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17
FINANCIAL STATEMENTS, MANAGEMENT AND CORPORATE GOVERNANCE REPORT.
2011
Useful life of property, plant and equipment and intangible assets
The Company periodically reviews the useful lives of its proper ty, plant and equipment and its intangible assets,
prospectively adjusting the provisions for depreciation when the estimates change.
Provisions
The Company recognises provisions for risks in accordance with the accounting policy set for th in Note 4.The Company
has made judgements and estimates regarding the probability of the occurrence of said risks, as well as the amount
thereof, and has recognised a provision when the risk has been considered likely, estimating the cost that such an
occurrence would represent for it.
Calculation of fair values, values in use and present values
Estimating fair values, values in use and present values entails calculating future cash flows and making assumptions on
the future values of flows as well as the applicable discount rates.The estimates and related assumptions are based on
historical experience and various other factors understood to be reasonable under the circumstances.
The Company values incentive plans through shares at fair value on the date of the concession. Making such an estimate
at that date requires making estimates and judgements on the valuation option models and taking into account the price
of the option in the year, the life of the option, the price of the underlying shares, the expected volatility of the share
price, an estimate of dividend payments and the risk-free interest rate for the life of the option.
3. APPROPRIATION OF PROFIT
The Directors have proposed the following appropriation of profit, expressed in thousands of euros, pending approval
by the General Shareholders’ Meeting:
Amount
Proposed appropriation
Profit for the year
137,264
Total
137,264
Appropriation to:
Dividends
55,260
Goodwill reserve
14,399
Voluntary reserves
67,605
Total
137,264
Limitations on the distribution of dividends
The Company is obliged to transfer 10% of the profit for the year to a legal reserve until this reserve reaches an amount
at least equal to 20% of share capital. Unless the balance of the reserve exceeds this amount, it cannot be distributed
to shareholders.