4. Information and communication

Information on the main features if at least the following exist:

4.1. A specific function in charge of defining and updating accounting policies (accounting policies area or department) and of settling doubts or conflicts arising from the construction thereof, which is in regular communication with those in charge of operations within the organization as well as an updated manual on accounting policies disclosed to the units through which the entity operates.

The External Reporting area within the Planning and Management Control Department is responsible for drafting, publishing, implementing and updating the Manual of Accounting Policies of the Group. Such area has, among others, the following duties associated with accounting policies:

  • Defining the accounting treatment of the transactions which make up the business of the Group.
  • Defining and updating the accounting practices of the Group.
  • Addressing accounting doubts raised by any company of the Group.
  • Standardizing the accounting practices of the Group.

Such manual covers transactions inherent in the Groups’ business and their accounting treatment in accordance with the Group’s benchmark accounting framework.

The manual is regularly updated. For such updating procedure, the Consolidation and Reporting area includes all accounting changes arisen during the financial year which were already advanced to those in charge of drafting the financial statements.

The manual and the remaining documentation are available on the corporate intranet.

A process to update the manual was initiated in financial year 2014, and the addition of a great number of case studies is noted.

4.2. Mechanisms for the capture and preparation of financial information in standard format, which are enforced and used by all the units of the company or the Group, supporting the main financial statements and the notes thereto, as well as the disclosure concerning SCIIF.

The process for consolidation and preparation of consolidated financial statements is centralized, falling on the External Reporting area which reports to the Planning and Management Control Department.

The Group relies on IT systems for the drafting of financial information of individual companies, which on the one hand allow the automatic recording of the different transactions, with the standard configuration of individual financial statements of each company within the Group, and on the other hand, provides the information required to draft the consolidated financial statements.

In this respect, for the purposes of reporting financial information, the subsidiaries of the Group use SAP BPC tool wherein the individual financial statements are automatically included. Contemporaneously, transactions and inter-group balances are reconciled through another IT tool. The remaining part of the consolidation process (removal, adjustment, etc.,) is carried out through SAP BPC.

Financial information reported to CNMV is drafted based upon consolidated financial statements gathered through the above-referred tool, and based upon certain supplementary information reported by the subsidiaries, required to prepare the annual/half-year report. Contemporaneously, certain specific controls are exerted to confirm integrity of such information.