IBERSOL • 2023 Integrated Management Report

Consolidated Financial Statements 2.1.6. Presentation currency and transactions in foreign currency 2.1.6.1. Presentation currency The Financial Statements of each of the Group’s entities are prepared using the currency of the economic environment in which the entity operates (“functional currency”). The consolidated Financial Statements are presented in Euros, which is the Ibersol Group’s functional and presentation currency. The foreign currency exchange rates used to convert transactions and balances expressed in Kwanzas at 31 December 2023 and 2022 were respectively: dec. 2023 Euro exchange rates (x foreign currency per 1 Euro) Rate on December, 31 2023 Average interest rate year 2023 Kwanza de Angola (AOA) 931,099 746,269 dec. 2022 Euro exchange rates (x foreign currency per 1 Euro) Rate on December, 31 2022 Average interest rate year 2022 Kwanza de Angola (AOA) 537,634 484,262 2.1.6.2. Foreign currency transactions Exchange differences arising on the settlement of monetary items or on the transla- tion of monetary items at rates different from those at which they were translated on initial recognition or in previous financial statements are recognized in profit or loss for the year, unless they arise on monetary items that form part of the net investment in a foreign operation. In this case, exchange differences are initially recognized in other comprehensive income and are reclassified from equity to consolidated net income for the year on the disposal of all or part of that operation. Exchange differences related to financing (financial) transactions are recorded as fi- nance costs or income. Exchange differences related to operating activities are re- corded under “Other operating income / (expenses)”. Assets and liabilities in the financial statements of foreign entities are translated into euros using the exchange rates at the balance sheet date and costs and income as well as cash flows are translated into euros using the average exchange rate for the period. The resulting exchange difference is recorded in the equity caption “Transla- tion reserve”. 408