IBERSOL | Integrated Management Report 2022

INTEGRATED MANAGEMENT REPORT 2022 investment properties are measured at cost less amortization and accumulated impairment losses. Subsequent costs with investment properties are only added to the cost of the asset if it is likely that they will result in future economic benefits in addition to those considered at initial recognition. The investment properties, which at 31 December 2022 amounted to 8.470.400 eu- ros, relate to real estate assets where 5 Burger King restaurants operate. These assets were subject to a lease agreement with Iberking Portugal, S.A.. Based on the terms of negotiation for the sale of Burger King, the Group estimates that the fair value of these assets amounts to approximately 8.5 million euros. 7. Financial Risk Management Group’s activities are exposed to a variety of financial risk factors: market risk (includ- ing currency risk, fair value risk associated with interest rate and price risk), credit risk, liquidity risk and cash flow risk associated with the interest rate. The Group has a risk management program that focuses its analysis on the financial markets, seek- ing to minimize the potential adverse effects of these risks on the Group’s financial performance. Financial risk management is carried out by the Finance Department, based on poli- cies approved by Management. Treasury identifies, assesses and hedges financial risks in strict cooperation with the Group’s operating units. Management provides princi- ples for risk management as a whole and policies covering specific areas, such as cur- rency risk, interest rate risk, credit risk and the investment of excess liquidity. 7.1. Exchange rate risk With regard to exchange rate risk, the Group pursues a policy of natural hedging by resorting to financing in local currency. Since the Group is essentially present in the Iberian market, bank loans are mostly denominated in euros and the volume of pur- chases, outside the Euro zone, does not assume relevant proportions. The Group’s main source of exposure comes from the investment outside the euro zone of the operation that it develops in Angola, still small in size and in a phase of weight loss in the Group’s activity. The imbalances in the Angolan economy give rise to significant exchange rate fluctuations in the kwanza, which means that there is an exchange rate risk. Financing contracted by Angolan subsidiaries is denominated in the local currency, the same currency in which income is generated. Given the limita- tions on payments abroad in the past, the Group adopted a policy of monthly moni- toring of credit balances in foreign currency and its full coverage with the acquisition of Treasury Bonds of the Republic of Angola, indexed to the USD. In 2021 and 2022, the monetary policy adopted by the Angolan government allowed fluid access to the foreign currency necessary to satisfy payment commitments abroad and settle all arrears. 443