Download Atresmedia Corporación de Medios de Comunicación, S.A. (formerly

Atresmedia Corporación de Medios
de Comunicación, S.A. (formerly
Antena 3 de Televisión, S.A.)
Auditors' Report
Financial Statements for the year
ended
31 December 2013
Translation of a report originally issued in Spanish based on our work performed in
accordance with the audit regulations in force in Spain and of financial statements originally
issued in Spanish and prepared in accordance with the regulatory financial reporting
framework applicable to the Company (see Notes 2 and 24). In the event of a discrepancy,
the Spanish-language version prevails.
AUDITORS’ REPORT ON FINANCIAL STATEMENTS
To the Shareholders of
Atresmedia Corporación de Medios de Comunicación, S.A. (formerly Antena 3 de Televisión,
S.A.):
We have audited the financial statements of Atresmedia Corporación de Medios de
Comunicación, S.A., which comprise the balance sheet at 31 December 2013 and the related
income statement, statement of changes in equity, statement of cash flows and notes to the
financial statements for the year then ended. The directors are responsible for the
preparation of the Company’s financial statements in accordance with the regulatory financial
reporting framework applicable to the Company (identified in Note 2 to the accompanying
financial statements) and, in particular, with the accounting principles and rules contained
therein. Our responsibility is to express an opinion on the financial statements taken as a
whole based on our audit work performed in accordance with the audit regulations in force in
Spain, which require examination, by means of selective tests, of the evidence supporting the
financial statements and evaluation of whether their presentation, the accounting principles
and policies applied and the estimates made comply with the applicable regulatory financial
reporting framework.
In our opinion, the accompanying financial statements for 2013 present fairly, in all material
respects, the equity and financial position of Atresmedia Corporación de Medios de
Comunicación, S.A. at 31 December 2013, and the results of its operations and its cash flows
for the year then ended, in conformity with the regulatory financial reporting framework
applicable to the Company and, in particular, with the accounting principles and rules
contained therein.
The accompanying directors’ report for 2013 contains the explanations which the directors
consider appropriate about the Company’s situation, the evolution of its business and other
matters, but is not an integral part of the financial statements. We have checked that the
accounting information in the directors’ report is consistent with that contained in the financial
statements for 2013. Our work as auditors was confined to checking the directors’ report with
the aforementioned scope, and did not include a review of any information other than that
drawn from the Company’s accounting records.
DELOITTE, S.L.
Registered in ROAC under no. S0692
Jesús Mota Robledo
26 February 2014
Atresmedia Corporación de Medios
de Comunicación, S.A. (formerly
Antena 3 de Televisión, S.A.)
Financial Statements for the year
ended
31 December 2013
Translation of a report originally issued in
Spanish based on our work performed in
accordance with the audit regulations in
force in Spain and of financial statements
originally issued in Spanish and prepared
in accordance with the regulatory financial
reporting framework applicable to the
Company (see Notes 2 and 24). In the
event of a discrepancy, the Spanishlanguage version prevails.
Translation of financial statements originally issued in Spanish and prepared in accordance with the regulatory financial reporting framework applicable to the Company (see Notes 2 and 24).
In the event of a discrepancy, the Spanish-language version prevails.
ATRESMEDIA CORPORACIÓN DE MEDIOS DE COMUNICACIÓN, S.A.
BALANCE SHEET AT 31 DECEMBER 2013
(Thousands of euros)
ASSETS
Notes
2013
2012
EQUITY AND LIABILITIES
NON-CURRENT ASSETS
Intangible assets
6
Licences and trademarks
5&6
Computer software
Property, plant and equipment
7
Land and buildings
Plant and other items of property, plant and equipment
Property, plant and equipment in the course of construction
Non-current investments in Group companies and associates 9.3 & 21
Equity instruments
Loans to companies
Non-current financial assets
9.1
Other financial assets
Deferred tax assets
18
642,733
81,285
75,496
5,789
43,492
24,866
18,390
236
201,610
76,288
125,322
10,960
10,960
305,386
661,935
82,835
76,287
6,548
47,540
26,439
20,291
810
211,746
74,445
137,301
16,385
16,385
303,429
EQUITY
SHAREHOLDERS' EQUITYShare capital
Registered share capital
Share premium
Reserves
Legal and bylaw reserves
Other reserves
Treasury shares
Other equity instruments
Profit for the year
Interim dividend
VALUATION ADJUSTMENTSHedges
CURRENT ASSETS
Non-current assets held for sale
Inventories
Programme rights
Raw and other materials
Advances to suppliers
Trade and other receivables
Trade receivables for sales and services
Receivable from Group companies and associates
Sundry accounts receivable
Remuneration payable
Current tax assets
Current investments in Group companies and associates
Loans to companies
Current financial assets
Derivatives
Other financial assets
Current prepayments and accrued income
Cash and cash equivalents
Cash
549,150
292,502
260,305
3,016
29,181
167,831
6,148
157,843
2,050
105
1,685
31,124
31,124
1,376
698
678
372
55,945
55,945
478,016
2,000
249,151
216,937
2,921
29,293
190,184
3,986
180,797
2,187
117
3,097
30,487
30,487
2,454
1,245
1,209
3,740
3,740
NON-CURRENT LIABILITIES
Long-term provisions
Non-current payables
Bank borrowings
Derivatives
Other non-current payables
Non-current payables to Group companies and associates
Deferred tax liabilities
12
13
21.2
18
21.2
9.2
11
TOTAL ASSETS
1,191,883 1,139,951
The accompanying Notes 1 to 24 are an integral part of the balance sheet at 31 December 2013.
CURRENT LIABILITIES
Short-term provisions
Bank borrowings
Financial derivatives
Current payables to Group companies and associates
Trade and other payables
Payable to suppliers
Payable to suppliers - Group companies and associates
Sundry accounts payable
Remuneration payable
Other accounts payable to public authorities
Customer advances
Current accruals and deferred income
TOTAL EQUITY AND LIABILITIES
Notes
2013
2012
343,136
308,313
207,604
169,300
38,304
157,032
42,474
114,558
(99,453)
42,643
34,468
-
207,604
169,300
38,304
142,521
40,281
102,240
(99,453)
42,643
35,862
(21,352)
842
488
288,579
2,328
263,600
200,129
207
63,264
2
22,649
91,800
380
197
183
68,534
22,886
560,168
31,976
6,305
3,025
87,411
431,021
332,714
75,601
40
13,565
8,558
543
430
739,838
41,692
137,388
485
83,190
476,607
326,454
124,719
139
17,445
7,146
704
476
1,191,883
1,139,951
14
15
16.1
11
21.2
18
15
16.2
11
21.2
21.2
18
1
Translation of financial statements originally issued in Spanish and prepared in accordance with the regulatory financial reporting
framework applicable to the Company (see Notes 2 and 24). In the event of a discrepancy, the Spanish-language version prevails.
ATRESMEDIA CORPORACIÓN DE MEDIOS DE COMUNICACIÓN, S.A.
INCOME STATEMENT FOR 2013
(Thousands of euros)
Notes
2013
2012
CONTINUING OPERATIONS
Revenue
20.1
Advertising revenue
Procurements
20.2
Programme amortisation and other
652,493
574,109
652,493
574,109
(432,033) (400,534)
(625,744)
Cost of raw materials and other consumables used
(598,249)
(1,686)
(979)
Inventories
195,397
198,694
Other operating income
25,616
18,194
25,616
18,194
(41,415)
(58,594)
(34,562)
(50,611)
(6,853)
(7,983)
Non-core and other current operating income/Other services
Staff costs
Wages, salaries and similar expenses
Employee benefit costs
20.3
Other operating expenses
20.4
Outside services
(170,485)
Taxes other than income tax
Excessive provisions
Impairment and gains or losses on disposals of non-current assets
(810)
1,363
1,115
(13,567)
(12,582)
4,127
550
8
37
8
37
24,604
(6,973)
20.5
18,923
27,849
9.3
12,354
26,356
21.1
12,354
26,356
6&7
15
7
Gains or losses on disposals and other
PROFIT (LOSS) FROM OPERATIONS
Finance income
From investments in equity instruments
- Group companies and associates
(128,458)
(1,503)
Losses on, impairment of and change in allowances for trade receivables
Depreciation and amortisation charge
(170,625) (128,153)
From marketable securities and other financial instruments
6,569
1,493
21.1
5,943
1,289
626
204
Finance costs
20.5
(16,642)
(10,014)
On debts to Group companies and associates
21.1
(4,046)
(2,303)
(12,596)
(7,711)
(952)
4,932
- Group companies and associates
- Third parties
On debts to third parties
Changes in fair value of financial instruments
Held-for-trading financial assets/liabilities and other
Exchange differences
19
Impairment and gains or losses on disposals of financial
instruments
Impairment and other losses
9.3
Gains or losses on disposals and other
FINANCIAL PROFIT
PROFIT BEFORE TAX
Income tax
PROFIT FOR THE YEAR
18.4
(952)
4,932
6,476
4,089
(1,947)
(5,483)
(1,949)
(6,664)
2
1,181
5,858
21,373
30,462
14,400
4,006
21,462
34,468
35,862
The accompanying Notes 1 to 24 are an integral part of the income statement for 2013.
2
Translation of financial statements originally issued in Spanish and prepared in accordance with the regulatory financial reporting
framework applicable to the Company (see Notes 2 and 24). In the event of a discrepancy, the Spanish-language version prevails.
ATRESMEDIA CORPORACIÓN DE MEDIOS DE COMUNICACIÓN, S.A.
STATEMENT OF CHANGES IN EQUITY FOR 2013
A) STATEMENTS OF RECOGNISED INCOME AND EXPENSE
(Thousands of euros)
2013
PROFIT PER INCOME STATEMENT (I)
2012
34,468
35,862
Income and expense recognised directly in equity:
- Arising from cash flow hedges
506
(631)
(152)
189
354
(442)
- Arising from cash flow hedges
-
(10)
- Tax effect
-
3
TOTAL TRANSFERS TO PROFIT OR LOSS (III)
-
(7)
34,822
35,413
- Tax effect
TOTAL INCOME AND EXPENSE RECOGNISED DIRECTLY IN EQUITY (II)
Transfers to profit or loss:
TOTAL RECOGNISED INCOME AND EXPENSE (I+II+III)
The accompanying Notes 1 to 24 are an integral part of the statement of recognised income and expense for
2013.
3
Translation of financial statements originally issued in Spanish and prepared in accordance with the regulatory financial reporting
framework applicable to the Company (see Notes 2 and 24). In the event of a discrepancy, the Spanish-language version prevails.
ATRESMEDIA CORPORACIÓN DE MEDIOS DE COMUNICACIÓN, S.A.
STATEMENT OF CHANGES IN EQUITY FOR 2013
B) STATEMENT OF CHANGES IN TOTAL EQUITY
(Thousands of euros)
Share
Share
Interim Treasury Profit for
Reserves
capital premium
dividend shares the year
BEGINNING BALANCE AT 01/01/12
Total recognised income/(expense)
Transactions with shareholders or
owners
Increase in equity arising from the merger
(Note 5)
158,335
-
138,309
-
-
-
10,965
38,304
(3,446)
-
Other
Valuation
equity
adjustments
instruments
Total
equity
(87,861)
96,184
-
-
-
35,862
-
(449)
35,413
-
7,427
-
42,643
-
95,893
-
- (21,352)
-
-
-
-
(21,352)
-
-
-
- (44,792)
-
-
(44,792)
-
-
-
- (19,019)
-
(19,019)
-
-
7,658
-
-
(43,734)
937 262,172
Distribution of profit
Interim dividends paid
Prior year's dividends paid
-
Treasury share transactions
Treasury share transactions (net)
-
-
Other changes in equity
Transfers between equity items
ENDING BALANCE AT 31/12/12
Total recognised income/(expense)
169,300
43,734
- (51,392)
38,304 142,521 (21,352) (99,453)
-
-
-
-
-
-
35,862
42,643
34,468
-
354
34,822
-
-
-
-
-
-
-
-
-
-
-
-
-
-
21,352
-
-
-
-
-
-
-
14,510
-
- (14,510)
488 308,313
Distribution of profit
Interim dividends paid
Prior year's dividends paid
-
- (21,352)
Treasury share transactions
Treasury share transactions (net)
-
-
Other changes in equity
Transfers between equity items
ENDING BALANCE AT 31/12/13
169,300
38,304 157,032
- (99,453)
34,468
-
42,643
842 343,136
The accompanying Notes 1 to 24 are an integral part of the statement of changes in total equity for 2013.
4
Translation of financial statements originally issued in Spanish and prepared in accordance with the regulatory financial
reporting framework applicable to the Company (see Notes 2 and 24). In the event of a discrepancy, the Spanish-language
version prevails.
ATRESMEDIA CORPORACIÓN DE MEDIOS DE COMUNICACIÓN, S.A.
STATEMENT OF CASH FLOWS FOR 2013
(Thousands of euros)
2013
2012
CASH FLOWS FROM OPERATING ACTIVITIES (I)
Profit for the year before tax
Adjustments for:
- Depreciation and amortisation charge
- Impairment losses
- Changes in provisions
- Gains on derecognition and disposal of non-current assets
- Finance income
- Finance costs
- Exchange differences
- Changes in fair value of financial instruments
Changes in working capital
- Inventories
- Trade and other receivables
- Trade and other payables
- Other current assets and liabilities
Other cash flows from operating activities
- Interest paid
- Dividends received
- Income tax recovered (paid)
27,263
30,462
10,001
13,567
1,949
2,298
(8)
(18,923)
16,642
(6,476)
952
(2,102)
(44,008)
817
75,393
(34,304)
(11,098)
(17,700)
12,353
(5,751)
(21,529)
14,400
3,697
12,582
6,664
12,525
(1,218)
(27,849)
10,014
(4,089)
(4,932)
(58,095)
(18,314)
24,407
(102,214)
38,026
18,469
(5,974)
26,356
(1,913)
CASH FLOWS FROM INVESTING ACTIVITIES (II)
Payments due to investment
- Group companies and associates
- Property, plant and equipment and intangible assets
Proceeds from disposal
- Group companies and associates
(5,822)
(16,795)
(8,844)
(7,951)
10,973
10,973
(8,494)
(10,214)
(1,433)
(8,781)
1,720
1,720
30,764
30,764
69,047
(38,283)
-
23,971
(19,019)
(19,019)
109,134
50,946
58,188
(66,144)
(66,144)
-
-
52,205
(6,052)
3,740
55,945
7,862
1,930
3,740
CASH FLOWS FROM FINANCING ACTIVITIES (III)
Proceeds and payments relating to equity instruments
- Purchase of treasury shares
Proceeds and payments relating to financial liability instruments
- Repayment of bank borrowings
- Proceeds from issue of borrowings from Group companies and associates
Dividends and returns on other equity instruments paid
- Dividends
EFFECT OF FOREIGN EXCHANGE RATE CHANGES (IV)
NET INCREASE/DECREASE IN CASH AND CASH EQUIVALENTS
(I+II+III+IV)
Cash and cash equivalents at beginning of year
Change due to merger
Cash and cash equivalents at end of year
The accompanying Notes 1 to 24 are an integral part of the statement of cash flows for 2013.
5
Translation of financial statements originally issued in Spanish and prepared in accordance with the regulatory
financial reporting framework applicable to the Company (see Notes 2 and 24). In the event of a discrepancy,
the Spanish-language version prevails.
Atresmedia Corporación de Medios de Comunicación, S.A.
(formerly Antena 3 de Televisión, S.A.)
Notes to the financial statements for the year ended 31 December 2013
1.- Company activities
Atresmedia Corporación de Medios de Comunicación, S.A. (formerly Antena 3 de Televisión, S.A.)
("the Company"), with registered office at Avenida Isla Graciosa, 13, San Sebastián de los Reyes
(Madrid), was incorporated on 7 June 1988, and its then sole company object was the indirect
management of a public television service.
For this purpose, it submitted a bid in response to the call for tenders made under Article 8 of
Private Television Law 10/1988, of 3 May, and, pursuant to a resolution of the Spanish Cabinet of
25 August 1989, was awarded a concession for the indirect management of the public television
service, for a period of ten years, which ended on 3 April 2000.
On 7 May 1996, the shareholders at the Annual General Meeting resolved to change and extend
the Parent's company object, as permitted by Satellite Telecommunications Law 37/1995.
On 10 March 2000, the Spanish Cabinet adopted a resolution renewing the concession for the
indirect management of the public television service for a period of ten years from 3 April 2000.
The terms of this renewal were the same as for the former concession, with the added obligation
of commencing digital broadcasting on 3 April 2002. The Company made all the necessary
investments to enable it to begin broadcasting on that date the Antena 3 de Televisión, S.A. signal
pursuant to Royal Decree 2169/1998, of 9 October, approving the Spanish Technical Plan for
Digital Terrestrial Television (DTT). On 3 April 2010, the National Government renewed, for a
period of ten years, the concession for the indirect management of the public television service,
under the same terms and conditions as the previous concession.
The Company's Annual General Meeting and its Board of Directors Meeting, on 28 April 2003 and
29 July 2003, respectively, resolved to request the admission to trading of all the shares of Antena
3 de Televisión, S.A. on the Madrid, Barcelona, Bilbao and Valencia Stock Exchanges and their
inclusion in the Spanish Stock Market Interconnection System. On 29 October 2003, the
Company's shares commenced trading on these stock exchanges.
Additional Provision One of Royal Decree 944/2005, of 29 July, approving the Spanish Technical
Plan for Digital Terrestrial Television established 3 April 2010 as the date for the switch-off of
analogue television broadcasting in all the transition projects defined in the National Plan for the
Transition to Digital Terrestrial Television. From that date onwards, all terrestrial television was
broadcast using digital technology.
Following this milestone, in accordance with Additional Provision Three of Royal Decree 944/2005,
of 29 July, each national terrestrial public television service concession operator would gain access
to a digital multiplex with national coverage.
Royal Decree 365/2010, of 26 March, governs the allocation of the Digital Terrestrial Television
multiplexes following the switch-off of terrestrial television broadcasting using analogue
technology.
It established two phases for the allocation of the digital multiplexes. Phase 1 (transitional), in
which each national terrestrial public service television concession operator would gain access to
the capacity equivalent to one digital multiplex with national coverage, provided they
demonstrated that they had met the terms and conditions established in relation to the drive and
development of digital terrestrial television, and phase 2, in which new digital multiplexes will be
planned, and adjustments will be established so that the radioelectric channels 61 to 69, which
were being used by the digital multiplexes in the previous phase can be replaced by others in
1
phase 2. This will conclude before 1 January 2015 with the allocation of the definitive digital
multiplexes to each qualifying company, thereby ending the shared use of digital multiplex
capacity by the national terrestrial public service concession operators.
On 16 July 2010, the Spanish Cabinet adopted a resolution to allocate a national digital multiplex
to each national DTT concession operator: Antena 3, Gestevisión Telecinco, Sogecable, Veo
Televisión, NET TV and Gestora de Inversiones Audiovisuales La Sexta. The digital multiplex is
composed of four digital television channels that can be operated twenty-four hours a day.
The allocation was made upon request and after the switch-off of analogue broadcasting, once it
had been verified that the digital terrestrial television service concession operators had met the
obligations relating to the drive and development of digital terrestrial television that they had
assumed in the framework of the Spanish Technical Plan for Digital Terrestrial Television and the
Royal Decree governing the specific allocation of DTT multiplexes, following the switch-off of
analogue terrestrial television broadcasting.
In any event, the definitive multiplex will be accessed by 1 January 2015, in accordance with the
phases established in the Royal Decree.
A judgment handed down on 27 November 2012 by Chamber Three of the Spanish Supreme Court
rendered void the resolution of the Spanish Cabinet of 16 July 2010 which allocated to each of the
Digital Terrestrial Television (DTT) licence holders, including Antena 3 de Televisión, S.A. and
Gestora de Inversiones Audiovisuales La Sexta, S.A., the capacity equivalent to a digital multiplex
with national coverage composed of four channels.
This allocation had been made pursuant to a set of rules which, since 1997, upon approval of the
National Plan for Digital Terrestrial Television, and particularly upon enactment of Law 10/2005, of
14 June, governed the transition from analogue terrestrial television to DTT, which was completed
in 2010. The allocation was made once the Government had verified that the licence holders had
complied with all the requirements and obligations incumbent upon them to foster transition to
DTT, as a condition for gaining access to the multiplex.
The judgment of the Spanish Supreme Court annulling the allocation was based primarily on the
fact that the allocation was made after the General Audiovisual Communications Law came into
force (which had been enacted one month before the Spanish Cabinet adopted the annulled
resolution), which stipulates that the licences must be granted through a tendering procedure. The
Supreme Court inferred from this that "the licences must reflect the content which existed upon
entry into force of the Law, with no more channels being allowed", while the General Audiovisual
Communications Law does not provide for any safeguard permitting the regulations to be applied
prior to their entry into force.
The judgment of the Spanish Supreme Court noted at the time that the matter would have been
resolved had the General Audiovisual Communications Law included a provision envisaging that
the rules in force prior to its enactment should continue to be valid. The obstacle posed by the
judgment of the Spanish Supreme Court is therefore basically formal, because neither the
conceptual basis of DTT, nor consequently its completion through the allocation of a multiplex to
each operator, have ever been questioned.
On 22 March 2013, the Spanish Cabinet approved a decision to comply with the judgment of the
Supreme Court handed down on 27 November 2012, indicating that the channels affected had to
cease broadcasting, and linking this process with that of the liberalisation of the digital dividend.
Subsequently, on 18 December 2013, the Spanish Supreme Court issued a writ of execution for
the aforementioned judgment, referring, inter alia, to the channels affected by its judgment, which
would include three of the channels currently being operated by Atresmedia.
At present, based on the available information, the interpretation of the aforementioned
resolutions and the fact that Atresmedia Corporación de Medios de Comunicación, S.A. has
complied with all the commitments and obligations imposed on it, a satisfactory solution is still
expected to be reached, and it was not considered necessary to make any significant adjustments
or amendments to these financial statements.
2
The Company is the head of a group of subsidiaries and is obliged under current legislation to
prepare, in addition to its own separate financial statements, the Atresmedia Group’s consolidated
financial statements, which also include its interests in joint ventures and investments in
associates.
The consolidated financial statements of Atresmedia for 2013 were formally prepared by the
directors at the Board of Directors Meeting held on 26 February 2014. The financial statements for
2012 were approved without any changes by the Company's shareholders at the Annual General
Meeting held on 24 April 2013. The shareholders also resolved to change the Company's name
from Antena 3 de Televisión, S.A. to Atresmedia Corporación de Medios de Comunicación, S.A.
In addition, on 14 December 2011 following a resolution by its Board of Directors, Antena 3 de
Televisión, S.A. entered into an agreement with the shareholders of Gestora de Inversiones
Audiovisuales La Sexta, S.A. to merge the two companies, through the merger by absorption of La
Sexta into Antena 3, subject to the obtainment of the relevant authorisations from the regulatory
and competition authorities.
On 25 January 2012, the Board of Directors of Antena 3 de Televisión, S.A. and Gestora de
Inversiones Audiovisuales La Sexta, S.A. approved the draft terms for the merger of the two
companies.
The shareholders at the Annual General Meeting held on 25 April 2012 approved the merger
involving the absorption by Antena 3 de Televisión, S.A. (absorbing company) of Gestora de
Inversiones Audiovisuales La Sexta, S.A. under the draft terms of merger filed with the Madrid
Mercantile Registry on 7 February 2012.
The merger was authorised by the Spanish anti-trust authorities on 24 August 2012, by virtue of a
resolution adopted by the Spanish Cabinet on the same date.
On 5 October 2012, the Spanish Cabinet also resolved to authorise the transfer of the audiovisual
communication licence held by La Sexta and the assignment for private use of the associated
public radioelectric domain. From that date onwards, the operations of La Sexta are deemed to be
performed for accounting purposes by Antena 3 de Televisión, S.A.
The public deed of merger of Antena 3 de Televisión, S.A. with Gestora de Inversiones
Audiovisuales La Sexta, S.A. was filed at the Madrid Mercantile Registry on 31 October 2012, and
as a result the latter was dissolved and all its assets and liabilities were transferred en bloc to the
former.
In view of the business activity carried on by the Company, it does not have any environmental
liability, expenses, assets, provisions or contingencies that might be material with respect to its
equity, financial position or results. Therefore, no specific disclosures relating to environmental
issues are included in these notes to the financial statements.
3
2.- Basis of presentation of the financial statements
Regulatory financial reporting framework applicable to the Company
The accompanying financial statements were formally prepared by the Company’s directors in
accordance with the regulatory financial reporting framework applicable to the Company, which
consists of:
a) The Spanish Commercial Code and all other Spanish corporate law.
b) The Spanish National Chart of Accounts approved by Royal Decree 1514/2007 and its industry
adaptations, and Spanish National Securities Market Commission (CNMV) Circular 1/2008, of 30
January, on the periodic information of issuers whose securities are admitted to trading on
regulated markets.
c) The mandatory rules approved by the Spanish Accounting and Audit Institute in order to
implement the Spanish National Chart of Accounts and the relevant secondary legislation, in
addition to the mandatory rules approved by the Spanish National Securities Market Commission.
d) All other applicable Spanish accounting legislation.
Fair presentation
The accompanying financial statements, which were obtained from the Company's accounting
records, are presented in accordance with the regulatory financial reporting framework applicable
to the Company and, in particular, with the accounting principles and rules contained therein and,
accordingly, present fairly the Company's equity, financial position, results of operations and cash
flows for 2013. These financial statements, which were formally prepared by the Company's
directors, will be submitted for approval by the shareholders at the Annual General Meeting, and it
is considered that they will be approved without any changes. The financial statements for 2012
were approved by the shareholders at the Annual General Meeting held on 24 April 2013.
Non-obligatory accounting principles applied
No non-obligatory accounting principles were applied. Also, the directors formally prepared these
financial statements taking into account all the obligatory accounting principles and standards with
a significant effect hereon. All obligatory accounting principles were applied.
Key issues in relation to the measurement and estimation of uncertainty
In preparing the accompanying financial statements estimates were made by the Company's
directors in order to measure certain of the assets, liabilities, income, expenses and obligations
reported herein. These estimates relate basically to the following:
-
The assessment of possible impairment losses on certain assets (see Notes 4.4 and 9).
The useful life of the property, plant and equipment and intangible assets (see Notes 4.1
and 4.2).
The calculation of provisions (see Notes 4.9 and 15).
Programme amortisation (see Notes 4.5 and 13).
The calculation of income tax and recoverability of tax losses (see Notes 4.7 and 18.).
The fair value of the assets acquired and liabilities assumed in a business combination (see
Note 5).
Although these estimates were made on the basis of the best information available at 2013 yearend, events that take place in the future might make it necessary to change these estimates
(upwards or downwards) in coming years. Changes in accounting estimates would be applied
prospectively.
At 2013 year-end the Company had a working capital deficiency of EUR 11,017 thousand covered
in full by the undrawn portion of the syndicated loan.
4
Comparative information
The information relating to 2013 contained in these notes to the financial statements is presented,
for comparison purposes, with the information for 2012.
Grouping of items
Certain items in the balance sheet, income statement, statement of changes in equity and
statement of cash flows are grouped together to facilitate their understanding; however, whenever
the amounts involved are material, the information is broken down in the related notes to the
financial statements.
Changes in accounting policies
In 2013 there were no significant changes in accounting policies with respect to those applied in
2012.
Correction of errors
In preparing the accompanying financial statements no significant errors were detected that would
have made it necessary to restate the amounts included in the financial statements for 2012.
Effect of not consolidating
The Company is the majority shareholder of certain companies and has ownership interests equal
to or exceeding 20% in the share capital of other companies (see Note 9). The separate financial
statements at 31 December 2013 do not reflect the increases in the value of the Company’s
ownership interests in these companies which would arise from fully consolidating majority
ownership interests and accounting for investments in associates using the equity method.
Pursuant to current legislation, the Company prepared consolidated financial statements
separately in accordance with International Financial Reporting Standards.
In 2013 the main aggregates in the consolidated financial statements are as follows: total assets
EUR 1,261 million; equity EUR 384 million; revenue EUR 796 million; and profit for the year EUR
46 million.
3.- Distribution of profit
The proposed distribution of the profit for the year that the Company's directors will submit for
approval by the shareholders at the Annual General Meeting is as follows (in thousands of euros):
2013
To voluntary reserves
34,468
Total
34,468
5
4.- Accounting policies
The principal accounting policies used by the Company in preparing its financial statements for
2013 and 2012, in accordance with the Spanish National Chart of Accounts, were as follows:
4.1 Intangible assets
As a general rule, intangible assets are recognised initially at acquisition or production cost. They
are subsequently measured at cost less any accumulated amortisation and any accumulated
impairment losses. These assets are amortised over their years of useful life.
Licences and trademarks
These accounts include the amounts relating to the licence and the trademark identified in the
purchase price allocation process arising from the merger with Gestora de Inversiones
Audiovisuales La Sexta, S.A.
The trademark is amortised on a straight-line basis over its useful life, which is estimated to be 20
years.
With regard to the licence, based on an analysis of all the relevant factors, the Company considers
that there is no foreseeable limit to the period over which it is expected to generate net cash
inflows for the Company. As a result, the licence was classified as an intangible asset with an
indefinite useful life and, therefore, it is not amortised. This indefinite useful life assessment is
reviewed at each reporting date and is consistent with the Company's related business plans.
The Company has reviewed the licence and trademark valuations identified in the purchase price
allocation process performed within the framework of the aforementioned merger. For this review,
which included the participation of an independent expert, the standard procedures for analyses of
this kind were used, and it was concluded that the assigned values are within reasonable valuation
ranges. Consequently, it was not necessary to modify the initial estimates or make any
adjustments at 2013 year-end.
Since the asset has an indefinite useful life, a recoverability assessment was performed at yearend. The key assumptions on which the cash flow projections are based relate mainly to
advertising markets, audience, advertising efficiency ratios and the evolution of expenses. Except
for advertising data, which is measured on the basis of external sources of information, the
assumptions are based on past experience and reasonable projections approved by Company
management and updated in accordance with the performance of the advertising markets.
Taking the correlation between the advertising market and the evolution of domestic demand and
private consumption as a reference, a retrospective analysis was conducted using the historical
data of these two variables, based on market consensus.
These future projections cover the next five years. The discount rate used to measure this
intangible asset was between 9% and 10%.
A variation of 0.5% in cumulative annual growth would give rise to a change in value of EUR 9
million, while a 0.5% increase in the discount rate would give rise to a change of EUR 13 million,
and a 0.5% decrease in the discount rate would result in a change of EUR 15 million. Zero
perpetual growth was used. An increase of 0.5% would give rise to an increase in value of EUR 16
million and a decrease of 0.5% would result in a decrease in value of EUR 14 million.
6
Computer software
The Company recognises under “Computer Software” the costs incurred in the acquisition and
development of computer programs, including website development costs. Computer software
maintenance costs are recognised with a charge to the income statement for the year in which
they are incurred. Computer software is amortised on a straight-line basis over three to five years.
4.2 Property, plant and equipment
Property, plant and equipment are initially recognised at acquisition or production cost and are
subsequently reduced by the related accumulated depreciation and by any impairment losses
recognised, as indicated in this note.
Property, plant and equipment upkeep and maintenance expenses are recognised in the income
statement for the year in which they are incurred. However, the costs of improvements leading to
increased capacity or efficiency or to a lengthening of the useful lives of the assets are capitalised.
The Company depreciates its property, plant and equipment by the straight-line method at annual
rates based on the years of estimated useful life of the assets, the detail being as follows:
Years of
estimated
useful life
Buildings
Plant
Computer hardware
33
5 to 8
3 to 5
Other fixtures
6 to 10
Other items of property, plant and equipment
6 to 10
Impairment of intangible assets and property, plant and equipment
At the end of each reporting period (for intangible assets with indefinite useful lives) or whenever
there are indications of impairment (for other tangible and intangible assets), the Company tests
these assets for impairment to determine whether the recoverable amount of the assets has been
reduced to below their carrying amount.
Recoverable amount is the higher of fair value less costs to sell and value in use.
In the case of property, plant and equipment, the impairment tests are performed individually for
each asset.
Where an impairment loss subsequently reverses (not permitted in the specific case of goodwill),
the carrying amount of the asset is increased to the revised estimate of its recoverable amount,
but so that the increased carrying amount does not exceed the carrying amount that would have
been determined had no impairment loss been recognised in prior years. A reversal of an
impairment loss is recognised as income.
4.3 Operating leases
Lease income and expenses from operating leases are recognised in income on an accrual basis.
A payment made on entering into or acquiring a leasehold that is accounted for as an operating
lease represents prepaid lease payments that are amortised over the lease term in accordance
with the pattern of benefits provided.
The leases in which the Company is a lessor consist basically of facilities which the Company has
leased to companies in its Group.
7
4.4 Financial instruments
4.4.1. Financial assets
Classification The financial assets held by the Company are classified in the following categories:
a) Loans and receivables: financial assets arising from the sale of goods or the rendering of
services in the ordinary course of the Company's business, or financial assets which, not
having commercial substance, are not equity instruments or derivatives, have fixed or
determinable payments and are not traded in an active market.
b) Equity investments in Group companies and associates: Group companies are deemed to
be those related to the Company as a result of a relationship of control and associates are
companies over which the Company exercises significant influence.
c)
Held-to-maturity investments: debt securities with fixed maturity and determinable
payments that are traded in an active market and which the Company has the positive
intention and ability to hold to the date of maturity.
d) Held-for-trading financial assets: assets acquired with the intention of selling them in the
near term and assets that form part of a portfolio for which there is evidence of a recent
actual pattern of short-term profit-taking. This category also includes financial derivatives
that are not financial guarantees (e.g. suretyships) and that have not been designated as
hedging instruments.
Initial recognition Financial assets are initially recognised at the fair value of the consideration given, plus any
directly attributable transaction costs.
In the case of equity investments in Group companies affording control over the subsidiary, since 1
January 2010 the fees paid to legal advisers and other professionals relating to the acquisition of
the investment have been recognised directly in profit or loss.
Subsequent measurement Loans and receivables and held-to-maturity investments are measured at amortised cost.
Held-for-trading financial assets are measured at fair value, based on the expected results, the
estimated dividend payable, the price per share and the volatility thereof, and the risk-free rate at
year-end. The result of these fair value changes is recognised in profit or loss.
Investments in Group companies and associates are measured at cost net, where appropriate, of
any accumulated impairment losses. These losses are calculated as the difference between the
carrying amount of the investments and their recoverable amount. Recoverable amount is the
higher of fair value less costs to sell and the present value of the future cash flows from the
investment. Unless there is better evidence of the recoverable amount, it is based on the value of
the equity of the investee, adjusted by the amount of the unrealised gains existing at the date of
measurement (including any goodwill).
At least at each reporting date the Company tests financial assets not measured at fair value
through profit or loss for impairment. Objective evidence of impairment is considered to exist
when the recoverable amount of the financial asset is lower than its carrying amount. When this
occurs, the impairment loss is recognised in the income statement.
The Company uses the strategic plans of the various businesses to calculate any possible
impairment and discounts expected future cash flows. The Company prepares the various
projections individually, taking into account the expected future cash flows of each cashgenerating unit.
8
For the radio unit, the key assumptions on which the cash flow projections are based relate mainly
to advertising markets, audience, advertising efficiency ratios and the evolution of expenses.
Except for advertising data, which is measured on the basis of external sources of information, the
assumptions are based on past experience and reasonable projections approved by Company
management and updated in accordance with the performance of the advertising markets.
These future projections cover the next five years. The cash flows for the years not considered in
the projections are estimated to be perpetual, with growth of 0%.
In assessing value in use, the estimated cash flows are discounted to their present value using a
pre-tax discount rate that reflects current market assessments of the time value of money and the
risks specific to the assets. In order to calculate the rate, the current value of money and the risk
premiums generally used by analysts for the business and geographical area are taken into
account, giving rise to future discount rates of 9%-10%.
The most sensitive variable is the growth of the radio advertising market, for which cumulative
annual growth of 2.4% was used for the projection period, which is in line a mild recovery in the
coming years. A change of 0.5% would change the amount by EUR 12 million. Also, a variation of
0.5% in the discount rate would give rise to a change of EUR 8 million. Zero perpetual growth was
used. An increase of 0.5% would increase the amount by EUR 6 million.
In calculating such valuation adjustments as might be required for trade and other receivables, the
Company takes into account the date on which the receivables are due to be settled and the equity
position of related debtors.
The Company derecognises a financial asset when the rights to the cash flows from the financial
asset expire or have been transferred and substantially all the risks and rewards of ownership of
the financial asset have also been transferred, such as in the case of firm asset sales.
However, the Company does not derecognise financial assets, and recognises a financial liability
for an amount equal to the consideration received, in transfers of financial assets in which
substantially all the risks and rewards of ownership are retained, such as in the case of bill
discounting.
4.4.2 Financial liabilities
Financial liabilities include accounts payable by the Company that have arisen from the purchase of
goods or services in the normal course of the Company's business and those which, not having
commercial substance, cannot be classed as derivative financial instruments.
Accounts payable are initially recognised at the fair value of the consideration received, adjusted
by the directly attributable transaction costs. These liabilities are subsequently measured at
amortised cost.
The Company derecognises financial liabilities when the obligations giving rise to them cease to
exist.
4.4.3 Equity instruments
An equity instrument is a contract that evidences a residual interest in the assets of the Company
after deducting all of its liabilities.
Equity instruments issued by the Company are recognised in equity at the proceeds received, net
of issue costs.
Treasury shares acquired by the Company during the year are recognised at the value of the
consideration paid and are deducted directly from equity. Gains and losses on the acquisition, sale,
issue or retirement of treasury shares are recognised directly in equity and in no case are they
recognised in profit or loss.
9
4.4.4 Hedges
The Company uses derivative financial instruments to hedge the risks to which its business
activities, operations and future cash flows are exposed. Basically, these risks relate to changes in
exchange rates. The Company arranges hedging financial instruments in this connection.
In order for these financial instruments to qualify for hedge accounting, they are initially
designated as such and the hedging relationship is documented. Also, the Company verifies, both
at inception and periodically over the term of the hedge (at least at the end of each reporting
period), that the hedging relationship is effective, i.e. that it is prospectively foreseeable that the
changes in the fair value or cash flows of the hedged item (attributable to the hedged risk) will be
almost fully offset by those of the hedging instrument and that, retrospectively, the gain or loss on
the hedge was within a range of 80-125% of the gain or loss on the hedged item.
In 2012 the Company used the following type of hedge, which is accounted for as described below:
Cash flow hedges: in hedges of this nature, the portion of the gain or loss on the hedging
instrument that has been determined to be an effective hedge is recognised temporarily in equity
and is recognised in the income statement in the same period during which the hedged item
affects profit or loss, unless the hedge relates to a forecast transaction that results in the
recognition of a non-financial asset or a non-financial liability, in which case the amounts
recognised in equity are included in the initial cost of the asset or liability when it is acquired or
assumed.
Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated or
exercised, or no longer qualifies for hedge accounting. At that time, any cumulative gain or loss on
the hedging instrument recognised in equity is retained in equity until the forecast transaction
occurs. If a hedged transaction is no longer expected to occur, the net cumulative gain or loss
recognised in equity is transferred to net profit or loss for the year.
4.5 Inventories
Programme rights
Rights and programme inventories are valued, based on their nature, as follows:
Inventoriable in-house productions (programmes produced to be re-run, such as series)
are measured at acquisition and/or production cost, which includes both external costs billed by
third parties for programme production and for the acquisition of resources and internal production
costs, which are calculated by applying pre-established internal rates on the basis of the time
during which operating resources are used in production. The costs incurred in producing the
programmes are recognised, based on their nature, under the appropriate headings in the income
statement and are included under “Programme Rights” in the balance sheet with a credit to
“Procurements – Inventories” in the income statement.
Amortisation of these programmes is recognised under “Programmes Amortisation and Other” in
the income statement, on the basis of the number of showings, in accordance with the rates
shown below:
Amortisation rate
1st showing
90%
2nd showing
10 %
The maximum period for the amortisation of series is three years, after which the unamortised
amount is written off.
Given their special nature, the series which are broadcast daily are amortised in full when the first
showing of each episode is broadcast.
10
Non-inventoriable in-house productions (programmes produced to be shown only once) are
measured using the same methods and procedures as those used to measure inventoriable inhouse productions. Programmes produced and not shown are recognised at year-end under
“Programme Rights - In-House Productions and Productions in Process” in the balance sheet. The
cost of these programmes is recognised as an expense under “Programme Amortisation and
Other” in the income statement at the time of the first showing.
Rights on outside productions (films, series and other similar productions) are measured at
acquisition cost. These rights are deemed to have been acquired when the term of the right
commences for the Company. Payments made to outside production distributors prior to
commencement of the term of the right are recorded under “Advances to Suppliers” in the balance
sheet.
The amortisation of the rights is recognised under “Programme Amortisation and Other” in the
income statement on the basis of the number of showings, in accordance with the rates shown
below, which are established on the basis of the number of showings contracted:
FILMS
Number of showings contracted
1
2
3 or more
1st showing
100%
50%
50%
2nd showing
-
50%
30%
3rd showing
-
-
20%
SERIES
Number of showings contracted
1
2 or more
1st showing
100%
50%
2nd showing
-
50%
Live broadcasting rights are measured at cost. The cost of these rights is recognised as an
expense under “Programme Amortisation and Other” in the income statement at the time of
broadcast of the event on which the rights were acquired.
Raw and other materials
Dubbings, sound tracks, titles and signature tunes of outside productions are recorded at
acquisition or production cost. The amortisation of rights is recorded under “Programme
Amortisation and Other” in the income statement at the time of the showing, using the same
methods as those used for outside productions.
Other inventories are recorded at acquisition cost and are allocated to profit or loss by the
effective or actual amortisation method over the production period.
Write-downs
The Company recognises write-downs to reduce the unamortised value of in-house productions
and of the rights on outside productions which it considers will not be shown. When these rights
expire, the valuation adjustments are recognised in profit or loss when the cost of the rights is
derecognised.
Classification of programmes
In accordance with the Spanish National Chart of Accounts, programme inventories are classified
as current assets on the basis of the normal business cycle and standard practice in the industry in
which the Company operates. However, programmes are amortised over several years (see Note
13).
11
4.6 Foreign currency transactions
The Company's functional currency is the euro. Therefore, transactions in currencies other than
the euro are deemed to be “foreign currency transactions” and are recognised by applying the
exchange rates prevailing at the date of the transaction.
At the end of each reporting period, monetary assets and liabilities denominated in foreign
currencies are translated to euros at the rates then prevailing. Any resulting gains or losses are
recognised directly in the income statement in the year in which they arise.
Monetary assets and liabilities carried at fair value that are denominated in foreign currencies are
translated at the exchange rates prevailing at the date when the fair value was determined. The
resulting gains or losses are recognised in equity or in profit or loss by applying the same methods
as those used to recognise changes in fair value, as indicated in Note 4.4 on financial instruments.
4.7 Income tax
Tax expense (tax income) comprises current tax expense (current tax income) and deferred tax
expense (deferred tax income).
The current income tax expense is the amount payable by the Company as a result of income tax
settlements for a given year. Tax credits and other tax benefits, excluding tax withholdings and
pre-payments, and tax loss carryforwards from prior years effectively offset in the current year
reduce the current income tax expense.
The deferred tax expense or income relates to the recognition and derecognition of deferred tax
assets and liabilities. These include temporary differences measured at the amount expected to be
payable or recoverable on differences between the carrying amounts of assets and liabilities and
their tax bases, and tax loss and tax credit carryforwards. These amounts are measured at the tax
rates that are expected to apply in the period when the asset is realised or the liability is settled.
Deferred tax liabilities are recognised for all taxable temporary differences, except for those arising
from the initial recognition of goodwill or of other assets and liabilities in a transaction that is not a
business combination and affects neither accounting profit (loss) nor taxable profit (tax loss).
Deferred tax assets are recognised to the extent that it is considered probable that the Company
will have taxable profits in the future against which the deferred tax assets can be utilised.
Deferred tax assets and liabilities arising from transactions charged or credited directly to equity
are also recognised in equity.
The deferred tax assets recognised are reassessed at the end of each reporting period and the
appropriate adjustments are made to the extent that there are doubts as to their future
recoverability. Also, unrecognised deferred tax assets are reassessed at the end of each reporting
period and are recognised to the extent that it has become probable that they will be recovered
through future taxable profits.
In 2001 the Company began to be taxed on a consolidated basis with other Group companies (see
Note 18). In this connection, in calculating its income tax, the Company took into consideration
the corresponding Spanish Accounting and Audit Institute (ICAC) resolutions, establishing the
methods for the recognition of income tax at companies that file consolidated tax returns.
12
4.8 Revenue and expense recognition
Revenue and expenses are recognised on an accrual basis, i.e. when the actual flow of the related
goods and services occurs, regardless of when the resulting monetary or financial flow arises.
Revenue is measured at the fair value of the consideration received, net of discounts and taxes.
Revenue from sales is recognised when the significant risks and rewards of ownership of the goods
sold have been transferred to the buyer, and the Company retains neither continuing managerial
involvement to the degree usually associated with ownership nor effective control over the goods
sold.
Revenue from the rendering of services is recognised by reference to the stage of completion of
the transaction at the end of the reporting period, provided the outcome of the transaction can be
estimated reliably.
At present, the Company basically obtains revenue from the sale of advertising space; this
revenue is recognised in the income statement when the related advertising spot is broadcast.
Interest income from financial assets is recognised using the effective interest method and
dividend income is recognised when the shareholder's right to receive payment has been
established. Interest and dividends from financial assets accrued after the date of acquisition are
recognised as income.
4.9 Provisions and contingencies
When preparing the financial statements the Company's directors made a distinction between:
Provisions: credit balances covering present obligations arising from past events with
respect to which it is probable that an outflow of resources embodying economic benefits that is
uncertain as to its amount and/or timing will be required to settle the obligations; and
Contingent liabilities: possible obligations that arise from past events and whose existence
will be confirmed only by the occurrence or non-occurrence of one or more future events not
wholly within the Company's control.
The financial statements include all the provisions with respect to which it is considered that it is
more likely than not that the obligation will have to be settled. Contingent liabilities are not
recognised in the financial statements, but rather are disclosed, unless the possibility of an outflow
in settlement is considered to be remote.
Provisions are measured at the present value of the best possible estimate of the amount required
to settle or transfer the obligation, taking into account the information available on the event and
its consequences. Where discounting is used, adjustments made to provisions are recognised as
interest cost on an accrual basis.
The compensation to be received from a third party on settlement of the obligation is recognised
as an asset, provided that there are no doubts that the reimbursement will take place, unless
there is a legal relationship whereby a portion of the risk has been externalised as a result of
which the Company is not liable; in this situation, the compensation will be taken into account for
the purpose of estimating the amount of the related provision that should be recognised.
4.10 Termination benefits
Under current legislation, the Company is required to pay termination benefits to employees
terminated under certain conditions. Therefore, termination benefits that can be reasonably
quantified are recognised as an expense in the year in which the decision to terminate the
employment relationship is taken. The accompanying financial statements do not include any
provision in this connection, since no situations of this nature are expected to arise.
13
4.11 Environmental assets and liabilities
Environmental assets are deemed to be assets used on a lasting basis in the Company's operations
whose main purpose is to minimise environmental impact and protect and improve the
environment, including the reduction or elimination of future pollution.
In view of the business activities carried on by the Company, it does not have any environmental
liability, expenses, assets, provisions or contingencies that might be material with respect to its
equity, financial position or results. Therefore, no specific disclosures relating to environmental
issues are included in these notes to the financial statements.
4.12 Business combinations
Business combinations are accounted for by applying the acquisition method, for which the
acquisition date is determined and the cost of the combination is calculated, and the identifiable
assets acquired and the liabilities assumed are measured at their acquisition-date fair value.
Goodwill or gains from a bargain purchase arising from a combination are calculated as the
difference between the acquisition-date fair value of the assets acquired and liabilities assumed
and the cost of the business combination at the acquisition date.
The cost of a business combination is the aggregate of:
The acquisition-date fair value of the assets acquired, the liabilities assumed and the
equity instruments issued.
The fair value of any contingent consideration that depends on future events or on the
fulfilment of certain specified conditions.
The costs incurred to issue equity or debt securities given up in exchange for the items acquired
are not included in the cost of a business combination.
Also, since 1 January 2010 the cost of a business combination does not include the fees paid to
legal advisers and other professionals involved in the combination or, clearly, any costs incurred
internally in this connection. Such amounts are charged directly to profit or loss.
If, exceptionally, a gain from a bargain purchase arises from the business combination, it is
recognised as income in the income statement.
When the fair value of intangible assets cannot be determined by reference to an active market,
Recognition and Measurement Standard no.19 of the Spanish National Chart of Accounts, as
drafted by Royal Decree 1159/2010, limits the recognition thereof up to the amount in which the
value of the net assets acquired is equal to the cost of the business combination.
If the initial accounting for a business combination is incomplete by the end of the reporting period
in which the combination occurs, the acquirer shall report in its financial statements provisional
amounts for the items for which the accounting is incomplete, and the provisional amounts may be
adjusted in the period required to obtain the necessary information. However, the measurement
period shall not exceed one year from the acquisition date. The effects of the adjustments made in
that period are recognised retrospectively and comparative information for prior periods must be
revised as needed.
Subsequent changes in the fair value of the contingent consideration are recognised in profit or
loss, unless the consideration has been classified as equity, in which case subsequent changes in
its fair value are not recognised.
14
4.13 Related party transactions
The Company performs all its transactions with related parties on an arm's length basis. Also, the
transfer prices are adequately supported and, therefore, the Company's directors consider that
there are no material risks in this connection that might give rise to significant liabilities in the
future.
4.14 Non-current assets and disposal groups classified as held for sale
The Company classifies a non-current asset or disposal group as held for sale when the decision to
sell it has been taken and the sale is expected to occur within twelve months.
These assets or disposal groups are measured at the lower of their carrying amount and fair value
less costs to sell.
Non-current assets classified as held for sale are not depreciated, but rather at the end of each
reporting period the related valuation adjustments are made to ensure that the carrying amount is
not higher than fair value less costs to sell.
Income and expenses arising from non-current assets and disposal groups classified as held for
sale which do not qualify for classification as discontinued operations are recognised under the
related heading in the income statement on the basis of their nature.
4.15 Current and non-current items
Current assets are assets associated with the normal operating cycle, which in general is
considered to be one year; other assets which are expected to mature, be disposed of or be
realised within twelve months from the end of the reporting period, financial assets held for
trading, except for financial derivatives that will be settled in a period exceeding one year; and
cash and cash equivalents. Assets that do not meet these requirements are classified as noncurrent assets.
Similarly, current liabilities are liabilities associated with the normal operating cycle, financial
liabilities held for trading, except for financial derivatives that will be settled in a period exceeding
one year; and, in general, all obligations that will mature or be extinguished at short term. All
other liabilities are classified as non-current liabilities.
5.- Business combinations
5.1 Description of the transaction
On 14 December 2011, following a resolution by its Board of Directors, Atresmedia Corporación de
Medios de Comunicación, S.A. (Atresmedia) entered into an agreement with Gestora de
Inversiones Audiovisuales La Sexta S.A. (La Sexta) and its shareholders (GAMP Audiovisual S.A.,
Grupo Televisa S.A.B. and Gala Desarrollos Comerciales S.L., as well as Imagina Media Audiovisual
S.L.), to merge the two television companies through a merger by absorption of La Sexta into
Atresmedia.
La Sexta engaged mainly in the management of a licence to provide audiovisual communication
services, for a period of fifteen years, pursuant to a resolution adopted by the Spanish Cabinet on
11 June 2010.
15
On 25 January 2012, the members of the Boards of Directors of Atresmedia Corporación de Medios
de Comunicación, S.A. and Gestora de Inversiones Audiovisuales La Sexta, S.A. signed the draft
terms of merger in accordance with Articles 30, 31 and related provisions of Law 3/2009, of 3
April, on structural changes to companies, in order to merge their respective businesses through a
merger transaction.
The draft terms of merger were filed at the Madrid Mercantile Registry on 7 February 2012 and
published in the Official Gazette of the Mercantile Registry (BORME) on 17 February 2012.
The draft terms of merger consisting of the absorption of Gestora de Inversiones Audiovisuales La
Sexta, S.A. into Antena 3 de Televisión, S.A. were approved by the shareholders at the Annual
General Meeting of the absorbing company and the shareholders at the Universal Extraordinary
General Meeting of the absorbed company on 25 April 2012.
On 24 August 2012, the Spanish Cabinet approved the business combination on the grounds of
general interest, but making the approval conditional upon the fulfilment of certain conditions
which modify some of those included in the resolution of the Spanish Anti-Trust Commission, of 13
July 2012.
On 5 October 2012, the Spanish Cabinet also authorised the transfer of La Sexta's audiovisual
communication licence and the assignment for private use of the associated radioelectric public
domain; thus, the last administrative authorisation established in the draft terms of merger as a
condition precedent for the completion of the transaction was obtained. On this same date,
effective control of La Sexta was obtained and, therefore, 5 October 2012 is taken to be the
acquisition date, from which time onwards La Sexta's operations are considered to be performed
for accounting purposes by Atresmedia.
On 29 October 2012, the merger resolutions adopted by the shareholders of Atresmedia
Corporación de Medios de Comunicación, S.A., as the absorbing company, and Gestora de
Inversiones Audiovisuales La Sexta, S.A., as the absorbed company, at their respective Annual
General Meetings on 25 April 2012, were executed in public deeds, as a result of which the draft
terms of merger were fully approved. As a result, Atresmedia Corporación de Medios de
Comunicación, S.A. acquired by universal succession all the assets and liabilities of Gestora de
Inversiones Audiovisuales La Sexta, S.A. with the concomitant dissolution of the latter.
Following the merger resolution approved by the shareholders at the Annual General Meetings of
the two companies and the filing of the merger deed at the Madrid Mercantile Registry on 31
October 2012, the shareholders of La Sexta received, as consideration for the assets and liabilities
of this company,15,801,296 shares of Atresmedia Corporación de Medios de Comunicación, S.A.,
which represent 7% of its share capital. For the purposes of the share exchange, Atresmedia
Corporación de Medios de Comunicación, S.A. increased its share capital through the issue of
14,620,000 new shares (of which 13,438,704 were ordinary shares and a further 1,181,296 were
shares with no dividend rights for a period of two years from the date on which the merger
became effective), while the remaining shares corresponding to the shareholders of La Sexta were
delivered with a charge to the treasury shares of Atresmedia Corporación de Medios de
Comunicación, S.A. (see Note 14).
Also, within the framework of the merger resolution, the parties resolved to grant the shareholders
of La Sexta an additional fixed ownership interest of 15,818,704 shares of Atresmedia Corporación
de Medios de Comunicación, S.A., representing 7% of its share capital, the delivery of which is
conditional upon the fulfilment in 2012, 2013, 2014, 2015 and 2016 of certain objectives relating
to the earnings of the Atresmedia Group. The delivery of these additional shares would be carried
out in full through treasury shares of Atresmedia, provided that the related objectives are met
and, in any case, these shares would be delivered in 2017 at the latest.
The main advantage and economic benefit of this transaction is the synergy achieved, with an
extended range of contents, greater efficiency in the use of Company resources and increased
advertising efficiency.
On 19 February 2014, the Company arranged the partial novation of this agreement and amended
the content thereof with respect to two of the three former shareholders of La Sexta (see Note
23).
16
5.2 Consideration transferred
The business combination consideration was estimated at the fair value (market price at closing on
5 October 2012) of the shares delivered to the shareholders of Gestora de Inversiones
Audiovisuales La Sexta, S.A. (a total of 15,801,296 shares representing 7% of the Company's
share capital and delivered as a result of the capital increase described in Note 14) and at the fair
value of the shares subject to deferred delivery, calculated on the basis of the forward price of the
shares of Atresmedia Corporación de Medios de Comunicación, S.A. at that date, taking into
account a 0.90% IRS rate and in accordance with management's estimate of the profit for 2012 to
2016 in order to estimate the time of delivery.
The fair value of the consideration transferred in the business combination amounted to EUR
95,893 thousand. The breakdown of this amount is as follows:
Thousands
of euros
7% ownership interest in the share capital
Deferred delivery of shares
Total consideration transferred
53,250
42,643
95,893
In order to enable the shareholders of La Sexta to receive a number of Atresmedia shares that is
proportional to their respective ownership interests in La Sexta, Atresmedia increased its share
capital through the creation of newly issued shares and the delivery of treasury shares.
Additionally, Atresmedia agreed to grant La Sexta shareholders an additional ownership interest of
15,818,704 Atresmedia shares representing 7% of its share capital, although the delivery thereof
is conditional upon the earnings of the Atresmedia Group from 2012 to 2016. The delivery of these
additional shares would be carried out in full through treasury shares of Atresmedia and, therefore,
would not constitute an additional issue (see Note 14.2).
On 19 February 2014, the Company arranged the partial novation of this agreement and amended
the content thereof with respect to two of the three former shareholders of La Sexta (see Note
23).
17
5.3 Assets acquired and liabilities assumed at the acquisition date
The assets and liabilities of Gestora de Inversiones Audiovisuales La Sexta, S.A., assumed at the
acquisition date and measured at fair value, were as follows:
Thousands
of euros
Current assets:
Inventories
Trade receivables
Investments in Group companies
Current financial assets
Current prepayments and accrued income
Cash and cash equivalents
62,718
21,790
24,787
13,331
696
184
1,930
Non-current assets:
Intangible assets
Property, plant and equipment
Investments in Group companies and associates
Non-current financial assets
Deferred tax assets (*)
Non-current trade receivables
337,937
77,201
615
9,445
8,926
241,596
154
Current liabilities:
Short-term provisions
Current payables
Current payables to Group companies and associates
Trade payables
(213,282)
(14,079)
(6)
(22,879)
(176,318)
Non-current liabilities:
Deferred tax liabilities (*)
Non-current payables to Group companies and associates
(91,480)
(22,945)
(68,535)
Total fair value of net identifiable assets acquired
95,893
(*) Under current accounting legislation, deferred tax assets and liabilities recognised in a business combination are not measured at
fair value, but rather at their nominal amount.
The gross contractual amount receivable in relation to the accounts receivable acquired, which
related in full to trade receivables and were recognised at their fair value of EUR 24,787 thousand,
is EUR 24,795 thousand.
The detail, by year of acquisition, of the intangible assets and property, plant and equipment
included as a result of the merger (excluding the licence and trademark) is as follows (in
thousands of euros):
Intangible assets
Computer software
Property, plant and equipment
Plant
Furniture
Computer hardware
2006
2007
2008
2009
2010
2011
2012
Total
-
-
-
1
54
460
201
716
716
4
293
-
15
-
20
6
-
29
2
28
20
76
22
89
11
53
358
204
615
Assets not reflected in the accounting records of Gestora de Inversiones Audiovisuales La Sexta,
S.A. were included (the "La Sexta" trademark and the audiovisual communication licence granted).
The fair value of intangible assets may not be determined by reference to an active market.
Accordingly, Recognition and Measurement Standard no.19 of the Spanish National Chart of
Accounts, as drafted by Royal Decree 1159/2010, limits the recognition thereof up to the amount
in which the value of the net assets acquired is equal to the cost of the business combination. In
accordance with this standard, the licence and trademark were only valued at a maximum amount
of EUR 77,201 thousand since it was not possible to recognise a gain from a bargain purchase
18
arising in a business combinations in this connection. The fair value of the licence was calculated
on the basis of its capacity to generate income with an indefinite useful life using the discounted
cash flow method. The royalty relief method was used to calculate the fair value of the trademark,
considering a useful life of 20 years.
At 2012 year-end, the allocation of the fair values of the assets acquired and liabilities assumed, in
particular of trademarks and licences, was subject to possible adjustments within one year from
the acquisition date, as required by accounting legislation. The purpose of these adjustments is to
reflect, in general, any additional information obtained during the aforementioned measurement
period, and, in the Company's particular case, the information referring to the Spanish Supreme
Court judgment of 27 November 2012 relating to the assignment of digital multiplexes with
national coverage. Once this period had elapsed and following a review by the Company, based on
a report by an independent expert, of the values initially assigned to the aforementioned assets
(using various widely accepted valuation methods for this purpose), there was no change in those
values.
Had the business combination been performed at the beginning of 2012, revenue would have
amounted to EUR 671,483 thousand and a loss of EUR 16,249 thousand would have been incurred
in the year.
After integration of the merged entity at the acquisition date, and in view of the fact that it was
not possible to extract separate information on the revenue and net profit or loss attributable to
the business combination, this information was not included.
The directors consider that these pro forma figures represented a reasonable approximation of the
annual performance of the new merged entity and an initial point of reference for comparison in
future years. In order to determine these pro forma revenue and profit or loss figures, Company
management took into account non-current asset depreciation and amortisation calculated on the
basis of the acquisition-date fair values and borrowing costs calculated on the basis of the situation
of the debt existing after the date of the business combination.
Lastly, it should be noted that fees paid to legal advisers and other professionals involved in the
transaction amounted to EUR 3,428 thousand, EUR 2,131 thousand of which related to 2012 and
was recognised under "Other Operating Expenses" in the income statement.
6.- Intangible assets
The changes in “Intangible Assets” in the balance sheets in 2013 and 2012 were as follows (in
thousands of euros):
Balance at
01/01/13
Cost
Licence
Trademark
Computer software
Other intangible assets
Total cost
60,666
15,819
33,675
304
110,464
Accumulated amortisation
Trademark
Computer software
Other intangible assets
Total accumulated amortisation
2,583
2,583
Balance at
01/01/13
Cost
Accumulated amortisation
Total, net
(368)
(368)
Increase or
decrease due
to transfer
Charge for
the year
(198)
(27,127)
(304)
(27,629)
Total intangible
assets
Increase or
decrease due
to transfer
Additions
(791)
(2,989)
(3,780)
Balance at
01/01/13
110,464
(27,629)
82,835
15
15
Balance at
31/12/13
60,666
15,819
35,890
304
112,679
Balance at
31/12/13
(989)
(30,101)
(304)
(31,394)
Balance at
31/12/13
112,679
(31,394)
81,285
19
Cost
Licence
Trademark
Computer software
Other intangible assets
Total cost
Balance at
01/01/12
30,443
304
30,747
Accumulated amortisation
Increase or
decrease due
to merger
(Note 5)
Additions
2,517
2,517
Balance at
01/01/12
Trademark
Computer software
Other intangible assets
Total accumulated amortisation
Total intangible
assets
Cost
Accumulated amortisation
Total, net
60,666
15,819
716
77,201
Charge for
the year
(24,870)
(304)
(25,174)
Disposals
or
reductions
30,747
(25,174)
5,573
60,666
15,819
33,675
304
110,464
Disposals or Balance at
reductions 31/12/12
(198)
(2,258)
(2,456)
Balance at
01/01/12
(1)
(1)
Balance at
31/12/12
1
1
(198)
(27,127)
(304)
(27,629)
Balance at
31/12/12
110,464
(27,629)
82,835
At the end of 2013 and 2012 the Company had fully amortised intangible assets still in use, the
detail being as follows (in thousands of euros):
Gross carrying amount
2013
Computer software
Other intangible assets
Total
25,433
304
25,737
2012
24,001
304
24,305
20
7.- Property, plant and equipment
The changes in 2013 and 2012 in “Property, Plant and Equipment” in the balance sheets and the
most significant information affecting this heading were as follows (in thousands of euros):
Balance at
01/01/13
Cost
Land and buildings
Plant
Machinery
Tools
Furniture
Computer hardware
Transport equipment
Property, plant and equipment in the
course of construction
Total cost
56,024
104,865
192
93
8,336
26,867
52
810
197,239
Land and buildings
Plant
Machinery
Tools
Furniture
Computer hardware
Transport equipment
Total accumulated depreciation
(29,585)
(90,155)
(188)
(92)
(7,408)
(22,219)
(52)
(149,699)
Cost
Balance at
01/01/12
Land and buildings
Plant
Machinery
Tools
Furniture
Computer hardware
Transport equipment
Property, plant and equipment in
the course of construction
Total cost
5,271
(5,844)
-
237
5,421
368
(7,590)
195,437
Increase or
decrease due
to transfer
Balance at
01/01/13
Cost
Accumulated depreciation
Total, net
(569)
(4,993)
(315)
(1,713)
-
Disposals
or
reductions
(5)
(8)
(2)
(15)
55,647
104,369
192
93
8,495
26,353
52
Balance at
31/12/13
569
(30,780)
4,966
(90,773)
(189)
(93)
312
(7,628)
1,709
(22,430)
(52)
7,556 (151,945)
Balance at
31/12/13
197,239
(149,699)
47,540
Additions
Balance at
31/12/13
192
4,497
324
1,199
-
(1,764)
(5,579)
(1)
(1)
(524)
(1,918)
(9,787)
Total property, plant
and equipment
Disposals
or
reductions
150
-
Charge for
the year
Balance at
01/01/13
Accumulated depreciation
Increase or
decrease due
to transfer
Additions
195,437
(151,945)
43,492
Increase or
decrease due
to transfer
Increase or
decrease due
to merger
(Note 5)
Disposals
or
reductions
Balance at
31/12/12
55,916
103,335
188
93
8,066
26,769
52
176
6,261
156
3,921
4
94
1,452
(5,627)
53
358
204
-
(48)
(2,444)
(182)
(1,558)
-
56,024
104,865
192
93
8,336
26,867
52
810
194,595
6,261
-
615
(4,232)
197,239
Accumulated depreciation
Land and buildings
Plant
Machinery
Tools
Furniture
Computer hardware
Transport equipment
Total accumulated depreciation
Balance at
01/01/12
(27,737)
(86,780)
(187)
(90)
(7,184)
(21,760)
(52)
(143,790)
Charge for
the year
(1,890)
(5,811)
(1)
(2)
(404)
(2,018)
(10,126)
Increase or
decrease due
to transfer
-
Disposals
or
reductions
42
2,436
180
1,559
4,217
Balance at
31/12/12
(29,585)
(90,155)
(188)
(92)
(7,408)
(22,219)
(52)
(149,699)
21
Total property, plant
and equipment
Cost
Accumulated depreciation
Total, net
Balance at
01/01/12
194,595
(143,790)
50,805
Balance at
31/12/12
197,239
(149,699)
47,540
The Company owns buildings, the value of which, net of depreciation, and that of the land, at the
end of 2013 and 2012 were as follows (in thousands of euros):
Property
Land
Buildings
Total
2013
11,517
13,350
24,867
2012
11,517
14,922
26,439
In 2013 the Company derecognised items of property, plant and equipment, giving rise to a net
gain of EUR 8 thousand (2012: EUR 37 thousand).
At the end of 2013 and 2012 the Company had fully depreciated items of property, plant and
equipment still in use, the detail being as follows (in thousands of euros):
Gross carrying amount
2013
Buildings
Other assets
Total
7,804
104,592
112,396
2012
5,696
101,619
107,315
The Company takes out insurance policies to cover the possible risks to which its property, plant
and equipment are subject. At the end of 2013 and 2012 the property, plant and equipment were
fully insured against these risks.
8.- Leases
At the end of 2013 and 2012 the Company, as a lessor under operating leases, had annual lease
arrangements with certain Group companies for facilities and other scantly material lease
arrangements with a term of more than one year with non-Group companies. Since the leased
facilities are in the same building as the Company, they are not considered to be investment
property included in the Company’s assets.
Income from operating leases in 2013 amounted to EUR 7,531 thousand (2012: EUR 3,023
thousand).
22
9.- Financial assets (non-current and current)
9.1 Non-current financial assets
The detail of “Non-Current Financial Assets” at the end of 2013 and 2012 is as follows (in
thousands of euros):
2013
Held-for-trading financial assets:
Other derivatives
Available-for-sale financial assets:
At cost (Note 21.2)
Loans and receivables:
Long-term guarantees and deposits
Total
2012
9,413
7,402
1,472
-
75
10,960
8,983
16,385
In relation to "Other Derivatives", in December 2012 the Company entered into various
agreements with the former shareholders of Gestora de Inversiones Audiovisuales La Sexta, S.A.,
including one whereby, in exchange for a fixed market consideration determined at the date of the
agreement and deliverable by Antena 3 de Televisión, S.A. (premium), the aforementioned
counterparty undertook to pay the Company a variable cash amount to be determined on the basis
of the future economic results of the Antena 3 Group and payable in 2017. The positive impact
thereof was included under "Changes in the Fair Value of Financial Instruments" in the
accompanying income statement. This agreement was amended in February 2014 (see Note 23).
"Available-For-Sale Financial Assets" includes non-current financial investments in the equity
instruments of companies over which the Company does not exercise significant influence under
Rule for the Preparation of Financial Statements no. 13 since it does not participate in the
process to set financial or commercial policies. At 2013 year-end, this amount related to the 45%
ownership interest in El Armario de la Tele, S.L.
At 31 December 2012, "Long-Term Guarantees and Deposits" included EUR 8,840 thousand
relating to the amount deposited in connection with the appeal filed by La Sexta against
assessments issued by the tax authorities relating to the levy on games. In 2013 this amount was
transferred to current assets.
9.2 Current financial assets
The detail of “Current Financial Assets” at the end of 2013 and 2012 is as follows (in thousands of
euros):
2013
Derivatives:
Derivatives (Note 11)
Loans and receivables:
Short-term guarantees and deposits
Total
2012
698
1,245
678
1,376
1,209
2,454
9.3 Non-current investments in Group companies and associates
The detail of “Non-Current Investments in Group Companies and Associates” at the end of 2013
and 2012 is as follows (in thousands of euros):
2013
Investments in Group companies and associates (Note 21.2)
Long-term loans to Group companies and associates (Note 21.2)
Total
76,288
125,322
201,610
2012
74,445
137,301
211,746
23
The most significant information in relation to investments in Group companies and associates
at the end of 2013 is as follows:
% of ownership
Thousands of euros
Profit (Loss)
Company name / Location /
Line of business
Antena 3 Multimedia,
S.L.U.
Madrid/
Commercial management
by television
Atres Advertising, S.L.U.
Madrid/
Advertising management
Antena 3 Noticias, S.A.U.
Madrid/
News producer
Antena 3 Juegos, S.A.U.
Madrid/
Games
Antena 3 Eventos, S.L.U.
Madrid/
Organisation of events
Guadiana Producciones,
S.A.U.
Madrid/
Producer
Música Aparte, S.A.U.
Madrid/
Management
of
copyrights
Antena 3 Films, S.L.U.
Madrid/
Audiovisual productions
La
Sexta
Editorial
Musical, S.A.U.
Madrid/
Management
of
copyrights
Publiseis,
Iniciativas
Comerciales, S.A.U.
Madrid/
Advertising management
Uniprex, S.A.U.
Madrid/
Radio
broadcasting
services
I3 Televisión, S.L.
Madrid/
IT services
Cordina Planet, S.L.
Barcelona/
Management of
intellectual works
Hola TV América, S.L.
Madrid/
Television
Atresmedia Foto
Madrid/
Photography
TVI Televisao
Independente, S.A.
Lisbon/
Television
Other
equity
items
100%
-
3
14
-
195
198
-
3
-
-
100%
-
3
17,338
12,322
(10,126)
2,199
11,780
3
-
-
100%
-
6
(420)
(4,227)
2,895
(1,361)
-
2,572
(2,572)
(2,572)
100%
-
100
223
152
325
577
-
100
-
-
100%
-
150
(21)
(2)
1,156
1,304
-
1,623
(21)
(338)
100%
-
60
(3)
(2)
(8)
50
-
716
(2)
(664)
100%
-
60
4,098
2,895
3,297
6,252
-
60
-
-
100%
-
1,900
(7,131)
665
3,229
5,794
-
34,022
665
(28,229)
100%
-
3
986
660
526
1,189
574
1,180
77
-
100%
-
5,000
202
187
1,297
6,484
-
8,264
187
(1,780)
100%
-
900
14,298
7,621
79,313
87,834
-
106,635
-
(46,335)
50%
-
300
38
26
(66)
260
-
150
45
(20)
100%
-
203
(1,716)
(2,018)
(1,060)
(2,875)
-
1,004
-
(503)
50%
-
371
(246)
(253)
584
702
-
737
(328)
(386)
90%
-
50
(127)
(89)
-
(39)
-
45
-
-
0.001%
-
(a)
(a)
(a)
-
2,016
-
(2,016)
12,354
159,130
(1,949)
(82,842)
(a)
9,109
27,533
Net
17,937
(a)
81,557
108,603
Dividend
received
Accumulated
impairment
losses
Indirect
From
operations
Total
equity
Impairment
losses
recognised
in the year
Direct
Total investments
Share
capital
Carrying amount
Cost
(a) Information not available
24
The most significant information in relation to investments in Group companies and associates
at the end of 2012 was as follows:
% of ownership
Thousands of euros
Carrying amount
Profit (Loss)
Company name / Location /
Line of business
Antena 3 Multimedia,
S.L.U.
Madrid/
Commercial management
by television
Atres Advertising, S.L.U.
Madrid/
Advertising management
Antena 3 Noticias, S.A.U.
Madrid/
News producer
Antena 3 Eventos, S.L.U.
Madrid/
Organisation of events
Antena 3 Juegos, S.A.U.
Madrid/
Games
Cordina Planet, S.L.
Barcelona/
Management
of
intellectual works
Guadiana Producciones,
S.A.U.
Madrid/
Producer
Hola TV América, S.L.
Madrid/
Television
Uniprex, S.A.U.
Madrid/
Radio
broadcasting
services
Música Aparte, S.A.U.
Madrid/
Management
of
copyrights
Antena 3 Films, S.L.U.
Madrid/
Audiovisual productions
La
Sexta
Editorial
Musical, S.A.U.
Madrid/
Management
of
copyrights
Publiseis,
Iniciativas
Comerciales, S.A.U.
Madrid/
Advertising management
I3 Televisión, S.L.
Madrid/
IT services
Antena 3 de Televisión
Colombia, S.A.
Colombia/
Television
Canal 3 Televisión de
Colombia, S.A.
Colombia/
Television
TVI Televisao
Independente, S.A.
Lisbon/
Television
Direct
Indirect
100%
Other
equity
items
Total
equity
Dividend
received
Impairment Accumulated
losses
impairment
recognised
losses
in the year
Share
capital
From
operations
-
3
7
-
195
198
-
3
-
-
100%
-
3
28,938
20,251
(18,598)
1,656
20,522
3
-
-
100%
-
6
513
329
-
335
-
6
-
-
100%
-
150
(45)
(31)
1,187
1,306
-
1,623
(31)
(317)
100%
-
100
567
391
(66)
425
-
100
-
-
50%
-
203
(1,860)
(1,859)
799
(857)
-
503
(503)
(503)
100%
-
60
(282)
(200)
191
51
-
716
(199)
(662)
50%
-
31
(469)
(489)
(14)
(472)
-
58
(58)
(58)
100%
-
900
(17,124)
(12,925)
96,583
84,558
-
106,635
-
(46,335)
100%
-
60
4,631
3,258
39
3,357
5,834
60
-
-
100%
-
1,900
(14,153)
(2,937)
6,166
5,129
-
34,022
(2,937)
(28,894)
100%
-
3
(110)
(77)
1,177
1,103
-
1,180
(77)
(77)
100%
-
5,000
(2,817)
(1,967)
3,264
6,297
-
8,264
(1,967)
(1,967)
50%
-
300
(8)
(9)
(120)
171
-
150
28
(65)
55%
-
576
(10)
(10)
(527)
39
-
366
(366)
(366)
2%
22%
1,265
(95)
(95)
(1,109)
61
-
29
(29)
(29)
0.001%
-
(a)
(a)
-
2,016
-
(2,016)
26,356
155,734
(6,139)
(81,289)
Total investments
(a)
10,560
(2,317)
Net
3,630
(a)
89,167
(a)
103,357
Cost
(a) Information not available
25
The detail of the long-term loans granted to Group companies and associates is as follows (in
thousands of euros):
Balance at
Balance at
Additions Transfers Disposals
01/01/13
31/12/13
Loans
Uniprex, S.A.U.
Antena 3 Films, S.L.U.
Hola TV América, S.L.
Total
Loans
Uniprex, S.A.U.
Antena 3 Films, S.L.U.
Hola TV América, S.L.
Total
90,000
46,729
572
137,301
Balance at Additions
01/01/12
60,300
59,134
412
119,846
90,000
160
90,160
593
593
(12,000)
(572)
(12,572)
Amount
converted
into capital
Disposals
(96,130)
- (12,405)
(96,130) (12,405)
-
78,000
47,322
125,322
Charge
for the
year
35,830
35,830
Balance at
31/12/12
90,000
46,729
572
137,301
The Company had granted two participating credit facilities to Uniprex, S.A. (Sole-Shareholder
Company) (formerly Publicidad 3, S.A. (Sole-Shareholder Company)), for a maximum amount of
EUR 334,000 thousand, which earned interest at floating rates based on the EBITDA of the
borrower.
In December 2011 EUR 10,000 thousand of the participating credit facility granted on 10
September 2002 was repaid early and the related charge for the year was reversed. Additionally,
at 2011 year-end, EUR 223,000 thousand were transferred to short term since the amount
matured on 30 November 2012 and, as it related to a participating credit facility, it had to be
either converted into capital or repaid. It was eventually converted into capital.
On 18 August 2012, the other participating loan granted to Uniprex, S.A. (Sole-Shareholder
Company) and maturing on 12 May 2014 was repaid early through the conversion into capital of
the balance thereof at that date (EUR 96,130 thousand). Also, the charge for the year recognised
in this connection, amounting to EUR 35,830 thousand, was reversed.
In December 2012 the Company granted a new loan to this subsidiary for a total amount of EUR
100,000 thousand, EUR 90,000 thousand of which are non-current, mature annually between 2014
and 2018 and earn fixed interest of 4.5%, reviewable annually. In 2013 EUR 12,000 thousand
were transferred to short term (see Note 21.2).
Also, the participating credit facility that the Company granted to Antena 3 Films, S.L. (SoleShareholder Company) was converted into capital in 2008, and in May 2008 the Company
renegotiated the short-term credit facility it had granted to this company, raising the limit to EUR
100,000 thousand and lengthening its maturity to three years. On 31 December 2010, the limit of
this credit facility was raised to EUR 150,000 thousand and the maturity was extended to 31
December 2013. In December 2012 the maturity date was extended to 31 December 2016. This
credit facility earns interest at a floating rate tied to Euribor. The amount drawn down at 31
December 2013 was EUR 47,322 thousand.
In September 2012 the Company granted a participating loan of EUR 160 thousand to Hola
Televisión América, S.L. and the balance thereof reached EUR 572 thousand. In 2013 this loan was
reclassified to current assets.
The most representative acquisitions and sales of ownership interests in other entities and other
significant corporate transactions in 2013 were as follows:
On 6 February 2013, Antena 3 de Televisión Colombia, S.A. and Canal 3 Televisión
Colombia, S.A. were liquidated.
On 4 July 2013, Hola Televisión América, S.L. increased its capital by EUR 679 thousand.
However, this did not result in an increase in the percentage of ownership held in this company.
26
On 5 December 2013, Atresmedia Foto, S.L. was formed with Atresmedia Corporación de
Medios de Comunicación, S.A. holding a 90% ownership interest therein. Its company object is the
manufacture and sale of photo albums and promotional and gift items.
On 12 December 2013, the Company acquired the other 50% of Cordina Planet, S.L.,
thereby giving the Company a full ownership interest in this company's share capital.
In December 2013 a shareholder contribution of EUR 2,566 thousand was made to offset
losses at Antena 3 Noticias, S.L. (Sole-Shareholder Company).
The most representative acquisitions and sales of ownership interests in other entities and other
significant corporate transactions in 2012 were as follows:
Antena 3 Directo, S.A. (Sole-Shareholder Company) was dissolved in 2012, which was
registered at the Mercantile Registry on 20 January 2012. This gave rise to a gain of EUR 704
thousand, which is recognised under "Impairment and Gains or Losses on Disposals of Financial
Instruments" in the accompanying income statement.
In January 2012 the Company subscribed to a EUR 500 thousand capital increase at
Cordina Planet, S.L. However, this did not result in an increase in the percentage of ownership
held in this company.
In February 2012 the investments in Antena 3 de Televisión Colombia, S.A. and Canal 3
Televisión de Colombia were increased, with a cost of EUR 51 thousand and EUR 4 thousand,
respectively, although there was no increase in the percentage of ownership interest in these
companies. These investments were acquired for the purpose of participating in the invitation to
tender for a television channel in Colombia.
On 14 March 2012, the Company incorporated Antena 3 Noticias, S.L. (Sole-Shareholder
Company), whose company object is to create audiovisual productions for their broadcast in any
media.
On 20 July 2012, the Company sold its full ownership interest in Movierecord Cine, S.A.
(Sole-Shareholder Company) and recognised a loss of EUR 239 thousand in this connection under
"Impairment and Gains or Losses on Disposals of Financial Instruments" in the accompanying
income statement.
The full ownership interest held in VNews Agencia de Noticias, S.L. (Sole-Shareholder
Company) was sold on 30 July 2012. This transaction gave rise to a gain of EUR 722 thousand,
recognised under "Impairment and Gains or Losses on Disposals of Financial Instruments" in the
accompanying income statement.
On 31 August 2012, the Company subscribed to a capital increase involving the issue of
4,000 new shares by Uniprex, S.A. (Sole-Shareholder Company) for EUR 240 thousand, and a
share premium of EUR 95,890 thousand.
In October 2012 Antena 3 Canarias, S.L. (Sole-Shareholder Company) was liquidated,
which gave rise to a loss of EUR 7 thousand, recognised under "Impairment and Gains or Losses
on Disposals of Financial Instruments" in the accompanying income statement.
On 29 October 2012, the merger resolutions adopted by the shareholders of Antena 3 de
Televisión, S.A., as the absorbing company, and Gestora de Inversiones Audiovisuales La Sexta,
S.A., as the absorbed company, at their respective Annual General Meetings on 25 April 2012,
were executed in public deeds, as a result of which the draft terms of merger were fully approved
(see Note 5). As a result of the merger, Publiseis, S.A. and La Sexta Editorial Musical S.L. (SoleShareholder Company) joined the Antena 3 Group.
In December 2012 a shareholder contribution of EUR 240 thousand was made to offset
losses at Guadiana, Producciones Audiovisuales, S.A. (Sole-Shareholder Company).
27
None of the investees of Atresmedia Corporación de Medios de Comunicación, S.A. are listed on
Spanish or foreign stock exchanges.
At the end of each year or period the directors assess the business plans of the Company’s
investees, revise them if necessary and estimate the value of the ownership interests and the
recoverability of the investments made.
For investments for which business plans are not available, impairment is estimated on the basis
of the company’s equity and the unrealised gains at the end of the year or period.
Impairment losses recognised in 2013 included EUR 2,572 thousand and EUR 328 thousand in
relation to the ownership interests held in Antena 3 Noticias, S.L. (Sole-Shareholder Company)
and Hola Televisión América, S.L., respectively. Also, impairment losses totalling EUR 975
thousand relating to other companies were reversed.
10.- Information on the nature and level of risk of financial instruments
The Company's financial risk management is centralised in its Financial Department, which has
established the mechanisms required to control exposure to interest rate and exchange rate
fluctuations and credit and liquidity risk. The main financial risks affecting the Company are as
follows:
a) Credit risk:
In general, the Company holds its cash and cash equivalents at banks with high credit ratings.
The advertising contracting terms enable bank guarantees to be demanded prior to the launch of
advertising campaigns. Also, it should be noted that the Company does not have a significant
concentration of credit risk exposure to third parties and no significant incidents arose in 2013.
At 31 December 2013, 2.7% of total borrowings were past-due.
In any case, the Company estimates allowances for doubtful debts based on the age of the debt.
Allowances for doubtful debts amounted to EUR 3,578 thousand at 31 December 2013 (31
December 2012: EUR 6,674 thousand) (see Note 20.4).
b) Liquidity risk:
The Company’s liquidity policy is to arrange credit lines and current financial assets that are
sufficient to support its financial needs, on the basis of expected business performance. These are
all tied to floating interest rates.
The Company, for the purpose of ensuring liquidity and enabling it to meet all the payment
obligations arising from its business activities, has the cash and cash equivalents disclosed in its
balance sheet, together with the credit and financing facilities detailed in Note 16.
c) Foreign currency risk:
Foreign currency risk relates mainly to the payments to be made in international markets to
acquire broadcasting rights, primarily from major production companies in the US, denominated in
US dollars. In order to mitigate this risk, the Company arranges financial instruments (mainly
foreign currency hedges) which reduce exchange differences on foreign currency transactions (see
Note 11).
d) Interest rate risk:
Both the Company's cash and its bank borrowings are exposed to interest rate risk, which could
have an adverse effect on financial profit or loss and cash flows. The Company's financing is
arranged at interest rates tied to Euribor. To mitigate this risk, the Company has arranged interest
rate swaps to reduce the finance costs arising from the pegging to floating rates (see Note 11).
28
11.- Derivative financial instruments
The Company uses derivative financial instruments to hedge the risks to which its business
activities, operations and future cash flows are exposed. As part of these transactions, the
Company has arranged certain hedging financial instruments, the detail of which is as follows:
Foreign currency hedges
The Company uses currency derivatives to hedge significant future transactions and cash flows.
The instruments purchased are denominated in US dollars.
The Company applies hedge accounting and documents the hedging relationships and the
measurement of their effectiveness as required by current legislation. In all cases, these include
the cash flow hedges of firm commitments, of which the EUR/USD forward exchange rate
exposures to possible variations in the cash flows payable in euros associated with broadcasting
rights is hedged.
For 2013, due to the commencement of the period in which the broadcasting rights being hedged
come into force, EUR 52 thousand was capitalised to inventories from equity. For 2012, inventories
were reduced by EUR 303 thousand with a charge to equity. The changes in the fair value of the
derivatives arranged by the Company depend on the change in the EUR/USD exchange rate and
on the euro yield curve.
At 31 December 2013, the Company had arranged instruments to hedge its foreign currency asset
and liability positions amounting to USD 89,863 thousand, at a weighted average exchange rate of
EUR 1.3117/USD 1. At 31 December 2012, the Company had arranged hedging instruments
amounting to USD 89,611 thousand, at a weighted average exchange rate of EUR 1.3058/USD 1.
At the end of 2013 and 2012, the total amount of outstanding forward currency contracts entered
into by the Group is as follows (the terms reflect the moment in which the hedged portion is
recognised and in which the value of the hedging instruments is adjusted in equity as an increase
in/reduction of inventories):
Fair value
(thousands of euros)
Classification
Foreign currency
hedges
Foreign currency
hedges
Foreign currency
hedges
Foreign currency
hedge
Foreign currency
hedge
Foreign currency
hedge
Amount
arranged
(thousands
of euros)
Ineffectiveness
recognised in
profit or loss
(thousands
of euros)
Type
Maturity
Purchase of USD
2014
62,520
-
698
3,025
Purchase of USD
2015
7,313
-
-
189
Purchase of USD
2016
8,053
-
-
18
Assets
Liabilities
The information in this connection at 31 December 2012 is as follows:
Fair value
(thousands of euros)
Classification
Foreign currency
hedges
Foreign currency
hedges
Foreign currency
hedge
Foreign currency
hedge
Amount
arranged
(thousands
of euros)
Ineffectiveness
recognised in
profit or loss
(thousands
of euros)
Type
Maturity
Purchase of USD
2013
60,575
-
1,245
485
Purchase of USD
2014
8,053
-
-
197
Assets
Liabilities
At 31 December 2013, the fair value of the Company’s foreign currency derivatives, which are
designated and are effective as cash flow hedges, was estimated to be positive by EUR 698
thousand and negative by EUR 3,232 thousand (31 December 2012: positive by EUR 1,245
thousand and negative by EUR 682 thousand). This amount was deferred and recognised in equity.
29
The derivatives were measured by estimating the present value of the future cash flows that will
arise under the terms and conditions arranged by the parties in the derivative contract. The cash
price is taken to be the reference exchange rates of the European Central Bank on 31 December
2013, the swap points (offer/bid) and the interest rates prevailing at the measurement date.
The foreign currency derivatives have been arranged in such a way that they are fully effective at
each reference date and, accordingly, are recognised in full in equity, until the inventories are
recognised.
The sensitivity analysis indicates that positive or negative changes of 10% in spot EUR/USD
exchange rates would give rise to changes of approximately EUR 14 million in the fair value of the
foreign currency derivatives (2012: EUR 9 million). Increases in the value of the euro (depreciation
of the US dollar) would increase negative values while decreases in the value of the euro would
increase positive values.
Interest rate hedges
In August 2013 the Company arranged interest rate derivatives (IRSs) in order to fix the financial
cost arising from the floating interest rates applicable to each of the tranches of syndicated
financing arranged at that date.
These IRSs expire on August 2017 and the hedged amount is EUR 111,209 thousand with a fixed
interest rate of 1.01%. At 31 December 2013, the fair value thereof amounted to EUR 5 thousand.
12.- Non-current assets classified as held for sale
In 2013 the Company sold the investment in Unipublic, S.A. that was classified at 31 December
2012 under "Non-Current Assets Classified as Held for Sale". This transaction did not have any
impact on the income statement for 2013.
13.- Inventories
The detail of “Inventories” in the balance sheets at 31 December 2013 and 2012 is as follows:
Thousands of euros
2013
2012
Programme rights, netRights on outside productions
In-house productions and programmes in process
Sports broadcasting rights
Inventory write-downs - outside productions
254,144
189,363
36,455
43,876
3,460
3,214
(33,754)
(19,516)
260,305
216,937
2,076
1,991
Consumables and other inventoriesDubbings, soundtracks and titles
Other materials
Advances to suppliers
Total
940
930
3,016
2,921
29,181
29,293
292,502
249,151
“Advances to Suppliers” in the accompanying balance sheets at 31 December 2013 and 2012
includes basically advances paid in connection with outside production commitments.
30
The changes in the write-downs relating to “Inventories” in the accompanying balance sheets were
as follows (in thousands of euros):
Disposals
Balance at
Balance at
or
31/12/11 Additions reductions 31/12/12 Additions
Inventory
write-downs
(17,566)
(1,956)
6
(19,516)
(6,976)
Disposals
Balance at
or
Transfers reductions 31/12/13
(9,508)
2,246
(33,754)
The write-downs recognised arose since it was decided that certain titles would not be marketable
and it was not likely that they would form part of the Company’s programme schedule. These
write-downs were recognised under "Programme Amortisation and Other” in the accompanying
income statement.
At 31 December 2013, the Company had commitments, mainly for the purchase of audiovisual
property rights, amounting to EUR 116,704 thousand (31 December 2012: EUR 149,617
thousand). In addition, the Company has purchase commitments to distributors, the definitive
amount and price of which will be determined once the programmes are produced and, in certain
cases, by establishing the acquisition price on the basis of box-office takings. In 2013 the best
estimate of these commitments amounts to EUR 80,400 thousand (2012: EUR 12,826 thousand).
It is estimated that in 2014 inventoriable in-house productions will be amortised in full and
approximately EUR 160,000 thousand of programme rights on outside productions (see Note 4.5).
14.- Equity and shareholders’ equity
On 29 October 2012, the Company increased share capital by a nominal amount of EUR 10,965
thousand through the issue of (i) 13,438,704 shares of EUR 0.75 par value each, of the same class
and series as the shares outstanding prior to the increase and without dividend rights with a
charge to the profit generated before the date on which the merger was filed at the Mercantile
Registry, irrespective of the payment date, and (ii) 1,181,296 shares of EUR 0.75 par value each,
of a different class and carrying the same restriction on dividend rights as the aforementioned
shares, applicable for 24 months following the date on which the merger was filed at the
Mercantile Registry.
The aforementioned capital increase, the sole purpose of which was to cater for part of the share
exchange on the merger, was approved by the shareholders at the Company's Annual General
Meeting held on 25 April 2012 on the terms and conditions included in the draft terms of merger
and was conditional upon the obtainment of the related administrative authorisations.
The new shares were issued at EUR 3.37 each, equal to the closing market price of the Atresmedia
share on 5 October 2012, the date on which the capital increase resolution became effective. The
difference between the issue price and the par value (i.e. EUR 2.62 per share) was treated as a
share premium. The total capital increase amounted to EUR 49,269 thousand. The capital increase,
including both the par value and the share premium thereof, was fully paid as a result of the
transfer en bloc of the assets and liabilities of the acquired company at the date on which the
merger deed was filed at the Madrid Mercantile Registry (i.e. 31 October 2012).
In accordance with Article 304.2 of the Spanish Limited Liability Companies Law, approved by
Legislative Royal Decree 1/2010, of 2 July, shareholder pre-emption rights were disapplied on the
occasion of the increase.
At 31 December 2013 and 2012, the share capital of the Company amounted to EUR 169,300
thousand and was represented by 225,732,800 fully subscribed and paid shares of EUR 0.75 par
value each, with the same rights except for the restriction on dividend rights mentioned in Note
14.3.
31
The detail of the shareholder structure at the end of 2013 is as follows:
2013
% of
ownership
Planeta-de Agostini, S.L. Group
41.70
Ufa Film und Fernseh, GMBH
19.17
Treasury shares
7.01
Gamp Audiovisual, S.A. (*)
3.64
Imagina Media Audiovisual, S.L.
Other shareholders
Total
2.85
25.63
100.00
* Gamp Audiovisual, S.A. is an Imagina Group company, which is controlled, pursuant to Article 4 of the Spanish
Securities Market Law, by the Imagina Group through Mediaproducción, S.L.
The Company's shares are listed on the Spanish stock market interconnection system and all carry
the same voting and dividend rights, except for the 1,181,296 shares mentioned above, which will
be admitted to trading 24 months following the date on which the merger was filed at the
Mercantile Registry in accordance with the draft terms of merger.
There are agreements between the main shareholders that guarantee the Company’s shareholder
stability, the grant of mutual rights of acquisition on their shares and the undertaking not to take
control of the Company or to permit a third party to do so, and also include management
agreements, as described in the Corporate Governance Report.
14.1 Reserves
Legal reserve
Under the Spanish Limited Liability Companies Law, the Company must transfer 10% of net profit
for each year to the legal reserve until the balance of this reserve reaches at least 20% of the
share capital. The legal reserve can be used to increase capital provided that the remaining
reserve balance does not fall below 10% of the increased share capital amount. Otherwise, until
the legal reserve exceeds 20% of share capital, it can only be used to offset losses, provided that
sufficient other reserves are not available for this purpose.
At 31 December 2013, the legal reserve had reached the legally required minimum.
Other reserves
“Other Reserves” includes an amount of EUR 281 thousand which is restricted as to its use since it
corresponds to the “Reserve for the Adjustment of Share Capital to Euros”.
As a result of the capital reduction made in 2006, a reserve of EUR 8,333 thousand was
established, equal to the par value of the retired shares, which may only be used if the same
requirements as those for the reduction of share capital are met, pursuant to Article 335-c of the
Spanish Limited Liability Companies Law.
The remaining reserves recognised under “Other Reserves” are unrestricted.
14.2 Other equity instruments
As indicated in Note 5, pursuant to the agreement to merge the two companies, Antena 3 de
Televisión, S.A. and Gestora de Inversiones Audiovisuales La Sexta, S.A. agreed to grant La Sexta
shareholders an additional ownership interest of 15,818,704 Antena 3 shares representing 7% of
its share capital, although the delivery thereof is conditional upon the earnings of the Antena 3
Group from 2012 to 2016. The delivery of these additional shares will be carried out in full through
treasury shares of Antena 3 and, therefore, does not constitute an additional issue. "Other Equity
Instruments" includes the measurement of the aforementioned consideration at the fair value of
the shares whose delivery was deferred, calculated as indicated in Note 5.
32
On 19 February 2014, the Company arranged the partial novation of this agreement and amended
the content thereof with respect to two of the three former shareholders of La Sexta (see Note
23).
14.3 Treasury shares
The detail of the treasury shares held by the Company at the end of 2013 and 2012 is as follows:
Year
No. of
shares
2013
2012
15,818,704
15,818,704
Par value
(euros)
Average
Total
acquisition price
acquisition cost
(euros)
(thousands of euros)
11,864,028
11,864,028
6.29
6.29
99,453
99,453
At 31 December 2013, the Company held 15,818,704 treasury shares, representing 7.01% of its
share capital.
The delivery of shares in 2012 was part of the merger transaction detailed above in these financial
statements. Specifically 1,181,296 of the Company's treasury shares representing 0.523% of
voting rights were delivered to the former shareholders of Gestora de Inversiones Audiovisuales La
Sexta, S.A. to cater for the share exchange in accordance with the draft terms of merger (see Note
5). The treasury shares delivered do not carry rights to receive dividends with a charge to the
profit generated before the date on which the merger deed was filed (i.e. 31 October 2012),
irrespective of the payment date.
The difference between the fair value of the treasury shares delivered as consideration at the
effective merger date and the average acquisition price thereof gave rise to a loss recognised in
the Company's equity.
The shareholders at the Annual General Meeting held on 24 March 2010 adopted a resolution
authorising the Company to acquire treasury shares provided that they did not exceed the
maximum legal limit permitted by law at any given time. This limit was established at 10% of
registered share capital by Law 3/2009, of 3 April, on structural changes to companies.
The changes in “Treasury Shares” in 2013 and 2012 were as follows:
Number of shares
At beginning of year
Purchases
Delivery
At end of year
2013
2012
15,818,704
12,630,728
-
4,369,272
-
(1,181,296)
15,818,704
15,818,704
15.- Provisions and contingencies
33
The detail of short- and long-term provisions in 2013 and 2012 were as follows (in thousands of
euros):
Provisions
Litigation and other provisions
Total
Provisions
Litigation and other provisions
Total
Balance at Charge for
01/01/13
the year
41,692
41,692
5,044
5,044
Balance at
01/01/12
Charge for
the year
31,540
31,540
6,261
6,261
Transfers
(6,566)
(6,566)
Additions
due to
merger
(Note 5)
14,079
14,079
Amounts
used
Excessive Balance at
provisions 31/12/13
(1,739)
(1,739)
Amounts
used
(4,127)
(4,127)
34,304
34,304
Excessive
provisions
Balance at
31/12/12
(550)
(550)
41,692
41,692
(9,638)
(9,638)
The charge for the year is reflected under "Outside Services" and the excessive provisions are
recognised under "Excessive Provisions” in the accompanying income statement.
At 31 December 2013 and 2012, certain civil, labour, criminal and administrative lawsuits had
been filed against the Company which were taken into account in estimating potential contingent
liabilities. Noteworthy, in view of their amount, were the lawsuits with certain collection societies.
As mentioned in Note 1, on 18 December 2013 the Supreme Court issued a writ of execution
enforcing the aforementioned judgment, rendering void the resolution of the Spanish Cabinet
regarding the allocation of channels. The Company does not consider it necessary to recognise a
provision in this connection.
In 2012 the tax authorities issued assessments relating to the levy on games of luck, betting or
chance, raffles and tombolas against the absorbed company Gestora de Inversiones Audiovisuales
La Sexta, S.A. for an amount of EUR 6,903 thousand. In this respect, the merger agreements
established that La Sexta shareholders must indemnify Atresmedia Corporación de Medios de
Comunicación, S.A. for any economic loss that could arise from these assessments.
The directors of the Company and its legal advisers do not expect any material liabilities additional
to those already recognised to arise from the outcome of the lawsuits in progress.
16.- Non-current and current liabilities
16.1 Non-current financial liabilities
The detail of “Non-Current Payables” at the end of 2013 and 2012 is as follows (in thousands of
euros):
Non-current financial instruments
Derivatives and other
2013
2012
Bank borrowings
2013
2012
Accounts payable
Derivatives
Total
200,129
200,129
-
63,264
207
63,471
183
197
380
Total
2013
263,393
207
263,600
2012
183
197
380
The detail, by maturity, of “Non-Current Payables” is as follows (in thousands of euros):
34
2015
Bank borrowings
Trade payables
Derivatives
Other payables
Total at 31/12/13
36,350
52,908
189
71
89,518
2014
Other payables
Derivatives
Total at 31/12/12
32
197
229
2016
62,602
9,383
18
10
72,013
2015
101
101
2017
2019 and
subsequent
years
2018
101,177
807
10
101,994
2016
37
33
70
2018 and
subsequent
years
2017
10
10
5
5
10
10
30
30
Total
200,129
63,135
207
129
263,600
Total
183
197
380
On 2 August 2013, the Company arranged syndicated financing of EUR 270,000 thousand in order
to repay the existing bilateral credit facilities, meet the obligations included in the financial
structure assumed as a result of the merger by absorption of Gestora de Inversiones Audiovisuales
La Sexta, S.A. and to satisfy the Company's general cash needs.
74% of the total amount is a four-year loan with partial repayments and the remaining 26% is a
revolving credit facility maturing at four years. Nine banks with which the Company has regular
dealings participated in the transaction.
The applicable interest rate is Euribor plus a market spread and the transaction is subject to
compliance with financial covenants habitually used in transactions of this kind, relating to the
debt to EBITDA ratio and the interest coverage ratio. This transaction was guaranteed by a
security interest in all the treasury shares. Under the agreement reached with the former
shareholders of La Sexta (see Note 28), this guarantee was partially released and, consequently,
1,145,594 shares of the Parent remain pledged as security. The fair value of this financing
approximates its carrying amount.
The balance of "Non-Current Trade Payables" relates to the maturities at more than twelve months
of the amounts payable to suppliers for rights on outside productions set on the basis of the
periods in which the productions become available. These payables do not bear interest and the
fair value thereof amounts to approximately EUR 58 million.
16.2 Current financial liabilities
At 31 December 2013, current bank borrowings amounted to EUR 6,305 thousand (2012: EUR
137,388 thousand), including the amounts drawn down (in 2012) against the credit facilities and
the related interest. These facilities were repaid with the syndicated financing that was arranged
(see Note 16.1)
The rate of interest paid by the Company in 2013 on the loans and credit facilities arranged with
banks was mainly tied to Euribor.
35
17.- Trade payables
The maximum payment period applicable to the Company under Law 3/2004, of 29 December, on
combating late payment in commercial transactions and pursuant to the transitional provisions
contained in Law 15/2010, of 5 July, is 60 days in 2013 (2012: 75 days).
The detail of the amounts paid and payable at 31 December 2013 is as follows (in thousands of
euros):
Amount
Within the maximum payment period
Other
Total payments made in 2013
Weighted average period of late payment (in days)
Payments at year-end not made in the maximum payment period
%
189,760
359,981
549,741
47
37,084
35%
65%
The detail of the amounts paid and payable at 31 December 2012 is as follows (in thousands of
euros):
Amount
%
380,809
75,921
456,730
50
18,224
Within the maximum payment period
Other
Total payments made in 2012
Weighted average period of late payment (in days)
Payments at year-end not made in the maximum payment period
83%
17%
Weighted average period of late payment was calculated as the quotient whose numerator is the
result of multiplying the payments made to suppliers outside the maximum payment period by the
number of days of late payment and whose denominator is the total amount of the payments
made in the year outside the maximum payment period.
18.- Tax matters
18.1 Current tax receivables and tax payables
The detail of the current tax receivables and payables is as follows (in thousands of euros):
Tax receivables
2013
2012
To be settled in 2014:
6,556
3,806
Deferred tax assets
1,472
2,779
Tax loss carryforwards
2,905
Unused tax credits and tax relief
2,179
1,027
298,830
299,623
To be settled from 2015:
Deferred tax assets
Tax loss carryforwards
Unused tax credits and tax relief
14,429
19,572
218,452
221,701
65,949
58,350
305,386
303,429
Income tax refundable
911
1,188
2013 income tax refundable
647
566
Other tax receivables
128
1,343
Total non-current assets
Total current assets
TOTAL TAX RECEIVABLE
1,686
3,097
307,073
306,526
36
Tax payables
Deferred tax liabilities
Total non-current liabilities
2013
22,649
2012
22,886
22,649
22,886
2,229
2,073
Short termTax withholdings payable
696
621
5,633
4,452
Accrued social security taxes payable
VAT payable
Total current liabilities
8,558
7,146
TOTAL TAX PAYABLE
31,207
30,032
18.2 Reconciliation of the accounting profit to the taxable profit
Pursuant to Corporation Tax Law 43/1995, of 27 December, on 26 December 2000, Atresmedia
Corporación de Medios de Comunicación, S.A. (formerly Antena 3 de Televisión, S.A.) notified the
Madrid tax authorities of its decision to file income tax returns under the special regime for
corporate groups. This application is considered indefinite provided that the requirements
established in the current Article 67 of the Consolidated Spanish Corporation Tax Law are met and
the Company does not opt to cease to apply the aforementioned regime.
The companies composing the tax Group at 31 December 2013 are as follows:
TAXPAYER
IDENTIFICATION
NUMBER
SUBSIDIARY
Date of
inclusion in
the Group
B85384881
Antena 3 Eventos, S.L.U.
01/01/08
B82832841
Antena 3 Films, S.L.U.
01/01/03
A86317872
Antena 3 Juegos, S.A.U.
01/01/11
B84187335
01/01/04
01/01/06
B86424132
Antena 3 Multimedia, S.L.U.
Antena 3 Televisión Digital Terrestre de Canarias,
S.A.U.
Antena 3 Noticias, S.L.U.
B84171453
Atres Advertising, S.L.U.
01/01/04
B86885530
Atresmedia Foto, S.L.
01/01/13
A81797656
Canal Media Radio, S.A.U.
01/01/05
A50005875
Estaciones Radiofónicas de Aragón, S.A.U.
01/01/03
A80847601
Guadiana Producciones, S.A.U.
01/01/01
A20175634
B85408128
A79458535
A78683851
Ipar Onda, S.A.U.
La Sexta Editorial Musical, S.L.U.
Música Aparte, S.A.U.
Onda Cero, S.A.U.
01/01/03
01/10/12
01/01/01
01/01/03
A84615178
Publiseis Iniciativas Comerciales, S.A.U.
01/10/12
B15609837
Radio Media Galicia, S.L.U.
01/01/05
B84196914
Uniprex Televisión, S.L.U.
01/01/04
B84405422
Uniprex Valencia TV, S.L.U.
01/01/05
A28782936
Uniprex, S.A.U.
01/01/01
A84920230
01/01/12
The filing of consolidated tax returns gives rise to reciprocal intra-Group balances, due to the
offset of the losses incurred by certain companies against the profit earned by other Group
companies. These balances are recognised under “Payable to Group Companies” and “Receivable
from Group Companies”, as appropriate.
Income tax is calculated on the basis of the accounting profit determined by application of
generally accepted accounting principles, which does not necessarily coincide with the taxable
profit.
37
The reconciliation of the accounting profit to the taxable profit for income tax purposes for 2013 is
as follows:
Increase
Accounting profit after tax
Income tax
Permanent differences –
Penalties
Donations
Impairment of investments
Elimination of dividends
Elimination of intra-Group transactions
Deductible temporary differences:
Arising in the year:
Provision for contingencies and charges
Non-current accounts payable
Impairment losses
Arising in prior years:
Provision for contingencies and charges
Non-current accounts payable
Impairment losses
Taxable temporary differences:
Thousands of euros
Decrease
7,041
1,143
809
1,949
3,140
15,145
4,006
12,353
12,353
36,803
Total
34,468
(4,006)
(5,312)
1,143
809
1,949
(12,353)
3,140
(21,658)
10,723
4,422
-
10,723
4,422
791
8,765
3,184
24,854
-
(8,765)
(3,184)
(24,854)
791
791
22,978
53,163
791
4,283
(1,143)
Arising in the year:
Impairment losses
Gross taxable profit
Offset of prior years' tax losses
Tax rate
30%
Gross tax payable
942
Accounts receivable from (payable to) Group companies
Tax credits used in 2013
2013 tax prepayments
8,416
(3,002)
(7,003)
Income tax payable (refundable)
(647)
The reconciliation of the accounting profit to the taxable profit for income tax purposes for 2012 is
as follows:
Increase
Accounting profit after tax
Income tax
Permanent differences –
Penalties
Donations
Elimination of provisions
Elimination of dividends
Elimination of intra-Group transactions
Deductible temporary differences:
Arising in the year:
Provision for litigation
Non-current accounts payable
Impairment losses
Arising in prior years:
Provisions and accounts payable
Provision for contingencies and charges
Impairment losses
Taxable temporary differences:
Thousands of euros
Decrease
Total
4,797
761
868
3,168
16,170
21,462
31,370
26,356
5,014
7,038
35,862
(21,462)
(26,573)
761
868
3,168
(26,356)
(5,014)
9,132
5,058
4,141
6,971
3,433
5,058
4,141
3,538
198
685
2,012
908
-
(685)
(2,012)
(908)
198
198
21,165
59,870
198
(2,843)
Arising in the year:
Impairment losses
Gross taxable profit
Tax rate
30%
Gross tax payable
(853)
Accounts receivable from (payable to) Group companies
Tax credits used in 2012
2012 tax prepayments
Income tax payable (refundable)
2,891
(640)
(1,964)
(566)
38
18.3 Tax recognised in equity
The detail of the taxes recognised directly in equity in 2013 is as follows:
Increase
Thousands of euros
Decrease
Total
-
-
-
-
152
(152)
-
152
(152)
(152)
Current taxes:
Capital increase expenses
Capital reduction expenses
Total current taxes
Deferred taxes:
Arising in the year:
Available-for-sale financial assets
Revaluation of other financial assets
Grants
Effect of first-time application of New Spanish
National Chart of Accounts
Arising in prior years:
Available-for-sale financial assets
Revaluation of other financial assets
Grants
Total deferred taxes
Total tax recognised directly in equity
The detail of the taxes recognised directly in equity in 2012 is as follows:
Increase
Thousands of euros
Decrease
Total
-
-
-
192
-
192
192
-
192
192
Current taxes:
Capital increase expenses
Capital reduction expenses
Total current taxes
Deferred taxes:
Arising in the year:
Available-for-sale financial assets
Revaluation of other financial assets
Grants
Effect of first-time application of New Spanish
National Chart of Accounts
Arising in prior years:
Available-for-sale financial assets
Revaluation of other financial assets
Grants
Total deferred taxes
Total tax recognised directly in equity
18.4 Reconciliation of the accounting profit to the income tax expense
The merger by absorption of Gestora de Inversiones Audiovisuales La Sexta, S.A. ("La Sexta") by
Antena 3 de Televisión, S.A. was registered at the Madrid Mercantile Registry on 31 October 2012.
As a result of the merger, Antena 3 de Televisión acquired all the assets and liabilities of La Sexta
by universal succession and was subrogated to all the rights and obligations of the absorbed
company.
The merger became effective for accounting purposes on 5 October 2012.
The Company opted to avail itself of the special tax regime for mergers, spin-offs, asset
contributions, security exchanges provided in Title VII, Chapter VIII of the Consolidated Spanish
Corporation Tax Law approved by Legislative Royal Decree 4/2004, of 5 March.
39
In the process of allocating the price of the business combination to assets and liabilities, certain
intangible assets were identified, such as the "La Sexta" brand and its audiovisual operating
licence. The brand will be amortised for accounting purpose in 20 years, while the licence is
considered to be an intangible asset with an indefinite useful life.
The reconciliation of the accounting profit to the income tax expense is as follows (in thousands of
euros):
2013
30,462
9,139
2012
14,400
4,320
(11,273)
(10,990)
(283)
-
(17,532)
(17,532)
-
(1,594)
(3,728)
(278)
(278)
(4,006)
(7,971)
(21,183)
(279)
(279)
(21,462)
Accounting profit before tax
Tax charge at 30%
Tax credits earned in the year:
Audiovisual productions
Donations to not-for-profit entities
Other
Offset of tax losses:
Other Permanent differences (Note 18.2)
Total income tax expense for the year
Income tax adjustments
Adjustment - difference in income tax per tax return
Total income tax expense recognised in profit or loss
The breakdown of the income tax expense for the year is as follows (in thousands of euros):
Current tax
Deferred tax
Total income tax expense for the year
2013
(10,332)
6,604
(3,728)
2012
(18,385)
(2,798)
(21,183)
18.5 Deferred tax assets recognised
The difference between the tax charge allocated to 2013 and to prior years and the tax charge
already paid or payable for such years, which is recognised under “Deferred Tax Assets”, arose as
a result of temporary differences derived from the following:
CHANGES IN DEFERRED TAX
ASSETS
Contingencies and charges
Accounts payable
Other items
Tax effect of assets at fair value
Financial hedging instruments
Total
Thousands of euros
2012
9,609
2,148
1,320
9,483
(209)
22,351
Additions
Disposals
3,217
(2,630)
(955)
1,327
(611)
(6,845)
(152)
4,544 (11,193)
Other
551
(540)
285
(97)
199
2013
10,747
653
2,321
2,541
(361)
15,901
The detail for 2012 is as follows:
Thousands of euros
CHANGES IN DEFERRED TAX
ASSETS
Contingencies and charges
Accounts payable
Other items
Tax effect of assets at fair value
Financial hedging instruments
Total
2011
5,960
871
262
(401)
6,692
Additions
2,508
1,242
1,101
192
5,043
Disposals
(205)
(604)
(272)
(1,030)
(2,111)
Inclusion
due to
Other
Transfers
merger
(215)
1,561
237
(95)
497
(81)
310
10,513
156
12,571
2012
9,609
2,148
1,320
9,483
(209)
22,351
40
At 31 December 2013, the tax effect of the valuation adjustments relating to the hedging
instruments amounting to EUR (361) thousand was recognised under “Non-Current Assets”.
The deferred tax assets indicated above were recognised because the Company's directors
considered that, based on their best estimate of the Company's future earnings, including certain
tax planning measures, it is probable that these assets will be recovered.
On the basis of the estimate made by the Company’s directors of the timing of future profits for
the offset and use of these deferred tax assets, EUR 14,429 thousand were considered to be
recoverable in the long term while EUR 1,472 thousand were considered to be recoverable in the
short term. Both amounts are recognised under “Deferred Tax Assets”. Also, on the basis of the
aforementioned estimate of the timing of future profits, the directors consider that there are no
reasonable doubts as to the recovery of the amounts recognised in the accompanying balance
sheet within the statutory time periods and limits.
Also, on the basis of the aforementioned timing estimate of future profits, the directors consider
that there are no reasonable doubts as to the recovery of the amounts recognised in the
accompanying balance sheet within the statutory time periods and limits on the basis of the
prepared projections.
The key assumptions on which the cash flow projections are based relate mainly to advertising
markets, audience, advertising efficiency ratios and the evolution of expenses. Except for
advertising data, which is measured on the basis of external sources of information, the
assumptions are based on past experience and reasonable projections approved by Company
management and updated in accordance with the performance of the advertising markets. These
future projections cover the next ten years.
The Company performs sensitivity analyses in the event of reasonable changes in the key
assumptions used to determine the recoverability of these assets. Therefore, the sensitivity
analyses are prepared under various scenarios based on the variables that are considered to be
most relevant, i.e. advertising income, which mainly depends on the performance of the
advertising market, the investment share reached and the operating margin achieved. The
discount rate used ranges from 9% to 10%.
A variation of 0.5% in cumulative annual growth would give rise to a change in value of EUR 43
million, while an increase of 0.5% in the discount rate would give rise to a change of EUR 65
million and a decrease of 0.5% in the discount rate would give rise to a change of EUR 73 million.
Zero perpetual growth was used. An increase of 0.5% would give rise to an increase in value of
EUR 80 million and a decrease of 0.5% would give rise to a decrease in value of EUR 71 million.
The aforementioned analyses do not disclose any evidence of non-recoverability of the tax assets
and tax credits recognised.
The changes in deferred tax assets recognised under "Other” include the difference between the
estimated tax for 2011 and the amount actually reported in the tax return, giving rise to an
adjustment of EUR 199 thousand to deferred tax assets. Also, the effect of this difference,
amounting to EUR 278 thousand, on the income tax expense is recognised under “Negative
Adjustments to Income Tax”.
Effective from 1 January 2013, the deductibility for tax purposes of impairment losses on securities
representing holdings in the share capital or shareholders' equity of entities was eliminated as a
result of the derogation of Article 12.3 of the Spanish Corporation Tax Law and the inclusion of
Letter j) in Article 14.1 of the foregoing law, which addresses non-deductible expenses, through
Sections 2.1 and 2.2, respectively, of Article 1 of Law 16/2013, of October 29, establishing certain
measures on environmental taxation and adopting other tax and financial measures (Spanish
Official State Gazette (BOE) of 30 October 2013).
The new Article 14.1.j) stipulates that securities representing holdings in the share capital or
shareholders' equity of entities cannot be considered to be tax-deductible expenses.
Accordingly, impairment losses recognised on investees, irrespective of whether or not they belong
to the tax group, are considered to be non-deductible items and, therefore, a permanent positive
adjustment was made to taxable profit (see Note 18.2).
41
Also, the adjustments made to taxable profit since 2009 pursuant to Article 12.3 of the Spanish
Corporation Tax Law will be reversed, as the equity of the investees is recovered.
In 2013 the adjustments arising from the derogation of Article 12.3 of the Spanish Corporation Tax
Law relating to Canal 3 de Colombia, S.A. and Antena 3 de Televisión Colombia, S.A. will be
derecognised, since both companies were liquidated in 2013. The positive adjustment to taxable
profit amounted to EUR 351 thousand.
Also, in 2013 the investment in Unipublic, S.A. was sold and, accordingly, Atresmedia Corporación
derecognised the impairment losses previously recorded with a negative adjustment to taxable
profit of EUR 2,036 thousand.
At 31 December 2013, the Company had recognised unused tax credits amounting to EUR 68,128
thousand (of which EUR 4,801 thousand arise from the merger with La Sexta) and tax loss
carryforwards (arising from the merger with La Sexta in their entirety) amounting to EUR 220,760
thousand.
Thousands of euros
Amount
Deducted in
the year
Carried forward
Last year
for
deduction
365
365
0
2016
625
625
0
2017
1,094
1,094
0
2018
4,347
129
4,218
2019
14,415
14,415
2020
21,025
21,025
2021
17,480
17,480
2022
10,990
2023
10,990
70,342
2,213
68,128
Of the EUR 3,002 thousand of tax credits taken in 2013, EUR 2,213 thousand were deductions for
audiovisual production, EUR 506 thousand for international double taxation and EUR 283 thousand
for donations to not-for-profit entities.
42
As a result of the merger by universal succession, the Company assumed the right to deduct the
tax credits and tax loss carryforwards of the transferor, in accordance with the following schedule
of deductions:
Thousands
of euros at
31/12/12
Unused tax credits
2006
Deducted
in the
year
Unused tax
credits at
31/12/13
6,886
2,085
366
366
-
Last year
for
deduction
4,801
2007
625
625
-
2008
1,094
1,094
-
2009
1,617
1,617
2019
2010
1,034
1,034
2020
2011
2,150
2,150
2021
Tax loss carryforwards
221,701
343
2005
207
207
2006
59,064
136
2007
2008
221,358
58,928
2024
45,185
45,185
2025
38,301
38,301
2026
2009
34,758
34,758
2027
2010
10,053
10,053
2028
2011
18,568
18,568
2029
2012
15,565
15,565
2030
Total deferred tax assets
recognised relating to La
Sexta
228,587
2,428
226,159
18.6 Deferred tax liabilities recognised
The detail of “Deferred Tax Liabilities" and of the changes therein is as follows:
DEFERRED TAX LIABILITIES
2011
Tax effect of identification of intangible assets
Total
-
Additions Disposals
(59)
(59)
Inclusion
due to
merger
(Note 5)
22,945
22,945
2012
Additions Disposals
22,886
(237)
22,886
(237)
2013
22,649
22,649
In accordance with income tax recognition and measurement standard number 13, the Company
will recognise the deferred tax liabilities relating to goodwill provided that these do not arise on the
initial recognition thereof.
The deferred tax liabilities relate to the identification of the "La Sexta" brand and signal
transmission licence.
The brand is amortised for accounting purposes at an annual rate of 5% (amortisation charge for
2012: EUR 792 thousand), while the licence is not amortised.
The amortisation is not deductible for tax purposes and, therefore, gives rise to a positive
adjustment to the taxable profit (tax loss) which is recognised as a deferred tax liability.
43
18.7 Years open for review and tax audits
Under current legislation, taxes cannot be deemed to have been definitively settled until the tax
returns filed have been reviewed by the tax authorities or until the four-year statute-of-limitations
period has expired. At 31 December 2013, the Company had from 2005 onwards open for review
for income tax since in 2010 it underwent a partial review in this connection. The Company has
from 2009 onwards open for review for all the other taxes applicable to it.
The Company's directors consider that the tax returns for the aforementioned taxes have been
filed correctly and, therefore, even in the event of discrepancies in the interpretation of current tax
legislation in relation to the tax treatment afforded to certain transactions, such liabilities as might
arise would not have a material effect on the accompanying financial statements.
18.8. Other disclosures
In 2008 the Company acquired non-current assets as required under the terms established in
Article 36.ter of the Spanish Corporation Tax Law as amended in Law 24/2001, for the
reinvestment of the extraordinary income obtained by the Group company Uniprex Televisión,
S.L.U. on the transfer of the ownership interest in a company. This reinvestment (EUR 499,950)
gave rise to a tax credit of EUR 42 thousand, which was taken in 2008.
The aforementioned non-current assets continue to be held in use at Atresmedia Corporación de
Medios de Comunicación, S.A. in accordance with Article 42.8 of Spanish Corporation Tax RoyalDecree Law 4/2004.
Also, in 2009 the Company used the aforementioned tax credit for the reinvestment of
extraordinary income deriving from the transfer of the ownership interest of Gloway Broadcasting
Services, S.L., in compliance with the requirement of Article 42. In 2009 the Company acquired
non-current assets amounting to EUR 6,414 thousand, under the terms and conditions established
in the aforementioned Article to comply with the reinvestment and earned tax credits of EUR 46
thousand that it did not use.
The Company used these tax credits in 2011.
These non-current assets continue to be used and are held in the equity of Atresmedia
Corporación de Medios de Comunicación, S.A.
19.- Foreign currency balances and transactions
The detail of the most significant balances and transactions in foreign currency, valued at the yearend exchange rate and the average exchange rates for the year, respectively, is as follows (in
thousands of euros):
2013
Accounts receivable
Accounts payable
Sales
Purchases
2012
1,075
1,141
201,386
121,224
3,181
2,377
128,370
104,070
44
The detail, by class of financial instrument, of the exchange differences recognised in 2013 in
profit or loss is as follows (in thousands of euros):
Transactions
settled in
the year
(28)
(28)
Trade receivables
Total financial assets
Trade payables
Total financial liabilities
Unmatured
balances
348
348
Total
(19)
(19)
(47)
(47)
6,175
6,175
6,523
6,523
The detail for 2012 is as follows (in thousands of euros):
Transactions
settled in
the year
8
8
Trade receivables
Total financial assets
Trade payables
Total financial liabilities
Unmatured
balances
1,128
1,128
Total
(123)
(123)
(115)
(115)
3,076
3,076
4,204
4,204
20.- Income and expenses
20.1 Revenue
The breakdown, by business line and geographical market, of the Company's revenue for 2013 and
2012 is as follows (in thousands of euros):
Business activity
2013
Advertising sales
Total
Geographical market
574,109
652,493
574,109
2013
Spain
Total
2012
652,493
2012
652,493
574,109
652,493
574,109
20.2 Procurements
The detail of "Procurements" in 2013 and 2012 is as follows:
Thousands of euros
2013
2012
Broadcasting of in-house productions
263,098
241,198
Outside production services
201,956
222,735
Programme broadcasting rights
151,997
123,244
48,593
43,465
Live broadcasting rights
Performances and contributions of entertainers
8,223
9,776
Other amortisation
8,140
7,477
Addition to inventories
Total
(249,974) (247,361)
432,033 400,534
“Addition to Inventories” reflects the expenses incurred in making programmes that, in accordance
with the Company’s procedures, are capitalised and subsequently amortised in accordance with
the policies described in Note 4.5.
In 2013 EUR 23 million of total procurements relate to purchases in other European Union
countries (2012: EUR 19 million) and approximately EUR 61 million to purchases made in countries
outside the European Union, mainly the United States (2012: EUR 38 million).
45
20.3 Employee benefit costs
The detail of "Employee Benefit Costs" in 2013 and 2012 is as follows:
Thousands of euros
2013
2012
Employer social security costs
5,201
Other employee benefit costs
1,652
1,438
6,853
7,983
Total
6,545
20.4 Other operating expenses
The detail of “Other Operating Expenses” in the income statements for 2013 and 2012 is as
follows:
Thousands of euros
2013
Rent and royalties
Work performed by other companies
Communications
Advertising and publicity
Copyrights and other expenses
Total
65,394
52,130
7,139
8,789
37,173
170,625
2012
47,530
35,409
7,018
6,260
31,936
128,153
“Rent and Royalties” includes mainly, inter alia, the amounts paid to Retevisión I, S.A. for the
audiovisual signal distribution and the contribution of the television operators to the financing of
Corporación RTVE.
“Copyrights and Other Expenses” includes changes in the allowance for doubtful debts. In 2013
the Company used provisions amounting to EUR 3,096 thousand (2012: EUR 57 thousand
recognised and EUR 1,164 thousand used).
20.5 Finance income and finance costs
The detail of the finance income and finance costs calculated by applying the effective interest
method is as follows (in thousands of euros):
2013
Finance income
Finance costs
18,923
16,642
2012
27,849
10,014
EUR 12,354 thousand of total finance income for 2013 relate to dividends received by Atresmedia
Corporación de Medios de Comunicación, S.A. from its subsidiaries (2012: EUR 26,356 thousand)
(see Note 9.3).
46
21.- Related party transactions and balances
21.1 Related party transactions
The detail of the transactions with related parties in 2013 and 2012 is as follows (in thousands of
euros):
2013
Group
companies
Associates
652,498
26,186
580
5,943
5,466
12,354
Income
Purchases and services received
Accrued interest expense
Accrued interest income
Guarantees (provided and received)
Dividends received
2012
Group
companies
Associates
8,786
77,963
3,466
-
574,182
15,140
351
1,289
6,284
26,356
3,034
32,257
1,952
182
-
"Accrued Interest Expense" includes borrowing costs payable to the former shareholders of
Gestora de Inversiones Audiovisuales La Sexta, S.A., totalling EUR 3,457 thousand (2012: EUR
1,942 thousand).
In addition to these transactions, in 2013 the Company purchased advertising space from related
companies amounting to EUR 1,188 thousand (2012: EUR 1,469 thousand) through advertising
agencies.
21.2 Related party balances
The detail of the on-balance sheet balances with related parties at 31 December 2013 and 2012 is
as follows (in thousands of euros):
2013
Group companies
Antena 3 Eventos, S.L.U.
Antena 3 Films, S.L.U.
Antena 3 Juegos, S.A.
Antena 3 Multimedia, S.L.U.
Antena 3 Noticias, S.L.U.
Antena 3 TDT de Canarias, S.A.
Atres Advertising, S.L.U.
Atresmedia Foto, S.L.
Cordina Planet, S.L.
Guadiana Producciones, S.A.
La Sexta Editorial Musical, S.L.U.
Música Aparte, S.A.U.
Publiseis Iniciativas Publicit
Uniprex Televisión, S.L.U.
Uniprex Valencia Telev, S.L.U.
Uniprex, S.A.U.
Equity
instruments
Non-current
Trade
loans to
receivables
companies
Current
financial
assets
Noncurrent
payables
Current
payables
Trade
payables
75,807
1,285
5,794
100
3
3
45
502
50
1,180
60
6,485
60,300
125,322
47,322
78,000
155,029
16
29
25
103
154,225
8
142
56
425
28,674
3
65
505
4,328
5,282
2,270
283
1,253
80
526
14,079
2
2
52,118
111
283
409
189
1,002
33,006
38
89
592
6,928
4,387
6
5,078
9,418
49
605
21
1,482
5,844
350
111
287
669
481
130
351
-
159
26
28
105
2,450
2,450
-
607
607
-
749
749
-
Financial assets
El Armario de la Tele, S.L. (Note
9.1)
1,472
-
-
-
-
-
1,472
-
-
-
-
-
Related companies:
GAMP Audiovisual, S.A.
Imagina Media Audiovisual, S.L.
Gala Desarrollos Comerciales,
S.L.
Planeta Group
RTL Group
Imagina Group
-
-
2,655
-
-
-
34,686
18,029
14,141
65,434
130
-
-
2,516
-
24
183
2,448
-
-
-
5,510
402
59,392
Associates:
Fundación Atresmedia
I3 Televisión, S.L.
Hola Televisión América, S.L.
-
-
-
-
47
2012
Equity
instruments
Noncurrent
Trade
loans to
receivables
companies
29,987
168
219
6,242
8
8,688
2
Noncurrent
payables
Current
payables
2
-
73,183
700
3,477
8
317
50,017
-
Trade
payables
Group companies
Antena 3 Canarias, S.L.U.
Antena 3 Eventos, S.L.U.
Antena 3 Films, S.L.U.
Antena 3 Juegos, S.A.
Antena 3 Multimedia, S.L.U.
Antena 3 Noticias, S.L.U.
Antena 3 TDT de Canarias, S.A.
Atres Advertising, S.L.U.
Canal Media Radio Galicia, S.L.U.
Estaciones Radiofónicas de
Aragón, S.A.U.
Guadiana Producciones, S.A.
Ipar Onda, S.A.U.
La Sexta Editorial Musical, S.L.U.
Música Aparte, S.A.U.
Publiseis Iniciativas Publicitarias,
S.A.U.
Uniprex Televisión, S.L.U.
Uniprex Valencia Televisión,
S.L.U.
Uniprex, S.A.U.
74,360
1,306
5,129
100
3
6
3
-
136,729
46,729
-
-
-
-
3
-
-
-
53
1,103
60
-
3
87
29
6
1,830
1,396
-
86
3,877
120
23
-
-
-
-
-
7
-
60,300
90,000
394
10,638
2
4,221
851
Associates:
Antena 3 de TV Colombia, S.A.
Canal 3 Televisión Colombia, S.A.
Fundación Atresmedia
I3 Televisión, S.L.
Organizaciones Deportivas y
Culturales de Unipublic, S.A.
Unipublic, S.A.
Hola Televisión América, S.L.
Cordina Planet, S.L.
85
85
572
-
196
22
60
500
-
-
6,295
1,035
-
1,258
4
1,247
Related companies:
GAMP Audiovisual, S.A.
Imagina Media Audiovisual, S.L.
Gala Desarrollos Comerciales,
S.L.
Planeta Group
RTL Group
Imagina Group
172,924
22
1,212
1
32
414
41
170,601
-
Current
financial
assets
9,885
40
(1,035)
59
967
7,634
185
155
-
6,297
-
97
334
-
10,473
842
-
-
20
424
-
-
44
-
-
-
-
-
50
-
-
572
-
26
18
70
500
-
5,210
-
7
-
-
-
7,677
-
-
68,532
35,619
27,918
3,712
1,929
1,513
113,576
-
-
-
-
-
4,995
270
-
-
-
189
251
7,237
-
-
-
4,767
7,782
101,027
“Current Financial Assets” includes the amounts drawn down against the credit facilities granted by
the Company to companies in its Group and the balances receivable from them relating to income
tax.
In June 2012 the Company granted Cordina Planet, S.L. a participating loan for EUR 500 thousand,
paying EUR 250 thousand in June and another EUR 250 thousand in August of the same year. The
loan earns interest at a floating rate equal to 5% of the borrower's annual positive EBITDA. In
2013, as a result of the acquisition of the remaining 50% of this company, Atresmedia assumed
the participating loan of EUR 1,100 thousand that the former shareholder had granted to Cordina.
The short-term participating loan granted by the Company to Uniprex, S.A. (Sole-Shareholder
Company) for EUR 223,000 thousand was repaid at the maturity date, 30 November 2012. In
December 2012, a loan was entered into with this subsidiary for a total of EUR 100,000 thousand,
of which EUR 10,000 thousand mature at short term and earn interest at a fixed rate of 3%,
subject to review each year. In 2013 EUR 12,000 thousand were transferred to short term and
EUR 10,000 thousand were repaid (see Note 9.3).
48
"Current Payables” includes the balances relating to cash surpluses managed by the Company on
behalf of its Group companies and the balances payable to them relating to income tax.
The sale of television advertising services has been managed by the Group company Atres
Advertising, S.L. (Sole-Shareholder Company) since its incorporation. On 1 April 2010, Atresmedia
Corporación de Medios de Comunicación, S.A. decided to begin billing the aforementioned service
from Atres Advertising, S.L. (Sole-Shareholder Company), in line with the most widely used sales
model in the television advertising industry. Accordingly, Atresmedia Corporación de Medios de
Comunicación, S.A. invoices this Group company for the sale of advertising space and Atres
Advertising, S.L. (Sole-Shareholder Company) bills the end customers.
The accounts receivable from and payable to the companies in which the investments held are
intended to be realised or settled at short term were taken into account in order to estimate the
net asset value and to consider the total risk associated with Atresmedia Corporación de Medios de
Comunicación, S.A.’s investments in these companies.
The Company centrally manages its cash and the cash of its subsidiaries (see Note 21.5).
21.3 Remuneration of directors and senior executives
The remuneration earned in 2013 by the current and former members of the Company’s Board of
Directors (composed of two women and eleven men) in the form of salaries, attendance fees and
life insurance premiums amounted to EUR 5,538 thousand, EUR 680 thousand and EUR 15
thousand, respectively. In 2012 this remuneration amounted to EUR 3,447 thousand, EUR 778
thousand and EUR 16 thousand, respectively.
In 2013 remuneration in the form of salaries and life insurance premiums of senior executives who
are not directors amounted to EUR 6,231 thousand and EUR 27 thousand, respectively (2012: EUR
4,230 thousand and EUR 25 thousand, respectively).
The Company has not granted any loans or advances to its Board members or senior executives
and it does not have any supplementary pension, retirement bonus, special indemnity or life
insurance obligations to them in their capacity as directors and executives.
49
21.4 Detail of investments in companies with similar activities and of the performance,
as independent professionals or as employees, of similar activities by the directors
Pursuant to Article 229 et seq. of the Spanish Limited Liability Companies Law (LSC), the
following information is included:
A) As notified by each of the directors, at 31 December 2013 none of the directors or parties
related thereto held direct or indirect equity interests in the share capital of companies
engaging in an activity that is identical, similar or complementary to the activity that
constitutes the company object of Atresmedia Corporación de Medios de Comunicación, S.A.
and the companies composing the Group, except for the director Imagina Media Audiovisual,
S.L.U., which has reported that it holds direct or indirect equity interests in the share capital of
the following companies, all of which belong to the Atresmedia Group:
Investee
Grupo Globo Media, S.A.U.
Equille Investiment, B.V.
Mediaproducción, S.L.
Business activity
Holding company Audiovisual industry
Holding company Audiovisual industry
Exploitation of mobile units for
broadcasting of sporting events
% of
direct or
indirect
ownership
Position held in
the company,
where
applicable
100
None
100
None
100
None
POC Ventures, B.V.B.A.
Audiovisual production services
100
None
Xarxa Oberta, de Comunació
i
Tecnologia de Catalunya,
S.A.
Construction and exploitation of
next generation networks
100
None
Audiovisual production services
60
None
Radio and television
Audiovisual production and
distribution
Holding company Audiovisual industry
60
None
49
None
52.35
None
90
None
82.5
None
Adisar Media, S.L.
Antena Local, S.L.
Asturmedia Producciones
Audiovisuales, S.L.
Avenida dos Aliados, S.A.
Bikini Pos Produçao de
Filmes, Ltda.
Post-production
Centroamerica TV, Llc
Television
CLS Audiovisuais, Lda
Production services
75
None
Digital Humor
Distribuidora Digital de
Fútbol, S.L.
Imagina Media Servicios de
producción audiovisual,
S.L.U.
Web management
67.50
None
Audiovisual services
100
None
Holding company Audiovisual industry
100
None
Estudios Hackenbush, S.L.
Full Zoom-producciones
audiovisuaes, lmtda
Gabinete de Estudios de la
Comunicación Audiovisual,
S.A.U.
Advertising
100
None
50
None
100
None
72.74
Director
100
None
100
None
GAMP Audiovisual, S.A.
Geca Minutados, S.L.
GLM Brasil Conteudos
Audiovisuais, Ltda
Audiovisual production
Studies and reports of sporting
events
Holding company Audiovisual industry
Studies and reports of sporting
events
Audiovisual content
50
Broadcasting of
audiovisual signals
via satellite
100
None
Globo Media, S.A.
Gol Televisión S.L.U.
Audiovisual content
98.70
None
Television
100
None
GTV Estudios, Lda
Multimedia services
Distribution of audiovisual
programmes
100
None
Hostoil Produkzioak, S.L.
Imagina Contenidos
Audiovisuales, S.L.
Audiovisual production
100
None
Audiovisual content
100
None
Imagina EU
Audiovisual production
Operation of mobile units for
broadcasting of sporting events
100
None
100
None
100
None
100
None
82.5
None
Globepro
Telecomunicaciones, S.L.
Hangin, S.A.
Imagina Group France
Imagina International Sales,
S.L.
Imagina USA, Inc.
Imalatam, S.L.U.
Marketing of audiovisual works
Purchase and sale of audiovisual
rights
Audiovisual production and
services
50
None
Imalatam Caracas, C.A.
Audiovisual production
40.43
None
Imasblue Estudio, S.L.
Post-production services
54.46
None
Infinia, AD, S.A.
Post-production services
54.46
None
K 2000, S.A.
Labo Productions 2007, LLC
Content production
Content production
Television, telematic network
and internet content
100
82.5
None
None
100
None
82.50
None
90
None
55
None
100
None
100
None
100
None
Liquid Media, S.L.
LVM Mexico
Audiovisual production
Media 3.14, S.L.
Television content production
Image right management
(sports)
Media Base Sports, S.L.
Media Burst Servicios para
Empresas
Audiovisuais Sociedad
Unipessoal
Media Cam Producción
Audiovisual, S.L.
Media Luso Produçoes para la
Televisao, Lda
Audiovisual-industry related
industrial facilities
Management and exploitation of
marketing rights
Videographic production
Media World, LLC
Distribution of television rights,
television production and sports
marketing
82.5
None
Mediaconti Servicios de
Continuidad, S.L.
Audiovisual continuity services
100
None
Mediamag Management Kft
Videographic production
100
None
Mediamóvil Unidad de
Producción, S.L.
Mediapro Middle East FZ
L.L.C.
Mediapropiedades, S.A.
Mediarena Servicios, S.L.U.
Mediasur Producciones
Audiovisuales, S.L.
Equipment and technical
facilities for audiovisual-related
fields
Audiovisual production and
services
Audiovisual production and
services
Videographic production
60
None
100
None
50
None
100
None
Videographic production
100
None
51
Mediatem Canales
Temáticos, S.L.
Molinare, S.L.U.
MW Colombia LLC
Nuevas Iniciativas
Audiovisuales, S.L.
Videographic production
100
None
Purchase and sale of shares
Audiovisual production and
services
Exploitation of
radiobroadcasting companies or
media
100
None
82.5
None
100
None
62.96
None
50
None
Ombú Producciones, S.A.
Film production
Omnicamm4Sky
Television services
Overon America, Llc
Broadcasting
100
None
Overon Bulgaria EOOD
Broadcasting
100
None
Overon US, Inc
Broadcasting
100
None
60
None
49.5
None
100
None
100
None
Pro TV Global Production
Services FZ-LLC.
Production and editing of film
and video programmes
TV channel management
Dormant
Audiovisual communication
services
Audiovisual production and
services
Prom TV, S.A.
Audiovisual production
70
None
Promofilm California, L.L.C.
Audiovisual production
82.5
None
Promofilm Colombia, Ltda.
Audiovisual production
100
None
Media Producoes Basil, LTDA
Audiovisual production
100
None
Promofiction Llc
Promofilm México S.A. de
C.V.
Promofilm Music, L.L.C
Audiovisual production
82.50
None
Audiovisual production
100
None
Audiovisual production
82.5
None
Promofilm US, L.L.C.
Audiovisual production
82.5
None
Promofilm, S.A.
Revolution Broadcast
Produçoes Artisticas Ltda
Royal Media Internacional,
S.L.
Servicios Audiovisuales
Overon, S.L.
Audiovisual production
Exploitation of mobile units for
broadcasting of sporting events
100
None
65
None
Videographic production
100
None
Broadcasting
100
None
Servicios Integrales
Unitecnic, S.L.
Industrial facilities related to the
audiovisual industry
100
None
Sociedad Europea de
Unidades Móviles, S.L.
Sociedad General de
Producción y Explotación
de Contenidos, S.L.
Teleamazonas Internacional,
Llc
Exploitation of mobile units for
broadcasting of sporting events
96.84
None
100
None
41.25
None
Trivideo Tricicle Ovideo, S.L.
T&M Tecnologia & Media,
Consultadoria e
Produçao Multimedia, Lda
Audiovisual production
30
None
Videographic production
50
None
82.5
None
Ovideo TV, S.A.
Pasiones TV, Llc
Plataforma de Televisión
Digital Terrestre, S.L.
Television Dominicana, Llc
Television content production
Theme channel production and
management
Television channel management
52
US Imagina, Llc
Audiovisual production and
services
82.5
None
Wisdom TV España, S.L.
Production, marketing and
consulting services
50
None
Production, marketing and
consulting services
50
None
50
None
50
None
28.05
None
50
None
41.25
None
Wisdom Televisión, Sistemas
Informáticos para Televisao,
Lda
Wtvision Sistemas
Informáticos para televisao,
Ltda
Wtvision, INC
You Whisp Company, S.L.
Production, marketing and
consulting services
Production, marketing and
consulting services
Consulting and integration of
technological tools for
audiovisual content
management
Umedia Sports Advertising,
S.L.
Static advertising
12 Hearts, LLC
Any lawful company object
In addition, Imagina Media Audiovisual, S.L.U. notified the Parent that José Miguel
Contreras Tejera, its designated representative to perform the duties of director of
Atresmedia Corporación de Medios de Comunicación, S.A., at 31 December 2013 held direct or
indirect equity interests in the share capital of companies engaging in an activity that is
identical, similar or complementary to the activity that constitutes the company object of
Atresmedia Corporación de Medios de Comunicación, S.A. and the companies composing its
Group:
Investee
Business activity
Imagina Media Audiovisual,
S.L.
Holding company Audiovisual industry
JMC 2000, S.L.
Audiovisual consulting
% of
ownership
3.45
50
Position held in
the company,
where
applicable
Director
Sole director
Gamp Audiovisual, S.A. reported that Josep María Benet Ferrán, its designated
representative to perform the duties of director of Atresmedia Corporación de Medios de
Comunicación, S.A., at 31 December 2013 held direct or indirect equity interests in the share
capital of the following company engaging in an activity that is identical, similar or
complementary to the activity that constitutes the company object of Atresmedia Corporación
de Medios de Comunicación, S.A. and the companies composing its Group:
Investee
Imagina Media Audiovisual,
S.L.
Business activity
Holding company Audiovisual industry
% of
ownership
14.27
Position held in
the company,
where
applicable
Individual
representing the
director
Mediavisual
Group, BV.
53
B) With regard to the performance of activities carried on by the members of the Board of
Directors, as independent professionals or as employees, that are identical, similar or
complementary to the activity that constitutes the company object of Atresmedia Corporación
de Medios de Comunicación, S.A., at 31 December 2013, the directors or their representatives
had notified the Company of the following:
Nicolas Abel Bellet de Tavernost:
Business activity
Company through which
the activity is performed
Television
Rtl Group, S.A.
Television
Bertelsmann
Multimedia
Radio
Position held or functions
discharged
Member of the operations
management committee
Member of the Management
Committee
Métropole Television, S.A.*
Chairman of the Board of Directors
Ediradio (RTL Radio)
Member of the Supervisory Board
* As a result of this position, he carries on activities related to the audiovisual industry through the M6 Group in France.
Josep María Benet Ferrán, representing the director Gamp Audiovisual, S.A.:
Business activity
Company through which
the activity is performed
Position held or functions
discharged
Holding company - Audiovisual
industry
Imagina Media Audiovisual,
S.L.
Individual representing the
director Mediavisual Group,
BV.
Planning, development,
management and operation of
construction work, equipment,
offices and facilities
Mediacomplex, S.L.
Director
Editing, printing, distribution
and sale of newspapers
Imagina Media Inversiones en
Comunicación Audiovisual,
S.L.U.
Holding company
Gamp Audiovisual, S.A.
News programme productions
Medianews Canarias, S.L.
Individual representing the
sole director Mediaproducción,
S.L.U.
Individual representing the
director Imagina Media
Inversiones en Comunicación
Audiovisual, S.L.U.
Director acting jointly
Creation, promotion and
marketing of advertising media
Umedia Sports Advertising,
S.L.
Director
Ovideo Tv, S.A.
Director
Production and editing of film,
video and all manner of
programmes
Audiovisual telecommunications
services and transmission of
audio and video data via all
manner of technologies
Holding company
Servicios Audiovisuales
Overon, S.L.
Rilson XXI, S.L.
Individual representing the
director Imagina Media
Inversiones en Comunicación
Audiovisual, S.L.U.
Individual representing the
director acting severally Atas
Corp, S.L.U.
54
José Miguel Contreras Tejera, representing the director Imagina Media
Audiovisual, S.L.:
Business activity
Company through which the
activity is performed
Position held or
functions
discharged
Holding company - Audiovisual
industry
Imagina Media Audiovisual, S.L.
Director
Holding company Audiovisual industry
Gamp Audiovisual, S.A.
Director
Audiovisual production
Grupo Globo Media, S.A.
Representative of the
director
JMC 2000, S.L.
Audiovisual production
Globo Media, S.A.
Director
Holding company Audiovisual industry
Distributor of audiovisual formats
Imagina Contenidos Audiovisuales,
S.L.
Imagina International Sales, S.L.U.
Audiovisual consulting
JMC 2000, S.L.
Director
Director
Sole director
Silvio González Moreno:
Business
activity
Company through which the
activity is performed
Advertising
Atres Advertising, S.L.U.
Sales
Antena 3 Eventos, S.A.U.
Audiovisual
production
Antena 3 Films, S.L.U.
Gaming operations
Antena 3 Juegos, S.A.U.
Sales
Antena 3 Multimedia, S.L.U.
News production
Antena 3 Noticias, S.L.U.
Production
advertising spots
Guadiana Producciones, S.A.U.
Rights management
Música Aparte, S.A.U.
Sales of digital print
products
Atresmedia Foto, S.L.
Radio
Uniprex, S.A.U.
Position held or functions
discharged
Representative of the sole director
(Atresmedia Corporación de Medios
de Comunicación, S.A.)
Representative of the sole director
(Atresmedia Corporación de Medios
de Comunicación, S.A.)
Representative of the sole director
(Atresmedia Corporación de Medios
de Comunicación, S.A.)
Representative of the sole director
(Atresmedia Corporación de Medios
de Comunicación, S.A.)
Representative of the sole director
(Atresmedia Corporación de Medios
de Comunicación, S.A.)
Representative of the sole director
(Atresmedia Corporación de Medios
de Comunicación, S.A.)
Representative of the sole director
(Atresmedia Corporación de Medios
de Comunicación, S.A.)
Representative of the sole director
(Atresmedia Corporación de Medios
de Comunicación, S.A.)
Representative of the sole director
(Atresmedia Corporación de Medios
de Comunicación, S.A.)
Since 5 December 2013
Representative of the sole director
(Atresmedia Corporación de Medios
de Comunicación, S.A.)
55
Television
Antena 3 Televisión Digital Terrestre
de Canarias, S.A.U.
Television
Uniprex Televisión, S.L.U.
Television
Uniprex Valencia TV, S.L.U.
Representative of the sole director
(Uniprex, S.A.U.)
Representative of the sole director
(Uniprex, S.A.U.)
Representative of the sole director
(Uniprex, S.A.U.)
Marco Drago:
Company through which
the activity is performed
Business activity
Holding company - Television
productions
Position held or functions
discharged
Zodiak Media, S.A.
Director
Elmar Heggen:
Business activity
Company through which the
activity is performed
Position held or functions
discharged
Financial Manager and Corporate
Director of the head office of the RTL
Group
Holding company Audiovisual industry
RTL Group, S.A.
Holding company Audiovisual industry
CLT–UFA, S.A.
Director
Holding company Radio industry
Immobilière Bayard d’Antin, S.A.
Director
Inadi, S.A.
Director
French radio and
advertising
IP France, S.A.
Director
Television
RTL 9, S.A.
Director
Belgian television
RTL Belgium, S.A.
Director
Holding company Audiovisual industry
RTL Group Central and Eastern
Europe, S.A.
Director
Holding company Audiovisual industry
RTL Group Germany, S.A.
Director
Holding company Audiovisual industry
RTL Group Central and Eastern
Europe, Gmbh
Executive Chairman
German radio
RTL Radio Berlin, Gmbh
General Manager
German television
RTL Television, Gmbh
General Manager
Belgian radio
Holding company Fremantlemedia, S.A.
Audiovisual industry
Holding company RTL Group Deutschland, Gmbh
Audiovisual industry
Holding company RTL Group Vermögensverwaltung,
Audiovisual industry Gmbh
Production
RTL Group Services, Gmbh
Holding company Ufa Film und Fernseh, Gmbh
Audiovisual industry
Holding company RTL TV D.O.O.
Audiovisual industry
French radio
Ediradio, S.A.
Chairman of the Board of Directors
General Manager
General Manager
General Manager
General Manager
Director
Member of the Supervisory Committee
56
French television
Métropole Television, S.A.
Member of the Supervisory Committee
Holding company Audiomedia Investments, S.A.
Audiovisual industry
Chairman of the Board of Directors
Radio broadcasting
Broadcasting Center Europe, S.A.
Chairman of the Board of Directors
Technical services
Media Properties, Sàrl
Chairman of the Management
Committee
Television and radio
RTL Nederland Holding, BV
holding company
Chairman of the Supervisory Committee
New technologies
Chairman of the Board of Directors
Duchy Digital, S.A.
The following must be stated in relation to the activities performed by the aforementioned
directors:
1.- In all cases, the proprietary directors discharge their professional activities at companies that
form part of the corporate groups of their respective reference shareholders, which they represent
on the Board of Directors of Atresmedia Corporación de Medios de Comunicación, S.A.
2.- At the time of their appointment by the shareholders at the Annual General Meeting,
information was disclosed on the relationship existing between the aforementioned proprietary
directors and the shareholders that proposed their appointment in each case and on those who
were associated as non-executive proprietary directors.
3.- In the case of the Chief Executive Officer, Silvio González, executive director, all the
professional activities indicated are performed at companies owned by the Atresmedia Group and,
therefore, no competition is entailed. In all cases, he acts as representative of the legal entity
holding the position of sole director, which may be Atresmedia Corporación de Medios de
Comunicación, S.A. itself or any of its subsidiaries. Each of these subsidiaries has its own
management team.
4.- The inclusion of this information in the Company’s financial statements complies with Article
230 of the Spanish Limited Liability Companies Law on notifying the shareholders at the Annual
General Meeting and obtaining their express authorisation.
The other directors, José Manuel Lara Bosch, Maurizio Carlotti, Mauricio Casals Aldama, Aurora
Catá Salas, José Creuheras Margenat, María Entrecanales Franco and Pedro Ramón y Cajal
Agüeras have notified the Company that, at 31 December 2013, they did not perform any
activities as independent professionals or employees that were identical, similar or complementary
to the activity that constitutes the company object of Atresmedia Corporación de Medios de
Comunicación, S.A.
21.5 Financial structure
As indicated in Note 1, the Company is the head of a group of subsidiaries. It holds its cash and
cash equivalents at banks with high credit ratings.
External financing is basically obtained by the Company, which also manages the financial
transactions of the rest of the Group, including both financing activities and asset management
activities (see Note 21.2).
57
22.- Other disclosures
22.1 Employees
The average number of employees in 2013 was 430 (2012: 537). The detail, by professional
category, is as follows:
2013
Professional category
Women
Senior executives
Managers
Line personnel
Clerical staff
Other
Total
Men
2
32
111
34
31
210
10
57
121
13
19
220
There were 441 employees at 2013 year-end. The detail, by gender and professional category, is
as follows:
2013
Professional category
Women
Senior executives
Managers
Line personnel
Clerical staff
Other
Total
Men
2
31
115
36
30
214
10
59
125
13
20
227
The number of senior executives includes two directors (both men).
The average number of employees in 2013 with a disability of more than 33%, by professional
category, is as follows:
Professional category
2013
Line personnel
Other
Total
2
2
22.2 Fees paid to auditors
In 2013 and 2012 the fees for financial audit and other services provided by the Company's
auditors, Deloitte, S.L., or by a firm in the same group or related to the auditors, were as follows
(in thousands of euros):
Financial audit
services
2013
2012
184
210
Audit-related
services
4
1
Tax
advisory
services
Other
services
-
36
178
The Annual Corporate Governance Report contains a description of the work of the Audit
Committee and explains how auditor objectivity and independence is guaranteed when auditors
provide other non-audit services.
58
22.3 Off-balance-sheet agreements
The detail of the guarantees provided by the Company to banks for third parties is as follows:
Thousands of euros
Group companies and associates
Other guarantees
Total
2013
2012
5,466
6,466
13,868
14,009
19,334
20,475
The Company's directors consider that any liabilities not foreseen at 31 December 2013 that might
arise from the guarantees provided would not be material.
23.- Events after the reporting period
On 19 February 2014, the Company, through a relevant event communication and subsequent to a
resolution of its Board of Directors, announced a partial novation of the integration agreement
entered into on 14 December 2011 with Gestora de Inversiones Audiovisuales La Sexta, S.A. ("La
Sexta") and its shareholders, which set the terms and conditions for the integration of La Sexta
into the Atresmedia Group through a merger by absorption. Specifically, the novation of the
agreement relates to the terms and conditions regarding the "Additional Ownership Interest",
whereby La Sexta shareholders were granted the right to receive an additional ownership interest
of 7% of the share capital of Atresmedia Corporación de Medios de Comunicación, S.A., conditional
upon the Atresmedia Group's earnings performance from 2012 to 2016, inclusive.
Under the novation, Atresmedia, with Gamp Audiovisual S.A. and Imagina Media Audiovisual, S.L.,
agreed to advance and permanently settle the delivery of the partial ownership interest that would
correspond to both companies and, accordingly, on 24 February 2014 they were delivered, with a
charge to treasury shares, an ownership interest in Atresmedia Corporación de Medios de
Comunicación, S.A. equal to 2.079% and 1.631% of its share capital, respectively.
As a result of the negotiation process for this agreement and forming part thereof, other
agreements were reached with Gamp Audiovisual, S.A. and Imagina Media Audiovisual, S.L.
consisting of the cancellation of their proportional share of the financial derivative agreement
described in Note 9 and of the definitive conclusion of other matters relating to the guarantees and
obligations under the integration agreement entered into for the merger with Gestora de Medios
Audiovisuales la Sexta, S.A. (see Note 15).
The recognition of all these transactions will give rise to an estimated reduction of EUR 13,631
thousand in the shareholders' equity of the Company in the financial statements for 2014.
The terms and conditions agreed upon in the integration agreement relating to Gala Desarrollos
Comerciales, S.L. remain unchanged and, accordingly, it continues to be entitled to receive an
additional ownership interest of 0.508% of the share capital of Atresmedia Corporación de Medios
de Comunicación, S.A., conditional upon the earnings performance of the Atresmedia Group, as
indicated above.
24.- Explanation added for translation to English
These financial statements are presented on the basis of the regulatory financial reporting
framework applicable to the Company (see Note 2). Certain accounting practices applied by the
Company that conform with that regulatory framework may not conform with other generally
accepted accounting principles and rules.
59
Atresmedia Corporación de Medios de
Comunicación, S.A.
(formerly Antena 3 de Televisión, S.A.)
Directors' Report
2013
Translation of a report originally issued in Spanish.
In the event of a discrepancy, the Spanish-language version prevails.
ATRESMEDIA CORPORACIÓN DE MEDIOS DE COMUNICACIÓN, S.A.
DIRECTORS' REPORT FOR 2013
Business performance and situation of the Company
In 2013 economic activity in Spain displayed a gradual improvement in stark contrast to
events in 2012. The easing of financial tensions in Southern Europe and in Spain in
particular led to less restrictive economic policies. Both of these events resulted in an
improvement in investment, consumption and employment indicators, coupled with the
favourable developments already witnessed in the external sector. Although the known data
are far from satisfactory, they have had a positive impact on the advertising market, itself
bolstered by the improved situation or expectations of the advertisers' markets.
Estimates place the decline in the advertising market at 8.1% in 2013, smaller than the
16.0% drop in 2012. The quarter-by-quarter performance was of particular note, recovering
from a double-digit year-on-year drop in the first quarter to slight growth in the fourth.
However promising the trend may be, the fact remains that, for yet another year,
advertising expenditure has dropped very significantly again this year and 2013 figures
equalled those for 1998, 15 years ago. Television advertising performed better than
average, with a 6.2% decline, while radio fell by 11.0%.
2013 saw the consolidation of the television model launched in 2012 with the merger by
absorption of Gestora de Inversiones Audiovisuales La Sexta, S.A. into the Company. As
regards audience, Atresmedia attained an average share of 28.8% in 2013, representing an
increase of three points - the highest of all television groups. Our main channels, Antena 3
and La Sexta, were the fastest growing national channels, growing by 1.0 and 1.1 points,
respectively. Our share of the television advertising market also grew by 1.3 points. Lastly,
the synergies obtained in costs were higher than initially expected and the merger was
completed with the greatest of success.
Revenue stood at EUR 652 million, compared to EUR 574 million in 2012. It should be noted
that in 2013 La Sexta activity was included for the entire year, while in 2012 it was only
included for the last three months, since the merger took effect from October 2012. In likefor-like terms, television revenue performed better than the market as a whole and, as
indicated above, the market share improved. Once again, other income increased in 2013
by 40.8% to EUR 26 million. The Company's total income was EUR 678 million, up 14% on
2012.
Although the comparison of expenses is, logically, also affected by the inclusion of La Sexta
in October 2012, their evolution is highly satisfactory. Total operating expenses increased
by only 10%, demonstrating both the cost synergies achieved and the Company's high
degree of cost discipline.
Profit from operations amounted to EUR 34 million, as opposed to the loss incurred in 2012.
Profit before tax stood at EUR 30 million, as compared with EUR 14 million in 2012.
On 18 December 2013, the Supreme Court issued an order enforcing the judgment which
rendered void the resolution of the Spanish Cabinet of 16 July 2010 regarding the allocation
of channels. At present, based on the information available, the interpretation of these
decisions and the fact that Atresmedia Corporación de Medios de Comunicación, S.A. has
1
met all the commitments and obligations imposed upon it, a satisfactory solution is still
expected to be reached.
Significant events for the Company after the reporting period
On 19 February 2014 the Company, through a relevant event communication and
subsequent to a resolution of its Board of Directors, announced a partial novation of the
integration agreement entered into on 14 December 2011 with Gestora de Inversiones
Audiovisuales La Sexta, S.A. ("La Sexta") and its shareholders, which set the terms and
conditions for the integration of La Sexta into the Atresmedia Group through a merger by
absorption. Specifically, the novation of the agreement relates to the terms and conditions
regarding the "Additional Ownership Interest", whereby La Sexta shareholders were granted
the right to receive an additional ownership interest of 7% of the share capital of
Atresmedia Corporación de Medios de Comunicación, S.A., conditional upon the Atresmedia
Group's earnings performance from 2012 to 2016, inclusive.
Under the novation, Atresmedia agreed, with Gamp Audiovisual S.A. and Imagina Media
Audiovisual, S.L., to bring forward and definitively adjust the delivery of the additional
ownership interest that would correspond to these companies. Accordingly, on 24 February
2014 they were delivered, with a charge to treasury shares, ownership interests in
Atresmedia Corporación de Medios de Comunicación, S.A. equal to 2.079% and 1.631% of
its share capital, respectively.
As a result of the process to negotiate this agreement and forming a part thereof, other
agreements were reached with Gamp Audiovisual, S.A. and Imagina Media Audiovisual, S.A.
consisting of the cancellation of their proportional part in the financial derivative agreement
described in Note 9 and the definitive conclusion of other matters relating to the guarantees
and obligations included in the merger agreement entered into for the merger with Gestora
de Medios Audiovisuales la Sexta, S.A. (see Note 15).
The recognition of all these transactions will give rise to an estimated reduction of EUR
13,631 thousand in the shareholders' equity of the Company in the financial statements for
2014.
The terms and conditions agreed upon in the integration agreement relating to Gala
Desarrollos Comerciales, S.L. remain unchanged and, accordingly, it continues to be entitled
to receive an additional ownership interest of 0.508% of the share capital of Atresmedia
Corporación de Medios de Comunicación, S.A., conditional upon the earnings performance
of the Atresmedia Group, as indicated above.
Outlook for the Company
The main indicators suggest that the improvement in economic activity will continue in the
near future. Although household consumption is not expected to make any major leap
forward, it is expected to display increasingly positive growth. This is consistent with
significant growth in the advertising market, whose elasticity with respect to consumption is
very high, as displayed by the massive decline in recent years. Accordingly, 2014 is
expected to be at least slightly positive, with the growth achieved being bolstered in the
coming years.
This more positive environment allows for some optimism regarding the immediate future,
and will make it possible to reap all the fruits of the merger carried out in recent years.
Although the outlook for the market and revenue is positive, cost discipline will remain a
cornerstone of management, so as to enable the margins of the television and radio
businesses to grow significantly. The high degree of quality and diversity in the content on
2
offer is expected to be maintained and, accordingly, we will be able to continue to enjoy the
boost this provides.
No major corporate transactions, such as the recent merger, are expected to be carried out.
However, we will devote greater efforts to the objective of earning income from audiovisualworld activities other than advertising. Nubeox, the pay video-on-demand content platform,
is one of the initiatives in this area, as are participation in the Hola TV channel, broadcast in
South America and the United States, tualbum.es. and EnglishHouse.TV. Furthermore, the
progress made in 2013 on the Internet will continue: 2013 saw 12 million unique visitors to
our websites and more than 56 million videos downloaded. The recent launch of
Atresplayer, an online multi-platform content viewing platform, has proven to be a great
success, which will allow us to achieve greater dissemination of our content and to obtain
additional revenues from both advertisers and paying spectators.
The framework for all these developments will continue to be a prudent financial policy
which, as has been the case to date, will couple a continued sound equity position with a
dividend policy in line with that of recent years.
Research and development activities
The Company did not carry out any specific research and development activities. However,
it updates its investments in all new technologies related to engineering, systems and
content distribution on an on-going basis. In this field Atresmedia Corporación de Medios de
Comunicación, S.A. has and uses state-of-the-art technology, which enables it to be at the
forefront in the deployment of digital activities and in the Internet.
Treasury share acquisitions
No transactions involving treasury shares were performed in 2013. The Company therefore
continued to hold 15,818,704 treasury shares of EUR 0.75 par value each, representing
7.01% of its share capital.
Use of financial instruments by the Company and main financial risks
The Company performs transactions with financial instruments mainly to hedge the foreign
currency risk on the purchases of broadcasting rights in the year.
At 31 December 2013, the Company had arranged instruments to hedge its foreign
currency asset and liability positions amounting to USD 89,863 thousand, at a weighted
average exchange rate of EUR 1.3117/USD 1. The net fair value of these hedging
instruments gave rise to a financial asset of EUR 698 thousand and a financial liability of
EUR 3,232 thousand at year-end.
Also, interest rate swaps were arranged in order to fix the financial cost arising from the
floating rates established in the syndicated financing agreement entered into in August
2013. The fair value of these swaps at 31 December 2013 gave rise to a financial asset of
EUR 5 thousand.
The Company has established the risk management systems required to ensure that
transactions in markets are performed in accordance with its established policies, rules and
procedures and within the limits approved for each case. The Company’s main financial
risks are as follows:
3
a) Foreign currency risk. Foreign currency risks relate mainly to the payments to be made
in international markets to acquire broadcasting rights. In order to mitigate this risk, the
Company arranges hedging instruments (mainly foreign currency hedges).
b) Liquidity risk. The Company’s liquidity policy is to arrange credit lines and current
financial assets that are sufficient to support its financial needs, on the basis of expected
business performance.
c) Credit risk. The Company does not have a significant credit risk since the average
customer collection period is very short and guarantees are required for deferred payment
sales. Cash placements are made and derivative instruments are arranged with institutions
of recognised solvency.
d) Interest rate risk. Both the Company's cash and its bank borrowings are exposed to
interest rate risk. The Company's financing is at interest rates tied to Euribor. To mitigate
this risk, the Company has arranged interest rate swaps to limit the finance costs arising
from its floating-rate borrowings.
In accordance with Article 538 of the Spanish Limited Liability Companies Law, the Annual
Corporate Governance Report (IAGC) forms part of this Directors' Report. The IAGC
constitutes a relevant event and is communicated to the Spanish National Securities Market
Commission, which publishes it on its website: www.cnmv.es. It is also available on the
Company's corporate website, www.atresmediacorporacion.com.
4
Atresmedia Corporación de Medios de
Comunicación, S.A. (formerly Antena 3
de Televisión, S.A.) and Subsidiaries
Auditors' Report
Consolidated Financial Statements for the year
ended 31 December 2013
Translation of a report originally issued in Spanish and of
consolidated financial statements originally issued in Spanish
and prepared in accordance with the regulatory financial
reporting framework applicable to the Group (see Notes 2 and
29). In the event of a discrepancy, the Spanish-language
version prevails.
Translation of a report originally issued in Spanish based on our work performed in
accordance with the audit regulations in force in Spain and of consolidated financial
statements originally issued in Spanish and prepared in accordance with the regulatory
financial reporting framework applicable to the Group (see Notes 2 and 29). In the event of
a discrepancy, the Spanish-language version prevails.
AUDITORS’ REPORT ON CONSOLIDATED FINANCIAL STATEMENTS
To the Shareholders of
Atresmedia Corporación de Medios de Comunicación, S.A.
(formerly Antena 3 de Televisión, S.A.):
We have audited the consolidated financial statements of Atresmedia Corporación de
Medios de Comunicación, S.A. (the Parent) and Subsidiaries (the Group), which comprise
the consolidated balance sheet at 31 December 2013 and the related consolidated income
statement, consolidated statement of comprehensive income, consolidated statement of
changes in equity, consolidated statement of cash flows and notes to the consolidated
financial statements for the year then ended. As indicated in Note 2 to the accompanying
consolidated financial statements, the directors are responsible for the preparation of the
Group’s consolidated financial statements in accordance with International Financial
Reporting Standards as adopted by the European Union and the other provisions of the
regulatory financial reporting framework applicable to the Group. Our responsibility is to
express an opinion on the consolidated financial statements taken as a whole based on
our audit work performed in accordance with the audit regulations in force in Spain, which
require examination, by means of selective tests, of the evidence supporting the
consolidated financial statements and evaluation of whether their presentation, the
accounting principles and policies applied and the estimates made comply with the
applicable regulatory financial reporting framework.
In our opinion, the accompanying consolidated financial statements for 2013 present
fairly, in all material respects, the consolidated equity and consolidated financial position
of Atresmedia Corporación de Medios de Comunicación, S.A. and Subsidiaries at 31
December 2013, and the consolidated results of their operations and the consolidated
cash flows for the year then ended, in conformity with International Financial Reporting
Standards as adopted by the European Union and the other provisions of the regulatory
financial reporting framework applicable to the Group.
The accompanying consolidated directors’ report for 2013 contains the explanations which
the directors of Atresmedia Corporación de Medios de Comunicación, S.A. consider
appropriate about the Group’s situation, the evolution of its business and other matters,
but is not an integral part of the consolidated financial statements. We have checked that
the accounting information in the consolidated directors’ report is consistent with that
contained in the consolidated financial statements for 2013. Our work as auditors was
confined to checking the consolidated directors’ report with the aforementioned scope,
and did not include a review of any information other than that drawn from the
accounting records of Atresmedia Corporación de Medios de Comunicación, S.A. and
Subsidiaries.
DELOITTE, S.L.
Registered in ROAC under no. S0692
Jesús Mota Robledo
26 February 2014
Atresmedia Corporación de Medios
de Comunicación, S.A. (formerly
Antena 3 de Televisión, S.A.) and
Subsidiaries
Consolidated Financial Statements for the
year ended 31 December 2013
Translation of consolidated financial statements originally issued in Spanish and prepared in accordance with the
regulatory financial reporting framework applicable to the Group (see Notes 2 and 29). In the event of a discrepancy,
the Spanish-language version prevails.
ATRESMEDIA CORPORACIÓN DE MEDIOS DE COMUNICACIÓN, S.A.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET AT 31 DECEMBER 2013
Thousands of euros
NOTES 31/12/13
31/12/12
ASSETS
Goodwill
5
153,193
150,012
Other intangible assets
6
142,685
140,820
Property, plant and equipment
7
51,975
57,414
Investments accounted for using the equity method
8
546
86
Non-current financial assets
9
1,769
13,052
Derivative financial instruments
Deferred tax assets
9
22-d
NON-CURRENT ASSETS
Programme rights
10
Inventories
Trade receivables for sales and services
11
9,413
7,402
327,183
322,539
686,764
691,325
280,033
238,977
3,019
2,924
222,803
216,345
Other receivables
11
5,792
12,650
Current tax assets
22-d
1,558
1,755
698
1,245
Derivative financial instruments
15
Other current financial assets
Other current assets
Cash and cash equivalents
CURRENT ASSETS
NON-CURRENT ASSETS CLASSIFIED AS HELD FOR SALE AND
DISCONTINUED OPERATIONS
TOTAL ASSETS
3,658
-
389
1,595
56,282
4,973
574,232
480,464
-
2,000
1,260,996
1,173,789
EQUITY AND LIABILITIES
Share capital
12-a
169,300
169,300
Share premium
12-b
38,304
38,304
Restricted reserves
12-c
42,475
40,282
189,916
165,989
Retained earnings
Treasury shares
12-e
(99,453)
(99,453)
Interim dividends
12-f
-
(21,352)
42,643
42,643
842
493
384,027
336,206
Other equity instruments
4
Valuation adjustments
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF
THE PARENT
Non-controlling interests
12-g
EQUITY
(9)
(4)
384,018
336,202
Provisions
13
2,328
-
Bank borrowings
14
200,129
226
Derivative financial instruments
15-a
207
197
Other non-current financial liabilities
15-b
495
69,469
Deferred tax liabilities
22-d
31,345
31,488
13
63,658
-
298,162
101,380
Other non-current liabilities
NON-CURRENT LIABILITIES
Provisions
13
73,022
79,192
Bank borrowings
14
6,589
137,669
485
Derivative financial instruments
15-a
3,025
Other current financial liabilities
15-b
35,384
-
Payable to suppliers
16
421,163
475,313
Other payables
16
37,719
39,776
Other current liabilities
13
1,914
3,772
578,816
736,207
1,260,996
1,173,789
CURRENT LIABILITIES
TOTAL EQUITY AND LIABILITIES
The accompanying Notes 1 to 29 are an integral part of the consolidated balance sheet at 31 December 2013.
1
Translation of consolidated financial statements originally issued in Spanish and prepared in accordance
with the regulatory financial reporting framework applicable to the Group (see Notes 2 and 29). In the
event of a discrepancy, the Spanish-language version prevails.
ATRESMEDIA CORPORACIÓN DE MEDIOS DE COMUNICACIÓN, S.A.
AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2013
Thousands of euros
Revenue
NOTES
2013
2012
19-a
795,774
34,016
28,589
Programme amortisation and other procurements
19-b
(448,487)
(406,468)
Staff costs
19-c
(110,880)
(120,298)
Other operating expenses
19-d
(190,269)
(174,911)
Other income
Depreciation and amortisation charge
6 and 7
712,574
(17,286)
(16,645)
Impairment and gains or losses on disposals of non-current assets
5
11
(25,392)
Gains on bargain purchases arising on business combinations
4
-
19,536
62,879
16,985
PROFIT FROM OPERATIONS
Net gain (loss) due to changes in the value of financial instruments
at fair value
20
(952)
4,931
Exchange differences
20
6,416
4,077
Financial loss
20
(15,677)
(9,835)
Impairment of financial assets
20
(3,786)
-
Gains (losses) on disposals of financial assets
20
-
(3,174)
(1,073)
(1,080)
47,807
11,904
1,753
(20,005)
46,054
31,909
10
2
46,064
31,911
Result of companies accounted for using the equity method
8
PROFIT BEFORE TAX FROM CONTINUING OPERATIONS
Income tax expense/(benefit)
22-b
PROFIT FOR THE YEAR
Loss attributable to non-controlling interests
PROFIT FOR THE YEAR ATTRIBUTABLE TO THE PARENT
Earnings per share:
2013
2012
From continuing operations
Basic
24
0.204
0.149
Diluted
24
0.204
0.149
The accompanying Notes 1 to 29 are an integral part of the consolidated income statement for 2013.
2
Translation of consolidated financial statements originally issued in Spanish and prepared in accordance
with the regulatory financial reporting framework applicable to the Group (see Notes 2 and 29). In the
event of a discrepancy, the Spanish-language version prevails.
ATRESMEDIA CORPORACIÓN DE MEDIOS DE COMUNICACIÓN, S.A.
AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2013
Thousands of euros
CONSOLIDATED PROFIT FOR THE YEAR
ITEMS THAT MAY BE RECLASSIFIED SUBSEQUENTLY TO PROFIT
OR LOSS:
2013
2012
46,054
31,909
349
(448)
492
(630)
9
(10)
(152)
192
46,403
31,461
10
2
46,413
31,463
Cash flow hedges:
Amounts recognised directly in equity
Amounts transferred to profit or loss
Tax effect
TOTAL COMPREHENSIVE INCOME
Loss attributable to non-controlling interests
TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO THE
PARENT
The accompanying Notes 1 to 29 are an integral part of the consolidated statement of
comprehensive income for 2013.
3
Translation of consolidated financial statements originally issued in Spanish and prepared in accordance with the regulatory financial reporting framework applicable to the Group (see Notes 2 and 29).
In the event of a discrepancy, the Spanish-language version prevails.
ATRESMEDIA CORPORACIÓN DE MEDIOS DE COMUNICACIÓN, S.A. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2013
Thousands of euros
Balance at 31 December
2011
Total comprehensive income
Share
capital
Share
premium
Restricted
reserves
Treasury
shares
Retained
earnings
Interim
dividend
Equity
Valuation
attributable
adjustments to the Parent
Other equity
instruments
158,335
-
40,282
(87,861)
226,301
(43,734)
-
-
-
-
31,909
-
-
-
-
(19,019)
-
-
10,965
38,304
-
7,427
(3,446)
-
-
-
-
-
-
-
-
-
-
-
Noncontrolling
interests
Equity
939
294,262
(2)
294,260
(446)
31,463
(2)
31,461
-
-
(19,019)
-
(19,019)
-
42,643
-
95,893
-
95,893
(43,734)
43,734
-
-
-
-
-
-
(44,792)
-
-
-
(44,792)
-
(44,792)
-
-
-
(21,352)
-
-
(21,352)
-
(21,352)
-
-
-
(249)
-
-
-
(249)
-
(249)
169,300
38,304
40,282
(99,453)
165,989
(21,352)
42,643
493
336,206
(4)
336,202
-
-
-
-
46,064
-
349
46,413
(10)
46,403
-
-
-
-
(21,352)
21,352
-
-
-
-
-
-
-
2,193
-
(785)
-
-
-
1,408
5
1,413
169,300
38,304
42,475
(99,453)
189,916
-
42,643
842
384,027
(9)
384,018
-
Treasury share
transactions:
Acquisition of treasury shares
Transactions with
shareholders:
Increase (decrease) in equity
arising from business
combinations
Distribution of profit:
2011 interim dividend paid in
2011
2011 final dividend paid in
2012
2012 interim dividend paid in
2012
Changes in the scope of
consolidation and other
Balance at 31 December
2012
Total comprehensive income
-
Distribution of profit:
2012 interim dividend paid in
2012 (Note 3-s)
Changes in the scope of
consolidation and other
Balance at 31 December
2013
The accompanying Notes 1 to 29 are an integral part of the consolidated statement of changes in equity for 2013.
4
Translation of consolidated financial statements originally issued in Spanish and prepared in accordance with
the regulatory financial reporting framework applicable to the Group (see Notes 2 and 29).
In the event of a discrepancy, the Spanish-language version prevails.
ATRESMEDIA CORPORACIÓN DE MEDIOS DE COMUNICACIÓN, S.A.
AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2013
Thousands of euros
2013
2012
1.- CASH FLOWS FROM OPERATING ACTIVITIES
Consolidated profit for the year before tax
47,807
11,904
Adjustments for:
26,952
36,958
17,286
16,645
(547)
39,022
- Depreciation and amortisation charge
- Provisions and other
- Provisions
- Net impairment losses (+/-):
- Result of companies accounted for using the equity method
(5,395)
9,376
3,775
1,073
28,566
1,080
10,213
827
-
(19,536)
(7,800)
10,559
Cash flows from operating activities
66,959
59,421
Income tax paid
(5,751)
(1,913)
Net cash flows from operating activities
61,208
57,508
(31,798)
(28,116)
- Financial result
- Gains on bargain purchases arising on business combinations
Changes in working capital
2.- CASH FLOWS FROM INVESTING ACTIVITIES
Investments
Subsidiaries, joint ventures and associates
(6,771)
(4,438)
(25,027)
(23,678)
11,050
1,620
11,050
1,620
(20,748)
(26,496)
Finance costs paid
(17,922)
(6,317)
Financing - Associates and related companies
(40,111)
917
-
(66,144)
Property, plant and equipment and intangible assets
Disposals
Subsidiaries, joint ventures and associates
Net cash flows from investing activities
3.- CASH FLOWS FROM FINANCING ACTIVITIES
Dividends paid
-
(19,019)
68,823
50,644
Net cash flows from financing activities
10,790
(39,919)
NET INCREASE / DECREASE IN CASH
51,250
(8,907)
4,973
8,103
59
5,777
5,032
13,880
56,282
4,973
Acquisition of treasury shares
Bank borrowings
Cash and cash equivalents at beginning of year
Changes in the scope of consolidation/IFRSs
Cash and cash equivalents at beginning of year - new scope of consolidation
Cash and cash equivalents at end of year
The accompanying Notes 1 to 29 are an integral part of the consolidated statement of cash flows for 2013.
5
Translation of consolidated financial statements originally issued in Spanish and prepared in accordance
with the regulatory financial reporting framework applicable to the Group (see Notes 2 and 29). In the
event of a discrepancy, the Spanish-language version prevails.
Atresmedia Corporación de Medios de Comunicación, S.A. (formerly
Antena 3 de Televisión, S.A.) and Subsidiaries
Notes to the 2013 Consolidated Financial Statements
1.
Group activities
Atresmedia Corporación de Medios de Comunicación, S.A. (formerly Antena 3 de Televisión,
S.A.), the Atresmedia Group's Parent, with registered office at Avenida Isla Graciosa, 13, San
Sebastián de los Reyes (Madrid), was incorporated on 7 June 1988, and its then sole company
object was the indirect management of a public television service.
For this purpose, it submitted a bid in response to the call for tenders made under Article 8 of
Private Television Law 10/1988, of 3 May, and, pursuant to a resolution of the Spanish Cabinet
of 25 August 1989, was awarded a concession for the indirect management of the public
television service, for a period of ten years, which ended on 3 April 2000.
On 7 May 1996, the shareholders at the Annual General Meeting resolved to change and
extend the Parent's company object, as permitted by Satellite Telecommunications Law
37/1995.
On 10 March 2000, the Spanish Cabinet adopted a resolution renewing the concession for the
indirect management of the public television service for a period of ten years from 3 April
2000. The terms of this renewal were the same as for the former concession, with the added
obligation of commencing digital broadcasting on 3 April 2002. The Parent made all the
necessary investments to enable it to begin broadcasting on that date the Atresmedia
Corporación de Medios de Comunicación, S.A. signal pursuant to Royal Decree 2169/1998, of
9 October, which approved the Spanish Technical Plan for Digital Terrestrial Television (DTT).
On 3 April 2010, the National Government renewed, for a period of ten years, the concession
for the indirect management of the public television service, under the same terms and
conditions as the previous concession.
Additional Provision One of Royal Decree 944/2005, of 29 July, approving the Spanish
Technical Plan for Digital Terrestrial Television established 3 April 2010 as the date for the
switch-off of analogue television broadcasting in all the transition projects defined in the
National Plan for the Transition to Digital Terrestrial Television. From that date onwards, all
terrestrial television has been broadcast using digital technology.
Following this milestone, in accordance with Additional Provision Three of Royal Decree
944/2005, of 29 July, each national terrestrial public television service concession operator
would gain access to a digital multiplex with national coverage.
Royal Decree 365/2010, of 26 March, governs the allocation of the Digital Terrestrial
Television multiplexes following the switch-off of terrestrial television broadcasting using
analogue technology.
It established two phases for the allocation of the digital multiplexes. Phase 1 (transitional), in
which each national terrestrial public television service concession operator would gain access
to the capacity equivalent to one digital multiplex with national coverage, provided they
demonstrated that they had met the terms and conditions established in relation to the
promotion and development of digital terrestrial television, and phase 2, in which new digital
6
multiplexes will be planned, and adjustments will be established so that the radioelectric
channels 61 to 69, which were being used by the digital multiplexes in the previous phase can
be replaced by others in phase 2. This will conclude before 1 January 2015 with the allocation
of the definitive digital multiplexes to each qualifying company, thereby ending the shared use
of digital multiplex capacity by the national terrestrial public television service concession
operators.
On 16 July 2010, the Spanish Cabinet adopted a resolution to allocate a national digital
multiplex to each national DTT concession operator: Antena 3, Gestevisión Telecinco,
Sogecable, Veo Televisión, NET TV and la Sexta. The digital multiplex is composed of four
digital television channels that can be operated twenty-four hours a day.
The allocation was made upon request and after the switch-off of analogue broadcasting, once
it had been verified that the DTT service concession operators had met the obligations relating
to the promotion and development of digital terrestrial television that they had assumed in the
framework of the Spanish Technical Plan for Digital Terrestrial Television and the Royal Decree
governing the specific allocation of DTT multiplexes, following the switch-off of analogue
terrestrial television broadcasting.
In any event, the definitive multiplex will be accessed by 1 January 2015, in accordance with
the phases established in the Royal Decree.
A judgment handed down on 27 November 2012 by Chamber Three of the Spanish Supreme
Court rendered void the resolution of the Spanish Cabinet of 16 July 2010, which allocated to
each of the Digital Terrestrial Television (DTT) licence holders, including Atresmedia
Corporación de Medios de Comunicación, S.A. and Gestora de Inversiones Audiovisuales La
Sexta, S.A., the capacity equivalent to a digital multiplex with national coverage composed of
four channels.
This allocation had been made pursuant to a set of rules which, since 1997, upon approval of
the National Plan for Digital Terrestrial Television, and particularly upon enactment of Law
10/2005, of 14 June, governed the transition from analogue terrestrial television to DTT,
which was completed in 2010. The allocation was made once the Government had verified that
the licence holders had complied with all the requirements and obligations incumbent upon
them to foster transition to DTT, as a condition for gaining access to the multiplex.
The judgment of the Spanish Supreme Court annulling the allocation was based primarily on
the fact that the allocation was made after the entry into force of the General Audiovisual
Communications Law (enacted one month before the Spanish Cabinet adopted the annulled
resolution), which stipulates that the licences must be granted through a tendering procedure.
The Supreme Court inferred from this that "the licences must reflect the content which existed
upon entry into force of the Law, with no more channels being allowed", while the General
Audiovisual Communications Law does not provide for any safeguard permitting the
regulations to be applied prior to their entry into force.
The judgment of the Spanish Supreme Court noted at the time that the matter would have
been resolved had the General Audiovisual Communications Law included a provision
envisaging that the rules in force prior to its enactment should continue to be valid. The
obstacle posed by the judgment of the Spanish Supreme Court is therefore basically formal,
because neither the conceptual basis of DTT, nor consequently its completion through the
allocation of a multiplex to each operator, have ever been questioned.
7
On 22 March 2013, the Spanish Cabinet adopted a resolution to comply with the judgment of
the Spanish Supreme Court of 27 November 2012, indicating that the affected channels must
cease broadcasting and associating this process with the freeing up of the digital dividend.
Subsequently, on 18 December 2013, the Spanish Supreme Court issued an order enforcing
the aforementioned judgment, referring, inter alia, to the channels affected by its judgment,
which would include three of the channels currently being operated by Atresmedia.
At present, based on the information available, the interpretation of the aforementioned
decisions and the fact that Atresmedia Corporación de Medios de Comunicación, S.A. has
complied with all the commitments and obligations imposed on it, a satisfactory solution is still
expected to be reached, and it was not considered necessary to make any significant
adjustments or amendments to these consolidated financial statements.
In relation to the renewal of the public radio broadcasting service concessions operated by
Uniprex, S.A. (Sole-Shareholder Company), to date, applications have been submitted to the
competent authorities, in accordance with the legislation in force, for the renewal of
concessions about to expire and for authorisation of a change of operator in other concessions.
In certain cases the renewal of the concession was granted expressly, whereas in others it was
obtained by the administrative silence route after the pertinent appeals were filed with a
higher administrative body, in accordance with Article 43 of the Public Authorities and
Common Administrative Procedure Law.
The other Group companies engage mainly in activities relating to the production, reproduction
and broadcasting of sounds and images.
The Parent's Annual General Meeting and its Board of Directors Meeting, on 28 April 2003 and
29 July 2003, respectively, resolved to request the admission to trading of all the shares of
Atresmedia Corporación de Medios de Comunicación, S.A. on the Madrid, Barcelona, Bilbao
and Valencia Stock Exchanges, as well as their inclusion in the Spanish Stock Market
Interconnection System. On 29 October 2003, the Parent's shares commenced trading on
these stock exchanges.
On 14 December 2011, following a resolution by its Board of Directors, Atresmedia
Corporación de Medios de Comunicación, S.A. entered into an agreement with the
shareholders of Gestora de Inversiones Audiovisuales La Sexta, S.A. to merge the two
companies, through the merger by absorption of La Sexta into Atresmedia Corporación de
Medios de Comunicación, S.A., subject to the obtainment of the relevant authorisations from
the regulatory and competition authorities.
On 25 January 2012, the Boards of Directors of Atresmedia Corporación de Medios de
Comunicación, S.A. and Gestora de Inversiones Audiovisuales La Sexta, S.A. approved the
draft terms of merger of the two companies.
The Parent's shareholders at the Annual General Meeting held on 25 April 2012 approved the
merger involving the absorption by Atresmedia Corporación de Medios de Comunicación, S.A.
(absorbing company) of Gestora de Inversiones Audiovisuales La Sexta, S.A., under the draft
terms of merger filed with the Madrid Mercantile Registry on 7 February 2012.
The merger was authorised by the Spanish anti-trust authorities on 24 August 2012, by virtue
of a resolution adopted by the Spanish Cabinet on the same date.
8
On 5 October 2012, the Spanish Cabinet also resolved to authorise the transfer of the
audiovisual communication licence held by La Sexta and the assignment for private use of the
associated public radioelectric domain. From that date onwards, the operations of La Sexta are
deemed to be performed for accounting purposes by Atresmedia Corporación de Medios de
Comunicación, S.A.
The public deed of merger of Atresmedia Corporación de Medios de Comunicación, S.A. with
Gestora de Inversiones Audiovisuales La Sexta, S.A. was filed with the Madrid Mercantile
Registry on 31 October 2012, and as a result the latter was dissolved and all its assets and
liabilities were transferred en bloc to the former.
The Parent's shareholders at the Annual General Meeting held on 24 April 2013 resolved, inter
alia, to change the company's name from Antena 3 de Televisión, S.A. to Atresmedia
Corporación de Medios de Comunicación, S.A.
The Parent is obliged to prepare, in addition to its own separate financial statements, the
Group’s consolidated financial statements, which also include its interests in joint ventures and
investments in associates.
In view of the business activities carried on by the Group companies, they do not have any
environmental liability, expenses, assets, provisions or contingencies that might be material
with respect to the equity, financial position and results of operations of the corporate Group.
Therefore, no specific disclosures relating to environmental issues are included in these notes
to the consolidated financial statements.
2.
Basis of presentation of the consolidated financial statements and
basis of consolidation
a) Basis of presentation
These consolidated financial statements were prepared, on the basis of the accounting
records kept by the Parent and by the other Group companies, in accordance with
International Financial Reporting Standards as adopted by the European Union (EU-IFRSs),
in conformity with Regulation (EC) no. 1606/2002 of the European Parliament and of the
Council.
The Group's consolidated financial statements were prepared taking into account all the
mandatory accounting principles and rules and measurement bases with a material effect
on the consolidated financial statements, as well as the alternative treatments permitted
by the relevant standards in this connection, and, accordingly, they present fairly the
Group's consolidated equity and financial position at 31 December 2013 and the results of
its operations, the changes in consolidated equity and the consolidated cash flows in the
year then ended.
However, since the accounting policies and measurement bases used in preparing the
Group's consolidated financial statements for 2013 (EU-IFRSs) differ from those used by
the Group companies (Spanish National Chart of Accounts), the required adjustments and
reclassifications were made on consolidation to unify the policies and methods used and to
make them compliant with EU-IFRSs. In addition to the International Financial Reporting
Standards adopted by the EU (EU-IFRSs), all the requirements included in the Spanish
Commercial Code and the Spanish Limited Liability Companies Law were applied in these
consolidated financial statements, as well as such other aspects of Spanish accounting
regulations in force as might be applicable.
9
The 2013 consolidated financial statements of the Group and the 2013 separate financial
statements of the Group companies, which were formally prepared by the companies'
respective directors, will be submitted for approval at the related Annual General
Meetings, and it is considered that they will be approved without any changes.
The 2012 consolidated financial statements, which were approved by the shareholders at
the Annual General Meeting on 24 April 2013 and are included for comparison purposes,
were also prepared in accordance with EU-IFRSs applied on a basis consistent with that of
2013.
Standards and interpretations effective in 2013:
The standards and interpretations that came into force in 2013 and that were taken into
account in preparing the accompanying consolidated financial statements are described below:
New standards, amendments and interpretations:
Obligatory application in annual
reporting periods beginning on
or after:
Approved for use in the European Union
Amendments to IAS 12, Income Taxes
- Deferred Taxes Arising from Investment
Property (issued in December 2010)
IFRS 13, Fair Value Measurement (issued in
May 2011)
Amendments to IAS 1 - Presentation of
Items of Other Comprehensive Income
(issued in June 2011)
Amendments to IAS 19, Employee Benefits
(issued in June 2011)
Amendments to IFRS 7, Financial
Instruments: Disclosures - Offsetting
Financial Assets and Financial Liabilities
(issued in December 2011)
Improvements to IFRSs, 2009-2011 cycle
(issued in May 2012)
IFRIC 20, Stripping Costs in the Production
Phase of a Surface Mine (issued in October
2011)
On the measurement of deferred taxes arising
from investment property measured using the
fair value model in IAS 40
Sets out a framework for measuring fair value
Annual reporting periods beginning
on or after 1 January 2013
(Original IASB date: 1 January
2012)
Annual reporting periods beginning
on or after 1 January 2013
Minor amendments relating to the presentation
of items of other comprehensive income
Annual reporting periods beginning
on or after 1 July 2012
The amendments affect mainly defined benefit
plans since one of the major changes is the
elimination of the “corridor”
Annual reporting periods beginning
on or after 1 January 2013
Introduction of new disclosures relating to the
offsetting of financial assets and financial
liabilities under IAS 32.
Annual reporting periods beginning
on or after 1 January 2013
Minor amendments to a series of standards.
Annual reporting periods beginning
on or after 1 January 2013
The IFRS Interpretations Committee addresses
the accounting treatment of the waste removal
costs incurred in surface mining.
Annual reporting periods beginning
on or after 1 January 2013
New standards, amendments and interpretations mandatorily applicable on or after
1 January 2013
Amendments to IAS 12, Income Taxes – Deferred Taxes Arising From Investment
Property
The main change introduced by these amendments is an exception to the general
principles of IAS 12 which affects deferred taxes arising from investment property that is
measured using the fair value model in IAS 40, Investment Property; there is now a
rebuttable presumption in relation to the measurement of the deferred taxes that the
carrying amount of the investment property will be recovered entirely through sale.
10
The entry into force of these amendments did not have any impact on the consolidated
financial statements.
IFRS 13, Fair Value Measurement
The purpose of this IFRS is to set out in a single standard a framework for measuring the
fair value of assets or liabilities when other standards require that the fair value
measurement model be used. IFRS 13 changes the current definition of fair value and
introduces new factors to be taken into account; it also extends the disclosure
requirements in this area.
The Group has analysed the impacts of the new definition of fair value mainly on financial
assets and liabilities relating to derivatives and, although it did not observe any significant
changes in the assumptions, methods and calculations used to date, the disclosures have
been adapted to the requirements of this standard. The effect of applying this standard
was EUR 688 thousand.
Amendments to IAS 1, Presentation of Items of Other Comprehensive Income
These amendments introduce small changes to IAS 1, Presentation of Financial
Statements, in relation to the items presented in “Other Comprehensive Income”,
distinguishing between items that will be reclassified to profit or loss in subsequent periods
and items that will not be reclassified subsequently.
The Group has adopted these amendments in these consolidated financial statements.
Amendments to IAS 19, Employee Benefits
The main change introduced by these amendments to IAS 19 will affect the accounting
treatment of defined benefit plans since it eliminates the “corridor” under which companies
are currently permitted to opt for deferred recognition of a given portion of actuarial gains
and losses. When the amendments come into effect, all actuarial gains and losses must be
recognised immediately in other comprehensive income. The amendments also include
changes in the presentation of cost components in the statement of comprehensive
income, which will be aggregated and presented in a different way.
The entry into force of these amendments did not have any impact for the Group.
Amendments to IFRS 7, Financial Instruments: Disclosures - Offsetting Financial
Assets and Financial Liabilities
The parallel amendments to IFRS 7 introduce a specific section of new disclosures required
for all recognised financial assets and financial liabilities that are set off; these disclosures
also apply to recognised financial instruments that are subject to an enforceable master
netting arrangement or similar agreement, irrespective of whether they are set off in
accordance with IAS 32.
The entry into force did not have any impact on the consolidated financial statements.
11
Standards and interpretations issued but not yet in force:
At the date of preparation of these consolidated financial statements, the most significant
standards and interpretations that had been published by the IASB but which had not yet
come into force, either because their effective date is subsequent to the date of the
consolidated financial statements or because they had not yet been adopted by the European
Union, were those listed below.
The directors have assessed the potential impact of applying these standards in the future and
consider that their entry into force will not have a material effect on the consolidated financial
statements.
New standards, amendments and interpretations:
Obligatory application
in annual reporting
periods beginning
on or after:
Approved for use in the European Union
IFRS 10, Consolidated Financial Statements
(issued in May 2011)
Supersedes the requirements relating to consolidated financial
statements in IAS 27
Annual reporting periods
beginning on or after 1
January 2014 (1)
IFRS 11, Joint Arrangements (issued in May
2011)
Supersedes the current IAS 31, Interests in Joint Ventures
Annual reporting periods
beginning on or after 1
January 2014 (1)
IFRS 12, Disclosure of Interests in Other Entities
(issued in May 2011)
Single IFRS presenting the disclosure requirements for interests in
subsidiaries, associates, joint arrangements and unconsolidated entities
Annual reporting periods
beginning on or after 1
January 2014 (1)
IAS 27 (Revised), Separate Financial Statements
(issued in May 2011)
The IAS is revised, since as a result of the issue of IFRS 10 it applies
only to the separate financial statements of an entity
Annual reporting periods
beginning on or after 1
January 2014 (1)
IAS 28 (Revised), Investments in Associates and
Joint Ventures (issued in May 2011)
Revision in conjunction with the issue of IFRS 11, Joint Arrangements
Annual reporting periods
beginning on or after 1
January 2014 (1)
Transition rules: Amendments to IFRS 10, 11 and
12 (issued in June 2012)
Clarification of the rules for transition to these standards
Annual reporting periods
beginning on or after 1
January 2014 (1)
Investment Entities: Amendments to IFRS 10,
IFRS 12 and IAS 27 (issued in October 2012)
Exception from consolidation for parent companies that meet the
definition of investment entities
Annual reporting periods
beginning on or after 1
January 2014
Amendments to IAS 32, Financial Instruments:
Presentation - Offsetting Financial Assets and
Financial Liabilities (issued in December 2011)
Additional clarifications to the rules for offsetting financial assets and
financial liabilities under IAS 32
Annual reporting periods
beginning on or after 1
January 2014
Not yet approved for use in the European Union
IFRS 9, Financial Instruments: Classification and
Measurement (issued in November 2009 and in
October 2010) and subsequent amendments to
IFRS 9 and IFRS 7 on effective date and
transition disclosures (issued in December 2011)
and hedge accounting and other amendments
(issued in November 2013)
Replaces the IAS 39 requirements relating to the classification,
measurement and derecognition of financial assets and liabilities and
hedge accounting
Amendments to IAS 36 – Recoverable Amount
Disclosures for Non-Financial Assets (issued in
May 2013)
Annual reporting periods
Clarifies when certain disclosures are required and extends the
disclosures required when recoverable amount is based on fair value less beginning on or after 1
January 2014
costs to sell
Amendments to IAS 39 - Novation of Derivatives
and Continuation of Hedge Accounting (issued in
June 2013)
The amendments establish the cases in which -and subject to which
criteria- there is no need to discontinue hedge accounting if a derivative
is novated.
Annual reporting periods
beginning on or after 1
January 2014
Amendments to IAS 19 – Defined Benefit Plans:
Employee Contributions (issued in November
2013)
The amendments were issued to allow employee contributions to be
deducted from the service cost in the same period in which they are
paid, provided certain requirements are met
Annual reporting periods
beginning on or after 1
July 2014
Improvements to IFRSs, 2010-2012 cycle and
2011-2013 cycle (issued in December 2013)
Minor amendments to a series of standards
Annual reporting periods
beginning on or after 1
July 2014
IFRIC 21, Levies (issued in May 2013)
This interpretation addresses the accounting for a liability to pay a levy
that is triggered by an entity undertaking an activity on a specified date.
Annual reporting periods
beginning on or after 1
July 2014
Not yet defined (2)
(1) The European Union postponed the mandatory effective date by one year. The original IASB application date was 1 January 2013.
(2) In November 2013 the IASB removed the mandatory effective date of IFRS 9 and a new date will not be set until the standard is complete. The new
date is not expected to be earlier than annual reporting periods beginning on or after 1 January 2017.
12
IFRS 10, Consolidated Financial Statements, IFRS 11, Joint Arrangements, IFRS
12, Disclosure of Interests in Other Entities, IAS 27 (Revised), Separate Financial
Statements and IAS 28 (Revised), Investments in Associates and Joint Ventures
IFRS 10 modifies the current definition of control. The new definition of control sets out
the following three elements of control: power over the investee; exposure, or rights, to
variable returns from involvement with the investee; and the ability to use power over the
investee to affect the amount of the investor’s returns.
The Group is analysing how this new definition of control will affect the consolidated group
companies as a whole and it will foreseeably not have a significant impact on the
composition of the Group.
IFRS 11, Joint Arrangements supersedes IAS 31. The fundamental change introduced by
IFRS 11 with respect to the current standard is the elimination of the option of
proportionate consolidation for jointly controlled entities, which will begin to be accounted
for using the equity method.
This amendment will not have a material effect on the Group’s consolidated financial
statements.
IAS 27 and IAS 28 are revised in conjunction with the issue of the aforementioned new
IFRSs.
In the case of the Group, they will not have any impacts other than those discussed
above.
Lastly, IFRS 12 is a disclosure standard that groups together all the disclosure
requirements for interests in other entities (whether these be subsidiaries, associates,
joint arrangements or other interests) and includes new disclosure requirements.
Accordingly, its entry into force will foreseeably give rise to an increase in the disclosures
that the Group has been making, i.e., those currently required for interests in other
entities and other investment vehicles.
Amendments to IAS 32, Financial Instruments: Presentation - Offsetting
Financial Assets and Financial Liabilities
The amendments introduce certain additional clarifications to the application guidance on
the requirements of the standard for being able to offset a financial asset and a financial
liability in the balance sheet, which are provided in paragraph 42 of IAS 32.
IAS 32 already indicates that a financial asset and a financial liability may only be offset
when an entity currently has a legally enforceable right to set off the recognised amounts.
The amended application guidance states, inter alia, that in order to meet this criterion,
the right of set-off must not be contingent on a future event, and must be legally
enforceable in the normal course of business, in the event of default and in the event of
insolvency or bankruptcy of the entity and all of the counterparties. It also clarifies in
which cases a gross settlement system could be considered equivalent to net settlement.
The adoption of this standard will foreseeably not have a material impact on the
consolidated financial statements.
13
IFRS 9, Financial Instruments: Classification and Measurement
IFRS 9 will in the future replace the current part of IAS 39 relating to classification and
measurement. There are very significant differences with respect to the current standard,
in relation to financial assets, including the approval of a new classification model based on
only two categories, namely instruments measured at amortised cost and those measured
at fair value, the disappearance of the current “held-to-maturity investments” and
“available-for-sale financial assets” categories, impairment analyses only for assets
measured at amortised cost and the non-separation of derivatives embedded in financial
asset contracts.
In relation to financial liabilities, the classification categories proposed by IFRS 9 are
similar to those currently contained in IAS 39 and, therefore, there should not be any very
significant differences except, in the case of the fair value option for financial liabilities, for
the requirement to recognise changes in fair value attributable to own credit risk as a
component of equity.
There will also be major changes in relation to hedge accounting, since the approach of
IFRS 9 is very different from that of the current IAS 39 in that it attempts to align hedge
accounting with economic risk management.
The Group is currently analysing the future impact of the adoption of this standard and
foreseeably it will not have a material impact on the consolidated financial statements
Amendments to IAS 36 – Recoverable Amount Disclosures for Non-Financial
Assets
The IASB proposes to restrict the current disclosure of the recoverable amount of an asset
or cash-generating unit to periods in which an impairment loss has been recognised or
reversed, i.e. it eliminates the current requirement of disclosure when there has been no
impairment or reversal. It also introduces new disclosure requirements for when the
recoverable amount has been calculated as fair value less costs of disposal and an
impairment loss has been recognised or reversed. The following disclosures are now
required:
• The level of the IFRS 13 hierarchy within which the fair value has been measured.
• For fair value measurements categorised within Level 2 or Level 3, a description of the
valuation techniques and key assumptions used, as well as the current and previous
discount rates.
The entry into force of these amendments will not have a significant impact for the Group.
Amendments to IAS 39 - Novation of Derivatives and Continuation of Hedge
Accounting
The purpose of these amendments is to ease the requirements to discontinue hedge
accounting when a derivative must be novated with a central clearing counterparty or an
entity acting in a similar capacity as a consequence of legal requirements. The
amendments state that the novation of a hedging instrument should not be considered an
expiration or termination giving rise to the discontinuation of hedge accounting when the
hedging derivative is novated:
14
• As a consequence of new laws and regulations, with one or more clearing counterparties
replacing the original counterparty, and,
• Any changes in terms of the novated derivative are limited to those necessary to effect
the replacement of the counterparty. No specific disclosure requirements are introduced.
The entry into force of these amendments will not have a significant impact for the Group.
Amendments to IAS 19 – Defined Benefit Plans: Employee Contributions
The amendments were issued to allow employee contributions to be deducted from the
service cost in the same period in which they are paid, provided certain requirements are
met, without having to perform calculations to attribute the reduction to each year of
service. Contributions from employees or third parties set out in the formal terms of a
defined benefit plan will be recognised as follows:
• If the amount of the contributions is independent of the number of years of service, the
contributions can be recognised as a reduction of the service cost in the same period in
which they are paid (this is an accounting option which must be applied consistently over
time).
• But if the amount of the contributions is dependent on a specific number of years of
service, the contributions must be attributed to those periods of service in accordance with
paragraph 70 of IAS 19.
The entry into force of these amendments will not have a significant impact for the Group.
IFRIC 21, Levies
The interpretation addressees the timing of recognition of a liability to pay a levy if that
liability is based on financial data for a period other than that in which the activity that
triggers the payment of the levy occurs.
The interpretation states that the liability must be recognised when the obligating event
giving rise to the recognition thereof occurs, which is normally identified by legislation.
The recognition principles outlined above must be applied to both the annual and interim
financial statements. This means that the interim financial statements will not include any
prepaid expense in respect of a levy if there is no present obligation to pay the levy at the
end of the interim reporting period.
The Group has evaluated the effects of the entry into force of this interpretation, which will
foreseeably not have an impact on the consolidated financial statements, although it is
expected to have an impact on the interim financial statements.
15
Responsibility for the information and use of estimates
The information contained in these consolidated financial statements is the responsibility
of the Parent's directors.
In the Group's consolidated financial statements for 2013 estimates were occasionally
made in order to quantify certain of the assets, liabilities, income, expenses and
obligations reported herein.
These estimates relate basically to the following:
ƒ
The impairment losses on certain assets (see Notes 6, 7, 10 and 11),
ƒ
The useful life of the property, plant and equipment and intangible assets (see Notes
3-c and 3-d).
ƒ
The measurement of goodwill arising on consolidation (see Note 5),
ƒ
Programme amortisation (see Note 3-f),
ƒ
The fair value of certain unquoted assets (see Notes 9 and 15), and
ƒ
Provisions (see Note 13).
Although these estimates were made on the basis of the best information available at 31
December 2013 on the events analysed, events that take place in the future might make it
necessary to change these estimates (upwards or downwards) in coming years. Changes
in accounting estimates would be applied prospectively, recognising the effects of the
change in estimates in the related consolidated income statements.
At 2013 year-end, the Group had a working capital deficiency of EUR 4,584 thousand
covered in full by the undrawn portion of the syndicated loan.
16
b) Basis of consolidation
Subsidiaries
Following are the subsidiaries included in the scope of consolidation:
Registered
office
Year of
incorporation
Owner
2013
%
Antena 3 Eventos, S.L.U.
Madrid
2008
Organisation of events
Atresmedia Corporación de Medios
de Comunicación, S.A.
100
Antena 3 Films, S.L.U. (*)
Madrid
2000
Audiovisual productions
Atresmedia Corporación de Medios
de Comunicación, S.A.
100
Antena 3 Juegos, S.A.U.
Madrid
2011
Organisation, marketing and operation of Atresmedia Corporación de Medios
gaming activities
de Comunicación, S.A.
100
Antena 3 Multimedia, S.L.U.
Madrid
2004
Commercial management by television
Atresmedia Corporación de Medios
de Comunicación, S.A.
100
Antena 3 Noticias, S.L.U. (*)
Madrid
2012
Audiovisual productions
Atresmedia Corporación de Medios
de Comunicación, S.A.
100
2004
Advertising management
Atresmedia Corporación de Medios
de Comunicación, S.A.
100
Atresmedia Corporación de Medios
de Comunicación, S.A.
90
Company name
Atres Advertising, S.L.U. (*)
Madrid
Line of business
Atresmedia Foto, S.L.
Madrid
2013
Manufacture and sale of photo albums
and promotional materials
Cordina Planet, S.L.U.
Barcelona
2010
Production, distribution, dissemination
and marketing of audiovisual content
Atresmedia Corporación de Medios
de Comunicación, S.A.
100
Guadiana Producciones, S.A.U.
Madrid
1994
Audiovisual productions
Atresmedia Corporación de Medios
de Comunicación, S.A.
100
La Sexta Editorial Musical, S.L.U.
Madrid
2008
Management of copyrights
Atresmedia Corporación de Medios
de Comunicación, S.A.
100
Música Aparte, S.A.U. (*)
Madrid
1990
Management of copyrights
Atresmedia Corporación de Medios
de Comunicación, S.A.
100
Publiseis Iniciativas Publicitarias, S.A.U. (*)
Madrid
2006
Advertising management
Atresmedia Corporación de Medios
de Comunicación, S.A.
100
Uniprex, S.A.U. (*)
Madrid
1982
Radio broadcasting services
Atresmedia Corporación de Medios
de Comunicación, S.A.
100
Las Palmas
2006
Local digital terrestrial television
Uniprex, S.A.U.
100
Canal Media Radio, S.A.U.
Madrid
1997
Radio broadcasting services
Uniprex, S.A.U.
100
Uniprex Televisión Digital Terrestre de
Andalucía, S.L.
Seville
2006
Local digital terrestrial television
Uniprex, S.A.U.
74.2
Uniprex Televisión, S.L.U.
Madrid
2004
Indirect management of TV service
Uniprex, S.A.U.
100
Uniprex Valencia TV, S.L.U.
Valencia
2005
Local digital terrestrial television
Uniprex, S.A.U.
100
Antena 3 Televisión Digital Terrestre de
Canarias, S.A.U.
(*) Audited companies.
The subsidiaries over which the Group exercises control are fully consolidated and all their
assets, liabilities, income, expenses and cash flows are included in the consolidated
financial statements after making adjustments to adapt the accounting policies used to
those applied by the Group and adjustments and eliminations relating to intra-Group
transactions.
The Group considers that it exercises control over a company when it has sufficient power
to govern its financial and operating policies so as to obtain benefits from its activities.
The results of subsidiaries acquired during the year are included in the consolidated
income statement from the date of acquisition to year-end.
17
Associates
The associates over which Atresmedia Corporación de Medios de Comunicación, S.A. or its
subsidiaries do not exercise control but over which they have the capacity to exercise
significant influence in their management, normally through agreements with other
shareholders, were accounted for in the consolidated financial statements using the equity
method. Using this accounting method, the investment is recognised at cost, including any
goodwill arising on the acquisition, and is subsequently adjusted on the basis of the
changes in its equity, in proportion to the percentage of ownership that corresponds to the
Group. The Group’s share of the results of these companies is recognised, net of the
related tax effect, under “Share of Results of Associates” in the consolidated income
statement, and any dividends received from these companies are deducted from the value
of the investment.
These associates are as follows:
Company name
I3 Televisión, S.L.
Registered
office
Year of
incorporation
Madrid
2005
Owner
2013
%
IT services
Atresmedia Corporación de Medios de
Comunicación, S.A.
50
50
Line of business
Hola Televisión América, S.L.
Madrid
2011
Audiovisual communication services
Atresmedia Corporación de Medios de
Comunicación, S.A.
Atlantis Global Solutions, S.L.
Barcelona
2013
Development and identification of
audiovisual content on various platforms
Antena 3 Films, S.A.U.
33.41
The Group does not exercise control over the associates that are 50% or more owned,
because under the shareholders agreements it has no powers to govern their financial and
operating policies so as to obtain benefits from their activities.
Changes in the scope of consolidation and main transactions in 2013
On 6 February 2013, Antena 3 de Televisión Colombia, S.A. and Canal 3
Televisión Colombia, S.A. were liquidated. This transaction did not have any impact on
the consolidated financial statements.
On 5 April 2013, the subsidiary Antena 3 Films, S.L. (Sole-Shareholder
Company) acquired 33.41% of the share capital of Atlantis Global Solutions, S.L., the
company object of which is to develop and identify audiovisual content that enables
synergies between various operating platforms to be created. This company was
accounted for using the equity method.
On 20 June 2013, the sole directors of Estaciones Radiofónicas de Aragón, S.A.
(Sole-Shareholder Company), Ipar Onda, S.A. (Sole-Shareholder Company), Onda Cero,
S.A. (Sole-Shareholder Company) and Canal Media Radio Galicia, S.L. (Sole-Shareholder
Company) signed the Common Draft Terms of Merger for the merger with Uniprex, S.A.
(Sole-Shareholder Company) (absorbing company), in conformity with Article 49 of Law
3/2009 on structural changes to companies formed under the Spanish Commercial Code,
since this merger involved the absorption of wholly-owned investees, given that the
absorbing company is the sole shareholder and direct owner of all the share capital of the
absorbed companies.
18
The aforementioned Common Draft Terms of Merger, drafted and signed by the sole
directors of the companies involved in the merger, was filed at the relevant Mercantile
Registries in July 2013.
On 18 September 2013, the Parent Atresmedia Corporación de Medios de Comunicación,
S.A., sole shareholder of Uniprex, S.A., resolved to approve the merger, whereby
Estaciones Radiofónicas de Aragón, S.A. (Sole-Shareholder Company), Ipar Onda, S.A.
(Sole-Shareholder Company), Onda Cero, S.A. (Sole-Shareholder Company) and Canal
Media Radio Galicia, S.L. (Sole-Shareholder Company) were absorbed by Uniprex, S.A.
(Sole-Shareholder Company) and were dissolved without liquidation. It also approved, as
the merger balance sheet, the balance sheet at 31 December 2012, the most recent yearend. The absorbing company recognised the assets and liabilities of the absorbed
companies in its accounts following criteria based on current consolidation rules, as well
as the goodwill arising from the consolidation of these companies.
On 5 December 2013, Atresmedia Foto, S.L. was incorporated in which
Atresmedia Corporación de Medios de Comunicación, S.A. held a 90% ownership interest.
Its company object is the manufacture and sale of photo albums and promotional
materials and gifts.
On 12 December 2013, the Parent acquired the other 50% of Cordina Planet,
S.L., which therefore joined the group of fully consolidated subsidiaries.
Other changes not affecting the scope of consolidation in 2013:
On 4 July 2013, the Parent subscribed to the capital increase at Hola Televisión
América, S.L., amounting to EUR 679 thousand, although this did not give rise to an
increase in the ownership interest in this company.
Changes in the scope of consolidation and main transactions in 2012:
Antena 3 Directo, S.A. (Sole-Shareholder Company), a subsidiary of
Atresmedia Corporación de Medios de Comunicación, S.A., was dissolved under a deed of
liquidation of 16 December 2011, which was registered at the Mercantile Registry on 20
January 2012. This transaction had an adverse effect of EUR 20 thousand on the
consolidated financial statements.
On 5 March 2012, VNews Agencia de Noticias, S.L. (Sole-Shareholder
Company) sold a 12% ownership interest in Videoreport Canarias, S.A. This transaction
gave rise to a gain of EUR 540 thousand in the consolidated financial statements. On the
same date, VNews Agencia de Noticias, S.L. (Sole-Shareholder Company) sold a 5%
ownership interest in its subsidiary Gestión Audiovisual Canarias, S.L. This transaction did
not have a significant effect on the Group's consolidated financial statements.
On 14 March 2012, the Parent incorporated Antena 3 Noticias, S.L. (SoleShareholder Company), whose company object is to create audiovisual productions for
their broadcast in any media.
On 20 July 2012, Atresmedia Corporación de Medios de Comunicación, S.A.
sold its full ownership interest in Movierecord Cine, S.A. (Sole-Shareholder Company), on
which it recognised a loss of EUR 418 thousand in the Group's consolidated financial
statements.
19
The full ownership interest held in VNews Agencia de Noticias, S.L. (SoleShareholder Company) was sold on 30 July 2012. The sale led to the exclusion of the
equity-accounted companies Videoreport Canarias, S.A. and Gestión Audiovisual Canarias,
S.L. from the Group's scope of consolidation. These companies were 18% and 15%
owned, respectively, by VNews Agencia de Noticias, S.L. (Sole-Shareholder Company) at
the date of the sale. The sale had an adverse effect of EUR 469 thousand on the
consolidated financial statements.
In October 2012 Antena 3 Canarias, S.L. (Sole-Shareholder Company) was
liquidated by the Parent. This transaction did not have any impact on the consolidated
financial statements for 2012.
As a result of the merger described in Note 4 to these consolidated financial
statements, Publiseis Iniciativas Publicitarias, S.A. (Sole-Shareholder Company) and La
Sexta Editorial Musical, S.L. (Sole-Shareholder Company), both subsidiaries of Gestora de
Inversiones Audiovisuales La Sexta, S.A., which had merged with Atresmedia Corporación
de Medios de Comunicación, S.A., joined the Group on 5 October 2012.
At 31 December 2012, Unipublic, S.A. and its subsidiary Organizaciones
Deportivas y Culturales Unipublic, S.A. (Sole-Shareholder Company) were classified as
held for sale (see Note 8).
Other changes not affecting the scope of consolidation in 2012:
In January 2012 the Parent subscribed to the capital increase at Cordina
Planet, S.L., amounting to EUR 500 thousand, although this did not lead to an increase in
the ownership interest in this company.
In February 2012 the investments in Antena 3 de Televisión Colombia, S.A.
and Canal 3 Televisión de Colombia, S.A. were increased, with a cost of EUR 51 thousand
and EUR 4 thousand, respectively, although there was no increase in the percentage of
ownership interest in these companies. These investments were acquired for the purpose
of participating in the tender for a television channel in Colombia.
c) Comparative information
The information relating to 2012 contained in these consolidated financial statements is
presented solely for comparison purposes with the information relating to the year ended
31 December 2013.
In order to improve the presentation of the information in the consolidated balance sheet,
the tax items other than income tax were reclassified from “Current Tax Assets” and
“Current Tax Liabilities” to “Other Receivables” and “Other Payables”, respectively. Items
were also reclassified from “Other Current Liabilities” to “Other Payables”. As a result, the
related balances for 2012 were reclassified for comparative purposes.
20
3.
Accounting policies
The principal accounting policies used in preparing the Group's consolidated financial
statements, in accordance with EU-IFRSs, were as follows:
a) Goodwill on consolidation
Goodwill arising on consolidation represents the excess of the cost of acquisition, plus the
non-controlling interests and fair value of any previous investment in the acquiree, over
the Group's interest in the fair value of the identifiable assets and liabilities of a subsidiary
at the date of acquisition.
The assets and liabilities acquired are measured provisionally at the date on which control
of the company is obtained, and the resulting value is reviewed within a maximum period
of one year from the acquisition date until the fair value of the assets and liabilities has
been calculated definitively. Any difference between the acquisition cost and the fair value
of the assets and liabilities acquired will be temporarily recognised as goodwill.
Goodwill acquired on or after 1 January 2004 is measured at acquisition cost and that
acquired earlier is recognised at the carrying amount at 31 December 2003. In both cases,
at the end of each reporting period goodwill is reviewed for impairment (i.e. a reduction in
its recoverable amount to below its carrying amount) and, if there is any impairment, the
goodwill is written down with a charge to “Impairment and Gains or Losses on Disposals of
Non-Current Assets” in the accompanying consolidated income statement.
An impairment loss recognised for goodwill must not be reversed in a subsequent period.
b) Business combinations
Business combinations are accounted for using the acquisition method.
The application of the acquisition method requires, as indicated in IFRS 3, Business
Combinations, at the acquisition date, the recognition and fair value measurement of the
identifiable assets acquired, the liabilities assumed and any non-controlling interest in the
acquiree, and the recognition and measurement of a gain from a bargain purchase made
on very favourable terms.
The acquirer shall identify the acquisition date, which is the date on which it obtains
control of the acquiree.
The cost of a business combination is the sum of the acquisition-date fair value of the
consideration transferred, and the amount of any non-controlling interests in the acquiree.
For each business combination, the acquirer shall measure any non-controlling interest in
the acquiree either at fair value or at the non-controlling interest’s proportionate share of
the acquiree’s identifiable net assets.
The costs incurred to issue equity or debt securities given up in exchange for the items
acquired are not included in the cost of a business combination.
Also, the cost of a business combination does not include the fees paid to legal advisers
and other professionals involved in the combination, or any costs incurred internally in this
connection. Such amounts are charged directly to the Group's consolidated profit or loss.
21
Any contingent consideration the Group transfers in exchange for the acquiree shall be
recognised at the acquisition-date fair value.
At the acquisition date, the acquirer shall recognise a gain or goodwill, measured as the
excess of the aggregate of the consideration transferred measured at acquisition-date fair
value and the amount of any non-controlling interest in the acquiree over the net of the
acquisition-date fair value amounts of the identifiable assets acquired and the liabilities
assumed. If consideration is lower, the resulting gain shall be recognised in profit or loss.
The consideration the acquirer transfers in exchange for the acquiree includes any asset or
liability resulting from a contingent consideration arrangement. The acquirer shall
recognise the acquisition-date fair value of contingent consideration as part of the
consideration transferred in exchange for the acquiree.
If the initial accounting for a business combination is incomplete by the end of the
reporting period in which the combination occurs, the acquirer shall report in its financial
statements provisional amounts for the items for which the accounting is incomplete, and
the provisional amounts may be adjusted in the period required to obtain the necessary
information. However, in no case shall the measurement period exceed one year from the
acquisition date. The effects of measurement period adjustments are recognised
retrospectively against goodwill, and comparative information for prior periods must be
revised as needed.
Subsequent changes that are not measurement period adjustments to the fair value of the
contingent consideration classified as an asset or a liability shall be recognised in
accordance with IAS 39, with any resulting gain or loss recognised either in profit or loss
or in other comprehensive income, unless the contingent consideration has been classified
as equity, in which case it shall not be remeasured and its subsequent settlement shall be
accounted for within equity.
After initial recognition at cost, goodwill acquired in a business combination is measured at
cost less accumulated impairment losses. The impairment tests are performed annually, or
more frequently if events or changes in circumstances indicate that the asset may have
become impaired.
In accordance with IAS 36, goodwill acquired in a business combination is allocated, from
the acquisition date, to the cash-generating units of the Group that are expected to benefit
from the synergies of the business combination, irrespective of whether other assets and
liabilities of the acquiree are assigned to those cash-generating units.
The impairment of goodwill is measured as the excess of its carrying amount over the
recoverable amount of the cash-generating unit or units with which that goodwill is
associated.
An impairment loss recognised for goodwill must not be reversed in a subsequent period.
22
c) Other intangible assets
Administrative concessions
“Administrative Concessions” includes mainly the cost assigned to administrative
concessions for radio broadcasting acquired by Uniprex, S.A. (Sole-Shareholder
Company). The amount recognised in the accompanying consolidated balance sheet
relates to the expenses incurred to directly obtain the concession from the State or from
the related public body. This amount is amortised on a straight-line basis over the initial
term of the radio licence.
Licences and trademarks
These accounts include the amounts relating to the licence and the trademark identified in
the purchase price allocation process arising from the merger with Gestora de Inversiones
Audiovisuales La Sexta, S.A. (see Note 4).
The trademark is being amortised on a straight-line basis over its useful life, which is
estimated to be 20 years.
With regard to the licence, based on an analysis of all the relevant factors, the Group
considers that there is no foreseeable limit to the period over which it is expected to
generate net cash inflows for the Group. As a result, the licence was classified as an
intangible asset with an indefinite useful life and, therefore, it is not amortised. This
indefinite useful life assessment is reviewed at each reporting date and is consistent with
the related business plans.
The Parent has reviewed the licence and trademark valuations identified in the purchase
price allocation process performed within the framework of the aforementioned merger.
For this review, which included the participation of an independent expert, the standard
procedures for analyses of this kind were used, and it was concluded that the assigned
values are within reasonable valuation ranges. Consequently, it was not necessary to
modify the initial estimates or make any adjustments at 2013 year-end.
Since the asset has an indefinite useful life, a recoverability assessment was performed at
year-end. The key assumptions on which the cash flow projections are based relate mainly
to advertising markets, audience figures, advertising efficiency ratios and the evolution of
expenses. Except for advertising, the data of which are measured on the basis of external
sources of information, the assumptions are based on past experience and reasonable
projections approved by Parent management and updated in accordance with the
performance of the advertising markets.
Taking the correlation between the advertising market and the evolution of domestic
demand and private consumption as a reference, a retrospective analysis was conducted
using the historical data of these two variables, based on market consensus.
These future projections cover the next five years. The discount rate used to measure this
intangible asset was between 9% and 10%.
23
A variation of 0.5% in cumulative annual growth would give rise to a change in value of
EUR 9 million, while a 0.5% increase in the discount rate would give rise to a change of
EUR 13 million, and a 0.5% decrease in the discount rate would result in a change of EUR
15 million. Zero perpetual growth was used. An increase of 0.5% would give rise to an
increase in value of EUR 16 million and a decrease of 0.5% would result in a decrease in
value of EUR 14 million.
Computer software
The acquisition and development costs incurred vis-à-vis third parties in relation to the
basic computer systems used in the Group's management are recognised with a charge to
“Other Intangible Assets” in the consolidated balance sheet.
Computer system maintenance costs are recognised with a charge to the consolidated
income statement for the year in which they are incurred.
Computer software is amortised on a straight-line basis over a period of between three
and five years from the entry into service of each application, on the basis of its estimated
useful life.
Audiovisual productions
“Audiovisual Productions” relates to the costs incurred by the Group in relation to film
productions. The carrying amount includes the production costs incurred in relation to the
remuneration paid to co-producers and the launch and initial marketing costs. The Group
begins to amortise the films from the date of commercial release or from the date on
which the rating certificate is obtained. Each film production is amortised on an annual
basis over the first commercial cycle of the film, which the Group considers to be four
years. Accordingly, at each year-end the amortised percentage until that date is
approximately the same as the percentage of the income generated until then with
respect to the present value of the estimated total income for that period. The Group
recognises the appropriate impairment losses to write down the carrying amounts of
these film productions when it is considered necessary based on future marketing
expectations.
Since the activities relating to the acquisition, production and marketing of audiovisual
productions are part of the Group's normal operations, the amortisation charges to
consolidated profit or loss are included under “Programme Amortisation and Other
Procurements”. Acquisitions of productions are classified as investment activities in the
statement of cash flows since the related amounts are recovered over various years.
d) Property, plant and equipment
Land and buildings acquired for the performance of the Group's business activity or for
administrative purposes are stated in the consolidated balance sheet at acquisition or
production cost, less any accumulated depreciation and any recognised impairment losses.
Replacements or renewals of complete items that lead to a lengthening of the useful life of
the assets or to an increase in their economic capacity are recognised as additions to
property, plant and equipment, and the items replaced or renewed are derecognised.
Periodic maintenance, upkeep and repair expenses are recognised in the income statement
on an accrual basis as incurred.
24
Fixtures and equipment are stated at cost less accumulated depreciation and any
recognised impairment loss.
Depreciation is calculated, using the straight-line method, on the basis of the acquisition
cost of the assets less their residual value; the land on which the buildings and other
structures stand has an indefinite useful life and, therefore, is not depreciated.
The period property, plant and equipment depreciation charge is recognised in the
consolidated income statement using the straight-line method at rates based on the
following average years of estimated useful life of the various assets:
Years of
useful life
Buildings
Plant
Machinery and tools
Furniture
Computer hardware
Transport equipment and other items of property,
plant and equipment
33
5 to 8
6 to 10
10
3 to 7
5 to 10
Assets held under finance leases are recognised in the corresponding asset category and
are depreciated over their expected useful lives on the same basis as owned assets or,
where shorter, over the term of the relevant lease.
Impairment of other intangible assets and property, plant and equipment
At each balance sheet date, or whenever there is any indication of impairment of other
intangible assets and property, plant and equipment, the Group conducts an impairment
test to determine whether the recoverable amount of these assets has been reduced to
below their carrying amount.
Recoverable amount is the higher of fair value less costs of disposal and value in use.
In the case of property, plant and equipment and audiovisual productions, impairment is
calculated item by item, on an individual basis.
Where an impairment loss subsequently reverses, the carrying amount of the asset is
increased to the revised estimate of its recoverable amount, but so that the increased
carrying amount does not exceed the carrying amount that would have been determined
had no impairment loss been recognised in prior years. Such reversal of an impairment
loss is recognised as income.
e) Financial assets
The financial assets held by the Group are classified in the following categories:
a) Loans and receivables: financial assets arising from the sale of goods or the rendering
of services in the ordinary course of the Company's business, or financial assets
which, not having commercial substance, are not equity instruments or derivatives,
have fixed or determinable payments and are not traded in an active market.
25
b) Held-for-trading financial assets: assets acquired with the intention of selling them in
the near term and assets that form part of a portfolio for which there is evidence of a
recent actual pattern of short-term profit-taking. This category also includes financial
derivatives that are not financial guarantees (e.g. suretyships) and that have not
been designated as hedging instruments.
c)
Available-for-sale financial assets: these include debt securities and equity
instruments of other companies that are not classified in any of the aforementioned
categories.
Initial recognition
Financial assets are initially recognised at the fair value of the consideration given, plus
any directly attributable transaction costs.
Subsequent measurement
Loans and receivables and held-to-maturity investments are measured at amortised cost.
Held-for-trading financial assets are measured at fair value, based on the expected
results, the estimated dividend payable, the price per share and the volatility thereof, and
the risk-free rate at year-end. The result of these fair value changes is recognised in profit
or loss.
Lastly, available-for-sale financial assets are measured at fair value and the gains and
losses arising from changes in fair value are recognised in equity until the asset is
disposed of or it is determined that it has become (permanently) impaired, at which time
the cumulative gains or losses previously recognised in equity are recognised in the net
profit or loss for the year. In this regard, (permanent) impairment is presumed to exist if
the market value of the asset has fallen by more than 40% or if there has been a
prolonged fall in market value over a period of 18 months without the value having
recovered.
At least at each reporting date the Group tests financial assets not measured at fair value
through profit or loss (accounts receivable) for impairment. Objective evidence of
impairment is considered to exist when the recoverable amount of the financial asset is
lower than its carrying amount. When this occurs, the impairment loss is recognised in the
consolidated income statement. In calculating such valuation adjustments as might be
required for trade and other receivables, the Group takes into account the date on which
the receivables are due to be settled and the equity position of related debtors.
f)
Programme rights
Programme rights are measured, based on their nature, as follows:
1.
Inventoriable in-house productions (programmes produced to be re-run, such as
fiction series) are measured at acquisition and/or production cost, which includes both
external costs billed by third parties for programme production and for the acquisition
of resources, and internal production costs, which are calculated by applying preestablished internal rates on the basis of the time during which operating resources
are used in production. The costs incurred in producing the programmes are
recognised, based on their nature, under the appropriate headings in the consolidated
26
income statement and are included under “Programme Rights” in the consolidated
balance sheet with a credit to “Additions to Programme Rights” under “Programme
Amortisation and Other Procurements” in the accompanying consolidated income
statement.
Amortisation of these programmes is recognised under “Programme Amortisation and
Other Procurements” in the consolidated income statement, on the basis of the
number of showings, at the rates shown below:
Amortisation rate
1st showing
90%
2nd showing
10%
The maximum period for the amortisation of series is three years, after which the
unamortised amount is written off.
Given their special nature, the series which are broadcast daily are amortised in full
when the first showing of each episode is broadcast.
2.
Non-inventoriable in-house productions (programmes produced to be shown only
once) are measured using the same methods and procedures as those used to
measure inventoriable in-house productions. Programmes produced and not shown
are recognised at year-end under “Programme Rights - In-House Productions and
Productions in Process” in the consolidated balance sheet. The cost of these
programmes is recognised as an expense under “Programme Amortisation and Other
Procurements” in the consolidated income statement at the time of the first showing.
3.
Rights on external productions (films, series and other similar productions) are
measured at acquisition cost. These rights are deemed to have been acquired when
the term of the right commences for the Group.
When payments to external production distributors are made in foreign currency,
these rights are recognised in the consolidated balance sheet by applying to the
foreign currency amount the spot exchange rate prevailing when the term of the right
commences.
Also, the initial value of all the external productions acquired by the Group for which
derivative instruments designated as cash flow hedges pursuant to IAS 39 were
arranged in order to hedge foreign currency risk includes:
ƒ
the portion of the cumulative gain or loss recognised in equity (effective hedge) on
the hedging instrument at the beginning of the term of the right.
ƒ
for payments made prior to the commencement of the term of the right, the
accumulated exchange gains or losses on that date.
The amortisation of the rights is recognised under “Programme Amortisation and Other
Procurements” in the consolidated income statement, on the basis of the number of
showings, at the rates shown below, which are established on the basis of the number
of showings contracted:
27
FILMS
1
2
3 or more
50%
1st showing
100%
50%
2nd showing
-
50%
30%
3rd showing
-
-
20%
SERIES
4.
Number of showings contracted
Number of showings contracted
1
2 or more
1st showing
100%
50%
2nd showing
-
50%
Live broadcasting rights are measured at cost. The cost of these rights is recognised
as an expense under “Programme Amortisation and Other Procurements” in the
consolidated income statement at the time of broadcast of the event on which the
rights were acquired.
Advances on purchases of rights
Payments made to external production distributors prior to the commencement of the
term of the rights are recognised under “Programme Rights - Advances on Purchases of
Rights” in the consolidated balance sheet and if such payments are in foreign currency
they are translated to euros at the year-end exchange rate.
Write-downs
The Group recognises write-downs to reduce the unamortised value of in-house
productions and of the rights on external productions which it considers will not be shown.
When these rights expire, the valuation adjustments are recognised in profit or loss when
the cost of the rights is derecognised.
Classification of programme rights
In accordance with standard practice in the industry in which the corporate Group
operates, programme rights are classified as current assets and the portion that is
amortised over more than one year is detailed in Note 10.
g) Non-current assets and liabilities classified as held for sale and discontinued
operations
The Group classifies under this heading in the consolidated balance sheet the non-current
assets and disposal groups whose carrying amount is expected to be recovered through a
sale transaction or liquidation rather than through continued use.
The non-current assets of discontinued operations are recognised at the lower of carrying
amount and market value.
The non-current liabilities of discontinued operations include the fair value of the liabilities
associated with the aforementioned assets which are expected to be settled at short term.
28
At 2012 year-end, Unipublic, S.A. and its subsidiary Organizaciones Deportivas y
Culturales Unipublic, S.A.U. were classified as held for sale. In 2013 the aforementioned
investments were sold, although this did not have any impact on the consolidated income
statement.
h) Classification of financial assets and liabilities as current or non-current
In the accompanying consolidated balance sheet, financial assets and liabilities are
classified on the basis of the time in which it is estimated that they will be realised or
settled, i.e. financial assets and liabilities that are expected to be realised or settled over
the course of the company's normal business cycle or within no more than 12 months are
classified as current items, and those which do not meet these requirements are classified
as non-current items.
Deferred tax assets and liabilities are classified as non-current regardless of when they are
expected to be realised or settled.
i)
Hedging derivatives
All the derivatives held by the Group at 31 December 2013 were OTC derivatives, whose
prices are not quoted on organised futures and options markets and, therefore, it is
necessary to apply generally accepted valuation techniques, based on objective market
data, used in the measurement of financial instruments of this nature.
Foreign currency hedging contracts are valued using the spot exchange rate and the
forward interest rate curves of the related currencies. The “market” foreign currency
hedge is calculated at year-end and is compared with the price of the foreign currency
hedge arranged.
Foreign exchange hedges
The derivative financial instruments held by the Group companies are basically cash flow
hedges arranged to mitigate the exposure of the cash flows associated with external
production rights to fluctuations in the US dollar/euro exchange rate.
Hedging instruments are recognised in the consolidated balance sheet at fair value and the
changes therein are recognised directly in equity, for the effective portion, as provided for
in IAS 39. When the term of the broadcasting rights designated as a hedged item
commences, the associated gains or losses on the derivative that had previously been
recognised in equity are included in the initial measurement of the asset and from then on
any change in the fair value of the hedging instrument is recognised directly in profit or
loss for the year.
The corporate Group periodically tests the effectiveness of the outstanding hedges and the
ineffective portion is recognised immediately under financial profit or loss in the
consolidated income statement.
If a hedged transaction is no longer expected to occur, or no longer qualifies for hedge
accounting, the net cumulative gain or loss recognised in equity is transferred to net profit
or loss for the year.
29
The Group has established the policy of categorising its assets and liabilities at fair value in
the different measurement hierarchy levels, on the basis of the availability of observable
market data, and only transfers items between levels when such inputs are not available.
In 2013 no transfers were made between the fair value hierarchy levels corresponding to
the Group's financial instruments.
j)
Treasury shares
All the treasury shares of the Parent at 31 December 2013 represented 7.01% of the
issued share capital at that date (the treasury share transactions performed in 2013 and
2012 are summarised in Note 12-e). The amount relating to these treasury shares is
recognised as a reduction of equity.
Acquisitions or sales of treasury shares (see Note 12-e) are charged or credited to equity
at the amount paid or received, respectively, and, therefore, the gains or losses arising
from these transactions are not reflected in the income statement but are recognised as
an addition to or a reduction of equity, respectively.
k) Bank borrowings
Interest-bearing bank loans, credit facilities and overdrafts are recorded at the amount
received. Borrowing costs are recognised in the consolidated income statement on an
accrual basis using the effective interest method and are added to the carrying amount of
the liability to the extent that they are not settled in the period in which they arise.
l)
Termination benefits
Under current employment legislation, the Group companies are required to pay
termination benefits to employees terminated under certain conditions. The Parent’s
directors do not expect any liabilities to arise other than those already recognised in this
connection.
m) Provisions
The present obligations arising from past events which could give rise to a loss for the
Group which is uncertain as to its amount and timing are recognised as provisions in the
consolidated balance sheet at the present value of the most probable amount that it is
considered the Group will have to disburse to settle the obligation.
Provisions are quantified taking into consideration the best information available at the
date of preparation of the consolidated financial statements on the consequences of the
event giving rise to them and are reestimated at the end of each year.
30
n) Revenue and expense recognition
Revenue and expenses are recognised on an accrual basis.
Revenue is measured at the fair value of the consideration received or receivable and
represents the value of the goods and services provided in the normal course of business,
net of discounts, VAT and other sales-related taxes.
The Group companies basically obtain revenue from the sale of advertising space; this
revenue is recognised in the consolidated income statement when the related advertising
spot is broadcast.
o) Income taxes; deferred taxes
The current income tax expense is calculated by aggregating the current tax arising from
the application of the tax rate to the taxable profit (tax loss) for the year, after deducting
the tax credits allowable for tax purposes, plus the change in deferred tax assets and
liabilities.
In general, deferred tax liabilities are recognised for all taxable temporary differences,
whereas deferred tax assets (including those relating to temporary differences and tax loss
and tax credit carryforwards) are only recognised to the extent that it is considered
probable that the consolidated companies will have sufficient taxable profits in the future
against which the deferred tax assets can be utilised.
Deferred tax assets and liabilities are calculated by applying the tax rates that are
expected to apply in the period when the asset is realised or the liability is settled. The
current rate is 30% for 2013 and subsequent years.
In 2001 the Group began to file consolidated tax returns. Atresmedia Corporación de
Medios de Comunicación, S.A. is the Parent of this consolidated tax group (see Note 22).
p) Foreign currency transactions
The functional currency of the Parent and its investees is the euro. Therefore, transactions
in currencies other than the euro are deemed to be “foreign currency transactions” and are
recognised by applying the exchange rates prevailing at the date of the transaction.
q) Consolidated statements of cash flows
The following terms are used in the consolidated statements of cash flows with the
meanings specified:
Cash flows: inflows and outflows of cash and cash equivalents, which are short-term,
highly liquid investments that are subject to an insignificant risk of changes in value.
Operating activities: the principal revenue-producing activities of the Company and other
activities that are not investing or financing activities.
Investing activities: the acquisition and disposal of long-term assets and other
investments not included in cash and cash equivalents.
31
Financing activities: activities that result in changes in the size and composition of equity
and borrowings that are not operating activities.
r) Earnings per share
Basic earnings per share are calculated by dividing the net profit attributable to the Parent
by the weighted average number of ordinary shares outstanding during the year,
excluding the number of shares of the Parent held by the Group.
The Group has not carried out transactions of any kind that have led to diluted earnings
per share differing from basic earnings per share (see Note 24).
s) Dividends
At the Annual General Meeting held on 24 April 2013, the shareholders of the Parent
approved the proposed distribution of profit for 2012 and ratified the resolutions that were
adopted in this connection by the Board of Directors of the Parent and by its Executive
Committee, at their meetings held on 28 November and 11 December 2012, respectively.
Consequently, the 2012 gross dividend was eleven euro cents (EUR 0.11) for each of the
194,112,800 shares (with a par value of EUR 0.75) entitled to receive it. Since the
dividend was paid out of the profit generated by the Parent up to 31 October 2012, in
conformity with the draft terms for the merger by absorption of Gestora de Inversiones
Audiovisuales La Sexta, S.A. (“La Sexta”) into Atresmedia Corporación de Medios de
Comunicación, S.A., the shares delivered to the La Sexta shareholders were not entitled to
receive this dividend, because the dividends were paid out of profit generated by
Atresmedia Corporación de Medios de Comunicación, S.A. prior to the date on which the
merger was registered at the Madrid Mercantile Registry.
Pursuant to the provisions of Article 148 of the Spanish Limited Liability Companies Law,
the dividend rights inherent to treasury shares are attributed proportionately to the other
shares that are eligible to receive the dividend.
This dividend, which was paid to the shareholders as an interim dividend on 20 December
2012, totalled EUR 21,352 thousand.
4.
Business combinations
Description of the merger transaction in 2012
On 14 December 2011, following a resolution by its Board of Directors, Atresmedia
Corporación de Medios de Comunicación, S.A. (Atresmedia) entered into an agreement with
Gestora de Inversiones Audiovisuales La Sexta S.A. (La Sexta) and its shareholders (GAMP
Audiovisual S.A., Grupo Televisa S.A.B. and Gala Desarrollos Comerciales S.L., as well as
Imagina Media Audiovisual S.L.), to integrate the two television companies through a merger
by absorption of La Sexta into Atresmedia.
32
La Sexta engages mainly in the management of a licence to provide audiovisual
communication services, for a period of 15 years, pursuant to a resolution adopted by the
Spanish Cabinet on 11 June 2010.
On 25 January 2012, the members of the Boards of Directors of Atresmedia Corporación de
Medios de Comunicación, S.A. and Gestora de Inversiones Audiovisuales La Sexta, S.A. signed
the draft terms of merger in accordance with Articles 30, 31 and related provisions of Law
3/2009, of 3 April, on structural changes to companies, in order to merge their respective
businesses through a merger transaction.
The draft terms of merger were filed at the Madrid Mercantile Registry on 7 February 2012 and
published in the Official Gazette of the Mercantile Registry (BORME) on 17 February 2012.
The draft terms for the merger by absorption of Gestora de Inversiones Audiovisuales La
Sexta, S.A. into Atresmedia Corporación de Medios de Comunicación, S.A. were approved at
the Annual General Meeting of the absorbing company and at the Universal Extraordinary
General Meeting of the absorbed company on 25 April 2012.
On 24 August 2012, the Spanish Cabinet approved the business combination on the grounds
of general interest, but making the approval conditional upon the fulfilment of certain
conditions which modify some of those included in the resolution of the Spanish Anti-Trust
Commission, of 13 July 2012.
On 5 October 2012, the Spanish Cabinet also authorised the transfer of La Sexta's audiovisual
communication licence and the assignment for private use of the associated radioelectric
public domain; thus, the last administrative authorisation established in the draft terms of
merger as a condition precedent for the completion of the transaction was obtained. On this
same date, effective control of La Sexta was obtained and, therefore, 5 October 2012 is taken
to be the acquisition date, from which time onwards La Sexta's operations are considered to
be performed for accounting purposes by Atresmedia.
On 29 October 2012, the merger resolutions adopted by Atresmedia Corporación de Medios de
Comunicación, S.A., as the absorbing company, and Gestora de Inversiones Audiovisuales La
Sexta, S.A., as the absorbed company, at their respective General Meetings on 25 April 2012,
were executed in public deeds, as a result of which the draft terms of merger were fully
approved. As a result, Atresmedia Corporación de Medios de Comunicación, S.A. acquired by
universal succession all the assets and liabilities of Gestora de Inversiones Audiovisuales La
Sexta, S.A. with the concomitant dissolution of the latter.
Following the merger resolution approved by the shareholders at the General Meetings of the
two companies and the filing of the merger deed at the Madrid Mercantile Registry on 31
October 2012, the shareholders of La Sexta received, as consideration for the assets and
liabilities of this company, 15,801,296 shares of Atresmedia Corporación de Medios de
Comunicación, S.A., which represent 7% of its share capital. For the purposes of the share
exchange, Atresmedia Corporación de Medios de Comunicación, S.A. increased its share
capital through the issue of 14,620,000 new shares (of which 13,438,704 were ordinary
shares and a further 1,181,296 were shares with no dividend rights for a period of two years
from the date on which the merger became effective), while the remaining shares
corresponding to the shareholders of La Sexta were delivered with a charge to the treasury
shares of Atresmedia Corporación de Medios de Comunicación, S.A. (see Note 12).
33
Also, within the framework of the merger agreement, the parties resolved to grant the
shareholders of La Sexta an additional fixed ownership interest of 15,818,704 shares of
Atresmedia Corporación de Medios de Comunicación, S.A., representing 7% of its share
capital, the delivery of which is conditional upon the fulfilment in 2012, 2013, 2014, 2015 and
2016 of certain objectives relating to the consolidated earnings of Atresmedia. The delivery of
these additional shares will be carried out in full by way of treasury shares of Atresmedia
Corporación de Medios de Comunicación, S.A., to the extent that the related objectives are
met and, in any case, these shares will be delivered no later than in 2017.
The main advantage and economic benefit of this transaction is the synergy achieved, with an
extended range of contents, greater efficiency in the use of Group resources and increased
advertising efficiency.
On 19 February 2014, the Parent entered into a partial novation of this agreement, modifying
the content thereof with respect to two of the three former shareholders of La Sexta (see Note
28).
Consideration transferred
The consideration for the business combination was estimated as: i) the fair value (at the date
of the combination) of the shares delivered to the shareholders of Gestora de Inversiones
Audiovisuales La Sexta, S.A. (a total of 15,801,296 shares representing 7% of the Parent's
share capital, delivered as a result of the capital increase described in Note 12-a, the fair value
being the share price at the 5 October 2012 close), and ii) the fair value of the shares subject
to deferred delivery, calculated on the basis of the forward price of Atresmedia Corporación de
Medios de Comunicación, S.A. shares, taking into account a 0.90% IRS rate and
management's estimate of the profit for 2012 to 2016, in order to estimate the delivery date.
The fair value of the consideration transferred in the business combination amounted to EUR
95,893 thousand. The breakdown of this amount is as follows:
Thousands of euros
7% ownership interest in the share capital
53,250
Deferred delivery of shares (additional 7%)
42,643
Total consideration transferred
95,893
In order to enable the shareholders of La Sexta to receive a number of Atresmedia
Corporación de Medios de Comunicación, S.A. shares that is proportional to their respective
ownership interests in La Sexta, the Parent increased its share capital through the creation of
newly issued shares and the delivery of treasury shares.
Also, Atresmedia agreed to grant La Sexta shareholders an additional ownership interest of
15,818,704 Atresmedia shares representing 7% of its share capital, although the delivery
thereof is conditional upon Atresmedia's consolidated earnings from 2012 to 2016. The
delivery of these additional shares will be carried out in full through treasury shares of the
Parent and, therefore, does not constitute an additional issue.
On 19 February 2014, the Parent entered into a partial novation of this agreement, modifying
the content thereof with respect to two of the three former shareholders of La Sexta (see Note
28).
34
Assets acquired and liabilities assumed at the acquisition date
The acquisition-date fair values of the assets and liabilities of Gestora de Inversiones
Audiovisuales La Sexta, S.A. were as follows:
Thousands
of euros
Current assets:
Inventories
Trade receivables
Investments in Group companies
Current financial assets
Current prepayments and accrued income
Cash and cash equivalents
Non-current assets:
Intangible assets
Property, plant and equipment
Investments in Group companies and associates
Non-current financial assets
Deferred tax assets (*)
Non-current trade receivables
Current liabilities:
Short-term provisions
Current payables
Current payables to Group companies and associates
Trade payables
Non-current liabilities:
Deferred tax liabilities (*)
Non-current payables to Group companies and associates
Total fair value of net identifiable assets acquired
62,718
21,790
24,787
13,331
696
184
1,930
365,847
105,111
615
9,445
8,926
241,596
154
(213,282)
(14,079)
(6)
(22,879)
(176,318)
(99,854)
(31,319)
(68,535)
115,429
(*) Under current accounting legislation, deferred tax assets and liabilities recognised in a business combination are
not measured at fair value, but rather at their nominal amount.
The gross contractual amount receivable in relation to the accounts receivable acquired, which
related in full to trade receivables and were recognised at their fair value of EUR 24,787
thousand, is EUR 24,795 thousand.
The detail, by year of acquisition, of the intangible assets and property, plant and equipment
included as a result of the merger (excluding the licence and trademark) is as follows (in
thousands of euros):
35
2006
Intangible assets
Computer software
Property, plant and equipment
Plant
Furniture
Computer hardware
2007
2008
2009
2010
2011
2012
Total
-
-
-
1
54
460
201
716
716
4
293
-
15
-
20
6
-
29
2
28
20
76
22
89
11
53
358
204
615
Gain from a bargain purchase arising from the business combination
The following gain from a bargain purchase arose from this business combination:
Thousands
of euros
Consideration transferred
95,893
Less- fair value of the net assets acquired
(115,429)
Gain from a bargain purchase arising from the business combination
(19,536)
In the aforementioned business combination, the cost of the business combination was EUR
19,536 thousand lower than the net of the acquisition-date amounts of the identifiable assets
acquired and the liabilities assumed. Therefore, as provided for in the recognition and
measurement bases, this amount was recognised as income under “Gains on Bargain
Purchases Arising on Business Combinations” in the 2012 consolidated income statement.
Assets not reflected in the accounting records of Gestora de Inversiones Audiovisuales La
Sexta, S.A. were included (i.e. the “La Sexta” trademark and the audiovisual communication
licence granted). The fair value of the licence was calculated on the basis of its capacity to
generate income with an indefinite useful life using the discounted cash flow method. The
royalty relief method was used to calculate the fair value of the trademark, considering a
useful life of 20 years.
At 2012 year-end, the allocation of the fair values of the assets acquired and liabilities
assumed, in particular of trademarks and licences, was subject to possible adjustments within
one year from the acquisition date, as required by accounting legislation. The purpose of these
adjustments is to reflect, in general, any additional information obtained during the
aforementioned measurement period, and, in the Company's particular case, the information
referring to the Spanish Supreme Court judgment of 27 November 2012 relating to the
assignment of digital multiplexes with national coverage. Once this period had elapsed and
following a review by the Parent, based on a report by an independent expert, of the values
initially assigned to the aforementioned assets (using various widely accepted valuation
methods for this purpose), there was no change in those values.
Had the business combination been performed at the beginning of 2012, revenue would have
amounted to EUR 828,475 thousand in 2012 and a loss of EUR 22,008 thousand would have
been incurred in that year.
36
After integration of the merged entity at the acquisition date, and in view of the fact that it
was not possible to extract separate information on the revenue and net profit or loss
attributable to the business combination, this information was not included.
The directors consider that these pro forma figures represented a reasonable approximation of
the annual performance of the new merged entity and an initial point of reference for
comparison in future years. In order to determine these pro forma revenue and profit or loss
figures, management of the Parent took into account non-current asset depreciation and
amortisation calculated on the basis of the acquisition-date fair values and borrowing costs
calculated on the basis of the situation of the debt after the date of the business combination.
Lastly, it should be noted that fees paid to legal advisers and other professionals involved in
the transaction amounted to EUR 3,428 thousand, of which EUR 2,131 thousand relate to
2012, and are recognised under “Other Operating Expenses” in the consolidated income
statement.
5. Goodwill
The changes in “Goodwill” in the consolidated balance sheets in 2013 and 2012 were as
follows:
Thousands of euros
Balance at Additions/
Balance at Additions/
Balance at
Impairment
Transfers
31/12/11 Disposals
31/12/12 Disposals
31/12/13
TELEVISION BUSINESS:
VNews Agencia de Noticias, S.L.U.
475
(475)
-
-
-
-
-
172,950
-
(25,392)
147,558
-
555
148,113
1,899
-
-
1,899
-
-
1,899
Canal Media Radio Galicia, S.A.U.
295
-
-
295
-
(295)
-
Ipar Onda, S.A.U.
260
-
-
260
-
(260)
-
RADIO BUSINESS:
Uniprex, S.A.U.
Canal Media Radio, S.L.U.
OTHER BUSINESSES:
Cordina Planet, S.L.U.
TOTAL
-
-
-
-
3,181
-
3,181
175,879
(475)
(25,392)
150,012
3,181
-
153,193
The change in the goodwill of the Radio business in 2013 is due to the merger by absorption
into the Group company Uniprex, S.A. (Sole-Shareholder Company) of several of its
subsidiaries, as described in Note 2-b on changes in the scope of consolidation.
Also, the Parent's acquisition of control over Cordina Planet, S.L.U. gave rise to goodwill of
EUR 3,181 thousand (see Note 2-b).
The Group periodically assesses the recoverability of the goodwill described in the foregoing
table, considering the cash-generating units on the basis of the business activities of its
subsidiaries, which at year-end were the radio business and other businesses.
37
The Group uses the strategic plans of the various businesses to calculate any possible
impairment losses and discounts expected future cash flows. The Group prepares the various
projections individually, taking into account the expected future cash flows of each cashgenerating unit.
For the radio cash-generating unit (which coincides with the radio segment), the key
assumptions on which the cash flow projections are based relate mainly to advertising
markets, audience figures, advertising efficiency ratios and cost forecasts. Except for
advertising, which is measured on the basis of external sources of information, the data
assumptions are based on past experience and reasonable projections approved by
management of the Parent and updated in accordance with the performance of the advertising
markets.
These future projections cover the next five years. The cash flows for the years not considered
in the projections are estimated to be perpetual, with growth of 0%.
In assessing value in use, the estimated cash flows are discounted to their present value using
a pre-tax discount rate that reflects current market assessments of the time value of money
and the risks specific to the assets. In order to calculate the rate, the current time value of
money and the risk premiums generally used by analysts for the business and geographical
area (Spain) are taken into account, giving rise to future discount rates of 9%-10% in 2012
and 2013.
Based on the methods used and the estimates, projections and valuations of value in use
available to the Parent's directors, at the date of presentation of these consolidated financial
statements, it was determined that the goodwill recognised by the Group represents its
recoverable amount and, therefore, it was not necessary to recognise any impairment losses.
In 2012 an impairment loss of EUR 25,392 thousand was calculated on the goodwill relating to
the Radio cash-generating unit, the impact of which was recognised under “Impairment and
Gains or Losses on Disposals of Non-Current Assets” in the consolidated income statement.
This impairment loss arose as a result of the accelerated decline of the advertising market in
2013, placing it, in nominal terms, at the levels of 1998/1999.
The Group also performs sensitivity analyses when there are reasonably possible changes in
the key assumptions used to calculate the recoverable amount of the radio cash-generating
unit. In this respect, the sensitivity analyses are prepared under various scenarios on the basis
of the variables deemed most significant, i.e. advertising revenue, which depends mainly on
the performance of the advertising market and the investment share, and the discount rate.
The most sensitive variable is the growth of the radio advertising market, for which cumulative
annual growth of 2.4% was used for the projection period, which is in line with a moderate
recovery over the next few years. A variation of 0.5% would give rise to a change in value of
EUR 12 million. Similarly, a variation of 0.5% in the discount rate would give rise to a change
of EUR 8 million. Zero perpetual growth was used. An increase of 0.5% would give rise to an
increase in value of EUR 6 million.
38
6.
Other intangible assets
The breakdown of the balances and transactions recognised under “Other Intangible Assets” in
the consolidated balance sheets in 2013 and 2012 is as follows:
Thousands of euros
Additions or
charge for
the year
Balance at
01/01/13
Disposals or
reductions
Additions/dis
posals due to
Balance at
Transfers
changes in
31/12/13
the scope of
consolidation
Cost:
Administrative concessions
40,802
-
-
180
-
40,982
Licences
82,804
-
-
-
-
82,804
Trademarks
21,591
-
-
-
-
21,591
1,096
-
-
112
-
1,208
42,306
-
-
2,333
156
44,795
190,542
2,228
-
12,336
-
205,106
647
-
-
-
923
1,570
14,283
16,850
-
(15,329)
-
15,804
394,071
19,078
-
(368)
1,079
413,860
Intellectual property
Computer software
Audiovisual productions
Other intangible assets
Intangible assets in progress
Accumulated amortisation:
Administrative concessions
(39,290)
(912)
-
-
-
(40,202)
Trademarks
(270)
(1,080)
-
-
-
(1,350)
Intellectual property
(807)
(133)
-
-
-
(940)
(35,562)
(3,138)
-
16
(191)
(38,876)
(162,120)
(11,565)
-
(7,490)
-
(181,175)
(647)
-
-
-
(61)
(708)
(238,696)
(16,828)
-
(7,474)
(252)
(263,250
(14,555)
(645)
-
7,490
(215)
(7,925)
140,820
1,605
-
(353)
612
142,685
Computer software
Audiovisual productions
Other intangible assets
Net impairment losses:
Total
Thousands of euros
Inclusions
Additions or
due to
charge for
merger
the year
(Note 4)
Balance at
01/01/12
Disposals or
reductions
Additions/
disposals due
Balance at
to changes in
31/12/12
the scope of
consolidation
Transfers
Cost:
Administrative concessions
40,802
-
-
-
-
-
40,802
Licences
-
82,804
-
-
-
-
82,804
Trademarks
-
21,591
-
-
-
-
21,591
-
-
-
(10)
1,096
2,555
-
-
(188)
42,306
857
(138)
7,797
-
190,542
Intellectual property
Computer software
Audiovisual productions
Other intangible assets
Intangible assets in progress
1,106
39,223
716
182,026
-
647
-
8,474
-
-
-
-
-
647
13,606
-
(7,797)
-
14,283
272,278
105,111
17,018
(138)
-
(198)
394,071
(38,276)
-
(1,014)
-
-
-
(39,290)
(270)
-
-
-
(270)
Accumulated amortisation:
Administrative concessions
Trademarks
Intellectual property
Computer software
Audiovisual productions
Other intangible assets
Net impairment losses:
Total
(672)
-
(139)
-
-
4
(807)
(33,224)
-
(2,518)
-
-
180
(35,562)
(138,049)
-
(14,948)
-
(9,123)
-
(162,120)
(647)
-
-
-
-
-
(647)
(210,868)
-
(18,889)
-
(9,123)
184
(238,696
(23,257)
-
(421)
-
9,123
-
(14,555)
38,153
105,111
(2,292)
(138)
-
(14)
140,820
39
Fully amortised intangible assets in use and in progress at 31 December 2013 amounted to
EUR 183,744 thousand (31 December 2012: EUR 151,715 thousand).
The impairment of intangible assets amounting to EUR 645 thousand in 2013 (2012: EUR 421
thousand) relates to the impairment of audiovisual cinema productions detected as a result of
analysing the recoverability of the related investment through a case-by-case analysis of the
value in use of each film. This analysis takes into account up-to-date estimates of the income
produced in each of the commercial exploitation windows and, if necessary, an impairment
loss is recognised under “Programme Amortisation and Other Procurements” since the
impairment relates to cinema productions shown on television channels.
7. Property, plant and equipment
The breakdown of the balances and transactions recognised under “Property, Plant and
Equipment” in the consolidated balance sheets in 2013 and 2012 is as follows:
Thousands of euros
Additions/
Additions
disposals due
Balance at
Disposals or
or charge
Transfers to changes in
01/01/13
reductions
for the year
the scope of
consolidation
Balance at
31/12/13
Cost:
Land and buildings
65,865
-
(569)
202
-
65,498
Plant and machinery
89,563
-
(4,743)
4,507
-
89,327
Other fixtures and tools
52,627
-
(612)
658
-
52,673
Furniture
13,124
149
(368)
329
-
13,234
Computer hardware
35,897
-
(1,736)
1,330
270
35,761
2,358
-
(40)
-
1
2,319
990
5,925
-
(6,660)
-
255
260,424
6,074
(8,068)
366
271
259,067
Land and buildings
(31,886)
(1,938)
569
-
-
(33,255)
Plant and machinery
(76,271)
(5,309)
4,735
-
-
(76,845)
Other fixtures and tools
(47,314)
(1,798)
592
(5)
-
(48,525)
Furniture
(11,877)
(623)
366
(8)
-
(12,142)
Computer hardware
(30,772)
(2,237)
1,731
-
(118)
(31,396)
(2,203)
(79)
40
-
-
(2,242)
(200,323)
(11,984)
8,033
(13)
(118)
(204,405)
(2,687)
-
-
-
-
(2,687)
57,414
(5,910)
(35)
353
153
51,975
Transport equipment and other items of
property, plant and equipment
Property, plant and equipment in the
course of construction
Accumulated depreciation:
Transport equipment and other items of
property, plant and equipment
Net impairment losses:
Total
40
Thousands of euros
Inclusions
Additions
Disposals or
Balance at
due to
Transfers
or charge
reductions
01/01/12
merger
for the year
(Note 4)
Additions/
disposals due
to changes in
the scope of
consolidation
Balance at
31/12/12
Cost:
Land and buildings
65,749
-
-
(49)
165
-
65,865
Plant and machinery
89,420
53
-
(2,400)
3,021
(531)
89,563
Other fixtures and tools
51,753
-
-
(60)
1,115
(181)
52,627
Furniture
12,876
358
-
(184)
103
(29)
13,124
Computer hardware
36,014
204
-
(1,575)
1,473
(219)
35,897
2,362
-
-
-
-
(4)
2,358
178
-
6,660
-
(5,877)
29
990
258,352
615
6,660
(4,268)
-
(935)
260,424
Land and buildings
(29,860)
-
(2,066)
40
-
-
(31,886)
Plant and machinery
(73,665)
-
(5,503)
2,418
-
479
(76,271)
Other fixtures and tools
(45,501)
-
(2,047)
52
-
182
(47,314)
Furniture
(11,546)
-
(539)
182
-
26
(11,877)
Computer hardware
(30,104)
-
(2,436)
1,572
-
196
(30,772)
(2,094)
-
(113)
-
-
4
(2,203)
(192,770)
-
(12,704)
4,264
(2,687)
-
62,895
615
Transport equipment and other items of
property, plant and equipment
Property, plant and equipment in the
course of construction
Accumulated depreciation:
Transport equipment and other items of
property, plant and equipment
Net impairment losses:
Total
(6,044)
(4)
-
887
(200,323)
-
-
(2,687)
-
(48)
57,414
At 31 December 2013, fully depreciated property, plant and equipment amounted to EUR
152,544 thousand (2012: EUR 143,939 thousand). The Group does not have any temporarily
idle items.
The Group has taken out insurance policies to cover the possible risks to which its property,
plant and equipment are subject and the claims that might be filed against it for carrying on
its business activities. These policies are considered to adequately cover the related risks.
8. Investments accounted for using the equity method
The changes in the investments accounted for using the equity method in 2013 and 2012 were
as follows:
Balance at
Changes in
Additions Disposals
the scope of or charge
or
Transfers
01/01/13 consolidation for the year reductions
31/12/13
Balance at
Thousands of euros
Investments accounted for using the
equity method
I3 Televisión, S.L.U.
86
-
44
-
-
Cordina Planet, S.L.
-
-
-
(912)
912
-
Hola TV América, S.L.
-
-
478
(126)
-
352
Atlantis Global Solutions, S.L.
-
112
-
(48)
-
64
86
112
522
(1,086)
912
546
Investments accounted for using the
equity method
130
41
Thousands of euros
Additions Disposals
Balance at
Balance at Changes in
the scope of or charge
or
Transfers
01/01/12 consolidation for the year reductions
31/12/12
Investments accounted for using the
equity method
Unipublic, S.A. (*)
(2,000)
3,359
-
126
(1,485)
437
-
-
(437)
-
-
90
-
-
(4)
-
86
1,509
(1,509)
-
-
-
-
35
(35)
-
-
-
-
Antena 3 de Televisión Colombia, S.A.
287
-
85
(372)
-
-
Canal 3 Televisión de Colombia, S.A.
297
-
54
(351)
-
-
3
-
500
(503)
-
-
16
-
-
(16)
-
-
6,033
(1,544)
765
(3,168)
(2,000)
86
Organizaciones Deportivas y Culturales de
Unipublic, S.A.
I3 Televisión, S.L.U.
Videoreport Canarias, S.A. (*)
Gestión Audiovisual de Canarias, S.L.
Cordina Planet, S.L.
Hola TV América, S.L.
Investments accounted for using the
equity method
-
(*) Audited companies
In February 2013 Antena 3 de Televisión Colombia, S.A. and Canal 3 Televisión Colombia, S.A.
were liquidated. This transaction did not have any impact on the consolidated financial
statements.
As discussed in Note 2-b in the section on changes in the scope of consolidation, in December
2013 Cordina Planet, S.L. changed from being accounted for using the equity method to being
a fully consolidated subsidiary of the Group.
At 31 December 2012, Unipublic, S.A. and its subsidiary Organizaciones Deportivas y
Culturales de Unipublic, S.A. (Sole-Shareholder Company) were transferred to “Non-Current
Assets Held for Sale”. The decrease in value of the investments in the two companies was a
result of their remeasurement at fair value at 2012 year-end, the impact of which on the
consolidated income statement was recognised under “Gains (Losses) on Disposals of Financial
Assets”. In April 2013 the agreement to reduce the share capital of Unipublic, S.A. was
executed in a public deed and the company was effectively excluded from the consolidated
Group, although this did not have any impact on these consolidated financial statements.
None of the Group's investees are listed on Spanish or foreign stock exchanges.
The detail of the main financial aggregates of the companies accounted for using the equity
method for 2013 and 2012 is as follows:
2013
Thousands of euros
Assets
Equity
Liabilities
Profit
(Loss)
Income
I3 Televisión, S.L.
3,156
261
2,896
6,821
26
Hola TV América, S.L.
3,222
702
2,520
-
(253)
142
83
59
-
(145)
Atlantis Global Solutions, S.L.
42
2012
Thousands of euros
Assets
Equity
Liabilities
Income
Loss
I3 Televisión, S.L.
2,399
171
2,228
6,812
(9)
Cordina Planet, S.L.
1,533
(857)
2,390
120
(1,859)
Hola TV América, S.L.
150
(472)
621
-
(489)
Antena 3 de Televisión Colombia, S.A.
39
39
-
-
(10)
Canal 3 Televisión de Colombia, S.A.
64
61
3
-
(95)
9. Financial assets and other non-current assets
The detail of “Non-Current Financial Assets” and “Derivative Financial Instruments” in the
consolidated balance sheets at 31 December 2013 and 2012 is as follows:
Non-current financial instruments
Thousands of euros
Equity
instruments
2013
Loans and receivables
Loans, derivatives and
other
2012
2013
Total
2012
2013
2012
-
-
297
9,694
297
9,694
Available-for-sale financial assets
1,472
3,358
-
-
1,472
3,358
Non-current financial assets
1,472
3,358
297
9,694
1,769
13,052
-
-
9,413
7,402
9,413
7,402
-
-
9,413
7,402
9,413
7,402
1,472
3,358
9,710
17,096
11,182
20,454
Other derivatives
Derivative financial instruments
Total
“Non-Current Financial Assets - Available-For-Sale Financial Assets” includes non-current
financial investments in the equity instruments of companies over which the Group does not
exercise significant influence either because its ownership interest is below 20% or because it
does not participate in the setting of financial or commercial policies. At 2013 year-end, the
balance of this item related to the 45% ownership interest in El Armario de la Tele, S.L.,
measured at the cost incurred; the Group's 15% ownership interest in Audiovisual Española
2000, S.A. was fully impaired. The impact of this impairment was included under “Impairment
of Financial Assets” in the consolidated income statement.
At 2012 year-end, “Loans and Receivables” included EUR 8,840 thousand relating to the
amount deposited in connection with the appeal filed by La Sexta against assessments issued
by the tax authorities relating to the levy on games. At 2013 year-end, this amount had been
transferred to “Current Assets”.
In relation to “Other Derivatives”, in December 2012 the Parent entered into several
agreements with the former shareholders of Gestora de Inversiones Audiovisuales La Sexta,
S.A., including one whereby, in exchange for a fixed market consideration determined at the
date of the agreement and deliverable by Atresmedia Corporación de Medios de Comunicación,
S.A. (premium), the aforementioned counterparty undertook to pay the Parent a variable cash
amount to be determined on the basis of the future economic results of Atresmedia and
payable in 2017. This agreement was amended in February 2014 (see Note 28).
43
At 2013 year-end, the balance of “Other Derivatives” represented the fair value (Level 2) of
the financial instrument at that date. The positive impact thereof amounted to EUR 2,011
thousand and was included under “Net Gain (Loss) due to Changes in the Value of Financial
Instruments at Fair Value” in the consolidated income statement. The market variables that
influence the value of this asset are the market price of the Parent's share, its volatility and its
dividend yield. The Group's estimated results also have an influence. The market price and
historical volatility at 31 December 2013 were used to measure the value of the asset at that
date, and the market consensus at year-end and credit risk (due to application of IFRS 13)
were used to estimate results and the dividend yield.
10. Programme rights
The detail of “Programme Rights” is as follows:
Thousands of euros
2013
2012
Programme rights, net
Rights on external productions
In-house productions and productions in process
Sports broadcasting rights
Write-down of external productions
Advances to suppliers
Total
242,329
178,050
36,456
43,876
3,460
3,214
(33,755)
(19,516)
248,490
205,624
31,543
33,353
280,033
238,977
At 31 December 2013, the Parent had commitments, mainly for the purchase of audiovisual
property rights, amounting to EUR 114,342 thousand (2012: EUR 149,617 thousand). In
addition, the Parent has purchase commitments to distributors, the definitive amount and
price of which will be determined once the programmes are produced and, in certain cases, by
establishing the acquisition price on the basis of box-office takings. In 2013 the best estimate
of these commitments amounted to EUR 80,400 thousand (2012: EUR 12,826 thousand).
It is estimated that inventoriable in-house productions will be amortised in full and
approximately EUR 160,000 thousand of external production rights will be amortised in 2014.
The changes in the write-downs included under “Programme Rights” in the consolidated
balance sheet were as follows (in thousands of euros):
Balance at
31/12/11
Write-downs
(17,801)
Additions
(1,956)
Disposals or
reductions
241
Balance at
31/12/12
(19,516)
Additions
(6,976)
Transfers
(9,509)
Disposals or
reductions
Balance at
2,246
(33,755)
31/12/13
The write-downs recognised arose since it was decided that certain titles would not be
marketable and it was not likely that they would form part of the Parent’s programme
schedule. These write-downs were recognised under “Programme Amortisation and Other
Procurements” in the consolidated income statement.
44
11. Trade and other receivables
The detail of trade and other receivables in the consolidated balance sheets at 31 December
2013 and 2012 is as follows:
Thousands of euros
Trade receivables
2013
2012
184,608
169,908
Receivable from associates and related companies
38,195
46,437
Total trade receivables for sales and services
222,803
216,345
5,792
12,650
5,792
12,650
Other receivables
Total other receivables
The estimated amounts are recognised in the consolidated balance sheet, net of allowances for
estimated bad and doubtful debts, on the basis of prior years' experience and of the Group's
assessment of the current economic climate.
At 31 December 2013, the allowance for doubtful debts amounted to EUR 22,541 thousand
(2012: EUR 30,632 thousand). The provision recognised in 2013 amounted to EUR 797
thousand (2012: EUR 5,429 thousand), and EUR 8,889 thousand of the allowance were used
in the year (2012: EUR 5,626 thousand).
As provided for in the measurement bases disclosed in Note 3 to these consolidated financial
statements, impairment losses are recognised or reversed as a result of valuation adjustments
of trade and other receivables based on their due dates and the equity position of the debtors.
The related write downs and amounts charged to profit or loss are recognised under “Other
Operating Expenses” in the consolidated income statement.
12. Equity
a) Share capital
On 29 October 2012, the Parent Atresmedia Corporación de Medios de Comunicación, S.A.
increased share capital by a nominal amount of EUR 10,965 thousand through the issue of
(i) 13,438,704 shares of EUR 0.75 par value each, of the same class and series as the
shares outstanding prior to the increase but without entitlement to dividends paid out of
the profits generated prior to the date of registration of the merger at the Mercantile
Registry, irrespective of the dividend payment date, and (ii) 1,181,296 shares of EUR 0.75
par value each, of a different class and carrying the same restriction on dividend rights as
the aforementioned shares, although in this case the restriction shall continue to apply for
24 months following the date on which the merger was registered at the Mercantile
Registry.
The aforementioned capital increase, the sole purpose of which was to cater for part of the
share exchange on the merger, was approved by the shareholders at the Company's
Annual General Meeting held on 25 April 2012 on the terms and conditions included in the
draft terms of merger and was conditional upon the obtainment of the related
administrative authorisations.
The new shares were issued at EUR 3.37 each, equal to the closing market price of the
Atresmedia share on 5 October 2012, the date on which the capital increase resolution
became effective. The difference between the issue price and the par value (i.e. EUR 2.62
per share) was treated as a share premium. The total capital increase amounted to EUR
45
49,269 thousand. The capital increase, including both the par value and the share
premium, was fully paid as a result of the transfer en bloc of the assets and liabilities of
the acquiree on the date on which the merger deed was filed at the Madrid Mercantile
Registry (i.e. 31 October 2012).
In accordance with Article 304.2 of the Spanish Limited Liability Companies Law, approved
by Legislative Royal Decree 1/2010, of 2 July, shareholder pre-emption rights were
disapplied on the occasion of this increase.
At 31 December 2013 and 2012, the share capital of the Parent amounted to EUR 169,300
thousand and was represented by 225,732,800 fully subscribed and paid shares of EUR
0.75 par value each, with the same rights except for the restriction on dividend rights
mentioned in Notes 12-a and 12-e.
At the end of 2013 the Parent's shareholder structure was as follows:
% of ownership
2013
Grupo Planeta-de Agostini, S.L.
41.70
Ufa Film und Fernseh, GMBH
19.17
Treasury shares
7.01
Gamp Audiovisual, S.A.*
3.64
Imagina Media Audiovisual, S.L.
Other shareholders
2.85
25.63
Total
100.00
* Gamp Audiovisual, S.A. is an Imagina Group company, which is controlled, within the meaning
of Article 4 of the Spanish Securities Market Law, by the Imagina Group through
MEDIAPRODUCCIÓN, S.L.
The Parent's shares are listed on the Spanish stock market interconnection system and all
carry the same voting and dividend rights, except for the 1,181,296 shares mentioned
above, which will be admitted to trading once 24 months have elapsed following the date
on which the merger was registered at the Mercantile Registry, in accordance with the
draft terms of merger.
There are agreements among the main shareholders that guarantee the Parent’s
shareholder stability, the grant of mutual rights of acquisition on their shares, the
undertaking not to take control of the Parent or to permit a third party to do so, and also
include Group management agreements, as described in the consolidated directors’ report.
For management purposes, the Group treats the equity attributable to the Parent as
capital. The only external requirements to which this capital for management purposes is
subject are those contained in current Spanish corporate law, and there are no other legal
restrictions thereon.
The Group determines the financial resources required with the two-fold objective of
ensuring the Group companies’ capacity to continue operating and maximising profitability
by optimising Group debt and equity. The Group’s financial structure taken as a whole
consists of the equity attributable to the Parent’s shareholders (comprising share capital,
share premium, retained earnings and other items), bank borrowings and cash and cash
equivalents. The Group reviews this structure regularly and, taking into account the costs
and risks associated with each type of funding (debt or equity), takes the appropriate
decisions to achieve the aforementioned objectives.
46
b) Share premium
As indicated in Note 12-a to the consolidated financial statements for 2012, the difference
between the issue price and the par value of the new shares (i.e. EUR 2.62 per share) was
treated as a share premium, amounting to EUR 38,304 thousand, which was fully paid as a
result of the transfer en bloc of the assets and liabilities of Gestora de Inversiones
Audiovisuales La Sexta, S.A. (see Note 12-a).
c) Restricted reserves
Legal reserve
Under the Spanish Limited Liability Companies Law, the Company must transfer 10% of
net profit for each year to the legal reserve until the balance of this reserve reaches at
least 20% of the share capital.
The legal reserve can be used to increase capital provided that the remaining reserve
balance does not fall below 10% of the increased share capital amount. Otherwise, until
the legal reserve exceeds 20% of share capital, it can only be used to offset losses,
provided that sufficient other reserves are not available for this purpose.
The shareholders at the Annual General Meeting of the Parent held on 24 April 2013
approved, among other resolutions, the proposed distribution of the profit for 2012,
whereby EUR 2,193 thousand were transferred to the legal reserve. With this contribution
the Parent’s legal reserve reached the legally stipulated level.
Reserve for retired capital
As a result of the capital reduction made in 2006, a reserve of EUR 8,333 thousand was
established, equal to the par value of the retired shares, which may only be used if the
same requirements as those for the reduction of share capital are met, pursuant to Article
335-c of the Spanish Limited Liability Companies Law.
Other restricted reserves
Restricted reserves include an amount of EUR 281 thousand which is restricted as to its
use since it corresponds to the “Reserve for the Adjustment of Share Capital to Euros”.
“Equity - Retained Earnings” in the consolidated balance sheet includes a restricted
reserve arising from the subsidiary Uniprex, S.A. (Sole-Shareholder Company). This is a
reserve for goodwill, amounting to EUR 19,079 thousand, recognised by appropriating
from profit for the year an amount equal to 5% of the goodwill on the asset side of the
subsidiary's balance sheet until the full amount of the reserve is reached, as required by
Spanish corporate legislation.
d) Contributions to consolidated profit by company
The detail of the contributions to the consolidated profit for the year of the fully
consolidated companies and the companies accounted for using the equity method at 31
December 2013 and 2012 is as follows:
47
Thousands of euros
2013
Atresmedia Corporación de Medios
de Comunicación subgroup
33,655
47,950
8,412
(12,855)
Uniprex subgroup
Other
TOTAL
2012
3,987
(3,186)
46,054
31,909
The method used to determine the contribution to consolidated profit maintains the
transactions between Group companies that are necessary for the conduct of their
business activities under normal market conditions.
e)
Treasury shares
The changes in “Treasury Shares” in 2013 and 2012 were as follows:
Number of shares
At beginning of year
Purchases
Delivery of shares (Note 4)
At end of year
2013
2012
15,818,704
12,630,728
-
4,369,272
-
(1,181,296)
15,818,704
15,818,704
At 31 December 2013, the shares of the Parent held by it represented 7.01% of the
Parent's share capital and totalled 15,818,704 shares, with a value of EUR 99,453
thousand and an average acquisition price of EUR 6.29 per share.
f)
The Annual General Meeting held on 24 March 2010 approved a resolution authorising the
Parent to acquire treasury shares provided that they did not exceed the maximum legal
limit permitted by law at any given time. This limit was established at 10% of subscribed
share capital by Law 3/2009, of 3 April, on structural changes to companies.
Dividends
At the Annual General Meeting held on 24 April 2013, the shareholders of the Parent
approved the proposed distribution of profit for 2012, whereby EUR 21,352 thousand,
relating to the interim dividend paid out of 2012 profit on 10 December 2012, were
allocated to the payment of dividends (see Note 3-s).
g) Non-controlling interests
“Non-Controlling Interests” relates to the non-controlling interests of Uniprex Televisión
Digital Terrestre de Andalucía, S.L. and Atresmedia Foto, S.L., which at 31 December 2013
held 25.8% and 10%, respectively, of the shares of these companies, the amounts of
which are not significant.
48
h) Other equity instruments
As indicated in Note 4, pursuant to the agreement to merge the two companies, the
Parent (Atresmedia Corporación de Medios de Comunicación, S.A.) and Gestora de
Inversiones Audiovisuales La Sexta, S.A. agreed to grant La Sexta shareholders an
additional ownership interest of 15,818,704 Atresmedia Corporación de Medios de
Comunicación, S.A. shares representing 7% of its share capital, although the delivery
thereof is conditional upon the consolidated earnings of Atresmedia from 2012 to 2016.
The delivery of these additional shares will be carried out in full through treasury shares of
the Parent and, therefore, does not constitute an additional issue.
“Other Equity Instruments” includes the measurement of the aforementioned
consideration at the fair value of the shares whose delivery was deferred, as discussed in
Note 4.
On 19 February 2014 the Parent entered into a partial novation of this agreement,
modifying the content thereof with respect to two of the three former shareholders of La
Sexta (see Note 28).
13. Provisions and other liabilities
The changes in the short- and long-term provisions in 2013 and 2012 were as follows:
Thousands of euros
Balance at
31/12/12
Amounts
used and
payments
Provisions
Excessive
provisions
Balance at
31/12/13
Transfers
Operating provisions
35,715
49,928
(50,437)
(1,000)
-
34,206
Provisions for litigation
24,809
6,556
(1,651)
(2,212)
-
27,502
Other provisions
18,668
3,985
(514)
(1,915)
(6,582)
13,642
79,192
60,469
(52,602)
(5,127)
(6,582)
75,350
Total provisions
Thousands of euros
Inclusions
Balance at
due to merger Provisions
31/12/11
(Note 4)
Amounts
used and
payments
Excessive
provisions
Changes in
Balance at
the scope of
31/12/12
consolidation
Operating provisions
40,262
-
35,676
(33,776)
(6,447)
-
35,715
Provisions for litigation
31,258
-
3,447
(9,512)
(344)
(40)
24,809
2,081
14,079
3,664
(1,302)
(206)
352
18,668
73,601
14,079
42,787
(44,590)
(6,997)
312
79,192
Other provisions
Total provisions
Short- and long-term provisions in the consolidated balance sheet include, inter alia, operating
provisions relating basically to volume rebates paid yearly which accrue over the course of the
year, the period additions, use and excessive amounts of which are recognised under
“Revenue” in the consolidated income statement.
49
“Provisions for litigation” relates mainly to the best estimate in this connection. The payment
schedule related to litigation is based on court judgments and is therefore difficult to estimate.
“Other Provisions” relates mainly to estimated future payments. The period additions, use and
excessive amounts of both these types of provisions are recognised under “Other Operating
Expenses” in the consolidated income statement.
As regards the changes in provisions in 2012, the inclusions due to merger related to the
recognition of the liabilities assumed at the acquisition date as a result of the business
combination described in Note 4.
In 2012 the tax authorities issued assessments amounting to EUR 6,903 thousand, in relation
to the levy on games of luck, betting or chance, raffles and tombolas, against the absorbed
company Gestora de Inversiones Audiovisuales La Sexta, S.A. In this respect, the merger
agreements established that La Sexta shareholders must indemnify Atresmedia Corporación de
Medios de Comunicación, S.A. for any economic loss that could arise from these assessments.
Also, “Other Non-Current Liabilities” relates mainly to the amounts maturing at more than
twelve months of the payables to suppliers of external production rights; these maturities are
set on the basis of the availability periods of those rights. These payables do not bear interest
and their fair value amounts to approximately EUR 58 million.
The detail, by maturity, of the items included under “Other Non-Current Liabilities” is as
follows:
Thousands of euros
Trade payables
Other non-current payables
Other non-current liabilities
2015
2016
52,908
807
2019 and
subsequent
years
37
523
63,658
2017
9,383
2018
465
10
10
33
5
53,373
9,393
817
70
5
Total
63,135
14. Bank borrowings
On 2 August 2013, the Parent Atresmedia Corporación de Medios de Comunicación, S.A.
arranged syndicated financing of EUR 270,000 thousand in order to repay the existing bilateral
credit facilities, meet the obligations included in the financial structure assumed as a result of
the merger by absorption of Gestora de Inversiones Audiovisuales La Sexta, S.A. and to
satisfy the Parent's general cash needs.
74% of the total amount is a four-year loan with partial repayments and the remaining 26% is
a revolving credit facility maturing at four years. Nine banks with which the Parent has regular
dealings participated in the transaction.
The applicable interest rate is Euribor plus a market spread and the transaction is subject to
compliance with financial covenants habitually used in transactions of this kind, relating to the
debt to EBITDA ratio and the interest coverage ratio. This transaction was guaranteed by a
security interest in all the treasury shares. Under the agreement reached with the former
shareholders of La Sexta (see Note 28), this guarantee was partially released and,
consequently, 1,145,594 shares of the Parent remain pledged as security. The fair value of
this financing approximates its carrying amount.
The detail of the items included under “Bank Borrowings” at 31 December 2013 and 2012 is
as follows:
50
2013
Thousands of euros
2012
Short-term
Long-term
balance
balance
drawn down drawn down
Limit
Short-term Long-term
balance
balance
drawn down
drawn
Limit
270,000
2,671
200,129
-
-
-
Bank loans
-
-
-
6,452
6,226
226
Credit facilities
-
-
-
256,300
130,479
-
Interest payable
-
3,918
-
-
964
-
270,000
6,589
200,129
262,752
137,669
226
Syndicated financing
Total
The detail, by maturity, of the long-term balances drawn down is as follows:
Thousands of euros
Syndicated financing
2015
36,350
2016
2017
62,602
101,177
Total
200,129
15. Derivative financial instruments and other financial liabilities
a) Hedging derivatives
Foreign currency hedges
The Group uses currency derivatives to hedge significant future transactions and cash flows.
The instruments purchased are denominated in US dollars.
The Group applies hedge accounting and documents the hedging relationships and measures
their effectiveness as required by IAS 39. All these relationships are cash flow hedges of firm
commitments, in which the risk hedged is the exposure to the EUR/USD forward exchange
rate, which results in variability in the cash flows payable in euros for broadcasting rights.
For 2013, due to the commencement of the period in which the broadcasting rights underlying
the hedge will be in force, EUR 52 thousand were capitalised to inventories from equity. For
2012 the amount deducted from equity and recognised as a deduction from inventories was
EUR 303 thousand. The changes in the fair value of the derivatives arranged by the Group
depend on the changes in the EUR/USD exchange rate and on the euro interest rate curves.
At 31 December 2013, the Group had arranged instruments to hedge its foreign currency
asset and liability positions amounting to USD 89,863 thousand, at a weighted average
exchange rate of EUR 1.3117/USD 1. At 31 December 2012, the Group had arranged hedging
instruments amounting to USD 89,611 thousand, at a weighted average exchange rate of EUR
1.3058/USD 1.
At the end of 2013 and 2012, the total amounts of the outstanding forward currency purchase
contracts entered into by the Group were as follows (the maturity dates reflect the time when
the hedged items will be recognised and when the value of the hedging derivatives in equity
will be adjusted as an increase in/reduction of inventories):
51
Fair value
(thousands of euros)
2013
Currency forwards
Currency forwards
Currency forwards
Classification
Type
Foreign currency
hedge
Foreign currency
hedge
Foreign currency
hedge
Purchase of
USD
Purchase of
USD
Purchase of
USD
Maturity
Amount
arranged
(thousands
of euros)
Ineffective
portion
recognised in
profit or loss
(thousands
of euros)
Assets
Liabilities
2014
62,520
-
698
3,025
2015
7,313
-
-
189
2016
8,053
-
-
18
Fair value
(thousands of euros)
2012
Currency forwards
Currency forwards
Classification
Type
Foreign currency
hedge
Foreign currency
hedge
Purchase of
USD
Purchase of
USD
Maturity
Amount
arranged
(thousands
of euros)
Ineffective
portion
recognised in
profit or loss
(thousands
of euros)
Assets
Liabilities
2013
60,575
-
1,245
485
2014
8,053
-
-
197
At 31 December 2013, the estimated fair value of the Group's foreign currency derivatives,
which are designated and effective as cash flow hedges, represented a financial asset of EUR
698 thousand and a financial liability of EUR 3,232 thousand (2012: asset of EUR 1,245
thousand and liability of EUR 682 thousand). This amount was deferred and recognised in
equity, taking into account the tax effect.
The valuation method consists of estimating the present value of the future cash flows that will
arise under the terms and conditions arranged by the parties for the derivative instrument.
The spot price is taken to be the reference exchange rate of the European Central Bank on 31
December 2013, the swap points (offer/bid) and the interest rates prevailing at the valuation
date.
The foreign currency derivatives have been arranged in such a way that they are totally
effective and, therefore, they are recognised in full in equity until inventories are recognised.
The sensitivity analysis indicates that positive or negative changes of 10% in the spot
EUR/USD exchange rate would give rise to changes of approximately EUR 14 million in the fair
value of the foreign currency derivatives in 2013 (2012: EUR 9 million). Increases in the value
of the euro (depreciation of the US dollar) would increase negative values while decreases in
the value of the euro would increase positive values.
Financial instruments measured at fair value must be classified as levels 1 to 3, based on the
degree of verification of their fair value. Therefore, fair values derived from quoted prices on
active markets will be classified as level 1. Those derived from external information other than
quoted prices will be classified as level 2. And values obtained using valuation techniques
including data that are not observable in active markets will be classified as level 3. The
Group’s derivative instruments detailed in this section on “Foreign Currency Hedges” would be
classified as level 2.
52
Interest rate hedges
In August 2013 the Parent arranged interest rate swaps in order to fix the finance cost arising
from the floating rates applicable to each of the tranches of the syndicated financing arranged
at that date. These swaps expire in August 2017 and the hedged amount is EUR 111,209
thousand, with an fixed interest rate of 1.01%. At 31 December 2013, the fair value of the
swaps amounted to EUR 5 thousand and was recognised as a financial asset.
b) Other current and non-current financial liabilities
The main item under “Other Current Financial Liabilities” relates mainly to the account payable
by Gestora de Inversiones Audiovisuales La Sexta, S.A. to its shareholders, which was
assumed by the Parent in the merger transaction carried out in 2012. This account payable
amounted to EUR 34,687 thousand at 31 December 2013 and bears interest a floating rate
tied to Euribor plus a market spread (see Note 23).
At 31 December 2012, a portion of this debt was included under “Non-Current Financial
Liabilities”.
16. Trade and other payables
The detail of trade and other payables in the consolidated balance sheets at 31 December
2013 and 2012 is as follows:
Thousands of euros
Payable to suppliers
Payable to associates and related parties (Note 23)
Total payable to suppliers
2013
2012
353,236
348,250
67,927
127,063
421,163
475,313
Other accounts payable to public authorities (Note 22-d)
15,740
13,598
Other non-trade payables
18,330
22,272
Customer advances
Total other payables
3,649
3,906
37,719
39,776
The maximum payment period applicable to the Parent under Law 3/2004, of 29 December,
on combating late payment in commercial transactions and pursuant to the transitional
provisions contained in Law 15/2010, of 5 July, was 60 days in 2013 (2012: 75 days).
The detail of the amounts paid and payable at 31 December 2013 is as follows (in thousands
of euros):
Amount
Within the maximum payment period
Remainder
Total payments made in 2013
Weighted average period of late payment (in days)
Payments at year-end not made in the maximum payment period
230,546
371,564
602,110
47
38,355
%
38%
62%
53
The detail of the amounts paid and payable at 31 December 2012 is as follows (in thousands
of euros):
Amount
Within the maximum payment period
Remainder
Total payments made in 2012
Weighted average period of late payment (in days)
Payments at year-end not made in the maximum payment period
426,283
78,232
504,515
50
18,838
%
84%
16%
Weighted average period of late payment was calculated as the quotient whose numerator is
the result of multiplying the payments made to suppliers outside the maximum payment
period by the number of days of late payment and whose denominator is the total amount of
the payments made in the year outside the maximum payment period.
17. Other guarantee commitments to third parties and contingent assets and liabilities
a) Guarantee commitments to third parties
The detail of the guarantees provided by the Group to banks for third- and related parties is as
follows:
Thousands of euros
Group companies and associates
Other guarantees
Total
2013
2012
5,466
6,465
13,868
14,009
19,334
20,474
The Parent’s directors consider that any liabilities not foreseen at 31 December 2013 that
might arise from the guarantees provided would not be material.
b) Contingent liabilities
At 31 December 2013, certain civil, labour, criminal and administrative lawsuits had been filed
against the Group companies, which were taken into account in estimating potential
contingent liabilities. Noteworthy, in view of their amount, were the lawsuits with certain
collection societies.
The directors of the Parent and its legal advisers do not expect any material liabilities
additional to those already recorded to arise from the outcome of the lawsuits in progress.
c)
Litigation
In 2013 there were no significant changes in lawsuits and no new litigation proceedings
deemed significant were brought against the Group, except as indicated in Note 1 in respect of
the decision of the Supreme Court.
54
18. Risk management policy
The Group’s financial risk management is centralised in its Financial Department, which has
established the mechanisms required to control exposure to interest rate and exchange rate
fluctuations and credit and liquidity risk. The main financial risks affecting the Group are as
follows:
a) Credit risk
The Group does not have significant credit risk since the average customer collection period is
very short and guarantees are required for deferred payment sales. Cash placements are
made and derivative instruments are arranged with institutions of recognised solvency.
The advertising contract terms enable bank guarantees to be demanded prior to the launch of
advertising campaigns. Also, it should be noted that the Group does not have a significant
concentration of credit risk exposure to third parties and no noteworthy incidents arose in
2013. The percentage of past-due receivables at 31 December 2013 was 6.6%.
The Corporate Governance Report includes an extensive summary of the risk control systems.
b) Liquidity risk
The Group’s liquidity policy is to arrange credit lines and short-term investments that are
sufficient to support its financing needs, on the basis of expected business performance. All of
the foregoing are tied to floating interest rates (see Note 14).
c) Market risk (including interest rate and foreign currency risk)
Both the Group’s cash and its bank borrowings are exposed to interest rate risk, which could
have an adverse effect on financial profit or loss and cash flows. The Group's financing is
arranged at interest rates tied to Euribor. In view of the bank borrowings at 31 December
2013, changes of 100 basis points in the total cost borne would give rise to a +/- EUR 2
million change in the debt at that date. To mitigate this risk, the Parent has arranged interest
rate swaps to limit the finance costs arising from its floating-rate borrowings (see Note 15).
Foreign currency risk is concentrated at the Parent and relates basically to the payments to be
made in international markets to acquire broadcasting rights. In order to mitigate foreign
currency risk, the Parent arranges hedging instruments, mainly currency forwards, to hedge
its exposure to the EUR/USD forward exchange rate. Sensitivity to changes in the exchange
rate is described in Note 15.
19. Income and expenses
a) Operating income
The breakdown, by line of business and geographical market, of the Group's revenue for 2013
and 2012 is as follows:
55
Thousands of euros
Advertising sales
2013
2012
800,482
Other sales
717,745
28,116
21,864
Trade and other discounts
(32,824)
(27,035)
Total
795,774
712,574
In 2013 and 2012 transactions exceeding 10% of total operating income were performed with
three customers (media buyers grouping together advertising orders of various advertisers),
which represented 17%, 16% and 13% (individually) and 46% (as an aggregate) of total
advertising sales.
The breakdown, by geographical market, of the Group's revenue for 2013 and 2012 is as
follows:
Thousands of euros
2013
Spain
2012
791,772
710,283
Other EU countries
2,345
1,495
Other non-EU countries
1,657
796
795,774
712,574
Total
b) Programme amortisation and other procurements
The detail of “Programme Amortisation and Other Procurements” is as follows:
Thousands of euros
2013
2012
External production services
221,961
225,051
Broadcasting of in-house productions
208,767
241,199
Programme broadcasting rights
163,338
140,271
Live broadcasting rights
48,513
43,589
Performances and contributions of entertainers
11,378
11,073
6,102
6,480
Other amortisation
-
347
(211,572)
(261,542)
448,487
406,468
Other purchases
Addition to programme rights
Total
“Addition to Programme Rights” reflects the expenses incurred in making programmes. In
accordance with the Parent’s procedures, these expenses are capitalised and subsequently
amortised in accordance with the policies described in Note 3-f.
c) Staff costs
The detail of “Staff Costs” is as follows:
Thousands of euros
2013
2012
Wages and salaries
90,236
100,467
Social security costs
17,805
17,400
2,839
2,431
110,880
120,298
Other staff costs
Total
56
In 2013 remuneration in the form of salaries and life insurance premiums of senior executives
who are not directors amounted to EUR 6,957 thousand and EUR 31 thousand, respectively
(2012: EUR 5,376 thousand and EUR 29 thousand, respectively).
The Parent has not granted any loans or advances to its senior executives and it does not have
any supplementary pension, retirement bonus or special indemnity obligations to them in their
capacity as executives.
The average number of Group employees in 2013, by gender and professional category, was
as follows:
2013
Professional category
Women
Senior executives
Managers
Men
2
12
74
165
Line personnel
525
601
Clerical staff
119
25
Other
120
80
Total
840
883
The number of Group employees at 2013 year-end, by gender and professional category, was
as follows:
2013
Professional category
Women
Senior executives
Managers
Men
2
12
72
171
Line personnel
537
615
Clerical staff
121
24
Other
134
89
Total
866
911
The number of senior executives includes two directors (both men).
The detail, by professional category, of the average number of employees in 2013 with a
disability of more than 33% is as follows:
Professional category
Managers
2013
2
Line personnel
17
Clerical staff
14
Other
3
Total
36
57
d) Other operating expenses
The detail of “Other Operating Expenses” in the consolidated income statement is as
follows:
Thousands of euros
2013
2012
Operating leases and charges
71,042
54,081
Work performed by other companies
41,179
50,484
Copyrights
30,990
16,883
Communications
10,765
8,224
Advertising and publicity
Other overheads
Total
6,386
5,838
29,907
39,401
190,269
174,911
“Operating Leases and Charges” in the accompanying consolidated income statement
includes mainly the charge for the distribution of the audiovisual signal and the television
operators’ contribution to the financing of Corporación RTVE.
e) Other disclosures
The fees for audit services provided to the various companies composing the Atresmedia
Corporación de Medios de Comunicación, S.A. and Subsidiaries Group by the principal
auditor, Deloitte, S.L., and by other entities related thereto in 2013 amounted to EUR 247
thousand (2012: EUR 281 thousand). The fees for audit-related services in 2013
amounted to EUR 4 thousand (2012: EUR 1 thousand).
Also, the fees for other professional services provided to the various Group companies by
the principal auditor and by other entities related thereto amounted to EUR 36 thousand
(2012: EUR 178 thousand). No tax advisory services were provided in 2013 or in 2012.
The fees for the audit services provided by the auditor of the subsidiaries included in the
merger amounted to EUR 10 thousand in 2012.
The Annual Corporate Governance Report includes a description of the work of the Audit
Committee and an explanation of the manner in which the objectivity and independence of
the auditor is guaranteed when the auditors provide non-audit services.
20. Other gains/losses
a) Net gain (loss) due to changes in the value of financial instruments at fair value
“Net Gain (Loss) due to Changes in the Value of Financial Instruments at Fair Value” in the
consolidated income statement includes mainly the net gain (loss) due to the change in fair
value of the hedging instruments detailed in Note 15 to these consolidated financial
statements and the gain on the held-for-trading financial asset at year-end (see Note 9).
58
b) Exchange differences
“Exchange Differences” includes the exchange differences arising from the Group's commercial
transactions, relating mainly to the purchase of audiovisual productions in foreign currencies.
c) Financial loss
“Financial Loss” in the consolidated income statement for 2013 includes mainly the interest
expense on bank borrowings and on the debt payable to the former shareholders of Gestora
de Inversiones Audiovisuales La Sexta, S.A. At 31 December 2013, finance costs amounted to
EUR 16,436 thousand and finance income amounted to EUR 759 thousand (31 December
2012: EUR 10,078 thousand and EUR 243 thousand, respectively).
d) Impairment and gains or losses on disposals of financial assets
“Impairment of Financial Assets” and “Gains (Losses) on Disposals of Financial Assets” in the
consolidated income statement include, on the one hand, the impairment losses recognised in
the year on financial assets, which were determined on the basis of an analysis of the
recoverability of these investments, including investments in companies accounted for using
the equity method, and, on the other hand, the net gains or losses arising from the disposal of
these assets and assets held for sale.
At 31 December 2013, the amount included under “Impairment of Financial Assets” related to
the impairment of the investment in Audiovisual Española 2000, S.A.
In 2012 the net losses on disposals of financial assets included the impact of the transfer, to
financial assets classified as held for sale, of the investments in Unipublic, S.A. and its
subsidiary Organizaciones Deportivas y Culturales de Unipublic, S.A. (Sole-Shareholder
Company) and other exclusions from the scope of consolidation (see Notes 2-b and 8).
21. Business and geographical segments
Basis of segmentation
Segment reporting is structured on the basis of the Group's various business lines at the end
of 2013 and 2012, taking into account, on the one hand, the nature of the services provided
and, on the other, the customer segments targeted by them.
In 2013 and 2012 the Group focused its business activities on the following major business
lines in Spain:
ƒ
Television
ƒ
Radio
ƒ
Other businesses, the most noteworthy of which are event management and
audiovisual production
59
Thousands of euros
INCOME STATEMENT
Television
2013
Radio
2012
2013
Adjustments and
eliminations between
segments
Other businesses
2012
2013
2012
2013
2012
Atresmedia
consolidated
2013
2012
Revenue and other income, net
728,699
638,813
80,549
82,773
28,289
28,008
(7,747)
(8,431)
829,790
741,163
Operating expenses (excluding
depreciation and amortisation
676,605
611,432
63,588
71,763
17,190
26,913
(7,747)
(8,431)
749,636
701,677
GROSS PROFIT FROM
OPERATIONS
52,094
27,381
16,961
11,010
11,099
1,095
-
-
80,154
39,486
14,434
13,469
2,651
28,383
190
185
-
-
17,275
42,037
-
19,536
-
-
-
-
-
-
-
19,536
37,660
33,448
14,310
(17,373)
10,909
910
-
-
62,879
16,985
Net gain (loss) due to changes in
the value of financial instruments
at fair value
(952)
4,931
-
-
-
-
-
-
(952)
4,931
Exchange differences
6,475
4,089
-
-
(59)
(12)
-
-
6,416
4,077
Financial profit (loss)
(10,268)
(8,643)
(4,209)
4
(1,200)
(1,196)
-
-
(15,677)
(9,835)
Impairment of financial assets
-
-
-
-
(3,786)
-
-
-
(3,786)
-
Gains (losses) on disposals of
financial assets
-
(832)
-
(3)
-
(2,339)
-
-
-
(3,174)
13
(32)
-
-
(1,086)
(1,048)
-
-
(1,073)
(1,080)
32,928
32,961
10,101
(17,372)
4,778
(3,685)
-
-
47,807
11,904
(744)
(16,122)
1,814
(4,444)
683
561
-
-
1,753
(20,005)
33,672
49,083
8,287
(12,928)
4,095
(4,246)
-
-
46,054
31,909
Depreciation and amortisation
charge, impairment and gains or
losses on disposals of non-current
Gains on bargain purchases
arising on business combinations
PROFIT (LOSS) FROM
OPERATIONS
Share of results of associates and
joint ventures accounted for using
the equity method
PROFIT (LOSS) BEFORE TAX
Income tax
PROFIT (LOSS) AFTER TAX
Thousands of euros
BALANCE SHEET
Television
2013
Radio
2012
Adjustments and
eliminations between
segments
Other businesses
2013
2012
2013
2012
2013
2012
Atresmedia
consolidated
2013
2012
ASSETS
Segment assets
Investments accounted for
using the equity method
TOTAL ASSETS
1,381,177
1,306,271
222,838
229,199
111,601
166,078
(455,166)
(527,846)
1,260,450
1,173,703
130
86
-
-
416
-
-
-
546
86
1,381,307
1,306,357
222,838
229,199
112,017
166,079
(455,166)
(527,846)
1,260,996
1,173,789
1,381,307
1,306,357
222,838
229,199
112,017
166,079
(455,166)
(527,846)
1,260,996
1,173,789
1,381,307
1,306,357
222,838
229,199
112,017
166,079
(455,166)
(527,846)
1,260,996
1,173,789
EQUITY AND LIABILITIES
Segment liabilities
TOTAL EQUITY AND
LIABILITIES
60
22. Tax matters
a) Consolidated tax group
Pursuant to current legislation, the consolidated tax group includes Atresmedia Corporación de
Medios de Comunicación, S.A., as the Parent, and the Spanish subsidiaries that meet the
requirements provided for in Spanish legislation regulating the taxation of the consolidated
profits of corporate groups (in which an ownership interest of more than 75% is held).
The Group's other subsidiaries file individual tax returns in accordance with the tax legislation
in force in each country.
Pursuant to Spanish Corporation Tax Law 43/1995, of 27 December, on 26 December 2000,
Atresmedia Corporación de Medios de Comunicación, S.A. notified the Madrid tax authorities of
its decision to file consolidated income tax returns. Application of the consolidated tax regime
shall be considered indefinite provided that the requirements established in the current Article
67 of the Consolidated Spanish Corporation Tax Law are met and the Group does not opt to
cease to apply the regime. The filing of consolidated tax returns gives rise to reciprocal intraGroup balances, due to the offset of the losses incurred by certain companies against the
profit earned by other Group companies.
On 16 December 2011, the joint merger agreement entered into on 30 June 2011 was
executed in a public deed; under this agreement, Publicidad 3, S.A.U. absorbed Antena de
Radiodifusión, S.A.U., Medipress Valencia, S.A.U., Canal Radio Baleares, S.L.U., Radio Media
Aragón, S.L.U., Canal Radio Madrid, S.L.U., Canal Radio Valencia, S.L.U. and Uniprex, S.A.U.,
which simultaneously and in the same act absorbed Radio Noticias Noventa, S.A.U., Radio
Sistemas Radiofónicos Cinco, S.L.U. and Rkor Radio, S.L.U. in a preliminary phase.
The resolution to change the resulting company's name to Uniprex, S.A.U. is contained in the
aforementioned deed.
Consequently, the new company Uniprex, S.A.U. acquired the assets and liabilities of the
absorbed companies, which were dissolved without liquidation, in accordance with their
balance sheets, whose assets and liabilities were transferred en bloc to the absorbing
company.
The merger goodwill, which at 16 December 2011 amounted to EUR 99,137 thousand for tax
purposes (comprising EUR 5,599 thousand of Rkor Radio, EUR 1,360 thousand of Medipress
Valencia, EUR 8,591 thousand of Antena de Radiodifusión and EUR 83,587 thousand of
Uniprex) may be amortised at an annual rate of 1% in 2012 and 2013, as defined in Article
26.1.3. of Royal Decree-Law 20/2012, of 13 July, introducing measures to ensure budgetary
stability and foster competitiveness, and at a rate of 5% from 2014 onwards, regardless of its
recognition for accounting purposes. This amortisation is deductible for tax purposes. The
merger goodwill for tax purposes does not coincide with that recognised for accounting
purposes (see Note 5).
On 5 June 2009, the public deed was executed of the agreement for the merger by absorption
of Radio Tormes, S.A. (Sole-Shareholder Company), Radio Alamedilla, S.A. (Sole-Shareholder
Company), Compañía Tres Mil Ochocientos, S.L. (Sole-Shareholder Company), La Veu de
LLeida, S.L. (Sole-Shareholder Company), Grupo Universal de Emisoras Radio Amanecer, S.A.
(Sole-Shareholder Company), Ondadit, S.L. (Sole-Shareholder Company) and Unión Ibérica de
Radio, S.A. (Sole-Shareholder Company) into the sole shareholder Uniprex, S.A. (SoleShareholder Company) through the dissolution without liquidation of the absorbed companies
61
and the transfer en bloc of their assets and liabilities to Uniprex, S.A. (Sole-Shareholder
Company), the absorbing company, which acquired them by universal succession and was
subrogated to all the rights and obligations of the absorbed companies, as stipulated in Article
233 of the Spanish Public Limited Liability Companies Law. The date from which the
transactions of the absorbed companies are considered to have been performed for accounting
and tax purposes by the absorbing company was taken to be 1 January 2009.
The merger gave rise to the merger goodwill shown in Note 5, which differs from the merger
goodwill for tax purposes calculated and amortised as provided for in Article 89.3 of the
Consolidated Spanish Corporation Tax Law.
On 31 October 2012, the merger by absorption of Gestora de Inversiones Audiovisuales La
Sexta ("La Sexta") into Antena 3 de Televisión was registered at the Mercantile Registry of
Madrid.
As a result of the merger, Antena 3 de Televisión acquired all the assets and liabilities of La
Sexta by universal succession and was subrogated to all the rights and obligations of the
absorbed company.
The merger became effective for accounting purposes on 5 October 2012.
The Company opted to avail itself of the special tax regime for mergers, spin-offs, asset
contributions and security exchanges provided in Title VII, Chapter VIII of the Consolidated
Spanish Corporation Tax Law approved by Legislative Royal Decree 4/2004, of 5 March.
In the process of allocating the price of the business combination to assets and liabilities, the
La Sexta trademark and the La Sexta multiplex operating licence were identified. The
trademark will be amortised for accounting purposes over 20 years and the licence is
considered to have an indefinite useful life.
On 8 November 2013 the merger, whereby Estaciones Radiofónicas de Aragón, S.A. (SoleShareholder Company), Ipar Onda, S.A. (Sole-Shareholder Company), Onda Cero, S.A. (SoleShareholder Company) and Radio Media Galicia, S.L. (Sole-Shareholder Company) were
absorbed by Uniprex, S.A. (Sole-Shareholder Company) and dissolved without liquidation, was
executed in a public deed, which also reflected the approval of the balance sheet for the year
ended 31 December 2012 as the merger balance sheet.
Merger goodwill for tax purposes amounted to EUR 555 thousand (EUR 260 thousand of Ipar
Onda, S.A. and EUR 295 thousand of Radio Media Galicia, S.L.) and is being amortised at an
annual rate of 5%, regardless of the rate at which the related amortisation is charged to profit
or loss for accounting purposes. This amortisation is deductible for tax purposes (see Note 5).
62
b) Reconciliation of the accounting profit to the income tax expense
The reconciliation of the accounting profit to the income tax expense is as follows:
Thousands of euros
Consolidated profit before tax
2013
2012
47,807
11,904
7,312
(13,179)
(4,029)
(15)
Adjusted profit (loss)
51,090
(1,290)
Tax rate
30.00%
30.00%
Permanent differences
Tax losses incurred prior to the formation of the tax
group used in 2013
Adjusted profit (loss) multiplied by tax rate
Tax credits
Current income tax expense (benefit)
Deferred tax expense
Income tax adjustment
Total tax expense (benefit)
Effective tax rate
15,327
(387)
(13,198)
(18,944)
2,129
(19,331)
(87)
(22)
(289)
(652)
1,753
(20,005)
3.67%
(168.05%)
The 2013 permanent differences include mainly negative consolidation differences (EUR 1,038
thousand) and, with a positive sign, non-deductible impairment losses on equity instruments
(EUR 6,388 thousand), other non-deductible expenses (EUR 1,153 thousand) and donations
(EUR 809 thousand).
The negative consolidation differences arise from changes in the scope of consolidation (- EUR
202 thousand), the share of results of companies accounted for using the equity method (EUR 1,073 thousand), increased amortisation of the trademark under IFRSs (- EUR 289
thousand) and accounting elimination differences (+ EUR 2,602 thousand).
The tax credits indicated in the table above were earned by the Group in 2013 for investment
in audiovisual production and donations to not-for-profit organisations (EUR 12,915 thousand
and EUR 283 thousand, respectively).
“Income Tax Adjustment” includes the difference between the projected income tax expense
recognised in 2012 and the effective tax return filed.
The deferred tax expense relates to the tax effect of the deferred tax liability under IFRSs (see
Note 22-e).
63
c) Reconciliation of the accounting profit to the taxable profit
The reconciliation of the accounting profit to the taxable profit for income tax purposes for
2013 and 2012 is as follows:
Thousands of euros
Accounting profit after tax
2013
2012
46,054
31,887
Income tax
1,753
(19,983)
Permanent differences –
7,312
(13,179)
Temporary differences –
(18,751)
8,083
Offset of prior years' tax losses
(5,172)
(15)
Taxable profit
31,196
6,793
Tax rate
30.00%
30.00%
9,359
2,038
Gross tax payable
Tax credits used in 2013
(3,002)
(640)
2013 tax prepayments
(7,004)
(1,964)
(647)
(566)
Tax payable (refundable)
The 2013 temporary differences include additions of EUR 24,038 thousand and reductions of
EUR 42,789 thousand (see Note 22-e).
Additions break down into deferred tax assets of EUR 23,247 thousand and deferred tax
liabilities of EUR 791 thousand, while reductions include deferred tax assets of EUR 41,550
thousand and deferred tax liabilities of EUR 1,239 thousand.
d) Tax receivables and payables
The detail of the tax receivables and payables at 31 December 2013 and 2012 is as follows:
Thousands of euros
2013
2012
NON-CURRENT ASSETS
Deferred tax assets (Note 22-e)
Tax loss carryforwards (Note 22-g)
Unused tax credits and tax relief
20,456
26,043
221,363
221,793
85,364
74,703
327,183
322,539
Income tax refundable
911
1,188
2013 income tax refundable (Note 22-c)
647
566
CURRENT ASSETS
Other tax receivables
VAT refundable
Total tax receivables
26
4
2,906
7,107
4,490
8,865
331,673
331,404
31,345
31,488
OTHER NON-CURRENT LIABILITIES
Deferred tax liabilities (Note 22-e)
CURRENT LIABILITIES
Tax withholdings payable
4,044
4,236
Accrued social security taxes payable
1,881
1,681
VAT payable
Total tax payables
9,815
7,681
15,740
13,598
47,085
45,086
64
On the basis of the timing estimate of future profits made by the Parent’s directors for the
offset and use of these tax items, only EUR 7,332 thousand were considered to be recoverable
in the tax return for the coming year, EUR 2,248 thousand of which relate to deferred taxes,
EUR 2,179 thousand to unused tax credits and tax relief and EUR 2,905 thousand to tax loss
carryforwards.
“Other Tax Receivables” and “VAT Refundable” are included in the consolidated balance sheet
under “Other Receivables”. Also, the items composing “Current Liabilities” are included in the
consolidated balance sheet under “Other Payables”.
At 31 December 2013, the Group had recognised unused tax credits amounting to EUR 85,364
thousand, of which EUR 4,801 thousand relate to La Sexta.
Amount
Limit
7,908
2019
19,482
2020
26,167
2021
18,892
2022
12,915
2023
85,364
e) Deferred tax assets recognised
The difference between the tax charge allocated to the current year and to prior years and the
tax charge already paid or payable for such years, which is recognised under deferred tax
assets, arose as a result of temporary differences derived from the following items:
CHANGES IN
DEFERRED
TAX ASSETS
Thousands
of euros
Contingencies
and charges
Non-current
accounts
payable
Hedging
instruments
Tax effect of
assets at fair
value
Balance at
Transfers at
31/12/11
Additions
Disposals
Other
31/12/11
Inclusions
due to
merger
Inclusions
in/exclusions
from scope of
consolidation
Balance at
31/12/12
Balance at
Additions
Disposals
Other
31/12/13
6,061
2,554
(1,985)
24
4,024
1,561
35
12,275
3,620
(4,027)
521
12,389
1,131
1,250
(690)
135
(95)
498
-
2,228
5
(982)
(644)
607
(401)
192
-
-
-
-
-
(209)
-
(152)
-
(361)
2,541
-
-
(1,030)
-
-
10,513
-
9,483
-
(6,845)
(97)
Other
4,873
1,299
(362)
251
(3,929)
-
134
2,266
3,349
(611)
276
5,280
Total
11,664
5,295
(4,067)
410
-
12,572
169
26,043
6,974
(12,617)
56
20,456
The changes in deferred tax assets, included in the “Other” column, include most notably the
difference between the projected income tax expense for 2012 and the tax return actually
filed.
65
The changes in “Deferred Tax Liabilities” were as follows:
DEFERRED TAX LIABILITIES
Thousands of euros
Recognition of intangible assets at fair
value
Grants
Amortisation of merger goodwill
Total
Balance at
31/12/11
Additions Disposals
Inclusions Balance at
Balance at
Additions Disposals
due to merger 31/12/12
31/12/13
-
-
(81)
31,319
31,238
-
(324)
136
114
-
-
-
-
-
-
136
114
(81)
31,319
30,914
250
-
(191)
59
-
372
-
372
31,488
372
(515)
31,345
“Hedging Instruments” in the “Deferred Tax Assets” table is not included in the temporary
differences or deferred tax assets in the tables in Note 22-c) since for tax purposes they are
recognised directly in equity.
The “Recognition of Intangible Assets at Fair Value” deferred tax liability relates to the
temporary difference arising as a result of the difference between the carrying amount and the
tax base of the identified trademark and signal broadcasting licence (IAS 12).
The trademark is amortised for accounting purposes at a rate of 5%, the amortisation charge
in 2013 being EUR 1,079 thousand.
The amortisation is not deductible for tax purposes and, therefore, gives rise to a positive
adjustment to the taxable profit which is recognised as a deferred tax liability.
The different interpretation provided under International Financial Reporting Standards, as
compared with local accounting standards, in relation to the recognition of intangible assets at
fair value, gives rise to a greater deferred tax liability under IFRSs than that recognised in
accordance with the Spanish National Chart of Accounts, to which the income tax legislation is
not applicable.
On the basis of the timing estimate of future profits made by the Parent’s directors for the
offset and use of these deferred tax assets, EUR 18,208 thousand were considered to be
recoverable in the long term while EUR 2,248 thousand were considered to be recoverable in
the short term. Both amounts are recognised under “Deferred Tax Assets”.
Also, on the basis of the aforementioned timing estimate of future profits, the directors
consider that there are no reasonable doubts as to the recovery of the amounts recognised in
the accompanying balance sheet within the statutory time periods and limits on the basis of
the projections prepared.
The key assumptions on which these projections are based relate mainly to advertising
markets, audience, advertising efficiency ratios and the evolution of expenses. Except for
advertising, the data of which are measured on the basis of external sources of information,
the assumptions are based on past experience and reasonable projections approved by Parent
management and updated in accordance with the performance of the advertising markets.
These future projections cover the next ten years.
The Group analyses the sensitivity of the projections to reasonable changes in the key
assumptions used to determine the recoverability of these assets. Therefore, the sensitivity
analyses are prepared under various scenarios based on the variables that are considered to
be most relevant, i.e. advertising income, which depends mainly on the performance of the
advertising market, the investment share reached and the operating margin achieved. The
discount rate used ranges from 9% to 10%.
66
A variation of 0.5% in cumulative annual growth would give rise to a change in value of EUR
43 million, while an increase of 0.5% in the discount rate would give rise to a change of EUR
65 million and a decrease of 0.5% in the discount rate would give rise to a change of EUR 73
million. Zero perpetual growth was used. An increase of 0.5% would give rise to an increase in
value of EUR 80 million and a decrease of 0.5% would give rise to a decrease in value of EUR
71 million. The aforementioned analyses do not disclose any evidence of non-recoverability of
the tax assets and tax credits recognised.
f) Tax recognised in equity
In addition to the income tax recognised in the consolidated income statement, in 2013 and
2012 the Group recognised the following amounts in consolidated equity:
Thousands of euros
Hedging instruments
Total
2013
2012
(361)
(209)
(361)
(209)
g) Other information
At 31 December 2013, the Group had from 2005 onwards open for review for income tax,
since in 2010 it underwent a partial review in this connection. The Group has the years from
2009 onwards open for review for all the other taxes applicable to it.
In 2008 the Parent (Antena 3 de Televisión, S.A.) acquired non-current assets as required
under the terms established in Article 36 ter. of the Spanish Corporation Tax Law, as worded
in Law 24/2001, for the reinvestment of the extraordinary income obtained by the Group
company Uniprex Televisión, S.L. (Sole-Shareholder Company) on the transfer of the
ownership interest in a company. This reinvestment (EUR 499,950) gave rise to a tax credit of
EUR 41,793, which was taken in 2008.
The aforementioned non-current assets continue in use and are held by Atresmedia
Corporación de Medios de Comunicación, S.A. in accordance with Article 36 of Spanish
Corporation Tax Royal-Decree Law 4/2004.
Also, in 2009 the Parent reported a tax credit for the reinvestment of extraordinary income
deriving from the transfer of the ownership interest in Gloway Broadcasting Services, S.L., in
compliance with the requirements of Article 36. In 2009 the Parent acquired non-current
assets for EUR 6,414 thousand, under the terms and conditions established in the
aforementioned Article to comply with the reinvestment requirement, and earned tax credits of
EUR 46 thousand that it did not use.
These non-current assets continue in use and are held by Atresmedia Corporación de Medios
de Comunicación, S.A.
Following is a detail of the last years for offset of prior years' tax loss carryforwards at 31
December 2013. EUR 221,363 thousand of these carryforwards have been recognised, of
which EUR 221,358 thousand were transferred to Antena 3 de Televisión from the absorbed
company, Gestora de Inversiones Audiovisuales La Sexta, as a result of the universal
succession of the former to the rights and obligations of the transferor arising from the
application of the special tax regime for mergers, spin-offs, asset contributions and security
exchanges provided for in Title VII, Chapter VIII of the Consolidated Spanish Corporation Tax
Law approved by Legislative Royal Decree 4/2004, of 5 March.
67
LAST YEAR FOR OFFSET
Thousands of euros
2019
46
2021
15
2022
10
2023
1
2024
58,935
2025
45,185
2026
38,301
2027
34,758
2028
10,053
2029
18,568
2030
15,565
TOTAL
221,437
23. Related party transactions
Transactions between the Parent and its subsidiaries, which are related parties, have been
eliminated on consolidation and are not disclosed in this Note. Balances and transactions
between the Group and its associates and other related companies are disclosed below:
Thousands of euros
Balances at 31/12/13
Trade
receivables
(Note 11)
Current trade
payables
(Note 16)
Current
Non-current
receivables
payables
Current
payables
(Note 15-b)
Associates:
Atlantis Global Solutions, S.L.
25
-
-
-
Fundación Antena3
60
-
-
-
-
119
-
2,450
-
-
28
784
-
-
-
232
784
2,450
-
607
Gamp Audiovisual, S.A.
-
-
-
-
18,029
Gala Desarrollos Comerciales, S.L.
-
-
-
-
2,516
Imagina Media Audiovisual, S.L.
-
130
-
-
14,142
34,963
59,550
-
7
-
2,799
7,011
44
-
-
201
406
-
-
-
-
46
-
-
-
37,963
67,143
44
7
34,687
Hola Televisión América, S.L.
I3 Televisión, S.L.
Total associates
607
Related companies:
Imagina Group
Planeta - De Agostini Group
RTL Group
PCsoporte Consultores, S.L.
Total related companies
68
Thousands of euros
Balances at 31/12/12
Current trade
payables
(Note 16)
Trade
receivables
(Note 11)
Non-current
payables
Current
payables
Associates:
Cordina Planet, S.L.
76
-
-
73
Fundación A3
33
1,039
-
-
Hola Televisión América, S.L.
32
-
336
-
I3 Televisión, S.L.
60
1,287
-
-
-
50
-
-
59
5,217
-
-
260
7,593
336
73
Gamp Audiovisual, S.A.
-
-
35,619
1,929
Gala Desarrollos Comerciales, S.L.
-
-
4,994
270
Imagina Media Audiovisual, S.L.
-
1,499
27,918
1,513
40,811
103,263
52
-
4,712
6,926
-
-
771
7,782
-
-
46,294
119,470
68,584
3,712
Organiz. Deport. y Culturales de Unipublic, S.A.U.
Unipublic, S.A.
Total associates
Related companies:
Imagina Group
Planeta Group
RTL Group
Total related companies
Thousands of euros
Transactions at
31/12/13
Purchases,
acquisition of
rights and other
services
Sales
Finance
costs
Associates:
Atlantis Global Solutions, S.L.
21
-
-
37
-
Fundación Antena3
75
230
9
Hola Televisión América, S.L.
72
-
-
-
3,755
-
168
4,022
9
Gamp Audiovisual, S.A.
-
-
1,797
Gala Desarrollos Comerciales, S.L.
-
-
251
Imagina Media Audiovisual, S.L.
-
95
1,413
Cordina Planet, S.L.
I3 Televisión, S.L.
Total associates
-
Related companies:
Imagina Group
141,921
76,284
-
Planeta - De Agostini Group
860
2,610
-
RTL Group
671
291
-
-
33
-
143,452
79,313
3,461
PCsoporte Consultores, S.L.
Total related companies
In addition to these transactions, in 2013 the Group sold and purchased advertising space to
and from related companies, amounting to EUR 3,298 thousand and EUR 1,309 thousand,
respectively, through advertising agencies.
69
Thousands of euros
Transactions at
31/12/12
Purchases,
acquisition of
rights and other
services
Sales
Finance
costs
Associates:
Cordina Planet, S.L.
Fundación A3
89
-
-
114
-
4
-
Hola Televisión América, S.L.
34
-
I3 Televisión, S.L.
273
6,378
-
Unipublic, S.A.
188
6
7
Total associates
698
6,384
11
Gamp Audiovisual, S.A.
-
-
1,009
Gala Desarrollos Comerciales, S.L.
-
-
141
Imagina Media Audiovisual, S.L.
-
75
791
37,212
19,784
-
2,273
7,228
-
419
9,855
-
39,904
36,242
1,941
Related companies:
Imagina Group
Planeta Group
RTL Group
Total related companies
In addition to these transactions, in 2012 the Group sold and purchased advertising space to
and from related companies, amounting to EUR 2,413 thousand and EUR 1,352 thousand,
respectively, through advertising agencies.
In 2012 the Group acquired a 15% ownership interest in Audiovisual Española 2000, S.A., a
company related to the main shareholder (see Note 9).
24. Earnings per share
Basic earnings per share
Basic earnings per share are calculated by dividing the net profit or loss attributable to the
Group by the weighted average number of ordinary shares outstanding during the year,
excluding the average number of treasury shares held in the year.
Accordingly:
2013
2012
Net profit for the year (thousands of euros)
46,054
31,909
Weighted average number of shares outstanding (thousands of
shares)
225,733
213,636
0.204
0.149
Basic earnings per share (euros)
The diluted earnings per share coincide with basic earnings per share since there are no equity
instruments with a dilutive effect.
25. Proposed distribution of profit
The Parent's directors will propose to the shareholders at the Annual General Meeting that the
profit for 2013 be distributed as follows:
70
Thousands of euros
2013
To voluntary reserves
34,468
Total
34,468
26. Remuneration of the Board of Directors
In 2013 the remuneration earned by the current and former members of the Parent’s Board of
Directors (composed of two women and eleven men) in the form of salaries, attendance fees
and life insurance premiums amounted to EUR 5,538 thousand, EUR 680 thousand and EUR 15
thousand, respectively. In 2012 these remuneration items amounted to EUR 3,447 thousand,
EUR 778 thousand and EUR 16 thousand, respectively.
The Parent has not granted any loans or advances to its Board members and it does not have
any supplementary pension, retirement bonus or special indemnity obligations to them in their
capacity as directors.
27. Other disclosures concerning the Board of Directors
Pursuant to Article 229 et seq. of the Consolidated Spanish Limited Liability
Companies Law (LSC), the following information is included:
A) Based on the notifications made by each of the directors, at 31 December 2013 none of the
directors or any persons related to them held direct or indirect ownership interests in the
share capital of companies engaging in an activity that is identical, similar or
complementary to the activity that constitutes the company object of Atresmedia
Corporación de Medios de Comunicación, S.A. and the companies composing its Group,
except for the director Imagina Media Audiovisual, S.L.U., which has notified that it
holds direct or indirect equity interests in the following companies, all of which belong its
group of companies:
Investee
Activity engaged in
% of direct or
indirect ownership
Position held in the
company, where
applicable
Grupo Globo Media, S.A.U.
Ownership of securities - Audiovisual industry
100
None
Equille Investiment, B.V.
Ownership of securities - Audiovisual industry
100
None
Mediaproducción, S.L.
Exploitation of mobile units for broadcasting of
sporting events
100
None
POC Ventures, B.V.B.A.
Audiovisual production services
100
None
Xarxa Oberta, de Comunació i
Tecnologia de Catalunya, S.A.
Construction and exploitation of new generation
networks
100
None
Adisar Media, S.L.
Audiovisual production services
60
None
Antena Local, S.L.
Radio and television
60
None
Asturmedia Producciones Audiovisuales,
S.L.
Audiovisual production and distribution
49
None
Avenida dos Aliados, S.A.
Ownership of securities - Audiovisual industry
52.35
None
Bikini Pos Produçao de Filmes, Ltda.
Post-production
90
None
Centroamerica TV, Llc
Television
82.5
None
CLS Audiovisuais, Lda
Production services
75
None
Digital Humor
Web management
67.50
None
71
Distribuidora Digital de Fútbol, S.L.
Audiovisual services
100
None
Imagina Media Servicios de Producción
Audiovisual, S.L.U.
Ownership of securities - Audiovisual industry
100
None
Estudios Hackenbush, S.L.
Advertising
100
None
Full Zoom-Producciones Audiovisuaes,
lmtda
Audiovisual production
50
None
Gabinete de Estudios de la Comunicación
Audiovisual, S.A.U.
Sporting event surveys and reports
100
None
GAMP Audiovisual, S.A.
Ownership of securities - Audiovisual industry
72.74
Director
Geca Minutados, S.L.
Sporting event surveys and reports
100
None
GLM Brasil Conteudos Audiovisuais, Ltda
Audiovisual content
100
None
Globepro Telecomunicaciones, S.L.
Broadcasting of audiovisual signals via satellite
100
None
Globo Media, S.A.
Audiovisual content
98.70
None
Gol Televisión, S.L.U.
Television
100
None
GTV Estudios, Lda
Multimedia services
100
None
Hangin, S.A.
Distribution of audiovisual programmes
50
None
Hostoil Produkzioak, S.L.
Audiovisual production
100
None
Imagina Contenidos Audiovisuales, S.L.
Audiovisual content
100
None
Imagina EU
Audiovisual production
100
None
Imagina Group France
Exploitation of mobile units for broadcasting of
sporting events
100
None
Imagina International Sales, S.L.
Marketing of audiovisual works
100
None
Imagina USA, Inc.
Purchase and sale of audiovisual rights
100
None
Imalatam, S.L.U.
Audiovisual production and services
82.5
None
Imalatam Caracas, C.A.
Audiovisual production
40.43
None
Imasblue Estudio, S.L.
Postproduction services
54.46
None
Infinia, AD, S.A.
Postproduction services
54.46
None
K 2000, S.A.
Content production
100
None
Labo Productions 2007, LLC
Content production
82.5
None
Liquid Media, S.L.
Television, telematic network and internet
content
100
None
LVM Mexico
Audiovisual production
82.50
None
Media 3.14, S.L.
Television content production
90
None
Media Base Sports, S.L.
Image right management (sports)
55
None
Media Burst Servicios para Empresas
Audiovisuais Sociedad Unipessoal
Audiovisual-industry related industrial facilities
100
None
Media Cam Producción Audiovisual, S.L.
Management and exploitation of marketing
rights
100
None
Media Luso Produçoes para la Televisao, Lda
Videographic production
100
None
Media World, LLC
Distribution of television rights, television
production and sports marketing
82.5
None
Mediaconti Servicios de Continuidad, S.L.
Audiovisual continuity services
100
None
Mediamag Management Kft
Videographic production
100
None
Mediamóvil Unidad de Producción, S.L.
Equipment and technical facilities for audiovisual
production-related fields
60
None
Mediapro Middle East FZ L.L.C.
Audiovisual production and services
100
None
Mediapropiedades, S.A.
Audiovisual production and services
50
None
Mediarena Servicios, S.L.U.
Videographic production
100
None
Mediasur Producciones Audiovisuales, S.L.
Videographic production
100
None
72
Mediatem Canales Temáticos, S.L.
Videographic production
100
None
Molinare, S.L.U.
Purchase and sale of shares
100
None
MW Colombia LLC
Audiovisual production and services
82.5
None
Nuevas Iniciativas Audiovisuales, S.L.
Exploitation of radio broadcasting companies or
media
100
None
Ombú Producciones, S.A.
Film production
62.96
None
Omnicamm4Sky
Television services
50
None
Overon America, Llc
Broadcasting
100
None
Overon Bulgaria EOOD
Broadcasting
100
None
Overon US, Inc.
Broadcasting
100
None
Ovideo TV, S.A.
Production and editing of films and video
programmes
60
None
Pasiones TV, Llc
TV channel management
49.5
None
Plataforma de Televisión Digital Terrestre,
S.L.
Dormant Company - Audiovisual communication
services
100
None
Pro TV Global Production Services FZ-LLC.
Audiovisual production and services
100
None
Prom TV, S.A.
Audiovisual production
70
None
Promofilm California, L.L.C.
Audiovisual production
82.5
None
Promofilm Colombia, Ltda.
Audiovisual production
100
None
Media Producoes Brasil, LTDA
Audiovisual production
100
None
Promofiction Llc
Audiovisual production
82.50
None
Promofilm México S.A. de C.V.
Audiovisual production
100
None
Promofilm Music, L.L.C.
Audiovisual production
82.5
None
Promofilm US, L.L.C.
Audiovisual production
82.5
None
Promofilm, S.A.
Audiovisual production
100
None
Revolution Broadcast Produçoes Artisticas
Ltda
Exploitation of mobile units for broadcasting of
sporting events
65
None
Royal Media Internacional, S.L.
Videographic production
100
None
Servicios Audiovisuales Overon, S.L.
Broadcasting
100
None
Servicios Integrales Unitecnic, S.L.
Audiovisual-industry related industrial facilities
100
None
Sociedad Europea de Unidades Móviles, S.L.
Exploitation of mobile units for broadcasting of
sporting events
96.84
None
Sociedad General de Producción y
Explotación de Contenidos, S.L.
Television content production
100
None
Teleamazonas Internacional, Llc
Theme channel production and management
41.25
None
Trivideo Tricicle Ovideo, S.L.
Audiovisual production
30
None
T&M Tecnologia & Media, Consultadoria e
Produçao Multimedia, Lda
Videographic production
50
None
Television Dominicana, Llc
Television channel management
82.5
None
US Imagina, Llc
Audiovisual production and services
82.5
None
Wisdom TV España, S.L.
Production, marketing and consulting services
50
None
Wisdom Televisión, Sistemas Informáticos
para Televisao, Lda
Production, marketing and consulting services
50
None
Wtvision Sistemas Informáticos para
Televisao, Ltda
Production, marketing and consulting services
50
None
Wtvision, INC.
Production, marketing and consulting services
50
None
You Whisp Company, S.L.
Consulting and integration of technological tools
for audiovisual content management
28.05
None
Umedia Sports Advertising, S.L.
Static advertising
12 Hearts, LLC
Any lawful company object
50
41.25
None
None
73
In addition, Imagina Media Audiovisual, S.L.U. notified the Parent that José Miguel
Contreras Tejera, the representative designated by it to perform the duties of director of
Atresmedia Corporación de Medios de Comunicación, S.A., at 31 December 2013 held
direct or indirect equity interests in the following companies engaging in an activity that is
identical, similar or complementary to the activity that constitutes the company object of
Atresmedia Corporación de Medios de Comunicación, S.A. and the companies composing its
Group:
Investee
Activity engaged in
Imagina Media Audiovisual, S.L.
Ownership of securities Audiovisual industry
JMC 2000, S.L.
Audiovisual consulting
% of ownership
3.45
50
Position held in the
company, where
applicable
Director
Sole director
The director Gamp Audiovisual, S.A. notified the Parent that Josep María Benet
Ferrán, the representative designated by it to perform the duties of director of Atresmedia
Corporación de Medios de Comunicación, S.A., at 31 December 2013 held a direct or
indirect equity interest in the following company engaging in an activity that is identical,
similar or complementary to the activity that constitutes the company object of Atresmedia
Corporación de Medios de Comunicación, S.A. and the companies composing its Group:
Investee
Imagina Media Audiovisual, S.L.
Activity engaged in
Ownership of securities Audiovisual industry
% of ownership
14.27
Position held in the
company, where
applicable
Individual representing the
director Mediavisual Group,
BV
B) With regard to the activities performed by the directors, as independent professionals or
as employees, that are identical, similar or complementary to the activity that constitutes
the company object of Atresmedia Corporación de Medios de Comunicación, S.A., at 31
December 2013, the directors or their representatives had notified the Parent of the
following:
Nicolás Abel Bellet de Tavernost:
Company through which the activity is performed
Position held or functions
performed
Television
Rtl Group, S.A.
Member of the Operations
Management Committee
Television
Bertelsmann
Member of the Management
Committee
Multimedia
Métropole Television, S.A.*
Chairman of the Board of
Directors
Radio
Ediradio (RTL Radio)
Member of the Supervisory
Board
Activity
* As a result of this position, he carries on activities related to the audiovisual industry
through Groupe M6 in France.
74
Josep María Benet Ferrán, representing the director Gamp Audiovisual, S.A.:
Activity
Company through which the activity is performed
Position held or functions
performed
Ownership of securities - Audiovisual industry
Imagina Media Audiovisual, S.L.
Individual representing the
director Mediavisual Group,
BV
Planning, development, management and operation of
construction work, equipment, offices and facilities
Mediacomplex, S.L.
Director
Editing, printing, distribution and sale of newspapers
Imagina Media Inversiones en Comunicación
Audiovisual, S.L.U.
Holding company
Gamp Audiovisual, S.A.
News programme productions
Medianews Canarias, S.L.
Director acting jointly
Creation, promotion and marketing of advertising media
Umedia Sports Advertising, S.L.
Director
Production and editing of film, video and all manner of
programmes
Ovideo Tv, S.A.
Director
Audiovisual telecommunications services and audio and
video data transmission services using all manner of
technologies
Servicios Audiovisuales Overon, S.L.
Holding company
Rilson XXI, S.L.
José Miguel Contreras
Audiovisual, S.L.:
Activity
Tejera,
representing
the
Individual representing the
sole director
Mediaproducción, S.L.U.
Individual representing the
director Imagina Media
Inversiones en
Comunicación Audiovisual,
S.L.U.
Individual representing the
director Imagina Media
Inversiones en
Comunicación Audiovisual,
S.L.U.
Individual representing the
director acting severally
Atas Corp, S.L.U.
director
Company through which the activity is performed
Imagina
Media
Position held or functions
performed
Ownership of securities - Audiovisual industry
Imagina Media Audiovisual, S.L.
Director
Ownership of securities Audiovisual industry
Gamp Audiovisual, S.A.
Director
Audiovisual production
Grupo Globo Media, S.A.
Representative of the
director JMC 2000, S.L.
Audiovisual production
Globo Media, S.A.
Director
Ownership of securities Audiovisual industry
Imagina Contenidos Audiovisuales, S.L.
Director
Distributor of audiovisual formats
Imagina International Sales, S.L.U.
Director
Audiovisual consulting
JMC 2000, S.L.
Sole director
75
Silvio González Moreno:
Activity
Company through which the activity is performed
Position held or functions performed
Advertising
Atres Advertising, S.L.U.
Representative of the sole director (Atresmedia
Corporación de Medios de Comunicación, S.A.)
Sales
Antena 3 Eventos, S.A.U.
Representative of the sole director (Atresmedia
Corporación de Medios de Comunicación, S.A.)
Audiovisual production
Antena 3 Films, S.L.U.
Representative of the sole director (Atresmedia
Corporación de Medios de Comunicación, S.A.)
Gaming operations
Antena 3 Juegos, S.A.U.
Representative of the sole director (Atresmedia
Corporación de Medios de Comunicación, S.A.)
Sales
Antena 3 Multimedia, S.L.U.
Representative of the sole director (Atresmedia
Corporación de Medios de Comunicación, S.A.)
News production
Antena 3 Noticias, S.L.U.
Representative of the sole director (Atresmedia
Corporación de Medios de Comunicación, S.A.)
Production of TV commercials
Guadiana Producciones, S.A.U.
Representative of the sole director (Atresmedia
Corporación de Medios de Comunicación, S.A.)
Management of rights
Música Aparte, S.A.U.
Representative of the sole director (Atresmedia
Corporación de Medios de Comunicación, S.A.)
Sale of digital print products
Atresmedia Foto, S.L.
Representative of the sole director (Atresmedia
Corporación de Medios de Comunicación, S.A.) since 5
December 2013
Radio
Uniprex, S.A.U.
Representative of the sole director (Atresmedia
Corporación de Medios de Comunicación, S.A.)
Television
Antena 3 Televisión Digital Terrestre de Canarias, S.A.U.
Representative of the sole director (Uniprex, S.A.U.)
Television
Uniprex Televisión, S.L.U.
Representative of the sole director (Uniprex, S.A.U.)
Television
Uniprex Valencia TV, S.L.U.
Representative of the sole director (Uniprex, S.A.U.)
Marco Drago:
Activity
Holding company - Television production
companies
Company through which the activity
is performed
Position held or functions performed
Zodiak Media, S.A.
Director
Elmar Heggen:
Activity
Company through which the activity
is performed
Position held or functions performed
Ownership of securities Audiovisual industry
RTL Group, S.A.
Chief Financial Officer and Head of the Corporate
Centre of the RTL Group
Ownership of securities Audiovisual industry
CLT–UFA, S.A.
Director
Ownership of securities Radio industry
Immobilière Bayard d’Antin, S.A.
Director
Radio
in Belgium
Inadi, S.A.
Director
76
Radio and advertising
in France
IP France, S.A.
Director
Television
RTL 9, S.A.
Director
Television in Belgium
RTL Belgium, S.A.
Director
Ownership of securities Audiovisual industry
RTL Group Central and Eastern Europe,
S.A.
Director
Ownership of securities Audiovisual industry
RTL Group Germany, S.A.
Director
Ownership of securities Audiovisual industry
RTL Group Central and Eastern Europe,
GmbH
Executive chairman
Radio in Germany
RTL Radio Berlin, GmbH
General Manager
Television in Germany
RTL Television, GmbH
General Manager
Ownership of securities - Audiovisual industry
Fremantlemedia, S.A.
Chairman of the Board of Directors
Ownership of securities - Audiovisual industry
RTL Group Deutschland, GmbH
General Manager
Ownership of securities - Audiovisual industry
RTL Group Vermögensverwaltung, GmbH
General Manager
Production
RTL Group Services, GmbH
General Manager
Ownership of securities Audiovisual industry
Ufa Film und Fernseh, GmbH
General Manager
Ownership of securities - Audiovisual industry
RTL TV D.O.O.
Director
Radio in France
Ediradio, S.A.
Member of the Supervisory Committee
Television in France
Métropole Television, S.A.
Member of the Supervisory Committee
Ownership of securities - Audiovisual industry
Audiomedia Investments, S.A.
Chairman of the Board of Directors
Radio broadcasting
Broadcasting Center Europe, S.A.
Chairman of the Board of Directors
Technical services
Media Properties, Sàrl
Chairman of Management Committee
Television and radio holding company
RTL Nederland Holding, BV
Chairman of the Supervisory Committee
New technologies
Duchy Digital, S.A.
Chairman of the Board of Directors
The following must be stated in relation to the activities performed by the aforementioned
directors:
1.- In all cases, the proprietary directors discharge their professional activities at companies
that form part of the corporate groups of their respective reference shareholders, which they
represent on the Board of Directors of Atresmedia Corporación de Medios de Comunicación,
S.A.
2.- At the time of their appointment by the shareholders at the Annual General Meeting,
information was disclosed on the relationship existing between the aforementioned proprietary
directors and the shareholders that proposed their appointment in each case, to whom they
were therefore associated as non-executive proprietary directors.
77
3.- In the case of the Chief Executive Officer, Silvio González, executive director, all the
professional activities indicated are performed at companies owned by the Atresmedia Group
and, therefore, no situation of competition arises. In all cases, he acts as representative of the
legal entity holding the position of sole director, which may be Atresmedia Corporación de
Medios de Comunicación, S.A. itself or any of its subsidiaries. Each of these subsidiaries has its
own management team.
4.- The inclusion of this information in the Company’s consolidated financial statements
complies with the provisions of Article 230 of the Spanish Limited Liability Companies Law on
the notification of activities to the Annual General Meeting and the obtainment of its express
authorisation.
The other directors, José Manuel Lara Bosch, Maurizio Carlotti, Mauricio Casals Aldama, Aurora
Catá Salas, José Creuheras Margenat, María Entrecanales Franco and Pedro Ramón y Cajal
Agüeras have notified the Company that, at 31 December 2013, they did not perform any
activities as independent professionals or employees that were identical, similar or
complementary to the activity that constitutes the company object of Atresmedia Corporación
de Medios de Comunicación, S.A.
28. Events after the reporting period
On 19 February 2014, the Parent, through a relevant event communication and subsequent to
a resolution of its Board of Directors, announced a partial novation of the integration
agreement entered into on 14 December 2011 with Gestora de Inversiones Audiovisuales La
Sexta, S.A. ("La Sexta") and its shareholders, which set the terms and conditions for the
integration of La Sexta into the Atresmedia Group through a merger by absorption.
Specifically, the novation of the agreement relates to the terms and conditions regarding the
"Additional Ownership Interest", whereby La Sexta shareholders were granted the right to
receive an additional ownership interest of 7% of the share capital of Atresmedia Corporación
de Medios de Comunicación, S.A., conditional upon the Atresmedia Group's earnings
performance from 2012 to 2016, inclusive.
Under the novation, Atresmedia Corporación agreed, with Gamp Audiovisual S.A. and Imagina
Media Audiovisual, S.L., to bring forward and definitively adjust the delivery of the additional
ownership interest that would correspond to these companies. Accordingly, on 24 February
2014 they were delivered, with a charge to treasury shares, ownership interests in Atresmedia
Corporación de Medios de Comunicación, S.A. equal to 2.079% and 1.631% of its share
capital, respectively.
As a result of the negotiation process for this agreement and forming part thereof, other
agreements were reached with Gamp Audiovisual, S.A. and Imagina Media Audiovisual, S.L.
consisting of the cancellation of their proportional share of the financial derivative agreement
described in Note 9 and of the definitive conclusion of other matters relating to the guarantees
and obligations under the integration agreement entered into for the merger with Gestora de
Medios Audiovisuales la Sexta, S.A. (see Note 13).
The recognition of all these transactions will give rise to an estimated reduction of EUR 13,631
thousand in the shareholders' equity of the Parent in the financial statements for 2014.
78
The terms and conditions agreed upon in the integration agreement relating to Gala
Desarrollos Comerciales, S.L. remain unchanged and, accordingly, it continues to be entitled to
receive an additional ownership interest of 0.508% of the share capital of Atresmedia
Corporación de Medios de Comunicación, S.A., conditional upon the earnings performance of
the Atresmedia Group, as indicated above.
29. Explanation added for translation to English
These consolidated financial statements are presented on the basis of the regulatory financial
reporting framework applicable to the Group (see Note 2-a). Certain accounting practices
applied by the Group that conform with that regulatory framework may not conform with other
generally accepted accounting principles and rules.
79
Atresmedia Corporación de Medios de
Comunicación, S.A. (formerly Antena 3
de Televisión, S.A.) and Subsidiaries
Consolidated directors' report
2013
Translation of a report originally issued in Spanish. In the event of a discrepancy, the
Spanish-language version prevails.
ATRESMEDIA AND SUBSIDIARIES GROUP (CONSOLIDATED GROUP)
DIRECTORS' REPORT FOR 2013
Business performance and situation of the Group
In 2013 economic activity in Spain displayed a gradual improvement in stark contrast to
events in 2012. The easing of financial tensions in Southern Europe and in Spain in
particular led to less restrictive economic policies. Both of these events resulted in an
improvement in investment, consumption and employment indicators, coupled with the
favourable developments already witnessed in the external sector. Although the known data
are far from satisfactory, they have had a positive impact on the advertising market, itself
bolstered by the improved situation or expectations of the advertisers' markets.
Estimates place the decline in the advertising market at 8.1% in 2013, smaller than the
16.0% drop in 2012. The quarter-by-quarter performance was of particular note, recovering
from a double-digit year-on-year drop in the first quarter to slight growth in the fourth.
However promising the trend may be, the fact remains that, for yet another year,
advertising expenditure has dropped very significantly again this year and 2013 figures
equalled those for 1998, 15 years ago. Television advertising performed better than
average, with a 6.2% decline, while radio fell by 11.0%.
2013 saw the consolidation of the television model launched in 2012 with the merger by
absorption of Gestora de Inversiones Audiovisuales La Sexta, S.A. into the Parent. As
regards audience, Atresmedia attained an average share of 28.8% in 2013, representing an
increase of three points - the highest of all television groups. Our main channels, Antena 3
and La Sexta, were the fastest growing national channels, growing by 1.0 and 1.1 points,
respectively. Our share of the television advertising market also grew by 1.3 points. Lastly,
the synergies obtained in costs were higher than initially expected and the merger was
completed with the greatest of success.
Consolidated revenue amounted to EUR 796 million, up from EUR 713 million in 2012. It
should be noted that in 2013 La Sexta activity was included for the entire year, while in
2012 it was only included for the last three months, since the merger took effect from
October 2012. In like-for-like terms, television revenue performed better than the market as
a whole and, as indicated above, the market share improved. Once again in 2013, other
income increased by 18.9% to EUR 34 million. The Group's total income was EUR 830
million, up 12% on 2012.
The radio business, operated via Uniprex, S.A.U., consolidated its positive trend in listener
numbers, which reached 4.8 million. 2.6 million of these listeners related to Onda Cero while
2.1 million related to the music station Europa FM.
1
Although the comparison of expenses is, logically, also affected by the inclusion of La Sexta
in October 2012, their evolution is highly satisfactory. Total operating expenses fell by 5.9%,
evidencing both the cost synergies achieved and the Group's high degree of cost discipline.
In addition, these lower expenses have not entailed a decline in the ability to compete in the
market. As mentioned, audience and market share in both television and radio have
increased simultaneously.
Profit from operations amounted to EUR 63 million, 3.7 times greater than the figure for
2012. Lastly, profit for the year after tax stood at EUR 46 million, as compared with EUR 32
million in 2012.
On 18 December 2013, the Supreme Court issued an order enforcing the judgment which
rendered void the resolution of the Spanish Cabinet of 16 July 2010 regarding the allocation
of channels. At present, based on the information available, the interpretation of these
decisions and the fact that Atresmedia Corporación de Medios de Comunicación, S.A. has
met all the commitments and obligations imposed upon it, a satisfactory solution is still
expected to be reached.
Significant events for the Group after the reporting period
On 19 February 2014 the Parent, through a relevant event communication and subsequent
to a resolution of its Board of Directors, announced a partial novation of the integration
agreement entered into on 14 December 2011 with Gestora de Inversiones Audiovisuales La
Sexta, S.A. ("La Sexta") and its shareholders, which set the terms and conditions for the
integration of La Sexta into the Atresmedia Group through a merger by absorption.
Specifically, the novation of the agreement relates to the terms and conditions regarding
the "Additional Ownership Interest", whereby La Sexta shareholders were granted the right
to receive an additional ownership interest of 7% of the share capital of Atresmedia
Corporación de Medios de Comunicación, S.A., conditional upon the Atresmedia Group's
earnings performance from 2012 to 2016, inclusive.
Under the novation, Atresmedia Corporación agreed, with Gamp Audiovisual S.A. and
Imagina Media Audiovisual, S.L., to bring forward and definitively adjust the delivery of the
additional ownership interest that would correspond to these companies. Accordingly, on 24
February 2014 they were delivered, with a charge to treasury shares, ownership interests in
Atresmedia Corporación de Medios de Comunicación, S.A. equal to 2.079% and 1.631% of
its share capital, respectively.
As a result of the negotiation process for this agreement and forming part thereof, other
agreements were reached with Gamp Audiovisual, S.A. and Imagina Media Audiovisual, S.L.
consisting of the cancellation of their proportional share of the financial derivative
agreement described in Note 9 and of the definitive conclusion of other matters relating to
the guarantees and obligations under the integration agreement entered into for the merger
with Gestora de Medios Audiovisuales la Sexta, S.A.
2
The recognition of all these transactions will give rise to an estimated reduction of EUR
13,631 thousand in the shareholders' equity of the Parent in the financial statements for
2014.
The terms and conditions agreed upon in the integration agreement relating to Gala
Desarrollos Comerciales, S.L. remain unchanged and, accordingly, it continues to be entitled
to receive an additional ownership interest of 0.508% of the share capital of Atresmedia
Corporación de Medios de Comunicación, S.A., conditional upon the earnings performance
of the Atresmedia Group, as indicated above.
Outlook for the Group
The main indicators suggest that the improvement in economic activity will continue in the
near future. Although household consumption is not expected to make any major leap
forward, it is expected to display increasingly positive growth. This is consistent with
significant growth in the advertising market, whose elasticity with respect to consumption is
very high, as displayed by the massive decline in recent years. Accordingly, 2014 is
expected to be at least slightly positive, with the growth achieved being bolstered in the
coming years.
This more positive environment allows for some optimism regarding the immediate future,
and will make it possible to reap all the fruits of the merger carried out in recent years.
Although the outlook for the market and revenue is positive, cost discipline will remain a
cornerstone of management, so as to enable the margins of the television and radio
businesses to grow significantly. The high degree of quality and diversity in the content on
offer is expected to be maintained and, accordingly, we will be able to continue to enjoy the
boost this provides.
No major corporate transactions, such as the recent merger, are expected to be carried out.
However, we will devote greater efforts to the objective of earning income from audiovisualworld activities other than advertising. Nubeox, the pay video-on-demand content platform,
is one of the initiatives in this area, as are participation in the Hola TV channel, broadcast in
South America and the United States, tualbum.es. and EnglishHouse.TV. Furthermore, the
progress made on the Internet will continue: 2013 saw 12 million different visitors to our
websites and a 28% increase in pageviews. The recent launch of Atresplayer, an online
multi-platform content viewing platform, has proven to be a great success, which will allow
us to achieve greater dissemination of our content and to obtain additional revenues from
both advertisers and paying spectators.
The framework for all these developments will continue to be a prudent financial policy
which, as has been the case to date, will couple a continued sound equity position with a
dividend policy in line with that of recent years.
3
Research and development activities
The Group does not itself carry on any specific research and development activities.
However, it invests, on an ongoing basis, in all new technologies related to engineering,
systems and content distribution. In this field Atresmedia Corporación de Medios de
Comunicación, S.A. has and uses state-of-the-art technology, which enables it to be at the
forefront in the roll-out of digital activities and in the Internet.
Treasury share acquisitions
No transactions involving treasury shares were performed in 2013. The Parent therefore
continued to hold 15,818,704 treasury shares of EUR 0.75 par value each, representing
7.01% of its share capital.
Use of financial instruments by the Group and main financial risks
The Group performs transactions with financial instruments to hedge the foreign currency
risk on the purchases of broadcasting rights in the year.
At 31 December 2013, the Parent had arranged instruments to hedge its foreign currency
asset and liability positions amounting to USD 89,863 thousand, at a weighted average
exchange rate of EUR 1.3117/USD 1. The net fair value of these hedging instruments gave
rise to a financial asset of EUR 698 thousand and a financial liability of EUR 3,232 thousand
at year-end.
Also, interest rate swaps were arranged in order to fix the financial cost arising from the
floating rates established in the syndicated financing agreement entered into in August
2013. The fair value of these swaps at 31 December 2013 gave rise to a financial asset of
EUR 5 thousand.
The Group has established the risk management systems required to ensure that
transactions in markets are performed in accordance with its established policies, rules and
procedures and within the limits approved for each case. The Group’s main financial risks are
as follows:
a) Foreign currency risk. The Group’s foreign currency risks relate mainly to the payments to
be made in international markets to acquire broadcasting rights. In order to mitigate foreign
currency risk, the Group arranges hedging instruments, mainly currency forwards.
4
b) Liquidity risk. The Group’s liquidity policy is to arrange credit lines and short-term
investments that are sufficient to support its financial needs, on the basis of expected
business performance.
c) Credit risk. The Group does not have significant credit risk since the average customer
collection period is very short and guarantees are required for deferred payment sales. Cash
placements are made and derivative instruments are arranged with institutions of recognised
solvency.
d) Interest rate risk. Both the Group's cash and its bank borrowings are exposed to interest
rate risk. The Group's financing is arranged at interest rates tied to Euribor. To mitigate this
risk, the Parent has arranged interest rate swaps to limit the finance costs arising from its
floating-rate borrowings.
In accordance with Article 538 of the Spanish Limited Liability Companies Law, the Annual
Corporate Governance Report (IAGC) forms part of this Directors' Report. The IAGC
constitutes a relevant event and is communicated to the Spanish National Securities Market
Commission, which publishes it on its website: www.cnmv.es. It is also available on the
Parent's corporate website, www.atresmediacorporacion.com.
5
ANNUAL CORPORATE GOVERNANCE REPORT OF LISTED CORPORATIONS A OWNERSHIP STRUCTURE A.1
Complete the following table on the Company's share capital: Date last modified Share capital (€) Number of shares 31/10/2012 169,299,600 225,732,800 Number of voting rights 225,732,800 If there are different classes of shares with different associated rights, indicate as follows: Yes X No Class A B A.2
Number of shares Par value each Number of voting rights per share Different rights 0.75 0.75 Ordinary shares 0.75 Such shares do not grant entitlement to dividends with a charge to profit generated during the 24 months following the registration in the Madrid Mercantile Register of the merger of Atresmedia Corporación and La Sexta (that is, until 31/10/14). 224,551,504 1,181,296 0.75 Detail the direct and indirect owners of significant holdings, of their Company at year‐end, excluding directors: Name or company name of shareholders Number of direct voting rights GRUPO PLANETA‐ DE AGOSTINI, S.L. UFA FILM UND FERNSEH, GMBH Indirect voting rights Direct owner of the Number of shareholding voting rights % of total voting rights
94,123,471
0 0 41.697 43,264,558
0 0 19.166 Indicate the most significant movements in the shareholder structure occurring during the year: Name or company name of shareholders A.3
Transaction date Description of the transaction Complete the following tables on members of the Company’s Board of Directors who own voting rights on company shares: Name or company name of director Number of direct rights Indirect rights Direct owner IMAGINA MEDIA 6,442,188 GAMP AUDIOVISUAL, S.A. AUDIOVISUAL, S.L. Mr. Nicolás Abel 82 Bellet de Tavernost Total % of voting rights held by the Board of Directors. Number of equivalent shares % of total voting rights 8,213,514 6.492 0 Number of voting rights 6.492 1
Complete the following tables on members of the Company’s Board of Directors who own rights on Company shares: Name or company Number of direct name of director voting rights Indirect voting rights Direct owner of Number of voting the shareholding
rights % of total voting rights Total % of voting rights held by the Board of Directors. A.4
Indicate, if appropriate, relationships of a family, commercial, contractual or corporate nature existing between the owners of significant holdings, to the extent they are known by the Company, unless they are of little significance or arise from the ordinary course of business or trade: Related name or company name Type of relationship Brief description Corporate GAMP AUDIOVISUAL, S.A. is an IMAGINA GROUP company and is controlled by IMAGINA MEDIA AUDIOVISUAL, S.L. in accordance with article 4 of the Securities Market Law, through the company MEDIAPRODUCCIÓN, S.L. GAMP AUDIOVISUAL, S.A. IMAGINA MEDIA AUDIOVISUAL, S.L. A.5
Indicate, if appropriate, relationships of a commercial, contractual or corporate nature existing between the owners of significant holdings, and the Company and/or its Group, unless they are of little significance or arise from the ordinary course of business or trade: A.6
Related name or company name Type of relationship Brief description Indicate whether side agreements concerning the Company have been notified to it under articles 530 and 531 of the Spanish Companies Law ("Ley de Sociedades de Capital"). Where applicable, briefly describe them and list the shareholders bound by such agreement: Yes X No % of share capital involved 41.697 Brief description of the agreement On 25 May 2005, Kort Geding, S.L. granted notification of the agreement entered into by its shareholders regarding the absorption of Grupo Planeta‐ De Agostini, S.L. and DeA Multicom, S.L. by Kort Geding, S.L., and of its intention to change the latter's company name to the current name of Grupo Planeta de Agostini, S.L. On that same date, the shareholders of Kort Geding, S.L. granted notification of the full wording of the agreement entered into by Planeta Corporación, S.R.L., De Agostini Invest, S.A., De Agostini International, B.V. and DeA Multicom, S.L. in relation to the Group's business restructuring in Spain. In this agreement the Parties: − Ratify the agreements that they had entered into in May 2003 with the shareholder RTL (now UFA Film). 2
−
State their intention not to alter their representation on the Board of Directors of Atresmedia Corporación and not to individually acquire new holdings therein. − Establish certain rules to adopt decisions relating to Atresmedia Corporación: proposals for the appointment of employees and representatives, non‐compete covenants, measures to be adopted in the event of disagreements among the parties, etc. On 20 December, 2005, De Agostini Communications, S.A. stated, in relation to the agreement signed on 25 May of the same year (mentioned above), that De Agostini Invest, S.A. had been spun off and dissolved and that, as a result, the shares of Grupo Planeta‐ De Agostini, S.L. (direct holder of the Atresmedia Corporación shares owned by De Agostini Invest, S.A.), were allocated to the Luxembourg‐based company, De Agostini Communication, S.A. Participants in the side agreement PLANETA CORPORACIÓN, S.R.L. DE AGOSTINI COMMUNICATION, S.A. % of share capital involved 60.863 The agreement described in this section in relation to the shareholder RTL Group Communication, S.L.U. now relates to the company UFA FILM UND FERNSEH GMBH SOLE‐SHAREHOLDER COMPANY. RTL Group Communication, S.L.U., which was the previous owner of the holding in Atresmedia Corporación, was absorbed in 2009 through a merger by absorption by UFA FILM UND FERNSEH GMBH SOLE‐SHAREHOLDER COMPANY. As a result of this operation, UFA FILM UND FERNSEH GMBH SOLE‐SHAREHOLDER COMPANY became the owner of the shares of Atresmedia Corporación. Brief description of the agreement Following the admission to listing of the Company's shares, on 29 October 2003, Grupo Planeta ‐ de Agostini, S.L (then called Kort Geding, S.L.) granted notification of the agreements entered into by it, Planeta Corporación, S.R.L. and DeA Multicom, S.L. with RTL Group Communications, S.R.L. and RTL Group, S.A. on 30 June 2003, under which the parties adopted, in relation to Atresmedia Corporación, agreements relating to: − The Company's shareholder stability and the granting of reciprocal acquisition rights on its holdings. − Non‐control commitment or control by a third party of Atresmedia Corporación. − Company management agreements, variable remuneration program and loyalty‐building of executives. On 27 June 2007, the signatories of the aforesaid agreement signed an extension supplement, granting the agreement an indefinite duration, with the possibility of cancellation by any one of the parties from 30 June 2009 onwards, and they ratified its content, except for clauses which had become invalid due to the time elapsed or because the circumstances which prompted their inclusion had changed. Participants in the side agreement UFA FILM UND FERNSEH, GMBH SOLE‐SHAREHOLDER COMPANY GRUPO PLANETA‐ DE AGOSTINI, S.L. Indicate whether the Company knows of the existence of concerted actions amongst its shareholders. If so, describe them briefly: 3
Yes No X Participants in concerted action % of share capital involved Brief description of the agreement
If, during the year, there have been any amendments to or rupture of such pacts, agreements or concerted actions, please expressly indicate them: Indicate whether any individual or legal entity exercises or may exercise control over the Company pursuant to article 4 of the Securities Market Law. If so, identify them: A.7
Yes No X Name or company name Observations A.8
Fill in the following tables regarding the Company’s treasury shares: At year‐end: Number of direct shares Number of indirect shares (*) Total % of share capital 15,818,704 7.008 (*) Through: Name or company name of direct shareholder Number of direct shares Total Detail of the significant changes occurring during the year, pursuant to Royal Decree 1362/2007: Notification date Total direct shares acquired Total indirect shares acquired Total % of share capital A.9
Detail the conditions and duration of the current mandate of the Shareholders' Meeting to the Board of Directors to issue, re‐purchase or transfer treasury shares. The resolution in force in this area was that adopted by the 2010 General Shareholders’ Meeting, applicable until 2015, which is transcribed as follows: The Company is authorised, directly or through any of its Group companies, to acquire own shares, and such shares may subsequently be disposed of, establishing the limits and requirements of these transactions, while granting the Board of Directors the powers necessary to execute the resolutions reached by the Shareholders' Meeting in this regard. 4
Consequently, the Company is authorised, directly or through any of its subsidiaries, to acquire shares by any means allowed by Law, even with a charge to profits for the year and/or unrestricted reserves, and such shares may subsequently be disposed of, in accordance the legislation in force, while granting the Board of Directors the powers necessary to execute the resolutions reached by the GSM in this regard. The following system is established for the acquisition of own shares: − The par value of the acquired shares, which will be added to those already owned by the Company and its subsidiaries, should not exceed the authorised legal limit at any given time. − The acquisition, including all the shares that the Company or anyone acting in its representation may have previously acquired or held in a portfolio, should not cause the Company's equity to be less than its share capital plus the restricted legal and by‐law reserves. For this purpose, equity is considered to be the amount deemed as such in accordance with the criteria used to prepare the annual accounts, minus the profits allocated directly to said equity, plus the amount of uncalled share capital, and the par value and the share premium of the subscribed share capital that is being recorded as a liability for accounting purposes. − The shares acquired must be paid in full. − The acquisition price will neither be less than the par value nor exceed the quoted market value by 20 per cent (20%), and the acquisition transactions must abide by the regulations and customs of the stock markets. It is expressly authorised that the shares acquired by the Company or its subsidiaries by virtue of this authorisation may be allocated, wholly or partially, for their delivery to beneficiaries of future remuneration schemes, or that they are the consequence of the exercise of share options in favour of Company workers, employees or directors. The Board of Directors is empowered, in the broadest sense, to use the authorisation forming the subject matter of this resolution and to fully execute and develop it. Furthermore, the Board of Directors is authorised to delegate such powers to the Executive Committee, the Chief Executive Officer or any other person expressly empowered by the Board in this respect and to the extent considered appropriate. This authorisation will be granted for five (5) years from the date on which it was approved at this General Meeting, and any unexecuted authorisation granted to the Board of Directors by the General Shareholders’ Meeting held on 25 March 2009 will have no effect. A.10
Indicate whether there are any restrictions on the transferability of securities and/or any restrictions on voting rights. In particular, the existence of any type of restrictions which may hinder the taking of control of the Company through the acquisition of its shares on the market will be notified. Yes No X Description of the restrictions In the current Articles of Association there are no restrictions of this kind. However, article 36 on Pluralism in the Television Audiovisual Market of the Audiovisual Media Law (Law 7/2010 of 31 March) stipulates: 1. Natural or legal persons may hold shares or voting rights simultaneously in different television audiovisual media service providers. 2. 2. However, no natural or legal person may acquire significant holdings in more than one national television audiovisual media service provider when the average audience of all the channels of the national providers considered exceeds 27% of the total audience for the twelve consecutive months prior to the acquisition. 3. 3. If the average audience exceeds 27% of the total audience after the acquisition of new significant holdings, this shall have no effect on the holder. 5
A.11
4. 4. The shares or voting rights of natural or legal persons from countries that are not members of the European Economic Area are subject to compliance with the principle of reciprocity. In the event of an increase in the shares held by natural and legal persons from countries that are not members of the European Economic Area, on the entry into force of this Law, the total percentage held in the share capital of the television audiovisual media service provider must be less than 50% at all times. 5. No natural or legal person may acquire significant holdings or voting rights in more than one television audiovisual media service provider: a) When national audiovisual media service providers accumulate rights of use over the radioelectric public domain which, as a whole, are greater than the technical capacity of two multiplex channels. b) When autonomous community audiovisual media service providers accumulate rights of use over the radioelectric public domain which, as a whole, are greater than the technical capacity of a multiplex channel. c) No natural or legal person or participant in the share capital of a national television audiovisual media service provider may acquire significant holdings or voting rights in the capital of another provider of the same service, where this would prevent the existence of at least three different private national television audiovisual media service providers, thus ensuring respect for pluralism of information. Indicate whether the Shareholders' Meeting has resolved to adopt neutralization measures with regard to a takeover bid under Law 6/2007. Yes No X A.12
If so, explain the measures approved and the terms under which the restrictions would become inefficient: Indicate whether the Company has issued securities which are not traded on regulated EU markets. Yes X No Where appropriate, indicate the different classes of shares and, for each class of shares, the rights and obligations conferred. The class B shares identified in section A.1 do not generate entitlement to receive dividends with a charge to the profits earned by the Company in the 24 months following the date of registration of the merger of Atresmedia Corporación and La Sexta in the Madrid Mercantile Register, regardless of the date on which they are distributed, that is, the profits earned until 31 October 2014. These shares are not traded on any regulated market. At the appropriate time, the admission to listing of these shares on the same markets as the remaining shares forming the share capital of Atresmedia Corporación will be requested. SHAREHOLDERS' MEETING B.1
Indicate and, where applicable, give details as to whether there are any differences with respect to the minimum standards established under the Spanish Companies Law with respect to the constitution quorum of the Shareholders' Meeting. B Yes No X 6
% quorum different to that stipulated in article 193 of the Spanish Companies Law for general cases Quorum required on first summons Quorum required on second summons % quorum different to that stipulated in article 194 of the Spanish Companies Law for the special cases of article 194 of the Spanish Companies Law 0
0
0
0
Description of the differences B.2
Indicate and, where applicable, give details on any differences with respect to the system established under the Spanish Companies Law regarding the adoption of corporate resolutions: Yes No X Describe the differences which arise with respect to the system established under the Spanish Companies Law. Reinforced majority other than that established in article 201.2 of the Spanish Companies Law for matters regulated under article 194.1 of the Spanish Companies Law Other cases of reinforced majority % established by the Entity to adopt resolutions Describe the differences B.3
Indicate the regulations governing changes in the Company's Articles of Association. In particular, the majorities envisaged to amend the Articles of Association and, where appropriate, the regulations foreseen to protect the rights of shareholders in the amendment of the Articles of Association will be notified . Changing the Company’s Articles of Association is the exclusive competency of the General Shareholders’ Meeting (article 16.6 of the Company's Articles of Association), governed by articles 285 to 345 of the Spanish Companies Law, with no specialisation. The following requirements are established by Law: −
That the directors, or, when appropriate, the shareholders who drafted the proposal, prepare a written report justifying such proposal. − That the scope of the changes that must be made are clearly explained at the General Shareholders’ Meeting. − That in the announcement of the General Meeting, all shareholders are notified of their right to examine the entire text relating to the proposed change at the Company's registered offices, as well as the report on such change, and to request the handing over or free delivery of said documents. − That the resolution be adopted at the General Shareholders’ Meeting, in accordance with articles 194 and 201 of the Spanish Companies Law. In all cases, the resolution will be recorded in a public deed that will be filed in the Mercantile Register, and it will be published, once filed, in the Official Bulletin of the Mercantile Register. B.4
Provide attendance data on the Shareholders' Meetings held during the year to which this report refers, and that of the preceding year's meetings: 7
Attendance data Date of GSM 24/04/2013 B.5
% shareholders present % attending by proxy E‐voting Others 0.056 67.691 0.003 8.026 % voting remotely Total 75.776 Indicate whether any restrictions exist regarding the Articles of Association establishing a minimum number of shares required to be able to attend the Shareholders' Meeting: Yes X No No. of shares required to attend the Shareholders' Meeting 400 B.6
Indicate whether it has been resolved that certain decisions leading to a structural modification of the Company (“subsidiarisation”, purchase and sale of essential operating assets, operations equivalent to Company liquidation, etc.) must be submitted for the approval of the Shareholders' Meeting, although such approval is not expressly required under the Mercantile Laws. Yes X No B.7
Indicate the address and means of access to the Company's web page, to information on corporate governance and other disclosures on the Shareholders' Meetings which must be placed at the disposal of shareholders through the Company's web page. www.atresmediacorporacion.com The web page may be accessed through the url www.atresmediacorporación.com, or indirectly through the television contents web page www.antena3.com or the portal www.atresmedia.com. C COMPANY MANAGEMENT STRUCTURE Board of Directors C.1
Detail the maximum and minimum number of directors stipulated in the Articles of C.1.1
Association: C.1.2
Maximum number of directors 15
Minimum number of directors 5
Fill in the following table on the Board members: 8
Name or company Representativ
name of director e Mr. José Manuel Lara Bosch Mr. Maurizio Carlotti Position held on the Board Date of first Date of last appointment appointment Executive 16/06/2003 25/03/2009 General Shareholders’ Meeting Deputy Chairman 16/06/2003 25/03/2009 General Shareholders’ Meeting General Shareholders’ Meeting IMAGINA MEDIA AUDIOVISUAL, S.L. Mr. José M. Contreras Tejera Deputy Chairman 25/04/2012 ‐ Mr. Silvio González Moreno Chief Executive Officer 25/04/2007 24/04/2013 Mr. Nicolás Abel Bellet de Tavernost Executive 29/10/2003 25/03/2009 GAMP AUDIOVISUAL, S.A. Executive 25/04/2012 ‐ Mr. Josep M. Benet Ferrán Mr. Mauricio Casals Aldama Executive 25/03/2009 ‐ Ms. Aurora Catá Sala Executive 25/03/2009 ‐ Mr. José Creuheras Margenat Executive 16/06/2003 25/03/2009 Executive 16/06/2003 25/03/2009 Mr. Marco Drago Election procedure General Shareholders’ Meeting General Shareholders’ Meeting General Shareholders’ Meeting General Shareholders’ Meeting General Shareholders’ Meeting General Shareholders’ Meeting General Shareholders’ Meeting Ms. María Entrecanales Franco Executive 25/03/2009 ‐ General Shareholders’ Meeting Mr. Elmar Heggen Executive 21/12/2005 25/03/2012 General Shareholders’ Meeting Mr. Pedro Ramón y Cajal Agüeras Executive 29/08/2003 25/03/2009 Total number of directors General Shareholders’ Meeting 13
Indicate the resignations/dismissals from the Board of Directors during the period subject to reporting: Name or company name of director Status of the director at the date of resignation/dismissal Resignation/dismissal date C.1.3
Fill in the following tables on the Board members and their different statuses: 9
EXECUTIVE DIRECTORS Name or company name of the director Committee informing on his/her appointment Post within company organisation Mr. José Manuel Lara Bosch Appointments and Remuneration Committee Executive Mr. Maurizio Carlotti Appointments and Remuneration Committee Deputy Chairman IMAGINA MEDIA AUDIOVISUAL, S.L. represented by Mr. José Miguel Contreras Tejera Appointments and Remuneration Committee Deputy Chairman Mr. Silvio González Moreno Appointments and Remuneration Committee CEO 4
Total number of executive directors 30.769
% of Board members SIGNIFICANT‐SHAREHOLDER APPOINTED NON‐EXECUTIVE DIRECTORS Name or company name of director Mr. Nicolás Abel Bellet de Tavernost GAMP AUDIOVISUAL, S.A., represented by Mr. Josep M. Benet Ferrán Committee informing on his/her appointment Appointments and Remuneration Committee Appointments and Remuneration Committee Mr. Mauricio Casals Aldama Appointments and Remuneration Committee Mr. José Creuheras Margenat Appointments and Remuneration Committee Mr. Marco Drago Mr. Elmar Heggen Appointments and Remuneration Committee Appointments and Remuneration Committee Name or company name of significant shareholder being represented or which has proposed his/her appointment UFA FILM UND FERNSEH GMBH IMAGINA MEDIA AUDIOVISUAL, S.L. GRUPO PLANETA‐ DE AGOSTINI, S.L. GRUPO PLANETA‐ DE AGOSTINI, S.L. GRUPO PLANETA‐ DE AGOSTINI, S.L. UFA FILM UND FERNSEH GMBH Total number of significant‐
shareholder appointed directors % of Board members 6
46.153
10
Name or company name of director Aurora Catá Sala Profile Aurora is an Industrial Engineer and has an MBA from the Institute of Higher Business Studies (IESE). She began her professional career in the financial sector, first at Bank of America and, subsequently, as Financial Director at Nissan Motor Ibérica until 1996, when she assumed the General Management of RTVE in Catalonia. Following this stage, she occupied the post of Chief Executive Officer of Planeta 2010, and was the Director General of Recoletos Grupo de Comunicación from 2003 until the acquisition of Recoletos by RCS, at which time she assumed the General Management of Unidad Editorial Sociedad de Revistas and the Development Area of the RCS Group in Latam. She has been a member of various Boards of Directors of companies linked to the telecommunications and audiovisual industries. She joined Seeliger & Conde in 2008 as a Partner responsible for Media Practice. She is currently an independent Director at ABANTIA. She has had a seat on the Executive Committees of various institutions in economic and social fields, the Institute of Higher Business Studies (IESE) and the Círculo de Economía, among others. Name or company name of director Ms. María Entrecanales Franco Profile Chairwoman and co‐founder of the Balia Foundation for Infancy formed in 2001, which was awarded the IMPULSA prize in 2011, granted by the Girona Prince Foundation, and the UNICEF Spain 2010 prize for its volunteer network. María has a Law degree from the Complutense University, a Master's Degree in International Law from the London School of Economics (with Honours) and a Master's Degree in the functional management of NGOs from ESADE obtained in 2000. She worked for four years in the law firm 'Araoz Rueda' and has experience in the business field. She currently combines her work in the Balia Foundation with business initiatives. She is the co‐founder of the Lateral chain. She is a member of the Advisory Committee of the Barcelona Contemporary Art Museum and of the Advisory Board of SOS Kinderdorf Spain. She was on the Jury for the Codespa Foundation awards in 2005, 2006, 2007, 2008, 2009 and 2010 , on the Jury for the Fundación Empresa y Sociedad awards in 2007 and on the Jury for the Infancy awards of the Madrid Autonomous Community in 2008. She is a patron of the Antonio Nebrija University. She frequently takes part in round tables and conferences related with the world of the third sector in institutions such as La Caixa, Esade, Carrefour, the Eduardo Baneiros Foundation, etc. En 2011, she received the Spanish national executive woman's prize in the category of Solidarity and Humanitarian Action delivered by Estrategia Directiva. Name or company name of director Mr. Pedro Ramón y Cajal Agüeras Profile Chairman of the Partners' Board of the Ramón y Cajal law firm. He is a State Attorney on leave of absence, and is currently the Secretary to the Board of Directors of Indra Sistemas, S.A. and Renta 4 Banco, S.A. Total number of independent directors % of total directors 3
23.077
Indicate whether any independent director receives from the Company, or from its own Group, any amount or benefit other than directors' remuneration, or any director who maintains or has maintained, during the last year, a business relationship with the Company or with any Group company, be it in his/her own name or as a significant shareholder, director or senior executive of an entity which maintains or which has maintained such relationship. 11
Where appropriate, a reasoned statement of the Board will be included on the reasons for which it is considered that this director may perform his/her functions as independent director. Name or company name of director Description of relationship Reasoned statement OTHER NON‐EXECUTIVE DIRECTORS Committee informing on or proposing his/her appointment Name or company name of director Total number of other non‐executive directors % of total directors Detail the reasons why they cannot be considered to be significant shareholder‐appointed or independent directors, and their affiliations with the Company, its management or its shareholders: Company, executive or Name or company name Motives shareholder to which he/she is of director affiliated Indicate the changes, if any, which may have occurred during the period in the type of directorship of each director: Name or company name of director IMAGINA MEDIA AUDIOVISUAL, S.L. represented by Mr. José M. Contreras Tejera C.1.4
Former status Current status 24/04/2013 Significant‐
shareholder appointed non‐
executive director Internal or executive director Fill in the following table with the information relating to the number of directors in the last four years, and the type of such directors: % of Board members Number of directors of each type C.1.5
Date of the change Year
t Year t‐
1 Year t‐
2 Year t‐
3 Year t Year t‐
1 Year t‐
2 Year t‐
3 Executif Significant. Shareholder appointed 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Independent 2 2 2 2 66,6 66,6 66,6 66,6 Other Total 2 2 2 2 15,38 15,38 18,18 18,18 Explain the measures which, where appropriate, were adopted to endeavour to include a number of women on the Board of Directors, thereby enabling a balanced presence of men and women. 12
Explanation of the measures No specific measure was adopted for this purpose. On filling vacancies on the Board or on appointing new directors to the Appointments and Remuneration Committee, assess the competences and knowledge of the persons proposed for the position, and the functions and aptitudes required by the candidates. C.1.6 Explain the measures which, where appropriate, were adopted by the Appointments Committee in order that the selection procedures do not suffer from implicit bias hindering the selection of female directors, and that the Company deliberately seeks to include women which meet the sought‐after professional profile amongst its potential candidates: Explanation of the measures The Appointments and Remuneration Committee guarantees that the selection procedures do not suffer from implicit bias which may give rise to any type of discrimination and, in particular, that they do not hinder the selection of female directors. This Committee informs the Board of Directors of the matters of gender diversity which may arise during the selection processes of new directors. When, despite the measures adopted, where appropriate, the number of female directors is scant or nil, explain the reasons justifying such decision. Explanation of the reasons C.1.7
C.1.8
Explain the form of representation on the Board of the shareholders with significant shareholdings. The significant shareholders are represented on the Board of Directors by directors who have been proposed thereby to the General Shareholders' Meeting and whose appointment was informed upon favourably by the Appointments and Remuneration Committee. Explain, where applicable, the reasons why significant‐shareholder appointed directors have been appointed at the behest of the shareholder whose holding is less than 5% of the capital: Name or company name of shareholders IMAGINA MEDIA AUDIOVISUAL, S.L. Justification IMAGINA MEDIA AUDIOVISUAL, S.L. (IMAGINA) and GAMP AUDIOVISUAL, S.A. (GAMP) were appointed directors at the request of IMAGINA, which is the direct holder of 2.85%, and the indirect holder, through GAMP, of 3.63%, giving rise to a shareholding of 6.49%. Indicate whether formal petitions for presence on the Board have been ignored from shareholders whose holding is equal to or higher than that of others at whose behest significant‐shareholder appointed directors were nominated. Where applicable, explain why these petitions have been ignored. Yes No X 13
Name or company name of shareholders Explanation C.1.9 Indicate if any director has stood down before the end of his/her term in office, if the director has explained his/her reasons to the Board and through which channels, and if the director sent a letter of explanation to the entire Board, explain below at least the reasons that he/she gave: C.1.10
Name of the director Reason for the resignation Indicate the powers, if any, delegated to the chief executive officer(s): Name or company name of director Mr. Silvio González Moreno Brief description All the powers of the Board of Directors, except those which may not be delegated under legal or by‐law regulations. C.1.11
Identify, where appropriate, the members of the Board who assume director or executive posts in other companies forming part of the listed company's group: Name or company name of director Company name of the group entity Mr. Silvio González Moreno ANTENA 3 EVENTOS, S.L.U. Mr. Silvio González Moreno ANTENA 3 FILMS, S.L.U. Mr. Silvio González Moreno ANTENA 3 JUEGOS, S.A.U Mr. Silvio González Moreno ANTENA 3 MULTIMEDIA, S.L.U.. Mr. Silvio González Moreno ANTENA 3 NOTICIAS, S.L.U. Mr. Silvio González Moreno ATRES ADVERTISING, S.L.U. Mr. Silvio González Moreno GUADIANA PRODUCCIONES, S.A.U. Mr. Silvio González Moreno MÚSICA APARTE, S.A.U. Mr. Silvio González Moreno ATRESMEDIA FOTO, S.L.U. Position Representative of the Sole Director (Atresmedia Corporación de Medios de Comunicación, S.A. hereinafter Atresmedia Corporación) Representative of the Sole Director (Atresmedia Corporación) Representative of the Sole Director (Atresmedia Corporación) Representative of the Sole Director (Atresmedia Corporación) Representative of the Sole Director (Atresmedia Corporación) Representative of the Sole Director (Atresmedia Corporación) Representative of the Sole Director (Atresmedia Corporación) Representative of the Sole Director (Atresmedia Corporación) Representative of the Sole Director (Atresmedia Corporación) 14
Mr. Silvio González Moreno UNIPREX, S.A.U. Mr. Silvio González Moreno ANTENA 3 TELEVISION DIGITAL TERRESTRE DE CANARIAS, S.A.U. Mr. Silvio González Moreno Mr. Silvio González Moreno C.1.12
UNIPREX TELEVISION, S.L.U. UNIPREX VALENCIA TV, S.L.U. Representative of the Sole Director (Atresmedia Corporación) Representative of the Sole Director (Uniprex, S.A.U., hereinafter Uniprex) Representative of the Sole Director (Uniprex) Representative of the Sole Director (Uniprex) Detail, where appropriate, the directors of your company who are members of the Board of Directors of other companies listed on official securities markets in Spain other than your Group, which have been notified to the Company: Name or company name of director Company name of the listed Position company Mr. José Manuel Lara Bosch C.1.13
BANCO DE SABADELL, S.A. Director Indicate and, where applicable, explain whether the Company has established rules on the number of boards on which its directors may sit: Yes No X Explanation of the rules C.1.14 Indicate the Company's general policies and strategies which the plenary session of the Board has resolved to approve: Yes No
The investment and funding policy x The definition of the structure of the group of companies x The corporate governance policy The corporate social responsibility policy x x The strategic or business plan, and the annual management and budgetary targets; x The policy for the remuneration and performance assessment of senior management x The policy for controlling and managing risks, and the periodic monitoring of the internal control and reporting systems. x The dividend and treasury shares policy, especially their limits. x C.1.15
Indicate the global remuneration of the Board of Directors:: Remuneration of the Board of Directors (thousands of Euros) Amount of global remuneration corresponding to the rights accumulated by the directors in the area of pensions (thousands of Euros) Global remuneration of the Board of Directors (thousands of Euros) 6,218 0 6,218 15
Identify the members of the senior management that are not in turn executive directors, and indicate the total remuneration accrued to them during the year: C.1.16
Name or company name MR. FRANCISCO JAVIER BARDAJÍ HERNANDO MR. FERNANDO COSTI PÉREZ Position(s) Director General of Atresmedia Televisión Director of Auditing and Process Control MS. GLORIA FERNÁNDEZ LOMANA Director General of Antena 3 Noticias MR. JOSÉ MANUEL GONZÁLEZ PACHECO Director General of Atresmedia Digital MR. MIKEL LEJARZA ORTIZ Director General of Atresmedia Cine MR. ANTONIO MANSO MARCOS Financial Director MR. JAVIER NUCHE SANZ MR. EDUARDO OLANO CODESIDO MS. PATRICIA PÉREZ GONZÁLEZ Director General of Atresmedia Diversificación Director General of Atresmedia Publicidad Corporate Director General MR. MANUEL DE LA VIUDA FDEZ. DE HEREDIA Legal Advisory Services Director Total remuneration of senior management (in thousands of Euros) C.1.17
6,258
Indicate, where applicable, the identity of Board members who also sit on the Board of Directors of companies that hold significant shareholdings and/or in its Group companies: Name or company name of director Name of significant shareholder Position MR. JOSÉ MANUEL LARA BOSCH GRUPO PLANETA‐DE AGOSTINI, S.L. Chairman of the Board of Directors of GRUPO PLANETA‐DE AGOSTINI, S.L. MR. JOSÉ CREUHERAS MARGENAT GRUPO PLANETA‐DE AGOSTINI, S.L. Director of GRUPO PLANETA‐ DE AGOSTINI, S.L. Mr. MARCO DRAGO GRUPO PLANETA‐DE AGOSTINI, S.L. Deputy Chairman of the Board of Directors of GRUPO PLANETA‐ DE AGOSTINI, S.L. UFA FILM UND FERNSEH, MR. ELMAR HEGGEN GMBH SOLE‐SHAREHOLDER COMPANY IMAGINA MEDIA IMAGINA MEDIA AUDIOVISUAL, S.L. AUDIOVISUAL, S.L. Director of RTL GROUP, S.A. Director of GAMP AUDIOVISUAL, S.A. Detail, where appropriate, the relevant affiliations other than those considered in the above paragraph, which link Board members to significant shareholders and/or companies in their Group: 16
Name or company name of related director Name or company name of the related significant shareholder MR. ELMAR HEGGEN UFA FILM UND FERNSEH, GMBH SOLE‐SHAREHOLDER COMPANY Mr. NICOLAS ABEL BELLET DE TAVERNOST UFA FILM UND FERNSEH, GMBH SOLE‐SHAREHOLDER COMPANY Description of the relationship Financial Director and Director of the Corporate Centre of RTL GROUP, S.A. Director General of UFA FILM UND FERNSEH, GMBH SOLE‐
SHAREHOLDER COMPANY Member of the Operations Management Committee and member of the Management Committee (BERTELSMANN RTL)
C.1.18
Indicate whether during the year there has been any change in the Board Rules:. Yes No X Description of changes C.1.19
Indicate procedures for the selection, appointment, re‐election, evaluation and removal of directors. List the competent bodies, the procedures to be followed and the criteria to be employed in each procedure. Selection (article 13 of the Board of Directors' Regulations): The persons proposed to hold the office of Director will have to meet the requisites set out at all times by the legal provisions in force and the Articles of Association, as well as enjoy recognized solvency, competence and professional prestige and possess the appropriate knowledge and experience to hold such office. In order to be appointed a director, it is not necessary to be a shareholder, with the exception of that legally envisaged for the co‐optation system. Any persons affected by any prohibitions or by the incompatibilities established by the applicable legislation and this Regulation will not be able to hold the office of directors of the Company. Appointment (article 13 of the Board of Directors' Regulations): The members of the Board of Directors will be appointed by the General Shareholders’ Meeting, in accordance with the Spanish Companies Law and the Articles of Association. In the case of vacancies, the Board may appoint, through the system of co‐optation, from among the shareholders, those persons who will fill such vacancies until the first General Meeting. In the event a legal person is named director, it will be necessary to appoint a single natural person to permanently exercise the functions inherent to the position, who will be subject to the solvency, competence and experience requirements and to the system of prohibitions and incompatibilities indicated in this article, and the directors' duties stipulated in this Regulation will be personally claimable from him/her. The revocation of his/her representative by the legal person‐director will not take effect until the person substituting him/her has been appointed. The proposal for the appointment or re‐election of directors submitted by the Board to the Shareholders’ General Meeting, as well as the provisional appointment by co‐ option, 17
will require the prior relevant report and, in the case of the independent directors, a preliminary proposal from the Appointments and Remuneration Committee. From the moment of the publication of the announcement of the Shareholders' Meeting, the Board of Directors will publish through its web page the following information on those persons proposed to be appointed or ratified as directors: (i) the professional and biographical profile; (ii) other Boards of Directors to which he/she belongs, be they listed companies or otherwise; (iii) indication of the type of directorship, where appropriate, indicating, in the event of significant‐shareholder appointed directors, the shareholder at whose request they have been appointed, re‐elected or ratified or with whom they have links; (iv) the date of his/her first appointment as Company director as well as subsequent appointments; (v) Company shares and derivative financial instruments whose underlying is Company shares, whose owner is either the director whose post is going to be ratified or re‐elected, or the candidate to occupy the post of director for the first time. Such information will be kept up to date. Re‐election (article 14.1 of the Board of Directors' Regulations): The directors will exercise their duties during the period established in the Articles of Association (six years), and may be re‐elected one or more times for periods of equal duration. Assessment (article 16 of the Board of Directors' Regulations) The Chairman of the Board of Directors is responsible for organizing and coordinating with the chairpersons of the related Committees, the periodic assessment of the Board, and, where appropriate, that of the Chief Executive Officer or of the first executive. Removal (article 15 of the Board of Directors' Regulations) Directors will no longer hold their offices when so decided by the General Shareholders' Meeting, when they notify their resignation to the Company and once their term of office has elapsed. The directors must offer their resignation to the Board of Directors and execute the related resignation in the cases detailed in the following section C.1.21 of this Report. The Board of Directors will refrain from proposing the dismissal of any independent director before the end of the statutory term for which he/she was appointed, unless there are justified reasons, in the opinion of the Board and subject to a prior report from the Appointments and Remuneration Committee. A justified reason will be deemed to exist when the Director has not complied with the duties inherent to his/her position or has committed any of the actions preventing his/her classification as independent director. The removal of independent directors may also be proposed when a takeover bid, merger or similar corporate operation produces changes in the Company’s shareholder structure, in order to meet the proportionality criterion set out in article 12.1 of the Board of Directors' Regulations. When, as a result of resignation or for other reasons, a director, Secretary or Deputy Secretary to the Board of Directors leaves his/her post before the end of his/her term of office, he/she must explain the reasons in a letter submitted to all the Board members, without prejudice to the fact that this cessation is notified as a Significant Event to the Spanish National Securities Market Commission and that the reason for the cessation is explained in the Annual Corporate Governance Report. In particular, in the event that the resignation is due to the fact that the Board has adopted significant or reiterated decisions with respect to which the director has evidenced serious reservations which have led him/her to resign, such circumstances will be expressly stated in the resignation letter addressed to the remaining members. C.1.20 Indicate whether the Board of Directors assessed their activity in the year: Yes X No 18
Where appropriate, explain to what extent the self‐assessment gave rise to significant changes in internal organisation and in the procedures applicable to their activities: Description of changes The Board performed its self‐assessment for the first time in 2013 and, consequently, no changes have yet taken place, since the analysis was aimed at the whole of that year and the related report will be approved by the Board of Directors on the same date on which this Corporate Governance Report will be approved, and then the measures to be adopted will be decided upon. C.1.21 Indicate the cases in which directors are obliged to resign. According to article 15 of the Board of Directors' Regulations, directors will offer their resignation to the Board of Directors and execute the relevant dismissal in the following cases, if considered appropriate by the Board: a) When internal or executive directors no longer hold the executive or management offices to which their appointment as directors was linked. b) When the shareholder represented by the significant‐shareholder appointed directors sells its whole shareholding or when such shareholder reduces its shareholding up to a limit that requires a reduction in the number of its significant‐shareholder appointed directors. c) When an independent director unexpectedly commits any of the actions preventing his/her classification as an independent director. d) When they are subject to any of the incompatibilities or prohibitions set out by the legislation in force. e) When they are seriously reprimanded by the Appointments and Remuneration Committee for having infringed their obligations as directors. f) When the circumstances of the directors might damage the creditworthiness and reputation of the Company. In such cases, the director must immediately inform the Board about the criminal proceedings in which he/she is involved as defendant, as well as the subsequent outcome. g) When a director is indicted or tried for any of the crimes stated in article 213 of the Spanish Companies Law, the Board will examine the matter as soon as possible and, in view of the particular circumstances, decide whether or not he or she should continue in his post. Accordingly, the Board should reasonably disclose all such information in the Annual Corporate Governance Report. C.1.22 Exceptionally, that previously indicated in the resignation causes envisaged in letters a), b) and c) will not apply when the Board of Director considers, subject to a report by the Appointments and Remuneration Committee, that causes exist justifying the director's non‐dismissal, without affecting the impact new unexpected circumstances may have on the director's rating. Explain whether the function of Chief Executive Officer in the Company is met by the Chairman of the Board. If so, indicate the measures taken to limit the risks of accumulating powers in a single person: Yes No X 19
Measures to limit risks Indicate and, where applicable, explain whether rules have been established to empower one of the independent directors to request a Board meeting be called or new points to be included on the Agenda, to coordinate and give voice to the concerns of non‐executive directors and to direct the assessment by the Board of Directors. Yes No X Explanation of the rules C.1.23 Are reinforced majorities required, other than the legal majorities, for any type of resolution?: Yes No X Where appropriate, describe the differences. Description of the differences C.1.24 Explain whether there are specific requirements, other than those regarding directors, to be appointed Chairman of the Board of Directors. Yes No X Description of the requirements C.1.25 Indicate whether the Chairman has the casting vote: Yes No X Areas in which a casting vote applies: C.1.26 Indicate whether the Articles of Association or Board of Directors' Regulations set any age limit for directors: Yes No X Indicate whether the Articles of Association or Board of Directors' Regulations set any limit regarding the term of office of independent directors, other than that established in the regulations: C.1.27 Yes No X C.1.28
Maximum term of office Indicate whether the Articles of Association or Board of Directors' Regulations establish specific regulations to delegate voting to the Board of Directors, the means of such delegation and, in particular, the maximum delegation per director, as well as whether the obligation has been established to delegate in one director of the same type. Where appropriate, details these regulations briefly. 20
In conformity with that established in article 29 of the Board of Directors' Regulations, all the directors must attend the meetings held, except when just cause exists to the contrary. When non‐attendance is unavoidable, the director may grant proxy to another director. Such delegation must be made in writing for each meeting, addressed to the Chairman or the Secretary, with the related voting instructions, and which may be notified by any adequate technological procedure (fax, email or letter). Any given Board member can represent more than one of the other members. The directors' absences at Board meetings are included in the Annual Corporate Governance Report for each year. C.1.29
Indicate the number of meetings the Board of Directors has held during the year. Where applicable, indicate how many times the Board has met without the Chairman in attendance: In calculating this number, proxies granted without specific instructions shall be considered non‐attendance: I suppose that it is the session‐less meeting. Number of Board meetings 9 Number of Board meetings not attended by the Chairman 0 Indicate how many meetings have been held by the various Board committees throughout the year: Number of Executive Committee meetings 9 Number of Audit Committee meetings 4 Number of Appointments and Remuneration Committee meetings 4 Indicate the number of meetings the Board of Directors has held during the year with the attendance of all its members. In calculating this number, proxies granted without specific instructions shall be considered non‐attendance: C.1.30
C.1.31
Attendance of directors 8 % of attendances to total votes during the year 88.8 Indicate whether the individual and consolidated financial statements submitted to the Board for its approval have been previously certified: Yes No X Where applicable, identify the person(s) who has (have) certified the Company's individual and consolidated financial statements to be prepared by the Board: C.1.32
Name Position ‐ ‐ Explain the mechanisms, if any, established by the Board of Directors to prevent the individual and consolidated financial statements prepared by it from being presented to the Shareholders' Meeting with a qualified auditors' report. The Board of Directors' Regulations (article 24.i) entrusts the Audit and Control Committee with the duty of ensuring that the Board submits the accounts to the Shareholders’ Meeting without reservations or qualifications in the auditors' report. In exceptional cases in which said reservations or qualifications may arise, both the Chairman of the Audit and Control Committee and the auditors will have to provide shareholders with a clear explanation of the content and scope thereof. 21
C.1.33
The Audit and Control Committee foresees the participation of the external auditors in certain of the meetings envisaged in each year, as a consequence of the half‐yearly review and of the conclusions of the final audit work. At these meetings, the conclusions reached by the external auditors as a consequence of their work are anticipated and analysed, in order to avoid the need to include any potential reservation, mention or qualification in the auditors' report. Does the Secretary to the Board have the status of director? Yes No X C.1.34
Explain the procedures to appoint and remove the Secretary to the Board, indicating whether his/her appointment or removal has been reported by the Appointments Committee and approved by the plenary Board meeting. Procedure for appointment and removal. The Board of Directors appoints the Secretary to the Board, which may or may not be a Board Member. As many Deputy Secretaries as necessary may be appointed, either members or non‐members, to assist the Secretary, or substitute him/her in the event of absence or inability to attend, or should the Office of Secretary not be filled. The appointment or removal of the Secretary or Deputy Secretary must be reported by the Appointments and Remuneration Committee and approved by the plenary Board meeting. Both the Appointments and Remuneration Committee and the Board of Directors will be responsible for ensuring that the Secretary and the Deputy Secretary(ies) are chosen from among prestigious professionals with the ideal qualifications to perform their functions, and for also guaranteeing their independence and impartiality. Yes No Did the Appointments Committee report the appointment? X Did the Appointments Committee report the removal? X Did the plenary Board meeting approve the appointment? X Did the plenary Board meeting approve the removal? X Is the Secretary to the Board particularly in charge of ensuring that the good governance recommendations are followed? Yes X No Observations Articles 19.5‐e and 19.6‐c of the Board of Directors' Regulations establish that the Secretary to the Board of Directors must provide special supervision to guarantee the legal and by‐law regularity of the Board's procedures, also verifying compliance with the provisions of the regulatory bodies, together with their recommendations, and it will guarantee that the Company's corporate governance procedures and rules are respected. C.1.35
Indicate what mechanisms the Company has established, if any, to preserve the independence of the external auditors, the financial analysts, the investment banks and the rating agencies. 22
The Audit and Control Committee is responsible for ensuring the independence and efficiency of audits; for proposing the selection, appointment, re‐election and dismissal of the internal audit head; for receiving regular information regarding his/her activities; and for verifying that senior management takes into account the conclusions and recommendations of its reports. In this connection, in accordance with the Audit Law approved by Legislative Royal‐Decree 1/2011 of 1 July and its enacting Regulation, approved by Royal Decree 1517/2011 of 31 October, as well as the consolidated Spanish Companies Law, approved by Legislative Royal‐ Decree 1/2010 of 2 July, the Audit and Control Committee establishes the appropriate relations with the external auditor to receive information on matters that may jeopardize its independence. C.1.36
For this purpose: a) On an annual basis, the Company receives written confirmation from the external auditors of its independence vis‐à‐vis the entities directly or indirectly related to it, together with information on additional services of any kind provided to these entities by the aforementioned auditors, or by persons or entities related thereto, in accordance with the audit legislation. b) The Company must inform the Spanish National Securities Market Commission, as a Significant Event, of a change of auditor, attaching thereto, where appropriate, a statement regarding the possible disagreements with the outgoing auditor and, if any, with the content thereof. c) The Company has established the appropriate measures to ensure that the Company and the auditor comply with the applicable laws regarding the provision of services other than auditing services, with the restrictions on the concentration of the auditor’s business, and, in general, with other laws stipulated to safeguard the independence of auditors. d) The Audit and Control Committee has competency to examine the circumstances which motivated the external auditor to resign, in the event this occurs. The Audit and Control Committee is obliged to issue a report each year expressing an opinion on the independence of the auditors, including a statement on the provision of its additional services of any kind (Additional Provision Eighteen of Securities Market Law 24/1988). The notes to the financial statements and this Corporate Governance Report contribute information on the audit and other services provided by the external auditor in the year. Indicate whether the Company has changed its external auditor during the year. If so, identify the incoming and outgoing auditors: Yes No X Outgoing auditor Incoming auditor If there were disagreements with the outgoing auditor, explain their grounds: Yes No X Explanation for disagreements 23
C.1.37
Indicate whether the audit firm performs other engagements for the Company and/or its Group other than the audit. If so, declare the amount of fees received for such work and the percentage of such fees with respect to the total fees charged to the Company and/or its Group: Yes X No Amount for engagements other than audit work (thousands of Euros). Amount of engagements other than audit work/ total amount billed by the audit firm (in %) Company Group Total 36
0 36
16.071
0 12.544
C.1.38
Indicate if the auditors' report on the financial statements for the preceding year contains any reservations or qualifications. If so, indicate the reasons given by the Chairman of the Audit Committee to explain the content and scope of said reservations or qualifications. Yes No X Explanation of the reasons C.1.39
Indicate the number of years during which the current audit firm has been performing the audit of the financial statements for the Company and/or its Group without interruption. Likewise, indicate the percentage of the number of years audited by the current audit firm with respect to the total number of years in which the financial statements have been audited: Company Group Number of consecutive years 12 12 Number of years audited by current audit firm/number of years the Company has been audited (%) Company Group 66.7 66.7 C.1.40
Indicate and, where appropriate, detail whether a procedure exists for the directors to rely on an external advisor: Yes X No Details of the procedure The procedure is envisaged in article 34.6 of the Board of Directors' Regulations. In order to help directors to exercise their functions, the Board, at the request of the directors, may arrange with a charge to the Company, the counselling of legal, accounting, financial or other experts. Such appointment must necessarily relate to specific problems of certain significance and complexity arising in the performance of the related functions. 24
The arrangement request must be made to the Chairman and may be denied by the Board of Directors if it is accredited that: a) it is not necessary for the strict performance of the functions entrusted to the directors; b) its cost is not reasonable in comparison with the scale of the problem and of the Company's assets and income; c) the technical assistance obtained may be adequately dispensed by Company experts and technical staff; d) from a confidentiality standpoint, the information which may be provided to the expert may constitute a risk. C.1.41
Indicate and, where appropriate, detail whether a process exists for directors to obtain the information required in order to be able to prepare Board meetings in sufficient time: Yes X No Details of the procedure Together with the announcement of the Board meetings, in conformity with the procedure stipulated in article 28.4 of the Board of Directors' Regulations, each director receives the Agenda proposed by the Chairman, which should sufficiently explain the matters to be dealt with. The announcement should be accompanied by the information to be submitted at the Board meeting, except when, in the Chairman's opinion, in exceptional cases and for security reasons, it is more appropriate that such documentation be examined only at Company headquarters. Furthermore, article 34.3 of the Board of Directors' Regulations stipulates that it is each director's obligation to obtain all the information that it deems necessary at all times for the sound performance of his/her duties. In particular, each of the directors is obliged to diligently inform upon the Company's performance. For such purpose, each director is invested with the most extensive powers to furnish information on any aspect of the Company, to the extent he/she deems necessary or advisable in order to diligently exercise his/her functions. This duty of disclosure also extends to the various subsidiaries integrating the Atresmedia Group, and it must always be exercised in accordance with the requirements of good faith. For these purposes, the Company will provide the specific support in order that the new directors may acquire speedy and sufficient knowledge of the Company, and of its corporate governance rules, and may establish guidance programmes in this connection. Likewise, the Company may establish, when the circumstances so advise, programmes to update knowledge aimed at directors. In order not to adversely affect the Company's ordinary management, the duty of disclosure will be channelled through the Chairman, or the Secretary to the Board of Directors, who will deal with the director's requests, directly providing them with information or offering them the Company delegates considered appropriate for each case. In the event that the Chairman or the Secretary to the Board of Directors are absent or cannot channel such disclosure, such task will be performed by one of the Deputy Chairmen or by a Deputy Chairman of the Board of Directors, respectively. Likewise, the functions performed by the Secretary to the Board include that of adopting the measures required in order that the Board is always up to date with the matters dealt with and the decisions adopted by the Executive Committee and the remaining Committees. Accordingly, he/she must guarantee that all the Board members receive a copy of the minutes of the Executive Committee and remaining Committee meetings. 25
C.1.42
Indicate and, where appropriate, detail whether the Company has established rules obliging the directors to inform upon and, where appropriate, resign in those cases which may harm the Company's proceeds and reputation: Yes X No Explain the rules In accordance with article 15.2.f) of the Board of Directors' Regulations, the directors must offer their resignation to the Board of Directors and resign accordingly should the Board deem it advisable when, in the figure of director, circumstances arise which may adversely affect the Company's proceeds and reputation. In such cases, the director must immediately inform the Board about the criminal proceedings in which he/she is involved as defendant, as well as the subsequent outcome. C.1.43
Indicate whether any Board member has informed the Company of being sued or having any court proceedings initiated against him or her for any of the offences listed in article 213 of the Spanish Companies Law: Yes No X Name of the director Criminal case Observations Indicate whether the Board of Directors has analysed the case. If the response is affirmative explain in a reasoned manner the decision taken on whether it is appropriate or otherwise for the director to continue in his/her position or, where appropriate, set forth the procedures performed by the Board of Directors up to the date of this report or which are envisaged. Yes No Decision taken/procedure performed Reasoned explanation C.1.44
C.1.45
Detail the significant agreements entered into by the Company which take effect, alter or terminate if there is a change of control in the Company following a takeover bid, and their effects. Identify on an aggregate and detailed basis the agreements reached between the Company and its administration and management posts or employees which have indemnity payments, guarantee or lock‐in clauses, when such employees resign or are unfairly dismissed, or whether the contractual relationship comes to an end as a result of a takeover bid or other type of transaction. Number of beneficiaries Type of beneficiary 2
Description of the resolution 26
DIRECTORS When executive or internal directors are hired, indemnity clauses may be stipulated, applicable only during the first two years in which the contract is in force and only in the event of a unilateral termination by the Company. The maximum limit of the amount of this indemnity payment will be one year's salary. Indemnity clauses may also be stipulated in the event of a change in the Group's controlling shareholder, with a maximum indemnity payment equivalent to an annual payment of the director's full remuneration, including the variable and fixed component. This type of clause is not common. EXECUTIVES EMPLOYEES In certain exceptional cases, following individual negotiation and motivated by the special interest the business might have in contracting a specific professional, a special compensation regime may be established, that can be temporary or permanent, and in which the particular circumstances of this contract and its future termination are taken into account. The general rule is that under no circumstance would a takeover bid itself be grounds for the termination of an employment contract or the payment of indemnity. Indicate whether these contracts must be disclosed and/or approved by the Company or Group bodies: Board of Directors Shareholders’ Meeting X Body authorising the clauses Was the Shareholders’ Meeting informed of the clauses? C.2
YES NO X Board of Directors' Committees C.2.1
Detail all the Board of Directors' Committees, their members and the proportion of significant‐shareholder appointed and independent directors integrating them: EXECUTIVE COMMITTEE Name Mr. José Manuel Lara Bosch Position Chairman Mr. Silvio González Moreno Director Mr. Maurizio Carlotti Director Imagina Media Audiovisual, S.L. (represented by Mr. José Miguel Director Contreras Tejera) Mr. Nicolás Abel Bellet de Tavernost Director Mr. Marco Drago Director Type Executive Executive Executive Executive Significant‐shareholder appointed non‐executive director Significant‐shareholder appointed non‐executive director % of executive directors 66.67 27
% of significant‐shareholder appointed directors 33.33 % of independent directors 0 % of other non‐executive directors 0 AUDIT AND CONTROL COMMITTEE Name Mr. Pedro Ramón y Cajal Position Type Chairman Independent Significant‐shareholder Mr. Elmar Heggen Deputy Chairman Ms. Aurora Catá Director Mr. José Creuheras Director appointed non‐executive director Independent Significant‐shareholder appointed non‐executive director GAMP AUDIOVISUAL, S.A., represented by Mr. Josep María Benet Significant‐shareholder Director appointed non‐executive director % of executive directors 0 % of significant‐shareholder appointed directors 60 % of independent directors 40 % of other non‐executive directors 0 APPOINTMENTS AND REMUNERATION COMMITTEE Name Position Type Ms. María Entrecanales Franco Chairwoman Mr. Nicolás Abel Bellet de Tavernost Deputy Chairman Mr. Mauricio Casals Aldama Director Mr. José Creuheras Margenat Director Mr. Pedro Ramón y Cajal Agüeras Director Independent Significant‐
shareholder appointed non‐
executive director Significant‐
shareholder appointed non‐
executive director Significant‐
shareholder appointed non‐
executive director Independent % of executive directors 0 % of significant‐shareholder appointed directors 60 % of independent directors 40 % of other non‐executive directors 0 C.2.2
Fill out the following table with the information relating to the number of female directors forming the Board of Directors' committees in the last four years: 28
Number of directors Year t % number Executive Committee Audit Committee Appointments and Remuneration Committee Year t‐1 % number Year t‐2 % number Year t‐3 % number 0 0 0 0 20% 25% 25% 25% 20% 20% 20% 20% C.2.3
Mark with a cross the duties assigned to the Audit Committee (formerly B.2.2): Supervision of the process of preparing and integrating the financial information relating to the Company and, where appropriate, to the Group, reviewing compliance with the regulatory requirements, the adequate definition of the consolidation scope and the correct application of accounting policies. Yes No YES Periodical review of the internal control and risk management systems, in order that the main risks are suitably identified, managed and notified. Oversight of the independence and effectiveness of the internal audit function; proposing the selection, appointment, re‐election and removal of the internal audit service head, and the estimate for that service; receiving periodic information on its activities; and verifying whether senior management has taken into account the conclusions and recommendations of its reports. Establishment and supervision of a mechanism enabling the employees to confidentially and, if deemed appropriate, anonymously, notify the irregularities of potential importance, especially financial and accounting irregularities, communicated within the Company. Submission to the Board of the selection, appointment, re‐election and substitution proposals for the external auditor, together with the recruitment conditions. Regular receipt from the external auditor of information on the audit plan and on the results of its implementation, and verify whether senior management takes into account his/her recommendations. Assurance of the external auditor's independence. YES YES YES YES YES YES C.2.4
Provide a description of the organisation and functioning rules, together with the responsibilities attributed to each of the Board's Committees. Committee name AUDIT AND CONTROL COMMITTEE Brief description (Article 42 of the Articles of Association and article 23 of the Board of Directors' Regulations). The Audit and Control Committee is formed by no less than three (3) and no more than five (5) directors. All the directors are non‐executive and are appointed by the Board from among its members, taking into account the knowledge, aptitudes and experience of the directors and the tasks of the Committee. 29
The Committee itself appoints its Chairman from among its members for a maximum period of four (4) years, and he/she may be re‐elected after the period of one (1) year following his/her removal. The Secretary of the Audit and Control Committee is the Secretary to the Board of Directors or a Deputy Secretary. In the event that the Secretary of the Committee is absent or cannot exercise his/her role, the Committee member appointed by him/her from among the attendees at the meeting in question will act as Secretary. The Committee meets following an announcement by the Chairman, once every quarter, and as requested by at least three of its members, by the Executive Committee or the Chief Executive Officer. The Audit and Control Committee is validly constituted when the number of directors present or duly represented exceeds the number of absent directors, and it adopts its resolutions by absolute majority of the attendees. In the event of a tie, the Chairman has the casting vote. The Committee meetings may be attended by executive directors, when expressly agreed by the Committee members. Likewise, the Committee may convene any Company employee or director, and even arrange from them to appear without the presence of any other director. As a general and consolidated rule with regard to this Committee's activity, both the Financial Director and the Internal Audit and Process Control Director attend all its meetings and occasionally other directors. The external auditor also attends on a regular basis. The Audit and Control Committee may seek the counselling of external professionals, under article 34.6 of the Board of Directors' Regulations. Minutes will be prepared after each meeting of the Committee and the Secretary will forward a copy to all the members of the Board. The Board deliberates on the Committee's proposals and reports. The Committee will report its activities and the work performed on the occasion of the first plenary meeting of the Board held after each one of the meetings of the Committee. Committee name APPOINTMENTS AND REMUNERATION COMMITTEE Brief description (Article 43 of the Articles of Association and article 25 of the Board of Directors' Regulations). The Appointments and Remuneration Committee is formed by no less than three (3) and no more than five (5) non‐executive directors, appointed by the Board from among its members, taking into account the knowledge, aptitudes and experience of the directors and the tasks of the Committee. The Chairman of the Appointments and Remuneration Committee is appointed by the Committee itself from among its independent members for a maximum period of four (4) years, and he/she may be successively re‐elected. The Secretary of the Appointments and Remuneration Committee is the Secretary to the Board of Directors or a Deputy Secretary. In the event that the Secretary of the Committee 30
is absent or cannot exercise his/her role, the Committee member appointed by him/her from among the attendees at the meeting in question will act as Secretary. The Committee meets following an announcement by the Chairman, when he/she deems it appropriate, and as requested by at least three of its members, by the Executive Committee or the Chief Executive Officer. The Appointments and Remuneration Committee is validly constituted when the number of directors present or duly represented exceeds the number of absent directors, and it adopts its resolutions by absolute majority of the attendees. In case of tie, the Chairman will have the casting vote. The Committee meetings may be attended by executive directors, when expressly agreed by the Committee members. Likewise, the Committee may convene any Company employee or director, and even arrange from them to appear without the presence of any other director. For enhanced compliance with its functions, the Appointments and Remuneration Committee may seek the counselling of outside professionals, under article 34.6 of the Board of Directors' Regulations. Minutes will be prepared after each meeting of the Committee and the Secretary will forward a copy to all the members of the Board. The Board deliberates on the Committee's proposals and reports. The Committee will report its activities and the work performed on the occasion of the first plenary meeting of the Board held after each one of the meetings of the Committee. Committee name EXECUTIVE COMMITTEE Brief description (Article 39 of the Articles of Association and articles 21 and 22 of the Board of Directors' Regulations). Composed of no less than three (3) and no more than nine (9) directors, preferably five (5). The exact number of members integrating this Committee at each moment will be determined by the Board, considering its size, the optimum operability and maximum effectiveness of the Executive Committee and the number of members of the remaining Committees regulated under the Board of Directors' Regulations. They are appointed with the favourable vote of at least two thirds of the Board of Directors. In any case, the following are members of the Executive Committee as a result of their position: the Chairman of the Board of Directors, who will also be Chairman of the Committee once he/she has been appointed member thereof, and the Chief Executive Officer. The Chairman of the Executive Committee is the director who holds this post on the Board of Director once he/she has been appointed a member of the Committee and, in his/her absence, it would be the Deputy Chairman and, should there be various, he/she corresponding by order, provided that he/she is a member thereof. In the event that the Chairman of the Executive Committee is absent or cannot exercise his/her role, the Committee member appointed by him/her from among the attendees at the meeting will act as Chairman. 31
C.2.5
The Secretary of the Executive Committee will be that of the Board of Directors and, in his/her absence, the Deputy Secretary, and, should there be various, he/she corresponding by order. In the event that all of the foregoing are absent or cannot exercise their role, the Committee member appointed by him/her from among the attendees at the meeting in question will act as Secretary. The Secretary of the Committee will only be entitled to vote if she/he also performs the function of director and member of the Executive Committee. The delegation of powers to the Executive Committee requires the favourable vote of two thirds of the members of the Board of Directors, and may include all or a part of the Board's powers, except those not delegable by law, by‐laws or regulations. It may have an undefined nature, while its revocation is not agreed upon by an equal majority. The Executive Committee meets subject to an announcement by the Chairman, provided that it is requested in the Company's interest, on a regular basis, once a month, unless not deemed necessary by the Chairman. The Committee is validly constituted with the direct assistance or by means of representation of, at least, the majority of its members, and adopts its resolutions by the absolute majority of its members present or duly represented, always by another director member of the Executive Committee. In case of tie, the Chairman will have the casting vote. The Secretary will be in charge of drafting the Minutes of each meeting of the Executive Committee. The Board of Directors must always have knowledge of the matters dealt with and of the decisions adopted by the Executive Committee. With this objective, the Secretary to the Board ensures that all Board members receive a copy of the Minutes of the Executive Committee meetings. Indicate, where appropriate, the existence of regulation of the Board committees, the place in which they are available for consultation and the amendments made in the year. In turn, indicate if any annual report on the activities of each committee has been prepared voluntarily. No specific regulations exist with respect to Board Committees. Such rules are included in the Board of Directors' Regulations, which establish the competences, breakdown, etc. of such committees, and which are available for consultation on the Spanish National Securities Market Commission (CNMV) web page and on the corporate web page. It is envisaged that each Committee of the Board of Directors will approve, on the same date of approval of this Report by the Board, a report on the activity carried on by each of them in 2013. C.2.6
Indicate if the composition of the Executive Committee reflects the participation on the Board of the different directors based on their status: Yes No X 32
If no, explain the breakdown of its Executive Committee The Executive Committee is formed by executive directors and by significant‐shareholder appointed directors: − The Chairman of the Board, executive director. − The two Deputy Chairmen, executive directors. − The CEO, who is an executive director. − A significant‐shareholder appointed director of GRUPO PLANETA‐DE AGOSTINI, S.L. the largest shareholder with the largest stake (41.70%). − A significant‐shareholder appointed director of the second most significant shareholder (UFA FILM UND FERNSEH GMBH), which owns 19.17% of the share capital.
The Secretary of the Executive Committee is the Secretary to the Board of Directors. D RELATED PARTY AND INTRA‐GROUP TRANSACTIONS D.1
Identify the competent body and explain, where appropriate, the procedure to approve related‐party and intra‐group transactions. Competent body to approve the related‐party transactions Subject to a favourable report issued by the Audit and Control Committee, the Board of Directors is responsible for approving the related‐party and intra‐group transactions. Procedure to approve the related‐party transactions The Audit and Control Committee is responsible for reporting to the Board of Directors, prior to the adoption by the latter of the respective decisions on related‐party transactions, except those performed under contracts whose conditions are standardised and which are applied en mass to many customers and, furthermore, at prices or rates generally established by whomever acts as supplier of the good or service in question, provided that its amount does not exceed one per cent (1%) of the Company's annual income. Explain whether the approval of related‐party transactions has been delegated, indicating, where appropriate, the body or persons to which it has been delegated. No. D.2
List the relevant transactions in terms of their amount or area between the Company or its Group companies, and the Company’s significant shareholders: Name or company name of significant shareholder Grupo Planeta de Agostini, S.L. Grupo Planeta de Agostini, S.L. Grupo Planeta de Agostini, S.L. Grupo Planeta de Agostini, S.L. Grupo Planeta de Agostini, S.L. Grupo Planeta de Agostini, S.L. Name or company name of the Company or Group company Nature of the relationship ATRESMEDIA CORPORACIÓN DE MEDIOS DE COMUNICACIÓN, S.A. Contractual ANTENA 3 NOTICIAS, S.L.U. Contractual ATRES ADVERTISING, S.L.U. Contractual ANTENA 3 MULTIMEDIA, S.L.U.. Contractual CORDINA PLANET, S.L.U. Contractual ANTENA 3 FILMS, S.L.U. Contractual Type of transaction Receipt of services Receipt of services Receipt of services Receipt of services Receipt of services Receipt of services Amount (thousands of Euros) 3,024
900
474
400
38
25
33
Grupo Planeta de Agostini, S.L. Grupo Planeta de Agostini, S.L. Grupo Planeta de Agostini, S.L. Grupo Planeta de Agostini, S.L. Grupo Planeta de Agostini, S.L. Grupo Planeta de Agostini, S.L. Imagina Media Audiovisual, S.L. Imagina Media Audiovisual, S.L. Imagina Media Audiovisual, S.L. Imagina Media Audiovisual, S.L. Imagina Media Audiovisual, S.L. Imagina Media Audiovisual, S.L. Imagina Media Audiovisual, S.L. Imagina Media Audiovisual, S.L. Imagina Media Audiovisual, S.L. Imagina Media Audiovisual, S.L. Imagina Media Audiovisual, S.L. Ufa Films und Fernseh Gmbh Ufa Films und Fernseh Gmbh D.3
Receipt of services Provision of services Provision of services Provision of services Provision of services Provision of services Receipt of services Receipt of services Receipt of services Receipt of services Receipt of services Provision of services Provision of services Provision of services Provision of services Provision of services FUNDACION ATRESMEDIA Contractual 8
ATRESMEDIA CORPORACIÓN DE MEDIOS DE COMUNICACIÓN, S.A. Contractual ATRES ADVERTISING, S.L.U. Contractual ANTENA 3 FILMS, S.L.U. Contractual ANTENA 3 EVENTOS, S.L.U. Contractual UNIPREX, S.A.U. Contractual ATRESMEDIA CORPORACIÓN DE MEDIOS DE COMUNICACIÓN, S.A. Contractual ANTENA 3 FILMS, S.L.U. Contractual ATRES ADVERTISING, S.L.U. Contractual PUBLISEIS INICIATIVAS PUBLICITARIAS, S.A.U. Contractual UNIPREX TELEVISION, S.L.U. Contractual ATRES ADVERTISING, S.L.U. Commercial ATRESMEDIA CORPORACIÓN DE MEDIOS DE COMUNICACIÓN, S.A. Contractual UNIPREX, S.A.U. Commercial ANTENA 3 FILMS, S.L.U. Contractual MÚSICA APARTE, S.A.U. Contractual ATRESMEDIA CORPORACIÓN DE MEDIOS DE COMUNICACIÓN, S.A. Contractual Finance costs ATRESMEDIA CORPORACIÓN DE MEDIOS DE COMUNICACIÓN, S.A. Contractual Receipt of services 4,265
ATRES ADVERTISING, S.L.U. Contractual Receipt of services 1
543
259
65
28
4
111,275
1,971
664
195
76
124,332
7,622
4,615
3,905
2
3,207
Ufa Films und ATRESMEDIA CORPORACIÓN DE Provision of Contractual 644
Fernseh Gmbh MEDIOS DE COMUNICACIÓN, S.A. services Ufa Films und Provision of ANTENA 3 FILMS, S.L.U. Contractual 17
Fernseh Gmbh services Ufa Films und Provision of ANTENA 3 EVENTOS, S.L.U. Contractual 9
Fernseh Gmbh services List the relevant transactions in terms of their amount or area between the Company or its Group companies, and the Company’s directors or executives: Name or company name of the directors or executives Name or company name of the related party Amount Nature of the transaction Link (Thousands of Euros) D.4
List the relevant transactions in which the Company has engaged with other companies belonging to the same group, except those that are eliminated in the process of drawing up the 34
consolidated financial statements and that do not form part of the Company's ordinary activities with respect to its object and conditions. In any case, all intra‐group transactions performed with entities located in countries or territories considered to be tax havens will be disclosed: Company name of the Group entity D.5 D.6
Brief description of the transaction Amount (Thousands of Euros) Indicate the amount of the transactions performed with other related parties. List the mechanisms established to detect, determine and resolve possible conflicts of interest between the Company and/or its Group, and its directors, managers and/or significant shareholders. The mechanisms relating to conflicts of interest of the Board members are regulated in the Board of Directors' Regulations, specifically in its article 35.3 e). Such article stipulates that the directors must notify the Board of Directors of any direct or indirect conflict with Company interests. Should such conflict be the consequence of a transaction between the director and the Company, this transaction may only be performed with the prior authorisation of the Board itself which, in turn, will have required a decision to have been handed down in this connection by the Appointments and Remuneration Committee. In the event of conflict, the director involved will abstain from intervening in the deliberation and decision‐making process on the transaction generating the conflict. The directors affected by the conflict of interests may not delegate their vote to the Board of Directors and must be absent from the meeting room when the Board votes and deliberates in this regard. The Annual Corporate Governance Report will include all the conflicts of interest in which the Company's directors are immersed. The directors must also notify the direct and indirect holdings which, both they and the persons related thereto under the terms of this article, owned in the capital of a company with an identical, similar or complementary activity to that constituting the company object of Atresmedia Corporación, together with the positions or functions exercised thereat. This information must be included in the notes to the financial statements of each year. Likewise, the directors must inform the Company of all the posts they hold, and of all the activities they perform at other companies or entities and, in general, of any event or situation which may be relevant in their role as Company directors. If a director or any other person affected by the Internal Rule of Conduct in the area of Security Markets is involved in a possible conflict of interest, the mechanism is disclosed therein. The affected party must inform the Regulatory Compliance Committee as soon as possible, through a computer system installed for this purpose, of any situations which may potentially give rise to conflicts of interest as a result of his/her activities outside the ATRESMEDIA Group, his/her family relationships, his/her personal assets or any other circumstances with: a) Financial intermediaries operating with the ATRESMEDIA Group. b) Professional or institutional investors which have a significant relationship with the ATRESMEDIA Group. c) Significant equipment or material suppliers. 35
d)
D.7
Providers of professional services or external advisors, including those which provide legal, consulting or audit services. With regard to the significant shareholders, article 9.2 c) of the Board of Directors' Regulations reserves for the Board the approval of the Company transactions with directors, significant shareholders or representatives on the Board, or with persons related thereto (related‐party transactions), except in those related‐party transactions performed under contracts whose conditions are standardised and which are applied en mass to many customers and, furthermore, at prices or rates generally established by whomever acts as supplier of the good or service in question, provided that its amount does not exceed one per cent (1%) of the Company's annual income. The approval of the Board with respect to related transactions must first have the favourable report of the Audit and Control Committee, which must assess the transaction from the standpoint of equality in dealings with the shareholders and the market conditions thereof. The annual public disclosures include a summary of the significant transactions performed by the Company with its directors and significant shareholders. Is more than one Group company listed in Spain? Yes No X Identify the listed subsidiaries in Spain: Listed subsidiaries Indicate whether they have accurately and publicly disclosed the respective areas of activity they engage in, and any possible business dealings between them, as well as between the listed subsidiary and other Group companies; Yes No Define the possible business relations between the Parent and the listed subsidiary, and between the latter and the other Group companies Identify the mechanisms envisaged to resolve the possible conflicts of interest between the listed subsidiary and the other Group companies: Mechanisms to resolve the possible conflicts of interest E RISK MANAGEMENT AND CONTROL SYSTEMS E.1
Explain the scope of the Company's Risk Management System. The Risk Management Model implemented at the Atresmedia Group is a tool to assist in Management decision‐making and to efficiently address the risks through the identification and implementation of the controls and corrective measures required for all the risks identified, if any, thereby improving the capacity for generating value. The Atresmedia Group’s Risk Management Model has the following goals: 36
1.
2.
3.
4.
5.
‐ Consistency and Uniformity in the Application of the Model: Assuring uniformity in the definition, identification and measurement of risks at all the Group companies. Internal Control Environment: Updating existing controls and measuring their degree of efficiency on a permanent basis. Assessment and Continuous Improvement: Continuous improvement in the model through tools and indicators which enable assessment, identifying new potential risks and identifying and introducing the necessary controls over new potential risks. Policies, Standards and Performance Procedures: Means of communication and management tool for the business areas of the different Group companies. Compliance with Laws and Regulations: Ensuring compliance with all regulations and laws applicable in the field of all Company businesses and operations. Risk management in the Atresmedia Group consists of a series of interrelated components, as a multi‐directional and interactive process in which all the components influence each other: 1). Internal control environment Periodically, the control environment of each area of organisation will be assessed, analysing on the one hand how the Company's personnel perceive the risks, establishing the controls which mitigate the risks and developing the actions plans and, on the other hand, the environment in which the Company acts. 2). Setting of targets Targets are reviewed and set annually Consequently, with said targets the level of acceptable risk is established, depending on the Group's global strategy and on the internal and external events identified during the prior period. 3). Identification of events In the process of identifying events, we decide which events can affect the Group, which of these offer opportunities, and which could have a negative impact on the Company’s capacity to implement the strategy and accomplish its goals. Events with a negative impact pose risks, and require assessment and response. Events with a positive impact offer opportunities, which are redirected towards the strategy of the target setting process. The Group applies a combination of techniques to identify events, simultaneously using past events (for example, historical series in the evolution of macroeconomic indicators) and future potential events (for example, new market conditions and actions of rivals). Events are identified at process level, thus helping to focus risk evaluation on the main business units or functions. Accordingly, the Atresmedia Group has a reference process chart in which all the processes of the Group’s companies and businesses are identified, classified and described. The main processes identified are as follows: ‐ Knowledge of the advertising market, its audience and its trends. ‐ Development of the corporate strategy. ‐ Designing of a programming grid. ‐ Marketing and sale of advertising slots. ‐ Contracting and production of programs and the buying of rights. ‐ Broadcasting and distribution of programs. ‐ Human resources management. ‐ Information and technology management. ‐ Administration and finance. ‐ General infrastructure management. ‐ Management of external relations and communication. 37
‐ Management of risks, transparency and compliance with regulations. 4). Assessment and classification of risks The system assesses the level of exposure to risks assigned to strategic targets and processes. Risks have been divided into the following categories: 1. 1 Risks associated with strategy 2. Risks associated with internal processes 2.1. Risks associated with operations and processes: 2.1.1.‐ Operating risks 2.1.2.‐ Technological risks 2.1.3.‐ Integrity risks 2.1.4.‐ Financial risks 2.1.5.‐ Management risks 2.2. Information risks for decision‐making: 2.2.1. ‐ Operational 2.2.2. ‐ Financial 2.2.3. ‐ Strategic 2.2.4. ‐ Risks associated with compliance. 3. Corporate and reputational risks Risks are evaluated taking into account both: − The inherent risk, understood to be the risk existing in the absence of actions to modify its probability and impact. − The residual risk, understood to be the risk which remains once the responses to the risks have been adopted and implemented. Subsequently, they are prioritised in line with importance and probability following the identified controls, in accordance with two criteria: − Importance: Classified in accordance with the negative impact of the occurrence of the risk on results or on business continuity. − Probability: That the risk becomes apparent regardless of whether the controls are sufficient and reduce the risk to acceptable levels. E.2
Identify the Company bodies responsible for the preparation and execution of the Risk Management System. The Internal Audit and Process Control Department is the internal body in charge of assessing Group risks. This area is responsible for identifying, assessing, controlling and monitoring the risks of the Group's different businesses, and for evaluating the existence and functioning of the existing controls on the different areas and businesses of the Atresmedia Group. In this connection, the Internal Audit and Process Control area prepares an annual Audit Plan based on the evaluation of the most significant risks existing. This Audit Plan includes both the periodic activity performed by area, together with those activities that are going to be carried out each year in order to mitigate the potential risks existing in the Group's main business processes (process reviews, area audits, implementations of procedures, launch of new controls, specific reviews, etc.). This Audit Plan is submitted and approved by the Audit and Control Committee. Likewise, the degree of progress and the most significant results of those activities carried on to date are submitted regularly during the periodic meetings held by the Audit and Control Committee over the year. The Audit and Control Committee, based on the work of the Audit Department, guarantees the supervision of the Risk Model through the assessment, control and performance of risk monitoring of the Group's business. 38
E.3
Indicate the main risks which may affect the attainment of the business objectives. The Group’s most significant risks are found in the following areas: 1. Risks associated with strategy These risks are taken to be those arising from external factors and which could cause changes to the Company’s strategy and targets. In this connection, the following have been identified: • regulatory changes • changes in competency • changes in the relationships with shareholders and investors • changes in the financial markets and others The Strategic Plan of the Atresmedia Group includes the assessment of these risks, and this is one of the bases when defining measures to be taken to offset said risks and minimize the possible impact on value creation for shareholders. 2. Operating risks The most significant risks have been identified for the main business processes: − Sale of advertising spaces and commercial policy: The Group avails itself of significant and reliable information for analysing changes in industry demand, and anticipates such changes by developing integral communication plans for customers which make it possible to constantly improve on the attraction of advertising investment, in both traditional and more innovative forms. Ongoing analyses are performed on the environment and on the audiovisual industry, which include information on competition, legal aspects, economic trends, demographic or socio‐cultural changes, changes in viewer habits, audience ratings, etc., which make it possible to define a commercial strategy based on ongoing interrelation with the market and with the programming and content objectives included on the broadcasting grid. On the other hand, all control procedures were established with respect to negotiating processes, burden of the advertising purchase on the systems, verification of broadcasting, valuation of advertising slots and billing and collection, with a view to avoiding a loss of revenue and ensuring compliance with the policies and standards of the sales and financial area. − Programme production: All the production projects are analysed, approved and developed in accordance with a programming strategy, based on an exhaustive analysis of expectations, audience objectives and commercial retakes. In order to minimize the negative impact of the possibility of programs not functioning satisfactorily in terms of audience and commercials, inherent in the programming activity, pilot programs are produced and viewer and advertiser expectations are studied with a view to tailoring the final product as much as possible to these needs. Standards are also established for contracting terms and conditions to be used by those in charge with a view to avoiding unforeseen losses and contingencies. In this connection, procedures exist with an adequate segregation of functions in negotiation, approval of contracts with producers and production orders, in the economic terms associated therewith with authorisation levels in the contract processes. − Acquisition of broadcasting rights: Broadcasting rights, which generally have a multi‐year projection and validity, are acquired after the required studies have been made of general trends and specific programming projections, product suitability, broadcasting capacity, audience estimates, consistency with television channel targets, pricing trends and authorised budgets. 39
This entails specific rules and a suitable segregation of functions in negotiation, the approval of acquisitions and framework agreements with distributors and the management of this type of product. − Purchases and contracts in general: The Group has designed a corporate system for processing contracting and investment proposals, which permits the electronic organisation and documentation of procedures for filling out contracting applications, their estimates and their authorisation, making them more transparent and clearer, eliminating the circulation of hard copy with confidential and sensitive information, anticipating knowledge regarding purchases and investments so as to prepare a better plan, quantifying undertakings assumed in contracting processes more quickly, classifying in an orderly manner all purchase processes and contracts still to be authorised or executed and, in short, have the work flow followed by the documents and the controls applied thereto. Likewise, a procedure has been established to approve any purchase/investment made within the Group. − Occupational health and safety risks: The company has an occupational risk prevention service which covers not only risks deriving from facilities but also those deriving from the various jobs. The prevention service depends on the Prevention and Medical Services Department, which is in charge of defining occupational risks, classifying them by position and establishing the control measures necessary for reducing them. It also performs periodic evaluations to determine whether the control measures defined are being applied. − ‐ Risks relating to technology and information systems Technological risks include most notably those relating to information systems (since the various activities of the Atresmedia Group are highly dependent on IT systems and on the technical elements associated with the production and broadcasting of the audiovisual content), and those relating to the broadcasting of the signal (guaranteeing that the technical conditions of the signal comply with the parameters established in the technical provisions applicable to the broadcasting medium). As in the case of other audiovisual communication service providers, a single company has been contracted to provide the services of carrying, supporting and broadcasting the television signal. Any failure in these services could have a negative impact on the Company’s activity. Nonetheless, regardless of the guarantees provided under the contract for services, no lasting incidences with significant adverse effects have been recorded to date throughout the years of the relationship. With respect to risks deriving from information systems and broadcasting process infrastructure, strict hardware and software security measures, as well as contingency and business continuity plans, have been established with a view to facing unforeseen events of a varied source and nature. Likewise, redundancies exist in key systems and applications to mitigate any potential risks regarding such systems. There is an IT security department in charge of defining the applicable procedures, which periodically performs various security audits with a view to verifying compliance with the Model. Security measures have also been stipulated for the technical means of broadcasting the signal to ensure its compliance with the established parameters. For this reason redundant equipment exists and preventive tests are carried out on both sets of equipment on a monthly basis. There are also maintenance contracts for all the necessary broadcasting equipment, as well as for other production and information systems equipment. − Financial risks One of the main financial risks of the Group is that of the evolution of the exchange rate, since a significant percentage of the purchase of broadcasting rights is made in US dollars. 40
The currency exchange risk is managed from the Cash area of the Atresmedia Group. Depending on the payment schedule drawn up on the basis of the information furnished by the different areas involved and by the rights management systems, the relevant hedging is established through forward currency purchases or by using transactions with derivatives which lead to closed risk scenarios. − Integrity risks Atresmedia has sufficient and effective control procedures to minimise the probability of fraud, illegal conduct and unauthorised uses of assets, as well as to avoid the quantitative and qualitative effect they could have on resources, the reputation and the image of the Group’s trademarks. − Information risks in the decision‐making process These risks may be classified as operational, financial and strategic depending on the impact that could arise from using incomplete, distorted or erroneous information when making decisions in relation to those aspects. The Atresmedia Group has mechanisms for measuring the most significant indicators and magnitudes of the business, with a view to making quick and efficient decisions on all business processes and on quantifiable aspects relating to its strategy and to its financial structure and capacity. With respect to the protection of assets, the Group’s policy is to take out insurance policies to provide sufficient coverage for the possible risks to which the various assets are subject. Transportation, business interruption, civil liability in various areas, life, accident and health risks are also covered by insurance. 3.
Reputational risks Furthermore, the risk system includes, due to its special impact, the reputational risks that basically refer to the two most important aspects of Corporate Responsibility: respect for the law and voluntary compliance with the Atresmedia Group’s principles and values: −
Risks associated with regulatory compliance, such as the General Audiovisual Communication Law, the Advertising Law, the environmental compliance laws, those relating to the securities market, Competence regulations, etc., as well as those contained in the self‐regulation Codes entered into by the Group. −
Risks associated with programming broadcasting which infringes the Group's ethical values. E.4
E.5 Identify whether the Entity has a risk tolerance level. Atresmedia has defined its risk tolerance level based on two main criteria: − Process or target potentially affected by the risk − Level of operations/results affected Indicate the risks which have arisen in the year. Regulatory risk: On 27 November 2012, the Supreme Court Room Three handed down a Ruling dismissing the Council of Minster's Resolution of 16 July 2010, which had assigned to each of the digital terrestrial television (DTT) service licence holders, including Antena 3 de Televisión, S.A. (now Atresmedia Corporación de Medios de Comunicación, S.A.) and Gestora de Inversiones Audiovisuales La Sexta, S.A., the capacity equivalent to a multiple state digital coverage integrated by four channels. Such assignment was made in line with the group of rules which, since 1997, with the approval of the Spanish National Digital Terrestrial Television Plan, and, especially, under Law 10/2005, of 14 June, 41
regulated the transition of analogue terrestrial television to DTT, culminating in 2010. Such assignment was made subject to verification by the Government of the strict compliance by the licence holders with all the requirements and obligations imposed to boost the transition to DTT, as a condition to access the multiple. On 22 March 2013, the Council of Ministers adopted a resolution for the enforcement of the aforementioned Supreme Court Ruling. This resolution stipulated the obligation to cease to broadcast the channels which had been affected by the previous rejection of the Council of Minister's Resolution of 16 July 2010, but likewise the continuity of the broadcasts was authorised on a transitory basis, in order to safeguard the general interests arising from the release of the digital dividend up to the culmination of this process. Subsequently, on 18 December 2013, the Supreme Court handed down an Order to enforce this Ruling which, among other matters, partially dismissed the aforementioned Council of Minster's Resolution and, furthermore, determined the channels affected by the Ruling arising from this Order, which includes three of those which are currently operated by Atresmedia. In the light of the appearance of this regulatory risk, the Atresmedia Group applied the corresponding controls and performed: ‐
An internal and external legal analysis of the related legal aspects. ‐
An economic analysis of the potential impact of the effective materialisation of the aforementioned risk. ‐
A risk analysis, of its potential consequences and of the existing controls to reduce it by the Audit Committee and the Board of Directors. Based on these analyses, the Atresmedia Group's interpretation is based on the fact that all the commitments and obligations imposed by it have been met and accordingly, its estimate is based on reaching a satisfactory solution, and it does not consider it necessary to make any adjustment or significant modification to the financial statements. E.6 Explain the response and supervision plans for the Entity's main risks. The responses to the existing risks are classified into 4 sections: − Prevent − Accept − Reduce − Share In accordance with the selected response, action plans are developed to bring the preliminary evaluation of the risk in line with the accepted risk and the Group's tolerance to risk. The aforesaid action plans are designed with the heads of the Group’s business areas and divisions and are supervised by the Internal Audit and Process Control Department within the framework of the Annual Auditing Plan, which the Audit and Control Committee approves and supervises regularly. In order to ensure that responses to risks effectively carry out control activities: Tests are performed to verify the degree of efficacy of the controls. New control and monitoring procedures are designed. Improvements to established control procedures are implemented. Periodically review the existing risks and controls. In addition to its adequate separation of functions and authorisation levels for operations, the Group avails itself of tools to carry out control activities, such as: Regulations and procedures applying to employees. Internal rule of conduct in securities market matters. 42
Ethical code Code of Conduct Whistleblower channel Procedures relating to the acquisition of products and services. Procedures relating to negotiating and selling advertising. IT tools: ƒ
Risk management system ƒ
Sales management system ƒ
Purchasing management system ƒ
Contracting proposals management system: authorisations for all contracting ƒ
of services in the Group ƒ
Quality System F INTERNAL CONTROL AND RISK MANAGEMENT SYSTEMS IN RELATION WITH THE ISSUANCE OF THE INTERNAL CONTROL OVER FINANCIAL REPORTING (ICFR) SYSTEM . Description of the mechanisms of the control and risk management systems in relation to the process of the issuance of the Internal Control over Financial Reporting (ICFR) system of its Entity. The Entity's control environment F.1
Report highlighting its main characteristics regarding at least: F.1.1.
Which bodies and/or functions are responsible for: (i) the existence and maintenance of an adequate and effective Internal Control over Financial Reporting (ICFR) system; (ii) its implementation; and (iii) its supervision. The Atresmedia Group’s current internal control model is applied in a homogeneous manner in the entire organisation and encompasses a duly documented regulatory environment. The Internal Audit area is the unit responsible for supporting and ensuring its functioning and compliance with the established requirements, combined with the oversight of the model by the Audit and Control Committee. This internal control model has been adapted to fully comply with the current requirements of the CNMV with regard to the ICFR. The Audit and Control Committee is the body responsible for oversight of the ICFR, and it receives assistance from the Internal Audit and Process Control department with regard to its implementation and maintenance. On 22 February 2012, a new Board of Directors' regulation was approved, which also establishes the rules regarding the competences and functions of the Board Committees. The new Regulations were approved in order to adapt their content to the legal reforms introduced by Law 2/2011 on the Sustainable Economy, by Law 12/2010, of 30 June, amending, among others, the Audit Law, and by the consolidated Spanish Companies Law, with the amendments introduced therein by Law 25/2011. This area encompasses the adaptation of the competence system and structure of the Audit and Control Committee, in relation with the internal control and reporting systems in order to ensure the independence of the external auditor. Without prejudice to the functions that the Regulatory Compliance Committee has been attributed in the Internal Rules of Conduct in Security Market Matters, the Committee exclusively assumes, among others, the function of supporting and coordinating with Internal Audit in the monitoring and supervision of the rules regarding the Internal Control over Financial Reporting (ICFR) system. 43
F.1.2.
The following elements if they exist, especially with respect to that relating to the process of preparing financing information: •
Departments and/or mechanisms entrusted: (i) design and review of the organisational structure; (ii) clear definition of the lines of responsibility and authority, with an adequate distribution of tasks and functions; and (iii) whether sufficient procedures exist for their correct implementation at the Entity. •
Code of conduct, approval body, degree of implementation and instruction, principles and values included (indicating whether specific mention is made to the register of transactions and the preparation of financial information), body entrusted with analysing breaches and proposing remedial and penalty measures. •
Whistleblower channel, which enables disclosure to the Audit Committee of irregularities of a financial and accounting nature, in addition to possible breaches of the code of conduct and irregular activities in the organisation notifying, where appropriate, whether the latter is of a confidential nature. •
Training programmes and periodic update for the personnel involved in the preparation and review of the financial information, and in the assessment of the Internal Control over Financial Reporting (ICFR) system, which cover at least accounting rules, audit, internal control and risk management. The organisational structure of the Atresmedia Group is defined by the CEO when it affects the senior management level, and by the managers in charge of each organisational unit when it corresponds to the rest of the resource levels. The lines of responsibility of the Atresmedia Group in the different processes for the preparation of financial information are shown in the organisation chart of the Group and of the different organisational areas. The Internal Audit and Process Control department is the area responsible for defining the main processes and lines of action at the Atresmedia Group. The Atresmedia Group’s Code of Conduct, which was approved by the Board of Directors, provides a general description of the policies, principles, objectives and values of the Atresmedia Group. In this connection, the Board of Directors is responsible for directing and supervising all matters related to effective compliance with this code, as well as the obligation to adopt and implement the appropriate measures to align the Code with the rest of the regulatory and procedural elements of corporate governance, with which it shares the same values and objectives. The Code of Conduct contains the general guidelines that should be followed by all the employees in the Atresmedia Group relating to basic principles of behaviour, relations with and between employees, internal control and prevention of fraud and commitment with the market, the company and the community. The ultimate responsibility with regard to the interpretation and application of this Code of Conduct corresponds to the Regulatory Compliance Committee. Currently, the Atresmedia Group's code of conduct has been communicated to all Group employees through a specific notification for this purpose, in which all the main aspects thereof and the obligations which must be met by all the Group 44
employees in relation to this Code were specified. Likewise, this Code of Conduct was published on the corporate web page www.atresmediacorporacion.com and on the Group's Intranet in order to be consulted by any employee or third party related with the Group. The Atresmedia Group has set up a “Whistleblower Channel” that allows its employees to communicate, in a simple and confidential manner, those actions which, to their understanding, constitute conduct or actions that do not comply with the Code of Conduct or other applicable regulations. Likewise, this is the communication channel which may also be used to detect irregularities in the preparation of financial reporting; or to ascertain significant weaknesses in the Internal Control over Financial Reporting (ICFR) system; or in the prevention of situations of discrimination, harassment at work and sexual harassment, and the prevention of any other illegal conduct or any conduct which goes against Atresmedia's policies and values. The Regulatory Compliance Committee is the body responsible for its management, composed of executive posts which are identified in the Code of Conduct itself, all related with areas and procedures regulated in the Code. The “Whistleblower Channel" will be monitored by the Internal Audit area and by General Corporate Management. The Regulatory Compliance Committee will report regularly to the Audit Committee regarding those matters which have been identified and investigated via the “Whistleblower Channel" set up. At present, the Atresmedia Group provides all employees involved in the preparation and review of the financial information the necessary training to carry out their functions. Said training is carried out through a series of specifically designed courses; all integrated within the Atresmedia Group's Training Plan. F.2
Evaluation of risks in financial reporting Report regarding at least: F.2.1.
The main characteristics of the risk identification process, including those relating to errors or fraud, with regard to: •
Whether the process exists and is documented. •
Whether the process covers all the financial reporting objectives (existence and occurrence; integrity, assessment, presentation, breakdown and comparability; and rights and obligations), whether they are updated and with what frequency. •
The existence of an identification process of the scope of consolidation, taking into account, among other aspects, the possible existence of complex corporate structures, holding companies or special purpose vehicles. •
Whether the process takes into account the effects of other types of risks (operating, technological, financial, legal, reputational, environmental, etc.) to the extent that they affect the financial statements. •
Whether the Entity's governing body supervises the process. 45
The Atresmedia Group uses a risk management tool that allows it to identify risks through the identification and implementation of corrective controls and measures. The Risk Map of the Atresmedia Group considers the following types of risks: ‐ Strategy and Environment ‐ Internal Processes: ‐ •
Risks related to operations and processes •
Information risks in the decision‐making process •
Risks associated with financial reporting Corporate and Reputational: •
•
Risks related to regulatory compliance Risks related to external image The Group currently has review mechanisms in place that reduce the risk that erroneous financial information is reported to the market. To determine the importance and probability of the risk of releasing incorrect information, the Atresmedia Group evaluates the following parameters: −
−
The complexity of the transactions and of the applicable rules. The volume of transactions and the quantitative importance of the items affected. − The complexity of the calculations − The need to use estimates or projections − The enforcement of judgements − The qualitative importance of the information All the processes have been analysed and based on a risk and control model, areas for improvement have been identified related to the contribution of evidence that formally accredits the communications concerning changes in the consolidation scope of the Group, confirmations of the reception of the information and the issuance of the consolidated financial statements and the formal documentation of the revisions that have been carried out. F.3
Control activities Report highlighting their main characteristics, if they have at least: F.3.1.
Review and authorisation procedures regarding financial reporting and description of the Internal Control over Financial Reporting (ICFR) system, to be published in the securities markets, indicating the persons in charge, and descriptive documentation of the activity and control flows (including those relating to fraud risk) of the different types of transactions which may materially affect the financial statements, including the accounting close procedure and the specific review of the significant opinions, estimates, assessments and projections. The Atresmedia Group has controls in place to reduce potential risks existing in the Group’s main operating processes. However, it intends to adapt and introduce, if necessary, new documented controls in response to the risks connected with the achievement of the objectives relating to the reliability of the financial information defined in the ICFR. The Atresmedia Group has established a series of procedures for the preparation and review of the financial statements and the accounting close. These processes describe the current activity flows, and a series of controls and reviews are identified to ensure 46
that the financial information published is correct. The review of the financial information is carried out by both senior management and by external and internal auditors and, in the last instance, by the Audit and Control Committee. In addition, the control activities are mainly aimed at preventing, detecting, mitigating, compensating and correcting the potential errors or errors that have been discovered adequately in advance of the reporting of the financial information. F.3.2.
Internal control policies and procedures on the information systems (among others, on access security, change control, the operation thereof, operating continuity and unbundling) which support the Entity's relevant processes in relation to the preparation and publication of financial information. The Atresmedia Group's controls are partly carried out through people and partly through IT systems. Many of the processes that support the relevant steps in the preparation of the financial information are automated in the management systems – mainly SAP – implemented at the Group. Controls have been designed and put in place regarding access and user profiles for the IT and communication systems that have an impact on the financial information and the accounting closes, which guarantee the security of access to data and programs, and control over changes, the correct operation of the changes and their continuity. F.3.3.
Internal control policies and procedures in place to supervise the management of activities subcontracted to third parties, and to monitor the evaluation, calculation and valuation activities of independent experts, which may have a material effect on the financial statements. Similarly, the Atresmedia Group has internal control policies and procedures in place to supervise the management of the activities subcontracted to third parties, and to monitor the evaluation, calculation and appraisal matters entrusted to independent experts, which may have a material effect on the financial statements. F.4
Information and communication Report highlighting their main characteristics, if they have at least: F.4.1.
A specific function charged with defining, keeping accounting policies up to date (accounting policies area or department) and resolving doubts or conflicts arising from their interpretation, maintaining smooth communication with the Organisation's heads of operations, and an updated accounting policies manual notified to the units through those operated by the Entity. All organisational levels of the Atresmedia Group have access to the information they may require at any time through the corporate intranet. At the Atresmedia Group, smooth communication exists between the Board of Directors and Senior Management, thereby ensuring the adequate performance of the functions and responsibilities, especially through the Chairman, Deputy Chairmen and CEO. In addition, the Board of Directors, through the Audit and Control Committee, with the support of the Audit and Process Control Department and the Financial Department, assess the action plans and the approval of the Strategic Plan, and also analyse the financial results prior to their presentation to the markets. The Board of Directors of Atresmedia Corporación maintains a proactive approach to the preparation of the financial information and is open to discussions concerning important matters related to financial reporting, through the participation of Senior Management (Chairman, Deputy Chairmen and CEO) at all the Board of Directors' Meetings, as well as 47
through an information feedback loop between the Financial Department, the Audit and Process Control Department, the Audit and Control Committee and the Board itself. Furthermore, all the regulatory changes relating to accounting, auditing and corporate risk management are communicated to the Audit and Control Committee by the Audit and Process Control Department and the Financial Department. F.4.2.
Mechanisms to capture and prepare financial information with homogeneous formats, applied and used by all the Entity or Group units, which support the main financial statements and notes, as well as the information provided on the Internal Control over Financial Reporting (ICFR) system. The data underpinning the financial information contains, in a complete, precise and relevant manner, all the transactions, significant events and other events that affect the Group, and therefore the information reported. All this information is identified, collected and communicated with sufficient time and in a form that allows the people responsible for preparing the financial information to carry out their functions in an effective and efficient manner. The Atresmedia Group has at its disposal the mechanisms to capture and prepare its financial information using homogeneous formats and applications, such as the SAP‐R3 and FRANGO applications that are used by all the units and subsidiaries of the Group. Furthermore, the different business units use management systems that are integrated in SAP R3, in such a way that the dumping of information is automatic; the necessary controls are in place and the supervisory and review processes are carried out by the Group’s Financial Department. F.5
Supervision of the functioning of the system Report highlighting its main characteristics regarding at least: F.5.1.
The Internal Control over Financial Reporting (ICFR) supervision activities performed by the Audit Committee, and whether the Entity has an internal audit function which includes among its competences that of supporting the committee in its task of supervising the internal control system, including the Internal Control over Financial Reporting (ICFR) system. Likewise, information will be provided on the scope of the evaluation of the Internal Control over Financial Reporting (ICFR) system performed in the year and of the procedure whereby the person in charge of executing the assessment notifies his/her results, if the Entity has an action plan detailing the possible remedial measures, and if their impact on financial reporting has been considered. The Audit and Control Committee is the body responsible for the supervision of the policies and procedures, the preparation and integrity of the financial information, as well as for the adequate definition of the consolidation scope and the correct application of accounting principles. The Internal Audit area has been delegated the function of supervising the internal control model by the Audit and Control Committee. This area carries out periodic reviews of business cycles at Group and subsidiary level, and proposes corrective action plans that are communicated to the Atresmedia Group's Senior Management and to the Audit and Control Committee. The Atresmedia Group implemented a project with a third party to assess the degree of compliance of the Group, in relation to the ICFR, with the guidelines indicated in the reference framework of the CNMV, regarding the level of compliance of the Atresmedia Group with respect to the 16 basic indicators defined by the Internal Control Working 48
Group in its "Guide for the preparation of the description of the Internal Control over Financial Reporting System", in the indicators relating to the Environment of Control, Information and Communication and Supervision of the functioning of the System. The results of this project were submitted to the Audit and Control Committee, defining an action plan to analyse the improvement recommendations that arose in the diagnostic project. F.5.2.
Whether it has a discussion procedure whereby the auditor (in line with that established in the Technical Audit Rules), the internal audit function and other experts may notify the Entity's senior management and the Audit Committee or the directors of the significant internal control weaknesses identified during the revision processes of the financial statements or those others entrusted. Likewise, information will be provided as to whether an action plan exists to endeavour to correct or mitigate the weaknesses observed. The external accounts auditor and the Internal Audit Department meet periodically, in accordance with the meetings' schedule established, with the Audit and Control Committee and informs it of the main weaknesses detected in the review area and of the functions commissioned to each of the parties. The Audit and Process Control department has periodically informed the Audit and Control Committee about the evolution and progress of the action plans to be implemented progressively in relation to the ICFR. F.6
Other significant information F.7
External auditors' report Report on: F.7.1.
Whether the information on the ICFR submitted to the markets was presented for review by the external auditor, in which case the Entity should include the corresponding report as an appendix. Otherwise, it should state why. The ICFR information has not been submitted with respect to the external auditor's report. Once the diagnostic project of the ICFR has been concluded, and once all the action plans arising from the recommendations of the preceding engagement have been implemented, in the future, where appropriate, the external auditor will be requested to issue a report. G DEGREE OF COMPLIANCE WITH CORPORATE GOVERNANCE RECOMMENDATIONS Indicate the extent to which the Company follows the recommendations of the Unified Code of Good Governance. In the event a recommendation is not followed or is only followed partially, a detailed explanation should be included of the motives in order that the shareholders, investors and the market in general have sufficient information to assess the Company's line of action. Explanations of a general nature will not be acceptable. 1. The Articles of Association of the listed companies do not limit the maximum number of votes that may be issued by the same shareholder, nor do they contain other restrictions which hinder the taking of control of the Company through the acquisition of its shares on the market. 49
See headings: A.10, B.1, B.2, C.1.23 and C.1.24. Complies 2.
2. When a parent and a subsidiary are publicly traded, the two should provide detailed disclosures on: a)
The type of activity they engage in, and any possible business dealings between them, as well as between the listed subsidiary and the other Group companies; b)
The mechanisms in place to resolve possible conflicts of interest. See headings: D.4 and D.7 Not applicable 3.
3. Even when not expressly required under Mercantile Law, any transactions involving a structural change to the Company should be submitted to the General Shareholders' Meeting for approval. In particular: a)
The transformation of listed companies into holding companies through the process of subsidiarisation, i.e., reallocating core activities to subsidiaries that were previously carried out by the holding company, even though the holding company retains full control of the subsidiaries; b)
Any acquisition or disposal of key operating assets that would effectively alter the Company's object; c)
Operations that would entail the Company's liquidation. See heading: B.6 Complies 4.
4. Detailed proposals of the resolutions to be adopted at the Shareholders' Meeting, including the information stated in Recommendation 27, should be made available at the same time as the publication of the meeting announcement. Complies 5.
5. Separate votes should be cast at the Shareholders' Meeting on substantially independent matters, so shareholders can separately express their voting preferences in each case. This rule shall apply in particular to: a)
The appointment or ratification of directors, who should be voted for individually; b)
Amendments to the Articles of Association, to all articles or groups of articles that are substantially independent. Complies 6.
Companies should allow split votes, so financial intermediaries legally appearing as shareholders, but acting on behalf of different clients, can issue their votes according to the instructions thereof. Complies 7.
The Board of Directors should perform its duties with unity of purpose and independent judgement, according all shareholders the same treatment. It should be guided at all times by the Company's best interests and, as such, strive to maximize its economic value over time on a sustained basis. It should likewise ensure that the Company abides by the laws and regulations in its dealings with the groups of interest (stakeholders); fulfils its obligations and contracts in good faith; respects the customs and good practices of the sectors and territories where it performs its activities; and upholds any additional social responsibility principles it has subscribed to voluntarily. 50
Complies 8.
The Board should assume as its core mission to approve the Company's strategy and the organisation required to execute it, and to supervise and control that management meets the objectives set and respects the Company's interests and object. As such, the plenary Board meeting reserves the competence to approve: a)
The Company’s general strategies and policies and, in particular: i) The strategic or business plan, and the annual management and budgetary targets; ii)
The investment and funding policy; iii)
The definition of the structure of the group of companies; iv)
The corporate governance policy; v)
The corporate social responsibility policy; vi)
The policy for senior managers’ remuneration and performance assessment; vii)
The policy for controlling and managing risks, and the periodic monitoring of the internal control and reporting systems. viii)
The dividend and treasury shares policy, especially their limits. See headings: C.1.14, C.1.16 and E.2 b)
c)
The following decisions: i)
At the proposal of the Company’s chief executive officer, the appointment and possible removal/resignation of senior managers from their posts, as well as their compensation clauses. ii)
Directors’ remuneration and any additional remuneration to executive directors for executive responsibilities and other terms and conditions which must be respected in their contracts. iii)
a) The financial information that the Company, as a publicly traded company, must disclose periodically. iv)
Investments or transactions of any kind, whose high value or special characteristics make them strategic, unless the GSM is charged with approving them; v)
The creation or acquisition of shares in special‐purpose entities or entities domiciled in countries or territories considered tax havens, and any other transactions or operations of an analogous nature whose complexity could undermine the Group’s transparency. Transactions between the Company and its directors, its significant shareholders or shareholders represented on the Board, or parties related to them ("related‐party transactions"). However, Board authorisation need not be required for related‐party transactions that simultaneously meet the following three conditions: 1. They are carried out under contracts with standard terms and conditions, applicable en masse to a large number of customers; 2. They are performed at rates set in general by the supplier of the goods or services in question; 3. The amount thereof does not exceed 1% of the Company’s annual revenues. 51
Related‐party transactions should only be approved on the basis of a favourable report from the Audit Committee or any other committee entrusted with such a report; and the directors involved should neither exercise nor delegate their voting rights, and should withdraw from the meeting room while the Board deliberates and votes. It is recommended that the competences attributed here to the Board should not be delegated, with the exception of those mentioned in b) and c), which may be adopted by the Executive Committee in urgent cases and later ratified by the plenary Board meeting. See headings: D.1 and D.6 Complies 9.
In the interests of maximum effectiveness and participation, the Board of Directors should ideally comprise no fewer than five and no more than fifteen members. See heading: C.1.2 Complies 10. Non‐executive significant‐shareholder appointed and independent directors should occupy an ample majority of Board places, while the number of executive directors should be the minimum required to deal with the complexity of the corporate Group and to reflect the ownership interests they hold. See headings: A.3 and C.1.3. Complies 11. Amongst non‐executive directors, the ratio between the number of significant‐shareholder appointed and independent directors should reflect the percentage of shares held by the Company that the significant‐shareholder appointed directors represent and the remaining share capital. These strict proportionality criteria can be relaxed so the percentage of significant‐shareholder appointed directors is greater than that which would correspond to the total percentage of capital they represent: 1. In large capitalization companies where few or no equity stakes attain the legal threshold to be considered significant shareholdings, but shareholders exist with shareholder packages of high absolute value. 2. In companies with a plurality of shareholders represented on the Board but not otherwise related to each other. See headings:
A.2, A.3 and C.1.3 Complies 12. Independent directors should account for at least one third of total directors. See heading: C.1.3 Explain Of the total Board members, three are independent. The percentage represented by the number of independent directors over the total directors is similar to the percentage of share capital not linked to a significant shareholding. 13. The Board should explain the type of each directorship to the GSM, which should appoint the director or ratify his/her appointment. This should be confirmed or reviewed each year in the Annual Corporate Governance Report, after verification by the Appointments Committee. Said report should also disclose the reasons for the appointment of significant‐shareholder appointed directors at the behest of 52
shareholders controlling less than 5% of capital; and it should explain any rejection of a formal request for a Board position from shareholders whose equity stake is equal to or greater than that of others at whose request significant‐shareholder appointed directors would have been nominated. See headings:
C.1.3 and C.1.8 Complies 14. When the number of female directors is scant or nil, the Appointments Committee oversees that, on providing new vacancies: a) The selection procedures do not suffer any implicit bias which hinders the selection of female directors. b) The Company makes a conscious effort to include women with the target profile among the candidates for Board positions. See headings:
C.1.2, C.1.4, C.1.5, C.1.6, C.2.2 and C.2.4. Complies 15. The Chairman, who is responsible for the efficient running of the Board, should at all times ensure that the directors receive sufficient prior information for the meetings; encourage directors to debate and participate actively in the meetings, safeguarding their freedom to take their own stance and express their own opinion. He/she should organise and coordinate periodic assessment of the Board with the chairs of the relevant committees and with the Managing Director or Chief Executive, when this is not also the Chairman. See headings: C.1.19 and C.1 41 Complies 16. When the Company's Chairman is also its Chief Executive, an independent director should be empowered to request a Board meeting be called or that new business be included on the Agenda; to coordinate and give voice to the concerns of non‐executive directors; and to lead the Board’s evaluation of the Chairman. See heading: C.1.22 Not applicable 17. The Secretary should take care to ensure that the Board's actions: a) Adhere to the spirit and letter of laws and their regulations, including those approved by regulators; b) Comply with the Company's Articles of Association and the Regulations of the Shareholders' and Board of Directors' Meetings and other Company regulations; c) Take into account those good governance recommendations of the Unified Code to which the Company has agreed. In order to safeguard the independence, impartiality and professionalism of the Secretary, his or her appointment and removal should be informed upon by the Appointments Committee and approved by a full Board meeting; the relevant appointment and removal procedures should be indicated in the Board's regulations. See heading:
C.1.34 Complies 18. The Board should meet with the necessary frequency to properly perform its functions, in accordance with a calendar and agenda set at the beginning of the year, to which each director may propose the addition of other unforeseen items. See heading:
C.1.29 53
Complies 19. Directors should keep their absences to the bare minimum. Absences should be quantified in the Annual Corporate Governance Report. When directors have no choice but to delegate their vote, they should provide instructions. See headings:
C.1.28, C.1.29 and C.1.30 Complies 20. When directors or the Company Secretary express concerns about proposals or, in the case of directors, about the Company's performance, and such concerns are not resolved at the meeting, the person expressing them may request they be recorded in the minutes. Complies 21. The plenary Board meeting should evaluate the following points on a yearly basis: a) The quality and efficient functioning of the Board; b) Based on a report submitted by the Appointments Committee, the performance of their functions by the Chairman of the Board and the Company's CEO; c) The functioning of its Committees on the basis of the reports furnished by such Committees. See headings: C.1.19 and C.1.20 Complies 22. All directors should be able to exercise their right to receive any additional information they require on matters within the Board's competence. Unless the Articles of Association or Board of Directors' Regulations indicate otherwise, such requests should be addressed to the Chairman or Secretary to the Board. See heading:
C.1.41 Complies 23. All directors should be entitled to obtain from the Company the exact advice they need to perform their duties. The Company should provide suitable channels for the exercise of this right. Under special circumstances, it could include external assistance at the Company's expense. See heading: C.1.40 Complies 24. Companies should organize induction programs for new directors to acquaint them rapidly and adequately with the workings of the Company and its corporate governance rules. Directors should also be offered refresher programs when circumstances so advise. Complies 25. Companies should require their directors to devote sufficient time and effort to performing their duties effectively, and, as such: a) The directors must inform the Appointments Committee of their other professional obligations, in case these interfere with the dedication required to perform their duties; b) Companies should lay down rules about the number of directorships their Board members can hold. See headings:
C.1.12, C.1.13 and C.1.17 Complies partially The Board Members assume, upon accepting their posts, the inherent duties and obligations thereof, under the terms established in the regulations in force and in the Company's internal corporate 54
governance rules, which include the personal responsibility to inform the Appointments and Remuneration Committee of any circumstance that could affect the normal performance of their activities or their degree of dedication. The Company considers that the number of boards on which each director sits is not in itself a significant indicator to measure his/her dedication, bearing in mind that it is possible to sit on a wide array of boards, and that in each case, a different degree of attention and work may be required. Therefore, under these same criteria, it has been deemed unnecessary to place a limit on the number of boards of which directors can be members. This question should be decided by each director on its own responsibility, and has no bearing on the supervisory tasks of the Appointments and Remuneration Committee. 26. The proposal for the appointment or renewal of directors which the Board submits to the General Shareholders' Meeting, as well as provisional appointments by co‐optation, should be approved by the Board: a)
At the proposal of the Appointments Committee for independent directors. b)
On the basis of a report by the Appointments Committee for all other directors. See heading: C.1.3 Complies 27. Companies should publish the following director particulars on their website and keep them permanently updated: a)
b)
c)
d)
e)
Professional experience and background; Directorships held in other companies, listed or otherwise; An indication of the category of directorship; in the case of significant‐shareholder appointed directors, state the shareholder they represent or to whom they are affiliated. The date of their first and subsequent appointments as a Company director, and; Shares and share options held in the Company. Complies 28. Significant‐shareholder appointed directors must resign when the shareholders they represent dispose of their ownership interest in its entirety. If such shareholders reduce their stakes, thereby losing some of their entitlement to significant‐shareholder appointed directors, the number of such significant‐shareholder appointed directors should be reduced accordingly. See headings: A.2 , A.3 and C.1.2 Complies 29. The Board of Directors must not propose the removal of independent directors before the expiry of their term in office pursuant to the Articles of Association, except where due cause is found by the Board, based on a report from the Appointments Committee. In particular, due cause will be presumed when a director is in breach of his or her fiduciary duties or comes under one of the disqualifying grounds causing him/her to lose his/her independent status, enumerated in the Order ECC/461/2013. The removal of independent directors may also be proposed when a takeover bid, merger or similar corporate operation produces changes in the Company’s capital structure, in order to meet the proportionality criterion set out in Recommendation 11. See headings:
C.1.2, C.1.9, C.1.19 and C.1.27 Complies 55
30. Companies should establish rules obliging directors to inform the Board of any circumstance that might undermine the organization's name or reputation, tendering their resignation as the case may be, with particular mention of any criminal charges brought against them and the progress of any subsequent proceedings. If a director is indicted or tried for any of the crimes stated in art. 213 of the Spanish Companies Law, the Board should examine the matter as soon as possible and, in view of the particular circumstances, decide whether or not he or she should continue in his/her position. The Board should also disclose all such determinations in the Annual Corporate Governance Report. See headings: C.1.42, C.1.43 Complies 31.
The directors should clearly express their opposition when they consider that a decision proposal submitted to the Board may not be in the Company’s best interest. In particular, independent directors and other directors unaffected by the potential conflict of interest should challenge any decision that could go against the interests of shareholders lacking Board representation. When the Board adopts material or reiterated resolutions on issues about which a director has expressed serious reservations, said director must draw the pertinent conclusions. Directors resigning for such causes should set out their reasons in the letter referred to in the next Recommendation. This Recommendation should also apply to the Company Secretary, even if the Secretary is not a director. Complies 32. If leaving office before the end of his/her term, be it due to resignation or to other motives, the director should explain the reasons in a letter sent to all Board members. Whether or not such resignation is filed as a significant event, the reasons behind the cessation must be explained in the Annual Corporate Governance Report. See heading: C.1.9 Complies 33. Remuneration comprising the delivery of shares in the company or other companies in the group, share options or other share‐indexed instruments, payments indexed to the Company’s performance or membership of pension schemes should be confined to executive directors. The delivery of shares is excluded from this Recommendation when directors are conditioned to retain them until the end of their term of office. Complies 34. Non‐executive directors' remuneration should sufficiently compensate them for the dedication, abilities and responsibilities that the post entails, but should not be so high as to compromise their independence. Complies 35. Deductions should be made to remuneration linked to Company earnings, for any qualifications stated in the external auditors' report that reduce such earnings. Complies 36. In the case of variable payments, remuneration policies should include the limits and technical safeguards required to ensure they reflect the professional performance of the beneficiaries and not simply the general progress of the markets or the Company’s sector, or other similar circumstances. 56
Complies 37. When the Company has an Executive Committee, the breakdown of its members by director category should be similar to that of the Board itself. The Secretary to the Board should also act as secretary to the Executive Committee. See headings: C.2.1 and C.2.6 Complies partially This Recommendation is not complied with insofar as the composition of the Executive Committee complies with the proportionality rule, given that there are no independent Board members. In accordance with the Recommendation, the Board's Secretary holds the same post on the Executive Committee. 38. The Board should always be kept fully informed of the business transacted and the resolutions adopted by the Executive Committee. To this end, all Board members should receive a copy of the Committee’s minutes. Complies 39. In addition to the Audit Committee mandatory under the Securities Market Law, the Board of Directors should form a Committee, or two separate committees, for Appointments and Remuneration. The rules governing the composition and functioning of the Audit Committee and the Appointments and Remuneration Committee(s) should be set forth in the Board's Regulations, and include the following: a) The Board of Directors should appoint the members of such Committees taking into account the knowledge, skills and experience of its directors and the tasks of each Committee; discuss their proposals and reports; and must notify it, in the first plenary Board meeting following each meeting, of its activity and be answerable for the work performed; b) These Committees should be formed exclusively by non‐executive directors and have a minimum of three members. Executive directors or senior management may also attend meetings at the Committee members’ express invitation. c) Committees should be chaired by independent directors. d) They may engage external advisers, when they feel this is necessary for the discharge of their duties. e) Meeting proceedings should include minutes and a copy sent to all Board members. See headings: C.2.1 and C.2.4 Complies 40. The job of supervising compliance with internal codes of conduct and corporate governance rules should be entrusted to the Audit Committee, the Appointments Committee or, as the case may be, separate Compliance or Corporate Governance Committees. See headings:
C.2.3 and C.2.4 Complies 41. All members of the Audit Committee, particularly its Chairman, should be appointed with regard to their knowledge and background in accounting, auditing or risk management. Complies 42. Listed companies should have an internal audit function, under the supervision of the Audit Committee, to ensure the sound functioning of the internal control and reporting systems. See heading:
C.2.3 Complies 57
43. The head of internal audit should present an annual work program to the Audit Committee; inform it directly of any incidents arising during its implementation; and submit an activities report at the end of each year. Complies 44. The risk management and control policy should specify at least: a) The different types of risk (operational, technological, financial, legal, reputational, etc.) to which the Company is exposed, with the inclusion under financial or economic risks of contingent liabilities and other off‐balance‐sheet risks; b) Setting the level of risk considered acceptable by the Company; c) The measures established to mitigate the impact of the risks identified, should they materialize; d) The internal control and reporting systems used to control and manage the aforesaid risks, including contingent liabilities and off‐balance sheet risks. See heading: E Complies 45. The Audit Committee’s role should be: With respect to internal control and reporting systems: 1 a) Management and adequate notification of the main risks identified as a result of the supervision of the effectiveness of the Company's internal control and internal audit, where appropriate. b) Oversight of the independence and effectiveness of the internal audit function; proposing the selection, appointment, re‐election and removal of the internal audit service head, and the estimate for that service; receiving periodic information on its activities; and verifying whether senior management has taken into account the conclusions and recommendations of its reports. c) Establishment and supervision of a mechanism enabling the employees to confidentially and, if deemed appropriate, anonymously, notify the irregularities of potential importance, especially financial and accounting irregularities, communicated within the Company. 2 With respect to the external auditor: a)
b) To receive regular information from the external auditor on the audit plan and the outcome of its execution, verifying that senior management takes due note of its recommendations; b) To ensure the independence of the external auditor, to which end: i) The Company should notify any change of auditor to the CNMV as a significant event, accompanied by a statement of any disagreements arising with the outgoing auditor and, if any, from its content. ii) iii) Should the external auditor resign, examine the circumstances leading to the resignation. See headings: C.1.36, C.2.3, C.2.4 and E.2 Complies 46. The Audit Committee should be empowered to meet with any Company employee or manager, even ordering their appearance without the presence of another senior officer. Complies 47. The Audit Committee should inform the Board, prior to the adoption by it of the related decisions, of the following matters indicated in Recommendation 8: a) The financial information that the Company, as a publicly traded company, must disclose periodically. The Committee should ensure that interim statements are drawn up under the same accounting principles as the annual statements and, to this end, may ask the external auditor to conduct a limited review; b) The creation or acquisition of shares in special‐purpose entities or entities domiciled in countries or territories considered tax havens, and any other transactions or operations of an analogous nature whose complexity could undermine the Group’s transparency. 58
c)
Related‐party transactions, except when that report function has been previously attributed to another supervision and control Committee. See headings:
C.2.3 and C.2.4 Complies 48. The Board of Directors shall try to avoid the accounts being presented to the GSM with reservations and qualifications in the auditors' report. When this is not possible, both the Chair of the Audit Committee and the auditors must clearly explain the content and scope of such reservations and qualifications to the shareholders. See heading: C.1.38 Complies 49. The majority of Appointments Committee members – or Appointments and Remuneration Committee members as the case may be – should be independent directors. See heading:
C.2.1 Explain The Appointments and Remuneration Committee comprises five members, two of which are independent and the remaining three are significant‐shareholder appointed non‐executive directors. Although the independent directors do not represent the majority, it is considered that their participation in this associated board is sufficient to guarantee the correct functioning of this Committee in the exercise of its corresponding powers. Also, the proportion represented by them is in line with the Company's capital structure and is equivalent to that also applied in all the remaining director bodies. 50. The Appointments Committee should have the following duties in addition to those stated in the earlier recommendations: a)
Evaluate the competences, knowledge and experience required on the Board, define the functions and capabilities required of the candidates to fill each vacancy accordingly, and decide the time and dedication necessary for them to properly perform their duties. b)
To examine or organize, in the manner it deems suitable, the succession of the Chairman and the Chief Executive Officer and, where appropriate, make corresponding proposals to the Board for an orderly, well‐planned succession. c)
Report on the senior officer appointments and removals that the Chief Executive Officer proposes to the Board; d)
Report to the Board on the gender diversity issues discussed in Recommendation 14 of this Code. See heading: C.2.4 Complies 51. The Appointments Committee shall consult with the Company Chairman and the Chief Executive Officer with respect to matters related to Executive Directors. Any Board Member may suggest directorship candidates to the Appointments Committee, if he/she considers them suitable. Complies 52. The Remuneration Committee should have the following duties in addition to those stated in the earlier Recommendations: a)
To propose to the Board of Directors: i) The remuneration policy of directors and senior executives; 59
ii)
The individual remuneration of the executive directors and the remaining terms and conditions of their contracts. iii) The basic terms and conditions of the contracts executed with senior executives. b)
Oversee compliance with the remuneration policy set by the Company. See headings: C.2.4 Complies 53. The Remuneration Committee shall consult with the Company Chairman and the Chief Executive Officer, especially with respect to matters related to Executive Directors and senior executives. Complies OTHER INFORMATION OF INTEREST H 1. Please briefly detail any significant matter existing with respect to corporate governance at the Company or at Group entities not included in the other sections of this report, but which is required to include more complete, founded information on the Entity or Group's governance practices and structure. 2. This section may include any other disclosure, clarification or qualification in relation with the previous sections of the report, insofar as they are significant and not repeated. Specifically, indicate whether the Company is subject to legislation other than Spanish legislation in the area of corporate governance and, where appropriate, include the information that must be provided and is different from that required in this report. In relation to the information provided on ownership structure in sections A.3 and A.8, it is stated that the information is at 31 December 2013. On 19 February 2014, the Company notified, as a significant event, the partial novation of the integration agreement entered into on 14 December 2011 with Gestora de Inversiones Audiovisuales La Sexta S.A. ("La Sexta") and its shareholders, under which Gamp Audiovisual S.A. and Imagina Media Audiovisual, S.L. received, with a charge to treasury shares, a holding in Atresmedia Corporación de Medios de Comunicación, S.A. equivalent, respectively, to 2.079% and 1.631% of its share capital. Consequently, at the date of approval of this report, the voting rights owned by the directors Gamp Audiovisual S.A. and Imagina Media Audiovisual, S.L jointly represent 10.202% of the Company's total voting rights and treasury shares represent 3.298%. 3.
It is reported in section C.1.29 that in 2013, nine Board of Directors' meetings were held. It should be added that in 2013 the Board adopted written resolutions without convening a meeting, on 20 December 2013; such agreements were included in the Company's Minutes Book. In relation to the information included in section C.1.39, the audit firm is indicated to be Arthur Andersen, S.L. ‐which merged with Deloitte, S.L.‐, it had previously performed the audit work for five years. The Company may also indicate whether it has voluntarily adhered to other codes of ethical principles or good practices, be they international, sectoral or of another scope. Where appropriate, the code in question will be identified, together with the adhesion date. The Company has voluntarily adhered to various sectoral self‐regulation codes. The main codes adhered to include most notably: − Radio Self‐Regulation Code (January 2013) − Code of Conduct on Gaming Activity Commercial Communication (2012) 60
−
−
−
−
−
−
PAOS: Self‐regulation Code on the Advertising of Foodstuffs Aimed at Minors, prevention of Obesity and Health (inclusion of television operators in 2010) Self‐Regulation Code on the Advertising of Children's Toys (modified in 2010) Self‐Regulation Code on the Advertising of Brewers in Spain (2009) Self‐Regulation Code on Wine (2009) Self‐Regulation Code on SMSs (2009) Spanish Federation on Spirit Drinks (FEBE): Self‐Regulation Code of the Spanish Federation on Spirit Drinks (FEBE) (2006) This Annual Corporate Governance Report was approved by the Company’s Board of Directors at its meeting on 26 February 2014. Indicate whether any directors have voted against or abstained with respect to the approval of this Report. Yes No X Reasons (opposition, Name or company name of the director who has not voted in favour of approving this report abstention, non‐
attendance) Explain the reasons 61