IBERSOL | 2019 Annual Report

Consolidated Financial Statements IBERSOL SGPS, S.A. ANNEX TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED ON 31 DECEMBER 2019 (Values in euros) 1. INTRODUCTION IBERSOL, SGPS, SA (“Group” or “Ibersol”) has its head office at Praça do Bom Su- cesso, Edifício Península n.º 105 a 159 – 9º, 4150-146 Porto, Portugal. Ibersol’s sub- sidiaries (jointly called the Group), operate a network of 659 units in the restaurant segment through the brands Pizza Hut, Pasta Caffé, Pans & Company, Ribs, FresCo, SantaMaria, Kentucky Fried Chicken, Burger King, O’ Kilo, Roulotte, Quiosques, Pi- zza Móvil, Miit, Taco Bell, Sol, Sugestões e Opções, Silva Carvalho Catering e Palace Catering, coffe counters and other concessions. The group has 547 units which it operates and 112 units under a franchise contract. Of this universe, 287 are head- quartered in Spain, of which 183 are own establishments and 104 are franchised establishments, and 10 in Angola and 7 in other locations. Ibersol is a public limited company listed on the Euronext of Lisbon. Ibersol SGPS parent company and ultimate parent entity is ATPS - SGPS, S.A.. 2. MAIN ACCOUNTING POLICIES The main accounting policies applied in preparing these consolidated financial sta- tements are described below. It should be noted that the Group first adopted, on 1 January 2019, the new stan- dard IFRS 16 - Leases. Additionally, due to the fact that Angola in 2019 ceased to meet the conditions established in IAS 29 to be considered a hyperinflationary economy, the Group has suspended the application of that standard to the financial statements of companies in that country, since January 1, 2019. 2.1 PRESENTATION BASIS, CONSOLIDATION AND MAIN ACCOUNTING POLICIES These consolidated financial statements were prepared according to the Interna- tional Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) and in accordance with interpretations issued by the In- ternational Financial Reporting Interpretations Committee (IFRIC) or the previous Standards Interpretation Committee (SIC), as adopted and effective by the Euro- pean Union as of January 1, 2019. With regard to Group companies that use diffe- rent accounting standards, conversion adjustments were made to IFRS. The consolidated financial statements have been prepared in accordance with the historical cost principle, changed to fair value in the case of derivative financial instruments. With the exception of the initial application of new standards (section 2.2), the ac- counting policies adopted at 31 December 2019 are the same as those adopted in 208