IBERSOL | Annual Report 2020

Consolidated Financial Statements and repayment plans identical to the terms of the loans. A loan of 20 million Euros with fixed rate debt is contracted. Based on simulations performed on 31 December 2020, an increase of 100 basis points in the interest rate, maintaining other factors constant, would have a negative impact in the net profit of 610,000 Euros (513,000 Euros in 2019). b) Credit risk The main activity of the Group is performed with sales paid in cash, or debit or credit card, so the Group has no significant credit risk concentrations. Regarding customers, the risk is limited to the Catering business and sales of merchandise to franchisees representing less than 3.5% of the consolidated turnover. The Group has policies to ensure that credit sales are made to customers with an appropriate credit history. The Group has policies that limit the amount of credit that customers have access to. The Group’s cash and cash equivalents include mainly deposits resulting from cash provided by sales and its deposits in current accounts. Excluding these amounts, the amount of financial investments at 31 December 2020, is not significant, with the exception of the above mentioned Treasury Bonds of the Republic of Angola in the amount of 2.6 million Euros, subject to country risk. Deposits and other financial investments are spread over several credit institutions; therefore there is not a concentration of these financial assets. As at 31 December 2020 and 2019, the ratings of the major credit institutions where Ibersol Group has its deposits are presented as follows: 336