IBERSOL | Integrated Management Report - 2024

INTEGRATED MANAGEMENT REPORT 2024 2 Valuation of financial investments (108,967,448 euros) and loans granted to subsidiaries (130,908,996 euros) See notes 5.1, 5.2 and 5.3 to the financial statements) The Risk Our response to the identified risk As mentioned in note 5.1 of the financial statements, financial investments are measured at cost less any impairment loss. The valuation of financial investments and loans granted to subsidiaries requires a significant degree of estimation and judgement by the Board of Directors, namely regarding the assessment of the recoverable amount of investments made when there impairment triggers are identified, since several the key assumptions are based on management expectations that are not observable in the market. The complexity and degree of judgement inherent to the valuation of financial investments and loans granted to subsidiaries as a key audit matter. Our audit procedures included, amongst others, those that we describe below:  We have inquired the Board of Directors about the basis of their estimates and judgements and challenged the assumptions made;  We have evaluated the design and implementation of the main controls implemented by the Entity in this area and analysed the budgeting procedures on which the projections are based, by comparing past performance with estimates made in previous periods and by reference to macroeconomic and sectoral information and projections produced by independent external bodies;  We have analysed the basis for the projections made by the Board of Directors and the assumptions used, such as inflation, projected economic growth and discount rates, and assessed their reasonableness and consistency, where applicable, for the various assets in the different locations and segments. We also assessed the impacts of alternative scenarios.  We have tested the integrity and mathematical accuracy of the discounted cash flow model;  We have reviewed the assessment of the impairment of loans granted based on the different variables, namely the assessment of credit risk;  We have carried out sensitivity analyses to changes in the relevant assumptions used; 517