ANNUAL REPORT
Original perspective

VISCOFAN, S.A.

Financial Statements

for the year ended

December 31, 2015

(Free translation from the original in Spanish, in the event of discrepancy, the Spanish-language version prevails)

VISCOFAN, S.A.

Balance sheet at December 31, 2015

(Thousands of euros)

ASSETS

Notes 2015 2014
NON-CURRENT ASSETS 423,448 406,971
Intangible assets 5 6,603 6,245
Concession rights 845 1,070
Software 3,929 4,312
Other intangible assets 1,829 863
Property, plant, and equipment 6 69,626 68,520
Land and buildings 12,431 13,522
Plant and other PP&E items 56,749 51,160
Property, plant, and equipment under construction and prepayments 446 3,838
Investment in group companies and associates 7 345,403 329,475
Equity instruments 345,403 329,475
Financial investments 8 182 132
Equity instruments 134 84
Other financial assets 48 48
Deferred tax assets 17 1,634 2,599
CURRENT ASSETS 96,304 83,464
Non-current assets held for sale 9 - 15,602
Inventories 10 24,948 20,275
Commercial inventories 5,171 2,808
Raw materials and other consumables 7,748 6,531
Work in progress 5,605 5,499
Finished products 6,424 5,437
Trade and other receivables 46,607 41,914
Trade receivables 8 18,480 21,847
Trade receivables from group companies and associates 8 24,346 14,032
Other receivables 8 47 90
Receivable from employees 8 56 84
Current income tax assets 17 - 1,722
Other receivables from public administrations 17 3,678 4,139
Investments in group companies and associates 8 6,964 5,222
Loans to companies 6,811 5,032
Other financial assets 153 190
Investments 8 2 -
Other financial assets 2 -
Accruals 142 142
Cash and cash equivalents 11 17,641 309
Cash 17,641 309
TOTAL ASSETS 519,752 490,435

VISCOFAN, S.A,

Balance sheet at December 31, 2015

(Thousands of euros)

EQUITY AND LIABILITIES Notes 2015 2014
EQUITY 432,520 383,898
CAPITAL AND RESERVES 432,763 386,736
Share capital 12.1 32,623 32,623
Issued capital 32,623 32,623
Share Premium 12.2 12 12
Reserves 12.3 320,359 307,217
Legal and statutory reserves 6,525 6,525
Other reserves 313,834 300,692
Profit for the year 3 104,003 67,856
Interim dividend 3.1 (24,234) (20,972)
UNREALIZED GAINS (LOSSES) RESERVE 13.1 (2,242) (3,892)
Hedging instruments (2,242) (3,892)
GRANTS, DONATIONS, AND LEGACIES 13.2 1,999 1,054
NON-CURRENT LIABILITIES 40,448 43,656
Borrowings 16 33,610 37,723
Payable to credit institutions 16.1 22,750 26,000
Finance leases 16.1 42 125
Hedging instruments 14 177 682
Other financial liabilities 16.2 10,641 10,916
Borrowings from group companies and associates 16 4,500 4,500
Deferred tax liabilities 17 2,338 1,433
CURRENT LIABILITIES 46,784 62,881
Provisions 15 1,442 893
Borrowings 16 13,457 29,842
Bank borrowings 16.1 4,274 20,087
Finance leases 16.1 83 81
Hedging instruments 14 3,217 5,009
Other financial liabilities 16.2 5,883 4,665
Payables to group companies and associates 16 5,109 10,155
Trade and other payables 26,776 21,991
Suppliers 16.2 6,834 2,789
Suppliers, group companies, and associates 16.2 1,405 1,933
Other payables 16.2 7,163 5,700
Employee benefits payable 16.2 1,909 1,996
Current tax liabilities 17 2,022 2,901
Other payables to public administrations 17 6,697 6,119
Customer advances 16.2 746 553
TOTAL EQUITY AND LIABILITIES 519,752 490,435

VISCOFAN, S.A,

Income statement for the year ended December 31, 2015

(Thousands of euros)

Notes 2015 2014
CONTINUING OPERATIONS
Revenue 18.1 181,726 175,802
Sale of goods 181,166 175,374
Rendering of services 560 428
Changes in inventory of finished goods and work in progress

1,093 (1,445)
Work performed by the entity and capitalized 252 253
Cost of sales (76,314) (75,081)
Consumption of goods for resale 18.2 (15,276) (14,712)
Consumption of raw materials and other consumables 18.2 (60,906) (60,009)
Impairment of goods for resale, raw materials, and other consumables 10 (132) (360)
Other operating income 12,322 10,348
Ancillary income 11,726 9,977
Grants related to income 13.2 596 371
Employee benefits expense (40,167) (37,763)
Wages, salaries, et al (31,308) (29,517)
Social security costs, et al 18.3 (8,859) (8,246)
Other operating expenses (44,013) (41,974)
External services 18.4 (39,635) (37,613)
Taxes (2,867) (2,839)
Losses on, impairment of, and change in trade provisions 8.1 (69) (629)
Other operating expenses 5.1 & 15 (1,442) (893)
Depreciation and amortization 5 & 6 (12,284) (12,000)
Grants related to non-financial assets and other grants 13.2 509 276
Impairment gains (losses) on disposal of non-current assets

3 (194)
Impairment gains and losses 6 2 2
Gains (losses) on disposals 1 (196)
OPERATING PROFIT 23,127 18,222
Finance income 46,874 54,353
From equity investments 7.1 46,548 54,033
In group companies and associates 46,548 54,033
From marketable securities and other financial instruments 326 320
Of group companies and associates 216 234
Of third parties 110 86
Finance costs 18.5 (1,014) (1,500)
On borrowings from group companies and associates (84) (316)
Third-party borrowings (930) (1,184)
Exchange gains (losses) (173) 200
Impairment gains (losses) on disposal of financial assets 9 39,316 -
Gains (losses) on disposals 39,316
FINANCE INCOME 85,003 53,053
PROFIT BEFORE TAX 108,130 71,275
Income tax 17.1 (4,127) (3,419)
PROFIT FOR THE PERIOD FROM CONTINUING OPERATIONS 104,003 67,856
DISCONTINUED OPERATIONS
Profit (loss) after tax for the year from discontinued operations - -
PROFIT FOR THE YEAR 3 104,003 67,856

VISCOFAN, S.A,

Statement of changes in equity for the year ended December 31, 2015

(Thousands of euros)

A)Statement of recognized income and expenses for the year ended December 31, 2015

Notes 2015 2014
PROFIT FOR THE PERIOD 104,003 67,856
INCOME AND EXPENSE RECOGNIZED DIRECTLY IN EQUITY
From measurement of financial instruments - -
Available-for-sale financial assets - -
Other income/expense - -
From cash flow hedges 13.1 (3,114) (5,190)
Grants, donations, and bequests received 13.2 2,879 260
Tax effect 69 1,290
TOTAL INCOME AND EXPENSE RECOGNIZED DIRECTLY IN EQUITY (166) (3,640)
AMOUNTS TRANSFERRED TO INCOME STATEMENT
From measurement of financial instruments - -
Available-for-sale financial assets - -
Other income/expense - -
From cash flow hedges 13.1 5,190 (36)
Grants, donations, and bequests received 13.2 (1,508) (613)
Tax effect (921) 195
TOTAL AMOUNTS TRANSFERRED TO INCOME STATEMENT 2,761 (454)
TOTAL RECOGNIZED INCOME AND EXPENSE 106,598 63,762

VISCOFAN, S.A,

Statement of changes in equity for the year ended December 31, 2015

(Thousands of euros)

B)Statement of all changes in equity for the year ended December 31, 2015

Issued

capital

(Note 12.1)

Share premium (Note 12.2) Reserves (Note 12.3) Profit

for the year (Note 3)

Interim dividend (Note 3) Net unrealized gains (losses) reserve

(Note 13.1)

Grants, donations, and bequests received

(Note 13.2)

TOTAL
BALANCE AT DECEMBER 31, 2013 32,623 12 286,444 72,689 (19,108) 25 1,231 373,916
Total recognized income and expense - - - 67,856 - (3,917) (177) 63,762
Transactions with shareholders and owners
Dividends paid - - - (51,916) (1,864) - - (53,780)
Other changes in equity
Transfers between equity accounts - - 20,773 (20,773) - - - -
BALANCE AT DECEMBER 31, 2014 32,623 12 307,217 67,856 (20,972) (3,892) 1,054 383,898
Total recognized income and expense - - - 104,003 - 1,650 945 106,598
Transactions with shareholders and owners
Dividends paid - - - (54,714) (3,262) - - (57,976)
Other changes in equity
Transfers between equity accounts - - 13,142 (13,142) - - - -
BALANCE AT DECEMBER 31, 2015 32,623 12 320,359 104,003 (24,234) (2,242) 1,999 432,520

VISCOFAN, S.A,

Cash flow statement for the year ended December 31, 2015

(Thousands of euros)

Notes 2015 2014
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax 108,130 71,275
Adjustments to profit (72,745) (38,975)
Depreciation and amortization 5 & 6 12,284 12,000
Impairment losses 6, 8.1, & 10 505 1,137
Changes in provisions 431 -
Grants released to income 13.2 (509) (276)
Results on disposal of property, plant, and equipment (1) 196
Results on disposals of financial instruments (39,316) -
Finance income (46,874) (54,353)
Finance costs 18.5 1,014 1,500
Exchange gains (losses) 173 (200)
Other interest and expenses (452) 1,021
Change in working capital (6,554) (9,139)
Inventories (5,112) 718
Trade and other receivables (6,759) (5,418)
Other current assets - (37)
Trade and other payables 5,523 (4,474)
Other current liabilities (206) 72
Other cash flows from operating activities 43,765 51,532
Interest paid (806) (1,489)
Dividends received 46,585 54,033
Interest received 251 320
Income tax receipts (payments) (2,265) (1,332)
Cash flow from operating activities 72,596 74,693
CASH FLOWS FROM INVESTING ACTIVITIES
Payments on investments (35,502) (30,833)
Group and associates (22,559) (15,239)
Intangible assets (1,890) (1,423)
Property, plant, and equipment (11,002) (14,171)
Other financial assets (51) -
Proceeds from disposals 59,919 16,968
Group companies and associates 59,918 11,897
Property, plant, and equipment 1 12
Other financial assets - 5,059
CASH FLOWS FROM INVESTING ACTIVITIES 24,417 (13,865)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from/(payments on) equity instruments 1,880 -
Grants, donations, and bequests received 13.2 1,880 -
Proceeds from and payments of financial liabilities (23,586) (7,537)
Issues
Bank borrowings - 15,283
Accounts payable to group companies and associates 5,000 -
Other borrowings 1,692 1,899
Repayment and redemption of
Bank borrowings (19,057) (1,309)
Borrowings from group companies and associates (10,000) (22,493)
Other borrowings (1,221) (917)
Dividends paid and payments on other equity instruments

(57,975)

(53.780)

Dividends (57,975) (53.780)
CASH FLOWS FROM FINANCING ACTIVITIES (79,681) (61.317)
NET FOREIGN EXCHANGE DIFFERENCE - -
NET INCREASE/DECREASE IN CASH AND CASH EQUIVALENTS 17,332 (489)
Cash and cash equivalents at January 1 309 798
Cash and cash equivalents at December 31 17.641 309

VISCOFAN, S.A.

Notes to the financial statements for the year ended December 31, 2015

1.ACTIVITY

Viscofan, S.A. (hereinafter the Company) was incorporated with limited liability on October 17, 1975 under the name of Viscofan, Industria Navarra deEnvolturas Celulósicas, S.A. At their general meeting held on June 17, 2002, the shareholders agreed to change the name of the Company to the current one.

It is mainly devoted to manufacturing all types of artificial sausage casings and other applications, and to a lesser degree, the production ofco-generated electricity for sale to third parties. Its industrial facilities are located in Caseda and Urdiain (Navarra). Its main offices and address arelocated at Polígono Industrial Berroa, Calle Berroa 15- 4ª planta, 31192 Tajonar (Navarra).

The Company is the parent of a group of companies (“the Viscofan Group” or “the Group”), and chiefly carry out their activities in the food and cellulose,plastic, fiber, and collagen casings business.

The entirety of Viscofan S.A.'s shares have been listed since 1986, and are quoted on the Spanish electronic trading platform (continuous market).

2. BASIS OF PRESENTATION OF THE FINANCIAL STATEMENTS

The financial statements have been prepared in accordance with the new accounting principles approved by Royal Decree 1514/2007 of November 16, amended byRoyal Decree 1159/2010, of September 17, and prevailing mercantile law.

These financial statements have been prepared by the directors of the company and will be submitted for approval by the shareholders in general meetingwithin the periods established by prevailing legislation. The directors of the Company consider that no significant changes will be made to the 2015financial statements as a result of these meetings.

The directors have prepared the 2015 financial statements separately, applying the international financial reporting standards adopted by the EuropeanUnion (IFRS-EU).

The figures shown in these financial statements are presented in thousands of euros unless otherwise indicated.

2.1 True and fair view

The accompanying financial statements have been prepared from the Company's auxiliary accounting records in accordance with prevailing accountinglegislation to give a true and fair view of its equity, financial position, and results. The cash flow statement has been prepared to present fairly theorigin and usage of monetary assets such as cash and cash equivalents.

2.2 Comparison of information

In compliance with Spanish mercantile law, for comparative purposes for each of the headings presented in the balance sheet, the income statement, thestatement of changes in equity, the cash flow statement, and in the Notes thereto, in addition to the figures for 2015, those of 2014 have been included.The Notes likewise contain quantitative information from 2014, unless an accounting standard specifically states that this is not required.

In accordance with the terms of the single additional provision of the Resolution of the Institute of Accounting and Auditors of Accounts on information tobe included in notes to the financial statements regarding the average period for making payments to suppliers, the Company has decided to apply the draftresolution, and therefore, in accordance with the terms outlined in the first additional provision, will only present the information for the year, ratherthan comparative information; therefore, these are considered first-time consolidated financial statements for these exclusive effects, with regard to theapplication of the uniformity principle and the comparability requirement.

2.3 Critical issues concerning the assessment of uncertainty

The directors have prepared the financial statements using estimates to determine the carrying amount of certain assets, liabilities, income and expenses,and for the breakdown of contingent liabilities. These estimates were made based on the best information available at year end. However, given theuncertainty inherent in them, events may occur in the future which require prospective adjustments.

3. APPROPRIATION OF PROFIT

The appropriation of 2015 profit proposed by the directors is expected to be approved by the shareholders in general meeting and is broken down as follows:

(Thousands of euros) 2015
Proposed appropriation
Profit for the year 104,003
104,003
Appropriation to
Other reserves 41,554
Dividends (*) 62,449
104,003

(*) This figure includes the interim dividend paid at December 29, 2015, amounting to 24,234 thousand euros (Note 3.1).

3.1 Interim dividend

On December 17, 2015, the Board of Directors approved an interim dividend against 2015 profit of 24,234 thousand euros based on profit projections for theperiod. This dividend was paid on December 29, 2015. The amount paid is less than the maximum limit established by prevailing legislation relating todistributable prior year profit.

The following table shows the provisional statement issued by the directors to substantiate that the Company has sufficient liquidity to distribute thisdividend:

(Thousands of euros)
Available cash at December 11, 2015 23,750
Cash flows from/(used in) operating activities
Trade and other receivables 192,411
Other income 274
Accounts payable and suppliers (120,934)
Payments made to employees (41,323)
Interest paid (1,063)
Other payments (8,050)
Cash flow related to investment activities
Dividends 58,330
Purchases of property, plant, and equipment (22,000)
Cash flow related to financing activities
Repayment of non-current borrowings (6,085)
Dividends paid (62,449)
Projected liquidity at December 11, 2016 12,861

3.2 Limitations on the distribution of dividends

The Company is obliged to transfer 10% of the profit for the year to a legal reserve until this reserve reaches an amount at least equal to 20% of sharecapital. Unless the balance of the reserve exceeds this amount, it cannot be distributed to shareholders but can only be utilized to offset losses shouldthere not be any corresponding reserves available. This reserve can equally be used to increase capital by the amount exceeding 10% of the new capitalafter the increase. The legal reserve had been fully set aside at December 31, 2015 (Note 12.3).

Once the legal and company bylaw requirements have been met, dividends may only be distributed against profit for the year or freely distributablereserves, if the value of equity is not lower than share capital or would not become lower than share capital as a result of distributing dividends.Accordingly, profit recognized directly in equity cannot be directly or indirectly distributed. Where losses exist from previous years that reduce theCompany’s equity to below the amount of share capital, profit must be allocated to offset these losses.

4. RECOGNITION AND MEASUREMENT ACCOUNTING POLICIES

The main recognition and measurement accounting policies applied in the preparation of these financial statements are the following:

4.1 Intangible assets

Intangible assets are initially measured at either acquisition or production cost.

Following initial measurement, they are stated at cost less accumulated amortization and any impairment loss.

The Company assesses the intangible asset’s useful life to be either finite or indefinite. At December 31, 2015 all the Company’s assets had a finiteuseful life.

Intangible assets having finite useful lives are amortized on a straight-line basis over their remaining estimated useful lives and residual value.Amortization methods and periods are reviewed at year end and adjusted prospectively where applicable. Intangible assets are tested for impairment at leastat year end and are written down where applicable.

Concession rights

Concession rights are recognized at the cost incurred, and are amortized over the ten-year period during which they are put to use.

Software

“Software” is recorded at the costs incurred and amortized on a straight-line basis over the useful life of the asset (five years).

Expenses for repairs which do not prolong the useful life of the assets, as well as expenses for maintenance, are taken to the income statement in the yearincurred.

CO2 emission rights

Greenhouse gas emission rights assigned or acquired for consumption during the Company's production process are initially recognized at acquisition cost asa non-amortizable intangible asset. When rights are acquired without payment of any consideration or at an amount substantially lower than their marketvalue, income is directly recognized in equity at the beginning of the natural year to which the rights correspond. Subsequently, these amounts recognizedin equity will be taken to the income statement as expenses recognized for the emissions associated with the rights received accrue.

Emission rights are subject to any impairment loss adjustments that may be necessary. These emission rights are eliminated from the balance sheet when theyare sold or delivered to third parties, or have expired.

Emission rights acquired with the intention of reselling them are accounted for in accordance with the criteria established in the accounting andmeasurement standard on inventories in the Spanish GAAP.

4.2 Property, plant, and equipment

Property, plant, and equipment are initially measured at either acquisition or production cost, revalued up to 2013, in accordance with prevailinglegislation, net of the corresponding accumulated depreciation.

Following initial measurement, PP&E items are stated at cost less accumulated depreciation and any recognized impairment loss.

The cost of assets acquired or produced subsequent to January 1, 2008, with installation periods exceeding one year, includes financial expenses accruedprior to putting the assets to use when these expenses meet capitalization requirements.

Expenses for repairs which do not prolong the useful life of the assets, as well as maintenance expenses, are taken to the income statement in the yearincurred. Expenses incurred for expansion or improvements which increase the productivity or prolong the useful life of the asset are capitalized as anincrease in the value of the item.

When available for use, PP&E items are depreciated on a straight-line basis over their estimated useful lives.

The estimated useful lives of PP&E items at year end 2015 and 2014 are as follows:

Useful lives
Buildings 30 years
Plant and machinery 10 years
Furniture 10 years
Other PP&E items 5-15 years

The Company reviews the assets’ residual value, useful lives, and depreciation methods at year end and adjusts them prospectively where applicable.

4.3 Impairment of non-financial assets

The Company assesses at each year end whether there is an indication that a non-current asset or, where applicable, a cash-generating unit may be impaired.If any indication of impairment exists, the Company estimates the asset’s recoverable amount.

The recoverable amount is the higher of the cash-generating unit’s (CGU) fair value less cost to sell and value in use. When the carrying amount of anasset or CGU exceeds its recoverable amount, the asset is considered impaired. To assess value in use, expected future cash flows are discounted to theirpresent value using risk free market rates, adjusted by the risks specific to the asset. For those assets that do not generate cash inflows that arelargely independent of those from other assets or groups of assets, the recoverable amount is determined for the cash-generating units to which the assetbelongs.

Impairment loss and its reversion are recognized in the income statement. Impairment loss is reversed only if the circumstances giving rise to it haveceased to exist. The reversal is limited to the carrying amount that would have been determined had no impairment loss been recognized.

4.4 Leases

Leases are considered to be financial leases when, based on the economic terms of the arrangement, all risks and rewards incidental to ownership of theleased item are substantially transferred to the Company. All other lease arrangements are classified as operating leases.

Assets acquired under financial lease arrangements are recognized, based on their nature, at the fair value of the leased item or, if lower, the presentvalue at the commencement of the lease of the minimum lease payments. A financial liability is recorded for the same amount. Lease payments are apportionedbetween finance charges and reduction of the lease liability. These assets are depreciated, impaired, and derecognized using the same criteria applied toassets of a similar nature.

Operating lease payments are recognized as expenses in the income statement when accrued.

4.5 Financial assets

Recognition and measurement

Loans and receivables

The Company recognizes trade and non-trade receivables in this category, which includes financial assets with fixed or determinable payments not quoted onactive markets and for which the Company expects to recover the full initial investment, except, where applicable, in cases of credit deterioration.

Upon initial recognition in the balance sheet, they are recognized at fair value, which, unless there is evidence to the contrary, is the transactionprice, which is equivalent to the fair value of the consideration paid plus directly attributable transaction costs.

Following initial recognition, these financial assets are measured at amortized cost.

Nevertheless, non-trade receivables which mature within less than one year with no contractual interest rate, as well as advances and loans to personnel,receivable dividends and called-up payments on equity instruments, the amount of which is expected in the short term, are carried at nominal value both atinitial and subsequent measurement, when the effect of not discounting cash flows is not significant.

Investments in group companies, joint ventures, and associates

This category includes investments in companies in which the entity exercises control, joint control via company bylaw requirements or contractualarrangement, or has significant influence.

Upon initial recognition in the balance sheet, they are recognized at fair value, which, unless there is evidence to the contrary, is the transactionprice, which is equivalent to the fair value of the consideration paid plus directly attributable transaction costs.

Investments in group companies are recognized, where applicable, based on accounting principles for transactions with group companies and those used fordetermining the cost of the business combination in accordance with the accounting policy governing business combinations (Note 4.21).

When an investment is newly classified as a Group company, joint venture or associate, the carrying amount of that investment immediately prior to its newclassification is taken as the cost of that investment. If applicable, any unrealized value adjustments to the investment which have been previouslyrecognized directly in equity are left in equity until the investment is either sold or impaired.

The initial value includes preferential subscription and similar rights acquired.

Following initial measurement, these financial assets are stated at cost, less any accumulated impairment loss.

Where preferential subscription or similar rights are sold or separated for the purpose of exercising them, the cost of these rights decreases the carryingamount of the respective assets.

Available-for-sale financial assets

This category includes debt securities and equity instruments that have not been classified in any of the preceding categories.

Upon initial recognition in the balance sheet, they are recognized at fair value, which, unless there is evidence to the contrary, is the transactionprice, which is equivalent to the fair value of the consideration paid plus directly attributable transaction costs. For equity instruments, initial valueincludes preferential subscription and similar rights.

After initial recognition, these assets are stated at fair value including any transaction costs which could be incurred when sold. Changes in fair valueare recognized directly in equity until the investment is derecognized or determined to be impaired, at which time the cumulative gain or loss previouslyrecognized in equity is taken to the income statement. However, foreign exchange gains and losses on monetary assets denominated in foreign currency arerecognized in the income statement.

Equity instruments whose fair value cannot be reliably determined are measured at cost, less any cumulative impairment.

Where preferential subscription or similar rights are sold or separated for the purpose of exercising them, the cost of these rights decreases the carryingamount of the respective assets.

Hedging Instruments

This category includes instruments classified as hedging instruments.

Financial instruments which have been designated as hedging instruments are measured as indicated in Note 4.8.

Cancelation

Financial assets are derecognized when the contractual rights to related cash flows have expired or when the assets are transferred, provided that relatedrisks and rewards are substantially transferred.

If the Company has not substantially transferred or retained the risks and rewards incidental to ownership of the financial asset, it is derecognized ifcontrol over the asset has not been retained. If control over the asset is retained, the Company continues to recognize it to the extent to which it isexposed to changes in the value of the transferred asset, i.e., due to its continuing involvement, recognizing the associated liability as well.

The difference between the consideration received, net of attributable transaction costs, including any new financial asset obtained less any liabilityassumed, plus any cumulative gain or loss directly recognized in equity, determines the gain or loss generated upon derecognition, and is included in theincome statement in the year to which it relates.

Interest and dividends received from financial assets

Interest and dividends from financial assets accrued subsequent to acquisition are recognized as income. Interest must be recognized using the effectiveinterest rate method; dividends are recognized when the right to receive them is established.

Financial assets are recognized separately on initial measurement based on maturity, accrued explicit interest receivable at that date, and the proposeddividends up to the date the assets are acquired. Explicit interest refers to the contract interest rate applied to the financial instrument.

In addition, when distributed dividends are derived unmistakably from profit generated prior to the date of acquisition given that the amounts ofdistributed dividends exceeded the profit generated by the associate since acquisition, the dividends are not recognized as income and decrease the cost ofthe investment.

4.6 Impairment of financial assets

The carrying amount of financial assets is adjusted against the income statement when there is objective evidence of actual impairment.

To determine impairment loss, the Company assesses the potential loss of individual as well as groups of assets with similar risk characteristics.

Debt instruments

There is objective evidence that debt instruments (trade receivables, loans and debt securities) are impaired when an event has occurred after initialrecognition of the instrument that has a negative impact on related estimated future cash flows.

The Company classifies as impaired assets (doubtful exposures) debt instruments for which there is objective evidence of impairment, which refers basicallyto the existence of unpaid balances, non-compliance issues, refinancing and data which evidences the possible irrecoverability of total agreed-upon futurecash flows or collection delays. For trade and other receivables, the Company considers balances including items more than six months past due for whichcollection is uncertain, as well as balances of companies having declared a payment's moratorium, to be doubtful assets.

For financial assets measured at amortized cost, impairment loss is measured as the difference between the carrying amount and the present value ofestimated future cash flows, discounted at the current market rate upon initial recognition. For financial assets with floating interest rates, theeffective interest rate at the balance sheet date is used. The fair value is used instead of the present value of estimated future cash flows in the caseof quoted instruments provided that it is considered sufficiently reliable.

When there is objective evidence of a decline in the fair value of “Available-for-sale financial assets” due to impairment, the underlying capital lossesrecognized as “Unrealized gains (losses) reserve” in equity are taken to the income statement.

The reversal of an impairment loss is recognized in the income statement. Such reversal is limited to the carrying amount of the financial asset that wouldhave been recognized on the reversal date had no impairment loss been recognized.

Equity instruments

There is objective evidence that equity instruments are impaired when one or more events have occurred after initial recognition that indicate that thecost of the investment in equity instruments may not be recovered due to a prolonged or significant decline in fair value.

In the case of equity instruments included in “Available-for-sale financial assets” and “Investments in group companies, joint ventures and associates,”impairment loss is measured as the difference between the carrying amount of the financial asset and the recoverable amount, which is the greater of theasset’s fair value, less costs to sell, and the present value of future cash flows derived from the investment. Unless better evidence is available,impairment of this type of asset is estimated taking into account the equity of the subsidiary, adjusted by any unrealized capital gain existing on themeasurement date. Such losses are recorded in the income statement as a direct decline in value of the equity instrument.

For investments in group companies, joint ventures and associates, the reversal of an impairment loss is recognized in the income statement and is limitedto the carrying value of the investment that would have been recognized on the reversal date had the original impairment not occurred.

4.7 Financial liabilities

Recognition and measurement

Trade and other payables

This category includes financial liabilities generated by the purchase of goods and services arising from trade transactions, and non-trade payables thatare not derivative instruments.

Upon initial recognition in the balance sheet, they are recognized at fair value, which, unless there is evidence to the contrary, is the transactionprice, which is equivalent to the fair value of the consideration received, adjusted by directly attributable transaction costs.

Following initial recognition, these financial liabilities are measured at amortized cost. Interest is recognized in the income statement using theeffective interest rate method.

Nevertheless, trade payables which mature within less than one year with no contractual interest rate, as well as called-up payments on shares, the amountof which is expected in the short term, are carried at the nominal value when the effect of not discounting cash flows is not significant.

Hedging instruments

This category includes instruments classified as hedging instruments.

Financial instruments which have been designated as hedging instruments are measured as indicated in Note 4.8.

Cancelation

The Company derecognizes a financial liability when the obligation under the liability is extinguished.

When debt instruments are exchanged, provided that their contractual terms are substantially different, the original financial liability is derecognizedand the new financial liability is recognized. Financial liabilities whose contractual terms are substantially modified are treated in the same manner.

The difference between the carrying amount of the derecognized financial asset (or part of it) and the compensation paid, including any attributabletransaction costs, which also includes any new asset transferred other than cash or liability assumed, is recognized in the income statement in the year towhich it relates.

When debt instruments are exchanged whose contractual terms are not substantially different, the original financial liability is not derecognized, and thecommissions paid are recognized as an adjustment to the carrying amount. The new amortized cost of a financial liability is determined by applying theeffective interest rate, which equates the carrying amount of the financial liability on the modification date to the cash flows to be paid as per the newterms.

4.8 Hedge accounting

The Company uses fair value hedges for trade receivables denominated in foreign currency, cash flow hedges on floating-rate loans, and cash flow hedgesattributable to the price of certain raw materials.

Transactions are only deemed hedges when they eliminate efficiently any risk inherent to the hedged item or position throughout the duration of the hedge,which implies that at the inception of the contract, the hedging item is highly effective (prospective effectiveness) and there is sufficient evidence thatthe hedge will be effective throughout the life of the hedged item or position (retrospective effectiveness).

The Company adequately documents the hedge, including how it intends to achieve and measure its effectiveness under its current risk management policy.

The hedge effectiveness is measured by testing to verify that the differences arising from changes in the value of the hedged item and the correspondinghedging instrument remain within a range of 80% to 125% over the remaining term to maturity, and comply with forecasts established at the related contractdates.

If at any time financial derivatives do not qualify to be treated as hedges, they are reclassified as held-for-trading derivatives, in which case any gainor loss arising from changes in fair value on derivatives are directly recognized in the income statement.

For the purpose of hedge accounting, hedges are classified as cash flow hedges. Thus, cash flow hedges are designed to hedge exposure tovariability in cash flows attributable to the changes in the exchange rates for purchases and sales carried out in foreign currency, the variability incash flows attributable to changes in interest rates on loans taken out and the changes in prices of raw materials. The portion of the gain or loss of thehedging instrument that is determined to be an effective hedge is recognized temporarily in equity; gains or losses are taken to the income statement inthe year or years in which the hedged item affects profit or loss.

4.9 Treasury shares

Treasury shares are recognized in equity as a decrease in “Capital and reserves” when acquired. No loss or gain is shown in the income statement on sale orcancelation. Expenses incurred in connection with transactions with treasury shares are recognized directly in equity as a decrease in reserves.

4.10 Inventories

Stocks are valued at acquisition price or production cost. Costs of purchase include the invoice price after deducting any trade discounts, rebates andother similar items, plus all other costs incurred until the goods are available for sale, such as transport, customs, insurance, and others directlyattributable to the acquisition of inventory items. Production cost is determined by adding the costs directly attributable to the product to the purchaseprice of raw materials and other consumables. The portion of indirectly attributable costs incurred in preparing the tools for sale that can reasonably beallocated to the products in question are also included, to the extent that such costs are related to the manufacturing or construction process and arebased on normal working conditions for the means of production.

Given that Company inventory is available-for-sale in less than one year, finance costs are not included in the acquisition or production cost.

The Company measures inventory at weighted average cost.

When the net realizable value of inventories is less than acquisition or production cost, the corresponding provision is recognized in the incomestatement. No provision is set aside for raw materials and other consumables used in production, if the finished products in which they are incorporatedare sold above cost.

4.11 Cash and cash equivalents

This heading includes cash and current accounts, as well as deposits which meet the following requirements:

  • They are readily convertible to cash.

· They mature within less than three months from the acquisition date.

  • The risk of change in value is insignificant.
  • They are part of the Company’s standard cash management strategy.

In terms of the cash flow statement, occasional bank overdrafts used as part of the Company’s cash management strategy are recognized as a decrease in cashand cash equivalents.

4.12 Grants

Grants are recognized as non-repayable when the requirements established for receiving them are met and are recognized directly in equity, net of thecorresponding tax effect.

Repayable grants are recognized as liabilities until they meet the criterion for being considered non-repayable. No income is recorded until this criterionis met.

Grants received to finance specific expenses are released to the income statement in the year in which the expenses which they are intended to compensateare incurred. Grants received to acquire property, plant, and equipment are released to income in proportion to the depreciation charged for the relatedassets.

4.13 Provisions

Provisions are recognized in the balance sheet when the Company has a present obligation (derived from a contract through its explicit or implicit terms,legislation or other operation of law) as a result of past events and it is probable that a quantifiable outflow of resources will be required to settlethe obligation.

Provisions are measured at the present value of the best estimate of the amount that an entity would rationally pay to settle the obligation at the balancesheet date or to transfer it to a third party at that time, recognizing provision discount adjustments as a finance cost as they accrue. No discounts aremade on those provisions falling due within twelve months that do not have a significant financial effect. Provisions are reviewed at each balance sheetdate and adjusted to reflect the current best estimate.

Provision for CO2 emission rights

As of 2006, companies included in the National Assignment Plan that emit CO2 in their operating activities, must submit the corresponding amountof CO2 emission rights in the early months of the year subsequent to the year in which they occurred.

The obligation to submit CO2 emission rights for CO2 emissions during the year is recorded in “Current provisions” on the balancesheet, while the related cost is recognized under “Other operating expenses”. This obligation is measured at the same amount as the CO2 emissionrights submitted to cover CO2 emissions, which are recognized under “Other intangible assets.”

4.14 Provisions for long-term employee benefits

The Company has no pension commitments whereby it is obliged to make contributions to a separate entity, such as an insurance company or a pension plan.

However, the Company does have early retirement and seniority bonus commitments with employees. The Company has externalized these commitments throughinsurance policies and has recognized the amounts paid under “Employee benefits expense.”

4.15 Income tax

Income tax expense for the year is calculated as the sum of current tax resulting from applying the corresponding tax rate to taxable profit for the year,less any applicable rebates and tax credits, taking into account changes during the year in recognized deferred tax assets and liabilities. Thecorresponding tax expense is recognized in the income statement, except when it relates to transactions recognized directly in equity, in which case thecorresponding tax expense is likewise recognized in equity.

Deferred income tax is recognized using the liability method on all temporary differences at the balance sheet date between the tax bases of assets andliabilities and their carrying amounts. The tax base of an asset or liability is the amount attributed to it for tax purposes.

The tax effect of temporary differences is included in “Deferred tax assets” or “Deferred tax liabilities” on the balance sheet, as applicable.

Deferred tax liabilities are recognized for all temporary differences, except where disallowed by prevailing tax legislation.

The Company recognizes deferred tax assets for all deductible temporary differences, unused tax credits and unused tax loss carryforwards, to the extentthat it is probable that future taxable profit will be available against which these assets may be utilized, except where disallowed by prevailing taxlegislation.

At each financial year end, the Company assesses the deferred tax assets recognized and those that have not yet been recognized. Based on this analysis,the Company derecognizes the asset recognized previously if it is no longer probable that it will be recovered, or it recognizes any deferred tax assetthat had not been recognized previously, provided that it is probable that future taxable profit will be available against which these assets may beutilized.

Deferred tax assets and liabilities are measured at the tax rate expected to apply to the period in which they reverse, as required by enacted tax laws andin the manner in which it reasonably expects to recover the asset’s carrying value or settle the liability.

Deferred tax assets and liabilities are not discounted and are classified as non-current assets or non-current liabilities, respectively.

4.16Non-current assets and disposal groups held for sale

The Company classifies as “Non-current assets held for sale” assets whose carrying amount is expected to be realized through a sale transaction, ratherthan through continuing use, when the following criteria are met:

• When they are immediately available for sale in their present condition, subject to the normal terms of sale; and

• It is highly probable that they will be sold.

Non-current assets held for sale are accounted for at the lower of their carrying amount and fair value less cost to sell, except deferred tax assets,assets arising from employee benefits, and financial assets which do not correspond to investments in Group companies, joint ventures and associates, whichare measured according to specific standards. These assets are not depreciated and, where necessary, the corresponding impairment loss is recognized toensure that the carrying amount does not exceed fair value less costs to sell.

Disposal groups held for sale are measured using the same criteria described above. The disposal group as a whole is then remeasured at the lower of thecarrying amount and fair value less costs to sell.

Related liabilities are classified as “Liabilities associated with non-current assets held for sale.”

4.17 Classification of current and non-current assets and liabilities

Assets and liabilities are classified in the balance sheet as current and non-current. Accordingly, assets and liabilities are classified as current whenthey are associated with the Company’s operating cycle and it is expected that they will be sold, consumed, realized or settled within the normal course ofthat cycle; and are expected to mature, to be sold or settled within one year; and when they are held for trading or correspond to cash and cashequivalents the use of which is not restricted to more than one year.

4.18Income and expenses

In accordance with the accruals principle, income and expenses are recognized when the goods or services represented by them take place, regardless of whenactual payment or collection occurs.

Income

Income is recognized when it is probable that the profit or economic benefits from the transaction will flow to the entity and the amount of income andcosts incurred or to be incurred can be reliably measured. Revenue is measured at the fair value of the consideration received or receivable, less anydiscounts, rebates, and other similar items given by the Company, and any interest included in the nominal amount of loans. Applicable indirect taxes ontransactions which are reimbursed by third parties are not included.

4.19 Transactions in foreign currency

The Company’s functional and presentation currency is the euro.

Transactions in foreign currency are initially translated at the spot rate prevailing at the date of the transaction.

Monetary assets and liabilities denominated in foreign currency are translated at the spot rate prevailing at the balance sheet date. All exchange gains orlosses arising from translation as well as those resulting on settlement of balance sheet items are recognized in the income statement.

Non-monetary items measured at historical cost are translated at the exchange rate prevailing on the date of the transaction.

Non-monetary items measured at fair value are translated at the exchange rate prevailing when the fair value is determined. When a gain or loss on anon-monetary item is recognized directly in equity, any exchange component of that gain or loss shall be recognized directly in equity. Conversely, when again or loss on a non-monetary item is recognized in profit or loss, any exchange component of that gain or loss shall be recognized in the incomestatement.

4.20 Environmental assets and liabilities

Expenses relating to decontamination and restoration work in contaminated areas, as well as the elimination of waste and other expenses incurred to complywith environmental protection legislation, are expensed in the year to which they relate, unless they correspond to purchases of assets incorporated inequity to be used over an extended period, in which case they are recognized in the corresponding line of “Property, plant and equipment” and depreciatedusing the same criteria.

4.21 Related-party transactions

Related-party transactions are measured as described above, except for the following:

• Non-monetary contributions from a business to a Group company are generally measured at the carrying amount of the assets delivered in the consolidatedfinancial statements at the transaction date.

• In mergers and spin-offs the acquired assets are generally valued at their carrying amount in the consolidated financial statements after thetransaction. Any differences are recognized in reserves.

The prices of related-party transactions are adequately documented; hence the Company’s directors consider there to be no risk of significant liabilitiesarising from these.

4.22 Termination benefits

In accordance with prevailing mercantile legislation, the Company is required to pay indemnities to employees who are dismissed under certaincircumstances. Reasonably quantifiable indemnity payments are recognized as an expense in the year in which the Company creates a valid expectation on thepart of the affected third parties that the dismissals will occur.

5. INTANGIBLE ASSETS

The movements in this heading are as follows:

(Thousands of euros) Balance at January 1 Additions and allowances Disposals and reversal of impairment loss Transfers Balance at December 31
2015
Cost
Patents 36 - - - 36
Concession rights 2,627 - - - 2,627
Software 13,753 976 67 14,796
Greenhouse gas emission rights 796 1,900 (880) - 1,816
Payments on account for non-current intangible

assets

67 13 (67) 13
17,279 2,889 (880) 19,288
Accumulated amortization
Patents (36) - - (36)
Concession rights (1.557) (225) (1,782)
Software (9,441) (1,426) (10,867)
(11,034) (1,651) (12,685)
Net carrying amount 6.245 6,603
2014
Cost
Patents 36 - - - 36
Concession rights 2,627 - - - 2,627
Software 12,581 1,164 - 8 13,753
Greenhouse gas emission rights 2,041 455 (1,700) - 796
Payments on account for non-current intangible

assets

8 67 - (8) 67
17,293 1,686 (1,700) - 17,279
Accumulated amortization
Patents (36) - - - (36)
Concession rights (1,332) (225) - - (1,557)
Software (8,051) (1,390) - - (9,441)
(9,419) (1,615) - - (11,034)
Net carrying amount 7,874 6,245

At December 31, 2015 and 2014, the cost value of fully amortized intangible assets amounted to 7,942 thousand and 6,348 thousand euros, respectively.

5.1 Information on greenhouse gas emission rights

The Company receives a free allocation of emissions rights arising from the resolution of the Council of Ministers dated November 15, 2013, which approvedthe final free assignation of greenhouse gas emission rights for the installations subject to the emissions trading scheme for the 2013-2020 period. Therights acquired through this scheme in 2015 totaled 142,944 (2014: 55,813)

The movements in emission rights during 2015 and 2014 are as follows:

(number of rights) Balance at January 1 Purchases Free allocation Delivery Balance at December 31
2015
Greenhouse gas emission rights 183.698 122.071 142.944 (195.871) 252.842
2014
Greenhouse gas emission rights 303,701 30,000 55,813 (205,816) 183,698

The expense for greenhouse gas emissions recognized under "Other operating expenses" at December 31, 2015 and 2014, amounts to 1,442 thousand and 893thousand euros, respectively (Note 15)

Further, income relating to the transfer of subsidized greenhouse gas emission rights recognized under "Ancillary income" amounts to 999 thousand and 337thousand euros at December 31, 2015 and 2014, respectively (Note 13.2.).

5.2 Other information

The breakdown of intangible assets acquired from Group companies at December 31 is as follows:

(Thousands of euros) 2015 2014
Software
Cost 256 256
Accumulated amortization (178) (128)
78 128

At December 31, 2015 and 2014, the Company did not have any intangible assets located outside Spain.

At December 31, 2015, and 2014, there were no firm commitments to purchase intangible assets items.

6. PROPERTY, PLANT, AND EQUIPMENT

The movements in the items composing “Property, plant, and equipment” are as follows:

(Thousands of euros) Balance at January 1 Additions and allowances Disposal and reversal of an impairment loss Transfers Balance at December 31
2015
Cost
Land 307 - - - 307
Buildings 28,579 - - - 28,579
Plant and other PP&E items 243,401 11,282 (7) 3,847 258,523
Property, plant, and equipment under

construction and payments on account

3.838 455 - (3,847) 446
276,125 11,737 (7) - 287,855
Accumulated depreciation
Buildings (15,334) (1,093) (16,427)
Plant and other PP&E items (192,241) (9,540) 7 - (201,774)
(207,575) (10,633) 7 - (218,201)
Impairment losses
Buildings (30) - 2 - (28)
(30) - 2 - (28)
Net carrying amount 68,520 69,626
2014
Cost
Land 265 42 - - 307
Buildings 28,138 441 - - 28,579
Plant and other PP&E items 233,884 9,784 (471) 204 243,401
Property, plant, and equipment under

construction and payments on account

203 3,839 - (204) 3,838
262,490 14,106 (471) - 276,125
Accumulated depreciation
Buildings (14,141) (1,193) - - (15,334)
Plant and other PP&E items (183,312) (9,192) 263 - (192,241)
(197,453) (10,385) 263 - (207,575)
Impairment losses
Buildings (32) - 2 - (30)
(32) - 2 - (30)
Net carrying amount 65,005 68,520

6.1 Significant movements

Additions in 2015 and 2014 mainly relate to machinery and installations acquired to improve productivity and increase capacity at the Company'smanufacturing plants.

6.2 Revaluation of assets

The Company opted for the possibility established in Navarre Regional Law 21/2012 of December 26, allowing the revaluation of PP&E items. The breakdownfor net gains, tax paid, and impact on reserves, is as follows:

(Thousands of euros) Restated net carrying amount Initial net carrying amount Restated amount
Land 265 206 59
Buildings 15,789 12,041 3,748
Plant 18,719 17,465 1,254
Machinery 25,006 23,353 1,653
Tools - - -
Other installations 7,121 6,159 962
Furniture 609 581 28
Other PP&E items 77 66 11
67,586 59,871 7,715
Tax paid (5%) (386)
Revaluation Reserve Regional Navarre Law 21/2012

(Note 12.4)

7,329

In 2015 and 2014, the amount of the depreciation expense for the assets updated in accordance with Navarre Regional Law 21/2012 totaled 863 and 1,189thousand euros, respectively. The net carrying amount of the updated figure at December 31, 2015 and 2014 was 3,640 and 4,503 thousand euros, respectively.

In addition, in 1996 the Company opted for the Navarre Regional Law 23/1996, carrying out a revaluation of assets by virtue of which the cost andaccumulated depreciation of its PP&E increased, resulting in net gains of 9,282 thousand euros (Note 12.4). The net carrying amount of these restatedassets at December 31, 2015 and 2014, amounts to 260 thousand and 318 thousand euros, respectively, while depreciation for these years amounts to 58thousand and 65 thousand euros, respectively.

6.3 Finance leases

The net carrying amount of property, plant, and equipment held under finance leases at December 31 is as follows:

(Thousands of euros) 2015 2014
Other PP&E
Cost 262 270
Accumulated depreciation (77) (29)
185 241

The initially recognized cost value for assets held under finance leases was the present value of future minimum lease payments on the date the leaseagreement was signed.

The reconciliation between the total future minimum lease payments and the present value at December 31 is as follows:

2015

2014

(Thousands of euros) Future minimum payments Present value

(Note 16.1)

Future minimum payments Present value

(Note 16.1)

Within one year 85 83 85 81
Between one and four years 42 42 127 125
127 125 212 206

The principal terms of finance lease agreements are as follows:

- The lease is for a term 3 years.

- The interest rate is fixed: 2.5%

- Repair and maintenance expenses are assumed by the lessor.

- The amount of the purchase option is equivalent to the last lease payment.

- There are no contingent lease payments.

6.4 Operating leases

The Company leases the building in which it carries out its activities in Urdiain (Navarra). Although the lease agreement was renewed in 2015, and ends in2025, since March of 2018 the Company has reserved the right to cancel it with a two-month notice.

In addition, the Company signed a lease agreement for the office building in Tajonar (Navarre) in December 2008, expanded and modified in May 2013. As aconsequence of the modification, the Company is obliged to maintain the lease until at least May 1, 2015. From said date the Company can decide toterminate the contract unilaterally before the 20 years stipulated in the initial contract have elapsed.

Additional to these agreements, the Company leases commercial offices in Moscow and Thailand. These are renewed annually and include clauses indicating assuch. None include purchase options.

The future minimum payments under non-cancelable operating leases at December 31 are as follows:

(Thousands of euros) 2015 2014
Within one year 358 90
Between one and five years 60 -
418 90

6.5 Other disclosures

The Company has acquired the following property, plant, and equipment from group companies at December 31:

(Thousands of euros) 2015 2014
Plant and machinery
Cost 3,182 3,021
Accumulated depreciation (2,371) (2,258)
Other PP&E items
Cost 34 34
Accumulated depreciation (34) (34)
811 763

At December 31, 2015 and 2014, there were PP&E items located outside Spain, recognized at 43 thousand and 21 thousand euros, respectively.

At December 31 of 2015 and 2014, the Company had firm purchase commitments for property, plant, and equipment totaling 1,703 thousand and 1,085 thousandeuros, respectively, in connection with investments under construction or prepayments made which will be financed with Company capital or undrawn creditfacilities.

The breakdown for fully depreciated property, plant, and equipment is as follows:

(Thousands of euros) 2015 2014
Buildings 3,020 3,020
Plant and machinery 125,797 121,315
Plant and other PP&E items 26,247 24,308
Property, plant, and equipment 7,180 6,825
162,244 155,468

The Company has arranged insurance policies to cover the carrying amount of these assets.

PP&E items for environmental activity are described in Note 22.3.

7. INVESTMENTS IN GROUP COMPANIES, JOINT VENTURES, AND ASSOCIATES

The movements in the items composing “Investments in group companies, joint ventures, and associates” are as follows:

(Thousands of euros) Balance at January 1 Additions Disposals Transfers Balance at December 31
2015
Equity instruments 329,475 15,928 - - 345,403
329,475 345,403
2014
Equity instruments 329,838 15,239 - (15,602) 329,475
329,838 329,475

In 2015 the Company carried out the following transactions:

· 10 million euros was disbursed corresponding to a capital increase in Viscofan Do Brasil, Ltda. to finance circulating capital arising from the growth inthe collagen casings segment over recent years.

· In May of 2015, the Company acquired 51.67% of the shares in Nanopack Technology & Packaging, S.L. for 4 million euros. In December of 2015, theCompany contributed 1,928 euros in another capital increase. As a result of this transaction, the Company controls 90.57% of this company’s share capital.

Further, in 2014 the Company carried out the following transactions:

· A payment of 15.2 million euros was made in connection with capital increases in Viscofan Uruguay, S.A.

· The investment in Industrias Alimentarias de Navarra, S.A.U. was transferred to "Non-current assets held for sale" (Note 9).

7.1 Description of investments in group companies, joint ventures, and associates

The information relating to group companies, joint ventures, and associates at December 31 is as follows:

Thousands of euros

Local currency (thousands)

Net carrying amount

Dividends distributed during the year

% of direct equity interest

Currency

Share capital

Reserves

Profit (loss) for the year

Total capital and reserves

Operating profit (loss)

2015

Naturin Viscofan, GMBH 90,570

12,000

100%

EUR

29,604

31,538

11,671

72,813

16,799

Viscofan do Brasil, soc.

com. e ind. Ltda

63,138

2,499

100%

BRL

133,268

99,703

50,335

283,307

93,435

Gamex CB S.r.o. 7,498

141

100%

CZK

250,000

25,037

3,592

278,628

2,551

Viscofan USA Inc. 34,729

-

100%

USD

35,587

72,018

(1,328)

106,276

(2,126)

Viscofan UK LTD 1,841

-

100%

GBP

10

3,086

231

3,327

352

Viscofan CZ, S.r.o 10,503

24,051

100%

CZK

345,200

1,115,433

999,800

2,460,633

1,218,404

Viscofan de México S.R.L.

de C.V.(1)

13,741

1,339

99,99%

MXP

219,777

506,494

310,502

1,036,773

444,789

Viscofan Centroamérica

Comercial, S.A.(1)

166

-

99,50%

USD

200

1,387

331

1,917

479

Koteks Viscofan, d.o.o. 33,307

6,518

100%

RSD

3,028,896

1,510,412

1,203,407

5,742,714

1,203,718

Viscofan de México

Servicios, S.R.L. de C.V.(1)

16

-

99,99%

MXP

103

15,352

161

15,616

7,299

Viscofan Technology (Suzhou) Co. Ltd 52,000

-

100%

CNY

431,021

91,450

70,126

592,596

92,957

Viscofan Uruguay, S.A. 31,966

-

100%

UYU

921,164

(106,220)

54,149

869,093

70,756

Nanopack Technology & Packaging, S.L. 5,928

-

90,57%

EUR

2,300

(44)

143

2,399

161
345,403

46,548

2014

Naturin Viscofan, GMBH

90,570

10,400

100%

EUR

29,604

28,150

15,388

73,142

21,999
Viscofan do Brasil, soc.

com. e ind. Ltda

53,138

11,660

100%

BRL

86,868

53,962

54,946

195,775

80,650
Gamex CB S.r.o.

7,498

130

100%

CZK

250,000

25,007

3,906

278,914

4,225
Viscofan USA Inc.

34,729

-

100%

USD

35,587

71,755

263

107,604

762
Viscofan UK LTD

1,841

-

100%

GBP

10

2,617

468

3,096

635
Viscofan CZ, S.r.o

10,503

22,900

100%

CZK

345,200

1,027,954

746,848

2,120,002

906,460
Viscofan de México S.R.L.

de C.V.(1)

13,741

7,441

99.99%

MXP

219,777

281,752

241,323

742,851

335,103
Viscofan Centroamérica

Comercial, S.A.(1)

166

-

99.50%

USD

200

967

419

1,587

624
Koteks Viscofan, d.o.o.

33,307

-

100%

RSD

3,028,896

1,532,217

767,288

5,328,401

786,289
Viscofan de México

Servicios, S.R.L. de C.V.(1)

16

-

99.99%

MXP

103

20,506

3,076

23,685

6,379
Viscofan Technology (Suzhou) Co. Ltd

52,000

502

100%

CNY

431,021

18,496

72,954

522,470

84.266
Viscofan Uruguay, S.A.

31,966

-

100%

UYU

921,164

(52,829)

(12,774)

855,560

(22,907)

329,475

53,033(2)

(1) The Company controls 100% of these subsidiaries through the ownership interests held in other Group companies.

(2) Apart from the abovementioned dividends, in 2014 the Company received a 1 million euro dividend arising from its participation in IndustriasAlimentarias de Navarra, S.A.U.

The operating profit (loss) of the group companies, shown in the above table correspond entirely to continuing operations. None of the companies is listedon the stock exchange.

The description of the main activity and registered address of each of the companies listed above at December 31, 2015 is as follows:

Company Activity Registered office
Naturin Viscofan GMBH Manufacture and sale of artificial casings Weinheim (Germany)
Viscofan do Brasil, soc. com. e ind. Ltda Manufacture and sale of artificial casings Sao Paulo (Brazil)
Gamex CB Sro Renting of an industrial warehouse where Viscofan CZ, S.r.o carries out activities/Other services

Ceske Budejovice (Czech Republic)
Viscofan USA Inc Manufacture and sale of artificial casings Montgomery (USA)
Viscofan UK LTD Commercial office Seven Oaks (UK)
Viscofan CZ, S.r.o Manufacture and sale of artificial casings Ceske Budejovice (Czech Republic)
Viscofan de México S.R.L. de C.V. Manufacture and sale of artificial casings San Luís de Potosí (Mexico)
Viscofan Centroamérica Comercial, S.A. Commercial office San José (Costa Rica)
Koteks Viscofan, d.o.o. Manufacture and sale of artificial casings Novi Sad (Serbia)
Viscofan de México Servicios, S.R.L. de C.V. Service company Zacapu Michoacán (Mexico)
Viscofan Technology (Suzhou) Co. Ltd. Manufacture and sale of artificial casings Suzhou (China)
Viscofan Uruguay, S.A. Manufacture and sale of artificial casings Montevideo (Uruguay)

All companies performed favorably, achieving positive results. The only company with non-relevant losses in 2015 was Viscofan USA, Inc., affected by theappreciation of the dollar in its export business. Thus, given the positive performance and prospects for all companies, there are no indications of anyimpairment and no related provision was recognized at December 31, 2015.

The breakdown for indirect investments in group companies and associates at December 31, 2014 is as follows:

Company Indirect investment Activity Registered office
Zacapu Power, S.R.L. de C.V. 100% Cogeneration plant Zacapu Michoacán (Mexico)
Viscofan Canada Inc. 100% Commercial office St, Laurent, Québec (Canada)

8. FINANCIAL ASSETS

The breakdown of financial assets, except for investments in group companies, joint ventures, and associates (Note 7), at December 31 is as follows:

Equity instruments Loans, derivatives, and other financial assets Total
(Thousands of euros) 2015 2014 2015 2014 2015 2014
Non-current financial assets
Loans and receivables - - 48 48 48 48
Available-for-sale financial assets
Measured at cost 134 84 - - 134 84
134 84 48 48 182 132
Current financial assets
Loans and receivables - - 49,895 41,275 49,895 41,275
- - 49,895 41,275 49,895 41,275
134 84 49,943 41,323 50,077 41,407

These amounts are disclosed in the balance sheet as follows:

Equity instruments

Loans, derivatives, and other financial assets

Total

(Thousands of euros) 2015 2014 2015 2014 2015 2014
Non-current financial assets
Investments 134 84 48 48 182 132
134 84 48 48 182 132
Current financial assets
Trade and other receivables (Note 8.1) - - 42,929 36,053 42,929 36,053
Investments in group companies and associates
Loans to companies (Note 20.1) - - 6,811 5,032 6,811 5,032
Loans and receivables (Note 20.1) - - 153 190 153 190
Investments
Investments - - 2 - 2 -
- - 49,895 41,275 49,895 41,275
134 84 49,943 41,323 50,077 41,407

8.1 Trade and other receivables

The breakdown of “Trade and other receivables” at December 31 is as follows:

(Thousands of euros) 2015 2014
Trade receivables 18,480 21,847
Receivable from group companies and associate (Note 20.1) 24,346 14,032
Other receivables 47 90
Receivables from employees 56 84
42,929 36,053

The breakdown of “Trade and other receivables” denominated in foreign currency at December 31 is as follows:

(Thousands of euros) 2015 2014
US Dollar 20,112 15,997
Canadian Dollar 103 70
Japanese Yen 251 410
Pounds Sterling 2,458 1,863
22,924 18,340

Impairment losses

The balance of “Trade receivables” is presented net of impairment. The movements in said impairment losses are as follows:

(Thousands of euros) 2015 2014
Balance at January 1 733 116
Allowance for the year 69 629
Transfer to irrecoverable debts - (13)
Balance at December 31 801 733

9. DISPOSAL GROUPS OF ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS

On November 10, 2014, Viscofan S.A. communicated that it had accepted a binding offer from Portobello Capital Gestión S.G.E.C.R., S.A., to acquire 100% ofthe IAN Group. Once the exclusivity period had passed without any agreements having been reached, on February, 23, 2015, the decision was made not to theextend the exclusivity period agreed upon with Portobello Capital Gestión, S.G.E.C.R., S.A., announcing a new period for receiving offers for the IANGroup.

Therefore, the value of the long-term investment in group and associated companies which was classified under "Equity instruments" in the amount of 15,602thousand euros was recognized under "Non-current assets held for sale." at December 31, 2014.

After 23 February, 2015 Portobello Capital Gestión, S.G.E.C.R., S.A. made the Company a 55.8 million euro offer for 100% of its shares.

On March 10, 2015, the Company sold Industrias Alimentarias de Navarra, S.A.U. and its subsidiaries, Lingbao Baolihao Food Industrial Co. and IAN Perú,S.A. for the above mentioned amount to Servicios Compartidos de Industrias Alimentarias, S.L., a company managed by Portobello Capital Gestión, S.G.E.C.R.,S.A.

Thanks to this sale, the Company recognized a 39,316 thousand of euro profit which is recognized under "Impairment losses and losses and gains on disposalof financial assets" on the income statement. The Viscofan Group’s profit recognized on the consolidated 2015 income statement amounted to 0.4 millioneuros.

The transaction is in line with Viscofan's strategy aimed at concentrating its management, efforts and resources on its casings business, which has solidshort- and medium-term growth perspectives.

10. INVENTORIES

The movements in “Impairment losses” are as follows:

(Thousands of euros) Goods for resale, raw material, and other consumables

Work in progress and finished products

Total
2015
Balance at January 1 1,292 1,034

2,326

Impairment losses 132 307

439

Balance at December 31 1,424 1,341

2,765

2014

Balance at January 1 932 871

1,803

Impairment losses 360 163

523

Balance at December 31 1,292 1,034

2,326

The impairment losses on inventories are mainly due to the slow moving product lines.

At December 31, 2015 and 2014, there were no firm purchase commitments for raw materials or for the sale of finished goods other than those related topurchase and sales orders from the Company’s normal business activity.

The Company has arranged insurance policies which guarantee recovery of the carrying amount of inventories in the event of possible damage affecting theiruse or sale.

11. CASH AND CASH EQUIVALENTS

The breakdown of “Cash and cash equivalents” at December 31 is as follows:

(Thousands of euros) 2015 2014
Cash 32 18
Current accounts 17,609 291
17,641 309

Current accounts were at market interest rates.

Cash and cash equivalents are unrestricted.

12. EQUITY – CAPITAL AND RESERVES

12.1 Issued capital

At December 31, 2015 and 2014, the Company’s share capital consisted of 46,603,682 bearer shares with a par value of 0.70 euros each. The shares were fullysubscribed and paid in.

All shares bear the same voting and dividend rights and obligations.

At December 31, 2015 and 2014, the parent was aware of the following shareholders with a direct or indirect stake of over 3%:

Percentage
2015 2014
Corporación Financiera Alba, S.A. (*) 6.86 6.79
APG Asset Management 5.17 5.17
Marathon Asset Management, LLP 4.93 4.93
Blackrock, Inc - 3.14
Delta Lloyd NV. - 3.06
María del Carmen Careaga Salazar - 3.01
Angustias y Sol S.L. 3.01 -

(*) Indirect ownership interest through Alba Participaciones, S.A.U.

Additionally, in accordance with Article 32 of Royal Decree 1362/2007, of October 19, on shareholders obliged to notify their residence in tax havens or incountries not requiring the payment of taxes, or with whom there is no effective exchange of tax information, the shareholders of Fidelity InternationalLimited and Invesco Limited communicated that at December 31, 2015 they own a percentage of 1.027% and 1.017%, respectively.

At December 31, 2015 and 2014, the Company did not own any treasury shares.

All of the Company’s shares are listed on the Spanish Stock Exchange.

12.2 Share premium

There were no movements in the share premium in 2015 and 2014.

This reserve is freely distributable, subject to the same restrictions as those for the voluntary reserves.

12.3 Reserves

The movements in the items composing “Reserves” are as follows:

(Thousands of euros) Balance at January 1

Appropriation of results

Transfers

Balance at December 31
2015
Legal reserve 6,525 - - 6,525
Revaluation reserve Navarre Regional

Law 23/1996

8,567 - - 8,567
Revaluation reserve Navarre Regional

Law 21/2012

7,321 - - 7,321
Merger reserves 119 - - 119
Voluntary reserves 284,685 13,142 - 297,827
307,217 13,142 - 320,359
2014
Legal reserve 6,525 - - 6,525
Revaluation reserve Navarre Regional

Law 23/1996

8,567 - - 8,567
Revaluation reserve Navarre Regional

Law 21/2012

7,329 - (8) 7,321
Merger reserves 119 - - 119
Voluntary reserves 263,904 20,773 8 284,685
286,444 20,773 - 307,217

12.4 Balance sheet revaluation reserve

Revaluation reserve Navarre Regional Law 23/1996

As permitted by legislation prevailing at that time, at December 31, 1996, the Company revalued its PP&E by 9,282 thousands of euros (Note 6.2). Theresulting revaluation reserve, which comprises the revaluation of PP&E, net of a 3% tax charge, amounts to 9,003 thousands of euros.

This restatement was inspected by the tax authorities during 1999 and can, accordingly, be applied free of tax to:

• Offset prior years’ losses.

• Increase share capital.

• Increase distributable reserves after December 31, 2006 to the extent that gains have been realized, that is, when the related assets have beendepreciated, disposed of or otherwise written off.

Revaluation reserve Navarre Regional Law 21/2012

The Company opted for the voluntary revaluation of PP&E items as established in the Navarre Regional Law 21/2012 of December 26, on modifying varioustaxes and other tax measures. The revaluation was carried out with respect to allowed items recorded in the balance sheet for the year ended December 31,2012, with the resulting reserve, net of 5% tax, amounting to 7,329 thousand euros (Note 6.2).

The balance of the revaluation reserve of Navarre Regional Law 21/2012 will not be distributable until it has been verified and accepted by the taxauthorities. Said verification, which had not been carried out at December 31, 2015, must be performed within three years from the date of presentation ofthe corporate tax return for 2012. Once the verification has been performed or the time stipulated for said verification has elapsed, the balancerecognized can be utilized to:

• Offset prior years’ losses.

• Increase share capital.

· Increase freely distributable reserves once ten years have elapsed from the closing date of the balance sheet for the year in which the revaluation wasrecognized. However, said balance can only be distributed, directly or indirectly, when the restated equity items have been fully depreciated, transferred,or derecognized.

12.5 Voluntary reserves and merger reserves

These reserves are freely distributable.

13. OTHER EQUITY ITEMS

13.1 Unrealized gains (losses) reserve

The movements in the items composing “Unrealized gains (losses) reserve” are as follows:

(Thousands of euros) Balance at January 1 Income/

(expenses)

Tax effect of income/

(expense)

Amounts transferred
to income statement
Tax effect of transfers Balance at December 31
2015
Cash flow hedges
Exchange rate hedges (184) 267 (75) 246 (61) 193
Raw materials (gas) (3,708) (3,381) 947 4,944 (1,237) (2,435)
(3,892) (3,114) 872 5,190 (1,298)

(2,242)

2014
Cash flow hedges
Exchange rate hedges - (246) 62 - - (184)
Raw materials (gas) 25 (4,944) 1,236 (36) 11 (3,708)
25 (5,190) 1,298 (36) 11 (3,892)

13.2 Grants received

The movements in the items composing “Non-repayable grants” are as follows:

(Thousands of euros) Balance at January 1 Additions Tax effect of additions Amounts transferred

to income statement

Tax effect of transfers Balance at December 31
2015

Non-repayable grants 1,054 1,880 (553) (509)

127

1,999
Grants for greenhouse gas emission rights - 999 (250) (999)

250

-
1,054 2,879 (803) (1,508)

377

1,999
2014
Non-repayable grants 1,179 (3) 71 (276) 83 1,054
Grants for greenhouse gas emission rights 52 263 (79) (337) 101 -
1,231 260 (8) (613) 184 1,054

(*) Includes an adjustment for the change in corporation tax rate (Note 17).

During the year, non-repayable grants amounting to 1,880 euros were received, corresponding to investments made in 2011 and 2013.

Grants for greenhouse gas emission rights includes amounts received and pending consumption by the Company (Notes 5 and 15).

Throughout 2014 and 2015, the Company received grants related to income totaling 596 and 371 thousand euros, respectively. These grants basically financedR&D expenses during both years, as well as training initiatives for Company personnel.

14. DERIVATIVE FINANCIAL INSTRUMENTS

All Viscofan, S.A.'s derivatives at December 31, 2015 and 2014, were designated as hedging instruments.

The breakdown of the balances at December 31, 2015 and 2014, including the values of derivatives at those dates, is as follows:

2015 2014
(Thousands of euros) Current financial liabilities

(Note 16.2)

Non-current financial liabilities (Note 16.2) Current financial liabilities

(Note 8)

Non-current financial liabilities

(Note 16.2)

Exchange rate hedges 12 - 747 -
Raw material hedges 3,205 177 4,262 682
3,217 177 5,009 682

Exchange rate hedges

Viscofan, S.A. uses derivatives to hedge exchange rates in order to mitigate the possible adverse effects that exchange rate fluctuations might have ontransactions in currencies other than the functional currency.

The nominal value of the main exchange rate insurances in effect at December 31, is as follows:

(Thousands of euros) 2015 2014
US dollar 25,000 24,000
Pounds sterling 5,915 2,252

Raw material hedges

A significant amount of the Company's production costs is linked to energy costs. Therefore, and to mitigate the potential negative effect of energy pricevariations, the Company carried out the following transactions:

  • During 2015, gas hedging contracts were signed for a total of 360,000 MWh, which corresponded to contracts covering gas purchases for the periodranging from February 2016 to January 2017. The contracted prices range from 2.07 to 2.29 euro cents per KWh. These contracts were arranged based onthe parent's hedging policies, which cover up to 80% of the foreseen gas consumption.
  • During 2014, gas hedging contracts were signed for a total of 1,940,000 MWh, of which 1,490,000 MWh corresponded to contracts covering gas purchasesfor the period ranging from January 2015 to January 2017. The contracted prices range from 2.35 to 2.91 euro cents per KWh. These contracts werearranged based on the parent's hedging policies, which cover up to 80% of the foreseen gas consumption.

15. PROVISIONS AND CONTINGENCIES

The breakdown of “Provisions” at December 31 is as follows:

(Thousands of euros) Current Total
2015
Provision for greenhouse gas emission rights (Note 5.1) 1,442 1,442
1,442 1,442
2014
Provision for greenhouse gas emission rights (Note 5.1) 893 893
893 893

The movements in these items are as follows:

(Thousands of euros) Balance at January 1 Allowances Utilized Balance at December 31
2015
Provision for greenhouse gas emission rights 893 1,442 (893) 1,442
893 1,442
2014
Provision for greenhouse gas emission rights 1,699 893 (1,699) 893
1,699 893

The Company filed several appeals during 2014, all related to the new remuneration and incentive scheme for electricity generation installations imposed byRoyal Decree Law 1/2012; Royal Decree Law 413/2014, and Order IET/1045/2041; however, it is not possible to determine the amount of contingent assets infavor of Viscofan, S.A. should it win the case.

16. FINANCIAL LIABILITIES

The breakdown of “Financial liabilities” at December 31 is as follows:

Bank borrowings Hedging Instruments and other financial liabilities Total
(Thousands of euros) 2015 2014 2015 2014 2015 2014
Non-current financial liabilities
Trade and other payables

Hedging instruments

22,792

-

26,125

-

15,141

177

15,416

682

37,933

177

41,541

682

22,792 26,125 15,318 16,098 38,110 42,223
Current financial liabilities
Trade and other payables 4,357 20,168 29,049 27,791 33,406 47,959
Hedging instruments - - 3,217 5,009 3,217 5,009
4,357 20,168 32,266 32,800 36,623 52,968
27,149 46,293 47,584 48,898 74,733 95,191

These amounts are disclosed in the balance sheet as follows:

Bank borrowings Hedging instruments and other financial liabilities Total
(Thousands of euros) 2015 2014 2015 2014 2015 2014
Non-current financial liabilities
Borrowings 22,792 26,125 10,818 11,598 33,610 37,723
Borrowings from group companies and associates - - 4,500 4,500 4,500 4,500
22,792 26,125 15,318 16,098 38,110 42,223
Current financial liabilities
Borrowings 4,357 20,168 9,100 9,674 13,457 29,842
Borrowings from group companies and associates - - 5,109 10,155 5,109 10,155
Trade and other payables - - 18,057 12,971 18,057 12,971
4,357 20,168 32,266 32,800 36,623 52,968
27,149 46,293 47,584 48,898 74,733 95,191

16.1 Bank borrowings

The breakdown of “Bank borrowings” at December 31 is the following:

(Thousands of euros) 2015 2014
Non-current
Loans and borrowings 22,750 26,000
Obligations under finance leases (Note 6.3) 42 125
22,792 20,125
Current
Loans and borrowings 4,142 19,864
Obligations under finance leases (Note 6.3) 83 81
Accrued interest payable 132 223
4,357 20,168
27,149 46,293

Loans and borrowings

The breakdown of “Loans and borrowings” at December 31 is as follows:

2015

2014

(Thousands of euros) Amount pending payment Accrued finance cost

(Note 18.5)

Amount pending payment Accrued finance cost

(Note 18.5)

Loans 26,892 555 34,000 546
Borrowings - 40 11,864 328
26,892 595 45,864 874

The loans and borrowings accrue floating interest at market rates.

At December 31, 2015 and 2014, the Company had been granted credit facilities up to a total limit of 42,000 thousand and 45,000 thousand euros,respectively.

The breakdown by maturities of loans and borrowings at December 31 is as follows:

(Thousands of euros) 2015 2014
1 - 2 years 4,250 4,000
2 - 3 years 4,250 4,000
3 - 4 years 14,250 4,000
4 - 5 years - 14,000
22,750 26,000

At December 31, 2015, the Company had confirming lines with an overall limit of 3,100 thousand euros (2014: 6,100 thousand euros). The Company also hadmulti-risk policies amounting to 8,000 thousand euros (2014: 11,500 thousand euros).

16.2 Hedging instruments and other financial liabilities

The breakdown of “Financial liabilities” as classified at December 31 is as follows:

(Thousands of euros) 2015 2014
Non-current
Loans at a subsidized interest rate 6,471 5,894
Other non-current debts 4,167 5,000
Hedging instruments (Note 14) 177 682
Borrowings from group companies and associates (Note 20.1) 4,500 4,500
Other borrowings 3 22
15,318 16,098
Current
Borrowings from group companies and associates (Note 20.1) 5,109 10,155
Trade and other payables 18,057 12,971
Loans at a subsidized interest rate 852 963
Payable to shareholders and directors 1,776 1,732
Payable to suppliers of non-current assets 2,625 1,930
Other borrowings 630 40
Hedging instruments (Note 14) 3,217 5,009
32,266 32,800

Loans at a subsidized interest rate

At December 31, 2015 and 2014, the Company had loans with subsidized interest rates with entities operating under the auspices of the Navarre RegionalGovernment, and the Ministry of Science and Technology. The Company measures these loans at amortized cost, recognizing the implicit interest on theseloans generated from discounting cash flows at market rates prevailing at the grant date.

2015

2014

(Thousands of euros) Nominal value

Fair value

Nominal value

Fair value

Non-current
Loans at a subsidized interest rate 7,072 6,471 6,565 5,894
Current
Loans at a subsidized interest rate 865 852 978 963
7,937 7,323 7,543 6,857

The total amounts recognized under finance costs in 2015 and 2014 corresponding to these loans come to 199 thousand and 194 thousand euros, respectively(Note 18.5).

The breakdown by maturity of the non-current loans with a subsidized interest rate at December 31 is as follows:

(Thousands of euros) 2015 2014
1 - 2 years 981 823
2 - 3 years 1,053 891
3 - 4 years 1,081 936
4 - 5 years 863 897
Over 5 years 2,493 2,347
6,471 5,894

Other non-current debts

During 2013, the Company was granted a loan amounting to 5,000 thousand euros from COFIDES (Compañía Española de Financiación del Desarrollo) to financethe investments made in Viscofan Uruguay, S.A.

This loan accrues interest at market rates.

The detail by maturity of the long-term loan at December 31 is as follows:

(Thousands of euros) 2015 2014
1 - 2 years 833 833
2 - 3 years 833 833
3 - 4 years 833 833
4 - 5 years 833 833
Over 5 years 833 1,668
4,167 5,000

Trade and other payables

The breakdown of “Trade and other payables” at December 31 is as follows:

(Thousands of euros) 2015 2014
Suppliers 6,834 2,789
Suppliers, group companies, and associates (Note 20.1) 1,405 1,933
Other payables 7,163 5,700
Employee benefits payable 1,909 1,996
Customer advances 746 553
18,057 12,971

17. TAXES

The breakdown of balances relating to income tax assets and liabilities at December 31 is as follows:

(Thousands of euros) 2015 2014
Deferred tax assets
Temporary differences 1,634 2,599
Current income tax assets - 1,722
Other payables to public administrations
VAT 3,676 4,135
Grants received 2 4
5,312 8,460
Deferred tax liabilities (2,338) (1,433)
Current income tax liabilities (2,022) (2,901)
Other payables to public administrations
Personal income tax withholdings (5,447) (4,943)
Social security (557) (583)
Electricity tax (693) (593)
(11,057) (10,453)

Under prevailing tax regulations, tax returns may not be considered final until they have either been inspected by tax authorities or until the four-yearinspection period has expired. The Company is open to inspection of all taxes to which it is liable for the last four years. The Company’s directors andtax advisors consider that, in the event of a tax inspection, no significant tax contingencies would arise as a result of varying interpretations of thetax legislation applicable to the Company’s transactions.

17.1 Income tax

The reconciliation of net income and expenses for the year with taxable income (tax results) is as follows:

Income statement

Income and expense recognized directly

in equity

(Thousands of euros) Increase Decrease Total Increase Decrease Total
2015
Income and expenses for the year
Continuing operations 104,003 2,595
Discontinued operations - -
104,003 2,595
Income tax
Continuing operations 4,127 852
Discontinued operations - -
4,127 852
Income and expenses for the year before tax 108,130 3,447
Permanent differences 424 (88,168) (87,744) - - -
Temporary differences
Arising in 2015 537 (982) (445) 3,114 (2,879) 235
Arising in prior years - (3,563) (3,563) 1,508 (5,190) (3,682)
Tax result 16,379 -
2014
Income and expenses for the year
Continuing operations 67,856 (4,094)
Discontinued operations - -
67,856 (4,094)
Income tax
Continuing operations 3,419 (1,485)
Discontinued operations - -
3,419 (1,485)
Income and expenses for the year before tax 71,275 (5,579)
Permanent differences 220 (55,418) (55,198) - - -
Temporary differences
Arising in 2014 932 (563) 369 4,929 - 4,929
Arising in prior years 1,187 (205) 982 649 - 649
Tax result 17,428 -

The increases in permanent differences are mainly due to expenses related to Shareholders’ meeting attendance paid. The decreases are due to the 50%reduction in taxable profit generated by royalties collected from subsidiaries located abroad, international double taxation relief in relation todividends from entities not resident in Spain. In 2015, profit obtained from the sale of the investment in a Group company was also adjusted (Note 9).

The increase in temporary differences during 2015 was mainly due to the amount of the depreciation of the revalued assets in January of 2013; theaccounting expense in 2013 and 2014 was not partially deductible until 2015.

The reconciliation between income tax expense/(income) and the result of multiplying total recognized income and expenses by applicable tax rates,differentiating the income statement balance, is as follows:

2015

2014

(Thousands of euros) Income statement Income and expense recognized directly in equity Income statement Income and expense recognized directly in equity
Income and expenses for the year before tax 180,130 3,447 71,275 (5,579)
Tax charge (tax rate: 25% in 2015 and 30% in 2014) 27,033 862 21,382 (1,674)
Deduction for double taxation on dividends - (300) -
Deduction for international double taxation (royalties and other services) (568) - (611) -
Deductions for research and development (1,023) - (352) -
Investment tax credits (888) - (1.127) -
Other deductions (71) - (33) -
Impact of permanent differences

Adjustment prior years

(21,936)

205

-

-

(16,560) -
Adjustments due to changes in tax rates 106 (10) - 189
Tax expense (income) 2,858 852 2,399 (1,485)
Tax paid abroad (*) 1,269 - 1,020 -
Tax expense (income) 4,127 852 3,419 (1,485)

(*)Amounts prepaid abroad for services, royalties, and other items.

The breakdown of income tax expense/(income) is as follows:

2015

2014

(Thousands of euros) Income statement Recognized directly in equity Income statement Recognized directly in equity
Current income tax 2,788 - 3,104 -
Changes in deferred taxes
From cash flow hedges (Note 13.1) - 426 - (1,309)
Grants, donations, and bequests received (Note 13.2) - 426 - (176)
Other temporary differences 990 - (482) -
Deductions generated (2,550) - (2,423) -
Deductions applied 1,630 - 2,200 -
2,858 852 2,399 (1,485)

Refundable income tax was calculated as follows:

(Thousands of euros) 2015 2014
Current income tax 2,788 3,104
Withholdings (766) (203)
Income tax payable/receivable 2,022 2,901

17.2 Deferred tax assets and liabilities

The movements in the items composing “Deferred tax assets and liabilities” are as follows:

Change in
(Thousands of euros) Balance at January 1 Income statement Equity Balance at January 1
2015
Deferred tax assets
Trade receivables 233 (83) - 150
Depreciation and amortization 44 (4) - 40
Balance sheet restatement 801 (499) - 302
Cash flow hedges 1,298 - (351) 947
Unused tax deductions 223 (28) - 195
2,599 (614) (351) 1,634
Deferred tax liabilities
Non-current investments in group companies (1,081) (404) - (1,485)
Cash flow hedges - - (75) (75)
Non-repayable grants (352) - (426) (778)
(1,433) (404) (501) (2,338)
1,116 (1,018) (852) (704)
2014
Deferred tax assets
Trade receivables 85 148 - 233
Depreciation and amortization 65 (21) - 44
Balance sheet restatement 605 196 - 801
Cash flow hedges - - 1,298 1,298
Unused tax deductions - 223 - 233
755 546 1,298 2,599
Deferred tax liabilities
Non-current investments in group companies (47) (1,034) - (1,081)
Cash flow hedges (12) - 12 -
Non-repayable grants (528) - 176 (352)
(587) (1,034) 188 (1,433)
168 (488) 1,486 1,166

Law 23/2015, of December 28 on reformed tax legislation and other economic measures changed the general tax rate from the current 25% to 28% for upcomingyears.

Law 29/2014, of December 24 on reformed tax legislation and economic incentive measures changed the general tax rate from the current 30% to 25% forupcoming years.

As a result, the Company adjusted the deferred tax assets and liabilities from prior years based on the prevailing rate at the estimated reversal date.

18. INCOME AND EXPENSES

18.1 Revenue

The distribution of revenue corresponding to the Company’s ordinary activity by market segment is as follows:

(Thousands of euros) 2015 2014
By business segment
Sale of meat, cellulose, plastic, and collagen casings 135,605 129,967
Sale of spare parts and machinery 6,473 6,785
Sale of energy 38,929 38,427
Other sales 159 195
Services provided 560 428
181,726 175,802
By market segments
Domestic market 52,716 51,262
Foreign market 129,010 124,540
181,726 175,802

Given that a significant percentage of exports were to group companies, the sales to third parties were not significant enough to warrant a breakdown bygeographical area.

18.2 Consumption of raw materials and other consumables

The breakdown is as follows:

(Thousands of euros) 2015 2014
Consumption of raw materials and other consumables
Purchases in Spain 41,725 41,799
EU acquisitions 12,056 11,896
Imports 8,467 6,248
Changes in raw materials and other consumables (1,342) 66
60,906 60,009

The breakdown of “Consumption of goods” is as follows:

(Thousands of euros) 2015 2014
Purchases of goods for resale
Purchases in Spain 8.805 7,077
EU acquisitions 5.188 5,217
Imports 3.652 3,048
Change in goods for resale (2.369) (630)
15,276 14,712

18.3 Social security costs, et al

The breakdown of “Social security costs, et al” is as follows:

(Thousands of euros) 2015 2014
Social security 7,247 6,996
Other employee welfare expenses 1,612 1,250
8,859 8,246

18.4 External services

The breakdown of “External services” is as follows:

(Thousands of euros) 2015 2014
Research expenses 1,449 1,025
Lease payments 929 1,018
Repairs and maintenance 12,561 12,074
Independent professional services 4,098 3,734
Transportation services 2,172 2,186
Insurance premiums 707 788
Bank services 64 72
Publicity, advertising, and public relations 843 596
Utilities 9,313 8,266
Other services 7,499 7,854
39,635 37,613

18.5 Finance costs

The breakdown of “Finance costs” is as follows:

(Thousands of euros) 2015 2014
Loans (Note 16.1) 555 546
Loans to group companies (Note 20.1) 84 316
Credit facilities (Note 16.1) 40 328
Loans with subsidized interest rates (Note 16.2) 199 194
Other financial liabilities 136 116
1,014 1,500

19. FOREIGN CURRENCY

The breakdown of transactions carried out in currencies other than the euro is as follows:

(Thousands of euros) 2015 2014
Revenue
Sales 76,809 68,737
Goods for consumption
Purchases of raw materials and other consumables (11,053) (8,564)
Purchases of goods for resale (1,447) (1,138)
Other operating income
Ancillary income 3,717 3,575
Employee benefits expense
Wages and salaries (198) (140)
Social security costs, et al (14) (6)
Other operating expenses
External services (2,771) (2,381)

20. RELATED PARTY DISCLOSURESAS

All the related-party transactions correspond to normal Company trading activity and are carried out on an arm’s length basis in a manner similar totransactions with unrelated parties.

20.1 Group companies

The balances with related entities are as follows:

(Thousands of euros) Direct parent Companies with an indirect investment
2015
Customers (Note 8.1) 24,117 229
Current loans (Note 8) 6,811 -
Current dividends receivable (Note 8) 153 -
Suppliers (Note 16.2) (1,405) -
Current accounts payable (Note 16.2) (9,609) -
2014
Customers (Note 8.1) 13,867 165
Current loans (Note 8) 5,032 -
Current dividends receivable (Note 8) 190 -
Suppliers (Note 16.2) (1,933) -
Current accounts payable (Note 16.2) (14,655) -

Loans to group companies

On December 31, 2015, the Company had a loan granted to Viscofan Technology (Suzhou) Co. Ltd. The loan was initially granted for one year untill March 12,2015, unless other agreement were made by the parties, and amounts to $10,000 thousand, of which $7,300 thousand were drawn down in 2015 (6,811 thousandeuros). The loan bears interest equivalent to one-year Libor plus 2 percentage points, and was renewed by both parties until March 12, 2017.

Borrowings from group companies

At December 31, 2015 and 2014, the Company had drawn down credit lines with various subsidiaries, regulated in accordance with the following conditions:

Amount pending payment at December 31

Accrued finance cost

(Thousands of euros) 2015 2014 Interest rate 2015 2014
Naturin Viscofan, GMBH - - 1.99% - 22
Viscofan CZ, S.r.o. 5,000 10,000 One-month Euribor + 1.07% in 2014 and 0.2% in 2015 31 177
5,000 10,000 31 199

In addition, in 2013 the Company signed a loan agreement with Gamex CB, S.r.o., amounting to 4,500 thousand euros and accruing interest at 90-day Euriborplus 1.15%. This loan matures on April 17, 2017, with a single payment, provided the contracting parties do not agree to other conditions beforehand. Thefinance costs associated to this loan during 2015 and 2014 were 53 and 63 thousand euros, respectively.

Transactions entered into with related parties were as follows:

2015

2014

(Thousands of euros) Direct parent Companies with an indirect investment Direct parent Companies with an indirect investment
Revenue
Sale of casings 69,437 743 59,092 1,557
Sale of spare parts and

machinery

5,849 - 6,749 32
Services provided 560 - 428 -
Goods for consumption
Purchases of casings and other (10,863) - (13,564) -
Purchases of casings and other re-invoiced - - 1,036 6
Other income 10,488 168 9,481 129
Other operating income
Employee benefits expense
Other employee benefits

expense

4 - (5) -
Other employee benefits expense re-invoiced (41) - 164 -
Other operating expenses
External services received (1,095) - (1,136) 14
External services re-invoiced 3,113 86 1,995 71
Net finance income (expense)
Finance income - dividends 46,548 - 54,033 -
Finance income - interest 216 - 234 -
Finance expense - interest (84) - (316) -

20.2 Directors and senior executives

Directors

Directors compensation is outlined in Article 27 ter of the bylaws and remuneration policies approved by the shareholders during their general meeting.

The breakdown for remuneration in 2015 is as follows:

Thousands of euros

Salaries Fixed remuneration Per diems Variable remuneration - short term Variable remuneration - long term Remuneration from membership

in other commissions

Boards of other group companies

Total
2015
Mr. José Domingo de Ampuero y Osma 348 350 - 157 139 - - 994
Mr. Nestor Basterra Larroudé - 330 33 - - 100 8 471
Ms. Agatha Echevarría Canales - 255 33 - - 100 - 388
Mr. Alejandro Legarda Zaragüeta - 80 33 - - 45 - 158
Mr. Ignacio Marco-Gardoqui Ibáñez - 80 30 - - 60 - 170
Ms. Laura González Molero - 80 24 - - 8 - 112
Mr. José María Aldecoa Sagastasoloa - 80 33 - - 30 - 143
Mr. Jaime Real de Asúa Arteche - 80 33 - - 20 - 133
Mr. José Antonio Canales García 308 - - 312 139 - - 759
Mr. Juan March de la Lastra - 51 21 - - 12 - 84
656 1,386 240 469 278 375 8 3,412

During the General Shareholders Meeting held on May 7, 2015 Mr. Juan March de la Lastra was designated Propriety Director of Corporación Financiera Alba,S. A.

The breakdown for remuneration in 2014 is as follows:

Thousands of euros

Salaries Fixed remune-ration Per diems Variable remuneration - short term Variable remuneration - long term Remuneration from membership

in other commissions

Boards of other group companies

Total
2014
Mr. José Domingo de Ampuero y Osma 347 350 - 171 - - - 868
Mr. Nestor Basterra Larroudé - 330 33 - - 100 50 513
Ms. Agatha Echevarría Canales - 255 33 - - 109 - 397
Mr. Alejandro Legarda Zaragüeta - 80 27 - - 45 - 152
Mr. Ignacio Marco-Gardoqui Ibáñez - 80 33 - - 51 - 164
Ms. Laura González Molero - 80 27 - - 20 - 127
Mr. José María Aldecoa Sagastasoloa - 80 33 - - 30 - 143
Mr. Jaime Real de Asúa y Arteche - 58 24 - - 10 - 92
Mr. José Antonio Canales García 307 - - 342 - - - 649
Mr. José Cruz Pérez Lapazarán - 22 9 - - 10 - 41
Mr. Gregorio Marañón Bertrán de Lis - 22 9 - - 9 - 40
654 1,357 228 513 - 384 50 3,186

Remuneration paid to Mr. José Cruz Pérez Lapazarán and Mr. Gregorio Marañón Bertrán de Lis correspond to the month of April, when they stepped down asmembers of the parent's Board of Directors, in accordance with the decision made during the General Shareholders’ Meeting held on April 11, 2014.

During the same meeting, Mr. Jaime Real de Asúa y Arteche was named independent director, and Mr. José Antonio Canales García was named executive director.

The two Executive directors, José Domingo de Ampuero y Osma and José Antonio Canales García earned a variable compensation totaling 747 thousand euros(2014: 513 thousand euros). This was calculated based on EBIDTA, net profit, sales, and share price values which were determined in accordance with theannual plan as well as personal performance.

At December 31, 2015 and 2014, the Viscofan Group had not paid any advances or granted any loans to serving or former members of the Board of Directors orrelated parties, and had no pension or life insurance commitments with them. There was no remuneration based on shares or options.

In 2015 and 2014 the members of the Board of Directors or persons acting on their behalf did not carry out any transactions with the Company or with Groupcompanies other than those conducted at arm’s length in the normal course of business.

Viscofan's directors have communicated that insofar as article 229 of the Capital Companies Law is concerned they do not have any conflicts of interestwith the Company.

The Viscofan Group has contracts with its two executive directors which include golden parachute clauses. The cancellation of these contracts in certainobjective terms not attributable to these board members will entitle them to an indemnity. The average total indemnity payable is twice the annual salary,and includes a non-competition condition.

Executives

In 2015, remuneration received by key management personnel totaled 2,056 thousand euros. This includes 537 thousand euros, corresponding to the payment oftri-annual remuneration. In 2014, remuneration totaled 1,259 thousand euros, with no additional payment made for pluri-annual complements. This amount doesnot include the abovementioned payments made to José Antonio Canales García and José Domingo de Ampuero y Osma, which are reflected above.

20.3 Other related parties

Financial debt includes a 5 million euro loan granted in 2013 by a financial entity linked to Corporación Financiera Alba, S.A., which owns 6.86% of theCompany's shares at year-end 2015 (2014: 6.7%). Payments made, including financial expenses, totaled 140 thousand euros (2014: 162 thousand euros). Also,services received from parties related to the shareholder amounted to 845 thousand euros in 2015. All transactions take place in normal market conditions.

21. NATURE AND EXTENT OF RISKS ARISING FROM FINANCIAL INSTRUMENTS

The Company’s risk management policies are established by the Example Group’s financial risk committee, having been approved by the Group’s directors.Based on these policies, the Company's finance department has established a series of procedures and controls which make it possible to identify, measure,and manage the risks arising from financial instrument activity. These policies establish that no trading in derivatives for speculative purposes will beundertaken by the Company.

Financial instrument activity exposes the Company to credit, market, and liquidity risk.

21.1 Credit risk

Credit risk exists when a potential loss may arise from the Company’s counterparty not meeting its contractual obligations, i.e. the possibility thatfinancial assets will not be recovered at their carrying amount within the established timeframe.

The maximum exposure to credit risk at December 31 is as follows:

(Thousands of euros) 2015 2014
Non-current financial investments 182 132
Trade and other receivables 42,929 36,052
Current loans to group companies 6,964 5,222
50,075 41,406

For the purposes of credit risk management, the Company differentiates between financial assets arising from operations and investments.

Operating activities

The Sales Department and Finance Department set credit limits for each customer, which are based on information obtained from an entity specializing insolvency analysis of companies.

Each month a breakdown giving the age of each of the accounts receivable is prepared which serves as a base to control collection. The Finance Departmentrequests settlement of past due accounts on a monthly basis until they are more than 90 days old, at which point they are submitted to the insurer toarrange recovery. In addition, the Legal Department is notified so it can monitor collection and if necessary, subsequently, claim the debt through courts.

Each month customers incurring in late payments have their credit status reviewed, with measures taken in respect of credit limit and payment terms.

The breakdown, by counterparty, of the concentration of credit risk related to “Trade and other receivables” at December 31 is as follows:

(Thousands of euros)

2015

2014

Not due 17,105 21,775
Past due, not impaired
Less than 3 months 1,422 162
3 – 6 months - -
6 – 12 months - -
More than 12 months - -
18,527 21,937
Doubtful (over 6 months) 801 733
Impairment allowances (Note 8.1) (801) (733)
Total 18,527 21,937

Investing activities

Loans and borrowing facilities to group companies and third parties, as well as the acquisition of unlisted companies’ securities must be approved byManagement.

21.2 Market risk

Market risk exists when a potential loss may arise from fluctuations in the fair value or future cash flows of a financial instrument due to changes inmarket prices. Market risk comprises interest rate risk, currency risk, and other price risks.

Foreign currency risk

Foreign currency risk is the risk of possible loss caused by changes in the fair value or future cash flows of a financial instrument because offluctuations in exchange rates. The Company’s exposure to the risk of exchange rate fluctuations is mainly related to sales carried out in currencies otherthan the functional currency.

As described in Note 19, the Company carries out major transactions in foreign currencies, in particular, US dollars. The Viscofan Group’s policy is toarrange exchange rate hedges to cover the net cash flows from these transactions. Maximum exposure to foreign currency risk for accounts receivable is asfollows:

2015

2014

(Thousands of euros) Receivables Payables Receivables Payables
In US dollars 20,112 2,931 15,997 2,557
In Canadian dollars 103 - 70 -
In pounds sterling 2,458 - 1,863 -
Other 251 - 410 -
22,924 2,931 18,340 2,557

Interest rate risk

Interest rate risk arises when there is a possible loss due to fluctuations in the fair value or future cash flows of a financial instrument due to changesin market interest rates. The Company’s exposure to the risk of changes in interest rates is mainly related to non-current loans and credit facilitiesreceived at floating interest rates.

The Company manages its interest rate risk by distributing financing received between fixed and floating rates. Company policy consisted in maintaining apercentage of non-current net loans (net of non-current investments) received from third parties at a fixed interest rate. To manage this, the Companyentered into interest rate swaps which were designated as hedges of the respective loans.

21.3 Liquidity risk

Liquidity risk is the possibility that the Company will have insufficient funds or access to sufficient funds at an acceptable cost to meet its paymentobligations at all times. The Company’s objective is to maintain sufficient available funds. Company policies establish the minimum liquidity levelsrequired. Each month, the Company adequately monitors expected collections and payments to be made in the coming months, and analyzes any deviations fromexpected cash flows in the previous month to identify any possible changes which might affect liquidity.

The undiscounted contractual maturity dates of financial liabilities were as follows:

(Thousands of euros) Up to 3 months 3 months – 1 year 1 year – 5 years More than 5 years Total
2015
Bank borrowings
Loans 1,250 2,892 22,750 - 26,892
Accrued interest payable 72 60 - - 132
Liabilities from capital leases 21 62 42 - 125
Derivatives 1,394 1,823 177 - 3,394
Other financial liabilities 2,658 3,225 7,315 3.326 16,524
Payable to group companies 5,109 - 4,500 - 9,609
Trade and other payables 18,057 - - - 18,057
28,561 8,062 34,784 3,326 74,733
2014
Bank borrowings
Loans - 8,000 26,000 - 34,000
Borrowings (*) - 11,864 - - 11,864
Accrued interest payable 223 - - - 223
Liabilities from capital leases 20 61 125 - 206
Derivatives 1,262 3,747 682 - 5,691
Other financial liabilities 2,308 2,357 6,902 4,014 15,581
Payable to group companies 42 10,113 4,500 - 14,655
Trade and other payables 12,971 - - - 12,971
16,826 36,142 38,209 4,014 95,191

(*) The classification of the maturities of “Borrowings” was determined according to current maturities of the amounts drawn down on the credit accounts. Thus“Up to 3 months” includes the balance drawn down on credit lines which are renewed annually and the renewal of which was agreed after year end.

22. OTHER INFORMATION

22.1 Employees

The headcount by professional category is as follows:

Average headcount at year end Número medio de personas empleadas en el ejercicio
Men Women Total
2015
Senior executives 16 3 19 18
Engineers and technicians 150 45 195 178
Administrative personnel 3 29 32 30
Specialized personnel 81 22 103 98
Laborers 264 68 332 335
514 167 681 659
2014
Senior executives 16 2 18 18
Engineers and technicians 142 32 174 165
Administrative personnel 3 32 35 34
Specialized personne 87 19 106 100
Laborers 246 79 325 309
494 164 658 626

22.2 Audit fees

Ernst & Young, S.L., the auditor of the Company’s financial statements and all other companies with which it has any of the relationships referred toin Additional Provision Fourteen of the Measures to Reform the Financial System Law, agreed the following fees with the Company for the years endedDecember 31, 2015 and 2014:

(Thousands of euros) 2015 2014
Fees for audit of the financial statements 104 102
Other audit services 23 22
Other services 18 5
145 129

The above amounts include all 2015 and 2014 related fees, irrespective of when they were actually billed.

22.3 Information on environmental issues

Plant and equipment included in “Property, plant, and equipment” used for protecting and improving the environment at December 31 is broken down asfollows:

(Thousands of euros) Balance at January 1

Additions

Disposals

Balance at December 31
2015
Cost 11,338 - - 11,338
Accumulated depreciation (9,779) (275) - (10,054)
1,559 1,284
(Thousands of euros) Balance at January 1

Additions

Disposals

Balance at December 31
2014
Cost 11,338 - - 11,338
Accumulated depreciation (9,333) (446) - (9,779)
2,005 1,559

The expenses to protect and improve the environment during 2015 and 2014 were ordinary and amounted to 1,246 thousand and 951 thousand euros, respectively.

Since the Company’s directors consider that no significant contingencies exist with respect to environmental protection and improvement, no provision hasbeen recognized in that respect.

22.4 Information on the average payment period to suppliers

In accordance with the terms of the single additional provision of the Resolution of the Institute of Accounting and Auditors of Accounts dated January 29,2016 on information to be included in notes to the financial statements regarding the average period for making payments to suppliers, the Company hasdecided to apply the draft resolution, and therefore, in accordance with the terms outlined in the first additional provision, will only present theinformation for the year, rather than comparative information; therefore, these are considered first-time financial statements for these exclusive effects,with regard to the application of the uniformity principle and the comparability requirement.

Information on the average payment period to suppliers follows:

2015
Days
Average supplier payment period 35.6
Ratio of paid transactions 37.2
Ratio of transactions pending payment 12.3
(Thousands of euros)
Total payments made 114,317
Total future payments 7,569

23. EVENTS AFTER THE BALANCE SHEET DATE

In its meeting on February 29, 2016 the Board of Directors agreed to propose remuneration for shareholders totaling 1.35 euros per share. This included theabovementioned 0.52 euros per share interim dividend paid on December 29, 2015, and a complementary 0.82 euros per share dividend thatwill be paid on June 9, 2016, plus the attendance per diem amounting to 0.01 euros per share.

No significant event has occurred after December 31, 2015 which would impact or substantially affect the information given herein.

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