Adscripción de un plan de pensiones de empleo a varios fondos de pensiones

In addition to the risks inherent to the results of the sports’ activity and its’ impacts on the economic results and on the assets appreciation, the Group’s activity is also exposed to a variety of financial risks, such as market risk, credit risk and liquidity risk. These risks are the result of the uncertainty inherent to the financial markets, which is reflected in the capacity to estimate future cash-flows and returns. The Group’s risk management policy seeks to minimize any adverse effects arising from these uncertainties characteristic of financial markets.

3.1. Market risk a) Interest rate risk

The interest rate risk is primarily result of loans indexed to variable interest rates.

The Group's debt is mainly indexed to variable and fixed interest rates, exposing the cost of debt to a risk of volatility. The impact of such volatility in the profits and equity of the Group is significant given the high level of indebtedness of the Group.

Although the interest rate risk is significant, the Group does not, usually, use interest rate derivatives for hedging this risk.

As of 30 June 2015 and 2014, the Group presents a debt of approximately 172,543 thousand Euro and 149,169 thousand Euro, respectively, divided between current and non-current loans (Notes 18 and 19) contracted with various financial institutions.

Interest rate sensitivity analysis

The sensitivity analysis presented below was computed on the basis of the Group's exposition to changes in interest rate on financial instruments with reference to the estimate of average indebtedness in the season 2014/2015. For financial instruments, the analysis was prepared on the understanding that changes in market interest rates affect interest income or expenses of financial instruments indexed to variable interest rates.

The mentioned analysis pointed out that if the Euribor had been 50 basis points higher and all other variables held constant, the financial charges for the year ended 30 June 2015 would increase by, approximately 234,000 Euro (327,000 Euro in the financial year ended 30 June 2014).

Consolidated Accounting Report 2014/2015

___________________________________________________________________________________________

b) Exchange rate risk

Developing its activity, the Group carries out some transactions denominated in currencies other than Euro, namely transactions of players’ registrations. However, such transactions in foreign currency have been insignificant, being the vast majority contracted in Euro, and residually in U.S. dollars. Thus, the Group does not use derivatives for hedging, namely exchange rates forwards. 3.2. Credit risk

The Group's exposure to credit risk is mainly related with accounts receivable arising from the sale of players’ registrations and other transactions related with the Group’s activity, namely the sale of broadcasting rights, advertising and various sponsorships. The credit risk refers to the risk of the counterparty defaulting on its payment contractual obligations, resulting in a financial loss to the Group.

The objective of this risk management is to ensure the effective credit collections on established deadlines without affecting the Group’s financial stability. The evaluation of this risk is made on a regular basis, and the management’s goal is (a) to evaluate the counterparty in order to assess its ability to pay the debt, (b) to monitor the evolution of the amount of trade receivables, and (c) to perform an impairment analysis of accounts receivables on a regular basis.

The Group does not consider there is significant credit risk with any entity in particular, or with a group of entities with similar characteristics, to the extent that accounts receivables are spread across various customers and different geographical areas. The Group asks for credit guarantees, when the financial position of the client recommends so. For customers with higher credit risk, or when the account receivable is greater than normal, these guarantees should be bank guarantees. Impairment losses related to accounts receivables are calculated taking into consideration: (a) the client’s risk profile, (b) the term of collection of each contract, which differs in each line of business, and (c) the customer’s financial conditions. Changes in accumulated impairment losses for the years ended 30 June 2015 and 2014 are disclosed in Note 22.

As of 30 June 2015 and 2014, the Group considers that there is no need to book additional impairment losses besides the amounts recorded on those dates and summary disclosed in Note 22.

3.3. Liquidity risk

Liquidity risk is defined as the risk of lack of ability to settle or accomplish its obligations on stipulated time and reasonable price. The existence of liquidity implies that management parameters are set which maximize the return and minimize the opportunity costs associated with the liquidity in a safe and efficient manner.

This risk management in the Group aims to:

- Liquidity - ensure the permanent and efficient access to funds to meet correct payments to the respective due dates;

- Security - minimize the probability of default in the refund of any application of funds; and

- Financial efficiency -minimise the cost of opportunity of excessive short term liquidity. The Group aims to make compatible the due dates of assets and liabilities through an active management of its maturities. Normally, each contract loan is guaranteed by a receivable account balance (due to player’s registration sale, or due to receivables amounts related to

Consolidated Accounting Report 2014/2015

___________________________________________________________________________________________

European competitions bonuses and broadcasting rights); additionally, usually, the maturity dates of such loans match the due dates of the accounts receivables.

The information considered in the notes to the consolidated financial statements, regarding the maturity analysis of financial liabilities includes the due amounts, not discounted, and based upon the worst case scenario, which is, the shortest period in which the liability becomes due, assuming the compliance of all requirements set contractually.

Regarding the liquidity risk, as of 30 June 2015, despite the consolidated financial statements show a equity attributable to equity holders of the parent company of 24 million Euro and a negative working capital in approximately 25 million Euro (84 million Euro as of 30 June of 2014), it is conviction of the Board of Directors that based (i) on loans obtained, or in the process of be obtained (ii) on the renegotiation of maturities of existing loans, as well as (iii) the predictions of the eventual financial reinforcement resulting from the sale of players registration sporting rights, as it has been usual in prior years, this risk is properly mitigated.

3.4. Regulatory risk - “ Financial Fair Play “

FCP, SAD is subjected to the licensing system for admission of football clubs in participating on UEFA organized competitions: "UEFA Club Licensing and Financial Fair Play Regulations". This regulation governs the rights, duties and responsibilities of all parties involved in the club licensing system for participation in the UEFA competitions and sets in particular the sport’s related to infrastructures, administrative and staff-related, legal and financial minimum criteria to be met by a sports company in order to obtain a license to participate in UEFA club competitions as part of the admission process to the competition.

According to this system FCP SAD, will have to meet a set of requirements, among which the following stands out:

1. Inexistence of overdue and unpaid debts (i) with football clubs regarding the players’ registrations transfers and (ii) towards employees and/or tax authorities and social security; 2. Verification of the equilibrium ("breakeven") between the relevant revenues and relevant costs, which the acceptable accumulated deviation raises to a 5 million Euro for a monitoring period equivalent to the sum of three exercises (the three previous seasons, except the first year of application of this criteria (season 2013/2014) in which it was considered only two seasons). However, this negative deviation may be exceeded if such excesses are fully covered by equity contributions from shareholders or and / or related parties:

• Seasons of 2013/14 and 2014/15: 45 million Euro;

• Seasons of 2015/16, 2016/17 and 2017/18: 30 million Euro

The sanctions for non-compliance with these rules may include (i) warnings, (ii) fines, (iii) retention of premiums paid and, ultimately, (iv) the prohibition to participate in UEFA’s organized competitions.

The FCP-SAD has been monitoring his situation regarding the new Financial Fair Play criteria and is currently complying with these requirements.

3.5. Sportive risk

The main activity of FCP, SAD is the participation in national and international professional football competitions. Therefore, the Company depends on the existence of these sportive competitions, the maintenance of their participation’s rights, the maintenance of the premiums paid under these competitions and the sportive performance achieved by its professional

Consolidated Accounting Report 2014/2015

___________________________________________________________________________________________

football team, particularly the possibility of qualifying for the European competitions mainly the UEFA Champions League. By its turn, sports performance may be affected by the sale or purchase of players’ registrations considered essential for the sportive performance of FCP, SAD. As predicted in the sports companies’ activity, FCP, SAD regularly sells regularly its players’ registrations. In the acquisition of each players’ registrations, there is no guarantee that the value of a potential sale corresponds to their fair value or even that there will be interested buyers in acquiring the players’ registrations of a certain player. As usual in its activity, FCP, SAD has players’ registrations that may be sold at any time, and, in case of sale of those players’ registrations, it may not be possible to find players that replace the players that were sold, providing at least the same level of performance.

Significant part of the operating income of FCP, SAD arises from the sale of football matches’ broadcasting rights of advertising contracts. These revenues are dependent on the media and sports projection of their main football team as well as the negotiating power of FCP, SAD towards the entities to which these exploitation rights are transferred of those activities. In addition, FCP, SAD is dependent on the ability of counterparties to such contracts comply with the agreed payments and, ultimately, to be possible to find other competitors in the market of those entities.

Costs related with the set of FCP, SAD football players, assume a determining weight in its operating results. The profitability and the economic and financial balance of the Company are, therefore, significantly dependent on the ability of the FCP, SAD Management to ensure a moderate increase in average costs per player and the rationalization of the number of players, specially taking into account the criteria of Financial Fair Play defined in Section 3.4.