RUBIS_REGISTRATION_DOCUMENT_2017

FINANCIAL STATEMENTS 9

2017 consolidated financial statements and notes

4.9 STOCK OPTIONS AND BONUS SHARES

ACCOUNTING POLICIES IFRS 2 provides for payroll expenses to be recognized for services remunerated by benefits granted to employees in the form of share- based payments. These services are carried at fair value of the instruments awarded. All the plans granted by the Group are in the form of instruments settled in shares; the payroll expense is offset in shareholders’ equity. Stock option plans Stock options are granted to certain members of the Rubis Group personnel. These options are valued at fair value on the grant date, using a binomial model (Cox Ross Rubinstein). This model takes into account the plan’s characteristics (exercise price, exercise period) and market data at the time of attribution (risk-free rate, share price, volatility, expected dividends). This fair value on the grant date is recognized as payroll expenses, on a straight-line basis over the vesting period, offset against shareholders’ equity. Free share awards Free share plans are also granted to some members of the Rubis Group personnel. These free share awards are valued at fair value on the grant date, using a binomial model. The valuation is based, in particular, on the share price on the grant date, taking into account the absence of dividends during the vesting period. This fair value on the grant date is recognized as payroll expenses, on a straight-line basis over the vesting period, offset against shareholders’ equity. Preferred share awards Preferred share plans are also granted to some members of the Rubis Group personnel. These preferred share awards are valued at fair value on the grant date, using a binomial model. The valuation is based, in particular, on the share price on the grant date, taking into account the vesting period, the absence of dividends and conditions relating to the Average Annual Overall Rate of Return (AAORR) of the Rubis share. This fair value on the grant date is recognized as payroll expenses, on a straight-line basis over the vesting period, offset against shareholders’ equity. Company savings plans The Group has set up several company savings plans for its employees. These plans provide employees with the possibility of subscribing to a reserved capital increase at a discounted share price. The plans comply with the conditions of application of share purchase plans (French National Accounting Council statement dated December 21, 2004). The fair value of each share is then estimated as corresponding to the variance between the share price on the plan grant date and the subscription price. The share price is nonetheless adjusted to take into account the unavailability of the share for 5 years, based on the variance between the risk-free rate on the grant date and the interest rate of an ordinary 5-year consumer loan. In the absence of vesting period, the payroll expense is recognized directly against shareholders’ equity. The expense corresponding to the Company contribution granted to employees is also recognized in the income statement under payroll expenses.

A €6,681 thousand expense for stock options, free shares, and company savings plans was recognized under “Payroll expenses” in 2017.

2017 Registration Document I RUBIS

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