All of the financial instruments measured at fair value are classified into one of the following levels depending on the inputs used to value them:
Level 1. Use of quoted prices in active markets of identical assets and liabilities (without any adjustment)
Level 2. Use of directly or indirectly observable inputs (other than level 1 quoted prices)
Level 3. Use of unobservable inputs
12-31-2014 LEVEL 1 LEVEL 2 LEVEL 3 Financial assets
Equity instruments 693 693 – –
Derivatives 2,233 – 2,233
Financial liabilities
Other financial liabilities 69,229 – – 69,229
Derivatives 1,482 – 1,482 –
Level 1 basically includes the valuation of equity interests classified as available for sale. Level 2 reflects the liability recognized under IAS 39 in connection with the shareholdings pending acquisition in TBA Suntra and the Garofalo Group.
The Group does not hold any financial instruments whose fair value cannot be reliably measured. No instruments were transferred between the various fair value hierarchy levels in the course of 2014.
29. ENVIRONMENTAL DISCLOSURES
The productive processes used at the Group’s various factories, in both the rice and the pasta divisions, are relatively simple agricultural food processes that do not have a major impact on the environment and entail minimum risk of accidental contamination. The most significant environmental aspects pertaining to the Group can be categorized as follows:
Greenhouse gas emissions: essentially the emission of particles related to the manipulation of cereals (rice and wheat) and gases produced in the combustion processes used to produce vapor and dry raw materials. The fuel most widely used is natural gas.
Productive processes: essentially mechanic and hydrothermal, these processes require the use of very few chemical products, and in very small amounts. Most of these products are used to clean equipment and sanitize raw materials and are relatively safe for the environment.
Water consumption: the Group uses relatively little water in its manufacturing processes (most of its products are dry products), so that the volume of wastewater produced is also small. Moreover, the wastewater generated is relatively uncontaminated as the water consumed is used basically to produce vapor, as a refrigerant or as an ingredient in finished products.
Waste generation and management: the Group generates minimum amounts of waste, including both non-hazardous (mainly ingredient and auxiliary material packaging) and hazardous (maintenance operations) waste.
To minimize its environmental footprint, Ebro Foods builds environmental protection into its business development and deploys the tools, measures and resources needed to guarantee protection at its subsidiaries. More specifically, the Group’s environmental policy is articulated around three lines of initiative:
Ensuring that its companies comply with applicable environmental legislation in carrying out their business activities by means of the rollout of in-house management systems and monitoring of prevailing legislation in this arena.
Minimizing the environmental impact of its business operations by searching for eco-efficient solutions and continually rolling out initiatives designed to reduce its emissions and waste generation and to optimize consumption of water, energy and packaging materials.
Suitably and safely managing all its waste, fostering recycling and reuse. Using recycled and/or environmentally-friendly raw materials whenever possible.
Rolling out environmental employee training and awareness programs.
In parallel, the Ebro Foods Group intervenes in the rest of its value chain by controlling the environmental performance of its industrial suppliers by means of internal and/or external audits and helping them to enhance their environmental management practices as appropriate.
The Group is also working actively on researching and promoting environmentally-sustainable farming practices for use in the production of its agricultural raw materials; the focus of this effort is currently on rice. This work is taking the form of in-house initiatives and ad-hoc collaborations with stakeholders and sector associations.
In 2015, the Group joined the Sustainable Agriculture Initiative Platform (SAI Platform), an industry initiative that brings together the key food players worldwide with the goal of attaining sustainable agricultural standards from an environmental and social standpoint. Within this initiative, alongside other sector members, a specific rice-growing taskforce has been set up to develop sustainable practices based on a common industry standard (mainly at the international level) and foster its implementation in the rice-growing regions from which this raw material is sourced.
Fuller information on the Group’s environmental performance in 2014 can be found in its Annual Sustainability Report.
In addition, in order to guarantee compliance with the packaging and packaging waste reduction, recycling and recovery objectives laid down in Spanish Law 11/97, of April 24, 1997, the Group’s Spanish subsidiary Herba is a member of Ecoembalajes España, S.A. (Ecoembes), a non-profit company whose mission is to design and develop systems oriented towards collecting, sorting and recovering used packaging and packaging waste. Ecoembes uses the concept known as the Green Dot (the symbol featured on the packaging) to certify that the product’s packager has paid a certain amount of money for each item of packaging it places on the market.
In tandem, both the European rice subsidiaries and Ebro Foods’ head offices have entered into agreements with entities akin to Ecoembes for the destruction of paper and other materials. These agreements allow then not only to comply with data protection legislation but also to guarantee the sustainable management of this documentation through recycling commitments.
Lastly, various Group companies have arranged civil liability insurance that covers third-party damages caused by a sudden and unintentional spill. Management believes that this policy adequately covers any potential risk in this respect. To date the Group has not been party to any material environmental-related claims; on the other hand it can claim a positive record on the basis of the results of audits and inspections and the lack of any pleas in respect of its integrated environmental permit processes, etc.
30. FEES PAID TO AUDITORS
External services in the consolidated income statement include the fees paid to the auditors of the consolidated financial statements.
The fees paid for account auditing and other services to the Company’s auditor, Ernst & Young, S.L., and entities related to the latter by means of control, joint ownership or joint management, in 2014 and 2013 (which services were provided by a different auditor in 2013) were as follows:
The fees corresponding to auditing services provided by EY in 2014 (Deloitte in 2013) amounted to 1,123 (2013: 1,421) thousand euros; those corresponding to other assurance services amounted to 95 (2013: 99) thousand euros.
The fees for tax advisory and and/other services totaled 303 (2013: 112) thousand euros.
31. EVENTS AFTER THE REPORTING PERIOD
There have been no significant events or developments between the end of the reporting period and the date of authorizing the accompanying financial statements for issue other than the CNMC verdict received on March 3, 2015 (note 21).