Page 55 - MEDIASET ESPAÑA / 2012. Financial Statements, Management and Corporate Governance Report

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FINANCIAL STATEMENTS, MANAGEMENT AND CORPORATE GOVERNANCE REPORT. 2012
The Company constantly monitors the age of its debt, and there were no risk situations at year end.
Investing activities
A Financial Risk Management Procedures Manual sets forth 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 recognized 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.
• Authorizations 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 Management
and Operations Director, and the 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.
Nevertheless, 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 ibor at De-
cember 31, as the benchmark, we applied a variation of -10 +100 basis points for 2012 (in 2011, we applied a variation
of -10 + 100).
The sensitivity test shows that the impact of variations on the interest rates applied to the cash surpluses, at December
31, would, in any event, not be significant and would exclusively affect the amount of financial income.
Reference Rate (€)
Cash
Surpluses
Annual
Interest 100bp
Annual
Interest -10bp
Annual
Interest
12/31/12 0.109 77,082 84 1.109 855 0.009 7
12/31/11 1.024 75,617 774 2.024 1,530 0.724 547
The financial instruments exposed to /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 (2011: 15.40% and 2012:
9.17%), 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 income
statement, which, in any event, is not significant.