income Securities have evolved positively but to a much lesser degree, due to the fact that interest rates are at an all-time low. The proportion of returns earned by Fixed-Income Securities has risen to 1.47%. The volatility of net asset value during the fiscal year has been 7.28%.
The breakdown of the contribution by asset type is as follows:
CARTERA DE INVERSIONES Y RENTABILIDAD DE LA ENTIDAD
INVESTMENT PORTFOLIO AND PROFITABILITY
RENTA VARIABLE / EQUITY
Estados UnidosUSA
AlemaniaGermany
Reino UnidoUnited Kingdom
FranciaFranceEspañaSpainItaliaItaly
JapónJapan
EurostoxxEurostoxx
Estados UnidosUSA
AlemaniaGermany
Reino UnidoUnited Kingdom
FranciaFrance
EspañaSpainItaliaItaly
JapónJapan
Indice Bono GlobalGlobal Bond Index
-0,73%
10,02%
-4,93%
8,53%
-7,15%
11,96%
9,33%
3,85%
1,71%
0,82%
0,66%
1,01%
1,30%
4,75%
1,41%
1,28%
RENTA FIJA: BONOS 7-10 AÑOS FIXED INCOME: 7-10 YR BONDS
Divisas / Currency Materias Primas / Commodities
Dólar EE. UU.US Dollar
Yen JaponésJapanese YenLibra EsterlinaBritish PoundFranco SuizoSwiss FrancYuan Chino
Chinese Yuan
Petróleo BrentBrent Crude
OroGold
AgriculturaAgriculture
Metales industrialesIndustrial Metals
11,36%
11,02%
5,30%
10,70%
6,42%
-35,87%
-10,77%
-15,60%
-26,88%
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-5%
0%
5%
10%
15%
20%
0€
5€
10€
15€
20€
25€
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
EVOLUCIÓN DE LA RENTABILIDADEVOLUTION OF RETURNS
CONTRIBUCIÓN A LA RENTABILIDAD POR ACTIVO
CONTRIBUTION TO THE RETURN BY ASSET TYPE
RENTABILIDAD ANUAL / ANNUAL YIELDRENTABILIDAD MEDIA / AVERAGE YIELDVALOR LIQUIDATIVO / NET ASSET VALUE
RESTO /
OTHERS :
0,09%
RENTA VARIABLE /
EQUITY :
3,57%
RENTA FIJA /
FIXED INCOME :
GEROA:
5,13%
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El valor liquidativo de la Entidad se ha situado en los 21,05 €, lo que supone multiplicar por 3,5 los 6,01 € con los que comenzó la Entidad en Febrero de 1996.
The net asset value of the Organisation stood at 21.05 €, which more than multiplies by 3.5 the 6.01€ that the Organisation began with in February 1996.
DIVERSIFICACIÓN DE LA CARTERAASSET ALLOCATION
La evolución de la asignación de activos ha sido bas-tante uniforme, con un porcentaje estable, sobre el 30%, en renta variable, y un 58% en renta fija. La Entidad mantiene un 15% en corto plazo y liquidez y un 18% en cartera a vencimiento a coste y no sujeta a los movimientos de mercado.
En el capítulo de la Renta Fija valorada a mercado y sujeta a la volatilidad del mismo, la Entidad ha ido reduciendo los activos con peor binomio rentabilidad riesgo, tanto por duración, como por tipo de riesgo de crédito. En concreto la Entidad ha disminuido ac-tivos que tienen rendimientos muy bajos, como cé-dulas hipotecarias, bonos de gobierno y bonos senior financieros. Con respecto a la duración de los activos de renta fija sujetos a la valoración de mercado, la Entidad ha aumentado los valores con poca duración y aumentado levemente los bonos ultralargos con el fin de obtener cupones más elevados.
Además el riesgo está limitado por la compra de bo-nos públicos por parte del Banco Central Europeo. La Entidad ha bajado de una manera importante la exposición a la parte media-larga de la curva.
En el apartado de la renta variable, se ha reducido la ponderación a valores industriales y de materiales e incrementado los valores financieros. Con respecto a segmentación geográfica, se ha aumentado la expo-sición a Europa y disminuido a Estados Unidos, Lati-noamérica y Japón. La exposición a divisas extranje-ras es, aproximadamente, de un 8%. El resto, 92%, se encuentra en Euros. La Entidad es muy dinámica a la hora de cubrir posiciones en divisas extranjeras con el fin de limitar los riesgos.
The evolution of asset allocation has been fairly even, with a stable percentage of approximately 30% in variable-income securities and 58% in fixed-income securities. The Institution has 15% in short-term and liquid assets and 18% in held-to-maturity portfolios that are not subject to market fluctuations.
Regarding the market value of Fixed-Income Securities subject to market price volatility, the Institution has been decreasing the assets with the worst risk-reward ratio, both in terms of duration and credit risk type. Specifically, the Institution has reduced assets that have very low returns, such as mortgage bonds, government bonds and straight bonds. With respect to the duration of fixed-income assets subject to market value, the Institution has increased the securities with a short duration and slightly increased the ultra-long bonds for the purpose of obtaining higher coupons.
In addition, the risk on the purchase of government bonds is limited by the European Central Bank. The Institution has significantly lowered exposure in the medium-long end of the curve.
In the section on variable-income securities, the weight of securities in industries and materials has been decreased and securities in finance increased. With respect to geographic segmentation, exposure to Europe has increased whereas exposure to the United States, Latin America and Japan has decreased. Exposure to foreign currency is approximately at 8%. The rest—92%—is in euros. The Institution takes a very active role when covering positions in foreign currencies for the purpose of limiting risks.
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La Entidad tiene invertido un 2,46% de la cartera en ORZA AIE. GEROA PENTSIOAK EPSV posee una parti-cipación del 50% en la entidad que fue constituida para la inversión en sociedades del tejido empresarial vasco.
Durante el año 2015 Orza ha realizado inversiones en LIKUID NANOTEK, SL (0,3M€), HISTOCELL, SL (0,7M€), GED EASTERN FUND II, FCR (0,1M€), GED SEE OPPORTUNITY I, SA (0,4M€), DIANA CAPITAL II, FCR (0,6 M€), SC ENERGY EFFICIENCY FUND I, FCR (0,3M€), YSIOS BIOFUND II INVIERTE, FCR (0,9 M€), ESPIGA EQUITY FUND, FCR (0,4 M€) Y TALDE CAPITAL CRECIMIENTO, FCR (0,5 M€) por un total de 4,2 millones de €.
The Organisation has invested 2.46% of its assets in ORZA AIE. GEROA PENTSIOAK VSWO holds 50% of the shares of the organisation which was constituted to invest in companies in the world of Basque business.
Over 2015 Orza has invested a total of 4.2 milion euros in LIKUID NANOTEK, SL (0,3M€), HISTOCELL, SL (0,7M€), GED EASTERN FUND II, FCR (0,1M€), GED SEE OPPORTUNITY I, SA (0,4M€), DIANA CAPITAL II, FCR (0,6 M€), SC ENERGY EFFICIENCY FUND I, FCR (0,3M€), YSIOS BIOFUND II INVIERTE, FCR (0,9 M€), ESPIGA EQUITY FUND, FCR (0,4 M€) Y TALDE CAPITAL CRECIMIENTO, FCR (0,5 M€).
POR TIPOLOGÍA DE ACTIVOSBY ASSET TYPE
RENTA VARIABLE /
EQUITY;
%0%303003
RESTO /
OTHERS; 11%
RENTA FIJA/A//// A
NCOME; 59%FIXED IN MNX CCOONNIIDXIF EMED 959%OD %; 59%59%%%
RF. MERCADO
MKT TO MKT FI; 27%
RF. A VENCIMIENTO/
FI AT MATURITY;
CORTO PLAZO/
SHORT TERMF I; 15%MSHS OSHO IFH MRETTRR R 15%5%O RR %S ;
PRINCIPALES INVERSIONES / MAIN INVESTMENTS
104.760.231€
74.895.452€
42.219.019€
39.654.706€
33.814.752€
GOBIERNO DE ESPAÑASPANISH GOVTGOBIERNO VASCOBASQUE GOVT
ORZA AIE
REPÚBLICA DE PORTUGALPORTUGUESE GOVTREPÚBLICA DE ITALIAITALIAN GOVT
6,12%
4,37%
2,46%
2,32%
1,97%
74.895.452€
42.219.019€
29.851.848€
10.447.503€
8.808.622€
4,37%
2,46%
1,74%
0,61%
0,51%
GOBIERNO VASCOBASQUE GOVT
ORZA AIE
BBVA
COMUNIDAD FORAL DE NAVARRAGovt of Navarre
MASMOVIL IBERCOM
PRINCIPAPES INVERSORES DE EUSKADIMAIN INVESTMENTS IN THE BASQUE COUNTRY
29
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During fiscal year 2015, both the Benefits Regulations and the Institution’s Statutes were amended.
The main change introduced is a new model that established that the form of payment will depend on the number of annuity years that could be generated with the Economic Rights of the member. This way,
MODIFICACIONES EN ESTATUTOS Y REGLAMENTO DE LA ENTIDAD
AMENDMENTS ON THE STATUTES AND REGULATION OF THE ENTITY
Durante el ejercicio 2015 se han modificado tanto el Re-glamento de Prestaciones como el Estatuto de la Entidad.
El cambio principal es que se introduce un nuevo modelo que establece que la forma de pago de las prestaciones dependerá del nº de años de renta que se pueda generar con los Derechos Económicos del
GASTOS DE ADMINISTRACIÓN ADMINISTRATIVE EXPENSES
Los gastos de administración, las comisiones implí-citas por la inversión en IIC y SCRs, porcentaje de gastos por la operativa con valores mobiliarios y el ratio de rotación de la cartera durante el año 2015 han sido los siguientes:
The administrative expenses, commissions implied by investment in UCI and CSRs, percentages of expense transactions with securities, and the rate of portfolio turnover during 2015 were as follows:
La cartera de inversión, se sitúa al cierre del ejercicio en 1.713 millones de euros, incluida la liquidez y el importe comprometido en Futuros. La inversión en valores del País Vasco y Navarra asciende a un 11%.
El criterio utilizado para la valoración de la Cartera de Inversión de la Entidad, es el de valor razonable o valor de mercado, excepto para un porcentaje de renta fija que a cierre se ha situado en el 17,72%.
La sociedad Orza AIE se valora, a valor de coste me-nos las dotaciones por correcciones valorativas más las plusvalías materializadas y no distribuidas.
The investment portfolio stood at the end of the fiscal year at 1,713 million euros, including liquidity, the amount committed in Futures. The investment in the Basque Country and Navarra represents 11% of the portfolio.
The criterion used for assessing the Organisation’s Investment Portfolio is its fair value less a percentage of fixed income which, by the end of the fiscal year, stood at 17.72%.
The Orza AIE Company is valued at cost price less provisions for value adjustments plus realised but undistributed capital gains.
Gastos de administraciónAdministrative expensesComisiones implicitas por la inversión en IICs y SCRsCommissions implied by investing in UCI and CSRsRatio de intermediaciónIntermediation RatioRatio de RotaciónTurnover Ratio
0,13%
0,24%
0,01%
52,12%
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socio. Se establecen 4 tramos:
-Un primer tramo con pagos obligatorios en capital.
-Un segundo tramo con pagos optativos entre renta temporal o capital.
-Un tercer tramo con renta temporal obligatoria.
-Un último tramo con renta temporal con renta vitali-cia diferida asociada obligatoria.
four sections are established:
-First section with compulsory payments as a lump sum.
-Second section with optional payments between temporary annuity or lump sum.
-Third section with compulsory temporary annuity.
-Last section with temporary annuity with a compulsory deferred lifetime annuity associated.
EVOLUCIÓN Y PREVISIONES PARA EL AÑO 2016
DEVELOPMENT AND FORECASTS FOR 2016
2016 started with a significant drop in the prices of Variable-Income and Raw Materials assets and a considerable increase in the credit spreads in Fixed-Income bonds. The reason behind this particularly negative behaviour lies in the uncertainty about overall growth in general and China’s growth in particular. Since the beginning of the year, China has injected vast amounts of money into its banking system and its economy for the purpose of supporting its currency and increasing the liquidity of its banks in response to the outflow of capital that is currently taking place. As a result of this,
ALTAS, BAJAS TRASLADOS Y MOVILIZACIONES
TRANSFERS AND MOBILISATIONS
Durante el ejercicio 2015 se han producido 55 tras-pasos de salida y un traspaso de entrada de otras entidades.
During 2015 there have been 55 output t ransfers and 1 input t ransfer f rom other organisat ions.
El año 2016 ha comenzado con una importante caí-da en el precio de los activos de Renta Variable y Ma-terias Primas, y con un considerable aumento de los diferenciales de crédito en los bonos de Renta Fija. La causa de este comportamiento tan negativo está en las dudas sobre el crecimiento global en general y el de China en particular. Desde que ha comenzado el año, China ha inyectado cantidades ingentes de dinero en sus bancos y en su economía con el fin de sostener a su divisa y dar liquidez a sus bancos ante la salida de capitales que se está produciendo. Como consecuencia de ello la volatilidad ha aumen-
28 29
ASPECTOS SIGNIFICATIVOS OCURRIDOS DESDE EL CIERRE DEL EJERCICIO
SIGNIFICANT EVENTS THAT TOOK PLACE AFTER THE CLOSURE OF THE TAX YEAR
De acuerdo con el artículo “9.3.1. Forma de Pago de las Prestaciones”, el importe mínimo para el cobro en forma de renta vitalicia correspondiente a 2016 será de 166 €.
Gracias a la rentabilidad de la Entidad durante el ejer-cicio 2015, el importe de las rentas actuariales se revalorizará en un 0,91% a partir del 1 de Enero de 2016 y el de las rentas financieras en un 1,5%.
According to article 9.3.1 Payment of Benefits, the minimum amount for collection in the form of annuity corresponding to 2016 will be 166 €.
Due to the entity profitability during year 2015, the amount of actuarial annuities will revalorize by 0.91% starting from the 1st of January of 2016 and temporary annuities by 1,5%.
tado enormemente y las materias primas, en especial el petróleo han caído fuertemente.
La situación de la economía real europea, va mejo-rando muy paulatinamente, pero con grandes desafíos cómo son la situación China y los riesgos políticos y sociales. La actuación del Banco Central Europeo está ayudando a fijar la rentabilidad de los bonos públicos en unos niveles bajos muy controlados, pero como contrapunto el ahorro no se remunera y produce un efecto muy pernicioso para la inversión.
La evolución de los mercados va a estar muy con-dicionada por la actividad de los bancos centrales; la Reserva Federal norteamericana en el camino de subida de tipos que ya ha iniciado el año pasado, y con respecto a los demás bancos centrales, saber hasta cuanto van a implementar medidas de apoyo y si las van a tener que ampliar por ser insuficientes. La evolución de los mercados va a depender de la vo-latilidad de los mismos. Se espera que ésta continúe elevada y por lo tanto con gran incertidumbre a la hora de estimar cualquier resultado futuro. Esto deja muy complicada la actuación de gestión de inversio-nes, ya que la rentabilidad esperada en la renta fija, o activos sin riesgo, es negativa y necesariamente tiene que ser compensada con la obtención de ren-tabilidad en activos con más riesgo y por lo tanto el binomio rentabilidad-riesgo se reduce.
volatility has considerably increased and raw materials, especially oil, have fallen sharply.
The actual state of the European economy is steadily improving, but it is not without great challenges such as the situation in China and the political and social risks. The intervention of the European Central Bank is helping to set government bond yields at carefully controlled low levels, but as a counterpoint, savings get no returns, negatively impacting on investment.
The evolution of the markets will be largely determined by the actions carried out by the central banks; for the US Federal Reserve, in the course of raising interest rates which it began last year, and with respect to other central banks, knowing the extent to which support measures will be implemented and if they will have to be expanded if they are not enough. The evolution of the markets will depend on their own volatility. It is expected that it will remain high, therefore sowing great uncertainty when estimating future results. This makes investment management a very complicated task, as the expected return on fixed-income securities or risk-free assets is negative. The only way to generate returns is by investing in assets with more risk, and therefore the risk-reward ratio decreases.
DICTAMEN ACTUARIAL ACTUARY’S REPORT
ANNUAL REPORTMEMORIA2015
www.geroa.eus
ELKARGO PROFESIONALA / PROFESSIONAL ASSOCIATION A 013820
PRELIMINARY_____
Euskal Herriko Unibertsitatea / University of the Basque Country, has been commissioned by GEROA E.P.S.V. to provide a valuation of their pension commitments as at 31.12.2015, based on the new wording of the Regulations of the Organisation, approved by the Board of Governors on 23 March 2010 and ratified at the Ordinary Assembly on 16 April 2010.
To this end, this organisation has provided us with the financial and personal data necessary to carry out this study.
BENEFITS EVALUATED_
In accordance with the specifications of the regulations, we distinguish between pensions due before and after 1 May 2010:
1) Pensions due before 01/05/2010:
All are actuarial Annuities: Annuity that implicitly entails some condition of survival for its payment. They may be
a) Lifetime annuities without reversion.
b) Lifetime annuities with lifetime reversion in favour of the spouse of 50% of the
amount of annuity currently payable.
c) Lifetime annuities with temporary reversion in favour of children under 25 years of
age of 9% of the amount of annuity currently payable for each child with a limit of
50%.
All annuities are monthly and constant.
2) Pensions due from 01/05/2010:
All are actuarial annuities: Annuity that implicitly entails some condition of survival for its payment. They may be
ELKARGO PROFESIONALA / PROFESSIONAL ASSOCIATION A 013821
a) Lifetime annuities without reversion.
b) Lifetime annuities with lifetime reversion in favour of the spouse of 60% of the amount of annuity currently payable.
All annuities are monthly and constant.
For annuities due from 01/05/2010 only, which does not have any right to reversion, the right to a capital payment on death is recognised for an amount equal to a percentage of the mathematical provision calculated for the original annuity at the time of death when it occurs in the first six year of income. The percentage to be applied to the mathematical provision will be:
60% for death during the first year of the annuity 50% for death during the second year of the annuity 40% for death during the third year of the annuity 30% for death during the fourth year of the annuity 20% for death during the fifth
year of the income 10% for death during the sixth year of the annuity
Those people who are receiving a lifetime annuity as a result of a reversion will not be entitled to payment of a capital sum.
CENSUS DATA_
Number of liabilities: 2,155 (1,539 men and 216 women).
Average age: 58.58 years.
ELKARGO PROFESIONALA / PROFESSIONAL ASSOCIATION A 013821
a) Lifetime annuities without reversion.
b) Lifetime annuities with lifetime reversion in favour of the spouse of 60% of the amount of annuity currently payable.
All annuities are monthly and constant.
For annuities due from 01/05/2010 only, which does not have any right to reversion, the right to a capital payment on death is recognised for an amount equal to a percentage of the mathematical provision calculated for the original annuity at the time of death when it occurs in the first six year of income. The percentage to be applied to the mathematical provision will be:
60% for death during the first year of the annuity 50% for death during the second year of the annuity 40% for death during the third year of the annuity 30% for death during the fourth year of the annuity 20% for death during the fifth
year of the income 10% for death during the sixth year of the annuity
Those people who are receiving a lifetime annuity as a result of a reversion will not be entitled to payment of a capital sum.
CENSUS DATA_
Number of liabilities: 2,155 (1,539 men and 216 women).
Average age: 58.58 years.
ELKARGO PROFESIONALA / PROFESSIONAL ASSOCIATION A 013822
ACTUARIAL FINANCIAL HYPOTHESES_
Reference date: 31/12/2015. Survival Table (income): PERM/F-2000C published in the Insurance and
Pension Funds General Directorate resolution dated 3 October 2000 Mortality Table (capital death benefit): GKM/F-95 Technical interest rate: 2.5% annual net cash. Growth in pensions: 0%
VALUATION_
The total current value of specified pensions valued at 31/12/2015 is:
Total monthly pensions: € 283,211.36 (including the revaluation of 0.91% for this year)
Current Pensions Value at 31/12/2015: € 71,844,507.30
This current value includes the value of any commitments in respect of the capital guaranteed in case of death of the annuitant (€ 26,499.63).
An annex is attached that includes the individual details for the valuation attributable to the income.
The actuary is at the disposal of GEROA E.P.S.V. to provide any clarifications or explanations that may be deemed appropriate.
AITOR BARAÑANO ABASOLO
Chartered Actuary No.70 of the Association of Actuaries of the Basque Country Bilbao, 19 January 2016.
AUDITORÍA AUDITOR’S REPORT
ANNUAL REPORTMEMORIA2015
www.geroa.eus
PricewaterhouseCoopers Auditores, S.L., Pº de Colón, 2, 20002 San Sebastián, EspañaTel.: +34 943 323 900 / +34 902 021 111, Fax: +34 943 288 177, www.pwc.es 1
R. M. Madrid, hoja 87.250-1, folio 75, tomo 9.267, libro 8.054, sección 3ªInscrita en el R.O.A.C. con el número S0242 - CIF: B-79 031290
This version of our report is a free translation from the original, which was prepared in Spanish. All possiblecare has been taken to ensure that the translation is an accurate representation of the original. However, inall matters of interpretation of information, views or opinions, the original language version of our report
takes precedence over this translation
INDEPENDENT AUDIT REPORT
To the General Assembly of Geroa Pentsioak, Entidad de Previsión Social Voluntaria:
Audit report on the annual accounts
We have audited the accompanying annual accounts of Geroa Pentsioak, Entidad de Previsión Social Voluntaria, which comprise the balance sheet at 31 December 2015, the income statement, the statement of changes in equity, cash flow statement and related notes for the year then ended.
Responsibility of the Governing Board in relation to the annual accounts
The Governing Board is responsible for the preparation of these annual accounts so that they presentfairly the equity, financial position and financial performance of Geroa Pentsioak, Entidad de PrevisiónSocial Voluntaria, in accordance with the financial reporting framework applicable to the Entity inSpain, as identified in Note 3.1 to the accompanying annual accounts, and for such internal control itconsiders necessary to enable the preparation of annual accounts that are free from materialmisstatement, whether due to fraud or error.
Auditor's responsibility
Our responsibility is to express an opinion on these annual accounts based on our audit. We conductedour audit in accordance with legislation governing the audit practice in Spain. This legislation requiresthat we comply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether the annual accounts are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosuresin the annual accounts. The procedures selected depend on the auditor's judgement, including theassessment of risks of material misstatement in the annual accounts, whether due to fraud or error. Inmaking those risk assessments, the auditor considers internal control relevant to the entity’spreparation of the annual accounts, in order to design audit procedures that are appropriate in thecircumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity'sinternal control. An audit also includes evaluating the appropriateness of accounting policies used andthe reasonableness of accounting estimates made by management as well as evaluating thepresentation of the annual accounts taken as a whole.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinion.
Opinion
In our opinion, the accompanying annual accounts present fairly, in all material aspects, the equity and financial position of Geroa Pentsioak, Entidad de Previsión Social Voluntaria at 31 December 2015 and its financial performance and cash flows for the year then ended in accordance with the applicable financial reporting framework, and in particular, with the accounting principles and criteria included therein.
PricewaterhouseCoopers Auditores, S.L., Pº de Colón, 2, 20002 San Sebastián, EspañaTel.: +34 943 323 900 / +34 902 021 111, Fax: +34 943 288 177, www.pwc.es 1
R. M. Madrid, hoja 87.250-1, folio 75, tomo 9.267, libro 8.054, sección 3ªInscrita en el R.O.A.C. con el número S0242 - CIF: B-79 031290
This version of our report is a free translation from the original, which was prepared in Spanish. All possiblecare has been taken to ensure that the translation is an accurate representation of the original. However, inall matters of interpretation of information, views or opinions, the original language version of our report
takes precedence over this translation
INDEPENDENT AUDIT REPORT
To the General Assembly of Geroa Pentsioak, Entidad de Previsión Social Voluntaria:
Audit report on the annual accounts
We have audited the accompanying annual accounts of Geroa Pentsioak, Entidad de Previsión Social Voluntaria, which comprise the balance sheet at 31 December 2015, the income statement, the statement of changes in equity, cash flow statement and related notes for the year then ended.
Responsibility of the Governing Board in relation to the annual accounts
The Governing Board is responsible for the preparation of these annual accounts so that they presentfairly the equity, financial position and financial performance of Geroa Pentsioak, Entidad de PrevisiónSocial Voluntaria, in accordance with the financial reporting framework applicable to the Entity inSpain, as identified in Note 3.1 to the accompanying annual accounts, and for such internal control itconsiders necessary to enable the preparation of annual accounts that are free from materialmisstatement, whether due to fraud or error.
Auditor's responsibility
Our responsibility is to express an opinion on these annual accounts based on our audit. We conductedour audit in accordance with legislation governing the audit practice in Spain. This legislation requiresthat we comply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether the annual accounts are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosuresin the annual accounts. The procedures selected depend on the auditor's judgement, including theassessment of risks of material misstatement in the annual accounts, whether due to fraud or error. Inmaking those risk assessments, the auditor considers internal control relevant to the entity’spreparation of the annual accounts, in order to design audit procedures that are appropriate in thecircumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity'sinternal control. An audit also includes evaluating the appropriateness of accounting policies used andthe reasonableness of accounting estimates made by management as well as evaluating thepresentation of the annual accounts taken as a whole.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinion.
Opinion
In our opinion, the accompanying annual accounts present fairly, in all material aspects, the equity and financial position of Geroa Pentsioak, Entidad de Previsión Social Voluntaria at 31 December 2015 and its financial performance and cash flows for the year then ended in accordance with the applicable financial reporting framework, and in particular, with the accounting principles and criteria included therein.
2
Information on other legal and regulatory requirements
The accompanying directors’ report for 2015 contains such explanations as the directors consider appropriate regarding the situation of Geroa Pentsioak, Entidad de Previsión Social Voluntaria, the development of its business and other matters, and does not form an integral part of the annual accounts. We have verified that the accounting information contained in the directors’ report is consistent with that of the annual accounts for 2015. Our work as auditors is limited to the verification of the directors’ report with the scope mentioned in this paragraph and does not include a review of information other than that obtained from the Entity’s accounting records.
PricewaterhouseCoopers Auditores, S.L.
Original in Spanish signed by Guillermo Cavia
28 April 2016
2
Information on other legal and regulatory requirements
The accompanying directors’ report for 2015 contains such explanations as the directors consider appropriate regarding the situation of Geroa Pentsioak, Entidad de Previsión Social Voluntaria, the development of its business and other matters, and does not form an integral part of the annual accounts. We have verified that the accounting information contained in the directors’ report is consistent with that of the annual accounts for 2015. Our work as auditors is limited to the verification of the directors’ report with the scope mentioned in this paragraph and does not include a review of information other than that obtained from the Entity’s accounting records.
PricewaterhouseCoopers Auditores, S.L.
Original in Spanish signed by Guillermo Cavia
28 April 2016
CUENTAS ANUALES ANNUAL ACCOUNTS
ANNUAL REPORTMEMORIA2015
www.geroa.eus
GEROA PENTSIOAK, ENTIDAD DE PREVISIÓN SOCIAL VOLUNTARIA Annual accounts and Administrators’ Report for 2015
GEROA PENTSIOAK, ENTIDAD DE PREVISIÓN SOCIAL VOLUNTARIA Annual accounts and Administrators’ Report for 2015
GEROA PENTSIOAK, ENTIDAD DE PREVISIÓN SOCIAL VOLUNTARIA
Annual accounts and Administrators’ Report for 2015
44 45
GEROA PENTSIOAK, ENTIDAD DE PREVISION SOCIAL VOLUNTARIA BALANCE SHEETS AT 31 DECEMBER 2015 (Expressed in thousand Euros)
1
Note 31.12.2015 31.12.2014 (*) A) ASSETS A-1) Cash and cash equivalents 9 173,370 118,804 A-2) Liquid financial assets held for trading 9 1,224 1,139 III. Derivatives 1,224 1,139 A-3) Other financial assets at fair value through profit or loss 9 1,141,395 1,037,537 I. Equity instruments 679,366 566,378 II. Debt securities 447,234 455,699 III. Hybrid financial instruments 14,795 15,460 A-4) Financial assets held for sale - - A-5) Loans and receivables 9 34,047 91,609 I. Debt securities 455 218 III. Deposits in credit institutions 25,038 84,086 V. Credits for operations of social welfare 224 56 IX. Other loans 8,330 7,249 A-6) Held-to-maturity investments 9 320,520 308,798 A-7) Derivatives held for hedging - - A-8) Reinsurers’ share of technical provisions 11 6,310 5,746 IV. Other technical provisions 6,310 5,746 A-9) Property, plant and equipment and investment property 8 536 570 I. Property, plant and equipment 536 570 A-10) Intangible assets 7 11 7 III. Other intangible assets 11 7 A-11) Investment in group companies and associates 9 42,219 42,195 III. Investments in associates 42,219 42,195 A-12) Tax assets - - A-13) Other assets 38 - A-14) Assets held for sale - - TOTAL ASSETS 1,719,670 1,606,405
(*) Presented solely and exclusively for comparison purposes.
44
GEROA PENTSIOAK, ENTIDAD DE PREVISION SOCIAL VOLUNTARIA
BALANCE SHEETS AT 31 DECEMBER 2015(Expressed in thousand Euros)
Note 31.12.2015 31.12.2014 (*)A) ASSETSA-1) Cash and cash equivalents 9 173,370 118,804A-2) Liquid financial assets held for trading 9 1,224 1,139
III. Derivatives 1,224 1,139A-3) Other financial assets at fair value through profit or loss 9 1,141,395 1,037,537
I. Equity instruments 679,366 566,378II. Debt securities 447,234 455,699III. Hybrid financial instruments 14,795 15,460
A-4) Financial assets held for sale - -A-5) Loans and receivables 9 34,047 91,609
I. Debt securities 455 218III. Deposits in credit institutions 25,038 84,086V. Credits for operations of social welfare 224 56IX. Other loans 8,330 7,249
A-6) Held-to-maturity investments 9 320,520 308,798A-7) Derivatives held for hedging - -A-8) Reinsurers’ share of technical provisions 11 6,310 5,746
IV. Other technical provisions 6,310 5,746A-9) Property, plant and equipment and investment property 8 536 570
I. Property, plant and equipment 536 570A-10) Intangible assets 7 11 7
III. Other intangible assets 11 7A-11) Investment in group companies and associates 9 42,219 42,195
III. Investments in associates 42,219 42,195A-12) Tax assets - -A-13) Other assets 38 -A-14) Assets held for sale - -TOTAL ASSETS 1,719,670 1,606,405
(*) Presented solely and exclusively for comparison purposes.
44 45
GEROA PENTSIOAK, ENTIDAD DE PREVISION SOCIAL VOLUNTARIA BALANCE SHEETS AT 31 DECEMBER 2015 (Expressed in thousand Euros)
1
Note 31.12.2015 31.12.2014 (*) A) ASSETS A-1) Cash and cash equivalents 9 173,370 118,804 A-2) Liquid financial assets held for trading 9 1,224 1,139 III. Derivatives 1,224 1,139 A-3) Other financial assets at fair value through profit or loss 9 1,141,395 1,037,537 I. Equity instruments 679,366 566,378 II. Debt securities 447,234 455,699 III. Hybrid financial instruments 14,795 15,460 A-4) Financial assets held for sale - - A-5) Loans and receivables 9 34,047 91,609 I. Debt securities 455 218 III. Deposits in credit institutions 25,038 84,086 V. Credits for operations of social welfare 224 56 IX. Other loans 8,330 7,249 A-6) Held-to-maturity investments 9 320,520 308,798 A-7) Derivatives held for hedging - - A-8) Reinsurers’ share of technical provisions 11 6,310 5,746 IV. Other technical provisions 6,310 5,746 A-9) Property, plant and equipment and investment property 8 536 570 I. Property, plant and equipment 536 570 A-10) Intangible assets 7 11 7 III. Other intangible assets 11 7 A-11) Investment in group companies and associates 9 42,219 42,195 III. Investments in associates 42,219 42,195 A-12) Tax assets - - A-13) Other assets 38 - A-14) Assets held for sale - - TOTAL ASSETS 1,719,670 1,606,405
(*) Presented solely and exclusively for comparison purposes.
GEROA PENTSIOAK, ENTIDAD DE PREVISION SOCIAL VOLUNTARIA BALANCE SHEETS AT 31 DECEMBER 2015 (Expressed in thousand Euros)
2
Note 31.12.2015 31.12.2014
(*) A) LIABILITIES A-1) Financial liabilities held for trade 51 - A-2) Other financial liabilities at fair value through profit and loss - - A-3) Debts and payables 9 497 565 IV. Debts for reinsurance transactions 123 240 IX. Other payables 374 325 A-4) Derivatives held for hedging - - A-5) Underwriting reserves 11 1,689,486 1,569,962 III. Reserve for pension activities 1,689,486 1,569,962
Mathematical reserve 78,197 69,136 Reserves linked to defined contribution plans in which the member assumes the investment risk 1,611,289 1,500,826 IV. Claims reserve - - V. Profit-sharing reserve - - VI. Other underwriting reserves - - A-6) Non-Underwriting reserves 12 47 47 IV. Other non-Underwriting reserves 47 47 A-8) Remaining liabilities - - A-9) Liabilities linked to assets held for sale - - TOTAL LIABILITIES 1,690,081 1,570,574
B) EQUITY B-1) Members’ funds 10 29,589 35,831 I. Members’ fund 15,911 15,911 III. Reserves 19,920 14,678 V. Profit from previous years - - VI Other contributions - - VII. Profit of the year (6,242) 5,242 VIII. (Equalization reserve) - - B-2) Measurment adjustments - - B-3) Received subventions, donations and legates - - TOTAL EQUITY 29,589 35,831
TOTAL EQUITY AND LIABILITIES 1,719,670 1,606,405 (*) Presented solely and exclusively for comparison purposes.
45
GEROA PENTSIOAK, ENTIDAD DE PREVISION SOCIAL VOLUNTARIA
BALANCE SHEETS AT 31 DECEMBER 2015(Expressed in thousand Euros)
Note 31.12.201531.12.2014
(*)A) LIABILITIESA-1) Financial liabilities held for trade 51 -A-2) Other financial liabilities at fair value through profit and loss - -A-3) Debts and payables 9 497 565
IV. Debts for reinsurance transactions 123 240IX. Other payables 374 325
A-4) Derivatives held for hedging - -A-5) Underwriting reserves 11 1,689,486 1,569,962
III. Reserve for pension activities 1,689,486 1,569,962
Mathematical reserve 78,197 69,136Reserves linked to defined contribution plans in which the memberassumes the investment risk 1,611,289 1,500,826
IV. Claims reserve - -V. Profit-sharing reserve - -VI. Other underwriting reserves - -
A-6) Non-Underwriting reserves 12 47 47IV. Other non-Underwriting reserves 47 47
A-8) Remaining liabilities - -A-9) Liabilities linked to assets held for sale - -TOTAL LIABILITIES 1,690,081 1,570,574
B) EQUITYB-1) Members’ funds 10 29,589 35,831
I. Members’ fund 15,911 15,911III. Reserves 19,920 14,678V. Profit from previous years - -VI Other contributions - -VII. Profit of the year (6,242) 5,242VIII. (Equalization reserve) - -
B-2) Measurment adjustments - -B-3) Received subventions, donations and legates - -TOTAL EQUITY 29,589 35,831
TOTAL EQUITY AND LIABILITIES 1,719,670 1,606,405
(*) Presented solely and exclusively for comparison purposes.
46 47
GEROA PENTSIOAK, ENTIDAD DE PREVISION SOCIAL VOLUNTARIA INCOME STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2015 (Expressed in thousand Euros)
3
Note 2015 2014 (*)
I. SOCIAL WELFARE PLAN ACTIVITY ACCOUNT (7.663) 2.404
I.1 Subscriptions for the year, net of reinsurance 78.526 77.547
I.2 Income from fixed assets and investments 9.2 19.147 15.369
I.3 Income from investments linked to defined contribution plans 9.2 439.644 363.860
I.4 Other Technical Income 9 24
I.5 Benefits for the Year, Net of Reinsurance (47.115) (36.652)
I.6 Change in Other Underwriting reserves, Net of Reinsurance (+ or -) 11 (118.959) (163.110)
I.7 Profit-shares - -
I.8 Operating expenses 13 (895) (653)
I.9 Other Technical Expenses (+ ó -) - -
I.10 Loss from fixed assets and investments 9.2 (15.749) (10.267)
I.11 Loss from investments linked to defined contribution plans 9.2 (362.271) (243.714)
I.12 Subtotal (Results from Social Welfare Plan Activity Account) (7.663) 2.404
II. OTHER ACTIVITIES PERFORMED ACCOUNT - -
II.1 Subscriptions for the year, net of reinsurance - -
II.2 Income from fixed assets and investments - -
II.3 Other Technical Income - -
II.4 Benefits for the Year, Net of Reinsurance - -
II.5 Change in Other Underwriting reserves, Net of Reinsurance (+ or -) - -
II.6 Profit-shares - -
II.7 Operating expenses - -
II.8 Other Technical Expenses (+ ó -) - -
II.9 Loss from fixed assets and investments - -
II.10 Subtotal (Results from other activities performed account) - -
III. NON SOCIAL WELFARE PLAN ACTIVITY ACCOUNT 1.421 2.838
III.1 Income from fixed assets and investments 8.219 8.686
III.2 Loss from fixed assets and investments (6.798) (5.848)
III.3 Other income - -
III.4 Other losses - -
III.5 Subtotal (Results from Non social Welfare Plan Activity Account) 1.421 2.838
III.10 PROFIT FOR THE YEAR (I.12+II.10+III.5) (6.242) 5.242
(*) Presented solely and exclusively for comparison purposes.
46
GEROA PENTSIOAK, ENTIDAD DE PREVISION SOCIAL VOLUNTARIA
INCOME STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2015(Expressed in thousand Euros)
Note 2015 2014 (*)
I. SOCIAL WELFARE PLAN ACTIVITY ACCOUNT (7.663) 2.404
I.1 Subscriptions for the year, net of reinsurance 78.526 77.547
I.2 Income from fixed assets and investments 9.2 19.147 15.369
I.3 Income from investments linked to defined contribution plans 9.2 439.644 363.860
I.4 Other Technical Income 9 24
I.5 Benefits for the Year, Net of Reinsurance (47.115) (36.652)
I.6 Change in Other Underwriting reserves, Net of Reinsurance (+ or -) 11 (118.959) (163.110)
I.7 Profit-shares - -
I.8 Operating expenses 13 (895) (653)
I.9 Other Technical Expenses (+ ó -) - -
I.10 Loss from fixed assets and investments 9.2 (15.749) (10.267)
I.11 Loss from investments linked to defined contribution plans 9.2 (362.271) (243.714)
I.12 Subtotal (Results from Social Welfare Plan Activity Account) (7.663) 2.404
II. OTHER ACTIVITIES PERFORMED ACCOUNT - -
II.1 Subscriptions for the year, net of reinsurance - -
II.2 Income from fixed assets and investments - -
II.3 Other Technical Income - -
II.4 Benefits for the Year, Net of Reinsurance - -
II.5 Change in Other Underwriting reserves, Net of Reinsurance (+ or -) - -
II.6 Profit-shares - -
II.7 Operating expenses - -
II.8 Other Technical Expenses (+ ó -) - -
II.9 Loss from fixed assets and investments - -
II.10 Subtotal (Results from other activities performed account) - -
III. NON SOCIAL WELFARE PLAN ACTIVITY ACCOUNT 1.421 2.838
III.1 Income from fixed assets and investments 8.219 8.686
III.2 Loss from fixed assets and investments (6.798) (5.848)
III.3 Other income - -
III.4 Other losses - -
III.5 Subtotal (Results from Non social Welfare Plan Activity Account) 1.421 2.838
III.10 PROFIT FOR THE YEAR (I.12+II.10+III.5) (6.242) 5.242
(*) Presented solely and exclusively for comparison purposes.
46 47
GEROA PENTSIOAK, ENTIDAD DE PREVISION SOCIAL VOLUNTARIA INCOME STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2015 (Expressed in thousand Euros)
3
Note 2015 2014 (*)
I. SOCIAL WELFARE PLAN ACTIVITY ACCOUNT (7.663) 2.404
I.1 Subscriptions for the year, net of reinsurance 78.526 77.547
I.2 Income from fixed assets and investments 9.2 19.147 15.369
I.3 Income from investments linked to defined contribution plans 9.2 439.644 363.860
I.4 Other Technical Income 9 24
I.5 Benefits for the Year, Net of Reinsurance (47.115) (36.652)
I.6 Change in Other Underwriting reserves, Net of Reinsurance (+ or -) 11 (118.959) (163.110)
I.7 Profit-shares - -
I.8 Operating expenses 13 (895) (653)
I.9 Other Technical Expenses (+ ó -) - -
I.10 Loss from fixed assets and investments 9.2 (15.749) (10.267)
I.11 Loss from investments linked to defined contribution plans 9.2 (362.271) (243.714)
I.12 Subtotal (Results from Social Welfare Plan Activity Account) (7.663) 2.404
II. OTHER ACTIVITIES PERFORMED ACCOUNT - -
II.1 Subscriptions for the year, net of reinsurance - -
II.2 Income from fixed assets and investments - -
II.3 Other Technical Income - -
II.4 Benefits for the Year, Net of Reinsurance - -
II.5 Change in Other Underwriting reserves, Net of Reinsurance (+ or -) - -
II.6 Profit-shares - -
II.7 Operating expenses - -
II.8 Other Technical Expenses (+ ó -) - -
II.9 Loss from fixed assets and investments - -
II.10 Subtotal (Results from other activities performed account) - -
III. NON SOCIAL WELFARE PLAN ACTIVITY ACCOUNT 1.421 2.838
III.1 Income from fixed assets and investments 8.219 8.686
III.2 Loss from fixed assets and investments (6.798) (5.848)
III.3 Other income - -
III.4 Other losses - -
III.5 Subtotal (Results from Non social Welfare Plan Activity Account) 1.421 2.838
III.10 PROFIT FOR THE YEAR (I.12+II.10+III.5) (6.242) 5.242
(*) Presented solely and exclusively for comparison purposes.
GEROA PENTSIOAK, ENTIDAD DE PREVISION SOCIAL VOLUNTARIA STATEMENT OF CHANGES IN EQUITY FOR THE YEARS ENDED 31 DECEMBER 2015 (Expressed in thousand Euros)
4
A) STATEMENT OF RECOGNISED INCOME AND EXPENSES 2015 2014 (*)
I) PROFIT FOR THE YEAR (6,242) 5,242
II) OTHER RECOGNISED INCOME AND EXPENSE - -
II.1 Available-for-sale financial assets - -
II.2 Cash flow hedges - -
II.3 Net investment hedging on foreign operations - -
II.4 Differences on exchange and conversion - -
II.5 Correction of accounting asymmetries - -
II.6 Assets held for sale - -
II.7 Actuarial gains/(losses) for long-term employee compensation - -
II.8 Other recognised income and expenses - -
III) TOTAL RECOGNISED INCOME AND EXPENSE (6,242) 5,242 (*) Presented solely and exclusively for comparison purposes.
47
GEROA PENTSIOAK, ENTIDAD DE PREVISION SOCIAL VOLUNTARIA
STATEMENT OF CHANGES IN EQUITY FOR THE YEARS ENDED 31 DECEMBER 2015(Expressed in thousand Euros)
A) STATEMENT OF RECOGNISED INCOME AND EXPENSES
2015 2014 (*)
I) PROFIT FOR THE YEAR (6,242) 5,242
II) OTHER RECOGNISED INCOME AND EXPENSE - -
II.1 Available-for-sale financial assets - -
II.2 Cash flow hedges - -
II.3 Net investment hedging on foreign operations - -
II.4 Differences on exchange and conversion - -
II.5 Correction of accounting asymmetries - -
II.6 Assets held for sale - -
II.7 Actuarial gains/(losses) for long-term employee compensation - -
II.8 Other recognised income and expenses - -
III) TOTAL RECOGNISED INCOME AND EXPENSE (6,242) 5,242
(*) Presented solely and exclusively for comparison purposes.
48 49
GER
OA
PENT
SIO
AK, E
NTID
AD D
E PR
EVIS
ION
SOCI
AL V
OLU
NTAR
IA
STAT
EMEN
T O
F CH
ANG
ES IN
EQ
UITY
FO
R TH
E YE
ARS
ENDE
D 2
015
(Exp
ress
ed in
thou
sand
Eur
os)
5
B)
STAT
EMEN
T O
F TO
TAL
CHAN
GES
IN E
QUI
TY
Cap
ital
M
embe
rs’ F
und
R
eser
ves
Pr
ofits
from
pr
evio
us y
ears
Oth
er
Con
trib
utio
ns
Pr
ofit
for t
he
year
Mea
sure
men
t Ad
just
men
ts
Rec
eive
d Su
bven
tions
, do
natio
ns a
nd
lega
tes
To
tal
CLO
SIN
G B
ALAN
CE
2014
(*)
15,9
11
14
,678
-
-
5,24
2
-
-
35,8
31
I. Ad
just
men
ts d
ue to
cha
nges
in a
ccou
ntin
g st
anda
rds
-
-
-
-
-
-
-
-
II. A
djus
tmen
ts d
ue to
err
ors
-
-
-
-
-
-
-
-
OPE
NIN
G B
ALAN
CE
2015
15
,911
14,6
78
-
-
5,
242
-
-
35
,831
I. To
tal r
ecog
nize
d in
com
e (e
xpen
ses)
-
-
-
-
(6
,242
)
-
-
(6,2
42)
II. T
rans
actio
ns w
ith o
wne
rs
-
-
-
-
-
-
-
-
In
crea
ses
in M
utua
l Fun
d -
-
-
-
-
-
-
-
(-
) Red
uctio
ns in
Mut
ual F
und
-
-
-
-
-
-
-
-
R
ecla
ssifi
catio
n of
fina
ncia
l lia
bilit
ies
to o
ther
equ
ity in
stru
men
ts
-
-
-
-
-
-
-
-
In
crea
ses
(red
uctio
ns) d
ue to
bus
ines
s co
mbi
natio
ns
-
-
-
-
-
-
-
-
O
tras
oper
acio
nes
con
soci
os
-
-
-
-
-
-
-
-
III. O
ther
cha
nges
in e
quity
-
5,
242
-
-
(5
,242
)
-
-
-
Tr
ansf
ers
amon
g eq
uity
item
s -
-
-
-
-
-
-
-
O
ther
cha
nges
-
5,
242
-
-
(5
,242
)
-
-
-
CLO
SIN
G B
ALAN
CE
2015
15
,911
19,9
20
-
-
(6
,242
)
-
-
29,5
89
(*
) Pre
sent
ed s
olel
y an
d ex
clus
ivel
y fo
r com
paris
on p
urpo
ses.
48
GER
OA
PENT
SIO
AK, E
NTID
AD D
E PR
EVIS
ION
SOCI
AL V
OLU
NTAR
IA
STAT
EMEN
T O
F CH
ANG
ES IN
EQ
UITY
FO
R TH
E YE
ARS
ENDE
D20
15(E
xpre
ssed
in th
ousa
nd E
uros
)
B)ST
ATEM
ENT
OF
TOTA
L CH
ANG
ES IN
EQ
UITY
Cap
ital
Mem
bers
’ Fun
dR
eser
ves
Prof
its fr
om
prev
ious
yea
rsO
ther
C
ontr
ibut
ions
Prof
it fo
r the
ye
arM
easu
rem
ent
Adju
stm
ents
Rec
eive
d Su
bven
tions
, do
natio
ns a
nd
lega
tes
Tota
l
CLO
SIN
G B
ALAN
CE
2014
(*)
15,9
1114
,678
--
5,24
2-
-35
,831
I. Ad
just
men
ts d
ue to
cha
nges
in a
ccou
ntin
g st
anda
rds
--
--
--
--
II. A
djus
tmen
ts d
ue to
err
ors
--
--
--
--
OPE
NIN
G B
ALAN
CE
2015
15,9
1114
,678
--
5,24
2-
-35
,831
I. To
tal r
ecog
nize
d in
com
e (e
xpen
ses)
--
--
(6,2
42)
--
(6,2
42)
II. T
rans
actio
ns w
ith o
wne
rs
--
--
--
--
Incr
ease
s in
Mut
ual F
und
--
--
--
--
(-) R
educ
tions
in M
utua
l Fun
d-
--
--
--
-
Rec
lass
ifica
tion
of fi
nanc
ial l
iabi
litie
s to
oth
er e
quity
inst
rum
ents
-
--
--
--
-
Incr
ease
s (r
educ
tions
) due
to b
usin
ess
com
bina
tions
-
--
--
--
-
Otra
s op
erac
ione
s co
n so
cios
-
--
--
--
-
III. O
ther
cha
nges
in e
quity
-5,
242
--
(5,2
42)
--
-
Tran
sfer
s am
ong
equi
ty it
ems
--
--
--
--
Oth
er c
hang
es-
5,24
2-
-(5
,242
)-
--
CLO
SIN
G B
ALAN
CE
2015
15,9
1119
,920
--
(6,2
42)
--
29,5
89
(*)P
rese
nted
sol
ely
and
excl
usiv
ely
for c
ompa
rison
pur
pose
s.
GER
OA
PENT
SIO
AK, E
NTID
AD D
E PR
EVIS
ION
SOCI
AL V
OLU
NTAR
IA
STAT
EMEN
T O
F CH
ANG
ES IN
EQ
UITY
FO
R TH
E YE
ARS
ENDE
D 2
014
(Exp
ress
ed in
thou
sand
Eur
os)
6
Cap
ital
M
embe
rs’ F
und
R
eser
ves
Pr
ofits
from
pr
evio
us y
ears
Oth
er
Con
trib
utio
ns
Pr
ofit
for t
he
year
Mea
sure
men
t Ad
just
men
ts
Rec
eive
d Su
bven
tions
, do
natio
ns a
nd
lega
tes
To
tal
CLO
SIN
G B
ALAN
CE
2013
15
,911
13,2
82
-
-
6,
686
-
-
35
,879
I. Ad
just
men
ts d
ue to
cha
nges
in a
ccou
ntin
g st
anda
rds
-
-
-
-
-
-
-
-
II. A
djus
tmen
ts d
ue to
err
ors
-
-
-
-
-
-
-
-
OPE
NIN
G B
ALAN
CE
2014
15
,911
13,2
82
-
-
6,
686
-
-
35
,879
I. To
tal r
ecog
nize
d in
com
e (e
xpen
ses)
-
-
-
-
5,
242
-
-
5,
242
II. T
rans
actio
ns w
ith o
wne
rs
-
-
-
-
-
-
-
-
In
crea
ses
in M
utua
l Fun
d -
-
-
-
-
-
-
-
(-
) Red
uctio
ns in
Mut
ual F
und
-
-
-
-
-
-
-
-
R
ecla
ssifi
catio
n of
fina
ncia
l lia
bilit
ies
to o
ther
equ
ity in
stru
men
ts
-
-
-
-
-
-
-
-
In
crea
ses
(red
uctio
ns) d
ue to
bus
ines
s co
mbi
natio
ns
-
-
-
-
-
-
-
-
O
tras
oper
acio
nes
con
soci
os
-
-
-
-
-
-
-
-
III. O
ther
cha
nges
in e
quity
-
1,
396
-
-
(6
,686
)
-
-
(5,2
90)
Tr
ansf
ers
amon
g eq
uity
item
s -
-
-
-
-
-
-
-
O
ther
cha
nges
-
1,
396
-
-
(6
,686
)
-
-
(5,2
90)
CLO
SIN
G B
ALAN
CE
2014
(*)
15,9
11
14
,678
-
-
5,24
2
-
-
35,8
31
(*
) Pre
sent
ed s
olel
y an
d ex
clus
ivel
y fo
r com
paris
on p
urpo
ses.
48 49
GER
OA
PENT
SIO
AK, E
NTID
AD D
E PR
EVIS
ION
SOCI
AL V
OLU
NTAR
IA
STAT
EMEN
T O
F CH
ANG
ES IN
EQ
UITY
FO
R TH
E YE
ARS
ENDE
D 2
014
(Exp
ress
ed in
thou
sand
Eur
os)
6
Cap
ital
M
embe
rs’ F
und
R
eser
ves
Pr
ofits
from
pr
evio
us y
ears
Oth
er
Con
trib
utio
ns
Pr
ofit
for t
he
year
Mea
sure
men
t Ad
just
men
ts
Rec
eive
d Su
bven
tions
, do
natio
ns a
nd
lega
tes
To
tal
CLO
SIN
G B
ALAN
CE
2013
15
,911
13,2
82
-
-
6,
686
-
-
35
,879
I. Ad
just
men
ts d
ue to
cha
nges
in a
ccou
ntin
g st
anda
rds
-
-
-
-
-
-
-
-
II. A
djus
tmen
ts d
ue to
err
ors
-
-
-
-
-
-
-
-
OPE
NIN
G B
ALAN
CE
2014
15
,911
13,2
82
-
-
6,
686
-
-
35
,879
I. To
tal r
ecog
nize
d in
com
e (e
xpen
ses)
-
-
-
-
5,
242
-
-
5,
242
II. T
rans
actio
ns w
ith o
wne
rs
-
-
-
-
-
-
-
-
In
crea
ses
in M
utua
l Fun
d -
-
-
-
-
-
-
-
(-
) Red
uctio
ns in
Mut
ual F
und
-
-
-
-
-
-
-
-
R
ecla
ssifi
catio
n of
fina
ncia
l lia
bilit
ies
to o
ther
equ
ity in
stru
men
ts
-
-
-
-
-
-
-
-
In
crea
ses
(red
uctio
ns) d
ue to
bus
ines
s co
mbi
natio
ns
-
-
-
-
-
-
-
-
O
tras
oper
acio
nes
con
soci
os
-
-
-
-
-
-
-
-
III. O
ther
cha
nges
in e
quity
-
1,
396
-
-
(6
,686
)
-
-
(5,2
90)
Tr
ansf
ers
amon
g eq
uity
item
s -
-
-
-
-
-
-
-
O
ther
cha
nges
-
1,
396
-
-
(6
,686
)
-
-
(5,2
90)
CLO
SIN
G B
ALAN
CE
2014
(*)
15,9
11
14
,678
-
-
5,24
2
-
-
35,8
31
(*
) Pre
sent
ed s
olel
y an
d ex
clus
ivel
y fo
r com
paris
on p
urpo
ses.
49
GER
OA
PENT
SIO
AK, E
NTID
AD D
E PR
EVIS
ION
SOCI
AL V
OLU
NTAR
IA
STAT
EMEN
T O
F CH
ANG
ES IN
EQ
UITY
FO
R TH
E YE
ARS
ENDE
D20
14(E
xpre
ssed
in th
ousa
nd E
uros
)
6
Cap
ital
Mem
bers
’ Fun
dR
eser
ves
Prof
its fr
om
prev
ious
yea
rsO
ther
C
ontr
ibut
ions
Prof
it fo
r the
ye
arM
easu
rem
ent
Adju
stm
ents
Rec
eive
d Su
bven
tions
, do
natio
ns a
nd
lega
tes
Tota
l
CLO
SIN
G B
ALAN
CE
2013
15,9
1113
,282
--
6,68
6-
-35
,879
I. Ad
just
men
ts d
ue to
cha
nges
in a
ccou
ntin
g st
anda
rds
--
--
--
--
II. A
djus
tmen
ts d
ue to
err
ors
--
--
--
--
OPE
NIN
G B
ALAN
CE
2014
15,9
1113
,282
--
6,68
6-
-35
,879
I. To
tal r
ecog
nize
d in
com
e (e
xpen
ses)
--
--
5,24
2-
-5,
242
II. T
rans
actio
ns w
ith o
wne
rs
--
--
--
--
Incr
ease
s in
Mut
ual F
und
--
--
--
--
(-) R
educ
tions
in M
utua
l Fun
d-
--
--
--
-
Rec
lass
ifica
tion
of fi
nanc
ial l
iabi
litie
s to
oth
er e
quity
inst
rum
ents
-
--
--
--
-
Incr
ease
s (r
educ
tions
) due
to b
usin
ess
com
bina
tions
-
--
--
--
-
Otra
s op
erac
ione
s co
n so
cios
-
--
--
--
-
III. O
ther
cha
nges
in e
quity
-1,
396
--
(6,6
86)
--
(5,2
90)
Tran
sfer
s am
ong
equi
ty it
ems
--
--
--
--
Oth
er c
hang
es-
1,39
6-
-(6
,686
)-
-(5
,290
)
CLO
SIN
G B
ALAN
CE
2014
(*)
15,9
1114
,678
--
5,24
2-
-35
,831
(*)P
rese
nted
sol
ely
and
excl
usiv
ely
for c
ompa
rison
pur
pose
s.
50 51
GEROA PENTSIOAK, ENTIDAD DE PREVISION SOCIAL VOLUNTARIA STATEMENT OF CASH FLOWS FOR THE YEARS ENDED 31 DECEMBER 2015 (Expressed in thousand Euros)
7
2015 2014 (*) A) CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES A.1) Pension Plans Activity 1. Subscriptions received 82,629 81,949 3. Proceeds from ouotward reinsurance 3,537 3,678 4. Outward reinsurance payment (4,104) (4,402) 5. Benefits paid (50,407) (40,095) 7. Other operating proceeds 321 474 8. Other operating payments (2,138) (2,067) 9. Total Cash collections related to pension activities (1+3+7)=I 86,487 86,101 10. Total Cash payments related to pension activities (4+5+8)=II (56,649) (46,564) A.2) Other operating activities 3. Proceeds from other activities - - 4. Payments from other activities - - 5. Other collections related to operating activities (3)=III - - 6. Other payments related to operating activities (4)=IV - - A.3) Cash Flows from operating activities (I+II+III+IV) 29,838 39,537 B) CASH FLOWS FROM INVESTMENT ACTIVITIES B.1) Collections 1. Property, plant and equipment - 2. Inversiones inmobiliarias - 3. Intangible assets - 4. Financial instruments 558,026 475,569 5. Shares of stock in Dependent, Multi-group and Associated Entities - 6. Collected interests 34,689 46,543 7. Collected dividends 3,672 3,741 8. Business unit - - 9. Other collections related to investment activities - -
10. Total Cash collections from investment activities (1+2+3+4+5+6+7+8+9)=VI 596,387 525,853 B.2) Payments 1. Property, plant and equipment (15) (2) 2. Inversiones inmobiliarias - 3. Intangible assets (6) - 4. Financial instruments (571,638) (529,721) 5. Shares of stock in Dependent, Multi-group and Associated Entities - 6. Business unit - 7. Other collections related to investment activities - 8. Total Cash collections from investment activities (1+2+3+4+5+6+7)=VII (571,659) (529,723) B.3) Cash flows from investment activities (VI-VII) 24,728 (3,870)
50
GEROA PENTSIOAK, ENTIDAD DE PREVISION SOCIAL VOLUNTARIA
STATEMENT OF CASH FLOWS FOR THE YEARS ENDED 31 DECEMBER 2015(Expressed in thousand Euros)
2015 2014 (*)A) CASH FLOWS FROM (USED IN) OPERATING ACTIVITIESA.1) Pension Plans Activity1. Subscriptions received 82,629 81,9493. Proceeds from ouotward reinsurance 3,537 3,6784. Outward reinsurance payment (4,104) (4,402)5. Benefits paid (50,407) (40,095)7. Other operating proceeds 321 4748. Other operating payments (2,138) (2,067)9. Total Cash collections related to pension activities (1+3+7)=I 86,487 86,10110. Total Cash payments related to pension activities (4+5+8)=II (56,649) (46,564)A.2) Other operating activities3. Proceeds from other activities - -4. Payments from other activities - -5. Other collections related to operating activities (3)=III - -6. Other payments related to operating activities (4)=IV - -A.3) Cash Flows from operating activities (I+II+III+IV) 29,838 39,537
B) CASH FLOWS FROM INVESTMENT ACTIVITIESB.1) Collections1. Property, plant and equipment -2. Inversiones inmobiliarias -3. Intangible assets -4. Financial instruments 558,026 475,5695. Shares of stock in Dependent, Multi-group and Associated Entities -6. Collected interests 34,689 46,5437. Collected dividends 3,672 3,7418. Business unit - -9. Other collections related to investment activities - -
10. Total Cash collections from investment activities (1+2+3+4+5+6+7+8+9)=VI 596,387 525,853B.2) Payments1. Property, plant and equipment (15) (2)2. Inversiones inmobiliarias -3. Intangible assets (6) -4. Financial instruments (571,638) (529,721)5. Shares of stock in Dependent, Multi-group and Associated Entities -6. Business unit -7. Other collections related to investment activities -8. Total Cash collections from investment activities (1+2+3+4+5+6+7)=VII (571,659) (529,723)B.3) Cash flows from investment activities (VI-VII) 24,728 (3,870)
50 51
GEROA PENTSIOAK, ENTIDAD DE PREVISION SOCIAL VOLUNTARIA STATEMENT OF CASH FLOWS FOR THE YEARS ENDED 31 DECEMBER 2015 (Expressed in thousand Euros)
8
2015 2014 (*) C) CASH FLOW FROM FINANCING ACTIVITIES C.1) Collections 1. Subordinated liabilities - - 2. Mutual Fund - - 3. Contributions - - 5. Other collections related to financing activities - - 6. Cash collection from financing activities (1+2+3+5)=VIII - - C.2) Payments 2. Interests - - 3. Subordinated liabilities - - 4. Payments due to reimbursements - - 5. Reimbursements - - 7. Other payments related to financing activities - - 8. Cash payments from financing activities (2+3+4+5+7)=IX - - C.3) Cash flow from financing activities (VIII-IX) - - Effect of exchange rate fluctuations (X) - - Net increase/(decrease) in cash and cash equivalents (A.3+B.3+C.3+-X) 54,566 35,667 Cash and cash equivalents at beginning of the year 118,804 83,137 Cash and cash equivalents at end of the year 173,370 118,804 Cash and cash equivalents at end of the period 1. Cash 166,253 112,443 2. Other financial assets 7,117 6,361 3. Bank overdrafts repayable on demand - -
Total cash and cash equivalents end of the year (1+2+3) 173,370 118,804
(*) Presented solely and exclusively for comparison purposes.
51
GEROA PENTSIOAK, ENTIDAD DE PREVISION SOCIAL VOLUNTARIA
STATEMENT OF CASH FLOWS FOR THE YEARS ENDED 31 DECEMBER 2015(Expressed in thousand Euros)
2015 2014 (*)C) CASH FLOW FROM FINANCING ACTIVITIESC.1) Collections1. Subordinated liabilities - -2. Mutual Fund - -3. Contributions - -5. Other collections related to financing activities - -6. Cash collection from financing activities (1+2+3+5)=VIII - -C.2) Payments2. Interests - -3. Subordinated liabilities - -4. Payments due to reimbursements - -5. Reimbursements - -7. Other payments related to financing activities - -8. Cash payments from financing activities (2+3+4+5+7)=IX - -C.3) Cash flow from financing activities (VIII-IX) - --Effect of exchange rate fluctuations (X) - --Net increase/(decrease) in cash and cash equivalents (A.3+B.3+C.3+-X) 54,566 35,667Cash and cash equivalents at beginning of the year 118,804 83,137Cash and cash equivalents at end of the year 173,370 118,804804
Cash and cash equivalents at end of the period1. Cash 166,253 112,4432. Other financial assets 7,117 6,3613. Bank overdrafts repayable on demand - -
Total cash and cash equivalents end of the year (1+2+3) 173,370 118,804804
(*) Presented solely and exclusively for comparison purposes.
52 53
GEROA PENTSIOAK, ENTIDAD DE PREVISION SOCIAL VOLUNTARIA Notes to the 2015 annual accounts (Expressed in thousand Euros)
9
1. Nature and principal activities Geroa Pentsioak, Entidad de Previsión Social Voluntaria (hereinafter the Entity) was incorporated on January 9, 1996 and its founding members were Asociación de Empresarios de Gipuzkoa (ADEGI) – Gipuzkoako Entrepresarien Elkartea, Eusko Langilleen Alkartasuna/Solidaridad de Trabajadores Vascos (ELA/STV), Langile Abertzaleen Batzordeak (LAB), Federación Estatal de Comisiones Obreras del Metal de Gipuzkoa (CCOO) and Federación Estatal Siderometalúrgica de UGT de Gipuzkoa. The Entity commenced activity on January 1, 1996 and its registered offices are located in San Sebastian (Spain). His performance is subject to the requirements established by Law 5/2012 of February 23 on voluntary social welfare institutions and Decree 87/1984 of February 20, which approves the regulations developing it also modified and amended by Decree 92/2007, of May 29, by Order of April 29, 2009 and Decree 86/2010, of March 16 approving adaptation Accounting Plan for Insurance Companies specificities of Voluntary Social Welfare Entities. From January 1st, 2016, the Entity it is additionally subject to the Decree 203/2015 of October 27, approving the Regulation of Law 5/2012 of February 23, about Voluntary Social Welfare Entities, which has repealed partially the cited Decrees 87/1984 and 92/2007. On March 6, 2012 was published in the Official Bulletin of the Basque Country, Law 5/2012 of February 23 on the Voluntary Social Welfare Entities, which repealed Law 25/1983 of October 27. The Entities must comply with the new law from the day following its publication in the Official Bulletin of the Basque Country, although the Constitutional Court agreed to hear a constitutional challenge brought by the President of the Government, represented by the State Advocacy against twelve articles of Law 5/2012: 14th-2, 19.2, 28, 23.1) , 24, 26.1, 32.1, 46.2, 57.2, 58.1.c), 58.2 and 60.1. On June 12, 2014, the Constitutional Court delivered its judgment 97/2014, partially upholding the constitutional challenge, and consequently, declaring them unconstitutional and void Articles 14.a-2, 19.2, 22, 23.1 ), 32.1, 46.2, 58.1.c), 58.2 and 60.1. Based on the legal interpretation made by management and the members of the Governing Board of the Entity, the rules of the Basque Government remains fully in force for E.P.S.V. engaged exclusively in welfare activities, as is the case Geroa Pentsioak, E.P.S.V. This approach has been endorsed on December 2, 2014, by the Department of Treasury and Finance of the Basque Government through the statement issued on that date, where it is stated that "in relation to the financial reporting framework for EPSVs not engaged in insurance activities, the applicable regulations is established in Decree 92/2007 of May 29, the Order of April 29, 2009, Decree 92/2007 and Decree 86/2010 of March 16"
52
GEROA PENTSIOAK, ENTIDAD DE PREVISION SOCIAL VOLUNTARIA
Notes to the 2015 annual accounts(Expressed in thousand Euros)
1. Nature and principal activities
Geroa Pentsioak, Entidad de Previsión Social Voluntaria (hereinafter the Entity) was incorporated on January 9, 1996 and its founding members were Asociación de Empresarios de Gipuzkoa (ADEGI) – Gipuzkoako Entrepresarien Elkartea, Eusko Langilleen Alkartasuna/Solidaridad de Trabajadores Vascos (ELA/STV), Langile Abertzaleen Batzordeak (LAB), Federación Estatal de Comisiones Obreras del Metal de Gipuzkoa (CCOO) and Federación Estatal Siderometalúrgica de UGT de Gipuzkoa. The Entity commenced activity on January 1, 1996 and its registered offices are located in San Sebastian (Spain).
His performance is subject to the requirements established by Law 5/2012 of February 23 on voluntary social welfare institutions and Decree 87/1984 of February 20, which approves the regulations developing it also modified and amended by Decree 92/2007, of May 29, by Order of April 29, 2009 and Decree 86/2010, of March 16 approving adaptation Accounting Plan for Insurance Companies specificities of Voluntary Social Welfare Entities. From January 1stPlan for Insurance Companies specificities of Voluntary Social Welfare Entities.
stPlan for Insurance Companies specificities of Voluntary Social Welfare Entities.
, 2016, the Entity it is additionally subject to the Decree 203/2015 of October 27, approving the Regulation of Law 5/2012 of February 23, about Voluntary Social Welfare Entities, which has repealed partially the cited Decrees 87/1984 and 92/2007.
On March 6, 2012 was published in the Official Bulletin of the Basque Country, Law 5/2012 of February 23 on the Voluntary Social Welfare Entities, which repealed Law 25/1983 of October 27. The Entities must comply with the new law from the day following its publication in the Official Bulletin of the Basque Country, although the Constitutional Court agreed to hear a constitutional challenge brought by the President of the Government, represented by the State Advocacy against twelve articles of Law 5/2012: 14th-2, 19.2, 28, 23.1) , 24, 26.1, 32.1, 46.2, 57.2, 58.1.c), 58.2 and 60.1.
On June 12, 2014, the Constitutional Court delivered its judgment 97/2014, partially upholding the constitutional challenge, and consequently, declaring them unconstitutional and void Articles 14.a-2, 19.2, 22, 23.1 ), 32.1, 46.2, 58.1.c), 58.2 and 60.1.
Based on the legal interpretation made by management and the members of the Governing Board of the Entity, the rules of the Basque Government remains fully in force for E.P.S.V.engaged exclusively in welfare activities, as is the case Geroa Pentsioak, E.P.S.V. This approach has been endorsed on December 2, 2014, by the Department of Treasury and Finance of the Basque Government through the statement issued on that date, where it is stated that "in relation to the financial reporting framework for EPSVs not engaged in insurance activities, the applicable regulations is established in Decree 92/2007 of May 29, the Order of April 29, 2009, Decree 92/2007 and Decree 86/2010 of March 16"
GEROA PENTSIOAK, ENTIDAD DE PREVISION SOCIAL VOLUNTARIA
10
Laws and Regulations in force until December 31, 2015 The prevailing Regulation and Decree governing Voluntary Social Welfare Entities establish, inter alia, the following compulsory stipulations: (a) Administration costs of Voluntary Social Welfare Entities are those stated in the articles
of association. In the case of entities that operate under the defined contribution system, administration costs are established based on equity relating to each social welfare plan or on these plans and their yield and may not exceed, on an annual basis, the following limits: When they are calculated only on the basis of related equity, 2% of this equity.
When both variables are used, 1% of related equity and 10% of the yield.
The General Assembly, in its session of April 15, 2015, it passed to establish the administration expenses in a maximum of 0.37% (0.37% in 2014) on the equity, including the inherent expenses in the investment of IIC and entities of risk capital.
(b) Investments in assets must comply with certain requisites of diversification, dispersion and congruence: At least 70% of the assets of each social welfare plan must be invested in the
following types of assets:
Fixed and variable income securities and rights traded on regulated markets within the bounds of the OECD.
Shares and investments in collective investment undertakings and stock investment funds that comply with certain conditions regulated by EU Directive 85/61 1/CEE and Law 35/2003 governing collective investment undertakings.
Demand deposits or term deposits of less than or equal to 12 months.
Though, across the Order of May 21, 2013 of the Counselor of Estate and Finance and the article 11.8 of the Decree 92/2007, of May 29, it will be considered suitable assets for the investment for Voluntary Social Welfare Entities deposits with less or equal 7 years in credit entities, when those have their headquarter in a Member state of the European Union, that the previous ones are nominated in a currency who are negotiated in the OCDE, which are annotated in liabilities of the corresponding financial institutions and refer to the Supporting Financial Program of th SMEs, businessman and autonomous professional for the year 2013 regulated in the Decree 183/2013, of March 19.
Derivative financial instruments traded on organized markets.
52 53
GEROA PENTSIOAK, ENTIDAD DE PREVISION SOCIAL VOLUNTARIA Notes to the 2015 annual accounts (Expressed in thousand Euros)
9
1. Nature and principal activities Geroa Pentsioak, Entidad de Previsión Social Voluntaria (hereinafter the Entity) was incorporated on January 9, 1996 and its founding members were Asociación de Empresarios de Gipuzkoa (ADEGI) – Gipuzkoako Entrepresarien Elkartea, Eusko Langilleen Alkartasuna/Solidaridad de Trabajadores Vascos (ELA/STV), Langile Abertzaleen Batzordeak (LAB), Federación Estatal de Comisiones Obreras del Metal de Gipuzkoa (CCOO) and Federación Estatal Siderometalúrgica de UGT de Gipuzkoa. The Entity commenced activity on January 1, 1996 and its registered offices are located in San Sebastian (Spain). His performance is subject to the requirements established by Law 5/2012 of February 23 on voluntary social welfare institutions and Decree 87/1984 of February 20, which approves the regulations developing it also modified and amended by Decree 92/2007, of May 29, by Order of April 29, 2009 and Decree 86/2010, of March 16 approving adaptation Accounting Plan for Insurance Companies specificities of Voluntary Social Welfare Entities. From January 1st, 2016, the Entity it is additionally subject to the Decree 203/2015 of October 27, approving the Regulation of Law 5/2012 of February 23, about Voluntary Social Welfare Entities, which has repealed partially the cited Decrees 87/1984 and 92/2007. On March 6, 2012 was published in the Official Bulletin of the Basque Country, Law 5/2012 of February 23 on the Voluntary Social Welfare Entities, which repealed Law 25/1983 of October 27. The Entities must comply with the new law from the day following its publication in the Official Bulletin of the Basque Country, although the Constitutional Court agreed to hear a constitutional challenge brought by the President of the Government, represented by the State Advocacy against twelve articles of Law 5/2012: 14th-2, 19.2, 28, 23.1) , 24, 26.1, 32.1, 46.2, 57.2, 58.1.c), 58.2 and 60.1. On June 12, 2014, the Constitutional Court delivered its judgment 97/2014, partially upholding the constitutional challenge, and consequently, declaring them unconstitutional and void Articles 14.a-2, 19.2, 22, 23.1 ), 32.1, 46.2, 58.1.c), 58.2 and 60.1. Based on the legal interpretation made by management and the members of the Governing Board of the Entity, the rules of the Basque Government remains fully in force for E.P.S.V. engaged exclusively in welfare activities, as is the case Geroa Pentsioak, E.P.S.V. This approach has been endorsed on December 2, 2014, by the Department of Treasury and Finance of the Basque Government through the statement issued on that date, where it is stated that "in relation to the financial reporting framework for EPSVs not engaged in insurance activities, the applicable regulations is established in Decree 92/2007 of May 29, the Order of April 29, 2009, Decree 92/2007 and Decree 86/2010 of March 16"
GEROA PENTSIOAK, ENTIDAD DE PREVISION SOCIAL VOLUNTARIA
10
Laws and Regulations in force until December 31, 2015 The prevailing Regulation and Decree governing Voluntary Social Welfare Entities establish, inter alia, the following compulsory stipulations: (a) Administration costs of Voluntary Social Welfare Entities are those stated in the articles
of association. In the case of entities that operate under the defined contribution system, administration costs are established based on equity relating to each social welfare plan or on these plans and their yield and may not exceed, on an annual basis, the following limits: When they are calculated only on the basis of related equity, 2% of this equity.
When both variables are used, 1% of related equity and 10% of the yield.
The General Assembly, in its session of April 15, 2015, it passed to establish the administration expenses in a maximum of 0.37% (0.37% in 2014) on the equity, including the inherent expenses in the investment of IIC and entities of risk capital.
(b) Investments in assets must comply with certain requisites of diversification, dispersion and congruence: At least 70% of the assets of each social welfare plan must be invested in the
following types of assets:
Fixed and variable income securities and rights traded on regulated markets within the bounds of the OECD.
Shares and investments in collective investment undertakings and stock investment funds that comply with certain conditions regulated by EU Directive 85/61 1/CEE and Law 35/2003 governing collective investment undertakings.
Demand deposits or term deposits of less than or equal to 12 months.
Though, across the Order of May 21, 2013 of the Counselor of Estate and Finance and the article 11.8 of the Decree 92/2007, of May 29, it will be considered suitable assets for the investment for Voluntary Social Welfare Entities deposits with less or equal 7 years in credit entities, when those have their headquarter in a Member state of the European Union, that the previous ones are nominated in a currency who are negotiated in the OCDE, which are annotated in liabilities of the corresponding financial institutions and refer to the Supporting Financial Program of th SMEs, businessman and autonomous professional for the year 2013 regulated in the Decree 183/2013, of March 19.
Derivative financial instruments traded on organized markets.
53
GEROA PENTSIOAK, ENTIDAD DE PREVISION SOCIAL VOLUNTARIA
Laws and Regulations in force until December 31, 2015
The prevailing Regulation and Decree governing Voluntary Social Welfare Entities establish, inter alia, the following compulsory stipulations:
(a) Administration costs of Voluntary Social Welfare Entities are those stated in the articles of association. In the case of entities that operate under the defined contribution system, administration costs are established based on equity relating to each social welfare plan or on these plans and their yield and may not exceed, on an annual basis, the following limits:
When they are calculated only on the basis of related equity, 2% of this equity.
When both variables are used, 1% of related equity and 10% of the yield.
The General Assembly, in its session of April 15, 2015, it passed to establish the administration expenses in a maximum of 0.37% (0.37% in 2014) on the equity, including the inherent expenses in the investment of IIC and entities of risk capital.
(b) Investments in assets must comply with certain requisites of diversification, dispersion and congruence:
At least 70% of the assets of each social welfare plan must be invested in the following types of assets:
Fixed and variable income securities and rights traded on regulated markets within the bounds of the OECD.
Shares and investments in collective investment undertakings and stock investment funds that comply with certain conditions regulated by EU Directive 85/61 1/CEE and Law 35/2003 governing collective investment undertakings.
Demand deposits or term deposits of less than or equal to 12 months.Though, across the Order of May 21, 2013 of the Counselor of Estate and Finance and the article 11.8 of the Decree 92/2007, of May 29, it will be considered suitable assets for the investment for Voluntary Social Welfare Entities deposits with less or equal 7 years in credit entities, when those have their headquarter in a Member state of the European Union, that the previous ones are nominated in a currency who are negotiated in the OCDE, which are annotated in liabilities of the corresponding financial institutions and refer to the Supporting Financial Program of th SMEs, businessman and autonomous professional for the year 2013 regulated in the Decree 183/2013, of March 19.
Derivative financial instruments traded on organized markets.
54 55
GEROA PENTSIOAK, ENTIDAD DE PREVISION SOCIAL VOLUNTARIA
11
Assets must be sufficiently diversified. Investments in the assets of a single
company listed in a regulated market may not exceed 5% of the Entity’s total assets, or 10% in the case of assets issued by companies of the same group. These limits are also applicable for derivative financial instruments.
Voluntary Social Welfare Entities cannot invest more than 2% of their assets in
unlisted securities issued by a single entity, or more than 4% in the case of securities issued by companies of the same group.
Investments in unlisted securities issued by promoters or protectors of social
welfare plans may not exceed 2% of total plan assets. Investments in properties may not exceed 20% of total plan assets and a single
property may not exceed 10% of these assets. Investments in securities issued on venture capital companies may not exceed
20%, on face value, of the total amount of shares issued. Investments in a single collective investment undertaking, asset securitization
fund or stock investment fund can be up to 20% of the assets of each plan.
These regulations governing limits are applicable as of January 1, 2010. (c) When a Voluntary Social Welfare Entity performs activities other than those that relate
to social welfare plans for retirement, death, permanent disability, long-term unemployment or serious illness, it should clearly define the assets and liabilities affected by these activities, without permitting, under any circumstance, the transfer of rights and obligations among the different activities.
(d) The governing board shall approve the entity’s investment policy through a written declaration of investment principles which should be reviewed at least every three years. The governing board of the Entity, at its meeting on 17 December has approved the entity’s investment policy currently in force, updating the concentration limits and the requirement for the held-to-maturity portfolio.
(e) Voluntary Social Welfare Entities that assume biometric risks and/or guarantee the result of an investment or a certain level of benefits must create adequate technical provisions to cover the related obligations. The calculation of minimum technical provisions should be made using prudent prospective actuarial methods, taking into account all obligations related to benefits and contributions in accordance with the entity’s pension options. This amount should be sufficient to finance current benefits and reflect the obligations deriving from pensions accrued by ordinary members. Economic and actuarial assumptions used to evaluate liabilities should also be chosen with prudence.
54
GEROA PENTSIOAK, ENTIDAD DE PREVISION SOCIAL VOLUNTARIA
Assets must be sufficiently diversified. Investments in the assets of a single company listed in a regulated market may not exceed 5% of the Entity’s total assets, or 10% in the case of assets issued by companies of the same group. These limits are also applicable for derivative financial instruments.
Voluntary Social Welfare Entities cannot invest more than 2% of their assets in unlisted securities issued by a single entity, or more than 4% in the case of securities issued by companies of the same group.
Investments in unlisted securities issued by promoters or protectors of social welfare plans may not exceed 2% of total plan assets.
Investments in properties may not exceed 20% of total plan assets and a single property may not exceed 10% of these assets.
Investments in securities issued on venture capital companies may not exceed 20%, on face value, of the total amount of shares issued.
Investments in a single collective investment undertaking, asset securitizationfund or stock investment fund can be up to 20% of the assets of each plan.
These regulations governing limits are applicable as of January 1, 2010.
(c) When a Voluntary Social Welfare Entity performs activities other than those that relate to social welfare plans for retirement, death, permanent disability, long-term unemployment or serious illness, it should clearly define the assets and liabilities affected by these activities, without permitting, under any circumstance, the transfer of rights and obligations among the different activities.
(d) The governing board shall approve the entity’s investment policy through a written declaration of investment principles which should be reviewed at least every three years.
The governing board of the Entity, at its meeting on 17 December has approved the entity’s investment policy currently in force, updating the concentration limits and the requirement for the held-to-maturity portfolio.
(e) Voluntary Social Welfare Entities that assume biometric risks and/or guarantee the result of an investment or a certain level of benefits must create adequate technical provisions to cover the related obligations. The calculation of minimum technical provisions should be made using prudent prospective actuarial methods, taking into account all obligations related to benefits and contributions in accordance with the entity’s pension options. This amount should be sufficient to finance current benefits and reflect the obligations deriving from pensions accrued by ordinary members. Economic and actuarial assumptions used to evaluate liabilities should also be chosenwith prudence.
54 55
GEROA PENTSIOAK, ENTIDAD DE PREVISION SOCIAL VOLUNTARIA
11
Assets must be sufficiently diversified. Investments in the assets of a single
company listed in a regulated market may not exceed 5% of the Entity’s total assets, or 10% in the case of assets issued by companies of the same group. These limits are also applicable for derivative financial instruments.
Voluntary Social Welfare Entities cannot invest more than 2% of their assets in
unlisted securities issued by a single entity, or more than 4% in the case of securities issued by companies of the same group.
Investments in unlisted securities issued by promoters or protectors of social
welfare plans may not exceed 2% of total plan assets. Investments in properties may not exceed 20% of total plan assets and a single
property may not exceed 10% of these assets. Investments in securities issued on venture capital companies may not exceed
20%, on face value, of the total amount of shares issued. Investments in a single collective investment undertaking, asset securitization
fund or stock investment fund can be up to 20% of the assets of each plan.
These regulations governing limits are applicable as of January 1, 2010. (c) When a Voluntary Social Welfare Entity performs activities other than those that relate
to social welfare plans for retirement, death, permanent disability, long-term unemployment or serious illness, it should clearly define the assets and liabilities affected by these activities, without permitting, under any circumstance, the transfer of rights and obligations among the different activities.
(d) The governing board shall approve the entity’s investment policy through a written declaration of investment principles which should be reviewed at least every three years. The governing board of the Entity, at its meeting on 17 December has approved the entity’s investment policy currently in force, updating the concentration limits and the requirement for the held-to-maturity portfolio.
(e) Voluntary Social Welfare Entities that assume biometric risks and/or guarantee the result of an investment or a certain level of benefits must create adequate technical provisions to cover the related obligations. The calculation of minimum technical provisions should be made using prudent prospective actuarial methods, taking into account all obligations related to benefits and contributions in accordance with the entity’s pension options. This amount should be sufficient to finance current benefits and reflect the obligations deriving from pensions accrued by ordinary members. Economic and actuarial assumptions used to evaluate liabilities should also be chosen with prudence.
GEROA PENTSIOAK, ENTIDAD DE PREVISION SOCIAL VOLUNTARIA
12
(f) The technical interest rate used in the calculation of technical provisions shall be
determined on the basis of the internal rate of return of investments assigned to the social welfare plan. This may not exceed the estimated rate of inflation used to determine technical provisions by more than three points, with a maximum limit of 5%.
(g) Entities must maintain sufficient and adequate assets to cover the technical provisions
specified in the corresponding actuarial studies. In the event that, for three consecutive years, the entity does not establish sufficient funds to cover the necessary technical provisions, or when existing funds in a specific period are less than 90% of the technical provisions, the entity must draw up a plan to redress the situation, which must be subsequently approved by the Basque Government’s Department of Justice, Employment and Social Security.
(h) Voluntary Social Welfare Entities that incorporate plans to cover biometric risks or the
result of an investment or a certain level of benefits must permanently hold assets, in the form of reserves, other than those in which their technical provisions are materialized. These assets must be free of all foreseeable obligations and will be used as an available capital adequacy margin to absorb deviations between actual and foreseeable expenses and benefits. The capital adequacy margin must be equal to at least 4% of technical provisions.
Entry into force of the new regulatory development of the law 5/2012, of VSWE On December 9, 2015 it was published on the BOPV (Official Gazette of the Basque Country), the Decree 203/2015 of October 27, approving the regulation 5/2012 of February 23, about Voluntary Social Welfare Entities, which repeals expressly certain regulation in effect on the date, as the Decree 87/1984 of February 20 with the exception of the Articles 12, 16 and 31 (previously modified by the Decree 92/2007) and certain regulations of the Decree 92/2007 of May 29. The new regulation introduces significant updates on the development of the Law 5/2012 of February 23. The main updates are the following: New requirements of Members funds; The Mutual Fund minimum is now 50,000 euros
and the necessity of forming a Security Margin for the defined contribution plans with a mínimum ammount of the 0.125% of the underwriting reserves is established, which has to be formed in a máximum period of 10 years, with a mínimum of the tenth part of the annual ammount.
Decrease of the maximum limit of Administration Costs to a 1.6% of the related equity plan, when it is calculated solely based on this one.
The possibility for shareholders of the VSWE from the individual or associated modality
to dispose in advance of their total or partial amount of economic rights, if they have been shareholders for more than 10 years.
55
GEROA PENTSIOAK, ENTIDAD DE PREVISION SOCIAL VOLUNTARIA
(f) The technical interest rate used in the calculation of technical provisions shall be determined on the basis of the internal rate of return of investments assigned to the social welfare plan. This may not exceed the estimated rate of inflation used to determine technical provisions by more than three points, with a maximum limit of 5%.
(g) Entities must maintain sufficient and adequate assets to cover the technical provisions specified in the corresponding actuarial studies. In the event that, for three consecutive years, the entity does not establish sufficient funds to cover the necessary technical provisions, or when existing funds in a specific period are less than 90% of the technical provisions, the entity must draw up a plan to redress the situation, which must be subsequently approved by the Basque Government’s Department of Justice, Employment and Social Security.
(h) Voluntary Social Welfare Entities that incorporate plans to cover biometric risks or the result of an investment or a certain level of benefits must permanently hold assets, in the form of reserves, other than those in which their technical provisions are materialized. These assets must be free of all foreseeable obligations and will be used as an available capital adequacy margin to absorb deviations between actual and foreseeable expenses and benefits. The capital adequacy margin must be equal to at least 4% of technical provisions.
Entry into force of the new regulatory development of the law 5/2012, of VSWE
On December 9, 2015 it was published on the BOPV (Official Gazette of the Basque Country), the Decree 203/2015 of October 27, approving the regulation 5/2012 of February 23, about Voluntary Social Welfare Entities, which repeals expressly certain regulation in effect on the date, as the Decree 87/1984 of February 20 with the exception of the Articles 12, 16 and 31 (previously modified by the Decree 92/2007) and certain regulations of the Decree 92/2007 of May 29.
The new regulation introduces significant updates on the development of the Law 5/2012 of February 23. The main updates are the following:
New requirements of Members funds; The Mutual Fund minimum is now 50,000 euros and the necessity of forming a Security Margin for the defined contribution plans with a mínimum ammount of the 0.125% of the underwriting reserves is established, whichhas to be formed in a máximum period of 10 years, with a mínimum of the tenth part of the annual ammount.
Decrease of the maximum limit of Administration Costs to a 1.6% of the related equity plan, when it is calculated solely based on this one.
The possibility for shareholders of the VSWE from the individual or associated modalityto dispose in advance of their total or partial amount of economic rights, if they have been shareholders for more than 10 years.
56 57
GEROA PENTSIOAK, ENTIDAD DE PREVISION SOCIAL VOLUNTARIA
13
The requirement of implementing a life-cycle investment strategy based on the development of plans which place a different combination of risk and performance, for the individual kind of VSWE which outline defined contribution plans.
Additional requirements in terms of Good Governance and Key Functions. Reinforcement by the Basque Government of the supervision, inspection and
intervention model. The Regulation approved by the Decree 203/2015 of October 27, which enters into force on January 1st, 2016 with the following exceptions mentioned in the Final Provision Ten of the Decree: The final provision two, related to the maximum limit of administration costs, will enter
into force in three months’ time. The established on the Articles 43 and 44 related to the life-cycle investment
strategies, will be enforceable in 24 months’ time, taking into consideration the stated on the transitory provision 3 related to the plans approved before January 1st, 2016.
The established on the Chapter X of the Title II of the Regulation of the Good Governance and Key Functions, will be enforceable in 24 months’ time.
Furthermore, the established on the article 51 of the Regulation related to the information to shareholders will be enforceable in 12 months’ time.
To the date of preparation of these financial statements, the Entity finds itself in an analysis and adjustment phase of the implications that the new Regulation involves, even though, they would not have an accounting impact of a significant amount for the Entity. Company purpose On November 27, 1995 the Employment and Social Security Office of the Basque Government’s Department of Justice, Economy, Employment and Social Security approved the incorporation and articles of association of the Entity, as well as its inscription in the Basque Country Registry of Voluntary Social Welfare Entities under number 178-G. According to its articles of association, the Entity is governed by the general assembly (comprising the members of the governing board, 53 contributing member representatives and 53 ordinary member representatives) and by the governing board (composed of 26 members, 13 contributing member representatives and 13 ordinary member representatives).
56
GEROA PENTSIOAK, ENTIDAD DE PREVISION SOCIAL VOLUNTARIA
The requirement of implementing a life-cycle investment strategy based on the development of plans which place a different combination of risk and performance, for the individual kind of VSWE which outline defined contribution plans.
Additional requirements in terms of Good Governance and Key Functions.
Reinforcement by the Basque Government of the supervision, inspection and intervention model.
The Regulation approved by the Decree 203/2015 of October 27, which enters into force on January 1st, 2016 with the following exceptions mentioned in the Final Provision Ten of the Decree:
The final provision two, related to the maximum limit of administration costs, will enter into force in three months’ time.
The established on the Articles 43 and 44 related to the life-cycle investment strategies, will be enforceable in 24 months’ time, taking into consideration the stated on the transitory provision 3 related to the plans approved before January 1st, 2016.
The established on the Chapter X of the Title II of the Regulation of the Good Governance and Key Functions, will be enforceable in 24 months’ time.
Furthermore, the established on the article 51 of the Regulation related to the information to shareholders will be enforceable in 12 months’ time.
To the date of preparation of these financial statements, the Entity finds itself in an analysis and adjustment phase of the implications that the new Regulation involves, even though, they would not have an accounting impact of a significant amount for the Entity.
Company purpose
On November 27, 1995 the Employment and Social Security Office of the Basque Government’s Department of Justice, Economy, Employment and Social Security approved the incorporation and articles of association of the Entity, as well as its inscription in the Basque Country Registry of Voluntary Social Welfare Entities under number 178-G.
According to its articles of association, the Entity is governed by the general assembly (comprising the members of the governing board, 53 contributing member representatives and 53 ordinary member representatives) and by the governing board (composed of 26 members, 13 contributing member representatives and 13 ordinary member representatives).
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The requirement of implementing a life-cycle investment strategy based on the development of plans which place a different combination of risk and performance, for the individual kind of VSWE which outline defined contribution plans.
Additional requirements in terms of Good Governance and Key Functions. Reinforcement by the Basque Government of the supervision, inspection and
intervention model. The Regulation approved by the Decree 203/2015 of October 27, which enters into force on January 1st, 2016 with the following exceptions mentioned in the Final Provision Ten of the Decree: The final provision two, related to the maximum limit of administration costs, will enter
into force in three months’ time. The established on the Articles 43 and 44 related to the life-cycle investment
strategies, will be enforceable in 24 months’ time, taking into consideration the stated on the transitory provision 3 related to the plans approved before January 1st, 2016.
The established on the Chapter X of the Title II of the Regulation of the Good Governance and Key Functions, will be enforceable in 24 months’ time.
Furthermore, the established on the article 51 of the Regulation related to the information to shareholders will be enforceable in 12 months’ time.
To the date of preparation of these financial statements, the Entity finds itself in an analysis and adjustment phase of the implications that the new Regulation involves, even though, they would not have an accounting impact of a significant amount for the Entity. Company purpose On November 27, 1995 the Employment and Social Security Office of the Basque Government’s Department of Justice, Economy, Employment and Social Security approved the incorporation and articles of association of the Entity, as well as its inscription in the Basque Country Registry of Voluntary Social Welfare Entities under number 178-G. According to its articles of association, the Entity is governed by the general assembly (comprising the members of the governing board, 53 contributing member representatives and 53 ordinary member representatives) and by the governing board (composed of 26 members, 13 contributing member representatives and 13 ordinary member representatives).
GEROA PENTSIOAK, ENTIDAD DE PREVISION SOCIAL VOLUNTARIA
14
According to its articles of association, the scope of activity of the Entity, which is a non-profit-making organization, is the Basque Country. The Entity’s objective is twofold: To protect ordinary members in the event of retirement, disability or death, the latter
insofar as widowhood, orphan hood or similar circumstances are concerned, paying them, once they have been recognized as passive members, or their beneficiaries the corresponding pension and benefit payments.
To encourage its members to save by way of social welfare plans while protecting their rights.
The social welfare regime contemplated on the constitution of the Entity was created as a consequence of the collective agreements of the Iron and Steel Industries of Gipuzkoa, with a mandatory effect, under the Article 83 of the Worker’s Statute, and based on the Article 39.2 of the royal law Decree 1/1994, June 20, 1994, currently repealed by the unique 1 derogatory provision of the royal Decree 8/2015, of October 30 (currently, Article 43 of the cited Royal Law Decree 8/2015). The Entity has three types of members: founding, contributing and ordinary members (the latter of which may be paying or non-paying), the main characteristics of which are as follows: The founding members are Asociación de Empresarios de Gipuzkoa (ADEGI) and the
ELA, LAB, CCOO and UGT trade unions, whose sole purpose in this context is to promote saving through supplementary social welfare plans.
Contributing members are those who, in accordance with the established membership
regulations, contribute to the maintenance and development of the Entity through the corresponding contributions made as contributing members and those made on behalf of the corresponding employees who are incorporated into the Entity as ordinary members.
Contributing members are companies in the Gipuzkoa iron and steel sector which, as with their workers who are bound by the collective agreement of December 1, 1995 (Official Gipuzkoa Gazette of 01.03.96) or superseding accords, were compulsorily incorporated into the Entity, without the need for subsequent individual ratification or acceptance, those from other sectors of economic activity which have been or will be compulsorily incorporated into the present regime as a result of similar agreements, and companies that do not have a collective labour agreement in the Basque Country but which voluntarily joined the aforementioned regime following their admission by the governing bodies of the Entity.
Ordinary paying members are employees or workers from the Gipuzkoa iron and steel sector who were compulsorily incorporated into the present regime, without the need for subsequent individual ratification, as a result of the collective labour agreement reached for the iron and steel sector in Gipuzkoa, or superseding accords, those from other companies affected by similar agreements, and voluntary members admitted by the governing bodies.
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GEROA PENTSIOAK, ENTIDAD DE PREVISION SOCIAL VOLUNTARIA
According to its articles of association, the scope of activity of the Entity, which is a non-profit-making organization, is the Basque Country. The Entity’s objective is twofold:
To protect ordinary members in the event of retirement, disability or death, the latter insofar as widowhood, orphan hood or similar circumstances are concerned, paying them, once they have been recognized as passive members, or their beneficiaries the corresponding pension and benefit payments.
To encourage its members to save by way of social welfare plans while protecting their rights.
The social welfare regime contemplated on the constitution of the Entity was created as a consequence of the collective agreements of the Iron and Steel Industries of Gipuzkoa, with a mandatory effect, under the Article 83 of the Worker’s Statute, and based on the Article 39.2 of the royal law Decree 1/1994, June 20, 1994, currently repealed by the unique 1 derogatory provision of the royal Decree 8/2015, of October 30 (currently, Article 43 of the cited Royal Law Decree 8/2015).
The Entity has three types of members: founding, contributing and ordinary members (the latter of which may be paying or non-paying), the main characteristics of which are as follows:
The founding members are Asociación de Empresarios de Gipuzkoa (ADEGI) and the ELA, LAB, CCOO and UGT trade unions, whose sole purpose in this context is to promote saving through supplementary social welfare plans.
Contributing members are those who, in accordance with the established membership regulations, contribute to the maintenance and development of the Entity through the corresponding contributions made as contributing members and those made on behalf of the corresponding employees who are incorporated into the Entity as ordinary members.
Contributing members are companies in the Gipuzkoa iron and steel sector which, as with their workers who are bound by the collective agreement of December 1, 1995 (Official Gipuzkoa Gazette of 01.03.96) or superseding accords, were compulsorily incorporated into the Entity, without the need for subsequent individual ratification or acceptance, those from other sectors of economic activity which have been or will be compulsorily incorporated into the present regime as a result of similar agreements, and companies that do not have a collective labour agreement in the Basque Country but which voluntarily joined the aforementioned regime following their admission by the governing bodies of the Entity.
Ordinary paying members are employees or workers from the Gipuzkoa iron and steel sector who were compulsorily incorporated into the present regime, without the need for subsequent individual ratification, as a result of the collective labour agreement reached for the iron and steel sector in Gipuzkoa, or superseding accords, those from other companies affected by similar agreements, and voluntary members admitted by the governing bodies.
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Ordinary non-paying members are those who have suspended their contributions as a
result of having previously suspended their working relationship with the contributing member(s), but who retain their rights within the Entity.
Passive members are persons who, through their entitlement to receive benefits
(retirement or disability), are recognized as such in accordance with the Entity’s articles of association and regulations and who have been ordinary members of the Entity.
Beneficiaries of the Entity are persons who, as successor in title of the deceased ordinary or passive member, are entitled to economic rights from the Entity. Beneficiaries are those persons designated according to the order established in the Entity’s regulations. In order to adapt the benefits’ payment system, the government board held on December 9, 2014 and the Extraordinary General Meeting of January 13, 2015 approved certain modifications to the Benefits Regulation and the Entity’s Statutes, whose entry into force was conditioned to the correspondent approval by the Finance Director’s Office of the Economy and Treasury Department of the Basque Government. After taking into consideration certain recommendations of the cited authority, the Ordinary General Meeting held on April 15, 2015 and the Extraordinary Government Board of the entity held on June 29, 2015, confirmed the modifications of the Benefits Regulation. The Director’s Office of Political Finance and Institutional Resources of the Treasury and Finance Department of the Basque Government has approved the cited Regulation on June 30, 2015 and the registration at the Registry of Voluntary Social Welfare Entities of the Basque Country, acquiring full effectiveness on the Entity from July 1st, 2015 (Note 2) Finally, the Government Board of October 8 and the Extraordinary General Meeting held on December 17, 2015 has approved certain modifications related to the adaptation of the Statute’s to the Benefits Regulation of the Entity. On January 11, 2016, the Director’s Office of Financial Politics and Institutional Resources of the Treasury and Finance Department of the Basque Government has published the resolution 1/2016, of January 11, that approves the cited modification on the Entity’s Statutes, and its registry on the Voluntary Social Welfare Entity’s Registry of the Basque Country.
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GEROA PENTSIOAK, ENTIDAD DE PREVISION SOCIAL VOLUNTARIA
Ordinary non-paying members are those who have suspended their contributions as a result of having previously suspended their working relationship with the contributing member(s), but who retain their rights within the Entity.
Passive members are persons who, through their entitlement to receive benefits (retirement or disability), are recognized as such in accordance with the Entity’s articles of association and regulations and who have been ordinary members of the Entity.
Beneficiaries of the Entity are persons who, as successor in title of the deceased ordinary or passive member, are entitled to economic rights from the Entity. Beneficiaries are those persons designated according to the order established in the Entity’s regulations.
In order to adapt the benefits’ payment system, the government board held on December 9, 2014 and the Extraordinary General Meeting of January 13, 2015 approved certain modifications to the Benefits Regulation and the Entity’s Statutes, whose entry into force was conditioned to the correspondent approval by the Finance Director’s Office of the Economy and Treasury Department of the Basque Government.After taking into consideration certain recommendations of the cited authority, the Ordinary General Meeting held on April 15, 2015 and the Extraordinary Government Board of the entity held on June 29, 2015, confirmed the modifications of the Benefits Regulation. The Director’s Office of Political Finance and Institutional Resources of the Treasury and Finance Department of the Basque Government has approved the cited Regulation on June 30, 2015 and the registration at the Registry of Voluntary Social Welfare Entities of the Basque Country, acquiring full effectiveness on the Entity from July 1st, 2015 (Note 2)
Finally, the Government Board of October 8 and the Extraordinary General Meeting held on December 17, 2015 has approved certain modifications related to the adaptation of the Statute’s to the Benefits Regulation of the Entity. On January 11, 2016, the Director’s Office of Financial Politics and Institutional Resources of the Treasury and Finance Department of the Basque Government has published the resolution 1/2016, of January 11, that approves the cited modification on the Entity’s Statutes, and its registry on the Voluntary Social Welfare Entity’s Registry of the Basque Country.
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During 2015 contributing members totaled 9,824 companies, while ordinary members totaled 103,362 persons (9,789 companies and 102,935 ordinary members in 2014). A breakdown of members by sector is as follows: Contributing members Ordinary members 2015 2014 2015 2014 Ceramic 10 10 234 227 Fur/leather trade 105 115 508 529 Metal trade 935 916 5,936 5,867 Construction 928 966 6,475 7,325 Service stations 61 60 766 765 Timber industry 269 265 1,475 1,484 Furniture industry 48 53 409 450 Public sports facilities 20 19 344 297 Cleaning sector 342 318 7,924 7,707 Catering, entertainment and sports 183 171 2,156 2,036 Fruit wholesalers 24 25 179 186 Bakeries 189 196 2,096 2,033 Paper/cardboard 14 12 1,089 1,092 Iron and steel 2,819 2,802 48,086 47,760 Textile 517 525 2,869 2,788 Freight 56 50 684 612 Road haulage 590 590 3,997 4,056 Glass 27 29 226 223 Sundry 60 54 7,026 6,629 Offices 1,439 1,476 6,301 6,377 General trade 1,188 1,137 4,582 4,492 9,824 9,789 103,362 102,935 The Entity’s funds mainly comprise the initial one-off members’ fund contributions of its founding members and the regular fixed contributions from both its contributing members and individual associates (ordinary paying members), which are determined by the corresponding agreements. These regular contributions may vary across different sectors of activity, but can never exceed the amount agreed for the iron and steel sector in Gipuzkoa, and may be modified periodically by applying a percentage of the contribution base for common workers’ contingencies.
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During 2015 contributing members totaled 9,824 companies, while ordinary members totaled103,362 persons (9,789 companies and 102,935 ordinary members in 2014). A breakdown of members by sector is as follows:
Contributing members Ordinary members
2015 2014 2015 2014Ceramic 10 10 234 227Fur/leather trade 105 115 508 529Metal trade 935 916 5,936 5,867Construction 928 966 6,475 7,325Service stations 61 60 766 765Timber industry 269 265 1,475 1,484Furniture industry 48 53 409 450Public sports facilities 20 19 344 297Cleaning sector 342 318 7,924 7,707Catering, entertainment and sports 183 171 2,156 2,036Fruit wholesalers 24 25 179 186Bakeries 189 196 2,096 2,033Paper/cardboard 14 12 1,089 1,092Iron and steel 2,819 2,802 48,086 47,760Textile 517 525 2,869 2,788Freight 56 50 684 612Road haulage 590 590 3,997 4,056Glass 27 29 226 223Sundry 60 54 7,026 6,629Offices 1,439 1,476 6,301 6,377General trade 1,188 1,137 4,582 4,492
9,824 9,789 103,362 102,935
The Entity’s funds mainly comprise the initial one-off members’ fund contributions of its founding members and the regular fixed contributions from both its contributing members and individual associates (ordinary paying members), which are determined by the corresponding agreements. These regular contributions may vary across different sectors of activity, but can never exceed the amount agreed for the iron and steel sector in Gipuzkoa, and may be modified periodically by applying a percentage of the contribution base for common workers’ contingencies.
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Contributions are paid monthly and comprise a percentage of each worker’s Social Security base, 50% of which is paid by the employee (ordinary member) and withheld from their salary, and 50% by the company (contributing member). In the event of temporary disability, maternity or paternity leave or temporary lay-off procedures, both the contributing and ordinary member will continue to honour their contributions. The evolution of the contribution percentages in the different sectors covered by the Entity is as follows:
Sector Evolution Contribution percentage
Asedir Gestión, S.L. Since April 2005 3,5% Since January 2008 4,3% Since January 2009 4,6% Aspace Since June 2005 0,5% Since April 2006 1,0% Since March 2007 1,2% Since October 2008 1,4% Since January 2011 2,9% Aspace Viviendas y Residencias Since January 2004 0,5% Since September 2006 1,0% Since February 2007 1,5% Since January 2008 2,0% Atención Sanitaria Tercera Edad Since January 2003 1,0% Bidelan Gipuzkoako Autobideak, S.A. Since January 2009 4,6% Casino Kursaal Since January 2006 4,0% Cementos Rezola Since July 1998 1,0% Since January 1999 1,5% Since June 2000 2,5% Since June 2001 3,0% Since January 2002 3,5% Since January 2003 3,5% Since January 2006 4,0% Since January 2008 4,3% Cerámica de Gipuzkoa Since January 1997 1,5% Since May 1999 2,0% Since January 2000 2,5% Since January 2002 3,0% Since January 2003 3,5% Comercio de la Piel de Gipuzkoa Since October 1999 0,8% Since January 2000 1,6%
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GEROA PENTSIOAK, ENTIDAD DE PREVISION SOCIAL VOLUNTARIA
Contributions are paid monthly and comprise a percentage of each worker’s Social Security base, 50% of which is paid by the employee (ordinary member) and withheld from their salary, and 50% by the company (contributing member). In the event of temporary disability, maternity or paternity leave or temporary lay-off procedures, both the contributing and ordinary member will continue to honour their contributions. The evolution of the contribution percentages in the different sectors covered by the Entity is as follows:
Sector EvolutionContribution percentage
Asedir Gestión, S.L. Since April 2005 3,5%Since January 2008 4,3%Since January 2009 4,6%
Aspace Since June 2005 0,5%Since April 2006 1,0%Since March 2007 1,2%Since October 2008 1,4%Since January 2011 2,9%
Aspace Viviendas y Residencias Since January 2004 0,5%Since September 2006 1,0%Since February 2007 1,5%Since January 2008 2,0%
Atención Sanitaria Tercera Edad Since January 2003 1,0%
Bidelan Gipuzkoako Autobideak, S.A. Since January 2009 4,6%
Casino Kursaal Since January 2006 4,0%
Cementos Rezola Since July 1998 1,0%Since January 1999 1,5%Since June 2000 2,5%Since June 2001 3,0%Since January 2002 3,5%Since January 2003 3,5%Since January 2006 4,0%Since January 2008 4,3%
Cerámica de Gipuzkoa Since January 1997 1,5%Since May 1999 2,0%Since January 2000 2,5%Since January 2002 3,0%Since January 2003 3,5%
Comercio de la Piel de Gipuzkoa Since October 1999 0,8%Since January 2000 1,6%
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Contributions are paid monthly and comprise a percentage of each worker’s Social Security base, 50% of which is paid by the employee (ordinary member) and withheld from their salary, and 50% by the company (contributing member). In the event of temporary disability, maternity or paternity leave or temporary lay-off procedures, both the contributing and ordinary member will continue to honour their contributions. The evolution of the contribution percentages in the different sectors covered by the Entity is as follows:
Sector Evolution Contribution percentage
Asedir Gestión, S.L. Since April 2005 3,5% Since January 2008 4,3% Since January 2009 4,6% Aspace Since June 2005 0,5% Since April 2006 1,0% Since March 2007 1,2% Since October 2008 1,4% Since January 2011 2,9% Aspace Viviendas y Residencias Since January 2004 0,5% Since September 2006 1,0% Since February 2007 1,5% Since January 2008 2,0% Atención Sanitaria Tercera Edad Since January 2003 1,0% Bidelan Gipuzkoako Autobideak, S.A. Since January 2009 4,6% Casino Kursaal Since January 2006 4,0% Cementos Rezola Since July 1998 1,0% Since January 1999 1,5% Since June 2000 2,5% Since June 2001 3,0% Since January 2002 3,5% Since January 2003 3,5% Since January 2006 4,0% Since January 2008 4,3% Cerámica de Gipuzkoa Since January 1997 1,5% Since May 1999 2,0% Since January 2000 2,5% Since January 2002 3,0% Since January 2003 3,5% Comercio de la Piel de Gipuzkoa Since October 1999 0,8% Since January 2000 1,6%
GEROA PENTSIOAK, ENTIDAD DE PREVISION SOCIAL VOLUNTARIA
18
Sector Evolution Contribution percentage
Comercio del Metal de Gipuzkoa Since October 1999 1,0% Since January 2000 2,0% Construcción de Gipuzkoa Since June 1999 0,5% Since June 2000 1,5% Since January 2001 2,5% Since January 2005 2,9% Since January 2006 3,3% Since July 2007 3,5% Since January 2008 3,7% Since January 2009 4,0% Clece, S.A. Since March 2004 1,0% Clece, S.A. – Donostiako Lamiak Since October 2004 1,5% Comercio General de Gipuzkoa Since January 2008 0,2% Since January 2009 0,4% Electroquímica de Servicio de Gipuzkoa
Since July 2000 0,5%
Since January 2001 1,0% Since January 2002 1,5% Since January 2003 2,0% Since January 2005 3,0% Since January 2006 3,5% Since January 2007 4,0% Federación de Entidades de Previsión Social Voluntaria de Euskadi
Since January 2001 3,5%
Since January 2006 4,0% Since January 2009 4,6% Gureserbi, S.L. Since June 2005 1,0% Since January 2006 1,5% Since August 2007 2,0% Grupo Herribus Since June 1996 1,5% Since January 1998 2,0% Since January 2000 3,0% Since January 2002 3,5% Since January 2006 4,0%
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Sector EvolutionContribution percentage
Comercio del Metal de Gipuzkoa Since October 1999 1,0%Since January 2000 2,0%
Construcción de Gipuzkoa Since June 1999 0,5%Since June 2000 1,5%Since January 2001 2,5%Since January 2005 2,9%Since January 2006 3,3%Since July 2007 3,5%Since January 2008 3,7%Since January 2009 4,0%
Clece, S.A. Since March 2004 1,0%
Clece, S.A. – Donostiako Lamiak Since October 2004 1,5%
Comercio General de Gipuzkoa Since January 2008 0,2%Since January 2009 0,4%
Electroquímica de Servicio de Gipuzkoa Since July 2000 0,5%
Since January 2001 1,0%Since January 2002 1,5%Since January 2003 2,0%Since January 2005 3,0%Since January 2006 3,5%Since January 2007 4,0%
Federación de Entidades de Previsión Social Voluntaria de Euskadi Since January 2001 3,5%
Since January 2006 4,0%Since January 2009 4,6%
Gureserbi, S.L. Since June 2005 1,0%Since January 2006 1,5%Since August 2007 2,0%
Grupo Herribus Since June 1996 1,5%Since January 1998 2,0%Since January 2000 3,0%Since January 2002 3,5%Since January 2006 4,0%
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Sector Evolution Contribution percentage
Grupo Radio Popular Since July 1999 1,0% Since January 2006 1,5% Industrias Químicas Irurena, S.A. Since January 2007 0,5% Since January 2008 1,0% Industria de la Madera de Gipuzkoa
Since October 1997 0,5%
Since January 1998 1,0% Since May 1999 1,5% Since January 2000 2,0% Industria del Mueble de Gipuzkoa Since September 1999 0,5% Since January 2000 1,0% Instalaciones Polideportivas de Titularidad Pública de Gipuzkoa
Since January 2010 1,0%
Itesa Producción Since January 2003 0,5% Since January 2004 1,0% ITV Gipuzkoa Since January 2003 1,0% Since January 2004 2,0% Since January 2005 3,0% Since January 2006 4,0% Izpia Media, S.L. Since January 2005 1,0% Katea Lantegiak Since January 2003 0,6% Since January 2007 1,56% Since January 2008 2,53% Since January 2009 3,50% Since January 2010 4,0% Kemen Manguitos, S.L. Since January 2009 4,30% Kursaal Producciones Since January 2002 0,5% Since January 2004 1,0% Lagun Izpi, s.L. Since September 2003 1,0% Since January 2004 1,5% Lending Service, S.L. Since April 2004 1,5% Since January 2005 2,5%
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Sector EvolutionContribution percentage
Grupo Radio Popular Since July 1999 1,0%Since January 2006 1,5%
Industrias Químicas Irurena, S.A. Since January 2007 0,5%Since January 2008 1,0%
Industria de la Madera de Gipuzkoa Since October 1997 0,5%
Since January 1998 1,0%Since May 1999 1,5%Since January 2000 2,0%
Industria del Mueble de Gipuzkoa Since September 1999 0,5%Since January 2000 1,0%
Instalaciones Polideportivas de Titularidad Pública de Gipuzkoa Since January 2010 1,0%
Itesa Producción Since January 2003 0,5%Since January 2004 1,0%
ITV Gipuzkoa Since January 2003 1,0%Since January 2004 2,0%Since January 2005 3,0%Since January 2006 4,0%
Izpia Media, S.L. Since January 2005 1,0%
Katea Lantegiak Since January 2003 0,6%Since January 2007 1,56%Since January 2008 2,53%Since January 2009 3,50%Since January 2010 4,0%
Kemen Manguitos, S.L. Since January 2009 4,30%
Kursaal Producciones Since January 2002 0,5%Since January 2004 1,0%
Lagun Izpi, s.L. Since September 2003 1,0%Since January 2004 1,5%
Lending Service, S.L. Since April 2004 1,5%Since January 2005 2,5%
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Sector Evolution Contribution percentage
Grupo Radio Popular Since July 1999 1,0% Since January 2006 1,5% Industrias Químicas Irurena, S.A. Since January 2007 0,5% Since January 2008 1,0% Industria de la Madera de Gipuzkoa
Since October 1997 0,5%
Since January 1998 1,0% Since May 1999 1,5% Since January 2000 2,0% Industria del Mueble de Gipuzkoa Since September 1999 0,5% Since January 2000 1,0% Instalaciones Polideportivas de Titularidad Pública de Gipuzkoa
Since January 2010 1,0%
Itesa Producción Since January 2003 0,5% Since January 2004 1,0% ITV Gipuzkoa Since January 2003 1,0% Since January 2004 2,0% Since January 2005 3,0% Since January 2006 4,0% Izpia Media, S.L. Since January 2005 1,0% Katea Lantegiak Since January 2003 0,6% Since January 2007 1,56% Since January 2008 2,53% Since January 2009 3,50% Since January 2010 4,0% Kemen Manguitos, S.L. Since January 2009 4,30% Kursaal Producciones Since January 2002 0,5% Since January 2004 1,0% Lagun Izpi, s.L. Since September 2003 1,0% Since January 2004 1,5% Lending Service, S.L. Since April 2004 1,5% Since January 2005 2,5%
GEROA PENTSIOAK, ENTIDAD DE PREVISION SOCIAL VOLUNTARIA
20
Sector Evolution Contribution percentage
Legaia Since July 1999 1,0% Since April 1999 3,0% Since January 2000 3,5% Since January 2007 3,66% Since January 2008 3,83% Since January 2009 4,00% Limpieza de Gipuzkoa Since January 2000 0,5% Since October 2003 1,5% Since January 2004 2,5% Locales, Espectáculos y Deportes de Gipuzkoa
Since January 2003 0,5%
Since January 2006 1,0% Manufacturas Oría, S.L. Since June 2004 2,0% Since July 2005 2,5% Since January 2008 3,10% Since January 2009 3,80% Since January 2010 4,60% Mayoristas de Frutas de Gipuzkoa
Since June 2002 1,0%
Since September 2004 1,5% Since June 2006 1,75% Since January 2007 2,5% Since January 2010 3,0% Oficinas y Despachos de Gipuzkoa
Since January 2008 0,2%
Since January 2009 0,4% Omey Kayak, S.L. Since January 2005 1,6% Panaderías de Gipuzkoa Since June 1998 0,7% Since January 1999 1,2% Papel-Cartón de Gipuzkoa Since July 1999 0,7% Since January 2000 1,2% Savera Since January 1999 1,0% Since January 2000 2,0% Since January 2001 3,0% Since January 2002 3,5% Since January 2006 4,0% Since January 2008 4,3% Since January 2009 4,6%
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GEROA PENTSIOAK, ENTIDAD DE PREVISION SOCIAL VOLUNTARIA
Sector EvolutionContribution percentage
Legaia Since July 1999 1,0%Since April 1999 3,0%Since January 2000 3,5%Since January 2007 3,66%Since January 2008 3,83%Since January 2009 4,00%
Limpieza de Gipuzkoa Since January 2000 0,5%Since October 2003 1,5%Since January 2004 2,5%
Locales, Espectáculos y Deportes de Gipuzkoa Since January 2003 0,5%
Since January 2006 1,0%
Manufacturas Oría, S.L. Since June 2004 2,0%Since July 2005 2,5%Since January 2008 3,10%Since January 2009 3,80%Since January 2010 4,60%
Mayoristas de Frutas de Gipuzkoa Since June 2002 1,0%
Since September 2004 1,5%Since June 2006 1,75%Since January 2007 2,5%Since January 2010 3,0%
Oficinas y Despachos de Gipuzkoa Since January 2008 0,2%
Since January 2009 0,4%
Omey Kayak, S.L. Since January 2005 1,6%
Panaderías de Gipuzkoa Since June 1998 0,7%Since January 1999 1,2%
Papel-Cartón de Gipuzkoa Since July 1999 0,7%Since January 2000 1,2%
Savera Since January 1999 1,0%Since January 2000 2,0%Since January 2001 3,0%Since January 2002 3,5%Since January 2006 4,0%Since January 2008 4,3%Since January 2009 4,6%
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21
Sector Evolution Contribution percentage
Siderometalúrgico de Gipuzkoa Since January 1996 1,5% Since May 1997 2,0% Since January 1998 2,5% Since March 1999 3,0% Since January 2000 3,5% Since January 2006 4,0% Since January 2009 4,6% Silam, S.A. Since January 2005 0,5% Talleres Protegidos Gureak, S.A. Since January 2009 0,4% Textil de Gipuzkoa Since September 1999 0,8% Since January 2000 1,6% Trainelec, S.L. Since May 2007 4,0% Transitarios de Gipuzkoa Since January 1998 1,5% Since January 1999 2,0% Since January 2001 2,5% Since January 2002 3,0% Transporte de Mercancías por carretera
Since October 2003 1,0%
Since January 2004 1,5% Vidrio de Gipuzkoa Since June 1998 1,0% Since January 1999 2,0% Since January 2002 2,5% Since January 2003 3,5% Zahor Since January 2002 0,66% Since January 2003 1,32% Since January 2004 2,0% Since January 2005 2,5% Since January 2006 3,0% Since January 2007 3,5% Since January 2008 4,0% Since January 2009 4,3% Since January 2011 4,6%
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Sector EvolutionContribution percentage
Siderometalúrgico de Gipuzkoa Since January 1996 1,5%Since May 1997 2,0%Since January 1998 2,5%Since March 1999 3,0%Since January 2000 3,5%Since January 2006 4,0%Since January 2009 4,6%
Silam, S.A. Since January 2005 0,5%
Talleres Protegidos Gureak, S.A. Since January 2009 0,4%
Textil de Gipuzkoa Since September 1999 0,8%Since January 2000 1,6%
Trainelec, S.L. Since May 2007 4,0%
Transitarios de Gipuzkoa Since January 1998 1,5%Since January 1999 2,0%Since January 2001 2,5%Since January 2002 3,0%
Transporte de Mercancías por carretera Since October 2003 1,0%
Since January 2004 1,5%
Vidrio de Gipuzkoa Since June 1998 1,0%Since January 1999 2,0%Since January 2002 2,5%Since January 2003 3,5%
Zahor Since January 2002 0,66%Since January 2003 1,32%Since January 2004 2,0%Since January 2005 2,5%Since January 2006 3,0%Since January 2007 3,5%Since January 2008 4,0%Since January 2009 4,3%Since January 2011 4,6%
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Sector Evolution Contribution percentage
Siderometalúrgico de Gipuzkoa Since January 1996 1,5% Since May 1997 2,0% Since January 1998 2,5% Since March 1999 3,0% Since January 2000 3,5% Since January 2006 4,0% Since January 2009 4,6% Silam, S.A. Since January 2005 0,5% Talleres Protegidos Gureak, S.A. Since January 2009 0,4% Textil de Gipuzkoa Since September 1999 0,8% Since January 2000 1,6% Trainelec, S.L. Since May 2007 4,0% Transitarios de Gipuzkoa Since January 1998 1,5% Since January 1999 2,0% Since January 2001 2,5% Since January 2002 3,0% Transporte de Mercancías por carretera
Since October 2003 1,0%
Since January 2004 1,5% Vidrio de Gipuzkoa Since June 1998 1,0% Since January 1999 2,0% Since January 2002 2,5% Since January 2003 3,5% Zahor Since January 2002 0,66% Since January 2003 1,32% Since January 2004 2,0% Since January 2005 2,5% Since January 2006 3,0% Since January 2007 3,5% Since January 2008 4,0% Since January 2009 4,3% Since January 2011 4,6%
GEROA PENTSIOAK, ENTIDAD DE PREVISION SOCIAL VOLUNTARIA
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2. Benefit coverage Benefits Regime applicable until June 30, 2015 Benefits comprise the financial recognition of the entitlements of the Entity’s passive members or beneficiaries deriving from the materialization of contingencies covered by the Entity. When a contingency materializes, passive members or beneficiaries receive the liquidating value of their accrued entitlements in the form of capital or annuity. It will be perceived as compulsory annuity until June 30, 2015. Exceptionally, when economic rights existing at the time of paying the benefit not generate the minimum amount of income referred to in the Regulation Benefits of the Entity (166 euros for the year 2015) for the year of payment of the benefit payments will be established as capital. Certain amendments to the Entity’s articles of association were approved at the extraordinary general assembly held on June 28, 2000, and came into force on January 1st, 2001. According to these amendments, the Entity’s benefits may be classified as ordinary (retirement and widowhood/orphanhood when the retired beneficiary dies) or risk (total permanent disability, absolute permanent disability and outstanding disability, widowhood/orphanhood in the event a disabled paying member dies and widowhood/orphanhood in the event a paying member dies). In order to reinforce or increase each paying member’s consolidated disability and death entitlements, an additional benefit was created (insured capital). This is obtained by multiplying the average payment made to the Entity by the ordinary member and the contributing member in respect of the ordinary member’s entitlements during the last six months by the number of months remaining from the materialization of the contingency until the member reaches 65 years of age. Nowadays, the benefits of retirement, benefits of disability for an active person and the benefits for death in an active member, will consist on a capital, by the payment of a unique quantity for the existing consolidated rights in the moment of the above mentioned benefits if the annuity does not reach the minimal revenue established in the Regulation Benefits of the Entity. The perception of the benefits will consist in an annuity if the amount previously mentioned is reached. Until June 30, 2015, benefits paid to the widow or person with a similar relationship of a deceased active member will be in the form of compulsory annuity. Exceptionally, when economic rights existing at the time of paying the benefit not generate the minimum amount of income referred to in the Regulation Benefits of the Entity, above, will be established as capital payments. The orphan hood benefit deriving from the death of a paying member will only be paid providing no widowhood entitlement exists, will take the form of a certain temporary financial annuity until the orphan or orphans reach the age of 25, and is based on the consolidated economic entitlements accrued up to the moment in which the contingency materialized, to be distributed through the same monthly income to each of them, if more than one, or the payment of a single capital.
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2. Benefit coverage
Benefits Regime applicable until June 30, 2015
Benefits comprise the financial recognition of the entitlements of the Entity’s passive members or beneficiaries deriving from the materialization of contingencies covered by the Entity. When a contingency materializes, passive members or beneficiaries receive the liquidating value of their accrued entitlements in the form of capital or annuity. It will be perceived as compulsory annuity until June 30, 2015. Exceptionally, when economic rights existing at the time of paying the benefit not generate the minimum amount of income referred to in the Regulation Benefits of the Entity (166 euros for the year 2015) for the year of payment of the benefit payments will be established as capital.
Certain amendments to the Entity’s articles of association were approved at the extraordinary general assembly held on June 28, 2000, and came into force on January 1st, 2001. According to these amendments, the Entity’s benefits may be classified as ordinary (retirement and widowhood/orphanhood when the retired beneficiary dies) or risk (total permanent disability, absolute permanent disability and outstanding disability, widowhood/orphanhood in the event a disabled paying member dies and widowhood/orphanhood in the event a paying member dies). In order to reinforce or increase each paying member’s consolidated disability and death entitlements, an additional benefit was created (insured capital). This is obtained by multiplying the average payment made to the Entity by the ordinary member and the contributing member in respect of the ordinary member’s entitlements during the last six months by the number of months remaining from the materialization of the contingency until the member reaches 65 years of age.
Nowadays, the benefits of retirement, benefits of disability for an active person and the benefits for death in an active member, will consist on a capital, by the payment of a unique quantity for the existing consolidated rights in the moment of the above mentioned benefits if the annuity does not reach the minimal revenue established in the Regulation Benefits of the Entity. The perception of the benefits will consist in an annuity if the amount previously mentioned is reached.
Until June 30, 2015, benefits paid to the widow or person with a similar relationship of a deceased active member will be in the form of compulsory annuity. Exceptionally, when economic rights existing at the time of paying the benefit not generate the minimum amount of income referred to in the Regulation Benefits of the Entity, above, will be established as capital payments. The orphan hood benefit deriving from the death of a paying member will only be paid providing no widowhood entitlement exists, will take the form of a certain temporary financial annuity until the orphan or orphans reach the age of 25, and is based on the consolidated economic entitlements accrued up to the moment in which the contingency materialized, to be distributed through the same monthly income to each of them, if more than one, or the payment of a single capital.
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On April 16, 2010 the General Assembly of the Entity approved the inclusion of insurance covering death for six years from the start of the provision through actuarial lifetime income in such a way that if an unmarried member dies, or a married member whose partner has already died, their beneficiaries will be entitled to receive an annually decreasing percentage of the mathematical provision (60% the first year, to 10% in the sixth year) (For income caused from May 1, 2010). In the event of disability or death of a non-paying member, the corresponding benefits comprise the consolidated individual entitlements deriving from the regular contributions of the deceased ordinary member and the contributing member, and any yield and gains generated through the management of funds after the Entity’s management expenses have been settled. Under the resolution adopted by the Governing Board of the Entity, on December 18, 2012 to amend Article 9A of the Statutes, disabled members grade less than 45% will be entitled to a retirement pension from age 56 if they are not active and are entitled to social Security retirement. On December 19, 2006 the Entity took out a life risk transfer contract with an insurance company (AVIVA) through the “Federación de Entidades de Previsión Social Voluntaria de Euskadi” (Basque Federation of Voluntary Social Welfare Entities). This contract covers 50% of the risk of death, permanent total disability, permanent total disability and severe disability, and took effect from January 1, 2007. The Entity gives the 29% and the 33% of the withdrawn fees for the hedge of the risky benefits cited previously for the years 2015 and 2014. During 2015 the amount paid by the Bank to the insurance totaled 2,093 thousand euros (2,403 thousand euros during 2014). In June 14, 2012 an additional contract for the transfer of risk to another reinsurer (VidaCaixa) was signed, covering the remaining 50% risk of death, permanent total disability, permanent total disability, severe disability, total disability permanent and permanent total disability. This reinsurance coverage took effect from January 1, 2012. The premium of this contract for the year 2015 amounted to 2,009 thousand euros (1,999 thousand euros for the year 2014). Both contracts are established on an annual basis, tacitly renewed each year and include the ability to participate in the benefits of reinsurance. During 2014, 312 thousand euros have accrued revenues for this matter (450 thousand euros during the year 2014) with credit to "Net operating expenses" in the income statement (Note 13). After the new drafting of the Regulation approved by the Ordinary General Meeting of April 15, 2015, this benefits regime stands applicable for the shareholders with benefits caused before December 31, 2014, based on the transitory provision one and two of the cited regulation. Additionally, for this shareholders exclusively, their benefits as annuities actuarial system are constant and not revaluable. However, when the yield (previous to the transfer to benefits of the excessive risk) obtained in a year exceeds the technical interest rate, will generate a right to an improvement of the annuity of the 70% of the exceeding amount, once taken into reserves all those annuities occurred until December 31, 2014.
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On April 16, 2010 the General Assembly of the Entity approved the inclusion of insurance covering death for six years from the start of the provision through actuarial lifetime income in such a way that if an unmarried member dies, or a married member whose partner has already died, their beneficiaries will be entitled to receive an annually decreasing percentage of the mathematical provision (60% the first year, to 10% in the sixth year) (For income caused from May 1, 2010).
In the event of disability or death of a non-paying member, the corresponding benefits comprise the consolidated individual entitlements deriving from the regular contributions of the deceased ordinary member and the contributing member, and any yield and gains generated through the management of funds after the Entity’s management expenses have been settled.
Under the resolution adopted by the Governing Board of the Entity, on December 18, 2012 to amend Article 9A of the Statutes, disabled members grade less than 45% will be entitled to a retirement pension from age 56 if they are not active and are entitled to social Security retirement.
On December 19, 2006 the Entity took out a life risk transfer contract with an insurance company (AVIVA) through the “Federación de Entidades de Previsión Social Voluntaria de Euskadi” (Basque Federation of Voluntary Social Welfare Entities). This contract covers 50% of the risk of death, permanent total disability, permanent total disability and severe disability, and took effect from January 1, 2007. The Entity gives the 29% and the 33% of the withdrawn fees for the hedge of the risky benefits cited previously for the years 2015 and 2014. During 2015 the amount paid by the Bank to the insurance totaled 2,093 thousand euros (2,403 thousand euros during 2014).
In June 14, 2012 an additional contract for the transfer of risk to another reinsurer (VidaCaixa) was signed, covering the remaining 50% risk of death, permanent total disability, permanent total disability, severe disability, total disability permanent and permanent total disability. This reinsurance coverage took effect from January 1, 2012. The premium of this contract for the year 2015 amounted to 2,009 thousand euros (1,999 thousand euros for the year 2014).
Both contracts are established on an annual basis, tacitly renewed each year and include the ability to participate in the benefits of reinsurance. During 2014, 312 thousand euros have accrued revenues for this matter (450 thousand euros during the year 2014) with credit to "Net operating expenses" in the income statement (Note 13).
After the new drafting of the Regulation approved by the Ordinary General Meeting of April 15, 2015, this benefits regime stands applicable for the shareholders with benefits caused before December 31, 2014, based on the transitory provision one and two of the cited regulation. Additionally, for this shareholders exclusively, their benefits as annuities actuarial system are constant and not revaluable. However, when the yield (previous to the transfer to benefits of the excessive risk) obtained in a year exceeds the technical interest rate, will generate a right to an improvement of the annuity of the 70% of the exceeding amount, once taken into reserves all those annuities occurred until December 31, 2014.
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On April 16, 2010 the General Assembly of the Entity approved the inclusion of insurance covering death for six years from the start of the provision through actuarial lifetime income in such a way that if an unmarried member dies, or a married member whose partner has already died, their beneficiaries will be entitled to receive an annually decreasing percentage of the mathematical provision (60% the first year, to 10% in the sixth year) (For income caused from May 1, 2010). In the event of disability or death of a non-paying member, the corresponding benefits comprise the consolidated individual entitlements deriving from the regular contributions of the deceased ordinary member and the contributing member, and any yield and gains generated through the management of funds after the Entity’s management expenses have been settled. Under the resolution adopted by the Governing Board of the Entity, on December 18, 2012 to amend Article 9A of the Statutes, disabled members grade less than 45% will be entitled to a retirement pension from age 56 if they are not active and are entitled to social Security retirement. On December 19, 2006 the Entity took out a life risk transfer contract with an insurance company (AVIVA) through the “Federación de Entidades de Previsión Social Voluntaria de Euskadi” (Basque Federation of Voluntary Social Welfare Entities). This contract covers 50% of the risk of death, permanent total disability, permanent total disability and severe disability, and took effect from January 1, 2007. The Entity gives the 29% and the 33% of the withdrawn fees for the hedge of the risky benefits cited previously for the years 2015 and 2014. During 2015 the amount paid by the Bank to the insurance totaled 2,093 thousand euros (2,403 thousand euros during 2014). In June 14, 2012 an additional contract for the transfer of risk to another reinsurer (VidaCaixa) was signed, covering the remaining 50% risk of death, permanent total disability, permanent total disability, severe disability, total disability permanent and permanent total disability. This reinsurance coverage took effect from January 1, 2012. The premium of this contract for the year 2015 amounted to 2,009 thousand euros (1,999 thousand euros for the year 2014). Both contracts are established on an annual basis, tacitly renewed each year and include the ability to participate in the benefits of reinsurance. During 2014, 312 thousand euros have accrued revenues for this matter (450 thousand euros during the year 2014) with credit to "Net operating expenses" in the income statement (Note 13). After the new drafting of the Regulation approved by the Ordinary General Meeting of April 15, 2015, this benefits regime stands applicable for the shareholders with benefits caused before December 31, 2014, based on the transitory provision one and two of the cited regulation. Additionally, for this shareholders exclusively, their benefits as annuities actuarial system are constant and not revaluable. However, when the yield (previous to the transfer to benefits of the excessive risk) obtained in a year exceeds the technical interest rate, will generate a right to an improvement of the annuity of the 70% of the exceeding amount, once taken into reserves all those annuities occurred until December 31, 2014.
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Adaptation in the year 2015 on the payment of benefits In order to adapt to its partners’ request and avoid future problems in the payment of benefits derived from certain factors such as demographic or economic that could damage the Entity’s solvency, the Entity’s Governing Board meeting held on December 9, 2014 has announced the transition to a new model of paying benefits. The agreement has been approved by the Entity’s Extraordinary General Assembly meeting held on January 13, 2015. Finally, after attending the recommendations of the Basque Government, the new benefits model is under the Benefits Regulation approved by the Ordinary General Meeting held on April 15, 2015, and also under the Entity’s Statutes approved by the Extraordinary General Meeting held on December 17, 2015. This change in the income model has been implemented through two distinct phases: - Transitional period between January 1, 2015 and June 30, 2015: Continuity of the old
model of annuities, where the technical interest rate used to calculate technical provisions of 3.5% is reduced to 1.5%, the solvency margin of 6% is covered by the rentier and the individual capitalization of the contributions of each partner in their economic rights increases from 90% to 93%, allocating 7% to risk hedging.
- Period beginning on July 1, 2015: Introduction of a new model of payment of benefits
which establishes that the payment of benefits depend on the number of years of income that can be generated with the partner’s economic rights. Benefits shall be paid as annuities if the income reaches at the time of the benefit being made, the "Amount of Income Generation (AIG)" for each of the established later sections. The Amount of Income Generation is calculated as follows:
AIG year 1 = BCCC max year 0 * % max year 0
In which: AIG year 1: Generated amount of income for year 1. MCCC max year 0: Maximum contribution base for common contingencies year 0. % max year 0: Maximum percentage of contribution to the Entity for year 0. The amount will be rounded up to the closest integer number. Thus, 4 sections are established:
a) Section 1: If the economic rights do not reach for the payment of an income during a 5 year period, with a monthly minimum amount of the IGR, it will be paid in a capital benefit form.
b) Section 2: If the economic rights reach for the payment of an annuity between 5
and 20 years, with a monthly mínimum amount of the IGR, the benefits will be optional between a capital form and a temporary annuity income that goes between 5 and 20 years.
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Adaptation in the year 2015 on the payment of benefits
In order to adapt to its partners’ request and avoid future problems in the payment of benefitsderived from certain factors such as demographic or economic that could damage the Entity’s solvency, the Entity’s Governing Board meeting held on December 9, 2014 has announced the transition to a new model of paying benefits. The agreement has been approved by the Entity’s Extraordinary General Assembly meeting held on January 13, 2015.
Finally, after attending the recommendations of the Basque Government, the new benefits model is under the Benefits Regulation approved by the Ordinary General Meeting held on April 15, 2015, and also under the Entity’s Statutes approved by the Extraordinary GeneralMeeting held on December 17, 2015.
This change in the income model has been implemented through two distinct phases:
- Transitional period between January 1, 2015 and June 30, 2015: Continuity of the old model of annuities, where the technical interest rate used to calculate technical provisions of 3.5% is reduced to 1.5%, the solvency margin of 6% is covered by the rentier and the individual capitalization of the contributions of each partner in their economic rights increases from 90% to 93%, allocating 7% to risk hedging.
- Period beginning on July 1, 2015: Introduction of a new model of payment of benefits which establishes that the payment of benefits depend on the number of years of income that can be generated with the partner’s economic rights. Benefits shall be paid as annuities if the income reaches at the time of the benefit being made, the "Amount of Income Generation (AIG)" for each of the established later sections. The Amount of Income Generation is calculated as follows:
AIG year 1 = BCCC max year 0 * % max year 0
In which:
AIG year 1: Generated amount of income for year 1.MCCC max year 0: Maximum contribution base for common contingencies year 0.% max year 0: Maximum percentage of contribution to the Entity for year 0.
The amount will be rounded up to the closest integer number.
Thus, 4 sections are established:
a) Section 1: If the economic rights do not reach for the payment of an income during a 5 year period, with a monthly minimum amount of the IGR, it will be paid in a capital benefit form.
b) Section 2: If the economic rights reach for the payment of an annuity between 5 and 20 years, with a monthly mínimum amount of the IGR, the benefits will be optional between a capital form and a temporary annuity income that goes between 5 and 20 years.
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c) Section 3: If the economic rights reach the amount necessary to pay an annuity
between 20 years and the years left to reach the legal age of retirement plus 25, with a monthly minimum amount of the IGR, the benefits will be paid in a temporary annuity income basis between the 20 years and the years left to reach the legal retirement age plus 25.
d) Section 4: If the economic rights reach the amount necessary to pay a monthly
mínimum amount of the IGR until the legal retirement age plus 25, the benefits will be paid as a temporary annuity income form until the legal age for retirement plus 25, and additionally a deferred life annuity (paid since the end of the temporary annuity until death). The deferred life annuity will be covered at the moment of transforming the capital into a rent, subtracting the amount that corresponds to the individual economic rights. The Entity will calculate an homogenous for all the members. Exceptionally this life annuity will be voluntary and the cost to apply will be real (PERM/F-2000C tables) if it is requested the benefit one year after the legal retirement age.
The rent for the widow or widower or the person with analogous relationship, derived from death of an active partner will be mandatorily paid as a financial rent, without dependency insurance, of the outstanding installments. The orphan's benefit for children under age 25 or disabled in a degree equal to or above 65% resulting from the death of an active partner, will receive the payment of the outstanding amounts as capital, proportionally to the remaining years up to 25 years of the orphan, matching the age of the handicapped child to the younger child, to be distributed by the same monthly rent to each of them, if there were more than one, or the payment of a single capital. Actuarial income from dependency insurance of the final section set in the model will not be reversed. Also, for the case of benefits arising from the contingencies of absolute permanent disability or great disability, the member may choose its rent to be calculated based on the AIG or twice the AIG, thereby reducing the term of the rent, and hiring or no deferred life annuity. The agreement does not constitute a change in the contingencies covered by the Entity, but the establishment of a new system of payment of benefits, different from and a replacement of the previous one. The initial calculation of the temporary financial income will be done using an interest rate of 1%, and considering they are post payable growing at a 0.5% annual rate. Annually, in case that the market conditions allow the gain of a higher yield, the incomes will obtain a share of the benefits of the 100% of the excess over the 1% of the assets assigned to the hedge of these incomes. Therefore it will be increased the monthly amount of all the shareholders in a homogenous percentage.
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c) Section 3: If the economic rights reach the amount necessary to pay an annuity between 20 years and the years left to reach the legal age of retirement plus 25, with a monthly minimum amount of the IGR, the benefits will be paid in a temporary annuity income basis between the 20 years and the years left to reach the legal retirement age plus 25.
d) Section 4: If the economic rights reach the amount necessary to pay a monthly mínimum amount of the IGR until the legal retirement age plus 25, the benefits will be paid as a temporary annuity income form until the legal age for retirement plus 25, and additionally a deferred life annuity (paid since the end of the temporary annuity until death). The deferred life annuity will be covered at the moment of transforming the capital into a rent, subtracting the amount thatcorresponds to the individual economic rights. The Entity will calculate an homogenous for all the members. Exceptionally this life annuity will be voluntary and the cost to apply will be real (PERM/F-2000C tables) if it is requested the benefit one year after the legal retirement age.
The rent for the widow or widower or the person with analogous relationship, derived from death of an active partner will be mandatorily paid as a financial rent, without dependency insurance, of the outstanding installments. The orphan's benefit for children under age 25 or disabled in a degree equal to or above 65% resulting from the death of an active partner, will receive the payment of the outstanding amounts as capital, proportionally to the remaining years up to 25 years of the orphan, matching the age of the handicapped child to the younger child, to be distributed by the same monthly rent to each of them, if there were more than one, or the payment of a single capital. Actuarial income from dependency insurance of the final section set in the model will not be reversed.
Also, for the case of benefits arising from the contingencies of absolute permanent disability or great disability, the member may choose its rent to be calculated based on the AIG or twice the AIG, thereby reducing the term of the rent, and hiring or no deferred life annuity.
The agreement does not constitute a change in the contingencies covered by the Entity, but the establishment of a new system of payment of benefits, different from and a replacement of the previous one.
The initial calculation of the temporary financial income will be done using an interest rate of 1%, and considering they are post payable growing at a 0.5% annual rate.
Annually, in case that the market conditions allow the gain of a higher yield, the incomes will obtain a share of the benefits of the 100% of the excess over the 1% of the assets assigned to the hedge of these incomes. Therefore it will be increased the monthly amount of all the shareholders in a homogenous percentage.
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c) Section 3: If the economic rights reach the amount necessary to pay an annuity
between 20 years and the years left to reach the legal age of retirement plus 25, with a monthly minimum amount of the IGR, the benefits will be paid in a temporary annuity income basis between the 20 years and the years left to reach the legal retirement age plus 25.
d) Section 4: If the economic rights reach the amount necessary to pay a monthly
mínimum amount of the IGR until the legal retirement age plus 25, the benefits will be paid as a temporary annuity income form until the legal age for retirement plus 25, and additionally a deferred life annuity (paid since the end of the temporary annuity until death). The deferred life annuity will be covered at the moment of transforming the capital into a rent, subtracting the amount that corresponds to the individual economic rights. The Entity will calculate an homogenous for all the members. Exceptionally this life annuity will be voluntary and the cost to apply will be real (PERM/F-2000C tables) if it is requested the benefit one year after the legal retirement age.
The rent for the widow or widower or the person with analogous relationship, derived from death of an active partner will be mandatorily paid as a financial rent, without dependency insurance, of the outstanding installments. The orphan's benefit for children under age 25 or disabled in a degree equal to or above 65% resulting from the death of an active partner, will receive the payment of the outstanding amounts as capital, proportionally to the remaining years up to 25 years of the orphan, matching the age of the handicapped child to the younger child, to be distributed by the same monthly rent to each of them, if there were more than one, or the payment of a single capital. Actuarial income from dependency insurance of the final section set in the model will not be reversed. Also, for the case of benefits arising from the contingencies of absolute permanent disability or great disability, the member may choose its rent to be calculated based on the AIG or twice the AIG, thereby reducing the term of the rent, and hiring or no deferred life annuity. The agreement does not constitute a change in the contingencies covered by the Entity, but the establishment of a new system of payment of benefits, different from and a replacement of the previous one. The initial calculation of the temporary financial income will be done using an interest rate of 1%, and considering they are post payable growing at a 0.5% annual rate. Annually, in case that the market conditions allow the gain of a higher yield, the incomes will obtain a share of the benefits of the 100% of the excess over the 1% of the assets assigned to the hedge of these incomes. Therefore it will be increased the monthly amount of all the shareholders in a homogenous percentage.
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The Finance Directors Office of the Economy and Treasury Department of the Basque Government approved the cited Regulation on June 30, 2015, acquiring full effectiveness on the Entity from July 1st, 2015. Additionally, on January 11, 2016, the Finance Director’s Office of the Economy and Treasury Department of the Basque Government sent a resolution that approved the modification related to the necessary adjustments of the Statutes to the Benefits Regulation of the Entity and the signing of those adjustments to the Voluntary Social Welfare Entity’s Registry of the Basque Country. 3. Basis of presentation of the annual accounts 3.1. Fair presentation The accompanying annual accounts have been prepared based on the accounting records of the Entity. The annual accounts for 2015 have been prepared in accordance with provisions applicable to Voluntary Social Welfare Entities issued by the Basque Government ’s Department of Justice, Employment and Social Security and Department of Finance and the accounting principles established in the adaptation of the Spanish General Chart of Accounts to Voluntary Social Welfare Entities to present fairly the equity and financial position at December 31st, 2015 and results of operations, changes in equity and cash flows for the year then ended. According to the statement of December 2nd, 2014 of the Department of Treasury and Finance of the Basque Government, the members of the Governing Board have proceeded to prepare these financial statements following the criteria indicated by the Basque Government and under the premise that entity does not perform any insurance activity, so the rules applied in preparing these financial statements have been established in Decree 92/2007 of May 29, by which the exercise of certain activities EPSVs regulated, Order of April 29, 2009, the Ministry of Finance and Public Administration, amending certain aspects of Decree 92/2007 and Decree 86/2010, of March 16, in which it is approved the adaptation of the Insurance accounting plan to the specificities of Voluntary Social Welfare Basque Entities. These annual accounts, issued by the Governing Board of the Entity will be subject to approval by the General Assembly, they are expected to be approved without significant changes. The Entity’s annual accounts for 2014 were approved by the General Assembly of April 15, 2015. At December 31st, 2015 the Entity is not required to prepare consolidated annual accounts in accordance with the provisions of Article 42 of the Commercial Code. Unless otherwise stated, these consolidated annual accounts are presented in €’000. 3.2. Comparability The financial statements at December 31st, 2015 are presented regarding the structure and accounting principles established in the current legislation of the Basque Government.
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The Finance Directors Office of the Economy and Treasury Department of the Basque Government approved the cited Regulation on June 30, 2015, acquiring full effectiveness on the Entity from July 1st, 2015. Additionally, on January 11, 2016, the Finance Director’s Office of the Economy and Treasury Department of the Basque Government sent a resolution that approved the modification related to the necessary adjustments of the Statutes to the Benefits Regulation of the Entity and the signing of those adjustments to the Voluntary Social Welfare Entity’s Registry of the Basque Country.
3. Basis of presentation of the annual accounts
3.1. Fair presentation
The accompanying annual accounts have been prepared based on the accounting records of the Entity. The annual accounts for 2015 have been prepared in accordance with provisions applicable to Voluntary Social Welfare Entities issued by the Basque Government ’s Department of Justice, Employment and Social Security and Department of Finance and the accounting principles established in the adaptation of the Spanish General Chart of Accounts to Voluntary Social Welfare Entities to present fairly the equity and financial position atDecember 31st, 2015 and results of operations, changes in equity and cash flows for the year then ended.
According to the statement of December 2nd, 2014 of the Department of Treasury and Finance of the Basque Government, the members of the Governing Board have proceeded to prepare these financial statements following the criteria indicated by the Basque Government and under the premise that entity does not perform any insurance activity, so the rules applied in preparing these financial statements have been established in Decree 92/2007 of May 29, by which the exercise of certain activities EPSVs regulated, Order of April 29, 2009, the Ministry of Finance and Public Administration, amending certain aspectsof Decree 92/2007 and Decree 86/2010, of March 16, in which it is approved the adaptation of the Insurance accounting plan to the specificities of Voluntary Social Welfare Basque Entities.
These annual accounts, issued by the Governing Board of the Entity will be subject toapproval by the General Assembly, they are expected to be approved without significant changes. The Entity’s annual accounts for 2014 were approved by the General Assembly ofApril 15, 2015.
At December 31st, 2015 the Entity is not required to prepare consolidated annual accounts in accordance with the provisions of Article 42 of the Commercial Code.
Unless otherwise stated, these consolidated annual accounts are presented in €’000.
3.2. Comparability
The financial statements at December 31st, 2015 are presented regarding the structure and accounting principles established in the current legislation of the Basque Government.
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The directors of the Entity show, for comparison purposes, with the balance sheet, the profit and loss account, statement of changes in equity and cash flow statement, besides the figures for 2015, those for the previous year. 3.3. Accounting principles When preparing these annual accounts the accounting and reclassification principles and standards set out, fundamentally, by the Basque Government Decree 86/2010, and the most significant are those described in Note 5. No mandatory accounting principle that has a significant effect on these annual accounts has been omitted from the preparation of the accompanying annual accounts. 3.4. Key aspects of the measurement and estimation of uncertainty When preparing the annual accounts judgments and estimates based on assumptions of the future and uncertainties have been used and basically refer to the impairment of financial assets, non-Underwriting reserves, the calculation of the fair value of financial assets not traded on active markets and the useful lives of property, plant and equipment and intangible assets. The estimates and assumptions used are reviewed regularly and are based on past experience and other factors that could have been considered more reasonable at any given moment. If, as a result of these reviews, there is a change in the estimate for a certain period, its effect would be applied to that period and, if appropriate, in successive periods. 3.5. Items included under more than one heading For the purposes of facilitating the understanding of the balance sheet, the income statement, the statement of changes in equity and the cash flow statement, these financial statements are presented in a group format and all necessary disclosures are set out in the notes to the annual accounts. 3.6. Changes in accounting policies Changes in accounting policies, either because they amend an accounting regulation that governs a certain transaction or event or because the Governing Board decides to change the accounting policy for justified reasons, are applied retroactively unless: It is impractical to determine the effect in each specific year deriving from a change in
an accounting policy regarding comparative information from a preceding year, in which case the new accounting policy is applied at the start of the oldest year so that retroactive application becomes practicable. When it is impractical to determine the accumulated effect, at the start of the current year, deriving from the application of a new accounting policy to all preceding years the new accounting policy is applied on a prospective basis as from the oldest date on which it is practical to do so or,
The accounting rule or regulation changes or establishes the application date.
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The directors of the Entity show, for comparison purposes, with the balance sheet, the profit and loss account, statement of changes in equity and cash flow statement, besides the figures for 2015, those for the previous year.
3.3. Accounting principles
When preparing these annual accounts the accounting and reclassification principles and standards set out, fundamentally, by the Basque Government Decree 86/2010, and the most significant are those described in Note 5. No mandatory accounting principle that has a significant effect on these annual accounts has been omitted from the preparation of the accompanying annual accounts.
3.4. Key aspects of the measurement and estimation of uncertainty
When preparing the annual accounts judgments and estimates based on assumptions of the future and uncertainties have been used and basically refer to the impairment of financial assets, non-Underwriting reserves, the calculation of the fair value of financial assets not traded on active markets and the useful lives of property, plant and equipment and intangible assets.
The estimates and assumptions used are reviewed regularly and are based on past experience and other factors that could have been considered more reasonable at any given moment. If, as a result of these reviews, there is a change in the estimate for a certain period, its effect would be applied to that period and, if appropriate, in successive periods.
3.5. Items included under more than one heading
For the purposes of facilitating the understanding of the balance sheet, the income statement, the statement of changes in equity and the cash flow statement, these financial statements are presented in a group format and all necessary disclosures are set out in the notes to the annual accounts.
3.6. Changes in accounting policies
Changes in accounting policies, either because they amend an accounting regulation that governs a certain transaction or event or because the Governing Board decides to changethe accounting policy for justified reasons, are applied retroactively unless:
It is impractical to determine the effect in each specific year deriving from a change in an accounting policy regarding comparative information from a preceding year, in which case the new accounting policy is applied at the start of the oldest year so that retroactive application becomes practicable. When it is impractical to determine the accumulated effect, at the start of the current year, deriving from the application of a new accounting policy to all preceding years the new accounting policy is applied on a prospective basis as from the oldest date on which it is practical to do so or,
The accounting rule or regulation changes or establishes the application date.
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The directors of the Entity show, for comparison purposes, with the balance sheet, the profit and loss account, statement of changes in equity and cash flow statement, besides the figures for 2015, those for the previous year. 3.3. Accounting principles When preparing these annual accounts the accounting and reclassification principles and standards set out, fundamentally, by the Basque Government Decree 86/2010, and the most significant are those described in Note 5. No mandatory accounting principle that has a significant effect on these annual accounts has been omitted from the preparation of the accompanying annual accounts. 3.4. Key aspects of the measurement and estimation of uncertainty When preparing the annual accounts judgments and estimates based on assumptions of the future and uncertainties have been used and basically refer to the impairment of financial assets, non-Underwriting reserves, the calculation of the fair value of financial assets not traded on active markets and the useful lives of property, plant and equipment and intangible assets. The estimates and assumptions used are reviewed regularly and are based on past experience and other factors that could have been considered more reasonable at any given moment. If, as a result of these reviews, there is a change in the estimate for a certain period, its effect would be applied to that period and, if appropriate, in successive periods. 3.5. Items included under more than one heading For the purposes of facilitating the understanding of the balance sheet, the income statement, the statement of changes in equity and the cash flow statement, these financial statements are presented in a group format and all necessary disclosures are set out in the notes to the annual accounts. 3.6. Changes in accounting policies Changes in accounting policies, either because they amend an accounting regulation that governs a certain transaction or event or because the Governing Board decides to change the accounting policy for justified reasons, are applied retroactively unless: It is impractical to determine the effect in each specific year deriving from a change in
an accounting policy regarding comparative information from a preceding year, in which case the new accounting policy is applied at the start of the oldest year so that retroactive application becomes practicable. When it is impractical to determine the accumulated effect, at the start of the current year, deriving from the application of a new accounting policy to all preceding years the new accounting policy is applied on a prospective basis as from the oldest date on which it is practical to do so or,
The accounting rule or regulation changes or establishes the application date.
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3.7. Correction of errors Errors in the preparation of prior-year annual accounts are the result of omissions or inaccuracies resulting from the failure to employ or use reliable information that was available when the annual accounts for those periods were prepared and the Entity should have used when preparing those annual accounts. Errors relating to prior years are corrected retroactively in the first annual accounts that are prepared after discovery, as if the error had never taken place: • Re-expressing the amounts of the various annual accounts affected by the error,
including the notes to the annual accounts that are published in the annual accounts for the purposes of comparison, which relate to that year and prior years, if applicable.
• Re-expressing the opening balance for the oldest year for which information is
presented if the error took place before the first annual accounts that are presented for the purposes of comparison.
When it is impractical to determine the effects arising in each specific year from an error involving comparative information from a preceding year, the opening balances for the oldest years are re-expressed, where possible. In the event that it is not practical to determine the accumulated effect, at the start of the current year, of an error involving all prior years, the comparative information is re-expressed correcting the error on a prospective basis as from the earliest date possible. Errors from prior years that affect equity are corrected in the year discovered using the relevant equity account. Under no circumstances are errors from prior years corrected through the income statement for the year in which they are discovered, unless they have no relative importance or it is impractical to determine the effect of the error based on the provisions of the preceding paragraph. During fiscal years 2015 and 2014, the Entity has not carried out any correction. 3.8. Criteria for attributing income and expense Income and expense are recorded in the period in which the income or expense deriving from the goods or services in question is represented rather than the period in which the cash or financial flow is actually received or disbursed. The income statement adequately separates income and expense for the period by activity in accordance with the disclosure rules established by current legislation (Activities of Pension Plans of the Voluntary Social Welfare Entities, Other activities developed by Voluntary Social Welfare Entities and non social welfare plan activity account). Within each activity, the related revenue and expenses related to the affected operations are charged to the appropriate account in the consolidated income statement. Revenues and expenses from investments to materialize in equity and other resources directly related to the practice of operations affected the social welfare activities are taken to the "non social welfare plan activity account" in the consolidated income statement.
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3.7. Correction of errors
Errors in the preparation of prior-year annual accounts are the result of omissions or inaccuracies resulting from the failure to employ or use reliable information that was available when the annual accounts for those periods were prepared and the Entity should have used when preparing those annual accounts.
Errors relating to prior years are corrected retroactively in the first annual accounts that are prepared after discovery, as if the error had never taken place:
• Re-expressing the amounts of the various annual accounts affected by the error, including the notes to the annual accounts that are published in the annual accounts for the purposes of comparison, which relate to that year and prior years, if applicable.
• Re-expressing the opening balance for the oldest year for which information is presented if the error took place before the first annual accounts that are presented for the purposes of comparison.
When it is impractical to determine the effects arising in each specific year from an error involving comparative information from a preceding year, the opening balances for the oldest years are re-expressed, where possible. In the event that it is not practical to determine the accumulated effect, at the start of the current year, of an error involving all prior years, the comparative information is re-expressed correcting the error on a prospective basis as from the earliest date possible.
Errors from prior years that affect equity are corrected in the year discovered using the relevant equity account. Under no circumstances are errors from prior years corrected through the income statement for the year in which they are discovered, unless they have no relative importance or it is impractical to determine the effect of the error based on the provisions of the preceding paragraph.
During fiscal years 2015 and 2014, the Entity has not carried out any correction.
3.8. Criteria for attributing income and expense
Income and expense are recorded in the period in which the income or expense deriving from the goods or services in question is represented rather than the period in which the cash or financial flow is actually received or disbursed.
The income statement adequately separates income and expense for the period by activity in accordance with the disclosure rules established by current legislation (Activities of Pension Plans of the Voluntary Social Welfare Entities, Other activities developed by Voluntary Social Welfare Entities and non social welfare plan activity account).
Within each activity, the related revenue and expenses related to the affected operations are charged to the appropriate account in the consolidated income statement. Revenues and expenses from investments to materialize in equity and other resources directly related to the practice of operations affected the social welfare activities are taken to the "non social welfare plan activity account" in the consolidated income statement.
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The Entity only carries out activities relating to a single Retirement Plan to which all its assets and liabilities are associated. Expenses are classified by class in the income statement but, when this is not possible, analytical cost attribution criteria that are reasonable, objectives and verifiable are used. 4. Distribution of surplus The proposed distribution of profit for 2015 that the Governing Board of the Entity will submit for approval to the General Assembly as well as the already approved for the year 2014, is as follows: 2015 2014 Basis of allocation Surplus for the year (6,242) 5,242 (6,242) 5,242 Distribution Reserves – reserves for actuarial risks (Note 10) (7,459) 1,171 Reserves associated with defined contribution plans under which the member assumes the investment risk 5
-
Voluntary reserves 1,212 4,071 (6,242) 5,242 The Entity is governed by an individual capitalisation financial system under which the rights of each member are the result of all direct or attributed contributions and the yields obtained from the investment of those amounts, less all attributable expenses. At any given moment, the Entity records all member financial rights through heading "I.6 Change in Other Underwriting reserves, Net of Reinsurance" in the income statement to the heading "A.5) Underwriting reserves" on the liability side of the balance sheet. 5. Significant accounting policies The accompanying annual accounts have been prepared in accordance with accounting principles established in the Spanish General Chart of Accounts for Insurance Entities adapted for Voluntary Social Welfare Entities, as per Decree 86/2010 of 16 March 2010 and the provisions of Decree 92/2007 of May 29, both issued by the Basque Government’s Department of Finance. a) Intangible assets Intangible assets are measured at cost or cost of production, less any accumulated amortization and accumulated impairment.
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The Entity only carries out activities relating to a single Retirement Plan to which all its assets and liabilities are associated.
Expenses are classified by class in the income statement but, when this is not possible, analytical cost attribution criteria that are reasonable, objectives and verifiable are used.
4. Distribution of surplus
The proposed distribution of profit for 2015 that the Governing Board of the Entity will submit for approval to the General Assembly as well as the already approved for the year 2014, is as follows:
2015 2014Basis of allocationSurplus for the year (6,242) 5,242
(6,242) 5,242
DistributionReserves – reserves for actuarial risks (Note 10) (7,459) 1,171Reserves associated with defined contribution plans under which the member assumes the investment risk 5 -Voluntary reserves 1,212 4,071
(6,242) 5,242
The Entity is governed by an individual capitalisation financial system under which the rights of each member are the result of all direct or attributed contributions and the yields obtained from the investment of those amounts, less all attributable expenses. At any given moment, the Entity records all member financial rights through heading "I.6 Change in Other Underwriting reserves, Net of Reinsurance" in the income statement to the heading "A.5) Underwriting reserves" on the liability side of the balance sheet.
5. Significant accounting policies
The accompanying annual accounts have been prepared in accordance with accounting principles established in the Spanish General Chart of Accounts for Insurance Entities adapted for Voluntary Social Welfare Entities, as per Decree 86/2010 of 16 March 2010 and the provisions of Decree 92/2007 ofprovisions of Decree 92/2007 ofpr May 29, both issued by the Basque Government’s Department of Finance.
a) Intangible assets
Intangible assets are measured at cost or cost of production, less any accumulated amortization and accumulated impairment.
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The Entity only carries out activities relating to a single Retirement Plan to which all its assets and liabilities are associated. Expenses are classified by class in the income statement but, when this is not possible, analytical cost attribution criteria that are reasonable, objectives and verifiable are used. 4. Distribution of surplus The proposed distribution of profit for 2015 that the Governing Board of the Entity will submit for approval to the General Assembly as well as the already approved for the year 2014, is as follows: 2015 2014 Basis of allocation Surplus for the year (6,242) 5,242 (6,242) 5,242 Distribution Reserves – reserves for actuarial risks (Note 10) (7,459) 1,171 Reserves associated with defined contribution plans under which the member assumes the investment risk 5
-
Voluntary reserves 1,212 4,071 (6,242) 5,242 The Entity is governed by an individual capitalisation financial system under which the rights of each member are the result of all direct or attributed contributions and the yields obtained from the investment of those amounts, less all attributable expenses. At any given moment, the Entity records all member financial rights through heading "I.6 Change in Other Underwriting reserves, Net of Reinsurance" in the income statement to the heading "A.5) Underwriting reserves" on the liability side of the balance sheet. 5. Significant accounting policies The accompanying annual accounts have been prepared in accordance with accounting principles established in the Spanish General Chart of Accounts for Insurance Entities adapted for Voluntary Social Welfare Entities, as per Decree 86/2010 of 16 March 2010 and the provisions of Decree 92/2007 of May 29, both issued by the Basque Government’s Department of Finance. a) Intangible assets Intangible assets are measured at cost or cost of production, less any accumulated amortization and accumulated impairment.
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(i) Computer software Computer software acquired and produced by the Entity, including website costs, is recognized when there is evidence of technical success and a clear allocation in time of costs. Computer software maintenance costs are charged as expenses when incurred. (ii) Subsequent costs Subsequent costs incurred on intangible assets are recognized in profit and loss, unless they increase the expected future economic benefits attributable to the intangible asset. (iii) Useful life and amortization rates The Entity assesses whether the useful life of each intangible asset acquired is finite or indefinite. An intangible asset is regarded by the Entity as having an indefinite useful life when there is no foreseeable limit to the period over which the asset will generate net cash inflows. Intangible assets with finite useful lives are amortized by allocating the depreciable amount of an asset on a systematic basis over its useful life, by applying the following criteria:
Amortization
method
Estimated years of
useful life Computer software Straight-line 1 - 3
The depreciable amount of intangible assets is measured as the cost of the asset, less any residual value. The Entity reviews the residual value, useful life and amortization method for intangible assets at each financial year end. Changes to initially established criteria are accounted for as a change in accounting estimates. (iv) Impairment The Entity measures and determines impairment to be recognized or reversed based on recoverable amount, which is the higher of fair value less costs to sell and value in use. Impairment of intangible assets, or a reversal of impairment when the circumstances that gave rise to it have ceased to exist, is recognized as an expense or income, respectively, in the income statement. b) Property, plant and equipment (i) Initial recognition Property, plant and equipment are carried at cost less any accumulated depreciation and any accumulated impairment.
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(i) Computer software
Computer software acquired and produced by the Entity, including website costs, is recognized when there is evidence of technical success and a clear allocation in time of costs. Computer software maintenance costs are charged as expenses when incurred.
(ii) Subsequent costs
Subsequent costs incurred on intangible assets are recognized in profit and loss, unless they increase the expected future economic benefits attributable to the intangible asset.
(iii(iii(i ) ii) ii Useful life and amortization rates
The Entity assesses whether the useful life of each intangible asset acquired is finite or indefinite. An intangible asset is regarded by the Entity as having an indefinite useful life when there is no foreseeable limit to the period over which the asset will generate net cash inflows.
Intangible assets with finite useful lives are amortized by allocating the depreciable amount of an asset on a systematic basis over its useful life, by applying the following criteria:
Amortization method
Estimated years of
useful lifeComputer software Straight-line 1 - 3
The depreciable amount of intangible assets is measured as the cost of the asset, less any residual value.
The Entity reviews the residual value, useful life and amortization method for intangible assets at each financial year end. Changes to initially established criteria are accounted for as a change in accounting estimates.
(i(i( v) Impairment
The Entity measures and determines impairment to be recognized or reversed based on recoverable amount, which is the higher of fair value less costs to sell and value in use. Impairment of intangible assets, or a reversal of impairment when the circumstances that gave rise to it have ceased to exist, is recognized as an expense or income, respectively, in the income statement.
b) Property, plant and equipment
(i) Initial recognition
Property, plant and equipment are carried at cost less any accumulated depreciation and any accumulated impairment.
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(ii) Depreciation Property, plant and equipment are depreciated by allocating the depreciable amount of an asset on a systematic basis over its useful life. The depreciable amount is the cost of an asset, less its residual value. The Entity determines the depreciation charge separately for each component of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the asset and with a useful life that differs from the remainder of the asset. Depreciation is provided on a straight line basis over the estimated useful lives of the assets as follows:
Amortization
method
Estimated years of
useful life Buildings Straight-line 33 Furniture and installations Straight-line 10 Information technology equipment Straight-line 3
The Entity reviews residual values, useful lives and depreciation methods at each financial year end. Changes to initially established criteria are accounted for as a change in accounting estimates. (iii) Subsequent costs Subsequent to initial recognition of the asset, only the costs incurred which increase capacity or productivity or which lengthen the useful life of the asset are capitalized. The carrying amount of parts that are replaced is derecognized. Costs of day-to-day servicing are recognized in profit and loss as incurred. (iv) Impairment The Entity measures and determines impairment to be recognized or reversed based on recoverable amount, which is the higher of fair value less costs to sell and value in use. Impairment of property, plant and equipment, or a reversal of impairment when the circumstances that gave rise to it have ceased to exist, is recognized as an expense or income, respectively, in the income statement. c) Financial instruments (i) Classification and separation of financial instruments Financial instruments are classified on initial recognition as a financial asset, a financial liability or an equity instrument in accordance with the economic substance of the contractual arrangement and the definitions of a financial liability, a financial asset and an equity instrument. The Entity classifies financial instruments into different categories based on the nature of the instruments and management’s intentions on initial recognition.
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(ii) Depreciation
Property, plant and equipment are depreciated by allocating the depreciable amount of an asset on a systematic basis over its useful life. The depreciable amount is the cost of an asset, less its residual value. The Entity determines the depreciation charge separately for each component of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the asset and with a useful life that differs from the remainder of the asset.
Depreciation is provided on a straight line basis over the estimated useful lives of the assets as follows:
Amortization method
Estimated years of
useful lifeBuildings Straight-line 33Furniture and installations Straight-line 10Information technology equipment Straight-line 3
The Entity reviews residual values, useful lives and depreciation methods at each financial year end. Changes to initially established criteria are accounted for as a change in accounting estimates.
(iii) Subsequent costs
Subsequent to initial recognition of the asset, only the costs incurred which increase capacity or productivity or which lengthen the useful life of the asset are capitalized. The carrying amount of parts that are replaced is derecognized. Costs of day-to-day servicing are recognized in profit and loss as incurred.
(iv) Impairment
The Entity measures and determines impairment to be recognized or reversed based on recoverable amount, which is the higher of fair value less costs to sell and value in use. Impairment of property, plant and equipment, or a reversal of impairment when the circumstances that gave rise to it have ceased to exist, is recognized as an expense or income, respectively, in the income statement.
c) Financial instruments
(i) Classification and separation of financial instruments
Financial instruments are classified on initial recognition as a financial asset, a financial liability or an equity instrument in accordance with the economic substance of the contractual arrangement and the definitions of a financial liability, a financial asset and an equity instrument.
The Entity classifies financial instruments into different categories based on the nature of the instruments and management’s intentions on initial recognition.
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(ii) Depreciation Property, plant and equipment are depreciated by allocating the depreciable amount of an asset on a systematic basis over its useful life. The depreciable amount is the cost of an asset, less its residual value. The Entity determines the depreciation charge separately for each component of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the asset and with a useful life that differs from the remainder of the asset. Depreciation is provided on a straight line basis over the estimated useful lives of the assets as follows:
Amortization
method
Estimated years of
useful life Buildings Straight-line 33 Furniture and installations Straight-line 10 Information technology equipment Straight-line 3
The Entity reviews residual values, useful lives and depreciation methods at each financial year end. Changes to initially established criteria are accounted for as a change in accounting estimates. (iii) Subsequent costs Subsequent to initial recognition of the asset, only the costs incurred which increase capacity or productivity or which lengthen the useful life of the asset are capitalized. The carrying amount of parts that are replaced is derecognized. Costs of day-to-day servicing are recognized in profit and loss as incurred. (iv) Impairment The Entity measures and determines impairment to be recognized or reversed based on recoverable amount, which is the higher of fair value less costs to sell and value in use. Impairment of property, plant and equipment, or a reversal of impairment when the circumstances that gave rise to it have ceased to exist, is recognized as an expense or income, respectively, in the income statement. c) Financial instruments (i) Classification and separation of financial instruments Financial instruments are classified on initial recognition as a financial asset, a financial liability or an equity instrument in accordance with the economic substance of the contractual arrangement and the definitions of a financial liability, a financial asset and an equity instrument. The Entity classifies financial instruments into different categories based on the nature of the instruments and management’s intentions on initial recognition.
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Regular way purchases or sales of financial assets, understood as those in which the reciprocal obligations of the parties must be consumed within the time frame established generally by regulation or convention in the marketplace concerned and cannot be settled by differences, are recognized using trade date accounting or settlement date accounting. (ii) Offsetting principles A financial asset and a financial liability are offset only when the Entity currently has the legally enforceable right to offset the recognized amounts and intends either to settle on a net basis or to realize the asset and settle the liability simultaneously. (iii) Financial assets and financial liabilities held for trading Financial assets or financial liabilities held for trading are those which are classified as held for trading from initial recognition. Financial assets and financial liabilities held for trading are initially recognized at fair value. Transaction costs directly attributable to the acquisition or issue are recognized as an expense when incurred. After initial recognition, they are recognized at fair value through profit or loss. Fair value is not reduced by transaction costs incurred on sale or disposal. Accrual interest and dividends are recognized separately. (iv) Financial assets at fair value through profit or loss Financial assets and financial liabilities at fair value through profit or loss are initially recognized at fair value. Transaction costs directly attributable to the acquisition or issue are recognized as an expense in the income statement. After initial recognition, they are recognized at fair value through profit or loss. Fair value is not reduced by transaction costs incurred on sale or disposal. Accrual interest and dividends are recognized separately. When investments are materialized in assets and it can be considered that the available information cannot be fully contrasted with third parties and the application of market value would give rise to a gain, this gain is not recognized. (v) Loans and receivables Loans and receivables comprise trade and non-trade receivables with fixed or determinable payments that are not quoted in an active market other than those classified in other financial asset categories. These assets are recognized initially at fair value, including transaction costs, and subsequently measured at amortized cost using the effective interest method. Nevertheless, financial assets which have no established interest rate, which mature or are expected to be received in the short term, and for which the effect of discounting is immaterial, are measured at their nominal amount.
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Regular way purchases or sales of financial assets, understood as those in which the reciprocal obligations of the parties must be consumed within the time frame established generally by regulation or convention in the marketplace concerned and cannot be settled by differences, are recognized using trade date accounting or settlement date accounting.
(ii) Offsetting principles
A financial asset and a financial liability are offset only when the Entity currently has the legally enforceable right to offset the recognized amounts and intends either to settle on a net basis or to realize the asset and settle the liability simultaneously.
(iii) Financial assets and financial liabilities held for trading
Financial assets or financial liabilities held for trading are those which are classified as held for trading from initial recognition.
Financial assets and financial liabilities held for trading are initially recognized at fair value. Transaction costs directly attributable to the acquisition or issue are recognized as an expense when incurred.
After initial recognition, they are recognized at fair value through profit or loss. Fair value is not reduced by transaction costs incurred on sale or disposal. Accrual interest and dividends are recognized separately.
(iv) Financial assets at fair value through profit or loss
Financial assets and financial liabilities at fair value through profit or loss are initially recognized at fair value. Transaction costs directly attributable to the acquisition or issue are recognized as an expense in the income statement.
After initial recognition, they are recognized at fair value through profit or loss. Fair value is not reduced by transaction costs incurred on sale or disposal. Accrual interest and dividends are recognized separately. When investments are materialized in assets and it can be considered that the available information cannot be fully contrasted with third parties and the application of market value would give rise to a gain, this gain is not recognized.
(v) Loans and receivables
Loans and receivables comprise trade and non-trade receivables with fixed or determinable payments that are not quoted in an active market other than those classified in other financial asset categories. These assets are recognized initially at fair value, including transaction costs, and subsequently measured at amortized cost using the effective interest method.
Nevertheless, financial assets which have no established interest rate, which mature or are expected to be received in the short term, and for which the effect of discounting is immaterial, are measured at their nominal amount.
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(vi) Held-to-maturity investments Held-to-maturity investments are debt securities with fixed or determinable payments and fixed maturity traded on an active market and that Entity management has the positive intention and ability to hold to maturity, other than those classified in other categories. The measurement criteria applicable to financial instruments classified in this category are the same as those applicable to loans and receivables. (vii) Investments in group companies, associates and jointly controlled entities Investments in group companies, associates and jointly controlled entities are initially recognized at cost, which is equivalent to the fair value of the consideration given, including transaction costs, and are subsequently measured at book value, less any accumulated impairment losses. (viii) Interest and dividends Interest is recognized using the effective interest method. Dividends from investments in equity instruments are recognized when the Entity is entitled to receive them. If the dividends are clearly derived from profits generated prior to the acquisition date because amounts higher than the profits generated by the investment since acquisition have been distributed, the carrying amount of the investment is reduced. (ix) Derecognition of financial assets Financial assets are derecognized when the contractual rights to the cash flows from the financial asset expire or have been transferred and the Entity has transferred substantially all the risks and rewards of ownership. Debt or equity instruments which form part of portfolios of similar instruments which have the same rights, except when the instruments sold and their individualized cost can be clearly identified, are measured and derecognized at weighted average cost On derecognition of a financial asset, the difference between the carrying amount and the sum of the consideration received, including any cumulative gain or loss deferred in recognized income and expense, is recorded in profit or loss. (x) Impairment of financial assets A financial asset is deemed to be impaired and its carrying amount is therefore adjusted on the basis of objective evidence of the following events: Debt instruments, when there is objective evidence of a significant effect on the future
cash flows that were estimated at the transaction date.
Equity instruments, when the carrying amount may not be fully recovered.
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(vi) Held-to-maturity investments
Held-to-maturity investments are debt securities with fixed or determinable payments and fixed maturity traded on an active market and that Entity management has the positive intention and ability to hold to maturity, other than those classified in other categories. The measurement criteria applicable to financial instruments classified in this category are the same as those applicable to loans and receivables.
(vii) Investments in group companies, associates and jointly controlled entities
Investments in group companies, associates and jointly controlled entities are initially recognized at cost, which is equivalent to the fair value of the consideration given, including transaction costs, and are subsequently measured at book value, less any accumulated impairment losses.
(viii) Interest and dividends
Interest is recognized using the effective interest method.
Dividends from investments in equity instruments are recognized when the Entity is entitled to receive them. If the dividends are clearly derived from profits generated prior to the acquisition date because amounts higher than the profits generated by the investment since acquisition have been distributed, the carrying amount of the investment is reduced.
(ix) Derecognition of financial assets
Financial assets are derecognized when the contractual rights to the cash flows from the financial asset expire or have been transferred and the Entity has transferred substantially all the risks and rewards of ownership.
Debt or equity instruments which form part of portfolios of similar instruments which have the same rights, except when the instruments sold and their individualized cost can be clearly identified, are measured and derecognized at weighted average cost
On derecognition of a financial asset, the difference between the carrying amount and the sum of the consideration received, including any cumulative gain or loss deferred in recognized income and expense, is recorded in profit or loss.
(x) Impairment of financial assets
A financial asset is deemed to be impaired and its carrying amount is therefore adjusted on the basis of objective evidence of the following events:
Debt instruments, when there is objective evidence of a significant effect on the future cash flows that were estimated at the transaction date.
Equity instruments, when the carrying amount may not be fully recovered.
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(vi) Held-to-maturity investments Held-to-maturity investments are debt securities with fixed or determinable payments and fixed maturity traded on an active market and that Entity management has the positive intention and ability to hold to maturity, other than those classified in other categories. The measurement criteria applicable to financial instruments classified in this category are the same as those applicable to loans and receivables. (vii) Investments in group companies, associates and jointly controlled entities Investments in group companies, associates and jointly controlled entities are initially recognized at cost, which is equivalent to the fair value of the consideration given, including transaction costs, and are subsequently measured at book value, less any accumulated impairment losses. (viii) Interest and dividends Interest is recognized using the effective interest method. Dividends from investments in equity instruments are recognized when the Entity is entitled to receive them. If the dividends are clearly derived from profits generated prior to the acquisition date because amounts higher than the profits generated by the investment since acquisition have been distributed, the carrying amount of the investment is reduced. (ix) Derecognition of financial assets Financial assets are derecognized when the contractual rights to the cash flows from the financial asset expire or have been transferred and the Entity has transferred substantially all the risks and rewards of ownership. Debt or equity instruments which form part of portfolios of similar instruments which have the same rights, except when the instruments sold and their individualized cost can be clearly identified, are measured and derecognized at weighted average cost On derecognition of a financial asset, the difference between the carrying amount and the sum of the consideration received, including any cumulative gain or loss deferred in recognized income and expense, is recorded in profit or loss. (x) Impairment of financial assets A financial asset is deemed to be impaired and its carrying amount is therefore adjusted on the basis of objective evidence of the following events: Debt instruments, when there is objective evidence of a significant effect on the future
cash flows that were estimated at the transaction date.
Equity instruments, when the carrying amount may not be fully recovered.
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Among the situations taken into consideration by the Entity as objective evidence that a financial instrument may be impaired, and gives rise to an analysis to determine the amount of the potential impairment, are the following: (a) Significant financial difficulties affecting the issuer or debtor.
(b) A failure to comply with contractual clauses, such as failure to make payment or delays
in the payment of interest or principle.
(c) When the Entity, for financial or legal reasons relating to the borrower's financial difficulties, grants the borrower concessions or advantages which it otherwise would not have granted, always applying the requirements established by the legislation applicable to the Entity.
(d) When it is considered probable that the borrower will enter into bankruptcy or any other financial reorganisation situation relating to difficulties to attend to its payment commitments.
(e) The disappearance of an active market for the financial asset in question, due to the debtor or counterparty's financial difficulties relating to the risk assumed by the Entity.
(f) If observable information indicates that there may be a decrease in the measurement of estimated future cash flows from a group of financial assets of uniform characteristics after its initial recognition, although the decrease may not be yet identified in the individual financial assets making up the group, including:
i) Adverse changes in the payment conditions for a uniform group of borrowers
which, for example, has a growing number of payment delays or presents an inadequate financial structure.
ii) Local or national financial conditions are co-related to the failure to make payment for a group of assets, such as an increase in the unemployment rate in the borrowers' geographic area, a significant decline in the price of mortgaged properties or adverse changes in the conditions of a sector that affects a group of borrowers.
(g) For equity instruments, information regarding significant changes are taken into
account when an adverse effect has arisen in the technological, market, financial or legal environment in which the issuer operates and the specific situations that affect the entities in which investments are made and which could indicate that the cost of the investment in the equity instrument may not be recoverable. A prolonged or significant decline in the fair value of an investment in an equity instrument below cost is also objective evidence of impairment, although the Entity requires a relevant analysis as to whether or not the decline is actually related to the impairment of the investment leading to the conclusion that the invested amount will not be recovered.
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Among the situations taken into consideration by the Entity as objective evidence that a financial instrument may be impaired, and gives rise to an analysis to determine the amount of the potential impairment, are the following:
(a) Significant financial difficulties affecting the issuer or debtor.
(b) A failure to comply with contractual clauses, such as failure to make payment or delays in the payment of interest or principle.
(c) When the Entity, for financial or legal reasons relating to the borrower's financial difficulties, grants the borrower concessions or advantages which it otherwise would not have granted, always applying the requirements established by the legislation applicable to the Entity.
(d) When it is considered probable that the borrower will enter into bankruptcy or any other financial reorganisation situation relating to difficulties to attend to its payment commitments.
(e) The disappearance of an active market for the financial asset in question, due to the debtor or counterparty's financial difficulties relating to the risk assumed by the Entity.
(f) If observable information indicates that there may be a decrease in the measurement of estimated future cash flows from a group of financial assets of uniform characteristics after its initial recognition, although the decrease may not be yet identified in the individual financial assets making up the group, including:
i) Adverse changes in the payment conditions for a uniform group of borrowers which, for example, has a growing number of payment delays or presents an inadequate financial structure.
ii) Local or national financial conditions are co-related to the failure to make payment for a group of assets, such as an increase in the unemployment rate in the borrowers' geographic area, a significant decline in the price of mortgaged properties or adverse changes in the conditions of a sector that affects a group of borrowers.
(g) For equity instruments, information regarding significant changes are taken into account when an adverse effect has arisen in the technological, market, financial or legal environment in which the issuer operates and the specific situations that affect the entities in which investments are made and which could indicate that the cost of the investment in the equity instrument may not be recoverable. A prolonged or significant decline in the fair value of an investment in an equity instrument below cost is also objective evidence of impairment, although the Entity requires a relevant analysis as to whether or not the decline is actually related to the impairment of the investment leading to the conclusion that the invested amount will not be recovered.
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The methods applied by the Entity to identify possible impairment losses for each category of financial instruments and to calculate accounting provisions for that impairment are described below: Debt instruments measured at amortised cost: Impairment losses are equal to the positive difference between their respective carrying amounts and the present value of their estimated future cash flows. The market value of listed debt instruments is treated as a reasonable estimate of the present value of future cash flows. Subsequently, the cash flows are discounted at the instrument’s effective interest rate (where a fixed rate was contracted) or at the effective contractual interest rate at the discount date (where a variable rate was contracted). As regards impairment losses caused by the insolvency of a party liable for payment (credit risk), a debt instrument is impaired: When there is evidence of a reduction in the party’s payment capacity due to default or
other causes, and/or
When country risk materialises: country risk is considered to be the risk associated with debtors resident in a given country due to circumstances other than normal commercial risk.
The process of evaluating possible impairment losses for these assets is done individually, for all significant debt instruments and those which, though not significant, cannot be classified into homogenous groups of instruments of a similar type, business sector and geographic area, debtor activity, guarantee type, age of past due amounts, etc. Adjustments for impairment, as well as their reversal when the amount of such losses decreases for reasons relating to subsequent events, will be recognised as an expense or income, respectively, in the income statement. The reversal of impairment will be limited by the book value of the asset being recognised at the reversal date if the impairment has not been recorded. Equity instruments measured at cost Impairment losses, if applicable, are equal to the difference between the carrying amount and the present value of forecast future cash flows, discounted at the market rate for returns from other similar securities. Impairment losses are recognised in the consolidated income statement for the period in which they arise as a direct reduction to the cost of the instrument. These losses can only be reversed subsequently if the impaired assets are sold.
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The methods applied by the Entity to identify possible impairment losses for each category of financial instruments and to calculate accounting provisions for that impairment are described below:
Debt instruments measured at amortised cost:
Impairment losses are equal to the positive difference between their respective carrying amounts and the present value of their estimated future cash flows. The market value of listed debt instruments is treated as a reasonable estimate of the present value of future cash flows.
Subsequently, the cash flows are discounted at the instrument’s effective interest rate (where a fixed rate was contracted) or at the effective contractual interest rate at the discount date (where a variable rate was contracted).
As regards impairment losses caused by the insolvency of a party liable for payment (credit risk), a debt instrument is impaired:
When there is evidence of a reduction in the party’s payment capacity due to default or other causes, and/or
When country risk materialises: country risk is considered to be the risk associated with debtors resident in a given country due to circumstances other than normal commercial risk.
The process of evaluating possible impairment losses for these assets is done individually, for all significant debt instruments and those which, though not significant, cannot be classified into homogenous groups of instruments of a similar type, business sector and geographic area, debtor activity, guarantee type, age of past due amounts, etc.
Adjustments for impairment, as well as their reversal when the amount of such losses decreases for reasons relating to subsequent events, will be recognised as an expense or income, respectively, in the income statement.
The reversal of impairment will be limited by the book value of the asset being recognised at the reversal date if the impairment has not been recorded.
Equity instruments measured at cost
Impairment losses, if applicable, are equal to the difference between the carrying amount and the present value of forecast future cash flows, discounted at the market rate for returns from other similar securities.
Impairment losses are recognised in the consolidated income statement for the period in which they arise as a direct reduction to the cost of the instrument. These losses can only be reversed subsequently if the impaired assets are sold.
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The methods applied by the Entity to identify possible impairment losses for each category of financial instruments and to calculate accounting provisions for that impairment are described below: Debt instruments measured at amortised cost: Impairment losses are equal to the positive difference between their respective carrying amounts and the present value of their estimated future cash flows. The market value of listed debt instruments is treated as a reasonable estimate of the present value of future cash flows. Subsequently, the cash flows are discounted at the instrument’s effective interest rate (where a fixed rate was contracted) or at the effective contractual interest rate at the discount date (where a variable rate was contracted). As regards impairment losses caused by the insolvency of a party liable for payment (credit risk), a debt instrument is impaired: When there is evidence of a reduction in the party’s payment capacity due to default or
other causes, and/or
When country risk materialises: country risk is considered to be the risk associated with debtors resident in a given country due to circumstances other than normal commercial risk.
The process of evaluating possible impairment losses for these assets is done individually, for all significant debt instruments and those which, though not significant, cannot be classified into homogenous groups of instruments of a similar type, business sector and geographic area, debtor activity, guarantee type, age of past due amounts, etc. Adjustments for impairment, as well as their reversal when the amount of such losses decreases for reasons relating to subsequent events, will be recognised as an expense or income, respectively, in the income statement. The reversal of impairment will be limited by the book value of the asset being recognised at the reversal date if the impairment has not been recorded. Equity instruments measured at cost Impairment losses, if applicable, are equal to the difference between the carrying amount and the present value of forecast future cash flows, discounted at the market rate for returns from other similar securities. Impairment losses are recognised in the consolidated income statement for the period in which they arise as a direct reduction to the cost of the instrument. These losses can only be reversed subsequently if the impaired assets are sold.
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(xi) Fair value The fair value of financial assets is mainly determined by using the listed prices on active markets as a reference. (xii) Individual cases Hybrid financial instruments Financial instruments are those that combine a primary non-derivative contract and a financial derivative, called an embedded derivative, which cannot be independently transferred and the effect is that some of the cash flows for the hybrid instrument very in a manner similar to derivative cash flows taken into consideration independently. These financial liabilities are measured, both initially and subsequently, at fair value and any changes affecting this value are taken to the income statement for the year. Directly attributable transaction costs are recognized in the income statement for the year. Compound financial instruments The non-derivative financial instruments simultaneously include liability and asset components The Entity recognizes measures and presents separately its components, distributing the initial book value in accordance with the following criteria which, except in the case of any error, will not be available for subsequent reversal: (a) It will assign the liability component the fair value of a similar liability that is not
associated with the equity component.
(b) It will assign the equity component the difference between the initial amount and the value assigned to the liability component.
(c) It will distribute the transaction costs in the same proportion. Financial guarantee contracts A financial guarantee contract is one that requires the issuer to make specific payments to reimburse the holder for any loss incurred when a specific borrower fails to comply with repayment obligations in accordance with the original or amended conditions of a debt instrument, such as a guarantee. These contracts are measured initially at their fair value which is the same as the premium received plus the present value of any premiums yet to be received. Subsequent to the initial recognition, and unless at that time the item has been classified as Other financial liabilities at fair value to changes in profit or loss, it is stated at the initially recognised amount less any portion relating to accrued income has been taken to the income statement.
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(xi) Fair value
The fair value of financial assets is mainly determined by using the listed prices on active markets as a reference.
(xii) Individual cases
Hybrid financial instruments
Financial instruments are those that combine a primary non-derivative contract and a financial derivative, called an embedded derivative, which cannot be independently transferred and the effect is that some of the cash flows for the hybrid instrument very in a manner similar to derivative cash flows taken into consideration independently.
These financial liabilities are measured, both initially and subsequently, at fair value and any changes affecting this value are taken to the income statement for the year. Directly attributable transaction costs are recognized in the income statement for the year.
Compound financial instruments
The non-derivative financial instruments simultaneously include liability and asset components The Entity recognizes measures and presents separately its components, distributing the initial book value in accordance with the following criteria which, except in the case of any error, will not be available for subsequent reversal:
(a) It will assign the liability component the fair value of a similar liability that is not associated with the equity component.
(b) It will assign the equity component the difference between the initial amount and the value assigned to the liability component.
(c) It will distribute the transaction costs in the same proportion.
Financial guarantee contracts
A financial guarantee contract is one that requires the issuer to make specific payments to reimburse the holder for any loss incurred when a specific borrower fails to comply with repayment obligations in accordance with the original or amended conditions of a debt instrument, such as a guarantee.
These contracts are measured initially at their fair value which is the same as the premium received plus the present value of any premiums yet to be received. Subsequent to the initial recognition, and unless at that time the item has been classified as Other financial liabilities at fair value to changes in profit or loss, it is stated at the initially recognised amount less any portion relating to accrued income has been taken to the income statement.
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(xiii) Financial liabilities Financial liabilities, including trade and other payables, that are not classified as held for trading or as financial liabilities at fair value through profit or loss are initially recognized at fair value less any transaction costs directly attributable to the issue of the financial liability. After initial recognition, liabilities classified under this category are measured at amortized cost using the effective interest method. Nevertheless, financial liabilities which have no established interest rate, which mature or are expected to be settled in the short term, and for which the effect of discounting is immaterial, are measured at their nominal amount. d) Cash and cash equivalents Cash and cash equivalents include cash on hand and demand deposits in financial institutions. They also include other short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. An investment normally qualifies as a cash equivalent when it has a maturity of less than three months from the date of acquisition. e) Underwriting reserves (i) Reserves associated with defined contribution plans under which the member assumes
the investment risk Relates to the reserves created in order to attend to the obligations assumed with respect to Members as a result of the Entity's pension activity. The Entity charges the heading "Change in other underwriting reserves, net of reinsurance" to credit the heading "Reserve for pension activity transactions - reserves associated with defined contribution pension plans under which the member assumes the investment risk" in the amount of the positive change in equity associated with the Pension Plan. In addition, it credits the heading "Change in other underwriting reserves, net of reinsurance" for any negative changes in equity charged against the heading "Reserve for pension activity transactions - reserves associated with defined contribution pension plans under which the member assumes the investment risk". (ii) Mathematical reserve The mathematical reserve covers the actuarial liabilities estimated by the Entity and calculated by an actuarial analysis prepared by an independent actuary in order to cover future obligations for benefits already being paid in the form of income. The basic working assumptions in the calculation of this reserve at 31 December 2015 and 2014 were as follows: 2015 2014 - Survival tables: PERM/F - 2000C PERM/F - 2000C - Mortality tables (only for insurance): GKM/F-95 GKM/F-95 - Technical interest rate 3,5% annual 3.5% annual - Growth of pensions 0% annual 0% annual
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(xiii) Financial liabilities
Financial liabilities, including trade and other payables, that are not classified as held for trading or as financial liabilities at fair value through profit or loss are initially recognized at fair value less any transaction costs directly attributable to the issue of the financial liability. After initial recognition, liabilities classified under this category are measured at amortizedcost using the effective interest method.
Nevertheless, financial liabilities which have no established interest rate, which mature or are expected to be settled in the short term, and for which the effect of discounting is immaterial, are measured at their nominal amount.
d) Cash and cash equivalents
Cash and cash equivalents include cash on hand and demand deposits in financial institutions. They also include other short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. An investment normally qualifies as a cash equivalent when it has a maturity of less than three months from the date of acquisition.
e) Underwriting reserves
(i) Reserves associated with defined contribution plans under which the member assumes the investment risk
Relates to the reserves created in order to attend to the obligations assumed with respect to Members as a result of the Entity's pension activity.
The Entity charges the heading "Change in other underwriting reserves, net of reinsurance" to credit the heading "Reserve for pension activity transactions - reserves associated with defined contribution pension plans under which the member assumes the investment risk" in the amount of the positive change in equity associated with the Pension Plan. In addition, it credits the heading "Change in other underwriting reserves, net of reinsurance" for any negative changes in equity charged against the heading "Reserve for pension activity transactions - reserves associated with defined contribution pension plans under which the member assumes the investment risk".
(ii) Mathematical reserve
The mathematical reserve covers the actuarial liabilities estimated by the Entity and calculated by an actuarial analysis prepared by an independent actuary in order to cover future obligations for benefits already being paid in the form of income. The basic working assumptions in the calculation of this reserve at 31 December 2015 and 2014 were as follows:
2015 2014- Survival tables: PERM/F - 2000C PERM/F - 2000C- Mortality tables (only for insurance): GKM/F-95 GKM/F-95- Technical interest rate 3,5% annual 3.5% annual- Growth of pensions 0% annual 0% annual
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(xiii) Financial liabilities Financial liabilities, including trade and other payables, that are not classified as held for trading or as financial liabilities at fair value through profit or loss are initially recognized at fair value less any transaction costs directly attributable to the issue of the financial liability. After initial recognition, liabilities classified under this category are measured at amortized cost using the effective interest method. Nevertheless, financial liabilities which have no established interest rate, which mature or are expected to be settled in the short term, and for which the effect of discounting is immaterial, are measured at their nominal amount. d) Cash and cash equivalents Cash and cash equivalents include cash on hand and demand deposits in financial institutions. They also include other short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. An investment normally qualifies as a cash equivalent when it has a maturity of less than three months from the date of acquisition. e) Underwriting reserves (i) Reserves associated with defined contribution plans under which the member assumes
the investment risk Relates to the reserves created in order to attend to the obligations assumed with respect to Members as a result of the Entity's pension activity. The Entity charges the heading "Change in other underwriting reserves, net of reinsurance" to credit the heading "Reserve for pension activity transactions - reserves associated with defined contribution pension plans under which the member assumes the investment risk" in the amount of the positive change in equity associated with the Pension Plan. In addition, it credits the heading "Change in other underwriting reserves, net of reinsurance" for any negative changes in equity charged against the heading "Reserve for pension activity transactions - reserves associated with defined contribution pension plans under which the member assumes the investment risk". (ii) Mathematical reserve The mathematical reserve covers the actuarial liabilities estimated by the Entity and calculated by an actuarial analysis prepared by an independent actuary in order to cover future obligations for benefits already being paid in the form of income. The basic working assumptions in the calculation of this reserve at 31 December 2015 and 2014 were as follows: 2015 2014 - Survival tables: PERM/F - 2000C PERM/F - 2000C - Mortality tables (only for insurance): GKM/F-95 GKM/F-95 - Technical interest rate 3,5% annual 3.5% annual - Growth of pensions 0% annual 0% annual
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On June 11, 2015 the Government Board approved to establish the technical interest rate for the calculation of mathematical provisions at a 2.5%, being effective from July 1st, 2015 (Notes 2 and 11). The new technical interest rate, in accordance with the macroeconomic environment and the returns of financial assets, is the proposed for its utilization for the calculation of mathematical provisions of the group of liabilities. To assign a decrease of 100 b.p. of the technical interest rate at the calculation of those provisiones will be hedged with the reserves the Entity has recorded during the years, therefore, the pensions will not be affected. (iii) Other underwriting reserves Relates to the reserves created to cover the restatement of lifetime income approved by the General Assembly (Note 2). In addition, it includes a reserve for changes in existing actuarial commitments approved by the General Assembly on May 7, 2003 and which is calculated at 25% of the current lifetime income commitments (Note 11). (iv) Underwriting reserves for ceded reinsurance The underwriting reserves for ceded reinsurance, recorded under assets in the accompanying balance sheet, is calculated on the basis of the same criteria as those applied to mathematical provisions in accordance with the prevailing reinsurance treaties in force. The balance included at the end of the year in the heading “Reinsurers’ share of technical provisions” corresponds to the estimated debt or funds necessary to meet the commitments assumed by the reinsurer in relation to benefits which are being paid. f) Recognition of income and expenses Income and expenses are recognized on an accruals basis, rather than upon collection or payment. Dividends are generally recognized as income when their distribution is approved and announced at the respective board of directors or annual general shareholder meetings. g) Commitments with personnel Pursuant to article 21 of the Gipuzkoa Office Workers’ Collective Labour Agreement, applicable to Entity personnel, workers with at least 25 years’ service who voluntarily leave the Entity are entitled to receive between two and four months’ salary, based on their length of service when leaving. The Entity has recorded the corresponding provision for the amounts accrued at December 31, 2015 and 2014 (Note 12). h) Foreign currency transactions - Functional and presentation currency The financial statements of the Entity are presented in Euros, which is the functional and presentation currency of the entity.
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On June 11, 2015 the Government Board approved to establish the technical interest rate for the calculation of mathematical provisions at a 2.5%, being effective from July 1st, 2015(Notes 2 and 11). The new technical interest rate, in accordance with the macroeconomic environment and the returns of financial assets, is the proposed for its utilization for the calculation of mathematical provisions of the group of liabilities. To assign a decrease of 100 b.p. of the technical interest rate at the calculation of those provisiones will be hedged with the reserves the Entity has recorded during the years, therefore, the pensions will not be affected.
(iii) Other underwriting reserves
Relates to the reserves created to cover the restatement of lifetime income approved by the General Assembly (Note 2). In addition, it includes a reserve for changes in existing actuarial commitments approved by the General Assembly on May 7, 2003 and which is calculated at 25% of the current lifetime income commitments (Note 11).
(iv) Underwriting reserves for ceded reinsurance
The underwriting reserves for ceded reinsurance, recorded under assets in the accompanying balance sheet, is calculated on the basis of the same criteria as those applied to mathematical provisions in accordance with the prevailing reinsurance treaties in force. The balance included at the end of the year in the heading “Reinsurers’ share of technical provisions” corresponds to the estimated debt or funds necessary to meet the commitments assumed by the reinsurer in relation to benefits which are being paid.
f) Recognition of income and expenses
Income and expenses are recognized on an accruals basis, rather than upon collection or payment.
Dividends are generally recognized as income when their distribution is approved and announced at the respective board of directors or annual general shareholder meetings.
g) Commitments with personnel
Pursuant to article 21 of the Gipuzkoa Office Workers’ Collective Labour Agreement, applicable to Entity personnel, workers with at least 25 years’ service who voluntarily leave the Entity are entitled to receive between two and four months’ salary, based on their length of service when leaving. The Entity has recorded the corresponding provision for the amounts accrued at December 31, 2015 and 2014 (Note 12).
h) Foreign currency transactions
- Functional and presentation currency
The financial statements of the Entity are presented in Euros, which is the functional andpresentation currency of the entity.
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- Transactions and balances Transactions in foreign currencies are initially translated into functional currency using the prevailing exchange rates. It is deferred in equity as cash-flow hedges and qualifying net investment hedges qualified. Gains and losses on foreign currency from the settlement of these transactions and from the conversion to the closure exchange of the monetary assets and liabilities denominated in foreign currencies are recognized in the Income Statement, unless they are deferred in equity, such as qualified cash flow hedges and qualified net investment hedges. Changes in value in monetary assets in foreign currency classified as available for sale are analyzed as the translation differences surging from changes in the amortized cost of the title and other changes in its book value. Exchange differences arising on translation of debtor and creditor balances denominated in foreign currency are generally recorded in the consolidated income statement. Differences arising from other changes in the book value are recognised in equity. The translation differences that arise on non-monetary items like equity instruments at fair value through profit or loss are considered as a part of the profit or loss in its fair value. In the case of exchange differences that arise on non-monetary items like available-for-sale equity instruments are included in equity. Non monetary items in foreign currency valued at historical cost are translated using the exchange rates of the date in which that fair value is determined. The equivalent in Euros of the total assets in foreign currency held by the Entity at December 31, 2015 and 2014 is as follows: Thousand Euros 2015 2014 US Dollar 161,718 136,903 Sterling Pound 32,793 22,282 Norway Crown 1,087 1,384 Brazilian Real 2,259 - 197,857 160,569 The equivalent in Euros of the total assets in foreign currency held by the Entity at December 31, 2015 and 2014 classified by its nature is as follows: Thousand Euros 2015 2014 Cash and cash equivalents 5,826 7,298 Financial assets at fair value through profit or loss 190,807 152,132 Loans and receivables 1,224 1,139 197,857 160,569
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- Transactions and balances
Transactions in foreign currencies are initially translated into functional currency using the prevailing exchange rates. It is deferred in equity as cash-flow hedges and qualifying net investment hedges qualified.
Gains and losses on foreign currency from the settlement of these transactions and from the conversion to the closure exchange of the monetary assets and liabilities denominated in foreign currencies are recognized in the Income Statement, unless they are deferred in equity, such as qualified cash flow hedges and qualified net investment hedges.
Changes in value in monetary assets in foreign currency classified as available for sale are analyzed as the translation differences surging from changes in the amortized cost of the title and other changes in its book value. Exchange differences arising on translation of debtor and creditor balances denominated in foreign currency are generally recorded in the consolidated income statement. Differences arising from other changes in the book value are recognised in equity.
The translation differences that arise on non-monetary items like equity instruments at fair value through profit or loss are considered as a part of the profit or loss in its fair value. In the case of exchange differences that arise on non-monetary items like available-for-sale equity instruments are included in equity.
Non monetary items in foreign currency valued at historical cost are translated using the exchange rates of the date in which that fair value is determined.
The equivalent in Euros of the total assets in foreign currency held by the Entity at December31, 2015 and 2014 is as follows:
Thousand Euros2015 2014
US Dollar 161,718 136,903Sterling Pound 32,793 22,282Norway Crown 1,087 1,384Brazilian Real 2,259 -
197,857 160,569
The equivalent in Euros of the total assets in foreign currency held by the Entity at December31, 2015 and 2014 classified by its nature is as follows:
Thousand Euros2015 2014
Cash and cash equivalents 5,826 7,298Financial assets at fair value through profit or loss 190,807 152,132Loans and receivables 1,224 1,139
197,857 160,569
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- Transactions and balances Transactions in foreign currencies are initially translated into functional currency using the prevailing exchange rates. It is deferred in equity as cash-flow hedges and qualifying net investment hedges qualified. Gains and losses on foreign currency from the settlement of these transactions and from the conversion to the closure exchange of the monetary assets and liabilities denominated in foreign currencies are recognized in the Income Statement, unless they are deferred in equity, such as qualified cash flow hedges and qualified net investment hedges. Changes in value in monetary assets in foreign currency classified as available for sale are analyzed as the translation differences surging from changes in the amortized cost of the title and other changes in its book value. Exchange differences arising on translation of debtor and creditor balances denominated in foreign currency are generally recorded in the consolidated income statement. Differences arising from other changes in the book value are recognised in equity. The translation differences that arise on non-monetary items like equity instruments at fair value through profit or loss are considered as a part of the profit or loss in its fair value. In the case of exchange differences that arise on non-monetary items like available-for-sale equity instruments are included in equity. Non monetary items in foreign currency valued at historical cost are translated using the exchange rates of the date in which that fair value is determined. The equivalent in Euros of the total assets in foreign currency held by the Entity at December 31, 2015 and 2014 is as follows: Thousand Euros 2015 2014 US Dollar 161,718 136,903 Sterling Pound 32,793 22,282 Norway Crown 1,087 1,384 Brazilian Real 2,259 - 197,857 160,569 The equivalent in Euros of the total assets in foreign currency held by the Entity at December 31, 2015 and 2014 classified by its nature is as follows: Thousand Euros 2015 2014 Cash and cash equivalents 5,826 7,298 Financial assets at fair value through profit or loss 190,807 152,132 Loans and receivables 1,224 1,139 197,857 160,569
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i) Income Taxes In accordance with prevailing Foral Legislation applicable on the three territories of the Comunidad Autónoma del País Vasco, Voluntary Social Welfare Entities are taxed at zero per cent rate in the Income Tax. They are entitled to be reimbursed for any withholdings made on investment returns, which are shown in the heading “Loans and receivables – other receivables” of the balance sheet. j) Environment The Entity considers to be complying with the laws concerning environment preservation. In 2015 and 2014, the Entity has not incurred in significant expenses or investments for this matter, nor has considered necessary any provision, as there are no risks or contingencies that could affect these balances, given the Entity’s activity. k) Related party transactions Transactions between group companies are recognized at the fair value of the consideration given or received. The difference between this value and the amount agreed is recognized in line with the underlying economic substance of the transaction. l) Criteria for reclassifying expenses by final use As is indicated in Note 3.8, the distribution criteria used are basically: the nature of the expenses, the dedication of personnel and the assets associated with the activity. m) Instalment income and accrued benefits The heading "Instalments treated to the Year, net of reinsurance" in the accompanying income statement reflects the contributions made during the year by ordinary and preferred members of the Entity. The amounts paid out are recorded under the heading "Benefits for the year, net of reinsurance" in the accompanying income statement. 6. Information on the nature and level of risk arising from financial instruments
The activities of an EPSV are exposed to diverse financial risk: market risk( interest rate risk, price risk and exchange rate risk), credit risk and liquidity risk. The management of financial risks undertaken by the Entity is directed to the establishment of mechanisms to control the exposure to changes in interest rates, prices, and exchange rates as well as credit and liquidity risk. In this respect the Decree 92/2007 of May 29, which regulates the exercise of certain activities of the EPSVs, establishes a number of regulatory factors that limit the exposure to those risks and whose control is performed by the Entity.
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i) Income Taxes
In accordance with prevailing Foral Legislation applicable on the three territories of the Comunidad Autónoma del País Vasco, Voluntary Social Welfare Entities are taxed at zero per cent rate in the Income Tax. They are entitled to be reimbursed for any withholdings made on investment returns, which are shown in the heading “Loans and receivables – other receivables” of the balance sheet.
j) Environment
The Entity considers to be complying with the laws concerning environment preservation. In 2015 and 2014, the Entity has not incurred in significant expenses or investments for this matter, nor has considered necessary any provision, as there are no risks or contingencies that could affect these balances, given the Entity’s activity.
k) Related party transactions
Transactions between group companies are recognized at the fair value of the consideration given or received. The difference between this value and the amount agreed is recognized in line with the underlying economic substance of the transaction.
l) Criteria for reclassifying expenses by final use
As is indicated in Note 3.8, the distribution criteria used are basically: the nature of the expenses, the dedication of personnel and the assets associated with the activity.
m) Instalment income and accrued benefits
The heading "Instalments treated to the Year, net of reinsurance" in the accompanying income statement reflects the contributions made during the year by ordinary and preferred members of the Entity.
The amounts paid out are recorded under the heading "Benefits for the year, net of reinsurance" in the accompanying income statement.
6. Information on the nature and level of risk arising from financial instruments
The activities of an EPSV are exposed to diverse financial risk: market risk( interest rate risk, price risk and exchange rate risk), credit risk and liquidity risk.
The management of financial risks undertaken by the Entity is directed to the establishment of mechanisms to control the exposure to changes in interest rates, prices, and exchange rates as well as credit and liquidity risk. In this respect the Decree 92/2007 of May 29, which regulates the exercise of certain activities of the EPSVs, establishes a number of regulatory factors that limit the exposure to those risks and whose control is performed by the Entity.
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A summary of the policies and risk management procedures performed by the Entity is presented as follows: - Market risk Considering the nature of the risk factors, within market risk we can distinguish: Interest rate risk Interest rate risk is the risk of loss due to changes in interest rates in which the Entity holds open positions. The Entity is exposed to this risk by investing in debt instruments, both public and private, deposits made in financial institutions and money market instruments. Variable interest rate securities expose the entity to cash flow’s interest rate risk and fixed rate securities expose the entity to interest rate risk on fair value. In order to measure interest rate risk the entity uses the concept of the portfolio of debt securities duration as weighted average (Macaulay duration) and the modified duration as a measure of sensitivity of the portfolio to changes in interest rates. Price risk It is defined as loss from equity face to adverse movements on stock or index prices. Price risk can also be understood as changes in the volatility of stock prices, in the relationship between prices of different stocks, and the yield spread between stocks and bonds. The Entity is exposed to price risk on investments in listed securities held in its portfolio. Exchange rate risk It is the risk of change in value of the positions held in currencies different from the functional currency due to changes in exchange rates. This risk is measured taking the net position held in each currency and the volatility of the exchange rates of those currencies. The Entity invests in both domestic and international markets, placing most of their investments in the Euro area. The investment held by the Entity in foreign currency assets at December 31, 2014 and 2013 is indicated in Note 5.h).
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A summary of the policies and risk management procedures performed by the Entity is presented as follows:
- Market risk
Considering the nature of the risk factors, within market risk we can distinguish:
Interest rate risk
Interest rate risk is the risk of loss due to changes in interest rates in which the Entity holds open positions.
The Entity is exposed to this risk by investing in debt instruments, both public and private, deposits made in financial institutions and money market instruments. Variable interest rate securities expose the entity to cash flow’s interest rate risk and fixed rate securities expose the entity to interest rate risk on fair value.
In order to measure interest rate risk the entity uses the concept of the portfolio of debt securities duration as weighted average (Macaulay duration) and the modified duration as a measure of sensitivity of the portfolio to changes in interest rates.
Price risk
It is defined as loss from equity face to adverse movements on stock or index prices.
Price risk can also be understood as changes in the volatility of stock prices, in the relationship between prices of different stocks, and the yield spread between stocks and bonds.
The Entity is exposed to price risk on investments in listed securities held in its portfolio.
Exchange rate risk
It is the risk of change in value of the positions held in currencies different from the functional currency due to changes in exchange rates.
This risk is measured taking the net position held in each currency and the volatility of the exchange rates of those currencies.
The Entity invests in both domestic and international markets, placing most of their investments in the Euro area.
The investment held by the Entity in foreign currency assets at December 31, 2014 and 2013is indicated in Note 5.h).
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A summary of the policies and risk management procedures performed by the Entity is presented as follows: - Market risk Considering the nature of the risk factors, within market risk we can distinguish: Interest rate risk Interest rate risk is the risk of loss due to changes in interest rates in which the Entity holds open positions. The Entity is exposed to this risk by investing in debt instruments, both public and private, deposits made in financial institutions and money market instruments. Variable interest rate securities expose the entity to cash flow’s interest rate risk and fixed rate securities expose the entity to interest rate risk on fair value. In order to measure interest rate risk the entity uses the concept of the portfolio of debt securities duration as weighted average (Macaulay duration) and the modified duration as a measure of sensitivity of the portfolio to changes in interest rates. Price risk It is defined as loss from equity face to adverse movements on stock or index prices. Price risk can also be understood as changes in the volatility of stock prices, in the relationship between prices of different stocks, and the yield spread between stocks and bonds. The Entity is exposed to price risk on investments in listed securities held in its portfolio. Exchange rate risk It is the risk of change in value of the positions held in currencies different from the functional currency due to changes in exchange rates. This risk is measured taking the net position held in each currency and the volatility of the exchange rates of those currencies. The Entity invests in both domestic and international markets, placing most of their investments in the Euro area. The investment held by the Entity in foreign currency assets at December 31, 2014 and 2013 is indicated in Note 5.h).
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Market risk measurement is done by using VaR (Value at Risk) methodology, VaR method estimates the maximum potential loss that could be expected from an adverse, but normal, movement from any of the identified parameters affecting market risk. That estimate is expressed in monetary terms and is referred to a specific date, at a given confidence level and a specified time horizon. - Credit/Default risk Credit risk refers to the potential loss from the breach of any or all the obligations of the counterparty. Credit risk exists Credit risk exists throughout the life of the operation, but may vary from one day to another due to the clearance procedures and changes in valuations. Two types of credit risk can be distinguished Counterparty risk It is the loss that would be incurred in the event of counterparty default, when having to restore the position in the market. Issuer risk It represents the risk of insolvency of the issuer due to changes in its economical and financial strenght, becoming unable to face, the payments from the securities issued by him. It is also considered as issuer risk the potential adverse change in the market value of an issuer’s securities value due to a change in the market’s perception of its solvency. Credit risk is managed by groups. Credit risk arises from cash and cash equivalents, financial instruments, deposits with banks and financial institutions, including accounts receivable and committed transactions. Limits of diversification and dispersion are regularly tracked.
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Market risk measurement is done by using VaR (Value at Risk) methodology, VaR method estimates the maximum potential loss that could be expected from an adverse, but normal, movement from any of the identified parameters affecting market risk. That estimate is expressed in monetary terms and is referred to a specific date, at a given confidence level and a specified time horizon.
- Credit/Default risk
Credit risk refers to the potential loss from the breach of any or all the obligations of the counterparty. Credit risk exists Credit risk exists throughout the life of the operation, but may vary from one day to another due to the clearance procedures and changes in valuations.
Two types of credit risk can be distinguished
Counterparty risk
It is the loss that would be incurred in the event of counterparty default, when having to restore the position in the market.
Issuer risk
It represents the risk of insolvency of the issuer due to changes in its economical and financial strenght, becoming unable to face, the payments from the securities issued by him. It is also considered as issuer risk the potential adverse change in the market value of an issuer’s securities value due to a change in the market’s perception of its solvency.
Credit risk is managed by groups. Credit risk arises from cash and cash equivalents, financial instruments, deposits with banks and financial institutions, including accounts receivable and committed transactions. Limits of diversification and dispersion are regularly tracked.
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The rating of the debt securities held by the Entity at the end of year 2015 and 2014 is as follows: 31 December 2015 (*)
Other financial assets at fair value through P&L
Debt securities Hybrid
instruments
Held-to-maturity
investments
Deposits with credit institutions
Total Rating AAA 2,259 - - - 2,259 Rating AA 4,935 4,643 36,898 - 46,476 Rating A 73,959 10,052 110,373 - 194,384 Rating BBB 262,034 - 165,222 10,026 437,282 Rating BB 88,987 - 5,027 15,012 109,026 Rating B 2,361 - - - 2,361 Rating CCC - 100 - - 100 Rating CC - - - - - Rating C - - - - - Rating D 80 - - - 80 Unassigned 12,619 - 3,000 - 15,619 447,234 14,795 320,520 25,038 807,587
(*) Includes the interest accruals at December 31, 2015. 31 December 2014 (*)
Other financial assets at fair value through P&L
Debt securities Hybrid
instruments
Held-to-maturity
investments
Deposits with credit institutions
Total Rating AAA - - - - - Rating AA 3,745 2,202 5,047 - 10,994 Rating A 49,756 9,203 81,483 - 140,442 Rating BBB 317,683 - 192,385 63,804 573,872 Rating BB 63,550 - 24,927 20,282 108,667 Rating B 4,076 2,162 975 - 7,213 Rating CCC - - - - - Rating CC - - - - - Rating C - - - - - Rating D - - - - - Unassigned 16,889 1,893 3,981 - 22,763 455,699 15,460 308,798 84,086 863,951
(*) Includes the interest accruals at December 31, 2015. - Liquidity risk We can distinguish two types of liquidity risk: Liquidity risk on the treasury forecast It is the risk of being unable to face the payment commitments due to an inadequate structure of the cash flows.
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The rating of the debt securities held by the Entity at the end of year 2015 and 2014 is as follows:
31 December 2015 (*)
Other financial assets at fair value through P&L
Debt securitiesHybrid
instruments
Held-to-maturity
investments
Deposits with credit institutions Total
Rating AAA 2,259 - - - 2,259Rating AA 4,935 4,643 36,898 - 46,476Rating A 73,959 10,052 110,373 - 194,384Rating BBB 262,034 - 165,222 10,026 437,282Rating BB 88,987 - 5,027 15,012 109,026Rating B 2,361 - - - 2,361Rating CCC - 100 - - 100Rating CC - - - - -Rating C - - - - -Rating D 80 - - - 80Unassigned 12,619 - 3,000 - 15,619
447,234 14,795 320,520 25,038 807,587
(*) Includes the interest accruals at December 31, 2015.
31 December 2014 (*)
Other financial assets at fair value through P&L
Debt securitiesHybrid
instruments
Held-to-maturity
investments
Deposits with credit institutions Total
Rating AAA - - - - -Rating AA 3,745 2,202 5,047 - 10,994Rating A 49,756 9,203 81,483 - 140,442Rating BBB 317,683 - 192,385 63,804 573,872Rating BB 63,550 - 24,927 20,282 108,667Rating B 4,076 2,162 975 - 7,213Rating CCC - - - - -Rating CC - - - - -Rating C - - - - -Rating D - - - - -Unassigned 16,889 1,893 3,981 - 22,763
455,699 15,460 308,798 84,086 863,951
(*) Includes the interest accruals at December 31, 2015.
- Liquidity risk
We can distinguish two types of liquidity risk:
Liquidity risk on the treasury forecast
It is the risk of being unable to face the payment commitments due to an inadequate structure of the cash flows.
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The Entity regularly tracks the treasury forecasts depending on the expected cash flows. Liquidity control and management performed by the Entity ensures the availability of enough liquid resources to fulfill the payment commitments. In order to measure this risk, the Entity tracks the following ratio: Total Contributions + Assets with < 1 year maturity Total Benefits Market liquidity risk It is defined the Entity's risk of being unable to undo a position in a timely manner, without suffering distortions in the market price and the cost of the operation. The risk is assessed considering the relationship between different markets, each market’s depth (ie the sale of products whose pricing is not frequent may be difficult), the period of unexpired products and other factors. It is also associated with the possibility that a large-volume operation on a particular instrument may have an unpredictable effect on the market price of the instrument. Liquidity risk is quantified adjusting risk measures to reflect the time needed to undo a certain position. This adjustmentr is known as liquidity factor. In illiquid markets, the aski/bid gap tends to be which increases that cost. A related phenomenon is the risk of a sudden and unexpected decrease in liquidty, even in traditionally liquid markets, due to significant movements in price or volatility. 7. Intangible assets Details of intangible assets and movement during 2015 and 2014 are as follows: 2015 Thousand Euros 01.01.15 Additions Withdrawals Transfers 31.12.15 Cost Administrative concessions - - - - - Computer software 845 15 - - 860 845 15 - - 860 Accumulated amortization Administrative concessions - - - - - Computer software (838) (11) - - (849) (838) (11) - - (849) 7 4 - - 11
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The Entity regularly tracks the treasury forecasts depending on the expected cash flows.
Liquidity control and management performed by the Entity ensures the availability of enough liquid resources to fulfill the payment commitments.
In order to measure this risk, the Entity tracks the following ratio:
Total Contributions + Assets with < 1 year maturityTotal Benefits
Market liquidity risk
It is defined the Entity's risk of being unable to undo a position in a timely manner, without suffering distortions in the market price and the cost of the operation.
The risk is assessed considering the relationship between different markets, each market’s depth (ie the sale of products whose pricing is not frequent may be difficult), the period of unexpired products and other factors. It is also associated with the possibility that a large-volume operation on a particular instrument may have an unpredictable effect on the market price of the instrument.
Liquidity risk is quantified adjusting risk measures to reflect the time needed to undo a certain position. This adjustmentr is known as liquidity factor.
In illiquid markets, the aski/bid gap tends to be which increases that cost.
A related phenomenon is the risk of a sudden and unexpected decrease in liquidty, even in traditionally liquid markets, due to significant movements in price or volatility.
7. Intangible assets
Details of intangible assets and movement during 2015 and 2014 are as follows:
2015 Thousand Euros01.01.15 Additions Withdrawals Transfers 31.12.15
CostAdministrative concessions - - - - -Computer software 845 15 - - 860
845 15 - - 860Accumulated amortizationAdministrative concessions - - - - -Computer software (838) (11) - - (849)
(838) (11) - - (849)7 4 - - 11
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2014 Thousand Euros 01.01.14 Additions Withdrawals Transfers 31.12.14 Cost Administrative concessions - - - - - Computer software 843 2 - - 845 843 2 - - 845 Accumulated amortization Administrative concessions - - - - - Computer software (820) (18) - - (838) (820) (18) - - (838) 23 (16) - - 7
The cost of fully amortized intangible assets still in use at December 31, 2015 totals €847 thousand (€815 thousand at December 31, 2014). At December 31, 2015 and 2014 there are no intangible assets subject to guarantees, ownership restrictions or pledged to secure liabilities. The Entity does not have any firm urges-sale commitments relating to intangible assets at December 31, 2015 and 2014. 8. Property, plant and equipment Details of property, plant and equipment and movement during 2015 and 2014 are as follows: 2015 Thousand Euros 01.01.15 Additions Withdrawals Transfers 31.12.15 Cost Buildings 737 - - - 737 Furniture and installations 677 - - - 677 Information technology equipment 129 6 - - 135 1,543 6 - - 1,549 Accumulated amortization Buildings (272) (20) - - (292) Administrative concessions (571) (15) - - (586) Information technology equipment (130) (5) - -
(135)
(973) (40) - - (1,013) 570 (34) - - 536
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2014 Thousand Euros01.01.14 Additions Withdrawals Transfers 31.12.14
CostAdministrative concessions - - - - -Computer software 843 2 - - 845
843 2 - - 845Accumulated amortizationAdministrative concessions - - - - -Computer software (820) (18) - - (838)
(820) (18) - - (838)23 (16) - - 7
The cost of fully amortized intangible assets still in use at December 31, 2015 totals €847thousand (€815 thousand at December 31, 2014).
At December 31, 2015 and 2014 there are no intangible assets subject to guarantees, ownership restrictions or pledged to secure liabilities.
The Entity does not have any firm urges-sale commitments relating to intangible assets atDecember 31, 2015 and 2014.
8. Property, plant and equipment
Details of property, plant and equipment and movement during 2015 and 2014 are as follows:
2015 Thousand Euros01.01.15 Additions Withdrawals Transfers 31.12.15
CostBuildings 737 - - - 737Furniture and installations 677 - - - 677Information technology equipment 129 6 - - 135
1,543 6 - - 1,549
Accumulated amortizationBuildings (272) (20) - - (292)Administrative concessions (571) (15) - - (586)Information technology equipment (130) (5) - - (135)
(973) (40) - - (1,013)570 (34) - - 536
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2014 Thousand Euros 01.01.14 Additions Withdrawals Transfers 31.12.14 Cost Administrative concessions - - - - - Computer software 843 2 - - 845 843 2 - - 845 Accumulated amortization Administrative concessions - - - - - Computer software (820) (18) - - (838) (820) (18) - - (838) 23 (16) - - 7
The cost of fully amortized intangible assets still in use at December 31, 2015 totals €847 thousand (€815 thousand at December 31, 2014). At December 31, 2015 and 2014 there are no intangible assets subject to guarantees, ownership restrictions or pledged to secure liabilities. The Entity does not have any firm urges-sale commitments relating to intangible assets at December 31, 2015 and 2014. 8. Property, plant and equipment Details of property, plant and equipment and movement during 2015 and 2014 are as follows: 2015 Thousand Euros 01.01.15 Additions Withdrawals Transfers 31.12.15 Cost Buildings 737 - - - 737 Furniture and installations 677 - - - 677 Information technology equipment 129 6 - - 135 1,543 6 - - 1,549 Accumulated amortization Buildings (272) (20) - - (292) Administrative concessions (571) (15) - - (586) Information technology equipment (130) (5) - -
(135)
(973) (40) - - (1,013) 570 (34) - - 536
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2014 Thousand Euros 01.01.14 Additions Withdrawals Transfers 31.12.14 Cost Buildings 737 - - - 737 Furniture and installations 677 - - - 677 Information technology equipment 129 - - - 129 1.543 - - - 1,543 Accumulated amortization Buildings (254) (18) - - (272) Administrative concessions (555) (16) - - (571) Information technology equipment (130) - - - (130) (939) (34) - - (973) 604 (34) - - 570
Details of the cost of fully depreciated property, plant and equipment in use at December 31, 2015 and 2014 are as follows: Thousand Euros 2015 2014 Furniture and installations 518 518 Information technology equipment 135 129 653 647 The Entity has arranged several insurance policies to cover the risks to which its property, plan and equipment are subject. The coverage of these policies is considered sufficient. At December 31, 2015 and 2014 there are no purchase or sale commitments relating to property, plant and equipment. All of the assets included under this balance sheet heading are used by the Entity during the course of its business. No property, plant and equipment is subject to guarantees, restrictions on ownership or pledged as security for liabilities.
52
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2014 Thousand Euros01.01.14 Additions Withdrawals Transfers 31.12.14
CostBuildings 737 - - - 737Furniture and installations 677 - - - 677Information technology equipment 129 - - - 129
1.543 - - - 1,543
Accumulated amortizationBuildings (254) (18) - - (272)Administrative concessions (555) (16) - - (571)Information technology equipment (130) - - - (130)
(939) (34) - - (973)604 (34) - - 570
Details of the cost of fully depreciated property, plant and equipment in use at December 31, 2015 and 2014 are as follows:
Thousand Euros2015 2014
Furniture and installations 518 518Information technology equipment 135 129
653 647
The Entity has arranged several insurance policies to cover the risks to which its property, plan and equipment are subject. The coverage of these policies is considered sufficient.
At December 31, 2015 and 2014 there are no purchase or sale commitments relating to property, plant and equipment.
All of the assets included under this balance sheet heading are used by the Entity during the course of its business.
No property, plant and equipment is subject to guarantees, restrictions on ownership or pledged as security for liabilities.
52
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9. Financial instruments 9.1 Disclosures regarding the relevance of financial instruments on the financial situation and the results of the Entity 9.1.1. Information relating to the balance sheet Detail of financial assets and liabilities at December 31, 2015 is as follows:
Other financial assets at fair value through P&L
FINANCIAL ASSETS
Cash and Cash
equivalents
Financial assets held for trading
Hybrid financial
instruments
Equity instruments
Debt securities
Loans and receivables
Held-to-maturity
investments
Investment in group
companies and
associates
TOTAL Equity instruments: - - - 679,366 - - - 42,219 721,585 -Financial investments in equity - - - 171,030 - - - 42,219 213,249 -Participation units in Investment Funds - - - 484,609 - - - - 484,609 -Participation units in Venture Capital Funds - - - 23,727 - - - - 23,727
Fixed-income securities - - - - 447,234 455 320,520 - 768,209 Hybrid instruments - - 14,795 - - - - - 14,795 Deposits in credit institutions - - - - - 25,038 - - 25,038 Derivatives - 1,224 - - - - - - 1,224 Credits for operations of social welfare - - - - - 224 - - 224 Other loans: - - - - - 8,330 - - 8,330 -Public entities - - - - - 8,330 - - 8,330 -Other loans - - - - - - - - - Other financial assets 7,117 - - - - - - - 7,117 Cash 166,253 - - - - - - - 166,253 TOTAL 173,370 1,224 14,795 679,366 447,234 34,047 320,520 42,219 1,712,775
FINANCIAL LIABILITIES Debts and accounts
payable Financial Liabilites Held for
Trade
Total
Derivatives - 51 51 Other debts: - Debt with public entities 239 - 239 Other financial liabilities 258 - 258 TOTAL 497 51 548
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9. Financial instruments
9.1 Disclosures regarding the relevance of financial instruments on the financial situation and the results of the Entity
9.1.1.Information relating to the balance sheet
Detail of financial assets and liabilities at December 31, 2015 is as follows:
Other financial assets at fair value through P&L
FINANCIAL ASSETS
Cash and Cash
equivalentsFinancial assets held for trading
Hybrid financial
instrumentsEquity
instruments Debt securitiesLoans and receivables
Held-to-maturity
investments
Investment in group
companies and
associates TOTALEquity instruments: - - - 679,366 - - - 42,219 721,585-Financial investments in equity - - - 171,030 - - - 42,219 213,249-Participation units in Investment Funds - - - 484,609 - - - - 484,609-Participation units in Venture Capital Funds - - - 23,727 - - - - 23,727
Fixed-income securities - - - - 447,234 455 320,520 - 768,209Hybrid instruments - - 14,795 - - - - - 14,795Deposits in credit institutions - - - - - 25,038 - - 25,038Derivatives - 1,224 - - - - - - 1,224Credits for operations of social welfare - - - - - 224 - - 224Other loans: - - - - - 8,330 - - 8,330-Public entities - - - - - 8,330 - - 8,330-Other loans - - - - - - - - -Other financial assets 7,117 - - - - - - - 7,117Cash 166,253 - - - - - - - 166,253TOTAL 173,370 1,224 14,795 679,366 447,234 34,047 320,520 42,219 1,712,775
FINANCIAL LIABILITIESDebts and accounts
payableFinancial Liabilites Held for
Trade Total
Derivatives - 51 51Other debts:
-Debt with public entities 239 - 239Other financial liabilities 258 - 258TOTAL 497 51 548
GER
OA
PENT
SIO
AK, E
NTID
AD D
E PR
EVIS
ION
SO
CIA
L VO
LUNT
ARIA
48
Det
ail o
f fin
anci
al a
sset
s an
d lia
bilit
ies
at D
ecem
ber 3
1, 2
014
is a
s fo
llow
s:
O
ther
fina
ncia
l ass
ets
at fa
ir va
lue
thro
ugh
P&L
FIN
ANC
IAL
ASSE
TS
Cas
h an
d C
ash
equi
vale
nts
Fina
ncia
l ass
ets
held
for t
radi
ng
Hyb
rid
finan
cial
in
stru
men
ts
Equi
ty
inst
rum
ents
Deb
t sec
uriti
es
Loan
s an
d re
ceiv
able
s
Hel
d-to
-m
atur
ity
inve
stm
ents
In
vest
men
t in
gro
up
com
pani
es
and
asso
ciat
es
TOTA
L Eq
uity
inst
rum
ents
: -
-
-
56
6,37
8
-
-
-
42,1
95
60
8,57
3 -F
inan
cial
inve
stm
ents
in e
quity
-
-
-
16
8,70
7
-
-
-
42,1
95
21
0,90
2 -P
artic
ipat
ion
units
in In
vest
men
t Fun
ds
-
-
-
386,
920
-
-
-
-
38
6,92
0 -P
artic
ipat
ion
units
in V
entu
re C
apita
l Fu
nds
-
-
-
10,7
51
-
-
-
-
10
,751
Fi
xed-
inco
me
secu
ritie
s -
-
-
-
45
5,69
9
218
30
8.79
8
-
764,
715
Hyb
rid in
stru
men
ts
-
-
15,4
60
-
-
-
-
-
15
,460
D
epos
its in
cre
dit i
nstit
utio
ns
-
-
-
-
-
84,0
86
-
-
84
,086
D
eriv
ativ
es
-
1,13
9
-
-
-
-
-
-
1,13
9 C
redi
ts fo
r ope
ratio
ns o
f soc
ial w
elfa
re
-
-
-
-
-
56
-
-
56
O
ther
loan
s:
-
-
-
-
-
7,24
9
-
-
7,24
9 -P
ublic
ent
ities
-
-
-
-
-
7,
249
-
-
7,
249
-Oth
er lo
ans
-
-
-
-
-
-
-
-
- O
ther
fina
ncia
l ass
ets
6,36
1
-
-
-
-
-
-
-
6,36
1 C
ash
112,
443
-
-
-
-
-
-
-
11
2,44
3 TO
TAL
118,
804
1,
139
15
,460
566,
378
45
5,69
9
91,6
09
30
8,79
8
42,1
95
1,
600,
082
FIN
ANC
IAL
LIA
BIL
ITIE
S D
ebts
and
acc
ount
s pa
yabl
e
Fina
ncia
l Lia
bilit
es H
eld
for
Trad
e
Tota
l
Der
ivat
ives
-
-
-
Oth
er d
ebts
:
- Deb
t with
pub
lic e
ntiti
es
206
-
20
6 O
ther
fina
ncia
l lia
bilit
ies
359
-
35
9 TO
TAL
565
-
56
5
GER
OA
PENT
SIO
AK, E
NTID
AD D
E PR
EVIS
ION
SO
CIA
L VO
LUNT
ARIA
Det
ail o
f fin
anci
al a
sset
s an
dlia
bilit
ies
atD
ecem
ber 3
1, 2
014
is a
s fo
llow
s:
Oth
er fi
nanc
ial a
sset
s at
fair
valu
e th
roug
h P&
L
FIN
ANC
IAL
ASSE
TS
Cas
h an
d C
ash
equi
vale
nts
Fina
ncia
l ass
ets
held
for t
radi
ng
Hyb
rid
finan
cial
in
stru
men
tsEq
uity
in
stru
men
tsD
ebt s
ecur
ities
Loan
s an
d re
ceiv
able
s
Hel
d-to
-m
atur
ity
inve
stm
ents
Inve
stm
ent
in g
roup
co
mpa
nies
an
d as
soci
ates
TOTA
LEq
uity
inst
rum
ents
:-
--
566,
378
--
-42
,195
608,
573
-Fin
anci
al in
vest
men
ts in
equ
ity-
--
168,
707
--
-42
,195
210,
902
-Par
ticip
atio
n un
its in
Inve
stm
ent F
unds
--
-38
6,92
0-
--
-38
6,92
0-P
artic
ipat
ion
units
in V
entu
re C
apita
l Fu
nds
--
-10
,751
--
--
10,7
51Fi
xed-
inco
me
secu
ritie
s-
--
-45
5,69
921
830
8.79
8-
764,
715
Hyb
rid in
stru
men
ts-
-15
,460
--
--
-15
,460
Dep
osits
in c
redi
t ins
titut
ions
--
--
-84
,086
--
84,0
86D
eriv
ativ
es-
1,13
9-
--
--
-1,
139
Cre
dits
for o
pera
tions
of s
ocia
l wel
fare
--
--
-56
--
56O
ther
loan
s:-
--
--
7,24
9-
-7,
249
-Pub
lic e
ntiti
es-
--
--
7,24
9-
-7,
249
-Oth
er lo
ans
--
--
--
--
-O
ther
fina
ncia
l ass
ets
6,36
1-
--
--
--
6,36
1C
ash
112,
443
--
--
--
-11
2,44
3TO
TAL
118,
804
1,13
915
,460
566,
378
455,
699
91,6
0930
8,79
842
,195
1,60
0,08
2
FIN
ANC
IAL
LIA
BIL
ITIE
SD
ebts
and
acc
ount
s pa
yabl
eFi
nanc
ial L
iabi
lites
Hel
d fo
r Tr
ade
Tota
l
Der
ivat
ives
--
-O
ther
deb
ts:
-Deb
t with
pub
lic e
ntiti
es20
6-
206
Oth
er fi
nanc
ial l
iabi
litie
s35
9-
359
TOTA
L56
5-
565
GER
OA
PENT
SIO
AK, E
NTID
AD D
E PR
EVIS
ION
SO
CIA
L VO
LUNT
ARIA
49
Det
ail o
f th
e ex
pect
ed m
atur
ity o
f fin
anci
al a
sset
s an
d lia
bilit
ies
at D
ecem
ber
31,
2015
, for
tho
se f
inan
cial
ass
ets
and
liabi
litie
s w
ith
fixed
or d
eter
min
able
mat
urity
for e
ach
cate
gory
is a
s fo
llow
s:
Fi
nanc
ial A
sset
s
2016
2017
2018
2019
2020
and
pr
ior y
ears
Tota
l
Cas
h an
d C
ash
equi
vale
nts
173,
370
-
-
-
-
17
3,37
0 O
ther
fina
ncia
l ass
ets
at fa
ir va
lue
thro
ugh
P&L
30,0
79
34
,469
19,5
21
35
,602
342,
358
46
2,02
9
Hel
d-to
-mat
urity
inve
stm
ents
10
4,70
0
34,1
94
30
,433
7,51
2
143,
681
32
0,52
0 Fi
nanc
ial A
sset
s he
ld fo
r tra
ding
73
3
-
-
491
-
1,
224
Loan
s an
d re
ceiv
able
s 34
,047
-
-
-
-
34,0
47
TOTA
L 34
2,92
9
68,6
63
49
,954
43,6
05
48
6,03
9
991,
190
Fi
nanc
ial l
iabi
litie
s
20
16
20
17
20
18
20
19
20
20 a
nd
prio
r yea
rs
To
tal
Deb
ts a
nd a
ccou
nts
paya
ble
497
-
-
-
-
49
7 Fi
nanc
ial L
iabi
litie
s he
ld fo
r tra
ding
51
-
-
-
-
51
TOTA
L 54
8
-
-
-
-
548
GER
OA
PENT
SIO
AK, E
NTID
AD D
E PR
EVIS
ION
SO
CIA
L VO
LUNT
ARIA
Det
ail o
f th
eex
pect
ed m
atur
ityof
fina
ncia
l ass
ets
and
liabi
litie
s at
Dec
embe
r 31
,20
15,f
or t
hose
fin
anci
al a
sset
s an
d lia
bilit
ies
with
fix
ed o
r det
erm
inab
lem
atur
ityfo
r eac
h ca
tego
ryis
as
follo
ws:
Fina
ncia
l Ass
ets
2016
2017
2018
2019
2020
and
prio
r yea
rsTo
tal
Cas
h an
d C
ash
equi
vale
nts
173,
370
--
--
173,
370
Oth
er fi
nanc
ial a
sset
s at
fair
valu
e th
roug
h P&
L30
,079
34,4
6919
,521
35,6
0234
2,35
846
2,02
9
Hel
d-to
-mat
urity
inve
stm
ents
104,
700
34,1
9430
,433
7,51
214
3,68
132
0,52
0Fi
nanc
ial A
sset
s he
ld fo
r tra
ding
733
--
491
-1,
224
Loan
s an
d re
ceiv
able
s34
,047
--
--
34,0
47TO
TAL
342,
929
68,6
6349
,954
43,6
0548
6,03
999
1,19
0
Fina
ncia
l lia
bilit
ies
2016
2017
2018
2019
2020
and
prio
r yea
rsTo
tal
Deb
ts a
nd a
ccou
nts
paya
ble
497
--
--
497
Fina
ncia
l Lia
bilit
ies
held
for t
radi
ng51
--
--
51TO
TAL
548
--
--
548
GER
OA
PENT
SIO
AK, E
NTID
AD D
E PR
EVIS
ION
SO
CIA
L VO
LUNT
ARIA
50
Det
ail o
f th
e ex
pect
ed m
atur
ity o
f fin
anci
al a
sset
s an
d lia
bilit
ies
at D
ecem
ber
31,
2014
, for
tho
se f
inan
cial
ass
ets
and
liabi
litie
s w
ith
fixed
or d
eter
min
able
mat
urity
for e
ach
cate
gory
is a
s fo
llow
s:
Fi
nanc
ial A
sset
s
2015
2016
2017
2018
2019
and
pr
ior y
ears
Tota
l
Cas
h an
d C
ash
equi
vale
nts
118,
804
-
-
-
-
11
8,80
4 O
ther
fina
ncia
l ass
ets
at fa
ir va
lue
thro
ugh
P&L
21,3
53
24
,528
19,9
79
20
,642
384,
657
47
1,15
9 H
eld-
to-m
atur
ity in
vest
men
ts
104,
196
68
,391
31,1
65
23
,371
81,6
75
30
8,79
8 Fi
nanc
ial A
sset
s he
ld fo
r tra
ding
-
67
9
-
-
460
1,
139
Loan
s an
d re
ceiv
able
s 91
,609
-
-
-
-
91,6
09
TOTA
L 33
5,96
2
93,5
98
51
,144
44,0
13
46
6,79
2
991,
509
Fi
nanc
ial l
iabi
litie
s
20
15
20
16
20
17
20
18
20
19 a
nd
prio
r yea
rs
To
tal
Deb
ts a
nd a
ccou
nts
paya
ble
565
-
-
-
-
56
5 Fi
nanc
ial L
iabi
litie
s he
ld fo
r tra
ding
-
-
-
-
-
-
TOTA
L 56
5
-
-
-
-
565
93
GER
OA
PENT
SIO
AK, E
NTID
AD D
E PR
EVIS
ION
SO
CIA
L VO
LUNT
ARIA
Det
ail o
f th
eex
pect
ed m
atur
ityof
fina
ncia
l ass
ets
and
liabi
litie
s at
Dec
embe
r 31
,20
14,f
or t
hose
fin
anci
al a
sset
s an
d lia
bilit
ies
with
fix
ed o
r det
erm
inab
lem
atur
ityfo
r eac
h ca
tego
ryis
as
follo
ws:
Fina
ncia
l Ass
ets
2015
2016
2017
2018
2019
and
pr
ior y
ears
Tota
l
Cas
h an
d C
ash
equi
vale
nts
118,
804
--
--
118,
804
Oth
er fi
nanc
ial a
sset
s at
fair
valu
e th
roug
h P&
L21
,353
24,5
2819
,979
20,6
4238
4,65
747
1,15
9H
eld-
to-m
atur
ity in
vest
men
ts10
4,19
668
,391
31,1
6523
,371
81,6
7530
8,79
8Fi
nanc
ial A
sset
s he
ld fo
r tra
ding
-67
9-
-46
01,
139
Loan
s an
d re
ceiv
able
s91
,609
--
--
91,6
09TO
TAL
335,
962
93,5
9851
,144
44,0
1346
6,79
299
1,50
9
Fina
ncia
l lia
bilit
ies
2015
2016
2017
2018
2019
and
pr
ior y
ears
Tota
l
Deb
ts a
nd a
ccou
nts
paya
ble
565
--
--
565
Fina
ncia
l Lia
bilit
ies
held
for t
radi
ng-
--
--
-TO
TAL
565
--
--
565
93
GEROA PENTSIOAK, ENTIDAD DE PREVISION SOCIAL VOLUNTARIA
51
9.1.1.1 Other financial instruments at fair value through changes in profit or loss Detail of this heading at December 31, 2015 and 2014 is as follows: Thousand Euros 2015 2014 Equity instruments 679,366 566,378 Financial investments in equity 171,030 168,707 Participation units in Investment Funds 484,609 386,920 Participation units in Venture Capital Funds 23,727 10,751 Debt securities 447,234 455,699 Hybrid instruments 14,795 15,460 1,141,395 1,037,537
The maximum exposure to credit risk at the time of presentation of the information is the fair value of the securities classified under this category. Inside the chapter of “debt securities” a bond is included issued by Banco Espirito Santo with a maturity date on June 2015 and a face value of 2,000 thousand euros. At the preparation date of the current annual accounts the Entity has not received the correspondent amount, therefore the Entity has applied an adjustment due to a value impairment and taken it to Profit & Loses during 2015 for the whole amount of the asset. During 2014, the Entity did not assign any provision to the portfolio of “Other financial assets at fair value through profit or loss”. The amount of income accrued and not due from debt securities and hybrid instruments of this heading amounted 7,433 thousand euros at December 2015 (8,176 thousand Euros in 2014). The annual interest rate of debt securities on December 31, 2015 range between 0.23% and 10.47% (1.75% and 9.38% on December 31, 2014). At December 31, 2015 and 2014, almost all of the securities of the Entity were deposited or pending deposit in Banco Bilbao Vizcaya Argentaria, S.A.
94
GEROA PENTSIOAK, ENTIDAD DE PREVISION SOCIAL VOLUNTARIA
51
9.1.1.1 Other financial instruments at fair value through changes in profit or loss
Detail of this heading at December 31, 2015 and 2014 is as follows:
Thousand Euros2015 2014
Equity instruments 679,366 566,378Financial investments in equity 171,030 168,707Participation units in Investment Funds 484,609 386,920Participation units in Venture Capital Funds 23,727 10,751
Debt securities 447,234 455,699Hybrid instruments 14,795 15,460
1,141,395 1,037,537
The maximum exposure to credit risk at the time of presentation of the information is the fair value of the securities classified under this category.
Inside the chapter of “debt securities” a bond is included issued by Banco Espirito Santo with a maturity date on June 2015 and a face value of 2,000 thousand euros. At the preparationdate of the current annual accounts the Entity has not received the correspondent amount, therefore the Entity has applied an adjustment due to a value impairment and taken it to Profit & Loses during 2015 for the whole amount of the asset. During 2014, the Entity did not assign any provision to the portfolio of “Other financial assets at fair value through profit or loss”.
The amount of income accrued and not due from debt securities and hybrid instruments ofthis heading amounted 7,433 thousand euros at December 2015 (8,176 thousand Euros in 2014).
The annual interest rate of debt securities on December 31, 2015 range between 0.23% and 10.47% (1.75% and 9.38% on December 31, 2014).
At December 31, 2015 and 2014, almost all of the securities of the Entity were deposited or pending deposit in Banco Bilbao Vizcaya Argentaria, S.A.
94
GEROA PENTSIOAK, ENTIDAD DE PREVISION SOCIAL VOLUNTARIA
52
At December 31, 2015 and 2014 the detail of pending disbursement and committed investment in private equity entities is as follows: Thousand Euros 2014 2013 Adara Ventures Pending disbursement 304 304 Committed investment 2,000 2,000 Azora Europa Pending disbursement 1,238 1,238 Committed investment 6,000 6,000 Nord II Pending disbursement 1,260 1,807 Committed investment 2,429 2,631 Oquendo Mezzanine II Pending disbursement 1,809 2,181 Committed investment 3,000 3,000 Altamar Global Private Equity Progran VIII Pending disbursement 4,240 - Committed investment 5,000 - Stepstone European Fund Pending disbursement 2,667 - Committed investment 4,602 - Hermes GPE Infraestructure Fund Core Pending disbursement 1,465 - Committed investment 13,560 - On March 13, 2014, the Entity has signed an agreement to sell its shares in Jenner Renewables, SARL, to Jenner Renewables, SL for a total amount of 7,500 thousand euros to be paid in three payments of 2,500 thousand euros, on March 13, 2014, December 30, 2014 and September 30, 2015. At the preparation date of the current annual accounts, the Entity has not received any amount corresponding to the shares expired on December 30, 2014 and September 2015. The Entity provisioned the complete amount receivable during 2014, having accounted a provision for the value impairment of 5,000 thousand euros charged to the profit & loss account of the cited year. The cited asset is fully provisioned both at December 31 and at the preparation date of these annual accounts. At December 31, 2015 and 2014, no financial instruments are subject to guarantees, ownership restrictions or pledged as collateral for liabilities. 9.1.1.2 Investments in group companies and associates Detail of investments at December 31, 2015 and 2014 is as follows: Thousand Euros 2015 2014 Equity instruments Shares 42,219 42,195 42,219 42,195
95
GEROA PENTSIOAK, ENTIDAD DE PREVISION SOCIAL VOLUNTARIA
At December 31, 2015 and 2014 the detail of pending disbursement and committed investment in private equity entities is as follows:
Thousand Euros2014 2013
Adara VenturesPending disbursement 304 304Committed investment 2,000 2,000
Azora EuropaPending disbursement 1,238 1,238Committed investment 6,000 6,000
Nord IIPending disbursement 1,260 1,807Committed investment 2,429 2,631
Oquendo Mezzanine IIPending disbursement 1,809 2,181Committed investment 3,000 3,000
Altamar Global Private Equity Progran VIIIPending disbursement 4,240 -Committed investment 5,000 -
Stepstone European FundPending disbursement 2,667 -Committed investment 4,602 -
Hermes GPE Infraestructure Fund CorePending disbursement 1,465 -Committed investment 13,560 -
On March 13, 2014, the Entity has signed an agreement to sell its shares in Jenner Renewables, SARL, to Jenner Renewables, SL for a total amount of 7,500 thousand euros to be paid in three payments of 2,500 thousand euros, on March 13, 2014, December 30, 2014 and September 30, 2015. At the preparation date of the current annual accounts, the Entity has not received any amount corresponding to the shares expired on December 30, 2014 and September 2015. The Entity provisioned the complete amount receivable during 2014, having accounted a provision for the value impairment of 5,000 thousand euros charged to the profit & loss account of the cited year. The cited asset is fully provisioned both at December 31 and at the preparation date of these annual accounts.
At December 31, 2015 and 2014, no financial instruments are subject to guarantees, ownership restrictions or pledged as collateral for liabilities.
9.1.1.2 Investments in group companies and associates
Detail of investments at December 31, 2015 and 2014 is as follows:
Thousand Euros2015 2014
Equity instrumentsShares 42,219 42,195
42,219 42,195
95
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The additions of 2015 and 2014 correspond mostly to the increase of the book value of the shares of Orza, Gestión y Tenencia de Patrimonios, A.I.E. At December 31, 2015 and 2014 there are no impairment losses on the investments in group companies and associates. Details of investments in the most significant subsidiary companies at December 31, 2015 and 2014, of the activities they carry out and shareholders’ equity according to their latest available unaudited financial statements are shown in Appendix I, which forms an integral part of this note. 9.1.1.3 Held-to-maturity investments Detail by issuer of investments at December 31, 2015 and 2014 is as follows: 2015 2014
Basque Government Debt 74,895 69,574 Spanish Public Debt 16,491 35,250 Caixa Bank, S.A. 18,297 18,067 Banco Popular Español 11,145 13,175 Banco Sabadell 14,941 19,869 Madrid Government Debt 15,282 23,727 ICO 11,280 13,767 Fondo de Amortización de Deuda Eléctrica 9,384 14,510 Banco Santander, S.A. 15,990 11,304 Navarra government Debt 10,448 10,444 Goldman Sachs 10,108 - Other issuer (< 10 million Euros) 112,259 79,111 320,520 308,798 After the analysis done by the Entity during 2014, signs of impairment were identified in a note issued by Banco Espirito Santo with maturity on April 2015, in possession of the Entity at December 31, 2014, having registered a provision for impairment on the held-to-maturity investments portfolio for an amount of 4,750 thousand euros during the cited year. At December 31, 2015, the mentioned note keeps unpaid for its fully amount, 5,000 thousand euros. The explicit amount of interest accrued and not due from debt securities under this heading amounted to 13,399 thousand Euros in 2015 (14,540 thousand Euros in 2014). The annual interest rate at 31 December 2015 ranges between 0.6% and 6.375% (2% and 6.375% at December 31, 2014).
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The additions of 2015 and 2014 correspond mostly to the increase of the book value of the shares of Orza, Gestión y Tenencia de Patrimonios, A.I.E.
At December 31, 2015 and 2014 there are no impairment losses on the investments in group companies and associates.
Details of investments in the most significant subsidiary companies at December 31, 2015and 2014, of the activities they carry out and shareholders’ equity according to their latest available unaudited financial statements are shown in Appendix I, which forms an integral part of this note.
9.1.1.3 Held-to-maturity investments
Detail by issuer of investments at December 31, 2015 and 2014 is as follows:
2015 2014Basque Government Debt 74,895 69,574Spanish Public Debt 16,491 35,250Caixa Bank, S.A. 18,297 18,067Banco Popular Español 11,145 13,175Banco Sabadell 14,941 19,869Madrid Government Debt 15,282 23,727ICO 11,280 13,767Fondo de Amortización de Deuda Eléctrica 9,384 14,510Banco Santander, S.A. 15,990 11,304Navarra government Debt 10,448 10,444Goldman Sachs 10,108 -Other issuer (< 10 million Euros) 112,259 79,111
320,520 308,798
After the analysis done by the Entity during 2014, signs of impairment were identified in a note issued by Banco Espirito Santo with maturity on April 2015, in possession of the Entity at December 31, 2014, having registered a provision for impairment on the held-to-maturity investments portfolio for an amount of 4,750 thousand euros during the cited year. At December 31, 2015, the mentioned note keeps unpaid for its fully amount, 5,000 thousand euros.
The explicit amount of interest accrued and not due from debt securities under this heading amounted to 13,399 thousand Euros in 2015 (14,540 thousand Euros in 2014).
The annual interest rate at 31 December 2015 ranges between 0.6% and 6.375% (2% and 6.375% at December 31, 2014).
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The additions of 2015 and 2014 correspond mostly to the increase of the book value of the shares of Orza, Gestión y Tenencia de Patrimonios, A.I.E. At December 31, 2015 and 2014 there are no impairment losses on the investments in group companies and associates. Details of investments in the most significant subsidiary companies at December 31, 2015 and 2014, of the activities they carry out and shareholders’ equity according to their latest available unaudited financial statements are shown in Appendix I, which forms an integral part of this note. 9.1.1.3 Held-to-maturity investments Detail by issuer of investments at December 31, 2015 and 2014 is as follows: 2015 2014
Basque Government Debt 74,895 69,574 Spanish Public Debt 16,491 35,250 Caixa Bank, S.A. 18,297 18,067 Banco Popular Español 11,145 13,175 Banco Sabadell 14,941 19,869 Madrid Government Debt 15,282 23,727 ICO 11,280 13,767 Fondo de Amortización de Deuda Eléctrica 9,384 14,510 Banco Santander, S.A. 15,990 11,304 Navarra government Debt 10,448 10,444 Goldman Sachs 10,108 - Other issuer (< 10 million Euros) 112,259 79,111 320,520 308,798 After the analysis done by the Entity during 2014, signs of impairment were identified in a note issued by Banco Espirito Santo with maturity on April 2015, in possession of the Entity at December 31, 2014, having registered a provision for impairment on the held-to-maturity investments portfolio for an amount of 4,750 thousand euros during the cited year. At December 31, 2015, the mentioned note keeps unpaid for its fully amount, 5,000 thousand euros. The explicit amount of interest accrued and not due from debt securities under this heading amounted to 13,399 thousand Euros in 2015 (14,540 thousand Euros in 2014). The annual interest rate at 31 December 2015 ranges between 0.6% and 6.375% (2% and 6.375% at December 31, 2014).
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9.1.1.4 Loans and receivables a) Deposits with credit institutions Detail of deposits with credit institutions in 2015 and 2014 is as follows: Thousand Euros 2015 2014 Fixed income Deposits 25,038 84,086 Variable income Deposits - - 25,038 84,086 During the year 2015, the Entity has registered a provision for impairment of 10,170 thousand euros charged to the profit & loss account for the fully amount of a deposit at Banco Madrid with a maturity date on January 2015 because any amount has been received, neither at December 31 of 2015 or at the preparation date of the current annual accounts. At the close of 2014 there were no impairment losses originated by risk credit over assets that form part of this chapter. The amount of accrued interest due from the assets of this account at December 31, 2015 amounted to Euro 38 thousands (euro 524 Thousands at December 31, 2014). The annual interest rate at December 31, 2015 ranges is 0.65% (0.99% and 2.05% at December 31, 2014). b) Other receivables Detail of the financial assets included in this category at December 31, 2015 and 2014 is as follows: Thousand Euros 2015 2014 Taxation authorities, withholdings on account 8,330 7,249 Other debtors - - 8,330 7,249 The chapter “Taxation authorities, withholdings on account” at December 31, 2015 include, mainly, 4,406 thousand euros still receivable for corporate tax of 2014 concept (2,814 thousand euros at December 31, 2014 for the corporate tax of 2013) and 3,915 thousand euros of withholding taxes over capital gains of 2015 (4,406 thousand euros at December 31 of withholding taxes over capital gains of 2014).
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9.1.1.4 Loans and receivables
a) Deposits with credit institutions
Detail of deposits with credit institutions in 2015 and 2014 is as follows:
Thousand Euros2015 2014
Fixed income Deposits 25,038 84,086Variable income Deposits - -
25,038 84,086
During the year 2015, the Entity has registered a provision for impairment of 10,170 thousand euros charged to the profit & loss account for the fully amount of a deposit at Banco Madrid with a maturity date on January 2015 because any amount has been received, neither at December 31 of 2015 or at the preparation date of the current annual accounts. At the close of 2014 there were no impairment losses originated by risk credit over assets that form part of this chapter.
The amount of accrued interest due from the assets of this account at December 31, 2015 amounted to Euro 38 thousands (euro 524 Thousands at December 31, 2014).
The annual interest rate at December 31, 2015 ranges is 0.65% (0.99% and 2.05% atDecember 31, 2014).
b) Other receivables
Detail of the financial assets included in this category at December 31, 2015 and 2014 is as follows:
Thousand Euros2015 2014
Taxation authorities, withholdings on account 8,330 7,249Other debtors - -
8,330 7,249
The chapter “Taxation authorities, withholdings on account” at December 31, 2015 include, mainly, 4,406 thousand euros still receivable for corporate tax of 2014 concept (2,814 thousand euros at December 31, 2014 for the corporate tax of 2013) and 3,915 thousand euros of withholding taxes over capital gains of 2015 (4,406 thousand euros at December 31 of withholding taxes over capital gains of 2014).
98 99
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On January 28, 2015, the Entity has received the payment of Income tax for the year 2014 from Gipuzkoa Provincial Treasury by 4,406 thousand euros mentioned in the previous paragraph. 9.1.1.5 Cash and cash equivalents Detail of cash and cash equivalents in 2015 and 2014 is as follows: Thousand Euros 2015 2014 Cash in hand and cash in credit institutions 166,253 112,443 Other highly liquid assets - - Deposits with credit institutions < 3 month maturity - - Guarantees for derivative transactions (Note 9.1.7) 7,117 6,361 Total 173,370 118,804
Interest rate on current accounts of the Bank has ranged between 0.4% and 1% in 2015 (0% and 1% at December 31, 2014). 9.1.1.6 Debts and payables Detail at December 31, 2015 and 2014 is as follows: Thousand Euros 2015 2014 Sundry creditors 135 119 Creditors purchase of securities - - Taxation authorities, various concepts 219 185 Social security 20 21 Debts for reinsurance transactions 123 240 Total 497 565 All debits and payables are short term, so the book value coincides with the face value and there is no significant risk of exposure to changes in interest rates. All these debts are in Euros, there is no exposure to exchange rate risk.
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On January 28, 2015, the Entity has received the payment of Income tax for the year 2014 from Gipuzkoa Provincial Treasury by 4,406 thousand euros mentioned in the previous paragraph.
9.1.1.5 Cash and cash equivalents
Detail of cash and cash equivalents in 2015 and 2014 is as follows:
Thousand Euros2015 2014
Cash in hand and cash in credit institutions 166,253 112,443Other highly liquid assets - -Deposits with credit institutions < 3 month maturity - -Guarantees for derivative transactions (Note 9.1.7) 7,117 6,361Total 173,370 118,804
Interest rate on current accounts of the Bank has ranged between 0.4% and 1% in 2015 (0% and 1% at December 31, 2014).
9.1.1.6 Debts and payables
Detail at December 31, 2015 and 2014 is as follows:
Thousand Euros2015 2014
Sundry creditors 135 119Creditors purchase of securities - -Taxation authorities, various concepts 219 185Social security 20 21Debts for reinsurance transactions 123 240Total 497 565
All debits and payables are short term, so the book value coincides with the face value and there is no significant risk of exposure to changes in interest rates.
All these debts are in Euros, there is no exposure to exchange rate risk.
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9.1.1.7 Transactions with derivatives Detail of transactions with derivatives at December 31, 2015 and 2014 is as follows: a) Transactions with warrants 2015
Type Underlying
Asset Maturity Number of contracts
Market Value (Thousand Euros)
Warrant General Motors A July 2016 32,756 733 Warrant General Motors B July 2019 32,756 491
2014
Type Underlying
Asset Maturity Number of contracts
Market Value (Thousand Euros)
Warrant General Motors A July 2016 32,756 679 Warrant General Motors B July 2019 32,756 460
The debtor market value of these contracts to December 31, 2015 is included under "Financial assets held for trading - derivatives" of the balance sheet for an amount of 1,224 thousand euros (1,139 thousand euros at December 31, 2014). b) Transactions with financial futures 2015
Type
Underlying Asset Maturity Number of contracts
Market Value (Thousand Euros)
Buy-Futures Dow Jones March 2016 1,300 42,666 Buy-Futures Eurostoxx50 December 2016 200 2,308 Buy-Futures Divisa USD March 2016 450 56,354 Sale-Futures Bono BUND March 2016 350 55,272 Sale-Futures Treasury Note 10YR March 2016 120 13,905
2014
Type
Underlying Asset Maturity Number of contracts
Market Value (Thousand Euros)
Buy-Futures Eurostoxx50 March 2015 1,900 59,527 Sale-Futures Bono BUND March 2015 650 101,316 Sale-Futures Divisa USD March 2015 100 10,262 Sale-Futures Treasury Note 10YR March 2015 50 6,339
Financial futures contracts are settled daily in the organized market EUREX.
98 99
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On January 28, 2015, the Entity has received the payment of Income tax for the year 2014 from Gipuzkoa Provincial Treasury by 4,406 thousand euros mentioned in the previous paragraph. 9.1.1.5 Cash and cash equivalents Detail of cash and cash equivalents in 2015 and 2014 is as follows: Thousand Euros 2015 2014 Cash in hand and cash in credit institutions 166,253 112,443 Other highly liquid assets - - Deposits with credit institutions < 3 month maturity - - Guarantees for derivative transactions (Note 9.1.7) 7,117 6,361 Total 173,370 118,804
Interest rate on current accounts of the Bank has ranged between 0.4% and 1% in 2015 (0% and 1% at December 31, 2014). 9.1.1.6 Debts and payables Detail at December 31, 2015 and 2014 is as follows: Thousand Euros 2015 2014 Sundry creditors 135 119 Creditors purchase of securities - - Taxation authorities, various concepts 219 185 Social security 20 21 Debts for reinsurance transactions 123 240 Total 497 565 All debits and payables are short term, so the book value coincides with the face value and there is no significant risk of exposure to changes in interest rates. All these debts are in Euros, there is no exposure to exchange rate risk.
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9.1.1.7 Transactions with derivatives Detail of transactions with derivatives at December 31, 2015 and 2014 is as follows: a) Transactions with warrants 2015
Type Underlying
Asset Maturity Number of contracts
Market Value (Thousand Euros)
Warrant General Motors A July 2016 32,756 733 Warrant General Motors B July 2019 32,756 491
2014
Type Underlying
Asset Maturity Number of contracts
Market Value (Thousand Euros)
Warrant General Motors A July 2016 32,756 679 Warrant General Motors B July 2019 32,756 460
The debtor market value of these contracts to December 31, 2015 is included under "Financial assets held for trading - derivatives" of the balance sheet for an amount of 1,224 thousand euros (1,139 thousand euros at December 31, 2014). b) Transactions with financial futures 2015
Type
Underlying Asset Maturity Number of contracts
Market Value (Thousand Euros)
Buy-Futures Dow Jones March 2016 1,300 42,666 Buy-Futures Eurostoxx50 December 2016 200 2,308 Buy-Futures Divisa USD March 2016 450 56,354 Sale-Futures Bono BUND March 2016 350 55,272 Sale-Futures Treasury Note 10YR March 2016 120 13,905
2014
Type
Underlying Asset Maturity Number of contracts
Market Value (Thousand Euros)
Buy-Futures Eurostoxx50 March 2015 1,900 59,527 Sale-Futures Bono BUND March 2015 650 101,316 Sale-Futures Divisa USD March 2015 100 10,262 Sale-Futures Treasury Note 10YR March 2015 50 6,339
Financial futures contracts are settled daily in the organized market EUREX.
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9.1.1.7 Transactions with derivatives
Detail of transactions with derivatives at December 31, 2015 and 2014 is as follows:
a) Transactions with warrants
2015
TypeUnderlying
Asset MaturityNumber of contracts
Market Value(Thousand Euros)
Warrant General Motors A July 2016 32,756 733Warrant General Motors B July 2019 32,756 491
2014
TypeUnderlying
Asset MaturityNumber of contracts
Market Value(Thousand Euros)
Warrant General Motors A July 2016 32,756 679Warrant General Motors B July 2019 32,756 460
The debtor market value of these contracts to December 31, 2015 is included under "Financial assets held for trading - derivatives" of the balance sheet for an amount of 1,224thousand euros (1,139 thousand euros at December 31, 2014).
b) Transactions with financial futures
2015
Type Underlying Asset MaturityNumber of contracts
Market Value(Thousand Euros)
Buy-Futures Dow Jones March 2016 1,300 42,666Buy-Futures Eurostoxx50 December 2016 200 2,308Buy-Futures Divisa USD March 2016 450 56,354Sale-Futures Bono BUND March 2016 350 55,272Sale-Futures Treasury Note 10YR March 2016 120 13,905
2014
Type Underlying Asset MaturityNumber of contracts
Market Value(Thousand Euros)
Buy-Futures Eurostoxx50 March 2015 1,900 59,527Sale-Futures Bono BUND March 2015 650 101,316Sale-Futures Divisa USD March 2015 100 10,262Sale-Futures Treasury Note 10YR March 2015 50 6,339
Financial futures contracts are settled daily in the organized market EUREX.
100 101
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Securities lodged at December 31, 2015 for the open positions in futures amounted to 7,117 thousand Euros (6,361 thousand Euros at December 31, 2014) and are presented in "Cash and cash equivalents" on the asset side of the balance (Note 9.1.1.5). c) Transactions with financial options
Thousand euros
Type Option Underlying Asset Maturity Number of contracts
Market value
Sale Call Adidas March 2016 100 12 Sale Call Rheinisch West. Elek. March 2016 625 7 Sale Call Infineon March 2016 670 18 Sale Call Arcellor Mittal March 2016 1.800 14
51 The market value of the mentioned contracts at December 31, 2015 it is included under the chapter “Financial liabilities held for trading – Derivatives” of the balance sheet for a fully amount of 51 thousand euros. 9.2. Information related to the Income Statement Detail of revenue and expenses registered in the Income Statement, both social Welfare Plan Activity account and non-Social Welfare account, classified by activity is as follows: Thousand Euros 2015 2014 Income from investments in equity - dividends 5,054 4,490 Income from debt securities - coupons 32,998 40,875 Gains on measurement of financial instruments at fair value 357,399 293,363 Gains on realization of investments 52,481 41,334 Gains on financial futures 16,853 7,153 Positive Exchange rate differences 2,225 700 Total Income from investments 467,010 387,915 Thousand Euros 2015 2014 Expenses on property, plant and equipment and investments 703 690 Expenses on brokerage and intermediation 424 411 Other expenses on property, plant and equipment and investments 279 279 Losses on changes in the fair value of investments 369,207 238,947 Losses on realization of investments 5,455 4,160 Losses on financial futures 7,714 15,545 Exchange Losses 1,739 487 Total Expense from investments 384,818 259,829
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GEROA PENTSIOAK, ENTIDAD DE PREVISION SOCIAL VOLUNTARIA
Securities lodged at December 31, 2015 for the open positions in futures amounted to 7,117thousand Euros (6,361 thousand Euros at December 31, 2014) and are presented in "Cash and cash equivalents" on the asset side of the balance (Note 9.1.1.5).
c) Transactions with financial options
Thousand euros
Type Option Underlying Asset MaturityNumber of contracts
Market value
Sale Call Adidas March 2016 100 12Sale Call Rheinisch West. Elek. March 2016 625 7Sale Call Infineon March 2016 670 18Sale Call Arcellor Mittal March 2016 1.800 14
51
The market value of the mentioned contracts at December 31, 2015 it is included under the chapter “Financial liabilities held for trading – Derivatives” of the balance sheet for a fully amount of 51 thousand euros.
9.2. Information related to the Income Statement
Detail of revenue and expenses registered in the Income Statement, both social Welfare Plan Activity account and non-Social Welfare account, classified by activity is as follows:
Thousand Euros2015 2014
Income from investments in equity - dividends 5,054 4,490Income from debt securities - coupons 32,998 40,875Gains on measurement of financial instruments at fair value 357,399 293,363Gains on realization of investments 52,481 41,334Gains on financial futures 16,853 7,153Positive Exchange rate differences 2,225 700Total Income from investments 467,010 387,915
Thousand Euros2015 2014
Expenses on property, plant and equipment and investments 703 690Expenses on brokerage and intermediation 424 411Other expenses on property, plant and equipment and investments 279 279
Losses on changes in the fair value of investments 369,207 238,947Losses on realization of investments 5,455 4,160Losses on financial futures 7,714 15,545Exchange Losses 1,739 487Total Expense from investments 384,818 259,829
100 101
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Securities lodged at December 31, 2015 for the open positions in futures amounted to 7,117 thousand Euros (6,361 thousand Euros at December 31, 2014) and are presented in "Cash and cash equivalents" on the asset side of the balance (Note 9.1.1.5). c) Transactions with financial options
Thousand euros
Type Option Underlying Asset Maturity Number of contracts
Market value
Sale Call Adidas March 2016 100 12 Sale Call Rheinisch West. Elek. March 2016 625 7 Sale Call Infineon March 2016 670 18 Sale Call Arcellor Mittal March 2016 1.800 14
51 The market value of the mentioned contracts at December 31, 2015 it is included under the chapter “Financial liabilities held for trading – Derivatives” of the balance sheet for a fully amount of 51 thousand euros. 9.2. Information related to the Income Statement Detail of revenue and expenses registered in the Income Statement, both social Welfare Plan Activity account and non-Social Welfare account, classified by activity is as follows: Thousand Euros 2015 2014 Income from investments in equity - dividends 5,054 4,490 Income from debt securities - coupons 32,998 40,875 Gains on measurement of financial instruments at fair value 357,399 293,363 Gains on realization of investments 52,481 41,334 Gains on financial futures 16,853 7,153 Positive Exchange rate differences 2,225 700 Total Income from investments 467,010 387,915 Thousand Euros 2015 2014 Expenses on property, plant and equipment and investments 703 690 Expenses on brokerage and intermediation 424 411 Other expenses on property, plant and equipment and investments 279 279 Losses on changes in the fair value of investments 369,207 238,947 Losses on realization of investments 5,455 4,160 Losses on financial futures 7,714 15,545 Exchange Losses 1,739 487 Total Expense from investments 384,818 259,829
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9.3. Fair value of financial assets and liabilities We include below the fair value of held-to-maturity investments portfolio compared to its book value (without interests) at December 31, 2015 and 2014: 2015 Thousand Euros
Fair Value Book Value Gain
(Loss) Held-to-maturity investments 332,798 320,520 12,278 332,798 320,520 12,278
2014 Thousand Euros
Fair Value Book Value Gain
(Loss) Held-to-maturity investments 347,960 308,798 39,162 347,960 308,798 39,162
As indicated in Note 5.c), the Entity's financial assets are recorded in the balance sheet at fair value except for: cash and cash equivalents, loans and receivables, held-to-maturity investments and holdings in group companies and associates. In order to obtain the fair value quoted prices in active markets have been searched in all cases. With the rest of the financial assets and liabilities at December 31, 2015 and 2014, it has been estimated that there are no significant differences between their book value and their fair value. 10. Equity At December 31, 2015 and 2014, the detail of equity of the Entity is as follows: Thousand Euros 2015 2014 Mutual Funds 15,911 15,911 Reserves 19,920 14,678 Other underwriting reserves - Reserve for actuarial risks 15,849 14,678 Voluntary reserves 4,071 - Profit of the year (6,242) 5,242 29,589 35,831
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9.3. Fair value of financial assets and liabilities
We include below the fair value of held-to-maturity investments portfolio compared to its book value (without interests) at December 31, 2015 and 2014:
2015Thousand Euros
Fair Value Book ValueGain(Loss)
Held-to-maturity investments 332,798 320,520 12,278332,798 320,520 12,278
2014Thousand Euros
Fair Value Book ValueGain(Loss)
Held-to-maturity investments 347,960 308,798 39,162347,960 308,798 39,162
As indicated in Note 5.c), the Entity's financial assets are recorded in the balance sheet at fair value except for: cash and cash equivalents, loans and receivables, held-to-maturity investments and holdings in group companies and associates.
In order to obtain the fair value quoted prices in active markets have been searched in all cases.
With the rest of the financial assets and liabilities at December 31, 2015 and 2014, it has been estimated that there are no significant differences between their book value and their fair value.
10. Equity
At December 31, 2015 and 2014, the detail of equity of the Entity is as follows:
Thousand Euros2015 2014
Mutual Funds 15,911 15,911Reserves 19,920 14,678 Other underwriting reserves - Reserve for actuarial risks 15,849 14,678 Voluntary reserves 4,071 -Profit of the year (6,242) 5,242
29,589 35,831
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The movement of the items in Equity for the years 2015 and 2014 were as follows: Thousand Euros
Mutual Fund Reserves
Profit of the year Equity
Balance at January 1, 2014 15,911 13,282 6,686 35,879 Profit distribution of fiscal 2013 (Note 11) - 1,396 (6,686) (5,290) Profit of the year - - 5,242 5,242 Balance at December 31, 2014 15,911 14,678 5,242 35,831 Profit distribution of fiscal 2014 (Notes 4 and 11) - 5,242 (5,242) - Profit of the year - - (6,242) (6,242) Balance at December 31, 2015 15,911 19,920 (6,242) 29,589 Members’ fund This comprises the fund created by the initial one-off contributions made by the founding members in accordance with the Regulation on Voluntary Social Welfare Entities. It also includes the contributions made upon the integration in prior years of Sidero-Zahar, VSWE. Details at December 31, 2015 and 2014 are as follows: Thousand Euros 2015 2014 Contributions from founding members 8,596 8,596 Contributions from Sidero – Zahar VSWE 7,432 7,432 16,028 16,028 Application of members’ fund (117) (117) 15,911 15,911 On February 28, 1997 Sidero – Zahar, Voluntary Social Welfare Entity was incorporated with the aim of complementing retirement, disability, widowhood, family and absolute orphanhood benefits below the national minimum wage for beneficiaries entitled to other income which, upon incorporation of the entity, was not being received and which, taken as a whole and added to the benefit, exceeded the national minimum wage. The beneficiaries of Sidero-Zahar, Voluntary Social Welfare Entity were pensioners under the general Social Security regime who, when the entity was incorporated, were beneficiaries of the supplementary pension scheme established in the collective labour agreement for the Gipuzkoa iron and steel industry, and those declared beneficiaries by the Entity’s governing board on account of being entitled to certain benefits at December 31, 1996, even if they were recognised as such subsequent to that date.
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The movement of the items in Equity for the years 2015 and 2014 were as follows:
Thousand EurosMutualFund Reserves
Profit of the year Equity
Balance at January 1, 2014 15,911 13,282 6,686 35,879Profit distribution of fiscal 2013 (Note 11) - 1,396 (6,686) (5,290)Profit of the year - - 5,242 5,242Balance at December 31, 2014 15,911 14,678 5,242 35,831Profit distribution of fiscal 2014 (Notes 4 and 11) - 5,242 (5,242) -Profit of the year - - (6,242) (6,242)Balance at December 31, 2015 15,911 19,920 (6,242) 29,589
Members’ fund
This comprises the fund created by the initial one-off contributions made by the founding members in accordance with the Regulation on Voluntary Social Welfare Entities. It also includes the contributions made upon the integration in prior years of Sidero-Zahar, VSWE. Details at December 31, 2015 and 2014 are as follows:
Thousand Euros2015 2014
Contributions from founding members 8,596 8,596Contributions from Sidero – Zahar VSWE 7,432 7,432
16,028 16,028Application of members’ fund (117) (117)
15,911 15,911
On February 28, 1997 Sidero – Zahar, Voluntary Social Welfare Entity was incorporated with the aim of complementing retirement, disability, widowhood, family and absolute orphanhood benefits below the national minimum wage for beneficiaries entitled to other income which, upon incorporation of the entity, was not being received and which, taken as a whole and added to the benefit, exceeded the national minimum wage.
The beneficiaries of Sidero-Zahar, Voluntary Social Welfare Entity were pensioners under the general Social Security regime who, when the entity was incorporated, were beneficiaries of the supplementary pension scheme established in the collective labour agreement for the Gipuzkoa iron and steel industry, and those declared beneficiaries by the Entity’s governing board on account of being entitled to certain benefits at December 31, 1996, even if they were recognised as such subsequent to that date.
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The movement of the items in Equity for the years 2015 and 2014 were as follows: Thousand Euros
Mutual Fund Reserves
Profit of the year Equity
Balance at January 1, 2014 15,911 13,282 6,686 35,879 Profit distribution of fiscal 2013 (Note 11) - 1,396 (6,686) (5,290) Profit of the year - - 5,242 5,242 Balance at December 31, 2014 15,911 14,678 5,242 35,831 Profit distribution of fiscal 2014 (Notes 4 and 11) - 5,242 (5,242) - Profit of the year - - (6,242) (6,242) Balance at December 31, 2015 15,911 19,920 (6,242) 29,589 Members’ fund This comprises the fund created by the initial one-off contributions made by the founding members in accordance with the Regulation on Voluntary Social Welfare Entities. It also includes the contributions made upon the integration in prior years of Sidero-Zahar, VSWE. Details at December 31, 2015 and 2014 are as follows: Thousand Euros 2015 2014 Contributions from founding members 8,596 8,596 Contributions from Sidero – Zahar VSWE 7,432 7,432 16,028 16,028 Application of members’ fund (117) (117) 15,911 15,911 On February 28, 1997 Sidero – Zahar, Voluntary Social Welfare Entity was incorporated with the aim of complementing retirement, disability, widowhood, family and absolute orphanhood benefits below the national minimum wage for beneficiaries entitled to other income which, upon incorporation of the entity, was not being received and which, taken as a whole and added to the benefit, exceeded the national minimum wage. The beneficiaries of Sidero-Zahar, Voluntary Social Welfare Entity were pensioners under the general Social Security regime who, when the entity was incorporated, were beneficiaries of the supplementary pension scheme established in the collective labour agreement for the Gipuzkoa iron and steel industry, and those declared beneficiaries by the Entity’s governing board on account of being entitled to certain benefits at December 31, 1996, even if they were recognised as such subsequent to that date.
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The articles of association of Sidero-Zahar, Voluntary Social Welfare Entity stipulated that in order for the entity to be wound up, vested benefits had to be individually guaranteed and incorporated within another entity, institution or destination which guaranteed that contingencies would be covered, and that the necessary funds had to be made available to carry out the winding up and liquidation process. Furthermore, the transitional provision of Sidero-Zahar’s articles of association granted a period of two years to update the census of beneficiaries entitled to receive benefits. On April 10, 2000, subsequent to the completion of the update of the census of beneficiaries in 1999, the governing board of Sidero-Zahar decided to transfer Euros 3,000 thousand to the Geroa Pentsioak, Voluntary Social Welfare Entity members’ fund as a result of the surplus in its mathematical provisions. This transfer was made on April 26, 2000. On December 19, 2001 the governing board of Sidero-Zahar proposed to the general assembly that it approve the commencement of the winding up of the entity by allocating the corresponding supplementary retirement, disability, widowhood, family and absolute orphanhood benefits below the national minimum wage to those entitled and, once these allocations were paid, that any surplus funds be transferred to Geroa Pentsioak, VSWE. The initiation of the Sidero-Zahar liquidation process was approved at the extraordinary general assembly held on April 24, 2002. On October 1, 2003, once members had been located and their outstanding benefits settled, the Sidero-Zahar liquidation committee decided to transfer Euros 4,000 thousand to the Geroa Pentsioak, Voluntary Social Welfare Entity members’ fund, in compliance with article 43 of its articles of association. On January 12, 2004 this transfer and the total liquidation of Sidero-Zahar, Voluntary Social Welfare Entity were approved at the Sidero-Zahar extraordinary general assembly. On April 7, 2005 the governing board approved the transfer of the surplus provision established to cover the Sidero-Zahar winding-up process, amounting to Euros 432 thousand, to the members’ fund. Furthermore, on December 19, 2006 the governing board approved the financing of the expenses deriving from the celebration of the tenth anniversary of the Entity, amounting to Euros 117 thousand, with a charge to the members’ fund. Reserves Article 20 of the Statutes indicates that the Entity will retain, on an ongoing basis, additional assets to those in which their mathematical materialize in reserve concept. These assets shall be free of all foreseeable liabilities and will serve as available solvency margin to absorb discrepancies between the costs and benefits, expected and actual. The Assembly of the Entity decided at its meeting of May 7, 2003, a reserve for risks of annuities, placing it in 25% of the commitment of defined benefit of reinsurance. At December 31, 2014, the said reserve is included in the "Reserves - Reserves for actuarial risks" of Shareholders' Equity.
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The articles of association of Sidero-Zahar, Voluntary Social Welfare Entity stipulated that in order for the entity to be wound up, vested benefits had to be individually guaranteed and incorporated within another entity, institution or destination which guaranteed that contingencies would be covered, and that the necessary funds had to be made available to carry out the winding up and liquidation process.
Furthermore, the transitional provision of Sidero-Zahar’s articles of association granted a period of two years to update the census of beneficiaries entitled to receive benefits.
On April 10, 2000, subsequent to the completion of the update of the census of beneficiaries in 1999, the governing board of Sidero-Zahar decided to transfer Euros 3,000 thousand to the Geroa Pentsioak, Voluntary Social Welfare Entity members’ fund as a result of the surplus in its mathematical provisions. This transfer was made on April 26, 2000. OnDecember 19, 2001 the governing board of Sidero-Zahar proposed to the general assembly that it approve the commencement of the winding up of the entity by allocating the corresponding supplementary retirement, disability, widowhood, family and absolute orphanhood benefits below the national minimum wage to those entitled and, once these allocations were paid, that any surplus funds be transferred to Geroa Pentsioak, VSWE. The initiation of the Sidero-Zahar liquidation process was approved at the extraordinary general assembly held on April 24, 2002. On October 1, 2003, once members had been located and their outstanding benefits settled, the Sidero-Zahar liquidation committee decided to transfer Euros 4,000 thousand to the Geroa Pentsioak, Voluntary Social Welfare Entity members’ fund, in compliance with article 43 of its articles of association. On January 12, 2004 this transfer and the total liquidation of Sidero-Zahar, Voluntary Social Welfare Entity were approved at the Sidero-Zahar extraordinary general assembly.
On April 7, 2005 the governing board approved the transfer of the surplus provision established to cover the Sidero-Zahar winding-up process, amounting to Euros 432 thousand, to the members’ fund. Furthermore, on December 19, 2006 the governing board approved the financing of the expenses deriving from the celebration of the tenth anniversary of the Entity, amounting to Euros 117 thousand, with a charge to the members’ fund.
Reserves
Article 20 of the Statutes indicates that the Entity will retain, on an ongoing basis, additional assets to those in which their mathematical materialize in reserve concept. These assets shall be free of all foreseeable liabilities and will serve as available solvency margin to absorb discrepancies between the costs and benefits, expected and actual.
The Assembly of the Entity decided at its meeting of May 7, 2003, a reserve for risks of annuities, placing it in 25% of the commitment of defined benefit of reinsurance. At December 31, 2014, the said reserve is included in the "Reserves - Reserves for actuarial risks" of Shareholders' Equity.
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11. Technical Provisions At December 31, 2015 and 2014 this balance sheet caption comprises the provisions established by the Entity to meet the consolidated rights of its members (Provisions attached to plans of defined contribution in which the partner assumes the risk of the investment), vested obligations paid in the form of annuities (mathematical provision) and obligations established by regulation (other technical provisions). The composition of the heading "Underwriting reserves" at December 31, 2015 and 2014 is as follows: Thousand Euros 2015 2014 Reserve for social welfare activities 1,689,486 1,569,962
Unexpired premium reserve - - Profit sharing reserve - - Mathematical reserve 78,197 69,136 Reserves linked to defined contribution plans in which the member assumes the investment risk 1,611,289 1,500,826
Other underwriting reserves - - 1,689,486 1,569,962 Movements in this item in 2015 and 2014 are as follows: Thousand Euros
Mathematical reserve
Reserves linked to defined
contribution plans Total
Balance at December 31, 2013 63,730 1,337,108 1,400,838 Change in other underwriting reserves, net of reinsurance 2,059
161,051 163,110
Change in underwriting reserves - ceded reinsurance 724
- 724
Profit distribution of fiscal 2013 (Note 10) - 5,290 5,290 Transfers 2,623 (2,623) - Balance at December 31, 2014 69,136 1,500,826 1,569,962 Change in other underwriting reserves, net of reinsurance 8,496
110,463 118,959
Change in underwriting reserves - ceded reinsurance 565
- 565
Profit distribution of fiscal 2014 (Notes 4 and 10) -
- -
Transfers - - - Balance at December 31, 2015 78,197 1,611,289 1,689,486
GEROA PENTSIOAK, ENTIDAD DE PREVISION SOCIAL VOLUNTARIA
11. Technical Provisions
At December 31, 2015 and 2014 this balance sheet caption comprises the provisions established by the Entity to meet the consolidated rights of its members (Provisions attached to plans of defined contribution in which the partner assumes the risk of the investment), vested obligations paid in the form of annuities (mathematical provision) and obligations established by regulation (other technical provisions).
The composition of the heading "Underwriting reserves" at December 31, 2015 and 2014 is as follows:
Thousand Euros2015 2014
Reserve for social welfare activities 1,689,486 1,569,962Unexpired premium reserve - -Profit sharing reserve - -Mathematical reserve 78,197 69,136Reserves linked to defined contribution plans in which the member assumes the investment risk 1,611,289 1,500,826
Other underwriting reserves - -1,689,486 1,569,962
Movements in this item in 2015 and 2014 are as follows:
Thousand Euros
Mathematical reserve
Reserves linked to defined
contribution plans Total
Balance at December 31, 2013 63,730 1,337,108 1,400,838Change in other underwriting reserves, net of reinsurance 2,059 161,051 163,110Change in underwriting reserves - ceded reinsurance 724 - 724Profit distribution of fiscal 2013 (Note 10) - 5,290 5,290Transfers 2,623 (2,623) -Balance at December 31, 2014 69,136 1,500,826 1,569,962Change in other underwriting reserves, net of reinsurance 8,496 110,463 118,959Change in underwriting reserves - ceded reinsurance 565 - 565Profit distribution of fiscal 2014 (Notes 4 and 10) - - -Transfers - - -Balance at December 31, 2015 78,197 1,611,289 1,689,486
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During the year 2014 transfers for a total amount of 2,623 thousand euros were performed from the chapter of “Underwriting assets - Reserves linked to defined contribution plans” to the chapter “Underwriting assets – Mathematical reserve”, correspondent to the economic rights of the active shareholders at the date of the contingency which gives the right to the benefit, since are considered passive shareholders. At December 31, 2015 and 2014, the most relevant information regarding the equity attributable to Members and Beneficiaries (Mathematical Reserve and Reserves associated with defined-benefit pension plans under which the Member assumes the investment risk) at the Entity are as follows:
2015 (*) 2014 (*) Number of shares 79,945,548 78,108,123 Units value of the share (in euro) 21,054026 20.026304 Annualised yield 5.13% 9.39% Number of members 103,362 103,635
(*) The Entity does not include the mathematical provisions for transfers to reinsurance to calculate de liquidating value. Under the chapter “Reserve for social welfare activities – Reserves linked to defined contribution plans in which the member assumes the investment risk” there are temporary annuities included for an amount of 2,294 thousand euros, correspondent to the rights of the passive shareholders which benefit has been caused after December 31, 2014 (excluded the deferred life annuity correspondent to the section 4 of the new benefits model (Note 2), that is registered in the chapter “underwriting assets” of the same chapter). The Entity disposes of an actuarial study dated on December 31, 2015, executed by the University of the Basque Country following the hypothesis and financial actuarial calculations generally accepted in the moment of accomplishment. The mentioned study established that the actuarial value of the future duties of benefits that have been already caused at December 31, 2015, as the improvement established in the article 10.6 based on the profit generated in the fiscal year 2015 (Note 2), it reaches an amount of 71,887 thousand euros that are included in the heading denominated “Mathematical provisions” (63,390 thousand of euros at December 31, 2014). On December 31, 2015, there are no deferred life annuity’s correspondent to section 4 (Note 2) of the new model of benefits (Note 2), included under the chapter “underwriting assets” On December 31, 2015, the chapter “Reserves” for a fully amount of 19,920 thousand euros (14,678 thousand euros on December 31, 2014), together with the results distribution of 2014 to reserves for a negative amount of 6,248 thousand euros (Note 4) (1,171 thousand euros on December 31, 2014), correspond with the funds established by the Entity to cope with possible deviations of the actuarial commitments of the life annuities, in accordance with the agreements reached at the General Meeting of the Entity (Note 10).
GEROA PENTSIOAK, ENTIDAD DE PREVISION SOCIAL VOLUNTARIA
During the year 2014 transfers for a total amount of 2,623 thousand euros were performed from the chapter of “Underwriting assets - Reserves linked to defined contribution plans” to the chapter “Underwriting assets – Mathematical reserve”, correspondent to the economic rights of the active shareholders at the date of the contingency which gives the right to the benefit, since are considered passive shareholders.
At December 31, 2015 and 2014, the most relevant information regarding the equity attributable to Members and Beneficiaries (Mathematical Reserve and Reserves associated with defined-benefit pension plans under which the Member assumes the investment risk) at the Entity are as follows:
2015 (*) 2014 (*)Number of shares 79,945,548 78,108,123Units value of the share (in euro) 21,054026 20.026304Annualised yield 5.13% 9.39%Number of members 103,362 103,635
(*) The Entity does not include the mathematical provisions for transfers to reinsurance to calculate de liquidating value.
Under the chapter “Reserve for social welfare activities – Reserves linked to defined contribution plans in which the member assumes the investment risk” there are temporary annuities included for an amount of 2,294 thousand euros, correspondent to the rights of the passive shareholders which benefit has been caused after December 31, 2014 (excluded the deferred life annuity correspondent to the section 4 of the new benefits model (Note 2), that is registered in the chapter “underwriting assets” of the same chapter).
The Entity disposes of an actuarial study dated on December 31, 2015, executed by the University of the Basque Country following the hypothesis and financial actuarial calculations generally accepted in the moment of accomplishment. The mentioned study established that the actuarial value of the future duties of benefits that have been already caused atDecember 31, 2015, as the improvement established in the article 10.6 based on the profit generated in the fiscal year 2015 (Note 2), it reaches an amount of 71,887 thousand euros that are included in the heading denominated “Mathematical provisions” (63,390 thousand of euros at December 31, 2014). On December 31, 2015, there are no deferred life annuity’s correspondent to section 4 (Note 2) of the new model of benefits (Note 2), included under the chapter “underwriting assets”
On December 31, 2015, the chapter “Reserves” for a fully amount of 19,920 thousand euros (14,678 thousand euros on December 31, 2014), together with the results distribution of 2014 to reserves for a negative amount of 6,248 thousand euros (Note 4) (1,171 thousand euros on December 31, 2014), correspond with the funds established by the Entity to cope with possible deviations of the actuarial commitments of the life annuities, in accordance with the agreements reached at the General Meeting of the Entity (Note 10).
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The heading "Participation of reinsurance in underwriting reserves" that is shown on the asset side of the balance sheets at December 31, 2015 and totalling €6,310 thousand (€5,746 thousand at December 31, 2014) relates to the funds that are estimated to be necessary to cover pending payments by the reinsurer company with respect to its obligations relating to benefits already being paid in the form of income. 12. Non-technical Provisions Details at December 31, 2015 and 2014 are as follows: Thousand Euros 2015 2014 Provision for benefits and obligations 47 47 The provision for pensions and obligations at December 31, 2015 and 2014 derives from the commitments acquired by the Entity in respect of employee retirement bonuses (Note 5(g)). 13. Income and expense Expense classification by destination In compliance with the provisions of the Decree 86/2010 of March 16, the Entity has distributed those expenses initially classified by its nature that according to its function should be reclassified by their destination. For the purpose of this reclassification the following should be taken into account: – The expense attributed to benefits primarily include expense in personnel dedicated to
the management of the benefits and the amortization of fixed assets assigned to this activity, commissions paid due to management of the benefits and the expenses incurred for services necessary for the process;
– Administrative expenses primarily include litigation fees in respect of the payment of
the benefits, the expense originated by the management of the collection of the contributions, the expense of the ceded reinsurance, in particular, personnel expense dedicated to those functions, and the amortization of fixed assets assigned to this activity.
– Expense that are imputed to the investment primarily include the expense on the
management of the investments, both internal and external, the latter comprising the fees and commissions accrued, personnel expense and amortization
– Other technical expense are those that, being a part of the account associated to the
social welfare, cannot be imputed applying the criteria established previously, it primarily includes general management expense.
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The heading "Participation of reinsurance in underwriting reserves" that is shown on the asset side of the balance sheets at December 31, 2015 and totalling €6,310 thousand(€5,746 thousand at December 31, 2014) relates to the funds that are estimated to be necessary to cover pending payments by the reinsurer company with respect to its obligations relating to benefits already being paid in the form of income.
12. Non-technical Provisions
Details at December 31, 2015 and 2014 are as follows:
Thousand Euros2015 2014
Provision for benefits and obligations 47 47
The provision for pensions and obligations at December 31, 2015 and 2014 derives from the commitments acquired by the Entity in respect of employee retirement bonuses (Note 5(g)).
13. Income and expense
Expense classification by destination
In compliance with the provisions of the Decree 86/2010 of March 16, the Entity has distributed those expenses initially classified by its nature that according to its function should be reclassified by their destination. For the purpose of this reclassification the following should be taken into account:
– The expense attributed to benefits primarily include expense in personnel dedicated to the management of the benefits and the amortization of fixed assets assigned to this activity, commissions paid due to management of the benefits and the expenses incurred for services necessary for the process;
– Administrative expenses primarily include litigation fees in respect of the payment of the benefits, the expense originated by the management of the collection of the contributions, the expense of the ceded reinsurance, in particular, personnel expense dedicated to those functions, and the amortization of fixed assets assigned to this activity.
– Expense that are imputed to the investment primarily include the expense on the management of the investments, both internal and external, the latter comprising the fees and commissions accrued, personnel expense and amortization
– Other technical expense are those that, being a part of the account associated to the social welfare, cannot be imputed applying the criteria established previously, it primarily includes general management expense.
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The heading "Participation of reinsurance in underwriting reserves" that is shown on the asset side of the balance sheets at December 31, 2015 and totalling €6,310 thousand (€5,746 thousand at December 31, 2014) relates to the funds that are estimated to be necessary to cover pending payments by the reinsurer company with respect to its obligations relating to benefits already being paid in the form of income. 12. Non-technical Provisions Details at December 31, 2015 and 2014 are as follows: Thousand Euros 2015 2014 Provision for benefits and obligations 47 47 The provision for pensions and obligations at December 31, 2015 and 2014 derives from the commitments acquired by the Entity in respect of employee retirement bonuses (Note 5(g)). 13. Income and expense Expense classification by destination In compliance with the provisions of the Decree 86/2010 of March 16, the Entity has distributed those expenses initially classified by its nature that according to its function should be reclassified by their destination. For the purpose of this reclassification the following should be taken into account: – The expense attributed to benefits primarily include expense in personnel dedicated to
the management of the benefits and the amortization of fixed assets assigned to this activity, commissions paid due to management of the benefits and the expenses incurred for services necessary for the process;
– Administrative expenses primarily include litigation fees in respect of the payment of
the benefits, the expense originated by the management of the collection of the contributions, the expense of the ceded reinsurance, in particular, personnel expense dedicated to those functions, and the amortization of fixed assets assigned to this activity.
– Expense that are imputed to the investment primarily include the expense on the
management of the investments, both internal and external, the latter comprising the fees and commissions accrued, personnel expense and amortization
– Other technical expense are those that, being a part of the account associated to the
social welfare, cannot be imputed applying the criteria established previously, it primarily includes general management expense.
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Variation of Other Technical Provisions, Nets of Reinsurance The details of the heading “I.6 Variation of Other Technical Provisions Nets of Reinsurance” of the Income statement of the fiscal years ended in December 31, 2015 and 2014 are. Thousand Euros 2015 2014 Subscriptions for the year, net of reinsurance (78,526) (77,547) Benefits for the year, Net of Reinsurance 47,115 36,652 Income from Investment (458,791) (379,229) Loss from investment 378,020 253,981 Other technical Income (9) (24) Operating Expenses 895 653 Results from Social Welfare Plan Activity Account (7,663) 2,404 (118,959) (163,110)
At December 31, 2015 and 2014, the Entity presents administrative expenses by destination, in compliance with the Decree 86/2010 of March 16, and classifies them as follows in the Income Statement:
2015 Expense on
benefits paid Administrative
expense (*) Expense on investments
Other technical expenses Total
Administrative Expenses 245 895 703 - 1,843
2014
Expense on benefits paid
Administrative expense
Expense on investments
Other technical expenses Total
Administrative Expenses 235 653 690 - 1,578
(*) During the years 2015 and 2014, revenues have been accrued for 312 and 450 thousand euros
respectively, for the participation of the Entity in the benefits of reinsurance contracts for transfer of risk (note 2), which are recognized under "Operating expenses" in the income statement.
14. Taxation In accordance with prevailing legislation relating to Voluntary Social Welfare Entities, the Entity is exempt from paying income tax and is entitled to be reimbursed for withholdings made on financial income (Note 5(i)). In accordance with current legislation, taxes cannot be considered definitive until they have been inspected and agreed by the tax authorities or before the inspection period of four years has elapsed. At December 31, 2015 the Entity has open to inspection by the tax authorities all main applicable taxes for the last four years. The administrators do not expect that any significant additional liabilities would arise in the event of inspection.
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Variation of Other Technical Provisions, Nets of Reinsurance
The details of the heading “I.6 Variation of Other Technical Provisions Nets of Reinsurance” of the Income statement of the fiscal years ended in December 31, 2015 and 2014 are.
Thousand Euros2015 2014
Subscriptions for the year, net of reinsurance (78,526) (77,547)Benefits for the year, Net of Reinsurance 47,115 36,652Income from Investment (458,791) (379,229)Loss from investment 378,020 253,981Other technical Income (9) (24)Operating Expenses 895 653Results from Social Welfare Plan Activity Account (7,663) 2,404
(118,959) (163,110)
At December 31, 2015 and 2014, the Entity presents administrative expenses by destination, in compliance with the Decree 86/2010 of March 16, and classifies them as follows in the Income Statement:
2015Expense on
benefits paidAdministrative
expense (*)Expense on investments
Other technical expenses Total
Administrative Expenses 245 895 703 - 1,843
2014Expense on
benefits paidAdministrative
expenseExpense on investments
Other technical expenses Total
Administrative Expenses 235 653 690 - 1,578
(*) During the years 2015 and 2014, revenues have been accrued for 312 and 450 thousand euros respectively, for the participation of the Entity in the benefits of reinsurance contracts for transfer of risk (note 2), which are recognized under "Operating expenses" in the income statement.
14. Taxation
In accordance with prevailing legislation relating to Voluntary Social Welfare Entities, the Entity is exempt from paying income tax and is entitled to be reimbursed for withholdings made on financial income (Note 5(i)).
In accordance with current legislation, taxes cannot be considered definitive until they have been inspected and agreed by the tax authorities or before the inspection period of four years has elapsed. At December 31, 2015 the Entity has open to inspection by the tax authorities all main applicable taxes for the last four years. The administrators do not expect that any significant additional liabilities would arise in the event of inspection.
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15. Transactions and Balances with Group Companies and Associates In the years 2015 and 2014 there have been no related party transactions outside the Entity's normal operating (charges fees Patron members and benefit payments to partners and beneficiaries). The detail of the accounting balances and transactions maintained during 2015 and 2014 with group companies and associates is the following: (in thousand euros): Group and multigroup Balance Sheet 2015 2014 Shares in group companies and associates 42,219 42,195 Group and multigroup Profit & Loss Statement 2015 2014 Revenues from the investments - dividends 8 - The only significant transactions effected during this period with group companies and associates correspond to the collection of dividends distributed by those same companies that figure at the Appendix I of the current annual accounts. 16. Personnel Expenses The average headcount for 2015 and 2014, distributed by category, is as follows:
Average number
of employees 2015 2014 Managing director 1 1 Graduates 7 7 Administrative staff 11 11 19 19 La Distribution by gender of the governing board and personnel at December 31, 2015 and 2014 is as follows: 2015 2014 Male Female Total Male Female Total Governing board 19 7 26 19 7 26 Managing director - 1 1 - 1 1 Graduates 3 4 7 3 4 7 Administrative staff 1 10 11 1 10 11 23 22 45 23 22 45
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15. Transactions and Balances with Group Companies and Associates
In the years 2015 and 2014 there have been no related party transactions outside the Entity's normal operating (charges fees Patron members and benefit payments to partners and beneficiaries).
The detail of the accounting balances and transactions maintained during 2015 and 2014 with group companies and associates is the following: (in thousand euros):
Group and multigroupBalance Sheet 2015 2014Shares in group companies and associates 42,219 42,195
Group and multigroupProfit & Loss Statement 2015 2014Revenues from the investments - dividends 8 -
The only significant transactions effected during this period with group companies and associates correspond to the collection of dividends distributed by those same companies that figure at the Appendix I of the current annual accounts.
16. Personnel Expenses
The average headcount for 2015 and 2014, distributed by category, is as follows:
Average numberof employees
2015 2014Managing director 1 1Graduates 7 7Administrative staff 11 11
19 19
La Distribution by gender of the governing board and personnel at December 31, 2015 and 2014 is as follows:
2015 2014Male Female Total Male Female Total
Governing board 19 7 26 19 7 26Managing director - 1 1 - 1 1Graduates 3 4 7 3 4 7Administrative staff 1 10 11 1 10 11
23 22 45 23 22 45
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15. Transactions and Balances with Group Companies and Associates In the years 2015 and 2014 there have been no related party transactions outside the Entity's normal operating (charges fees Patron members and benefit payments to partners and beneficiaries). The detail of the accounting balances and transactions maintained during 2015 and 2014 with group companies and associates is the following: (in thousand euros): Group and multigroup Balance Sheet 2015 2014 Shares in group companies and associates 42,219 42,195 Group and multigroup Profit & Loss Statement 2015 2014 Revenues from the investments - dividends 8 - The only significant transactions effected during this period with group companies and associates correspond to the collection of dividends distributed by those same companies that figure at the Appendix I of the current annual accounts. 16. Personnel Expenses The average headcount for 2015 and 2014, distributed by category, is as follows:
Average number
of employees 2015 2014 Managing director 1 1 Graduates 7 7 Administrative staff 11 11 19 19 La Distribution by gender of the governing board and personnel at December 31, 2015 and 2014 is as follows: 2015 2014 Male Female Total Male Female Total Governing board 19 7 26 19 7 26 Managing director - 1 1 - 1 1 Graduates 3 4 7 3 4 7 Administrative staff 1 10 11 1 10 11 23 22 45 23 22 45
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A breakdown of this heading in the income statement for the years ended December 31, 2015 and 2014 is as follows: Thousand Euros 2015 2014 Salaries 847 822 Social Security contributions 211 205 Contributions to VSWE 16 15 1,074 1,042 Personnel expense at December 31, 2015 and 2014 has been recorded by destination in compliance with Basque Government’s Decree 86/2010. 17. Information on Environmental Issues During the year ended December 31, 2015 the Entity has not made any investments or incurred any expenses of an environmental nature, nor are any environment- related projects in progress. At December 31, 2015 the Entity considers that no significant contingencies exist concerning possible litigation, indemnities or other items connected with the environment and, accordingly, no provision has been made in this regard. The Entity has not received any environment-related income or grants during the year. 18. Information on the average supplier payment period. Additional Provision Three.
“Disclosure requirements” of Law 15/2010 of July 5. In accordance with final provision two of Law 31/2014, which amended additional provision three of Law 15/2010, which amended Law 3/2004, which established measures against delinquency on trade operations, in relation to the information to be disclosed in the notes to the annual accounts on the deferral of payment to suppliers on trade operations, calculated based on the Resolution of January 29, 2016 of the Institute of Accountants and Auditors. The information for 2015 is as follows:
2015 Days Average payment period to suppliers 1 Ratio of payments made 1 Ratio of pending payments - Thousand
euros Total payments made 1,520 Total pending payments 136
GEROA PENTSIOAK, ENTIDAD DE PREVISION SOCIAL VOLUNTARIA
A breakdown of this heading in the income statement for the years ended December 31,2015 and 2014 is as follows:
Thousand Euros2015 2014
Salaries 847 822Social Security contributions 211 205Contributions to VSWE 16 15
1,074 1,042
Personnel expense at December 31, 2015 and 2014 has been recorded by destination in compliance with Basque Government’s Decree 86/2010.
17. Information on Environmental Issues
During the year ended December 31, 2015 the Entity has not made any investments or incurred any expenses of an environmental nature, nor are any environment- related projects in progress.
At December 31, 2015 the Entity considers that no significant contingencies exist concerning possible litigation, indemnities or other items connected with the environment and, accordingly, no provision has been made in this regard.
The Entity has not received any environment-related income or grants during the year.
18. Information on the average supplier payment period. Additional Provision Three. “Disclosure requirements” of Law 15/2010 of July 5.
In accordance with final provision two of Law 31/2014, which amended additional provision three of Law 15/2010, which amended Law 3/2004, which established measures against delinquency on trade operations, in relation to the information to be disclosed in the notes to the annual accounts on the deferral of payment to suppliers on trade operations, calculated based on the Resolution of January 29, 2016 of the Institute of Accountants and Auditors. The information for 2015 is as follows:
2015Days
Average payment period to suppliers 1Ratio of payments made 1Ratio of pending payments -
Thousand euros
Total payments made 1,520Total pending payments 136
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As established in Additional Provision One of the Resolution of January 29, 2016 of the Institute of Accountants and Auditors, concerning the information to be disclosed in the notes to the annual accounts in relation to the average supplier payment period on trade operations, as this is the first year of application, comparative information is not presented and these annual accounts are considered to be initial accounts solely for the purposes of the principle of consistency and requirement of comparability. 19. Information Relating to the Members of the Governing Board and Other
Information At December 31, 2015 and 2014 members of the Governing Board had not accrued salaries, allowances and other remuneration, and not maintain with the Entity advances or loans balances. During fiscal 2015 the senior management (composed of 7 people) has accrued an amount of 464 thousand euros in compensation and contributions to voluntary social welfare entity (460 thousand euros in 2014). Also, at December 31, 2015 and 2014 the Entity had no obligations for pensions and life insurance with respect to current or former members of the Governing Board, nor has it on their own by way of security. 20. Compliance with regulations a) Decree 92/2007 of May 29, which regulates the exercise of certain activities
of EPSV On a proposal of the Basque Government’s Treasury, Public Administration and Justice and Employment and Social security departments it was published in the Official Bulletin of the Basque Country the Decree 92/2007 of May 29, and came into force the day after its publication. The intention of the Decree 92/2007 of May 29 is to develop the content of the Law 25/1983 of October 27, and its objective is that EPSVs and Welfare Plans provide a more effective framework, more solvent and rigorous for the benefit of the ordinary members and benefit recipients, through the development and regulation of certain matters. Transitional Provision 5 of the mentioned Decree established that compliance with the established in article 11 of Decree 92/2007, regarding financial investments was mandatory from January 1, 2010, which establishes that investments in assets must be done in compliance with certain criteria of safety, profitability, liquidity, diversification, dispersion, term and congruence. The Entity adopted the mentioned criteria established in this article on January 1, 2010. The main impacts of the Decree regarding accounting principles and valuation of investments are included in Article 11. Both at December 31, 2014 and at the date of on which these annual accounts have been prepared, the Entity complies with the obligations set out in Article 11.
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GEROA PENTSIOAK, ENTIDAD DE PREVISION SOCIAL VOLUNTARIA
As established in Additional Provision One of the Resolution of January 29, 2016 of the Institute of Accountants and Auditors, concerning the information to be disclosed in the notes to the annual accounts in relation to the average supplier payment period on trade operations, as this is the first year of application, comparative information is not presented and these annual accounts are considered to be initial accounts solely for the purposes of the principle of consistency and requirement of comparability.
19. Information Relating to the Members of the Governing Board and Other Information
At December 31, 2015 and 2014 members of the Governing Board had not accrued salaries, allowances and other remuneration, and not maintain with the Entity advances or loansbalances. During fiscal 2015 the senior management (composed of 7 people) has accrued an amount of 464 thousand euros in compensation and contributions to voluntary social welfare entity (460 thousand euros in 2014).
Also, at December 31, 2015 and 2014 the Entity had no obligations for pensions and life insurance with respect to current or former members of the Governing Board, nor has it on their own by way of security.
20. Compliance with regulations
a) Decree 92/2007 of May 29, which regulates the exercise of certain activities of EPSV
On a proposal of the Basque Government’s Treasury, Public Administration and Justice and Employment and Social security departments it was published in the Official Bulletin of the Basque Country the Decree 92/2007 of May 29, and came into force the day after its publication.
The intention of the Decree 92/2007 of May 29 is to develop the content of the Law 25/1983 of October 27, and its objective is that EPSVs and Welfare Plans provide a more effective framework, more solvent and rigorous for the benefit of the ordinary members and benefit recipients, through the development and regulation of certain matters.
Transitional Provision 5 of the mentioned Decree established that compliance with the established in article 11 of Decree 92/2007, regarding financial investments was mandatory from January 1, 2010, which establishes that investments in assets must be done in compliance with certain criteria of safety, profitability, liquidity, diversification, dispersion, term and congruence. The Entity adopted the mentioned criteria established in this article on January 1, 2010.
The main impacts of the Decree regarding accounting principles and valuation of investments are included in Article 11.
Both at December 31, 2014 and at the date of on which these annual accounts have been prepared, the Entity complies with the obligations set out in Article 11.
GEROA PENTSIOAK, ENTIDAD DE PREVISION SOCIAL VOLUNTARIA
67
As established in Additional Provision One of the Resolution of January 29, 2016 of the Institute of Accountants and Auditors, concerning the information to be disclosed in the notes to the annual accounts in relation to the average supplier payment period on trade operations, as this is the first year of application, comparative information is not presented and these annual accounts are considered to be initial accounts solely for the purposes of the principle of consistency and requirement of comparability. 19. Information Relating to the Members of the Governing Board and Other
Information At December 31, 2015 and 2014 members of the Governing Board had not accrued salaries, allowances and other remuneration, and not maintain with the Entity advances or loans balances. During fiscal 2015 the senior management (composed of 7 people) has accrued an amount of 464 thousand euros in compensation and contributions to voluntary social welfare entity (460 thousand euros in 2014). Also, at December 31, 2015 and 2014 the Entity had no obligations for pensions and life insurance with respect to current or former members of the Governing Board, nor has it on their own by way of security. 20. Compliance with regulations a) Decree 92/2007 of May 29, which regulates the exercise of certain activities
of EPSV On a proposal of the Basque Government’s Treasury, Public Administration and Justice and Employment and Social security departments it was published in the Official Bulletin of the Basque Country the Decree 92/2007 of May 29, and came into force the day after its publication. The intention of the Decree 92/2007 of May 29 is to develop the content of the Law 25/1983 of October 27, and its objective is that EPSVs and Welfare Plans provide a more effective framework, more solvent and rigorous for the benefit of the ordinary members and benefit recipients, through the development and regulation of certain matters. Transitional Provision 5 of the mentioned Decree established that compliance with the established in article 11 of Decree 92/2007, regarding financial investments was mandatory from January 1, 2010, which establishes that investments in assets must be done in compliance with certain criteria of safety, profitability, liquidity, diversification, dispersion, term and congruence. The Entity adopted the mentioned criteria established in this article on January 1, 2010. The main impacts of the Decree regarding accounting principles and valuation of investments are included in Article 11. Both at December 31, 2014 and at the date of on which these annual accounts have been prepared, the Entity complies with the obligations set out in Article 11.
GEROA PENTSIOAK, ENTIDAD DE PREVISION SOCIAL VOLUNTARIA
68
The Entity maintains both at December 31, 2015 and at the annual accounts preparation date certain assets not classified as suitable, as established in the Decree 92/2007 in the article 11.3. The Entity maintains in its portfolio, at December 31, 2015, 41,662 thousand euros worth non suitable assets (mainly investment funds which do not follow the European regulation UCIT). During the year 2015, the Entity has classified some ETFs with a 17,882 thousand euros value and some investment funds which follow the AIFMD regulation worth 20,689 thousand euros, as non-suitable assets by recommendation of the Basque Government, as they do not follow the UCIT mentioned regulation. On October 29, 2009, the entity required the Economy and Treasury Department of the Basque Government the authorization for the maintenance in its portfolio of those assets, based on the possible damage that could cause the disinvestments to the shareholders, obtaining on December 17, 2009 the resolution by the Finance Department of the Basque Government, by which they authorized an extended deadline for the modifications to the portfolio of the Entity to the criteria’s in the article 11.3 of the Decree 92/2007. Nevertheless, the Entity cannot do any buying operation of non-suitable assets and will have to communicate quarterly to the Finance Department of the Basque Government the Balance of the mentioned assets. b) Order of April 29, 2009, from the Counselor of Finance and Public Administration. Through the Order of April 29, 2009 from the Counselor of Finance and Public Administration, certain aspects of the Decree 92/2007 are developed. This Order focuses on three areas: The existence of a proper segregation in the allocation of rights and obligations to the
different activities that can be performed by the EPSV. The development of those subjects related to the normal operations of the EPSVs in
which exists a higher risk due to the use of certain financial instruments.
Development of the transparency of the EPSVs. At December 31, 2015 and on the date of the formulation of the accounts the Entity carries out with the duties in the Order of April 29, 2009 except for certain assets not qualified as suitable, as it established the 9th article of the above Order. The Entity keeps at December 31, 2015 in its portfolio, structured financial assets with a lower rating to the established one by the mentioned article by a value in book of 100 thousand euro. Furthermore, the Entity maintains both at December 31, 2015 and at the preparation date of these annual accounts, three financial structured assets with a total book value of 10,051 thousand euros, with A rating awarded by the rating agency DBRS for two of them and by the rating agency EGAN for the last one.
GEROA PENTSIOAK, ENTIDAD DE PREVISION SOCIAL VOLUNTARIA
The Entity maintains both at December 31, 2015 and at the annual accounts preparation date certain assets not classified as suitable, as established in the Decree 92/2007 in the article 11.3. The Entity maintains in its portfolio, at December 31, 2015, 41,662 thousand euros worth non suitable assets (mainly investment funds which do not follow the European regulation UCIT). During the year 2015, the Entity has classified some ETFs with a 17,882 thousand euros value and some investment funds which follow the AIFMD regulation worth 20,689 thousand euros, as non-suitable assets by recommendation of the Basque Government, as they do not follow the UCIT mentioned regulation.
On October 29, 2009, the entity required the Economy and Treasury Department of the Basque Government the authorization for the maintenance in its portfolio of those assets, based on the possible damage that could cause the disinvestments to the shareholders, obtaining on December 17, 2009 the resolution by the Finance Department of the Basque Government, by which they authorized an extended deadline for the modifications to the portfolio of the Entity to the criteria’s in the article 11.3 of the Decree 92/2007. Nevertheless, the Entity cannot do any buying operation of non-suitable assets and will have to communicate quarterly to the Finance Department of the Basque Government the Balance of the mentioned assets.
b) Order of April 29, 2009, from the Counselor of Finance and Public Administration.
Through the Order of April 29, 2009 from the Counselor of Finance and Public Administration, certain aspects of the Decree 92/2007 are developed.
This Order focuses on three areas:
The existence of a proper segregation in the allocation of rights and obligations to the different activities that can be performed by the EPSV.
The development of those subjects related to the normal operations of the EPSVs in which exists a higher risk due to the use of certain financial instruments.
Development of the transparency of the EPSVs.
At December 31, 2015 and on the date of the formulation of the accounts the Entity carries out with the duties in the Order of April 29, 2009 except for certain assets not qualified as suitable, as it established the 9th article of the above Order. The Entity keeps at December 31, 2015 in its portfolio, structured financial assets with a lower rating to the established one by the mentioned article by a value in book of 100 thousand euro.
Furthermore, the Entity maintains both at December 31, 2015 and at the preparation date of these annual accounts, three financial structured assets with a total book value of 10,051 thousand euros, with A rating awarded by the rating agency DBRS for two of them and by the rating agency EGAN for the last one.
112 113
GEROA PENTSIOAK, ENTIDAD DE PREVISION SOCIAL VOLUNTARIA
69
21. Statement of the coverage of underwriting reserves and Statement of the solvency margin
In accordance with current legislation, voluntary pension activities that assume coverage of biometric risks must have uncommitted equity (or solvency margin) in each financial year that is established at 4% of the mathematical reserve. Reinsured pension plans do not require any solvency margin In addition, the assets associated to that coverage must exceed the underwriting reserves. The statement of underwriting reserve coverage at December 31, 2015 and 2014 is as follows: Thousand Euros 2015 2014 Mathematical reserve 78,197 69,136 Assets associated with coverage of the mathematical reserve 79,197 69,136 Surplus/(Deficit) - - The calculations carried out by the Entity for 2015 and 2014 regarding the Statement of the solvency margin are presented below: Thousand Euros Item 2015 2014 Mutual Fund (Note 10) 15.911 15.911 Reserves - Reserve for actuarial risks (Note 10) 15.849 14.678 Reserves – Voluntary Reserves 4.071 - Reserves - Reserve for actuarial risks Susprus for the year to be allocated (Note 4)
(7.460) 1.171
Reserves – Voluntary Reserves – Distribution of surplus pending (Note 4) 1.212 4.071 29,583 35,831 Underwriting reserves associated with solvency 71,887 63,390 Uncommitted equity (or solvency margin) represents 41.15% of the actuarial commitment (56.52% at December 31, 2014). 22. Other information Fees received by PricewaterhouseCoopers Auditores, S.L. for the audit services of the 2014 financial statements of the Entity amounted to €28k and €27k in 2015 and 2014, respectively. No fees for other services were charged in 2015 and 2014 by PricewaterhouseCoopers Auditores, S.L. or companies linked to it.
112
GEROA PENTSIOAK, ENTIDAD DE PREVISION SOCIAL VOLUNTARIA
21. Statement of the coverage of underwriting reserves and Statement of the solvency margin
In accordance with current legislation, voluntary pension activities that assume coverage of biometric risks must have uncommitted equity (or solvency margin) in each financial year that is established at 4% of the mathematical reserve. Reinsured pension plans do not require any solvency margin
In addition, the assets associated to that coverage must exceed the underwriting reserves.
The statement of underwriting reserve coverage at December 31, 2015 and 2014 is as follows:
Thousand Euros2015 2014
Mathematical reserve 78,197 69,136Assets associated with coverage of the mathematical reserve 79,197 69,136Surplus/(Deficit) - -
The calculations carried out by the Entity for 2015 and 2014 regarding the Statement of the solvency margin are presented below:
Thousand EurosItem 2015 2014Mutual Fund (Note 10) 15.911 15.911Reserves - Reserve for actuarial risks (Note 10) 15.849 14.678Reserves – Voluntary Reserves 4.071 -Reserves - Reserve for actuarial risks Susprus for the year to be allocated (Note 4)
(7.460) 1.171
Reserves – Voluntary Reserves – Distribution of surplus pending(Note 4) 1.212 4.071
29,583 35,831
Underwriting reserves associated with solvency 71,887 63,390
Uncommitted equity (or solvency margin) represents 41.15% of the actuarial commitment (56.52% at December 31, 2014).
22. Other information
Fees received by PricewaterhouseCoopers Auditores, S.L. for the audit services of the 2014financial statements of the Entity amounted to €28k and €27k in 2015 and 2014, respectively.
No fees for other services were charged in 2015 and 2014 by PricewaterhouseCoopersAuditores, S.L. or companies linked to it.
112 113
GEROA PENTSIOAK, ENTIDAD DE PREVISION SOCIAL VOLUNTARIA
69
21. Statement of the coverage of underwriting reserves and Statement of the solvency margin
In accordance with current legislation, voluntary pension activities that assume coverage of biometric risks must have uncommitted equity (or solvency margin) in each financial year that is established at 4% of the mathematical reserve. Reinsured pension plans do not require any solvency margin In addition, the assets associated to that coverage must exceed the underwriting reserves. The statement of underwriting reserve coverage at December 31, 2015 and 2014 is as follows: Thousand Euros 2015 2014 Mathematical reserve 78,197 69,136 Assets associated with coverage of the mathematical reserve 79,197 69,136 Surplus/(Deficit) - - The calculations carried out by the Entity for 2015 and 2014 regarding the Statement of the solvency margin are presented below: Thousand Euros Item 2015 2014 Mutual Fund (Note 10) 15.911 15.911 Reserves - Reserve for actuarial risks (Note 10) 15.849 14.678 Reserves – Voluntary Reserves 4.071 - Reserves - Reserve for actuarial risks Susprus for the year to be allocated (Note 4)
(7.460) 1.171
Reserves – Voluntary Reserves – Distribution of surplus pending (Note 4) 1.212 4.071 29,583 35,831 Underwriting reserves associated with solvency 71,887 63,390 Uncommitted equity (or solvency margin) represents 41.15% of the actuarial commitment (56.52% at December 31, 2014). 22. Other information Fees received by PricewaterhouseCoopers Auditores, S.L. for the audit services of the 2014 financial statements of the Entity amounted to €28k and €27k in 2015 and 2014, respectively. No fees for other services were charged in 2015 and 2014 by PricewaterhouseCoopers Auditores, S.L. or companies linked to it.
GEROA PENTSIOAK, ENTIDAD DE PREVISION SOCIAL VOLUNTARIA
70
23. Subsequent events There have been no significant events subsequent to December 2015 that may affect the content of the annual accounts of the Entity and that have not been reported in these financial statements.
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GEROA PENTSIOAK, ENTIDAD DE PREVISION SOCIAL VOLUNTARIA
23. Subsequent events
There have been no significant events subsequent to December 2015 that may affect the content of the annual accounts of the Entity and that have not been reported in these financial statements.
114 115
GER
OA
PENT
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114
GER
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AK, E
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114 115