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ANNUAL REPORT AND CONSOLIDATED ACCOUNTS 2012
b) Interest rate risk
As the Group does not have remunerated assets with
significant interests, the profit and cash flows from fi-
nancing activity are largely independent of any changes
in the market interest rate.
The Group’s interest rate risk comes from liabilities,
specifically long term loans. Loans issued with fixed
rates expose the Group to cash flow risks linked to in-
terest rates. With the actual level of the interest rate,
the group politic is, in long maturity loans, to proceed to
total or partial fixing of interest rates. The Ibersol group
has resorted to hedging the interest rate risk for 40% of
obtained loans. Regarding the liquidity policy followed
in recent years and representing the cash assets about
35% of liabilities paid, it is understood to be reduced the
exposure to interest rate risk.
c) Credit risk
The Group’s main activity is carried out with sales paid
in cash or debit/credit card; the Group, therefore, has
no relevant credit risk concentrations. However, with in-
creased sales of the catering business, with a significant
proportion of credit sales, the Group has to monitor
more regularly the accounts receivable in order to:
i) limiting the loans to customers;
ii) analyze with the operations the seniority and re-
coverability of receivables;
iii) analyze the risk profile of customers.
d) Liquidity risk
As mentioned above, the current situation on finan-
cial markets has given greater relevance to liquidity
risk. Financial planning based on forecast cash flows
in more than one scenario and for longer periods
than one year has become a requirement for the
Group. The short-term treasury is based on the an-
nual planning that is reviewed quarterly and adjusted
daily. Related to the dynamics of the underlying busi-
ness, the Group’s Treasury has provided a flexible
management of commercial paper and the negotia-
tion of credit lines available at all times. The policy of
open dialogue with all partners has allowed to main-
tain a financial relationship with a high degree of con-
fidence, despite the liquidity constraints that are now
debating the Portuguese Banking. The Group, instead
of the cost, has privileged the liquidity risk and has
been strengthening the medium and long term fund-
ing that emerged in replacement of short-term lines,
leaving some surplus for the constitution of applica-
tions.
Management of liquidity risk also involves maintain-
ing a comfortable level of financial resources avail-
able. The Group ended the year with about 26 million
euros in financial resources available, 19 millions of it
in time deposits which represents about 35% of the
liability remunerated. However, the reduction of the
liquidity risk does increase the risk of application of
treasury surplus.
e) Capital risk
The company seeks to maintain a level of equity capital
that suits the characteristics of its main business (cash
sales and supplier credit) and to ensure continued ex-
pansion. The balance of capital structure is monitored
based on the ratio of leverage (defined as net interest
bearing debt / (net interest bearing debt + equity)) with
the aim of within the range 35% -70%. By prudently ad-
dress the constraints of existing markets in 2012, we re-
cord a ratio of 19%.
Environmental
Management of this risk area is coordinated by the
Quality Division. Its main focus is on implementing the
policy deriving from the Ibersol Sustainability Principles,
so that the processes and procedures, across all hier-
archic levels, can be applied to the environment. The
adoption of good environmental management is a con-
cern of the Board of Directors of Ibersol which consists
