Consolidated Financial Statements
ii) Price risk
The group is not greatly exposed to the merchandise price risk.
iii) Interest rate risk (cash flow and fair value)
With the exception of the Angola Treasury
Bonds, the group has no significant interest
bearing assets. Therefore, profit and cash flows
from investment activities are substantially in-
dependent of changes in market interest rate.
Regarding the Angolan State treasury bonds,
interest is fixed, so there is also no risk.
The group’s interest rate risk follows its li-
abilities, in particular long-term loans. Loans
issued with variable rates expose the group to
the cash flow risk associated to interest rates.
Loans with fixed rates expose the group to the
risk of the fair value associated to interest
rates. At the current interest rates, in financ-
ing of longer maturity periods the group has a
policy of totally or partially fixing the interest
rates.
The unpaid debt bears variable interest rate,
part of which has been the object of an inter-
est rate swap. The interest rate swap to hedge
the risk of a 10 million euros (commercial paper
programmes) loan has the maturity of the un-
derlying interest and the repayment plan iden-
tical to the terms of the loan.
Based on simulations performed on 31 Decem-
ber 2015, an increase of 100 basis points in the
interest rate, maintaining other factors con-
stant, would have a negative impact in the net
profit of 149.000 euros.
b) Credit risk
The main activity of the Group is carried out
with sales paid in cash, or debit or credit card,
so the Group has no significant credit risk con-
centrations. Regarding the customers, the risk
is limited to the Catering business and sales of
merchandise to franchisees representing less
than 5% of the consolidated sales. The Group has
policies to ensure that credit sales are made to
customers with an appropriate credit history.
The Group has policies that limit the amount of
credit that customers have access to.
The Group’s cash and cash equivalents include
mainly deposits resulting from cash provided by
sales and its deposits in current accounts. These
amounts excluded, the value of financial invest-
ments at December 31, 2015, is not significant.
Deposits and other financial investments are
spread over several credit institutions; there-
fore there is not a concentration of these finan-
cial assets.
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