IBERSOL Sustainability Report 2018

SUSTAINABILITY REPORT 2018 taken into account. Funding the Angolan subsidiary in foreign cur- rency, in the amount of USD 500,000, does not expose us too much given that the amount is not very large. Other borrowings by Ango- lan subsidiaries are denominated in local currency, the same curren- cy in which income is generated. In light of the current limitations to foreign payments, the group has adopted a policy to monitor credit balances in foreign currency on a monthly basis and fully hedging the risk by purchasing Angolan treasury bonds, indexed to the USD. Interest rate risk With the exception of the Angolan Treasury Bonds, the Ibersol group does not have any significant interest-bearing assets. Thus, profit and cash flows from investment are largely independent of fluctuations in the market interest rate. As regards the Angolan Treasury Bonds, which are indexed to the US dollar, they also do not present a risk as they have a fixed interest rate. The Ibersol Group’s main interest rate risk stems from liabilities, name- ly long-term loans. Variable-rate loans expose the Group to cash flow risks associated with the interest rate. Fixed-rate loans expose the Group to fair value risk associated with the interest rate. With current interest rate levels, the Group’s policy is to set interest rates up to 50% of the amount owed, for long-term financing. Credit Risk The Ibersol group’s main activity is sales paid in cash or by credit/ debit card, which means there are no relevant credit risk concentra- tions. As regards accounts receivable, risk is limited to the Catering and Franchising business areas, which account for approximately 6% of consolidated turnover. The Group began monitoring accounts receiv- able more regularly in order to: • Control credit granted to customers; • Analyse the ageing and recoverability of accounts receivable; • Analyse the risk profile of customers. 25