IBERSOL | Integrated Management Report 2022

INTEGRATED MANAGEMENT REPORT 2022 loans. Loans issued with variable rates expose the Group to cash flow risk associated with the interest rate and loans issued with fixed rates expose the Group to fair value risk associated with the interest rate. The Group’s policy, in longer maturity loans, is to fix interest rates up to 50% of the outstanding amount. Credit risk The Ibersol Group has no relevant credit risk concentrations, since its main activity is carried out with sales paid in cash or by debit or credit card. However, in relation to the Catering and Franchising businesses that represent about 7.3% of the consolidated turnover, the Group regu- larly monitors the accounts receivable, controlling the credit granted, analysing the ageing and recoverability of the receivables and the cus- tomers’ risk profile. In relation to home sales through Aggregators, the Group receives the money within eight or fifteen days. Liquidity risk The Ibersol Group manages liquidity risk by maintaining a sufficient amount of cash and bank deposits, viability of the consolidation of float- ing debt and the ability to liquidate market positions. The annual plan- ning of treasury needs is reviewed quarterly and adjusted daily. Flexible management of commercial paper and continuous negotiation of credit lines available, in accordance with the dynamics of the underlying busi- ness, is adopted. Capital risk The Ibersol Group seeks to maintain an adequate level of equity to ensure the continuity and expansion of the business. The balance of the capital structure is monitored based on the financial leverage ratio, which is in- tended to be kept within the 50% to 75% range. Economic, Sectoral and Short-term Risks Business portfolio The Ibersol Group undertakes strategic and operational risk manage- ment of its business portfolio, including the assessment of new projects and actions to manage specific risks. It operates international brands under a franchising scheme, with long-term renewable contracts, except 317