IBERSOL | Annual Report 2020

Ibersol Group with fixed rates expose the group to the fair value risk associated to the interest rate. With the current interest rate level, the Group’s policy is, for higher maturity loans, to fix interest rates to 30% of the debt. Credit risk The Ibersol Group’s main activity is paid for in cash, or credit or debit cards, so there are no relevant concentrations of credit risk. In deliv- ery sales through aggregators, they charge customers and transfer the cash by weekly summary within eight or fifteen days. Regarding clients, the risk is limited to the Catering and Franchisee businesses, which represent around 3.5% of consolidated business volume. The Group has taken to monitoring payments due more reg- ularly, with the aim of: • Controlling credit granted to customers; • Analysing the age and recoverability of the values due; • Assessing client profile risks. Liquidity risk Management of liquidity risk entails keeping a sufficient value in cash and bank deposits, the viability of consolidating the floating debt through an adequate amount of credit facilities and the ability to liquidate market positions. Management of treasury needs is carried out based on annual planning, which is reviewed quarterly and ad- justed daily. In line with underlying business dynamics, the Ibersol Group has been conducting a flexible management of the commer- cial paper and negotiation of readily available credit lines. Capital risk The Ibersol Group seeks to maintain a level of own capital adequate to the characteristics of its main business (cash sales and suppliers’ credit) and ensure continuity and expansion. Balance of the capital structure is monitored based on the financial leverage ratio (defined as: net remunerated debt/net remunerated debt + own capital), with the goal of fixing it in the 50% - 75% interval. 66