IBERSOL Annual Report and Consolidated Accounts 2017

Consolidated Financial Statements Year 2016 Kwanzas Equivalent EUR USD Equivalent EUR Financial Assets Cash and Bank deposits 1.301.850.100 7.057.329 6.128 5.705 Treasury bonds 3.224.560.292 17.480.341 - - Others 70.347.511 381.354 989 920 4.596.757.903 24.919.025 7.117 6.625 Financial Liabilites Loans 2.931.708.332 15.892.791 1.500.000 1.396.422 Suppliers 206.301.398 1.118.360 3.568.393 3.321.990 Others 5.054.977 27.403 106.613 99.251 3.143.064.707 17.038.554 5.175.006 4.817.663 Additionally in Angolan subsidiaries we have debts to suppliers in EUR that, after conversion, generate exchange differences in the consolidated financial statements (net financing costs), although mostly are debts with group companies. Furthermore, the same subsidiaries hold financial assets indexed to USD, a value equivalent to about 106% of liabilities in foreign currency. Due to this full coverage and based on the figures for 31 December 2017, any simulation of a depreciation of the AKZ against the USD and EUR, keeping everything else constant, would not have a negative impact on Ibersol’s Net Profit. Based on simulations performed on December 31, 2017, a decrease from 10% to 15% in AOA, concerning EUR and USD currency, keeping everything else constant, would have an impact of 396 thousand and 590 thousand euros (79 thousand euros and 119 thousand euros in 2016), respectively, on equity of the group. ii) Price risk The group is not greatly exposed to the merchandise price risk. iii) Interest rate risk (cash flow and fair value) With the exception of the Angola Treasury Bonds, the group has no significant interest bear- ing assets. Therefore, profit and cash flows from investment activities are substantially in- dependent of changes in market interest rate. Regarding the Angolan State treasury bonds, interest is fixed, so there is also no risk. The group’s interest rate risk follows its liabilities, in particular long-term loans. Loans issued with variable rates expose the group to the cash flow risk associated to interest rates. Loans with fixed rates expose the group to the risk of the fair value associated to interest rates. At 226