IBERSOL | Integrated Management Report - 2024

INTEGRATED MANAGEMENT REPORT 2024 7.2. Interest rate risk Historically, with the exception of Angola Treasury Bonds, the group has no significant interest-earning assets. Therefore, profit and cash flows from the investment activity are substantially independent of changes in the market interest rate. With regard to Angolan State Treasury Bonds, the interest is fixed, so there is no risk either. The Ibersol Group’s main interest rate risk comes from the remuneration of investments in Term Deposits. It also comes from liabilities, namely long-term borrowings. Borrowings issued at variable rates expose the Group to the cash flow risk associated with interest rates. Borrowings issued at fixed rates expose the Group to the fair value risk associated with the interest rate. With the current level of interest rates, the Group’s policy for longer-term borrowings is to fix interest rates up to 50% of the outstanding amount. Borrowings amounting to 9.8 million euros were contracted at a fixed rate. Since the end of 2022, following the sale of the Burger King restaurants, the Group has set up treasury applications (term deposits) amounting to 106 million euros in 31December 2024 (144 million euros in 31 December 2023). These deposits, together with the Angolan State Treasury Bonds, represent the Group’s interest-bearing assets. Without prejudice, given the value of these assets and their remuneration conditions, the profit and cash flows of the investment activity are not materially impacted by changes in the market interest rate. It should also be noted that the Angolan State Treasury Bonds, indexed to the US Dollar, bear a fixed interest rate. Based on simulations carried out on 31 December 2024, an increase of another 100 basis points in the interest rate, keeping everything else constant, would have a positive impact on the net profit for the period of 973 thousand euros (1,170 thousand euros in 2023). A reduction of 100 basis points would have a negative impact on the net profit for the period of 975 thousand euros. 7.3. Credit risk The Group main activity is sales paid for by cash or debit or credit card, so there are no significant concentrations of credit risk. In home sales through aggregators, these collect from customers and transfer the money by weekly summary within eight or fifteen days. With regard to customers, the risk is confined to the Catering business and loans to Franchisees, which represent around 6.8 % of consolidated turnover. The Group regu- larly monitors accounts receivable in order to: · Controlling credit granted to customers; · Analyzing the ageing and recoverability of receivables; · Analyzing the risk profile of customers. The Group has policies that limit the amount of credit that customers have access to, and there is no information on the rating assigned to these entities. Credit situations overdue for more than 30 days are subject to an analysis of future losses based on historical information and taking into account the commercial relationship established as well as the existing real guarantees, with adjustments being recognized for impair- ment losses. 427