Financial statements

NOTE 24



EVENTS AFTER THE END OF THE REPORTING PERIOD

The appearance of the Coronavirus (COVID-19) in China in January 2020 and its recent global expansion to a large number of countries caused the viral outbreak to be classified as a pandemic by the World Health Organization on 11 March.

Bearing in mind the complexity of the markets due to their globalisation and the absence, for the time being, of effective medical treatment against the virus, the consequences for the Company's operations are uncertain and will depend to a large degree on the evolution and extension of the pandemic in the coming months, as well as on the capacity of all the economic players affected to react and adapt to the circumstances.

Therefore, at the date of authorisation for issue of these financial statements it was still premature to make a detailed evaluation or quantification of the possible impacts that COVID-19 will have on the Company, due to the uncertainty of its consequences in the short, medium and long term.

However, the directors and management of the Company have conducted a preliminary assessment of the current situation, based on the best available information. As a result of the considerations discussed above, this information may be incomplete. The following aspects of the results of this assessment are worthy of note:

  • Liquidity risk: it is foreseeable that the general situation of the markets may lead to an overall increase in liquidity constraints in the economy, as well as a contraction in the credit market. In this regard, the Company does not foresee having liquidity problems thanks to the significant volume of liquid financial assets available, which, together with the implementation of specific plans for the improvement and efficient management of liquidity, will enable these constraints to be overcome.
  • Operational risk: the changing and unpredictable nature of events could lead to a risk of temporary interruption of some services. For this reason, the Company has established specific working groups and procedures aimed at monitoring and managing the evolution of its operations at all times, given the relevance that these have at the moment for citizens, companies and institutions in the country.
  • Risk of changes in certain financial aggregates: the factors mentioned above, together with other specific factors as the decrease in the volume of operations of the visitors, the less willingness to attract new ones and the general contraction of the market, may cause a decrease in the next financial statements in the amount of important headings for the company as “Net sales revenue”, “Profit from Operations” or “Profit before/after Tax, etc., although it is not yet possible to reliably quantify their impact, taking into account the aforementioned difficulties and restrictions.
  • Risk of measurement of assets and liabilities: a change in the future estimates of the Company's [Group's] sales, production costs, finance costs, trade receivables, etc. could have an adverse impact on the carrying amount of certain assets and on the need to recognise certain provisions or other types of liabilities. As soon as sufficient and reliable information becomes available, the appropriate analyses and calculations will be made to allow, if necessary, the re-measurement of those assets and liabilities.
  • Going concern risk: taking into account all the aforementioned factors, the directors consider that the conclusion on the application of the going concern basis of accounting remains valid.

Lastly, it should be noted that the Company's directors and management are constantly monitoring the evolution of the situation in order to successfully address any possible impacts, both financial and non-financial, that may arise.