Annual Report 2010 - AdP

Any excess cost in acquiring a financial investment over the group's holdings in the fair value of the assets, liabilities and contingent
liabilities identified at the date of acquisition of the associated company is recognized as goodwill, which is included in the value of the
financial holding and its recovery is valuated annually as an integral part of the financial investment. If the acquisition cost is less than the
fair value of the net value of the assets of the acquired associated company, the difference is recorded directly in the income statement.
Below, entities that are classified as associated companies.
Companies Headquarter % Capital Shareholder Assets Liabilities Shareholder Sales Net
Holdings Capital Capital Income
Trevo Oeste, S.A. Alcobaça 35,00% 1.236.085 3.277.313 852.006 2.425.307 - (81.139)
Netdouro, S.A. Porto 100,00% 50.000 95.384 15.520 79.864 25.200 10.265
Clube de Golf das Amoreiras, S.A. Lisboa 100,00% 350.000 1.511.688 1.373.788 137.900 - (50.671)
Miese (i) Vila Real 40,00% 200.000 201.003 82.608 118.395 - (81.605)
Águas de Timor, S.A. (ii)
(i) Amounts as at 31 December 2009.
(ii) Company that is not operating
Timor 100,00% 5.000 - - - - -
2.2.4 Financial holdings in foreign subsidiaries
In preparing consolidated financial statements, the value of assets and liabilities of subsidiaries domiciled abroad are recorded in
euros at the official exchange rates in force at the balance sheet date. Subsidiary results are stated at their value in euros at the
average monthly exchange rate of the year. Foreign exchange differences resulting from conversion of net worth into euros at the
start of the year and of income of the year at the official exchange rate applicable at the balance sheet date are recorded under
shareholder equity.
2.2.5 Goodwill
Goodwill is the excess acquisition cost over the fair value of the identifiable assets and liabilities attributable to the group at the date
of acquisition or at the date of the first consolidation. If the acquisition cost is less than the fair value of the net assets of the acquired
subsidiary, the difference is recorded directly under income of the year. Goodwill is not amortized, however the group looks for
possible impairment on an annual basis or when there are any indications of impairment. If there is any indication of this, an assessment
is conducted regarding the recoverability of the net value of goodwill, and an impairment loss is recognized whenever the book
value of goodwill exceeds its recoverable value. For the purposes of conducting the impairment test, goodwill is attributed to the
basic cash flow generating units (CGU) and compared with the present value of future cash flows generated by them. Gains or
losses from the sale of an entity includes the book value of goodwill in relation to this entity, except when the business that goodwill
is associated with keeps generating benefits for the group.
2.2.6 Balances and transactions
Intragroup transactions, dividend distributed between group companies, balances and unrealized gains from transactions between
group companies are eliminated.
2.3 Information according to business area
A business area is a group of assets and operations involved in the supply of products or services subject to risks and benefits that
are different from other business areas. A geographic segment involves the supply of products or services within a particular economic
environment that is subject to risks and benefits different from those that influence segments that operate in other economic
environments. AdP Group only reports according to business area because the transactions conducted by the group’s international
companies are presented as an isolated business area in the supply of production and/or water distribution services.”
Below the identified business areas:
I - Regulated activities
a. UNA-PD
b. UNR
c. UNA-DR