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FINANCIAL STATEMENTS, MANAGEMENT AND CORPORATE GOVERNANCE REPORT.
2011
Provision for outstanding litigation
At 31 December 2011 and 2010, the non-current provisions for liabilities and charges relate to pending lawsuits and
appeals between the Company and third par ties. Provisions recognised in the year relate to new lawsuits brought
against the Company, while reversals relate to litigation that has been resolved. Reversals in 2010 include the lawsuit
with the tax authorities on assessments raised on 24 July 2009, which were provisioned in 2009 and amounted to EUR
3,543 thousand.The Company appealed these before the Central Tax Cour t.This cour t ruled par tially in favour of the
Company, requiring it to pay a total of EUR 345 thousand.Therefore, the unused amount of the provision was reversed.
At 31 December 2010, there are practically no shor t-term provisions since the amounts recognised in the previous year
under this heading, which were provisions for lawsuits with intellectual proper ty rights management entities and the levy
to finance the Spanish public television company,Televisión Española, were cancelled as follows:
• Since 2001 the Company has been making provisions for lawsuits with intellectual proper ty rights management
entities which had either already taken legal action against the Company in pursuit of claims arising from the
alleged illicit use of their rights reper toire, or had claimed, by any other means, payment for such rights. On 31 May
Telecinco signed an agreement with AIE (Spanish Management Company of Actors, Musicians and Performers)
thus resolving the differences between them regarding the remuneration of publicly broadcast audiovisual record-
ings.The increase in the amount of reversals and amounts used in 2010 related to this agreement.With this settle-
ment agreement, effective from 1 January 1995 to 31 December 2010, the par ties agreed to terminate the various
lawsuits and appeals they had initiated, respectively.
• The amounts related to the 3% of gross operating income billed from September to December pursuant to
Law 8/2009 on the financing of Radio Televisión Española were transferred to “Other payables to public
administrations”·(Note 15) once the definitive procedure for calculating, declaring and paying the amount was
established by Royal Decree 1004/2010 of 5 August, which implemented Law 8/2009 and ITC Order/2373/2010
of 9 September approving the statements and prepayments set out in Law 8/2009.
15. TAXES
Under prevailing tax regulations, tax returns may not be considered final until they have either been inspected by tax
authorities or until the four-year inspection period has expired.The Company is open to inspection of all taxes to which
it is liable for the last four years. Once the SpanishTax Authorities’Tax and Customs Control Depar tment of the Central
Office of Major Tax Payers had performed its verifications and investigations in 2009 (as explained in the above note),
the Company has the following items and years open to inspection:
Item(s)
Periods
Income tax
2008 to 2011
Value added tax
2008 to 2011
Was holding, non-resident income tax
2008 to 2011
Gaming tax:
06/2008 to 2011
Taxes on games of luck, betting, and chance: raffles and tombola
06/2008 to 2011
Annual transaction statement
2008 to 2011
Consolidated statement of intra-regional delivery and acquisition of assets
2008 to 2011
The Company has the last four years open to inspection of all other applicable taxes. Based on the best interpretation of
current legislation, the Company’s directors and tax advisors consider that in the event of a tax inspection, no significant
tax contingencies would arise as a result of varying interpretations of the tax legislation applicable to the Company’s
transactions.