Page 170 - MEDIASET ESPAÑA / 2012. Financial Statements, Management and Corporate Governance Report

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MEDIASET ESPAÑA COMUNICACIÓN, S.A. AND SUBSIDIARIES
22.4.3. Investing activities
The financial assets considered as investment activity are non-current loans (Note 11), non-current financial investments
(Note 11) and current financial investments (Note 13).Those notes provide information on the concentration of this
risk and the related maturities.
A Financial Risk Management Procedures Manual sets forth the general criteria governing investments of the Group’s
treasury surpluses, which, in broad terms, are as follows:
• The investments are made with institutions (whether domestic or foreign) of recognized financial solvency measured
based on their current ratings.
• The investments are placed in conservative products (bank deposits, debt repos, etc,) on which, in general, the
repayment of the invested capital is guaranteed.
• Authorizations for the corresponding investments are limited by the powers granted to the group’s senior executives
and, in any event, are highly restricted (according to the amount, the Board Members, General Management and
Operations Director, and Financial Director).
• Under ordinary circumstances, the longest term is three months and the investments usually offer automatically
available funds.
22.4.4. Liquidity risk
The Company’s financial structure is at a low liquidity risk, given the low level of financial leveraging and the high levels
of operating cash flows generated each year.
Liquidity risk would result from the Group having insufficient funds or access to sufficient funds at an acceptable cost
to meet its payment obligations at all times. The Group’s objective is to maintain sufficient available funds to conduct
its business.
The Group’s policies establish the minimum liquidity levels required at all times:
• Excess liquidity may only be invested in certain types of assets (see previous section on credit risk/investment
activities) the liquidity of which is guaranteed.
• The amount of the Group’s revolving credit lines ensures that the Group is able to meet its operating needs as well
as finance new short-term investment projects. At year end 2012, the opening credit lines total 345 million euros
(2011:total 333 million euros). Given the difficult market situation, these credit lines have been contracted under very
competitive financial conditions, which strengthen the financial sector’s perception that the Group is creditworthy
and sound.
22.4.5. Market risk
Given the nearly complete absence of financial debt, there are no financial risks associated with interest-rate movements.
Nevertheless, and for illustrative purposes, the Group has conducted a test to determine the sensitivity of the Group’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
December 31, as the benchmark, we applied a variation of +100 basis points -10 basis points.