IBERSOL | Annual Report 2020

ANNUAL REPORT 2020 strict control of costs, launching of new concepts, distribution channels, products and promotions adapted to changes in consumer profiles are some of the initiatives aimed at mitigating this risk. With the acquisition of the Eatout Group, Ibersol has a significant part of its turnover in airport concession areas. The concessions are awarded by tender for a certain period, so the Group may or may not guarantee the renewal of these contracts, which may affect its turnover and profit- ability. Operating various international brands under the franchise system, the Group enters into long-term franchise agreements (20 years or 10 + 10 years) and, after the respective term, have been renewed, although there is no such requirement. The group seeks to fulfil all obligations associ- ated with contracts and maintain a good relationship with franchisors to minimize the risk of non-renewal. Operational risks are closely linked to the activity of restaurants: supply management (supply and logistics), stock management, fund manage- ment, and the efficiency and safety of resource and asset utilization. The adequacy and scope of the control procedures are monitored and revised where necessary. Due to the specificities of the Business, there are areas of risk whose current management has been allocated to functional departments, namely: Food quality and food safety In the restaurants business, the risk associated with hygiene and food safety is of primordial importance. The management of this area of risk is overseen by the Quality Unit and is aimed primarily by adopting a responsible proactive approach, fol- lowing the prevention principles, training, monitoring of indicators and continuous improvement in order to minimise risks with an impact on consumers health. The main management dimensions of this risk area are: - qualification and selection of Suppliers and Products in food quality and safety area and a Programme of Periodic Inspections of Suppli- ers, Products and Services; - ensuring the effectiveness of the Traceability System; 249