IBERSOL | Integrated Management Report - 2024

Individual Financial Statements 6. Financial risk management The company’s activity is exposed to a variety of financial risk factors, namely interest rate risk and price risk, credit risk, liquidity risk and capital risk. The company has a risk management program which focuses its analysis on the financial markets, seek- ing to minimize the potential adverse effects of these risks on the company’s financial performance. Financial risk management is carried out by the Finance Department, based on poli- cies approved by the Board of Directors. Treasury identifies, evaluates and hedges financial risks in close cooperation with Ibersol’s operating units. The Board of Direc- tors provides principles for risk management as a whole and policies covering specific areas, such as exchange rate risk, interest rate risk, credit risk and the investment of excess liquidity. 6.1.Interest rate risk The company is exposed to interest rate risk in relation to loans granted to subsidiaries and long-term loans obtained. Loans issued at variable rates expose Ibersol to cash flow risk associated with the interest rate. Loans issued at fixed rates expose the company to the fair value risk associated with the interest rate. All existing loans were obtained at fixed interest rates, so any change would have no impact on results. 6.2.. Credit risk The credit risk essentially results from the receivable balances resulting from loans to subsidiaries. The credit risk is assessed by the company’s Financial Department, taking into account the history of the commercial relationship, its financial situation, as well as other information that can be obtained through Ibersol’s business network. Credit limits are regularly analyzed and revised if necessary. 6.3.. Liquidity risk Liquidity risk management involves maintaining sufficient cash and bank deposits, the viability of consolidating floating debt through an adequate amount of credit facilities and the ability to liquidate market positions. Cash requirements are managed on the basis of annual planning, which is reviewed quarterly and adjusted daily. In line with the dynamics of the underlying business, Ibersol treasury has been flexibly managing commercial paper and negotiating credit lines available at all times. 498