IBERSOL Annual Report and Consolidated Accounts 2017

LegalCertificationofAccountsandAuditReportonConsolidatedFinancialInformation Key Audit Matter Summary of the Audit Approach Business Combinations As disclosed in financial statements during 2016, Ibersol acquired Eat Out Group, having recognized a Goodwill of 70,6 million euros as of 31 December 2016. in the context of the acquisition process of the control of Eat Out Group, brands were identified which as at 31 December 2016 were in process of valuation at fair value through a set of relevant estimatives and judgements, based in economic and market indicators, namely, the definition of future cash flows and discount rate to be used, among others. For that reason goodwill was registered on a provisory basis in the 2016 financial statements. In 2017 this process was finished and the amount attributed to brands was 22 million euros, which implied a reduction of goodwill by the same amount. The accounting of this business combination is complex, due to judgements made in the application of accounting standards, namely valuation of assets and liabilities identified and consequent calculation of Goodwill. The expression of the amounts involved and the level of judgement associated to the valuation of assets and liabilities acquired, require the definition of a set of complex estimatives and assumptions by management, which justifies that this matter was considered by us as a key audit matter. Disclosures related with business combinations are presented in note 5 of consolidated financial statements. The audit procedures that we performed related to this matter were, namely, the following : - Analyse of assessment model prepared by management with the objective of valuation of the acquired brands; - The involvement of ours specialists in capital markets in order to assess the assumptions and methodologies used by management; - Analyse of inputs included in assessment model, including growth rates forecasted and discount rates; We also reviewed disclosures made, in accordance with accounting standards applicable. Statutory Audit Report 31 December 2017 Ibersol, S.G.P.S., S.A. PwC 3 of 7 286