Annual Report 2010 - AdP

Treasury is responsible for managing AdP Group’s net exposure in each foreign currency, centrally conducting swaps in view of
minimizing recognized commercial risks, assets and liabilities. AdP holds investments expressed in foreign currency whose net assets
are exposed to foreign exchange risk due to conversion, as well as financing in foreign currency exposed to foreign exchange risk.
The foreign exchange risk related to net assets in foreign currency is managed by obtaining loans in the same currency and via swap
loans that hedge against foreign exchange risk.
3.4 Liquidity Risk
Management of liquidity risk implies maintaining deposits at a reasonable level, the feasibility of consolidating floating debt through a
suitable amount of credit and the ability to liquidate market positions. Because of the underlying business dynamic, the AdP treasury
seeks to ensure the flexibility of floating debt, by maintaining the lines of credit available for this. AdP manages liquidity risk by obtaining
and maintaining lines of credit and financing arrangements underwritten by national and financial institutions with high credit ratings
that allow immediate access to funds.
The table below lists AdP’s responsibilities according to contractual residual maturity periods. The amounts listed in the table are
contractual cash flows, not discounted and payable in the future (without the interest that these liabilities are earning.
31.12.2010 < 1 year 1 to 5 years > 5 years
Financing 4,581,657 - 600,000,000
Suppliers and other liabilities 9,337,998 - -
3.5 Cash flow and fair value risk associated with interest rates
AdP interest rate risk essentially ensues from contracting long-term loans. As such, loans obtained with interest calculated at variable
rates expose AdP to cash flow risks, and loans obtained with fixed interest rates expose AdP to the fair value risk associated with
the interest rate. AdP manages cash flow risk associated with interest rates via swaps that that allow conversion of loans with interest
calculated at a variable rate to loans with interest calculated at a fixed rate. The guaranteed yield from concession contracts is also
associated with the volatility of interest rates and consequently the tariff deficit.
3.6 Capital risk
AdP’s goal in terms of managing capital, which is a broader concept than the capital stated on the face of the balance sheet, is to
maintain an optimized capital structure via prudent use of debt that will allow it to reduce the cost of capital.
The goal of capital risk management is to safeguard the continuity of group operations with adequate shareholder earnings and
generating benefits for all interested third parties.
31.12.2010 31.12.2009
Non-current loans 597,772,414 599,017,132
Current loans 4,581,657 290,771
Deposits (144,744,618) (143,233,353)
Debt total 457,609,452 456,074,550
Total equity 518,607,244 515,878,730
Capital 976,216,697 971,953,280
Debt/total capital 0.47 0.47
4 Estimates and judgements
Estimates and judgements that have an impact on the financial statements of AdP are continually assessed, representing the
Administration’s best estimate at the date of each report, taking into account the historical performance, accumulated experience
and expectations regarding future events that, under the circumstances in question, are believed to be reasonable. The intrinsic nature
of the estimates can cause the real effect of the situations that had been the target of the estimate to differ from the estimated
amounts for the purpose of the financial report. Estimates and judgements that pose a significant risk of causing material adjustment
in the book value of assets and liabilities over the course of the financial year are as follows: