Notes to the Financial Statements - Efacec

2.3 Estimates of fair value
The fair value of fi nancial instruments available on the open market (for example publicly negotiated derivatives, negotiable
instruments available for sale) is determined on the basis of quoted market prices on the balance sheet date. The quoted market
price used for fi nancial assets of the Group is the price received by shareholders on the open market; the quoted market price for
fi nancial liabilities is the price paid on the open market.
The fair value of fi nancial instruments not traded on the open market (for example unquoted derivatives) is determined using
valuation techniques. The Group uses a variety of methods and reaches its conclusions based on market conditions at each balance
sheet date. Quoted market prices or negotiation quotas for similar instruments are used for long term debts. Other techniques,
such as estimates of discounted cash fl ows, are used to determine the fair value of other fi nancial instruments. The fair value of
interest rate swaps is calculated based on the present value of estimated future cash fl ows. The fair value of exchange rate futures
contracts is determined using market exchange rates at the balance sheet date.
The nominal value of debtor and creditor balances less estimated credit adjustments is assumed to be close to their fair value. The
fair value of fi nancial liabilities is estimated by updating future contractual cash fl ows at the current market interest rate available
for similar fi nancial instruments.
C. Segment Information
3. Reporting by activity segment
Information by segments is presented for the geographical segments and businesses of the Group. The results, assets and
liabilities of each segment correspond to those that are directly attributable to them as well as those that can be attributed on a
reasonable basis.
Business segment
A business segment is a separately identifi able part of the Group, committed to supplying a specifi c product or service, and that
is subject to different risks and opportunities than those of other business segments.
As at 31 December 2007, the Group was organised on a worldwide basis into the following business segments:
- SEN – Energy Solutions;
- EES – Engineering, Environment and Services;
- STL – Transport and Logistics;
The information also includes a heading entitled “Various”, which groups together assets relating to corporate centres and
investments in non core Group business activities.
Geographical segment
A geographical segment is an individual area of the Group committed to providing products or services within a specifi c economic
zone, and that is subject to different risks and opportunities than those of other economic zones.
In addition to Portugal, the relevant geographic segments are those in countries or regions which the company has chosen as
EFACEC markets:
3.1 Information by business segment
- Spain
- Central Europe
- Maghreb countries
- Southern Africa
- Latin America
- United States of America
17
2007 Consolidated and
Individual Financial Statments