Investor Presentaiton
In Nicaragua, payouts for termination benefits vary from one to five months of salary
for the period the services were provided.
In Costa Rica, termination benefits are paid to employees based on current corporate
policy and in conformity with the laws of such country.
r. Equity
Legal reserve:
In conformity with the Mexican Corporations Act, the Company appropriates at least
5% of the net income of each year to increase the legal reserve. This practice must be
continued each year until the legal reserve reaches 20% of the value of the Company's
capital stock.
Employee stock option plan fund:
The employee stock option plan fund is comprised of WALMEX shares presented
at acquisition cost. The plan is designed to grant stock options to executives of the
companies in the Group, as approved by the CNBV.
All employee stock options are granted to executives of subsidiary companies at a value
that is no less than the market value on the grant date.
In accordance with current corporate policy, WALMEX executives may exercise their
option to acquire shares in equal parts over five years. The right to exercise an employee
stock option expires after ten years as of the grant date or after sixty days following the
date of the employee's termination.
The compensation cost of stock option is calculated using the Black-Scholes financial
valuation technique, in conformity with IFRS 2, Share-Based Payments.
Premium on sale of shares:
The premium on sale of shares represents the difference between the cost of shares
granted under the stock option plan and the value at which such shares were sold to
executives of companies in the Group, net of the corresponding income tax.
s. Revenue recognition
Revenue from merchandise sales is recognized in the consolidated statement of
comprehensive income at the time ownership of the products sold is transferred to the
customer and the services income at the time the service is provided, in conformity with
IAS 18, Revenue.
Sam's Club and ClubCo membership income is deferred over the twelve-month term
of the membership and it is presented in the other revenues line in the consolidated
statement of comprehensive income.
Rental income is recognized as it accrues over the terms of the lease agreements entered
into with third parties and it is presented in the other revenues line in the consolidated
statement of comprehensive income.
The Company recognizes the net amount of cell phone minutes revenues in the net sales
line in its consolidated statement of comprehensive income at the time the service is
provided.
Walmart Bank's interest and fee revenues are recognized as they accrue in the other
revenues line in the consolidated statement of comprehensive income.
Revenues from the sale of waste, extended warranties and service commissions are
recognized in the other revenues line in the consolidated statement of comprehensive
income at the time ownership of the products sold is transferred to the customer or the
service is provided.
t. Basic earnings per share attributable to owners of the parent
The basic earnings per share is the result of dividing the net income of the year
attributable to owners of the parent by the weighted average number of outstanding
shares, in conformity with the guidelines of IAS 33, Earnings per Share. Diluted earnings
per share is the same as basic earnings per share since there is currently no potentially
dilutive common stock.
U. Operating segments
Segment financial information is prepared based on the information used by the
Company's senior management to make business decisions and assess the Company's
performance. Segment information is presented based on the geographical zones in
which the Company operates, in conformity with IFRS 8, Operating Segments.
v. Foreign currency transactions
The Company's foreign currency denominated assets and liabilities are translated to
Mexican pesos at the prevailing exchange rate at the date of the consolidated statement
of financial position. Exchange differences are recognized in the consolidated statement
of comprehensive income under the Financial (expenses) income, net line, in conformity
with IAS 21, The Effects of Changes in Foreign Exchange Rates.
2013 Financial and
Social Responsibility Report
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