Consolidated Annual Accounts 2017

Atresmedia Corporación de Medios de Comunicación, S.A. 2017 FINANCIAL STATEMENTS 8 2.- Basis of presentation Financial reporting framework applicable to the Company The accompanying financial statements were prepared by the Company’s directors in accordance with the financial reporting framework applicable to the Company, which is set out in: a) The Spanish Commercial Code and other company law. b) The Spanish National Chart of Accounts (Plan General Contable) 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 implementing 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. True and fair view The accompanying financial statements were obtained from the Company's accounting records and 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, give a true and fair view of the Company's equity, financial position, results of operations and cash flows for the year. These financial statements, which were authorised for issue by the Company’s directors, will be submitted for approval by shareholders at the General Meeting. They are expected to be approved without any changes. The financial statements for 2016 were approved at the General Meeting held on 19 April 2016. Non-mandatory accounting principles applied No non-mandatory accounting principles were applied. The directors prepared these financial statements taking into account all the mandatory accounting principles and standards with a significant effect thereon. All mandatory accounting principles were applied. Critical issues regarding the measurement and estimation of uncertainties The accompanying financial statements were prepared using estimates by the Company's directors to measure certain of the assets, liabilities, revenue, expenses and obligations recognised therein. Basically, these estimates relate to: - Where there are indications of impairment, the Company tests its investments in group companies and associates for impairment. The determination of the recoverable amount of these investments entails the use of estimates by management. The Company uses discounted cash flow methods to determine these values. The key assumptions and sensitivity analysis are detailed in Note 8. The Company also measures certain investments in group companies and associates using the indirect method based on the underlying carrying amount of the investment plus the unrealised gains existing at the date of estimation where this method provides better evidence of the recoverable amount considering the activity and specific situation of each investment. - If there are indications of impairment, the determination of the recoverable amount of available-for-sale financial assets is subject to uncertainty, due to the absence of benchmark market values for these investments. The directors' base these estimates on the business plans of the investees or the existence of possible commitments, rights or set-price repurchase or capitalisation agreements.