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54
MEDIASET ESPAÑA COMUNICACIÓN, S.A.
Investing activities
A Financial Risk Management Procedures Manual sets for th the general criteria governing investments of the Company’s
Treasury surpluses, which, in broad terms, are as follows:
• The investments are made with institutions (whether domestic or foreign) of recognised financial solvency;
• The investments are placed in conservative products (bank deposits, debt repos, etc.) on which, in general, the
repayment of the invested capital is guaranteed.
• Authorisations for the corresponding investments are limited by the powers granted to the company’s senior
executives and, in any event, are highly restricted (according to the amount, the Board Members, General Manage-
ment and Operations Director, Financial Director).
• Under ordinary circumstances, the longest term is three months and the investments usually offer automatically
available funds.
2. Market risk
Market risk exists when a potential loss may arise from fluctuations in the fair value or future cash flows of a financial
instrument due to changes in market prices.
Given the nearly complete absence of financial debt, there are no financial risks associated with interest-rate movements.
Never theless, and for illustrative purposes, the Company has conducted a test to determine the sensitivity of the
Company’s cash surpluses to certain modifications in interest rates.
The following assumption was used: beginning with our year-end cash surpluses, and taking the 1-month Euribor at 31
December as the benchmark, we applied a variation of -30 +100 basis points for 2011.(In 2010, we applied a variation
of -30 + 100)
The sensitivity test shows that the impact of variations on the interest rates applied to the cash surpluses, at 31
December, would, in any event, not be significant and would exclusively affect the amount of financial income.
Reference
Rate (EUR)
Cash
Surpluses
Annual
Interest
100bp
Annual
Interest
-30bp
-100bp
Annual
Interest
31/12/11
1.024
75,617
774
2.024
1,530
0.724
-
547
31/12/10
0.782
(25,174)
(197)
1.782
(449)
0,482
-
(121)
The financial instruments exposed to EUR/USD exchange-rate risk, mainly consisting of future currency-purchase
agreements, have undergone a sensitivity test at the balance sheet date.
The exposed balance sheet value of these financial instruments was corrected by applying a symmetrical percentage
change, equal to the 1-year implicit volatility of the currency in question published by Reuters (14.58% for 2010 and
15.40% for 2011), to the year-end exchange rate.
The sensitivity test shows that the variations on the year-end exchange rate would have had an impact on the P&L
account, which, in any event, is not significant.