Consolidated Annual Accounts 2017

Atresmedia Corporación de Medios de Comunicación, S.A. and Subsidiaries Translation of consolidated financial statements originally issued in Spanish and prepared in accordance with the regulatory financial reporting framework applicable to the Group in Spain (see Notes 2 and 29). In the event of discrepancy, the Spanish-language version prevails. 2017 CONSOLIDATED FINANCIAL STATEMENTS 42 The Group determines the financial resources required with the dual 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 equity holders of the parent (comprising share capital, share premium, retained earnings and other items), 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. b) Share premium This reserve is unrestricted. c) Legal and bylaw reserves Legal reserve Under the Spanish Companies Act, the Company must earmark an amount equal to 10% of profit for the year to a legal reserve until such reserve reaches at least 20% of the capital. The legal reserve can be used to increase capital by the amount exceeding 10% of the increased capital amount. Except for this purpose, until the legal reserve exceeds the limit of 20% of share capital, it can only be used to offset losses, if there are no other reserves available. The Parent’s legal reserve has reached the legally required minimum. Capital redemption reserve The capital redemption reserve has been appropriated in compliance with Article 335 of the Spanish Companies Act, which establishes that, when the reduction is performed with a charge to profit or unrestricted reserves or through the redemption of shares acquired by the Parent free of charge, the amount of the par value of the redeemed shares or of the decrease in the par value of the shares must be appropriated to a reserve, which shall only be unrestricted where the same requirements as for the capital reduction are met. The amount of this reserve is EUR 8,333 thousand. Other restricted reserves “Legal and bylaw reserves” includes a restricted amount of EUR 281 thousand related to “Reserve for the adjustment of share capital to euros”. At 31 December 2016, “Equity - Retained earnings” in the consolidated balance sheet included a restricted reserve for goodwill arising from subsidiary Uniprex, S.A. Unipersonal of EUR 41,295 thousand. At 31 December 2017, this amount was not changed. According to the single transitional provision of Royal Decree 602/2016, of 2 December, the goodwill reserve will be reclassified to the Company’s voluntary reserves in the amount exceeding the goodwill recognised on the asset side of the balance sheet of this subsidiary.