IBERSOL Annual Report 2018

CORPORATE GOVERNANCE REPORT Hygiene and safety at work (HSW) The management of this risk area is overseen by the Human Resources Unit, which defines and coordinates training plans and the application of the rules and procedures defined in Ibersol’s HSW Manual, and articu- lates the training plans. A number of initiatives and actions are developed annually in the field of Health and Safety at Work, aiming to reinforce the commitment and involvement of all employees with the prevention and reduction of oc- cupational risks. Financial It is the responsibility of the Finance Department to manage the various financial risks inherent to the unpredictability of the markets to which the Group is naturally exposed, namely foreign exchange, interest rate, credit, liquidity and capital risks. The steps taken by the Finance Depart- ment work to minimize the adverse effects of these possible risks: a) Exchange rate risk In this regard, the Ibersol Group pursues a policy of natural hedging, us- ing local currency financing. Since it is essentially present in the Iberian market, bank loans are mostly denominated in euros and the volume of purchases, outside the Euro Zone, does not assume relevant propor- tions. It should be noted that the main source of exposure comes from the investment outside the euro zone of the operation in Angola, which is still small and in the process of losing weight in the group’s activity. The imbalances of the Angolan economy cause a shortage of foreign currency in Angola, reason why the devaluation of Kwanza is a risk to consider. The financing of the Angolan branch in foreign currency, in the amount of 500,000 USD, does not present great exposure due to the small amount. The remaining financings contracted by the Ango- lan subsidiaries are denominated in local currency, the same in which the income is generated. In view of the current limitations on payments abroad, the Group adopted a policy of monthly monitoring of credit bal- ances in foreign currency and its full coverage with the acquisition of Treasury Bonds of the Republic of Angola, indexed to the USD. 164