MEFF Sociedad Rectora de Productos Derivados, S.A. (Sociedad Unipersonal)

Transcription

1 MEFF Sociedad Rectora de Productos Derivados, S.A. (Sociedad Unipersonal) Financial Statements and Management Report for the financial year ended 31 December 2012, together with the Auditors Report 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 1 and 23). In the event of a discrepancy, the Spanish-language version prevails.

2

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 1 and 23). In the event of a discrepancy, the Spanish-language version prevails. MEFF SOCIEDAD RECTORA DE PRODUCTOS FINANCIEROS DERIVADOS, S.A. (SOCIEDAD UNIPERSONAL BALANCE SHEET AT 31 DECEMBER 2012 AND 2011 () ASSETS Notes (*) LIABILITIES Notes (*) NON-CURRENT ASSETS: SHAREHOLDERS' EQUITY: Intangible assets EQUITY: Other intangible assets 12 - Capital Tangible assets Paid-up capital Technical installations and other tangible fixed assets (Uncalled capital) - - Long-term investments in Group and associated companies Share premium - - Long-term financial investments Reserves Deferred tax assets (Treasury shares and equity instruments) - - Earnings from previous years - - Other member contributions Earnings for the year (Interim dividend) 12 (9.708) (6.879) Other equity instruments - - UNREALISED GAINS (LOSSES) RESERVE: - - Financial assets available for sale - - Hedging transactions - - Exchange conversion differences - - Other unrealised gains (losses) - - SUBSIDIES, DONATIONS AND LEGACIES RECEIVED - - CURRENT ASSETS: Trade and other receivables NON-CURRENT LIABILITIES: Clients - sales and supply of services (members and member entities) Long-term provisions Clients, Group and associated companies 17 and Other accounts receivable 15 and CURRENT LIABILITIES: Short-term investments in Group and associated companies Short-term financial liabilities to third parties Group current financial assets Margins and deposits received from the market Non-Group current financial assets As central counterparty for financial instruments Materialisation of margins and deposits received from the market Credit balances for settlement As central counterparty for financial instruments Short-term debts with group and associated companies Debit balances for settlement Trade and other accounts payables Short-term accruals Accounts payable 16 and Cash and cash equivalents Sundry accounts payable 14 and TOTAL ASSETS 1-b) and TOTAL EQUITY AND LIABILITIES (*) Figures presented solely and exclusively for comparative purposes. The accompanying notes 1 to 22 of the Financial Statements form an integral part of the balance sheet at 31 December 2012.

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 1 and 23). In the event of a discrepancy, the Spanish-language version prevails. MEFF SOCIEDAD RECTORA DE PRODUCTOS DERIVADOS, S.A. (SOCIEDAD UNIPERSONAL) PROFIT AND LOSS ACCOUNTS FOR THE YEARS ENDED 31 DECEMBER 2012 AND 2011 () Notes (*) Revenues Personnel costs: 15 (7.965) (7.254) Wages, salaries and similar (6.542) (5.954) Social welfare contributions (1.041) (933) Provisions and other personnel costs (382) (367) Other operating costs: (3.355) (1.754) External services 16 (3.323) (1.737) Taxes (32) (12) Losses, impairment and changes to provisions for business operations 16 - (5) Depreciation of fixed assets: (228) (8) Amortisation of intangible assets 5 (44) - Tangible assets depreciation 6 (184) (8) Depreciation and profit (loss) on fixed asset disposals - - OPERATING PROFIT (LOSS) Financial income: Interests in equity instruments In group and associated companies Tradable securities and other financial instruments In third parties 7 and Financial expenses: (4.768) (12.284) Provisions updates 13 (8) (8) Margins and deposits received from the market 10 (4.760) (12.276) Exchange conversion differences - - Impairment and profit (loss) on financial asset disposals - - FINANCIAL PROFIT (LOSS) PROFIT BEFORE TAX Tax on earnings 14 (4.096) (3.024) EARNINGS FROM CONTINUING OPERATIONS Earnings from discontinued operations net of tax - - PROFIT (LOSS) FOR THE FINANCIAL YEAR (*) Figures presented solely and exclusively for comparative purposes. The accompanying notes 1 to 22 of the Financial Statements form an integral part of the profit and loss account for the year ended 31 December 2012.

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 1 and 23). In the event of a discrepancy, the Spanish-language version prevails. MEFF SOCIEDAD RECTORA DE PRODUCTOS FINANCIEROS DERIVADOS, S.A. (SOCIEDAD UNIPERSONAL) STATEMENT OF CHANGES TO SHAREHOLDERS' EQUITY FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2012 AND 2011 A) STATEMENTS OF RECOGNISED INCOME AND EXPENSE () Notes (*) EARNINGS FROM THE PROFIT AND LOSS ACCOUNT From measurement of financial instruments Financial assets available for sale - - Other income/expense - - For cash flow hedging - - Subsidies, donations and legacies received - - For actuarial gains and losses and other adjustments 13 (82) (2) Remaining income and expenses allocated directly to shareholders' equity - - Tax effect - - TOTAL INCOME AND EXPENSES ALLOCATED DIRECTLY TO SHAREHOLDERS' EQUITY (82) (2) From measurement of financial instruments - - Financial assets available for sale - - Other income/expenses - - For cash flow hedging - - Subsidies, donations and legacies received - - Remaining income and expenses allocated directly to shareholders' equity - - Tax effect - - TOTAL TRANSFERS TO THE PROFIT AND LOSS ACCOUNT - - TOTAL RECOGNISED INCOME AND EXPENSES (*) Figures presented solely and exclusively for comparative purposes. The accompanying notes 1 to 22 of the Annual Report form an integral part of the statement of recognised income and expense for the financial year ended 31 December 2012.

6 Translation of financial statements originally issued in Spanish and prepared in accordance with the regulatory financial reporting framework applicable to the Company (see Notes 1 and 23). In the event of a discrepancy, the Spanish-language version prevails. MEFF SOCIEDAD RECTORA DE PRODUCTOS FINANCIEROS DERIVADOS, S.A. (SOCIEDAD UNIPERSONAL) STATEMENTS OF CHANGES TO SHAREHOLDERS' EQUITY FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2012 AND 2011 B) STATEMENT OF CHANGES TO TOTAL SHAREHOLDERS' EQUITY () Shareholders' equity Share premium, Reserves and Other Grants Profit/loss Other Other Unrealised donations and Share from prior Members' Interim Treasury shares and Profit/loss equity gains(losses) legacies Shareholders' Capital premium Reserves years contributions dividend equity investments for the year instruments reserve received Equity BALANCE AT YEAR-END 2010 (*) (9.793) Adjustments for changes to accounting criteria Adjustments for errors ADJUSTED BALANCE AT START OF YEAR 2011 (*) (9.793) Total recognised income and expense - - (2) Transactions with shareholders - Capital increases / (-) Capital decreases Conversion of financial liabilities to shareholders' equity Distribution of dividends (850) - (6.879) (7.729) Treasury share transactions (net) Equity increase /(decrease) by business combinations Other operations with shareholders Other changes to shareholders' equity (10.643) FINAL BALANCE AT YEAR-END 2011 (*) (6.879) Adjustments for changes to accounting criteria Adjustments for errors ADJUSTED BALANCE AT START OF YEAR (6.879) Total recognised Income and Expenses - - (82) Transactions with shareholders - Capital increases / (-) Capital decreases Conversion of financial liabilities to shareholders' equity Distribution of dividends (1.022) - (9.708) (10.730) Treasury share transactions (net) Equity increase /(decrease) from business combinations Other operations with shareholders Merger (Note 1b) Partial spin-off (Note 1b) Other changes to shareholders' equity (7.901) FINAL BALANCE AT YEAR-END (9.708) b) and 12 (*) Figures presented solely and exclusively for comparative purposes. The accompanying notes 1 to 22 of the Financial Statements form an integral part of the consolidated statement of changes in equity for the year ended 31 December 2012.

7 Translation of financial statements originally issued in Spanish and prepared in accordance with the regulatory financial reporting framework applicable to the Company (see Notes 1 and 23). In the event of a discrepancy, the Spanish-language version prevails. MEFF SOCIEDAD RECTORA DE PRODUCTOS FINANCIEROS DERIVADOS, S.A. (SOCIEDAD UNIPERSONAL) STATEMENT OF CASH FLOWS FOR THE YEARS ENDED 31 DECEMBER 2012 AND 2011 (NOTES 1 TO 4) () Financial YeaFinancial Year Notes (*) CASH FLOWS FROM OPERATING ACTIVITIES: Income for the year before tax Adjustments to profit (loss) (1.031) (738) Depreciation of fixed assets 5 and Other adjustments to profit (loss) (net) 7, 10, 12 and 13 (1.259) (746) Changes to working capital 13, 14, 15, 16 and 17 (380) (1.186) Other cash flows from operating activities (2.407) (1.935) Interest payments 7 and 10 (4.768) (12.284) Dividends received Interest collections 7 and Collections (payments) for corporate income tax 14 (4.096) (3.024) CASH FLOW FROM INVESTMENT ACTIVITIES: (328) Payments on investments (19.988) (328) Group, multi-group and associated companies 9 - (324) Intangible assets, tangible assets and investment properties 5 and 6 (235) (2) Other financial assets 10 (19.753) (2) Proceeds from disposals Group, multi-group and associated companies - - Intangible assets, tangible assets and investment properties - - Other financial assets - - Other assets - - Business Unit 1-b CASH FLOW FROM FINANCING ACTIVITIES: (10.771) (7.729) Proceeds from and payments for equity instruments Issuance of equity instruments - - Amortisation of equity instruments - - Acquisition of treasury equity instruments - - Disposal of treasury equity instruments - - Subsidies, donations and legacies received - - Proceeds from and payments for financial liabilities Issue - - Return and amortisation - - Dividends paid and payments on other equity instruments 1-b) and 12 (10.771) (7.729) EFFECT OF EXCHANGE RATE VARIATIONS - - NET INCREASE/(DECREASE) IN CASH OR CASH EQUIVALENTS (991) Cash and cash equivalents at start of year Cash and cash equivalents at end of year (*) Figures presented solely and exclusively for comparative purposes. The accompanying notes 1 to 22 of the Financial Statements form an integral part of the cash flow statement for the year ended 31 December 2012.

8 Translation of financial statements originally issued in Spanish and prepared in accordance with the regulatory financial reporting framework applicable to the Company (see Notes 1 adn 23). In the event of a discrepancy, the Spanish-language version prevails. MEFF Sociedad Rectora de Productos Derivados, S.A. (Sociedad Unipersonal) Notes to the financial statements for the year ended 31 December Brief history of the Company, the merger by absorption of MEFF Sociedad Rectora de Productos Financieros Derivados de Renta Fija, S.A. Sociedad Unipersonal (the absorbed company) by the Company (the absorbing company) and the partial spin-off of MEFF Tecnología y Servicios, S.A. Sociedad Unipersonal (the spun-off company) to the Company: a) Historical outline of the Company MEFF Sociedad Rectora de Productos Derivados, S.A. (Sociedad Unipersonal), henceforth the Company, was incorporated on 7 December 1988 as OM Ibérica, S.A, coming into operation on 8 November Its corporate purpose is to govern and administer the Market in Options and Financial Futures Derivatives of Equity Instruments, assuming responsibility for the internal organisation and operations of the market, for which it will possesses the resources required. This single corporate objective is understood to include all the activities required to fulfil the corporate purpose in compliance with the law, especially in respect of regulations governing the markets at any particular time. In March 1991, the Company changed its name to Mercado de Opciones Financieras Español, S.A. (MOFEX - Spanish Financial Options Exchange). On 18 December 1991, the Company had a further name change, to MEFF Sociedad Rectora de Productos Financieros Derivados de Renta Variable, S.A. (Sociedad Unipersonal), (MEFF RENTA VARIABLE - The Governing Company for Equities Financial Derivatives, a Single Shareholder Company). On 18 December 1991, the company Mercado de Futuros Financieros, S.A. (MEFFSA) also changed its name to its current name of MEFF Sociedad Rectora de Productos Financieros Derivados de Renta Fija, S.A. (Sociedad Unipersonal) (MEFF Renta Fija - MEFF The Governing Company for Fixed Income Financial Derivatives - a Single Shareholder Company). These name changes occurred under an agreement between the said two companies whereby they became the governing bodies of the official financial derivative exchanges, and took place under the provisions of Royal Decree 1814/1991, of 20 December, which regulates the official futures and options exchanges (subsequently modified by Royal Decree 1282/2010, of 16 October which regulates the official secondary exchanges for futures, options and other derivative financial instruments). The fundamental activity of the Company is the management of the Market in Equity Derivatives and the administration of the clearing house and settlement of operations in that market. However, as a result of the publication of Royal Decree 1282/2010, of 16 October regulating the official secondary exchanges for futures, options and other financial derivative instruments, in financial year 2010, the Company amended its Articles of Association to reflect the change of its corporate name to the current name and increased the scope of its corporate purpose to include the performance of the activities provided for in Article 59 of the Spanish Securities Exchanges Act and Article 44 (iii) relating to its activity as a central counterparty contained in the said Royal Decree. The Company's corporate purpose therefore includes all activities that enable it to fulfil these obligations and are in compliance with the law, and especially with the regulations that govern the markets at all times. As a result, the regulations of the official secondary market in futures and options was changed when it came into force on 24 January 2011.

9 Finally, on 22 October 2012 a change to the Company's Articles of Association was authorised to include its new activities as a central fixed income securities clearing house, transferred from the defunct MEFF Sociedad Rectora de Productos Financieros Derivados de Renta Fija, S.A. (Sociedad Unipersonal) to the Company as a result of its merger with the Company during the year (section b of this Note). In accordance with Royal Decree 1282/2010, the governing companies of futures and options exchanges must comply with the following fundamental requirements: - Be incorporated as a sociedad anónima (limited company). - May not be members of the exchange, but must organise and manage the exchange. - The governing body's equity must not be lower than eighteen million euros and must exceed than the sum of the guarantees provided by the governing body. - The volume of borrowings, excluding the margins received from the exchange members, must not exceed shareholders' equity at any time. - Exchange members and participants will be required to maintain certain margins, based on their open positions. The Company's activity is, therefore, subordinated to the interests of the Bolsas y Mercados Españoles Group, whose controlling Company is Bolsas y Mercados Españoles, with registered office at Plaza de la Lealtad, 1, Madrid, with the latter being responsible for preparing the consolidated financial statements. This group combines all the Spanish companies that administer the systems for recording, clearing and settlement of securities and secondary markets. The consolidated financial statements of the Bolsas y Mercados Españoles Group for financial year 2011 were approved by the Company's Directors at the meeting of the Board of Directors held on 29 February 2012 and these have been filed with the Madrid Companies Registry. The Company's registered office is at Plaza de la Lealtad, 1, Madrid, but its operational centre is at Calle Tramontana, 2 in Las Rozas, Madrid (Note 4.3). b) Merger by absorption of MEFF Sociedad Rectora de Productos Financieros Derivados de Renta Fija, S.A. Sociedad Unipersonal (the absorbed company) by the Company (the absorbing company) and partial spin-off of MEFF Tecnología y Servicios, S.A. Sociedad Unipersonal (the spun-off company) to the Company: On 28 June 2012, the Board of Directors of MEFF Sociedad Rectora de Productos Financieros Derivados de Renta Fija, S.A. (Sociedad Unipersonal) and the company agreed the merger and takeover by the company of MEFF Sociedad Rectora de Productos Financieros Derivados de Renta Fija, S.A. (Sociedad Unipersonal), with the latter being wound up through dissolution without liquidation and the transfer en bloc of its assets and liabilities to MEFF Sociedad Rectora de Productos Derivados, S.A. (Sociedad Unipersonal), with the later acquiring the rights and obligations of MEFF Sociedad Rectora de Productos Financieros Derivados de Renta Fija, S.A. (Sociedad Unipersonal) through universal succession. On 28 and 29 June 2012, the Board of Directors of the company and of MEFF Tecnología y Servicios, S.A. (Sociedad Unipersonal), respectively, agreed the partial spin-off of MEFF Tecnología y Servicios, S.A. (Sociedad Unipersonal) to the company, which involved transferring the business unit comprising the technical and human resources of MEFF Tecnología y Servicios, S.A. (Sociedad Unipersonal) supporting the derivatives market to the company, with the latter acquiring the assets, liabilities, rights and obligations of the aforementioned business unit through universal succession. 2

10 Finally, the merger and spin-off deeds were executed on 28 November 2012, and filed with the Companies Registries of Barcelona and Madrid on 14 and 28 December 2012, respectively. The following aspects of the merger should be taken into account: - Pursuant to the provisions of Articles 49 and 73 of Act 3/2009, dated 3 April, concerning structural modifications to mercantile companies: it was not necessary to include in the common merger and spin-off plans the particulars listed under sections 2, 6, 9 and 10 of Article 31 of the aforementioned Act; it was not necessary to issue reports by the Administrators or an independent expert; there was no need to increase the Company's share capital; and there was no need to obtain the approval of the sole shareholder of the three companies involved. - Pursuant to the provisions of article 49 of Act 3/2009, of 3 April concerning structural modifications to mercantile companies, the partial spin-off was performed without increasing the share capital of the Company (the beneficiary), and therefore the common partial spin-off Plan did not include any reference to a distribution of shares in the beneficiary company to the single shareholder of MEFF Tecnología y Servicios, S.A. (Sociedad Unipersonal) as required by article 74.2 of that Act. - The tax arrangements for the merger and partial spin-off is one of neutrality resulting from the tax arrangement provided for in Chapter VIII of Title VII and the Second Additional Provision of Royal Legislative Decree 4/2004, dated 5 March, approving the consolidated text of the Corporate Income Tax Act (Note 14). - That pursuant to article 44 ter of Act 24/1988, of 28 July, on the Securities Market, as established in Act 31/2011, of 4 October, the Company requested authorisation to perform the role of Central Counterparty Entity in relation to transactions involving fixed income instruments. Authorisation for this was granted by the Ministry of the Economy and Competitiveness by order ECC/2405/2012 on 22 October. In accordance with the provisions of section 2 of registration and measurement rule 21, Operations between group companies, of the Spanish Charter of Accounts approved by Royal Decree 1514/2007 of 16 November, as amended by Royal Decree 1159/2010 of 17 September, both the Joint Merger Project and the Joint Partial Spin-Off Project established 1 January 2010 as the date from which the transactions performed by the company absorbed and the operations of the business unit spun off from MEFF Tecnología y Servicios, S.A. (Sociedad Unipersonal) would be considered to have been transferred for the Company's accounting purposes. Pursuant to the provisions of registration and measurement rule 21 of the Spanish Charter of Accounts approved by Royal Decree 1514/2007, dated 16 November (amended by Royal Decree 1159/2010, dated 17 September), the balance sheets of the merger and the partial spin-off are considered to be those of the Company, the absorbed company and the partially spun-off company as of 31 December In the merger and partial spin-off operations described above, the assets acquired from MEFF Sociedad Rectora de Productos Financieros Derivados de Renta Fija, S.A. (Sociedad Unipersonal) and MEFF Tecnología y Servicios, S.A. (Sociedad Unipersonal) were valued by the Company, being Grupo Bolsas y Mercados Españoles companies, at their value following completion of these operations in the consolidated financial statements of Grupo Bolsas y Mercados Españoles (which do not differ from those in the Company's individual accounts), in accordance with the Spanish Charter of Accounts (as modified by Royal Decree 1159/2010, of 17 September). This generated a merger reserve of million euros (Note 12). For information, the balance sheet of the absorbed company, MEFF Sociedad Rectora de Productos Financieros Derivados de Renta Fija, S.A. (Sociedad Unipersonal) at 31 December 2011 and the assets and liabilities of MEFF Tecnología y Servicios, S.A. (Sociedad Unipersonal) spun-off are shown below. The 3

11 balance sheet of the Company is shown for comparative purposes, together with the balance sheet at 31 December 2011: MEFF, Sociedad Rectora de Productos Financieros Derivados de Renta Fija, S.A. (Sociedad Unipersonal) Miles de Euros ACTIVO PASIVO Y PATRIMONIO NETO ACTIVO NO CORRIENTE: PATRIMONIO NETO: Inmovilizado material- 36 FONDOS PROPIOS: Instalaciones técnicas y otro inmovilizado material (Nota 6) 36 Capital Inversiones financieras a largo plazo (Nota 8) 32 Capital escriturado (Nota 12) Activos por impuesto diferido (Nota 14) 47 (Capital no exigido) Prima de emisión - Reservas (Nota 12) (Acciones y participaciones en patrimonio propias) - Resultados de ejercicios anteriores - Otras aportaciones de socios (Nota 12) 63 Resultado del ejercicio 547 (Dividendo a cuenta) (506) Otros instrumentos de patrimonio - AJUSTES POR CAMBIOS DE VALOR: - SUBVENCIONES, DONACIONES Y LEGADOS RECIBIDOS - ACTIVO CORRIENTE: Deudores comerciales y otras cuentas a cobrar- 101 PASIVO CORRIENTE: Clientes, empresas del grupo y asociadas 33 Pasivos financieros a corto plazo ajenos Otros deudores 68 Fianzas y depósitos recibidos del mercado Inversiones financieras a corto plazo ajenas Instrumentos financieros en contrapartida central Materialización de fianzas y depósitos recibidos del mercado (Nota 10) Deudas con empresas del grupo y asociadas a corto plazo 45 Instrumentos financieros en contrapartida central Acreedores comerciales y otras cuentas a pagar- 541 Periodificaciones a corto plazo 5 Acreedores 481 Efectivo y otros activos líquidos equivalentes (Nota 7) Acreedores varios 60 TOTAL ACTIVO TOTAL PASIVO Y PATRIMONIO NETO

12 MEFF, Tecnología y Servicios, S.A. (Sociedad Unipersonal) ELEMENTOS DEL ACTIVO Y DEL PASIVO QUE FORMAN PARTE DEL PATRIMONIO ESCINDIDO Miles de Euros ACTIVO PASIVO Y PATRIMONIO NETO ACTIVO NO CORRIENTE: PATRIMONIO NETO: 824 Inmovilizado intangible- 42 FONDOS PROPIOS: 824 Otro inmovilizado intangible (Nota 5) 42 Capital- Inmovilizado material- 362 Capital escriturado - Instalaciones técnicas y otro inmovilizado material (Nota 6) 362 (Capital no exigido) - Activos por impuesto diferido (Nota 14) 4 Prima de emisión Reservas (Nota 12) 824 (Acciones y participaciones en patrimonio propias) - Resultado del ejercicio - (Dividendo a cuenta) - Otros instrumentos de patrimonio - AJUSTES POR CAMBIOS DE VALOR: - SUBVENCIONES, DONACIONES Y LEGADOS RECIBIDOS PASIVO NO CORRIENTE: - Provisiones a largo plazo (Nota 13) - ACTIVO CORRIENTE: 682 Deudores comerciales y otras cuentas a cobrar- 296 PASIVO CORRIENTE: 266 Clientes, empresas del grupo y asociadas 283 Deudas con empresas del grupo y asociadas a corto plazo 67 Otros deudores 13 Acreedores comerciales y otras cuentas a pagar- 199 Periodificaciones a corto plazo 3 Acreedores 186 Efectivo y otros activos líquidos equivalentes 383 Acreedores varios 13 TOTAL ACTIVO TOTAL PASIVO Y PATRIMONIO NETO The merger and partial spin-off described above were conducted to reorganise the Bolsas y Mercados Españoles Group companies involved in activities in the derivatives markets, providing the technical services on which this market is based, to increase the Group's efficiency and reorganise the activities of the companies involved. In this regard, work is currently underway on the possible split of the Company into two different companies: a central counterparty entity and a governing body for the derivatives market. This possibility was still being analysed at the date of these financial statements and no formal decision has been taken on this matter. 2. Bases on which the financial statements are presented 2.1 Regulatory framework for financial information applicable to the Company These financial statements have been prepared by the Directors in accordance with the regulatory framework for financial information applicable to the Company as set out in: a. The Spanish Commercial Code and other commercial legislation. b. The Spanish Chart of Accounts approved by Royal Decree 1514/2007 and its sector-specific modifications and especially in respect of Circular 9/2008, of 10 December, issued by the Comisión Nacional del Mercado de Valores (CNMV, the Spanish National Securities Exchanges Commission), as modified by Circular 6/2011, of 12 December issued by the same body (Note 2.2). 5

13 c. The mandatory standards approved by the Spanish Accounting and Auditing Institute based on the Spanish Chart of Accounts and supplementary standards thereto and those approved by the CNMV applicable to the Company. d. All other applicable Spanish accounting standards. 2.2 True and fair view The Company's financial statements have been obtained from the Company's accounting records and are presented in accordance with the regulatory framework applicable to the financial information and, in particular, the accounting principles and criteria contained therein, such that they show a true and fair view of the company's equity, financial situation, earnings and cash flows in the financial year. These financial statements, which have been approved by the Company's Board of Directors, will be submitted for approval of the Single Shareholder. It is expected that they will be approved without modification. The financial statements for financial year 2011 were approved by the Single Shareholder on 19 April The accompanying balance sheets, profit and loss accounts, statements of changes to shareholders' equity and cash flow statements are presented in compliance with the formats established in Standard 36 of Circular 9/2008, of 10 December, issued by the Comisión Nacional del Mercado de Valores, after inclusion of the changes incorporated by Circular 6/2011, of 12 December. 2.3 Non-mandatory accounting principles applied No non-mandatory accounting principles have been applied. The Board of Directors has prepared these financial statements taking into account all mandatory accounting standards and principles that have a significant effect on the said financial statements. All mandatory accounting principles have been applied. 2.4 Critical aspects concerning the valuation and estimation of uncertain items The results and determination of net worth are sensitive to accounting principles and policies, and the valuation and estimation criteria applied by the Company's Directors when preparing the financial statements. The main accounting principles and policies and valuation criteria are set out in Note 4. When preparing the accompanying financial statements, the Company's Board of Directors has used estimates in valuing some of the assets, liabilities, income, expenses and commitments recorded in the accounts. Basically, these estimates concern: - Assessment of possible losses owing to the impairment of some assets (Notes 4.1, 4.2 and 4.4). - The assumptions used for the actuarial calculation of liabilities relating to pensions and other commitments to personnel (Note 13). - The useful life of tangible and intangible assets (Notes 4.1 and 4.2). - The fair value of certain financial instruments (Note 10). - Remuneration to personnel based on equity instruments (Note 4.13). 6