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Use of financial instruments by the Group and main financial risks
The Group performs transactions with financial instruments to hedge the foreign currency risk
on the purchases of broadcasting rights in the year.
At 31 December 2015, the Parent had arranged instruments to hedge its foreign currency
asset and liability positions amounting to USD 244,048 thousand, at a weighted average
exchange rate of USD 1.1821/EUR 1. The net fair value of these hedging instruments gave
rise to a financial asset of EUR 15,882 thousand and a financial liability of EUR 310 thousand
at year-end.
Also, interest rate swaps were arranged in order to fix the financial cost arising from the
floating rates established in the syndicated financing agreement entered into in May 2015.
The fair value of these swaps at 31 December 2015 gave rise to a financial liability of EUR 2.6
thousand.
The Group has a risk management and control system in place which is periodically reviewed
and updated based on the changes in the Group's business activities, the materialisation of
risks, legislative developments and the organisation's own development.
This risk management and control system is a tool to aid in management decision-making and
to effectively manage risks by identifying and implementing the controls and actions plans, if
any, that are necessary for all the identified risks, thereby improving the ability to generate
value and minimising any impact that may arise from the materialisation of any risk.
Risk analysis and control affects all Group businesses and activities and also involves all
organisational units. It is therefore a corporate risk management and control system in which
the entire organisation actively participates and which is managed and overseen by the Board
of Directors, with the functions that are granted in this regard to the Audit Committee and the
coordination and participation of the Regulatory Compliance Committee and, in particular, the
Legal area in risk management and compliance controls, the Finance area in relation to
financial risks and the set of controls that compose the System of Internal Control over
Financial Reporting and, lastly, the Internal Audit and Process Control area in the coordination
and supervision of the overall functioning of the risk management system.
The Group has the tools and the organisation necessary to ensure the effectiveness of the
approved control procedures.
The Group’s main financial risks are as follows:
a) Foreign currency risk. Foreign currency risks relate mainly to the payments to be made in
international markets to acquire broadcasting rights. In order to mitigate foreign currency
risk, the Group arranges hedging instruments, mainly currency forwards.