ACA Group - Annual Report and Financial Statements 2014

Annual Report and Financial Statements

2014

Our Projects are the Public Face of our Team.

Table of Contents

1. ACA Group - 8

5. Governance - 83

1. Mission, Vision and Values of the ACA Group - 10

1. Introduction - 84

2. Profile of the Group - 10

2. Organisational Structure and Corporate Functioning - 85

3. Subsidiaries - 12

3. Risk Management - 85

4. Geographical Presence - 14

4. Corporate Rules - 87

5. Economic and Financial Indicators - 17

5. Shareholdings between the Parent Company and Controlling or Group Subsidiaries and among the latter - 87

6. Parent Company - 25 7. Governing Bodies - 25 2. Annual Report - 27 1. CEO’s Message - 29 2. Relevant Facts 2014 - 30 3. Macroeconomic Background - 30 4. The Construction Industry - 44 5. Water Supply and Sanitation Industry - 47 6. Food Retail - 47 7. The Commodities Market - 48 8. Operations: Production and Portfolio - 50 9. Integrated Management System: Quality, Environment, Safety and Health in the Workplace - 53 10. Human Capital - 56 11. Information Systems - 57 12. Relevant Data - 58 13. Outlook for 2015 - 59 14. Contacts - 60 15. Acknowledgments - 60 16. Annex to the 2014 Annual Report - 61 3. Consolidated Financial Information - 63 1. Consolidated Financial Statements - 64 2. Investment and Disinvestment - 72 3. Financing and Consolidated Net Debt - 72 4. Consolidated Companies - 73 4. Supervision Report - 75 1. Legal Certification of Accounts - 76 2. Report and Opinion of the Statutory Auditor - 80

6. Consolidated Financial Report - 89 7. Annex to the Consolidated Financial Report - 101 Note 1. Identification of the Entity - 102 Note 2. Accounting Framework for the Preparation of Financial Statements - 105 Note 3. Main Accounting Policies -106 Note 4. Cash Flows - 116 Note 5. Accounting Policies, Changes in Accounting Estimates and Errors - 117 Note 6. Related Parties - 119 Note 7. Intangible Assets - 125 Note 8. Fixed Tangible Assets - 128 Note 9. Non-Current Assets Held for Sale and Discontinued Operations - 132 Note 10. Costs of Obtained Loans and Financing Details - 133 Note 11. Asset Impairment - 134 Note 12. Investments in Subsidiaries and Other Companies - 136 Note 13. Investments in Subsidiaries and Consolidation - 138 Note 14. Inventories - 139 Note 15. Construction Contracts - 142 Note 16. Revenue - 143 Note 17. Provisions, Contingent Liabilities and Contingent Assets - 145 Note 18. Events After the Balance - 146 Note 19. Income Taxes - 146 Note 20. Financial Instruments - 147 Note 21. Equity - 150 Note 22. Other Relevant Information - 152 Note 23. Legally Required Disclosures - 158

Maria dos Anjos Guimar達es Legal & Tax Coporate Director

Rigour

1.

ACA Group

1

2

Mission, Vision and Values of the ACA Group

Profile of the Group

Vision

The mission, the values, the ethical principles and the rules of conduct are the guidelines that bring together the operation of the Group and that define and differentiate the group from its direct competitors.

Conduction of our global operations in a socially responsible manner, taking into account the economic dimension of the business, but striving for excellence with responsible operations, incorporating environmental and social concerns and actions into the Management, applicable to the entire portfolio of activities and markets.

Mission • Offer the best possible answer to market demands, ensuring the protection of the environment and allowing employees to safely execute their tasks; • Produce well, efficiently and effectively; • Strengthen the involvement of individuals within a collective goal of continuous improvement (individual, organisational and community development).

Values of ACA Rigour Cooperation Quality Excellence Equality Professionalism 365 days with our values

Apart from its internal perspective and applicability, these guidelines position the organisation in the external relations it has with its stakeholders, be they clients, suppliers, consortia or the surrounding community.

ACA SGPS SA and all its subsidiaries are driven towards the institution of a corporate culture guided by high ethical standards and values that sustain its Mission. This incentive is embodied in a Handbook on Ethics and Conduct that directs the attitudes and behaviour of employees, within and outside the organisation.

Organically, the Group has the characteristic structure of a company in the construction industry, but guided by high standards of quality, accuracy, professionalism, ethics and cooperation, in an organisation that works in unison to create added value for all stakeholders and for the communities in which it operates.

Economically and financially, the ACA Group has a conservative profile within the market, with very little leverage, operating, whenever possible, with its own funds.

Aliados Avenue – Porto, Portugal

3

Subsidiaries

On 31st December, 2014, ACA Group had the following holdings: >

When compared to 31st December, 2013, the following changes have occurred in the Group’s consolidation perimeter: • Acquisition of 51% of equity of the company Consmar PT and, through this company, 100% of equity of the company Consmar FR;

97,10% 5,2%

20% 3,7%

85,64% 1%

ACA

Álea

53,75%

96,29%

AngolACA

ACAMedCo

77,4% 95%

Ambiágua

RRI

48%

5%

VCP

IELAC

• Reduction of participation in the equity of the company ACA France, from 98.85% to 51%; • Acquisition of 66.67% of equity of the company GV, via our subsidiary ACA Brazil; • 50% participation in ACE ACA/ Ferreira; • 33% equity of the company Minersolo.

33%

Minersolo

1%

SGPS 2014

15%

Control

Control

Control

74%

100%

50%

GS

Vivangola

Vivasuper

AmbiĂ frica

Parq G

Nortepolis

VID Garden

99,99%

49,39%

0,10%

51%

Control

50%

51%

ACA Brasil

ACA France

Agro Angola

ACE ACA-Ferreira

Consmar PT

66,67%

100%

GV

Consmar FR

Golfinvest

4

Geographical Presence

Portugal France Brazil Angola

The Sand Bank of Lobito - Angola

5

Economic and Financial Indicators

Statement of Results EUR '000 Sales and Provisions of Services Operating Subsidies Gains/losses allocated of sub., associated companies and joint ventures Variation in Production Iventories

2012

%

2013

% △ 13/12

2014

%

△ 14/13

205 213,0

100,2%

183 815,9

99,1%

-10%

190 656,8

99,1%

3,7%

110,5

0,1%

19,7

0,0%

-82%

21,5

0,0%

9,2%

(268,9)

-0,1%

1 083,3

0,6%

-503%

616,7

0,3%

-43,1%

(276,1)

-0,1%

519,8

0,3%

-288%

1 102,3

0,6%

112,1%

Total Operating Gains

204 778,6

100,0%

185 438,8

100,0%

-9%

192 397,4

100,0%

3,8%

Cost of sold goods, and consumed materials and subcontracts

(34 978,2)

-17,1%

(31 269,0)

-16,9%

-11%

(40 204,8)

-20,9%

28,6%

Supplies and external services

(54 162,1)

-26,4%

(70 243,8)

-37,9%

30%

(74 142,1)

-38,5%

5,5%

Staff expenses

(26 109,3)

-12,7%

(31 204,9)

-16,8%

20%

(37 542,0)

-19,5%

20,3%

(543,0)

-0,3%

221,8

0,1%

-141%

(255,0)

-0,1%

-214,9%

(11 736,2)

-5,7%

(72,7)

0,0%

-99%

4 041,9

2,1%

-5661,1%

0,0

0,0%

(102,5)

-0,1%

n.a.

0,0

0,0%

-100,0%

Fair value increases/decreases

(127,9)

-0,1%

26,6

0,0%

-121%

120,3

0,1%

351,6%

Other revenues and gains

8 310,9

4,1%

6 312,2

3,4%

-24%

12 733,9

6,6%

101,7%

Impairment of receivables debts (losses / reversals) Provisions (increases/reductions) Impairment of non-depreciable/ amortisable investments (losses/ revisions)

Other expenses and losses

(7 969,5)

-3,9%

(9 753,7)

-5,3%

22%

(10 303,8)

-5,4%

5,6%

Operating Cash Flow (EBITDA)

77 463,4

37,8%

49 352,9

26,6%

-36%

46 845,8

24,3%

-5,1%

(11 864,0)

-5,8%

(13 196,5)

-7,1%

11%

(11 089,1)

-5,8%

-16,0%

0,0

0,0%

0,0

0,0%

n.a.

0,0

0,0%

n.a.

Operating Results

65 599,4

32,0%

36 156,4

19,5%

-45%

35 756,8

18,6%

-1,1%

Financial Results

(3 584,9)

-1,8%

(6 659,5)

-3,6%

86%

(9 003,3)

-4,7%

35,2%

Earnings before taxes

62 014,4

30,3%

29 496,9

15,9%

-52%

26 753,5

13,9%

-9,3%

(928,7)

-0,5%

(2 982,1)

-1,6%

221%

(8 086,5)

-4,2%

171,2%

Result before Minority interests

61 085,8

29,8%

26 514,9

14,3%

-57%

18 667,0

9,7%

-29,6%

Results from Minority Interests

(25 024,8)

-12,2%

(11 399,9)

-6,1%

-54%

(6 285,6)

-3,3%

-44,9%

36 060,9

17,6%

15 115,0

8,2%

-58%

12 381,4

6,4%

-18,1%

Depreciations and Provisions Impairment of depreciable/amortisable investments (losses/revisions)

Income Tax

Net Income

Balance EUR '000

2012

%

2013

% △ 13/12

Tangible fixed assets

32 346,3

6,1%

67 501,7

11,5%

Goodwill

10 227,0

1,9%

11 529,8

2,0%

2014

%

△ 14/13

109%

68 413,5

11,6%

1%

13%

10 390,9

1,8%

-10%

ASSETS

2,5

0,0%

2,1

0,0%

-16%

638,9

0,1%

30487%

Investments - equity method

Intangible fixed Assets

551,8

0,1%

1 884,3

0,3%

241%

32 437,0

5,5%

1621%

Investments - other methods

338,6

0,1%

74,8

0,0%

-78%

83,3

0,0%

11%

0,0

0,0%

0,0

0,0%

n.a.

0,1

0,0%

n.a.

844,9

0,2%

645,3

0,1%

-24%

211,1

0,0%

-67%

Shareholders/partners Other receivable accounts Other financial assets

9,2

0,0%

8,0

0,0%

-12%

3,1

0,0%

-61%

615,3

0,1%

171,5

0,0%

-72%

54,4

0,0%

-68%

44 935,7

8,5%

81 817,5

13,9%

82%

112 232,3

19,1%

37%

3 963,6

0,7%

9 214,5

1,6%

132%

12 295,3

2,1%

33%

368 588,1

69,6%

276 620,4

47,1%

-25%

293 730,2

50,0%

6%

23 727,4

4,5%

21 498,6

3,7%

-9%

23 016,9

3,9%

7%

6 519,4

1,2%

9 331,9

1,6%

43%

10 098,1

1,7%

8%

Other receivable accounts

56 017,8

10,6%

151 634,1

25,8%

171%

101 303,9

17,2%

-33%

Deferrals

11 229,9

2,1%

8 502,8

1,4%

-24%

8 128,1

1,4%

-4%

4 599,6

0,9%

4 625,7

0,8%

1%

8 123,4

1,4%

76%

Assets from deferred taxes Non-current Assets Inventories Clients Advances to suppliers State and other public entities

Financial assets held for negotiation Non-current assets held for sale Cash flow and bank deposits Current Assets Total Assets

Total Paid Debt (MLP e CP) ('000 EUR)

63,0

0,0%

63,0

0,0%

0%

0,0

0,0%

-100%

10 181,1

1,9%

24 485,2

4,2%

140%

18 674,4

3,2%

-24%

484 889,8

91,5%

505 976,3

86,1%

4%

475 370,3

80,9%

-6%

529 825,5

100,0%

587 793,8

100,0%

11%

587 602,5

100,0%

0%

39 828,9

63 999,2

60,7%

47 710,9

-25,5%

315 636,0

245 388,5

-22%

256 028,1

4%

Working Capital (in % of sales and provision of services)

153,8%

133,5%

-13%

134,3%

1%

Interest covering ratio

21,47 x

7,19 x

4,53 x

-37%

Working Capital ('000 EUR)

EUR '000

2012

%

2013

% △ 13/12

2014

%

△ 14/13

EQUITY Paid-in capital

30 050,0

5,7%

30 050,0

5,1%

0%

30 050,0

5,1%

0%

Legal reserves

1 022,4

0,2%

1 043,4

0,2%

2%

1 109,8

0,2%

6%

Other reserves

0,0

0,0%

0,0

0,0%

n.a.

122 995,0

20,9%

n.a.

169 976,0

32,1%

209 574,3

35,7%

23%

52 062,2

8,9%

-75%

(65,3)

0,0%

(93,5)

0,0%

43%

16 648,9

2,8%

-17 908%

Other variations in equity

(7 317,9)

-1,4%

(21 684,3)

-3,7%

196%

(9 873,1)

-1,7%

-54%

Net profit for the period

36 060,9

6,8%

15 115,0

2,6%

-58%

12 381,4

2,1%

-18%

Minority Interests

156 126,4

29,5%

156 079,0

26,6%

0%

189 995,2

32,3%

22%

Total Equity

385 852,5

72,8%

390 083,8

66,4%

1%

415 369,4

70,7%

6%

11 930,5

2,3%

11 279,5

1,9%

-5%

2 007,9

0,3%

-82%

4 068,5

0,8%

3 577,4

0,6%

-12%

2 046,8

0,3%

-43%

75,7

0,0%

67,8

0,0%

-11%

0,0

0,0%

-100%

Non-current liabities

16 074,7

3,0%

14 924,6

2,5%

-7%

4 054,7

0,7%

-73%

Suppliers

56 915,6

10,7%

40 446,5

6,9%

-29%

49 997,4

8,5%

24%

Advances to clients

14 977,0

2,8%

15 216,2

2,6%

2%

22 921,4

3,9%

51%

870,1

0,2%

4 138,8

0,7%

376%

8 667,1

1,5%

109%

0,0

0,0%

0,1

0,0%

n.a.

0,1

0,0%

0%

Obtained loans

35 760,4

6,7%

60 421,8

10,3%

69%

45 664,1

7,8%

-24%

Other payable accounts

17 562,6

3,3%

58 951,6

10,0%

236%

33 027,4

5,6%

-44%

Carried forward results Adjustments in financial assets

LIABILITIES Provisions Loans obtained Deferred tax liabilities

State and public entities Shareholders/partners

1 812,6

0,3%

3 610,4

0,6%

99%

7 902,8

1,3%

119%

Current liabilities

Deferrals

127 898,3

24,1%

182 785,3

31,1%

43%

168 180,5

28,6%

-8%

Total Liabilities

143 973,0

27,2%

197 710,0

33,6%

37%

172 235,2

29,3%

-13%

Total Equity & Liabilities

529 825,5

100,0%

587 793,8

100,0%

11%

587 602,5

100,0%

0%

Caption: Working Capital = Inventories + clients - suppliers Interest covering ratio = EBIDTA / Interest and similar expenses

Economic and Financial Ratios Economic and Financial Ratios

SNC

SNC

SNC

Financial Gearing Ratios

2012

2013

2014

0,09

0,14

0,10

0,73

0,66

0,71

0,37

0,51

0,41

0,01

0,01

0,00

0,51

1,30

1,02

21,47

7,19

4,53

8,68

4,81

3,72

0,74

0,67

0,71

79,63

26,63

20,82

2012

2013

2014

3,76

2,78

2,92

3,26

1,88

2,22

0,12

0,16

0,17

Debt Ratio = NON SHAREHOLDERS' FUNDS / TOTAL ASSETS Financial Autonomy = SHAREHOLDERS' FUNDS / TOTAL ASSETS Debt to Equity =TOTAL LIABILITIES / EQUITY Structure Ratio = MLT DEBT / EQUITY Debt Recover Ratio = TOTAL DEBT / EBITDA CAPEX Coverage = EBITDA / FINANCIAL CHARGES Assets Coverage Ratio = PERMANENT CAPITAL / FIXED ASSETS Assets Hedging Ratio = PERMANENT CAPITAL / TOTAL NET ASSETS Inventories Coverage Ratio = WORKING CAPITAL / INVENTORIES Liquidity Ratios Global Liquidity Ratio = CURRENT ASSETS / SHORT TERM LIABILITIES Reduced Liquidity Ratio = (SHORT TERM DEBTORS + CASH & CASH EQUIVALENTS) / SHORT TERM LIABILITIES Imediate Liquidity Ratio =CASH AND CASH EQUIVALENTS / SHORT TERM LIABILITES

EN 101 Arcos de Valdevez - Portugal

Extended Dupont Analysis The Dupont® analysis is a financial analysis tool with the objective of gauging the financial performance and efficiency of an organisation, considering that ROE (Return on Equity) may be broken down into three ratios:

ROA 12,4%

6,2%

6,1%

• Operating efficiency, which is measured by profit margin; • Asset use efficiency, which is measured by total asset turnover; • Financial leverage, which is measured by the equity multiplier.

Return on Equity 9,3%

3,9%

3,0%

Financial Leverage 129,8%

122,9%

105,8%

EBT / CURR R 100,0%

100,0%

100,0%

Subtitle: NI / EBT 2012 2013 2014 (Amounts in % or thousand of EUR)

58,1%

51,2%

46,3%

Operating Results 65 599

OR / GM 38,6%

OR / SAL 32,0%

19,5%

18,6%

23,5%

23,5%

83,1%

79,1%

38,7%

31,5%

32,7%

137,3%

150,7%

152 193

185 439

192 397

Net Assets 529 825

NA / E

154 170

Sales 204 779

SAL / NA

35 757

Gross Margin 169 800

GM / SAL 82,9%

36 156

141,5%

587 794

587 603

Equity 385 853

390 084

415 367

Operating Results

CURR R / OP A 94,5%

81,6%

74,8%

65 599

36 156

35 757

Current Results 62 014

29 497

26 753

Earnings Before Taxes 62 014

29 497

26 753

Net Income 36 061

15 115

12 381

Alberto Augusto Couto Alves

António José Veloso dos Santos

Hugo Manuel de Oliveira Gonçalves

João Paulo Barcelos de Morais Barbot

Joaquim Cândido Castelo e Veiga Ribeiro

6

7

Parent Company

Governing Bodies

Trading Name

Chairman of the General Meeting

Alberto Couto Alves, SGPS, S.A.

Ana Patrícia da Costa Passos Rebelo de Sousa

Type of Company

Vice-President

Public Liability Company

Maria dos Anjos da Costa Mesquita Guimarães Vilas Boas

Main Office

Secretary

Avenida dos Descobrimentos, Edifício Las Vegas Três, n.º 63 4760 011 Vila Nova de Famalicão

Cristina Sofia Barbosa da Cunha Araújo

Share Capital EUR: 30.050.000,00

Inscription Registered at Vila Nova de Famalicão’s Commercial Registry under number 505839547

Company VAT number: N.º 505839547

Main Activity (Code) 64202-R3 – Activities of non-financial holding companies.

Board of Directors Alberto Augusto Couto Alves - CEO João Paulo Barcelos de Morais Barbot – Voting Member Hugo Manuel de Oliveira Gonçalves – Voting Member António José Veloso dos Santos – Voting Member Joaquim Cândido Castelo e Veiga Ribeiro - Voting Member

Statutory Auditor Gaspar Castro, Romeu Silva & Associados, S.R.O.C., represented by Gaspar Vieira de Castro, Statutory Auditor no. 557

Deputy Statutory Auditor Fátima Cristina dos Santos Amorim Barroso Gonçalves, Statutory Auditor no. 1279.

Corporate Purpose Management of holdings in other companies, as an indirect way of carrying out economic activities.

Cooperation

2.

Annual Report Dear Stakeholders, In compliance with the rules of incorporation and applicable legal standards, the Board of Directors hereby submits the Management Report and the Financial Statements for the financial year of 2014.

Maria Augusta Azevedo

Secretary of Board of Directors Corporate Chairman

Alberto Augusto Couto Alves

1

CEO’s Message

Dear Shareholders of Alberto Couto Alves SGPS, S.A., Dear collaborators, To all stakeholders, At the end of this year, it is important to revisit the recent past and to look towards the future with confidence, sharing with you our strategy, our ambitions, as well as the objectives that we want to maintain and exceed.

The scope of our operations across different geographical areas, the rigorous compliance with our operational plan, cost and risk control, the quality of our collaborators and the much-needed flexibility imposed by the markets in which we operate, will allow us to ensure a consolidated and sustainable path. This sustained and responsible growth is one of our goals. Therefore, the presentation of the 2014 Annual Report is a time to highlight the commitment towards the future.

The year of 2014 was quite demanding, proving how important it is to have an agile organisation, able to normalise the volatility experiences in some markets.

The adverse evolution of the Angolan market, as a consequence of its dependence on crude prices, has created important challenges, but it has once again shown us, as a cohesive and consistent team, that we are able to overcome setbacks and to prepare our future. Day after day, work after work, we had the change, the motivation and the ingenuity to show our value, both individual and collective, always guiding our behaviour and position by an enormous social concern to integrate and add value to the socio-economic context in which we operate.

The ACA Group is a solid and dynamic international group with a strong ambition, endowed with a strong and professional team, which is able to overcome difficulties and achieve our objectives of economic and financial stability, so necessary for its strengthening and independence. Because we believe in our project, in our

scopes of operations and our people, we initiated several actions to diversify ACA Group’s operating markets in the near future, in order to boost our growth, either organically or through acquisitions, always taking into account our priorities for profitability and sustainability, with very controlled risks, which will maintain our path towards growth. I am sure that 2015 will bring good news.

For all this, I would like to thank each collaborator on an individual basis for the determination shown, their sacrifice, their necessary flexibility, their personal and family efforts.

Finally, as the leader of the ACA Group, I carry myself with firmness, determination and responsibility, I know that I am a factor of hope for many of you and for the collective future of our business group. Therefore, I will always make the most accurate and coherent decisions with our strategy, even if difficult, because our path will always be paved by all of us.

We want to be stronger and more competitive. For this project, we rely on the commitment, skills and competence of our collaborators and stakeholders, so that we can achieve increasingly more and increasingly better.

Therefore, in compliance with by-laws and applicable legal standards, the Board of Directors hereby submits the Management Report and the Financial Statements for the financial year of 2014 of the company Alberto Couto Alves SGPS S.A.

Alberto Couto Alves CEO

2

3

Relevant Facts 2014

Macroeconomic Background

• Strengthening of operations in Brazil and new investments (GV);

Eurozone

• New governance management team;

model

and

reinforcement

of

• Strengthening of the sales team and new international expansion strategies; • Acquisition of 51% of the equity of Consmar SA; • Low demand, in Portugal, for public works; • Geographical diversification of our intervention within the international markets, having chosen Algeria and Poland as strategic countries for sustained growth; • Partnership agreement that will allow ACA to enter the market of marine works in Angola and Portugal.

The year of 2014 mostly reveals the effort, underwent by the ACA Group, to diversify its activity, rather than a clear commitment towards its core business – construction works. For 2015, signs are, however, slightly encouraging, reason why an emphasis will be placed in the commercial department of the construction segment, in order to expand its activity in Portugal while always bearing in mind the premise that, rather than turnover, operating profitability should be the factor that guides all operating decisions.

In the macro-region of Europe and Northern Africa, ACA has been conducting, since 2013, market researches on the Algerian market, having found a potential that needed to be explored. The country has many natural resources and a vast investment plan in the construction of infrastructures, such as roads, military bases, public buildings, hospitals, hotels and gaps in the housing segment, etc., which has led the ACA group to make the decision of opening a subsidiary in Algiers by the end of first quarter of 2015.

In sub-Saharan Africa, the year of 2014 was indelibly marked by a severe economic crisis that was experienced from Q3 2014 in Angola, a consequence of the drop in oil prices, with consequences still difficult to ascertain with respect to public investment, major construction projects and even with regard to the macro-economic and financial balance of Angola.

2014 was marked by the weak economic growth in the Eurozone, justified by an increase in geopolitical conflicts, especially tensions with Russia, together with the weakening of some developed and emerging economies, with close relations with central Europe countries. On the topic, emphasis should be given to the three main economies, Germany, France and Italy, whose economic performance was crucial to the weak growth in the Eurozone (data by the European Commission highlight a growth, during the Q3, of 0.1% q/q, 0.3% q/q and -0.1% q/q, respectively), unlike other countries, such as Ireland (Q2 was 1.5% q/q), Spain, Portugal and Greece, whose growth was better than expected (0.5% q/q, 0.3 % q/q and 0.7% q/q, respectively).

The improvements observed in the labour market were modest, in line with economic growth, which was not sufficiently robust to leverage employment creation.

Unemployment rate was probably 11.6%, according to the European Commission, better than in 2013 (11.9%), resulting from improvements in the most vulnerable countries. The differences between Member States continued to be significant in 2014, ranging from 5.1% in Germany and 26.8% in Greece. At the same time, the weak improvements in the labour market have had a limited impact on private consumption, which was expected to have grown 0.7% in 2014, an increase over 2013, when this variable decreased 0.6%.

Hindering this sluggish growth was the uncertainty on future income and the slow process of financial deleveraging of households.

Annual Rate of Change in GDP and Evolution of Brent Prices (USD - quarterly average; y/y%) 140 120 100 80 60 40 20 0

6% 4% 2% 0% -2% -4% -6% -8%

Sept/05 Mar/07 Sept/08 Mar/10 Sept/11 Mar/13 Sept/14 Brent Prices Source: Bloomberg

GDP

Annual Inflation

Composite PMI and Manufacture for Eurozone

( y/y%)

(PMI Index, 50 - null variation)

4.0

55

3.0

52

2.0

49

1.0

46

0.0 Nov/11

Aug/12

-1.0

May/13

Feb /14

Nov /14

43 Dec/12

Annual Inflation Inflation - Services

Composite PMI

Inflation - Goods Source: Bloomberg, Eurostat

June/13

Dec/13

June/14

Dec/14

Manufacture PMI

Source: Bloomberg

Macroeconomic Forecasts for GDP GDP

2013

2014E

2015P

2016P

-0.4%

0.8%

1.0%

1.7%

Private Consumption

-0.6%

0.6%

0.7%

0.9%

Public Consumption

0.2%

0.9%

0.8%

0.8%

-2.4%

1.1%

2.7%

4.4%

Exports

2.1%

3.1%

2.9%

3.5%

Imports

1.2%

3.3%

3.4%

3.4%

Average Inflation Rate

1.4%

0.4%

0.7%

1.8%

Investment

Source: BPI

Despite having been affected by the deleveraging process, in a context of low inflation and weak demand, investments in 2014 seem to have initiated a recovery from the 2.4% decrease observed in 2013, growing 0.6% in the previous year. Inflation remained well below the 2% target (inflation forecast in December, according to the Eurostat, was -0.2%, and it is expected that the full year inflation was 0.4%), influenced by the falling prices of energy and food, as well as the weak economic environment in the Eurozone. The projected inflation for the last month of 2014 could pile pressure the ECB to take further new unconventional measures already in January 2015.

The current account in the Eurozone has observed surplus, registering, in 2014, 2.5% of GDP. This surplus is not due to the strengthening of exports, but rather to the vulnerability of domestic demand, which adversely affected imports.

This happens in the most vulnerable countries, such as the peripheral ones, which regresses as the economic recovery gains dimension. In terms of public finances, one should highlight the increase in the primary balance, which increased from -0.1% of GDP in 2013 to 0.1% of GDP in 2014.

By contrast, gross public debt increased in the previous year from 93.1% to 94.5% of GDP.

2015 is expected to be less predictable than 2014 in the Eurozone, due to greater uncertainty in the global economy, the evolving political situation in Greece, the actions taken by the Federal Reserve and because of the scale and likely effectiveness of quantitative easing programme of the ECB. Nevertheless, the weak economic growth of 2014 is expected to continue in 2015, although at a higher rate (EC forecast is 1.1% y/y in 2015 and 1.7% y/y in 2016), boosted by better conditions in the labour market, increase in disposable income, improved financing conditions, reduced fragmentation and lower financial deleveraging needs.

In the labour market, a light recovery is expected and the unemployment rate is expected to reach 11.3% in 2015 in the Eurozone (10.8% in 2016), which should have favourable impacts on the growth of private consumption, which will reach 1.1 % this year (1.4% in 2016). Contributing to the further growth of private consumption will be the lesser need for deleveraging, which will also influence the growth of gross fixed capital formation, with an increase of 1.7% this year, a figure previously registered in 2011, significantly increasing in 2016 to 3.9%. Regarding inflation, the European Commission points to a rise in prices of 0.8% in 2015 and 1.5% in 2016, although the historic drop in oil prices may boost inflation into negative figure in the first months of 2015, which will then stabilize in relatively low levels until the end of the year.

The surplus in the current balance will be maintained for the next two years, this time reaching 2.6% and 2.5% of GDP in 2015 and 2016, respectively, a reflection of the slight economic recovery is expected in the Eurozone, accompanied by the growth of domestic demand. Public finances are expected to continue their path towards consolidation, with the primary balance reaching 0.3% of GDP in 2015 (0.5% in 2016), with an expected neutral budget in 2015 and negative in 2016 (-0.3%), reflecting a fiscal policy with a greater support to growth. In contrast, gross public debt is expected to continue to increase in 2015, albeit in a milder form, to 94.8% of GDP in the Eurozone, while, for 2016, a reduction by 1 pp is expected. Regarding the three major economies, growth is still expected to be modest in 2015, with Germany expected to grow 1.1%, supported by its robust labour market and the strengthening of external demand; in France, slow growth is expected (0.7%), combining a reduced pace of private consumption growth to a contraction in investments; and, finally, Italy expects positive growth (0.6%) with a slowly recovering external demand.

The risks that may affect the forecasts mentioned herein are based on the probability that the geopolitical tensions and financial problems in Russia may worsen during 2015 and on the elections that will be conducted in some countries of the Eurozone (Portugal, Spain and Greece). What may be at stake is the possibility of more radical political forces winning the elections in these countries, which could lead to political instability, weak governance and a weakening of the reforms. Special attention must be given to Greece, since the Syriza party won the elections held on 25th January. Given the current slump in oil prices, which may continue, and if the fall in energy prices continues to intensify, such may lead to a continuous drop in inflation and, ultimately, going into negative figures. One should note that the estimates by the Institute of International Finance (IIF) report that an oil price decline of USD 25 per barrel could lead to a drop in prices in the Eurozone of 2%.

Together with falling energy prices, the risk that internal demand may be lesser than expected, as well as the deterioration of inflation expectations, may lead up to a disappointing performance in general prices and force the ECB to adopt new measures.

Even though, ECB’s programme may, on the one hand, stimulate asset prices, but and on the other hand, low yield levels and the continued aversion to risk in the banking sector may limit its effectiveness. Alongside this, low inflation favours real expenses with debt. On the other hand, there is also the risk of forecasts being revised upwards, albeit with a lower probability. Among factors, one finds a greater than expected increase in external demand, the recovery of investments and employment, as well as extremely significant impacts of the eventual measures of the ECB and the continued drop in oil prices, since the Eurozone is one of the regions that may largely benefit from this situation. IIF’s estimates refers that an oil price decline of USD 25 per barrel could lead to an increase of 0.3% of GDP in the Eurozone. Therefore, if oil prices stay at current levels of around USD 60 per barrel, the estimated impact would be +0.6pp. In addition, political factors might have fewer adverse developments or a quicker resolution. In particular, the possible easing of tensions between Russia and the West would have very favourable consequences in the countries of the European centre, particularly Italy and Germany.

As for France, where ACA also operates, the growth for 2014 was, as already mentioned, quite anaemic, although the first data referring to Q1 of 2015 point towards a GDP growth of

0.6% q/q, which, if in fact happens, will be the highest figure since Q2 2013.

France GDP Growth Rate Percent Change in Gross Domestic Product 1.2 1 0.8 0.6 0.4 0.2 0 -0.2 -0.4 2010

2012

Source: www.tradingeconomics.com | Insee, France

Kennedy Villas - France

2014

Portugal

projected for the Eurozone. These projections include the maintenance of a robust export growth and an acceleration of Gross Fixed Capital Formation (GFCF) in 2015-2016, along with a slowdown in private consumption. The evolution of domestic demand should continue to be conditioned by the still high level of private sector indebtedness and the fiscal consolidation process.

The projection for the Portuguese economy for 2014-2016 reflects the continuation of the gradual adjustment process of macroeconomic imbalances, along with a moderate growth of activity and price levels and also the maintenance of the ability to reduce external indebtedness.

After a virtual stabilization of the level of activity in the first three quarters of 2014, current projections point to a continuation of the gradual recovery started in 2013. This development should lead to an average annual growth rate of gross domestic product (GDP) of 0.9 percent in 2014 and 1.5 and 1.6 percent in 2015 and 2016, respectively, which sets an average growth for this period slightly higher than that

The dynamism of exports, considering improvements in terms of trade exchanges, may favour the maintenance of current account and capital surpluses over the forecast period, allowing for an enhanced international investment position.

Economic Projects by the Bank of Portugal Weights 2013

BE December 2014

BE October 2014

BE June 2014

2014(p)

2015(p)

2016(p)

2014(p)

2014(p)

2015(p)

2016(p)

Gross Domestic Product

100

0,9

1,5

1,6

0,9

1,1

1,5

1,7

Private Consumption

65,7

2,2

2,1

1,3

1,9

1,4

1,5

1,5

Public Consumption

18,3

-0,5

-0,5

0,5

-0,7

-0,2

-1,4

0,

Gross Fixed Capital Formation

16,3

2,2

4,2

3,5

1,6

0,8

3,7

3,9

100,7

2,3

1,0

1,5

1,9

1,4

1,0

1,6

Exports

37,3

2,6

4,2

5,0

3,7

3,8

6,1

5,6

Imports

38,0

6,3

3,1

4,7

6,4

4,6

4,8

5,5

Domestic Demand

2,3

1,1

1,5

1,9

1,4

1,0

1,6

Exports

1,0

1,7

2,1

1,5

1,5

2,5

2,4

Imports

-2,5

-1,3

-2

-2,5

-1,8

-2,0

-2,3

Current plus Capital Account (% of GDP)

2,6

2,8

2,9

2,2

2,8

4,0

4,3

Trade Balance (% of GDP)

1,6

2,5

2,6

1,6

2,0

3,0

3,3

-0,1

0,7

1,0

0,0

0,2

1,0

1,1

Domestic Demand

Contribution to GDP Growth (in p.p.)

Harmonized Index of Consumer Prices (HICP) Source: Bank of Portugal

Note: (p) - projected. For each aggregate, this table shows the projection corresponding to the most likely value, conditional on the set of assumptions considered.

The current projections by the Bank of Portugal point towards the continuation of a moderate recovery process of the economy, which may produce a slightly higher average growth, in 2014-2016, than the one projected for the Eurozone. This evolution means a GDP, at the end of the projection line, even lower than that observed before the financial crisis, reflecting a very significant recovery of expenditure in real terms. In fact, the weight of exports in real GDP should increase from around 11 p.p. between 2008 and 2016, to 43 percent, reflecting the continued upward trend observed in 2010-2013. On the other hand, despite the slight increase in the share of GFCF in GDP seen in the projection horizon, the sharp reduction observed since the financial crisis will also lead to a drop of this ratio between 2008 and 2016 (6 p.p., to around 16 percent). The weight of private consumption in GDP was slightly reduced in this period, being close to 66% of GDP.

This evolution reports a growth in exports that is expected to be around 5% at the end of the projection horizon, together with a relative stabilisation of the average growth of internal demand (excluding variation in stocks) in 2015-2016 when compared to 2014. The total internal demand is expected to slow down to approximately 1% in 2015, after a 2.3% growth in 2014, gaining momentum once again in 2016 to 1.5%. The contribution of net internal demand for GDP growth will remain constant in 2014-2016 in approximately 0.6 p.p. (following chart)

Gross and net contributions for GDP growth (percentage) Gross contr.

Net contr.

Gross contr.

Net contr.

Gross contr.

Net contr.

Gross contr.

Net contr.

5.0 3.0 1.0 -1.0 -3.0 -5.0 2013

Private consumption

2014 (p)

Public Consumption

Sources: INE and Bank of Portugal Notes: (p) - projected. For each year, the left-hand bar refers to gross contributions from each GDP component and the right-hand bar to the corresponding net contributions.

2015 (p)

Investment

2016 (p)

Exports

Imports

After a reduction in 2014, the contribution of net exports is expected to increase in 2015-2016 to about 0.9 p.p. of GDP (value close to the one seen in 2012-2013).

The following chart shows that the weight of internal demand, excluding content imported in nominal GDP has been reduced since 2010, a trend that is expected to continue over the forecast period. On the other hand, the share of exports deducted from the respective imported content, reflecting the effective contribution of this component to create internal value added, is expected to maintain an upward trend.

Domestic Demand and Exports, excluding imported contents in nominal GDP

85

30 25

80

20 75

15 10

70 2008

2010

2012

Domestic demand

2014(p) Exports (rhs)

Sources: INE and Bank of Portugal

Overpass and Railway Accesses – Valongo, Portugal

2016(p)

Angola

points less when compared to the goals of the 2013-2017 NDP (8%). The oil sector has suffered a negative rate of -3.5%, as a result of restrictive operational problems in the physical production in some production units, and non-oil sector grew 8.2%.

Since the Angola mostly depends - approximately 80% - of the oil industry, both in terms of added value and in terms of obtaining international currencies, this economy suffered, during the second half of 2014, with the falling oil prices.

Recent estimates point to a growth of 4.4% GDP in 2014, less 2.4 percentage points compared to 2013 and 3.6 percentage

Real growth rates of GDP at market prices (%) 2009

2010

2011

2012

2013

2014p

GDP mp

2,4

3,4

3,9

5,2

6,8

4,4

Oil Industry

-5,1

-3

-5,6

4,3

-0,9

-3,5

Non-oil Industry

8,3

7,8

9,7

5,6

10,9

8,2

Agriculture

29

6

9,2

-22,5

42,3

11,9

Fishery

-8,7

1,3

17,2

9,7

2,4

5,3

Diamonds and others

4,6

-10,3

-0,7

0,3

3,3

1

5,3

10,7

13

14

8,6

8,1

Construction

Manufacturing Industry

23,8

16,1

12

11,7

8,1

8

Energy

21,3

10,9

3,5

10,4

34,4

17,3

Trade

-1,5

8,7

9,5

13,4

7

8

Others

5,9

4,7

9,6

8,3

0,7

6

Source: MPDT.

Crude Oil Brent Prices 115,49

120 110 100 90 80 70

57,8

60 50

06 -0 120 15 06 -0 220 15

06 -1 220 14

06 -1 120 14

06 -1 020 14

06 -0 920 14

06 -0 820 14

06 -0 720 14

06 -0 520 14

06 -0 420 14

06 -0 320 14

06 -0 220 14

Source: Bloomberg

06 -0 620 14

19-06-2014

40

In 2014, the inflation, as measured by the CPI, was established at 7.48%, reflecting a downwards trend during that year. As for 2013, such inflation rate corresponds to a 0.21 p.p. reduction when compared to the 7.69% inflation registered in 2013.

If the crisis extends throughout the entire year, the loss in Foreign Exchange Reserves may rise to USD -8.005,39 million, positioning the stock of Forex Reserves in USD 19.277,18 million. Such would correspond to a 28.4% contraction, when compared to the previous year, which registered a stock of USD 26.907,09 million.

In 2014, the Global Payment Balance registered a deficit, justified by the less positive result of the Current Balance, whose balance has proven to be insufficient to cover financial accounts, which resulted in a loss of gross reserves of USD 4,542,28.2 million.

-20.000,00 2011 Current Account

12.015,41

3.439,59

84,21

2012

2013

2014

Capital and Financial Balance

-8.005,39

-15.000,00

-20.020,80

-10.000,00

-4.542,28

-3.979,47

-5.000,00

-7.981,87

0,00

-8.209,32

5.000,00

8.348,37

13.084,66

10.000,00

-8.883,64

15.000,00

13.853,27

9.087,71

20.000,00

4.643,20

Payment Balance

2015

Global Balance

Source: BNA

The reference exchange rate registered a slight depreciation in 2014 of about 1.79%, while the Kwanza evolved from KZ/USD 96.6 in 2013 to KZ/USD 98.3 in 2014.

Exchange Rate Variation

Annual accumulated nominal depreciation Source: BNA (Calculations by GERI - Ministry of Finance)

2008

2009

2010

2011

2012

2013

2014

0,15

18,12

4,39

2,84

0,55

1,03

1,79

The current level of foreign currencies remains stable and in adequate levels to act as buffers, absorbing the imbalances in the balance of payments, despite the fall in forex reserves that went from USD 29,570 billion in Q2 to USD 27,030 billion in Q3 2014, a decrease of about 8.6%. The stock of gross international reserves was USD 25,909,35 million, a decrease of 4.32% (USD 1.11957 million) compared with the previous month.

In 2014, the variations in monetary base and money supply were aligned with the objective of inflation control. In fact, the M3, M2 and M1 monetary aggregates showed a growth of 18.45%, 13.49% and 15.01%, when compared to the same period of 2013.

October 2014 shows that the Monetary Base in national currency suffered a reduction of Kz 16.104,88 million (1,86%) with a balance of Kz 851.099,46 milions, as a result of the reduction of Deposits in Commercial Banks made in national currency of Kz 19.057,95 million (3,90%). Overall (January to October 2014) the Monetary Base in national currency grew Kz 690,99 million (0,08%).

In the money market, the weighted average interest rates for subscription of Bilhetes do Tesouro (BT) with a maturity of 91, 182 and 364 days increased by 12 pp, 28 pp and 12 pp, reaching 4.88%, 5, 43% and 6.18%, respectively. In turn, the LUIBOR Overnight rate increased by 28 pp, reaching 4.14% per annum. For the maturities of 3 and 12 months, rates were established at 7.49% and 9.54%, respectively.

The 2014 fiscal accounts were amply influences by the fall in the production and prices of oil. The most recent estimates point out to a Gross Revenues of KZ 4.322,8 billion, 8.9% below the figure of 2013. Oil-related revenue reached a total of KZ 2.961,9 billion, also below the figure of the previous year. Non-oil revenue meanwhile, rose to KZ 1,360,93 billion, of which KZ 1,128,2 billion were from the non-oil taxes.

On the other hand, fiscal accounts indicate a reduction of tax expenses in 2014; when compared to 2013, the amount was KZ 4.682,4 billion. The tax deficit was calculated at KZ 359,6 billion, representing 2.8% of GDP. The year of 2014 was also marked by the launching of the medium-term strategy for the reform of fuel subsidies, due to the high level of subsidy-dependence of the economy – approximately 5% of GDP, which should positively impact the management of quasi-fiscal operations, since expenses with subsidies are determined according to the oil reference fiscal price, which, for fiscal prudence sake and particularly for macro-fiscal management reasons, are lower than market prices.

The drop in oil prices conditions the fiscal targets underlying to the NDP 2013-2017. The cumulative decline of oil prices in more than 55% since June 2014 will present many challenges in the short and medium term against the achievement of the main macroeconomic targets set out in the 2013-2017 NDP. The tax effects of falling oil prices may extend in time.

Indeed, the compliance with fiscal targets, in terms of deficit and public debt, should be relaxed during a mid-term review of the framework of assumptions, goals and objectives of the 2013-2017 NDP. For 2015, real GDP growth was revised downwards, at 9.7% (initial SGB) to 6.6%, but the economy is expected to enter a period of economic acceleration, compared to the growth rate of 4.4% documented in 2014. As originally planned, the real growth of economy should be led by the oil sector, whose most recent forecasts point to a 9.8% expansion, instead of the initially projected 10.7%. The updated outlook for growth in the Non-Oil industry were significantly moderated, to 5.3%, with an expected sharp slowdown compared to the previous year (real growth of 8.2%).

Five main developments will redefine the real growth perspective of the national economy: • Slightly more optimistic forecasts, with an expected increase in daily average production to 1,83 MBbl/day, for the current year; • Moderate forecast of real growth in agriculture, from 12.3% (initial SGB) to 7.9%; • More moderate real growth perspectives for the manufacturing industry, expected to grow, in 2015, at a rate of 6.8%, 4.4pp less than originally planned; • Downwards revision of the Construction Industry to 6%, against initial projections of 10.5% established at the SGB; • Downwards revision of Services to 4%, from an initial 9% projected in the initial SGB. The assumptions supporting the preparation of the Macroeconomic Scenario are briefly presented in the table below.

Macroeconomic Assumptions, 2015 Year

Year

Prel.

GSB

Reviewed GSB

2012

2013

2014

2015

2015

9,0

7,7

7,5

7,0

9,0

Annual Oil Production

631,8

626,3

604,4

669,1

669,8

Daily Average (bbl/day)

1,73

1,72

1,66

1,83

1,83

111,6

107,7

104

81

40

Inflation (%)

Average Export Prince – Oil (USD/barrel) Gross Internal Product

10.876,00

12.056,30

11.495,15

13.480,90

11.534,9

Real Growth Rate (%)

5,2

6,8

4,7

9,7

6,6

Oil Industry

4,3

-0,9

-2,6

10,7

9,8

Non-oil Industry (NO)

5,6

10,9

8,2

9,2

5,3

-55,5

-48,3

-47,3

-35,2

-16,6

30.632,30

30.945,3

26.907,09

(A)

19.277,18

33,5

15,2

20,2

16

14,8

-9.638,7

-13.164,18

-8.901,91

9.079,06

9.079,06

Nominal Value (Billions of KZ)

Primary Non-Oil Balance (% of NO GDP) Forex Stock (millions of USD) M2 Growth rate (percentage) Liquid Direct Investment (Millions of USD)

A relative rise in the inflation rate may be expected to 9%, 1 p.p. above the inflation seen in 2014. This evolution in the inflation rate reflects a decline of approximately 2.0 p.p, anticipated by the 2013-2017 NDP.

Dondo Court House - Angola

Brazil In 2014, the Brazilian economy registered a GDP growth of 0.1%, the worst result since the 0.2% drop of the Brazilian GDP in 2009, the height of the global economic crisis.

The chronological growth of the Brazilian GDP is:

Brazil - GDP growth rates

7,6

3,9 -0,2 2009

2,7 1,8

2010

2011

2012

0,1 2013

2014

The Brazilian economy was severely impaired, in its economic growth, by the viral confidence crisis that contaminated the economy, a result of the coming to public of several different corruption scandals and presidential elections that led to the re-election of President Dilma Roussef who, however and a few months later, had the worst popularity ratings of the last elected Presidents of the Republic.

Between the GDP-producing industries, industry performed the worst, falling 1.2% in 2014. Agriculture advanced 0.4% and services increased their revenue by 0.7%.

Services represented 73.3% of Brazil’s GDP, followed by industry, with a weight of 22.8%, and agriculture, with a weight of 3.9%.

Track Superstructure of the Carajás Railway Line Being Duplicated – Maranhão, Brazil

Economic Indicators – Quarterly Variation (Variation in volume in comparison to quarter of previous year - %) Sector Agriculture Industry Mining Transformation

2014.I

2014.II

2014.III

2014.IV

3,4

-1,5

-1,4

1,2

3

-3,6

-1,9

-1,9

6,1

7,6

11,1

9,7

1

-6,3

-4

-5,4

Prod. and dist. of electricity, gas, water, sanitation and waste collection

7,2

-4,7

-6,5

-5,9

Civil construction

3,5

-5,6

-5,3

-2,3

2,4

-0,2

0,3

0,4

Commerce

2,5

-3,6

-2,8

-2,9

Services Transportation, storage and mail

6,9

-0,5

1,4

0,8

Information services

7,1

4,6

5,1

1,9

Financial mediation, insurance and related services

2,7

-0,6

-1,6

1,3

Real state and leases

3,9

3

3,2

3

Other services

0,3

-1,2

0,3

1,1

Public adm., health and education

1,2

0,5

0,3

-0,1

Added value on basic prices

2,7

-1,1

-0,4

-0,2

Net tax on products

2,8

-1,8

-1,5

-0,6

MP GDP

2,7

-1,2

-0,6

-0,2

2

0,2

0,1

1,3

Family consumption expenses State consumption expenses

2,6

1,5

1,6

-0,2

3

-7,9

-6,4

-5,8

Exports of goods and services

3,1

-0,2

4,6

-10,7

Imports of goods and services (-)

1,6

-2,7

1,6

-4,4

Gross formation of fixed income

Source: IBGE

The previous table analyses the evolution of GDP components, among which one stands out for its clearly adverse evolution: gross fixed capital formation.

The data show that, since the first quarter of 2014, investments in the private sector have registered negative annual quarterly variations: during 2014, the level of private

investment fell 4.4% compared to 2013. It was the worst result since 1999, when the decline was 8.9%.

4

The Construction Industry

Portugal

Construction Production Index

In Portugal, GFCF stopped, in the middle of 2013, the downwards trend that had been registered since 2009, which caused a drop of about 30%. Therefore, GFCF is expected to have a variation of 2.2% in 2014 and 4.2 and 3.5% in 2015 and 2016, respectively (following chart).

This evolution amply reports the upwards trend for corporate investment, from -2.4% in 2013 to 2.8% in 2014 and 4.9% on average in 2015-2016.

GFCF by Institutional Sector (Index 2008=100)

-6% -8%

-7,7% -9,0%

-10%

-10,8%

-12% -14% -16%

-15,7% -15,9% -16,1%

-18% -20%

160

2013

140 120

2014

Average variation – last 12 months

100 80

-6%

60

-8% -10%

Sources: INE and Bank of Portugal

-18%

Note: (p) - projected

-20%

Particularly referring to the construction industry and again to the Portuguese market, the following chart highlights the recovery observed since late 2013: although negative annual variations are still being persistently registered, these are increasingly fewer, even with the growing reduction of participants in the Portuguese construction market. The first signs that arise for the 1st quarter of 2015 are positive, which should be connected with the Programa ComunitĂĄrio Compete 2020.

Total

Construction of buildings

Civil Engineering Source: INE

Jan -15

-16%

Nov -14

Public GFCF

Set -14

Housing GFCF

Jul -14

-14%

Mai -14

Business GFCF

Mar -14

Total GFCF

Jan -14

-12%

Nov-13

2016(p)

Set -13

2014(p)

Jul -13

2012

Mai-13

2010

Mar -13

2008

Jan -13

40

Angola After having double-digit growth rates until 2012, the construction industry in Angola grew approximately 8.1% in 2013 and a growth of 8.0% is expected for the construction industry in Angola in 2014. The activity in the construction industry in Angola suffered, mostly during Q4 2014 with the beginning of failing crude prices in the international markets. Public investment projects are restricted due to inexistent funds.

With regard to stakeholders in the construction sector in Angola, there are different nationalities involved, with a growing presence of Asian companies. Foreign capital companies, such as AngolAca, have to be extremely competitive to cope with the increasing international competition and with budget shortages and shortages in public investment, currently affecting the region.

N’Dalatando Road – Lucala, Angola

Brazil Bearing in mind that the Brazilian economy registered an anaemic growth in 2014, the construction industry was not immune to an overall recessive year in the Brazilian market, made worse during the second half of the year due to the corruption cases brought to light by

operation “Lava Jato”, which led to the arrest of some major business leaders of the sector in the country.

Statistically and considering the data below, released

by Instituto Brazileiro de Geografia e Estatística, the construction industry had an average negative variation of 2.5%.

Quarterly GDP Indicators - Industries and Civil Constrution* According to the quarterly index - Base: Average 1995 = 100 (index number) Quarter

Industry

Construction

Agriculture

Services

GVA pb

GDP mp

2012 Q1

141,05

163,31

183,23

165,64

159,69

162,50

Q2

144,17

165,04

199,73

170,44

164,54

167,29

Q3

153,74

175,68

200,60

174,01

169,81

172,70

Q4

147,88

169,48

132,70

176,62

166,67

170,68

Average

146,71

168,38

179,06

171,68

165,18

168,29

Q1

138,88

164,98

222,46

169,73

163,75

166,67

Q2

149,72

178,14

219,11

175,87

170,78

173,89

Q3

157,10

185,90

193,97

178,39

173,35

176,83

Q4

151,44

175,95

137,19

180,13

170,13

174,25

Average

149,29

176,24

193,18

176,03

169,50

172,91

Q1

143,08

170,71

229,99

173,86

168,14

171,18

Q2

144,40

168,17

215,85

175,47

168,89

171,80

Q3

154,14

176,14

191,27

178,89

172,68

175,84

Q4

148,62

171,89

138,88

180,80

169,85

173,82

Average

147,56

171,73

194,00

177,25

169,89

173,16

Q1

138,86

165,76

239,26

171,85

166,07

168,51

Average

138,86

165,76

239,26

171,85

166,07

168,51

2013

2014

2015

Source: IBGE - Diretoria de Pesquisas. Coordenação de Contas Nacionais.

By: Banco de Dados - CBIC Obs.: * New Series of National Accounts - Reference 2010

5

6

Water Supply and Sanitation Industry

Food Retail

Via our subsidiaries Ambiágua and AmbiÁfrica, the Group has registered, over the last few years, a significant growth in this sector, both in the construction of sanitation networks, wastewater treatment plants and in their posterior maintenance.

ACA Group’s business segment targeting food retail has gained a relative weight in the group’s turnover, a result of the expansion carried out in the Angolan market.

In an overall perspective and in the market where the Group operates, the water supply and sanitation industry evolved favourably, in 2014, despite the recession experienced in the Angolan economy. A particular emphasis must be given to the operations and financial performance of our subsidiary AmbiÁgua, not only for the works executed, but also for the results obtained.

The ACA Group has, through its subsidiaries Vivangola and VivaSuper, a wholesale and retail distribution model, operating in the HORECA channel and with own points of sale.

With the objective of creating conditions for a new scale in the food retail business, the ACA Group has been carrying out relevant investments, not only in fixed assets, but also by reinforcing their own management team.

EN 103 – 1 Bypass – Esposende, Portugal

7

The Commodities Market

2014 was indelibly marked by the sharp drop of crude prices in international markets from Q3 2014, as shown by the following chart.

Brent Crude Oil 120 100 80 60

10 -0 120 14

07 -0 120 14

04 -0 120 14

01 -0 120 14

10 -0 120 13

07 -0 120 13

04 -0 120 13

01 -0 120 13

40

Source: www.tradingeconomics.com | ICE

Vila Nova de Gaia Riverside - Portugal

Inversely, there are a market rise in steel prices in international markets, with a percentage variation surpassing 30%.

Steel 500 400 300 200

01 -0 120 15

10 -0 120 14

07 -0 120 14

04 -0 120 14

01 -0 120 14

10 -0 120 13

07 -0 120 13

04 -0 120 13

01 -0 120 13

100

Source: www.tradingeconomics.com | LME

These facts, combined, produce different impacts in the prices of ACA Construção’s productive inpurts and with equally different impacts according to different geographical areas, from the outset due to customs charges and number of competitors and free fluctuation of prices of such inputs in the markets where ACA Construction operates.

8

Operations: Production and Portfolio

National Market - Developed Activities and Strategies These were the main works executed throughout 2014: Name of The Work

Client

Macieira Cambra EB2 School Centre

Câmara Municipal Vale de Cambra

Cultural Recreational Centre

World Of Discoveries - Atividades Culturais, Lúdicas, Diversão e de Lazer, S.A.

Nursing Home Facilities, Salamonde

Junta de Freguesia de Salamonde

Santa Marta de Penaguião Elementary School

Município de Santa Marta de Penaguião

Anadia Secundary School

Parque Escolar, EPE

City Park - V.N. Famalicão

Município de V.N. Famalicão

IKEA Access Roads Rehabilitation

IKEA Portugal - Móveis e Decoração, Lda

Manta Rota Sanitation Network

VRSA, Sociedade de Gestão Urbana, E.M.S.A.

Guilhofrei EB1 Rehabilitation

Município de Vieira do Minho Alberto Couto Alves, S.A.’s works portfolio has been affected by the crisis in the construction industry and also by the international crisis, broadly speaking. Our market diversification strategy was begun many years ago by the subsidiary Angolaca, in the Angolan market.

After that came the markets of France, Brazil and many others, where we want to consolidate a medium and long-term strategy as a condition for sustainability and growth.

The need to conduct a capable restructuring, able to answer to these global needs, was identified and centralized in Portugal, where we invest in core competences and flexibility as a means to transfer knowhow.

Alberto Couto Alves SA intends to follow the path that has been being trodden by keeping a strong and combative mind, fighting weaknesses left by the crisis and presenting alternative strategies in new markets with new opportunities.

Therefore, 2015 is expected to be a strong year, with potential growth opportunities for the group.

Vila Nova de Famalicão City Park Portugal

Simultaneously and as to mitigate the risk associated with the construction industry, the ACA Group decided to advance with the acquisition of a company dedicated to hand labour management, CONSMAR, acquiring 51% of its equity. This company will allow the ACA Group’s construction sector, in the near future, to position itself in other northern European markets, where Portuguese hand labour in the construction sector continues to be highly sought after and valued, with interesting rates of return.

French Market Main works in 2014: Name of The Work

Client

Grand Quevilly

Nexity – SCI Le Grand Quevilly Kennedy

Monbadon

SCI 22 Monbadon

Beth Rivkah

Institution Beth Rivkah

Palaiseau

Nexity – Sci Palaiseau Les Granges

Grammont

Sci Rouen Grammont - Ilot 11B

Athis Mons

Nexity – SCI Athis Mons Quai de l’Industrie

Hotel Kyriad Argenteuil

SARL N&C Monsieur Chang Yang

Regarding ACA France’s operations, they grew exponentially in turnover when compared to 2013.

The subsidiary ACA France SARL had a turnover of € 11.988.938 and a slightly positive operating result.

Nevertheless, it is quite obvious that the crisis has taken often the engineering and civil construction industry in France. A clear sign is the unemployment level in the industry, the result of redundancies carried out by large French construction companies. Consequently, we have witnessed a steep deterioration in prices and margins in the proposals put forward and, for that reason and for 2015, ACA does not consider growth a possibility in the French market, even after choosing to expand our operations into various regions where the group still didn’t operate.

For 2015, the central objective is clearly up scaling the project of Alberto Couto Alves SA in the French market.

Palaiseau – France

Angolan Market Main works in 2014: Name of The Work

Client

Inea - Roads Rehabilitation in KN,MG,BG and HB

Inea - Instituto de Estradas de Angola

Kora - Construction of 4500 Houses

K.A. - Kora Angola Lda

Humbo's Urban Requalification – 2nd Stage

Ministério Urbanismo e Habitação

Dondo City Requalification / En230 Gota/Parq. Sonangol/ Morro Binda/Ndalatando

Inea - Instituto de Estradas de Angola

Dondo City Requalification – 2nd Stage

Ministério Urbanismo e Habitação

En230,Alt.Dondo and Morro Binda Expansion

Inea - Instituto de Estradas de Angola

Malange City Requalification

Ministério Urbanismo e Habitação

Sinohydro- Bituminous Application

Sinohydro Corporation

Earthmoving and Infrastructure Works

K.A. - Kora Angola Lda

After having double-digit growth rates until 2012, the construction industry in Angola grew approximately 8.1% in 2013 and a growth of 8.0% is expected for the construction industry in Angola in 2014.

2014 can be clearly split into two periods: one marked by a high stability in oil prices, and a second period during which there was a serious and substantial drop in barrel crude prices in international markets, with impacts in the collection of foreign currencies by the Angolan economy and, concomitantly, in the execution of public investments.

That said, and regarding the period up to September 2014, the operations of Angolaca in 2014 were in line with forecasts and Angolaca executed the works that had been commissioned.

From September 2014, with crude barrels breaking the psychological barrier of USD 100 per barrel, we noticed a certain reduction in activity levels, but more importantly a delay in the decision-making by the main political and economic decision-makers of the macro region.

Anticipating the retraction that soon became a reality in public investment, AngolACA has been redefining its performance in the Angolan market, as to obtain a more balanced work portfolio, between the private and the public sector. Therefore, at the end of the year, AngolACA had a production portfolio of which 37.9% were works from private clients, which represents a significant change when compared to the previous year.

Social Housing – Uíge, Angola

9

Integrated Management System: Quality, Environment, Safety and Health in the Workplace

Quality With the globalization of markets and the extension of competition, it is becomes necessary to systematise practices, create performance procedures and monitor activities, as to present proof of compliance with the Client’s requirements.

Aware of this reality, Alberto Couto Alves, SA, initially received its Quality certification in 2000 and later, in 2004, it certified its Integrated Management System (Quality, Environment and Safety).

In 2014, the Integrated Management System (Quality and Safety) of AngolACA was certified and the implementation of the Integrated Management System (Quality and Safety) was initiated in AmbiĂ frica.

The Group, by integrating an Integrated Management System according to NP EN ISO 9001, NP EN ISO 14001, OHSAS 18001 standards demonstrates its aptitude to provide, continuously and consistently, with a product and/or service that fulfils the client’s needs and this certification allows to highlight, with credibility provided by third parties, that the organisation has management systems according to the requirements of those reference standards.

To ensure the implementation of the Integrated Management System follow-up meetings are promoted between process managers for the monitoring and tracking of targets/indicators defined.

Alberto Couto Alves, SA has an internal database of auditors that have the mission of assessing the compliance of the Integrated Management System by conducting internal audits to the works and to the internal processes, while the motivation of the Organisation in the promotion and development of its employees prevails.

The satisfaction of customers is a constant objective of the Group and, therefore, in 2014, customer satisfaction questionnaires. The sending of such questionnaires is made according to the frequency and specificity of customers in different companies.

Within the principles explicated in the Quality, Environment and Safety Policy, Alberto Couto Alves, SA promoted and discloses the activities developed for the implementation of the Integrated Management System via the Intranet, thus fostering awareness, involvement and participation of all collaborators of the company and partners.

We understand that the success of an organisation, mainly one within a complex, demanding and always changing environment, can only be achieved by the ability to meet the needs and expectations of its customers in the long term and a balanced manner.

Environment The Group, as an organisation aware of the environmental associated with the development of construction activities, wants to have anticipate any potential environmental accidents and positively contribute towards sustainability, by rationally using natural resources and by carrying out its activities always respecting the future.

To that extent, the Group develops and implements measures as to safeguard environmental aspects, by creating conditions to reduce the risk of contamination of receptive means (soil, air and water), by monitoring and rationalizing resources, management of waste produced, by involving, training and monitoring its employees and the by implementing measures to protect Biodiversity.

The actions carried out on the areas mentioned above results from the creation and implementation of the Environmental Management Plan, which is expected to become a practical tool, well-structured and easy to read and apply, as to cover all the demands of environmental safeguard.

This document identifies and assesses environmental aspects based on the analysis of the characteristics of the location and activities to be developed; from there on, the respective mitigation measures are defined and a monitoring plan is put into motion, where the aspects to be controlled are defined; finally, there is the verification of the actions implemented with an environmental follow-up and regular reports.

In order to identify, prevent and combat environmental emergencies, a specific procedure is developed, which contains the modes of operation in the event of emergency.

Regarding training, several themes are addressed, as to ensure all employees are involved in the compliance and implementation of the defined environmental safeguard procedures.

Safety and Health in the Workplace

Corporate Social Responsibility

The Safety and Health of workers is currently a matter receiving plenty of media attention. Such is due to the increasing value that current society gives to human life, which is transformed into specific legislation that tends to minimize the risks in the workplace, while preventing the occurrence of accidents and occupational diseases.

The Group carries out its projects with an emphasis in the Quality and Satisfaction of its Clients, reflecting a social concern towards sustainable development.

Safety and health in the workplace are two activities that are directly interconnected and represent the continuity of production and how workers develop the activity.

The Group, for its ability, qualification and experience acquired over the past few years, today has a group of experts in these areas that, working in teams, develop formal safety procedures, as to comply with preventionoriented policies and strategies.

Therefore, we understand that, within a philosophy of the preventive “new approach”, rather than the mere compliance with a set of technical rules provided for in the law, there is a need to globally develop prevention, as to obtain high levels of safety and health.

Regarding safety requirements, the Group understand that a greater emphasis must be placed in the following areas: • Individual and collective protective equipment (IPE and CPE);

As a socially responsible organisation, the Group has tried to reconcile economic development, social responsibility and protection of the environment, supported by a culture of rigor, cooperation, equality, quality, excellence and professionalism, with all those with whom it interacts.

The Group’s contribution is not restricted to the construction of infrastructures. The value and the culture of solidarity are immensely important for all the collaborators of the Group, who dedicate themselves to promote proximity with the populations, involving the most deprived populations.

Any social project the Group decides to execute will imply the involvement of local and traditional authorities, in order to guarantee that such projects suppress the most relevant needs of the populations.

We underline some of the charity projects carried out by the Group: • “A Escolinha” • “Dia da Criança”

• Safety procedures;

• “Luga”

• Alcohol consumption;

• “Acarinhar”

• Public health; • Plan for visits; • Training / awareness raising.

Regarding emergencies, potential emergency situations are identified, as well as available means (human and material), alarm type (internal and external), propagation of the alarm (training and information), evacuation plan, actions and Emergency Response Team (ERE).

As for the control of operations, visits to the work sites are carried out and items are then registered in reports and verification check-lists. Therefore, it is possible to collect needs in terms of safety, while also verifying the efficiency of the adopted preventive measures.

“A Escolinha”

“Dia da Criança”

Luga

“Acarinhar”

10

Human Capital

Characterisation of Human Resources

production and a lesser concentration in administrative, technical and supervisory functions.

On 31-12-2014, the Group had 2561 employees, distributed by the functional groups described in fig. 1.

The Macro-regions of Europe and North Africa and Portugal have the higher percentage of Technicians and Senior Management Staff. On the other hand, they have the lowest percentage of operational employees.

This distribution is concomitant with the scenario generally found in the Civil Construction and Public Works industry, namely construction companies with direct labour. I.e., a stronger concentration of human capital in operational functions directly linked to > Functional Group

Senior Management Technicians Administrative

Macro-region Sub-Saharan Africa

Macro-region Portugal

Macro-region Brazil

Macro-region Europe and North Africa

Total

%

34

25

2

1

62

2,4%

103

96

9

9

217

8,5%

56

24

3

1

84

3,3%

Operational

1958

204

33

3

2198

85,8%

Total

2151

349

47

14

2561

100,0%

Fig. 1

Regarding the distribution of employees according to their nationality, the macro-region of Sub-Saharan Africa had, on 31-12-2014, 1848 Angolan workers and 303 expatriates, which represents a percentage of 14.1% of expatriates if one considers the total number of employees working at that macro-region. Nevertheless, after analysing such figure, one finds a greater concentration of expatriates in AngolACA Construções, S.A., although according to legal norms.

Interestingly, the Macro-Regions of Brazil and Europa and North Africa have similar expatriation rates: 14.9% and 14.3%, respectively.

The concept of contractual flexibility is another relevant organisational variable, since we think this is positively related to corporate competitiveness. Essentially, this is the percentage of temporary contracts, which allows the Group to better adjust its staff to work volume variations.

Temporary work contracts represent 59% in the macroregion of Sub-Saharan Africa, a figure surpasses by the macro-region of Portugal, with a flexibility index of 64.5%.

The contractual flexibility indicator is partly explained by the low seniority of employees, since the macroregion of Sub-Saharan Africa has an average seniority of 1.2 years (the same of the macro-region of Europe and North Africa), where in the macro-region of Portugal the average seniority is 3 years.

Also relevant in Human Resources Management is the average age of employees. The lowest figure corresponds to the macro-region of Sub-Saharan Africa, where the average age is 32.5 years. The highest average is found in the macro-region of Portugal, 40 years, whereas in the macro-region of Europe and North Africa is lower, 38 years.

The flow of entries or exits of human resources in a given year partly reflects the evolution that the business has had during a specific operation or in Macro-region.

Due to a very specific labour market, the macro-region of Sub-Saharan Africa has the highest employees’ flow of entries or exits of the Group; during 2014, there was a total of 657 entries and 562 exits. This flow highlights the net creation of 95 job positions.

In turn, the macro-region of Portugal had the second greatest flow, with 149 entries and 137 exists, generating the net creation of 12 job positions. The macro-region of Europe and North Africa had the lowest flow, with 5 entries and 4 exits.

In summary, the year of 2014 witnessed a significant investment in the hiring of human resources, due to the work portfolio and the strengthening of the strategy of internationalization and diversification of the business portfolio.

11

Information Systems

Relevant projects

The Group believes that:

2014 is also marked by the implementation of a new model of organisational structure and governance of the Group, which establishes important guidelines on the organisation and functioning of the Corporate Structure and the Macro-Regions, which grants certainty and efficiency to management.

• Better information competitiveness;

The Management Programme According to Values was replicated, in 2014, in the Macro Region of SubSaharan Africa, after few years of implementation in Macro-region Portugal. This program works values such as Cooperation, Rigor, Equality, Professionalism, Excellence and Quality. The methodology adopted is reflected in the diagnosis of best practices and toxic practices, the analysis and debate on areas of interventions, proposals for action plans to the Board of Directors, implementation of actions and monitoring of their impact.

Perspectives for 2015 During 2015, the Corporate Policy of Human Resources and the respective Handbook of Corporate Procedures for Human Resources will be implemented. With these, one wants to consistently adopt a set of best practices in Human Resources Management, which may potentiate the mission of Human Resources – supporting the development of the business.

In 2015, according to a continuous effort to adapt to the evolution of the business, one expects a decrease in recruitment and selection processes in the Macro Region of Sub-Saharan Africa. Nevertheless, such decrease will be somehow balanced out with an increase in the structure of human resources in the Macro-regions of Brazil and Europe and North Africa.

systems

are

a

factor

of

• Given operational dynamics of the construction industry, information systems have to be quick, agile and flexible to be able to meet the sector’s requirements; • Different information systems must be perfectly integrated, allowing operations on an international level: respecting the integrity of information and the information systems’ architecture defined at the corporate level; information systems must also be able to respond to local conditions, notably to the unique tax and legal aspects of each country; • Information systems should also allow optimizing production processes and must themselves be constantly optimized.

Based on these assumptions, the Group continue to strongly promote, in 2014, information systems, reinforcing its communication infrastructures in Angola, continuing the Group’s Information Technology integration strategy defined in 2012, with the aim of interconnecting systems and centralising the majority of IT services in Portugal for all Regions, supporting the Group’s internalisation. In that train of thought, a Data Centre was also built in our facilities at Famalicão, Portugal, able to manage infrastructures that support information systems.

Aligned with the business strategy defined by the Corporate Directors, a decision was taken to move towards an ERP with global support and to shape will the standardization and integration of processes from all Regions. SAP was the choice. The project was begun in late 2014 in order to start production in 2015.

Simultaneously, several solutions have been developed in Portugal and Angola, as to meet the needs of the Group’s different operations or as the legal and tax demands of these two Regions.

In 2015 the ACA Group will continue to invest in the improvement of information systems, seeking a correct adaptation to the business structure and greater process efficiency, which is achieved through the collection and revision of the processes for the implementation

12

Relevant Data

and adaptation in the new ERP. Given the importance and impact that this project will have, it will also be the process demanding the most attention and involvement of the entire Organisation.

Since the ERP will be centralised in Portugal, some IT areas will need to be restructured, as to properly answer to the demands of the business, specifically, Servers, Storage, Backup, Perimeter Security and Communications infrastructures in Portugal, Angola and Brazil.

The geographical mobility of the Group’s senior staff members will grow exponentially in 2015 according to the defined business strategy, so telecommunication solutions must be implemented that facilitate such mobility and, on the other hand, reduce the cost thereof.

We refer in particular to countries where the Group has a traditional presence, such as Portugal, France and Angola, but also countries where the Group has been expanding its operations, particularly in Brazil and Algeria.

As had already been advanced in the 2013 Annual Report, the Alberto Couto Alves S.A. continued with the strategy defined in previous years – the international reorganisation of the group, both regarding the expansion to new industries and geographies and regarding current financial parities.

In this sense, we emphasize the following facts, which took place in 2014: • Reduction of the equity held in the company ACA France SAS, from 98.85% to 51.00% in 2014 – such has allowed the Group to free resources and, at the same time, introduce in the share capital of the subsidiary ACA France SAS a new shareholder with the financial strength and the ability to catapult the company’s activities to different levels of turnover and profitability; • Acquisition of 51% of the equity of the company Consmar SA, at the end of last year. The though process behind this acquisition was the opportunity to endow ACA SA with the human and technical resources necessary so that this company is able to take a stand, in Central Europe markets, as a provider of engineering and construction services; • Regarding financial parities, and particularly the subsidiary of Alberto Couto Alves SA in the Angolan market, in 2014, a factoring process was carried out, where AngolACA sold its accounts receivables to other companies outside the consolidation perimeter of Alberto Couto Alves SA, as a way to make the group less exposed to risk management in each of its entities and the market itself and, as a consequence, more independent.

Although all companies have, ultimately, the same beneficiary, such accounting operation, with no reflection in financial flows, caused some alterations in the equity of Alberto Couto Alves SA, using the equity method in its subsidiaries, given that such factoring process was simultaneous to the recognition of an investment in the subsidiary AngolACA, which previously had no economic value from an accounting stand point.

To the date of conclusion of this report, there aren’t any significant data to report.

13

Outlook for 2015

Our perspective for 2015 are based on the following factors: • International expansion and implementation in new markets, namely Algeria and Poland; • Priority to growth and investment in Brazil; • Growing our operation in Portugal; • New partnerships that open the door for new business areas and new markets.

Continuing the process of organisational restructuring begun several years ago, Alberto Couto Alves SGPS SA will always pay particular attention to growth opportunities that fit with its scope of operations, with a conservative risk profile and higher profitability.

Despite the still unfavourable conjecture in the Portuguese construction industry, despite the slowdown of the negative trend in recent years, increased activity is expected in Portugal, although the highest growth opportunities will occur outside the Portuguese market.

Our objective is and will always be to keep up with the globalisation of the markets, based on the premise “think locally, act globally”.

Therefore, one anticipates that the Group may obtain relevant competitiveness gains in the next years, not only by increasing its assets’ and competences’ portfolio, but also by its growing presence in markets with high growth potential.

Prospections continue to be carried out in potentially interesting markets and, for 2015, one should expect: • International expansion and implementation in new markets such as Algeria and Poland, where we are well positioned to garner works; • Investment in Brazil, as to prioritize the growth potential of the presence of the Group in this market.

The Group has been conducting, since 2013, market researches on the Algerian market, having found a potential that needed to be explored. The country has many natural resources and a vast investment plan in the construction of infrastructures, such as roads, military bases, public buildings, hospitals, hotels and gaps in the housing segment, etc., which has led the ACA group to make the decision of opening a subsidiary in Algiers by the end of first quarter of 2015.

As for Poland, implementation opportunities are already being analysed in this market, prudently but consistently, possibly through a local partner, which can also serve as an operating platform not only for the Polish market but also for all surrounding countries.

Finally and as a way to strengthen the economic Group, the ACA Group will remain alert to other growth opportunities that fit into its conservative profile and are long-term projects, as well as partnerships in markets where, for specific reasons associated with them, such option is the best.

14

15

Contacts

Acknowledgments

For more information, to make suggestions or to simply pay us a visit, please access:

A company is born from the entrepreneurship of its founders, but its growth relies on the effort, dedication, commitment and loyalty of all those with whom the company grows.

www.grupo-aca.pt Looking forward to see you!

It is, therefore, unavoidable, even necessary to express our gratitude: • To our clients, with whom we learn and grow and who motivate us to be better each day; • To our suppliers, our partners in the creation of value; • To our employees, who embrace projects and are true associates in the materialisation of dreams; • To financial institutions, for continuing to believe in this project; • To our Statutory Auditor, for being, unconditionally, a paradigm of rigor while encouraging our constant improvement; • To shareholder, for continuing to believe in the project; • To all entities that support the Group in its project.

Many Thanks!

To All!

16

Annex to the 2014 Annual Report

Shares Held by Members of the Board 1. Complying with the dispositions of art. 447 of the Portuguese Companied Code, the shareholding position of the Governing Bodies is: Alberto Augusto Couto Alves – 99,99%

2. Complying with the dispositions of art. 448 of the Portuguese Companied Code, the shareholders with an equity equal or higher than 10% are: Alberto Augusto Couto Alves – 99,99%

3. Complying with the dispositions of art. 448 of the Portuguese Companied Code, the shareholders with an equity equal or higher than 33% are: Alberto Augusto Couto Alves – 99,99%

4. Complying with the dispositions of art. 448 of the Portuguese Companied Code, the shareholders with an equity equal or higher than 33% are: Alberto Augusto Couto Alves – 99,99%

Vila Nova de Famalicão, 30th April, 2015

The Board of Directors,

Alberto Augusto Couto Alves

João Paulo Barcelos de Morais Barbot

Hugo Manuel de Oliveira Gonçalves

António José Veloso dos Santos

Joaquim Cândido Castelo e Veiga Ribeiro

Manuel Silva

Subcontrators Purchasing Manager Purchasing and Logistics Department

Quality

3.

Consolidated Financial Information

1

Consolidated Financial Statements

Profit and Loss Account EUR '000

2012

%

2013

2014

%

△ 14/13

205 213,0

100,2%

183 815,9

99,1%

-10%

190 656,8

99,1%

3,7%

110,5

0,1%

19,7

0,0%

-82%

21,5

0,0%

9,2%

Gains/losses allocated of sub., associated companies and joint ventures

(268,9)

-0,1%

1 083,3

0,6%

-503%

616,7

0,3%

-43,1%

Variation in Production Iventories

(276,1)

-0,1%

519,8

0,3%

-288%

1 102,3

0,6%

112,1%

Total Operating Gains

204 778,6

100,0%

185 438,8

100,0%

-9%

192 397,4

100,0%

3,8%

Cost of sold goods, and consumed materials and subcontracts

(34 978,2)

-17,1%

(31 269,0)

-16,9%

-11%

(40 204,8)

-20,9%

28,6%

Supplies and external services

(54 162,1)

-26,4%

(70 243,8)

-37,9%

30%

(74 142,1)

-38,5%

5,5%

Staff expenses

(26 109,3)

-12,7%

(31 204,9)

-16,8%

20%

(37 542,0)

-19,5%

20,3%

(543,0)

-0,3%

221,8

0,1%

-141%

(255,0)

-0,1%

-214,9%

(11 736,2)

-5,7%

(72,7)

0,0%

-99%

4 041,9

2,1%

-5661,1%

0,0

0,0%

(102,5)

-0,1%

n.a.

0,0

0,0%

-100,0%

(127,9)

-0,1%

26,6

0,0%

-121%

120,3

0,1%

351,6%

Sales and Provisions of Services Operating Subsidies

Impairment of receivables debts (losses / reversals) Provisions (increases/reductions) Impairment of non-depreciable/ amortisable investments (losses/ revisions) Fair value increases/decreases Other revenues and gains

% △ 13/12

8 310,9

4,1%

6 312,2

3,4%

-24%

12 733,9

6,6%

101,7%

Other expenses and losses

(7 969,5)

-3,9%

(9 753,7)

-5,3%

22%

(10 303,8)

-5,4%

5,6%

Operating Cash Flow (EBITDA)

77 463,4

37,8%

49 352,9

26,6%

-36%

46 845,8

24,3%

-5,1%

(11 864,0)

-5,8%

(13 196,5)

-7,1%

11%

(11 089,1)

-5,8%

-16,0%

0,0

0,0%

0,0

0,0%

n.a.

0,0

0,0%

n.a.

Depreciations and Provisions Impairment of depreciable/amortisable investments (losses/revisions) Operating Results

65 599,4

32,0%

36 156,4

19,5%

-45%

35 756,8

18,6%

-1,1%

Financial Results

(3 584,9)

-1,8%

(6 659,5)

-3,6%

86%

(9 003,3)

-4,7%

35,2%

Earnings before taxes

62 014,4

30,3%

29 496,9

15,9%

-52%

26 753,5

13,9%

-9,3%

(928,7)

-0,5%

(2 982,1)

-1,6%

221%

(8 086,5)

-4,2%

171,2%

61 085,8

29,8%

26 514,9

14,3%

-57%

18 667,0

9,7%

-29,6%

(25 024,8)

-12,2%

(11 399,9)

-6,1%

-54%

(6 285,6)

-3,3%

-44,9%

36 060,9

17,6%

15 115,0

8,2%

-58%

12 381,4

6,4%

-18,1%

Income Tax Results before Minority Interests Results from Minority Interests Net Income

When compared to 2013, the Group had a growth of 3.7% in total sales and provisions of services. The main contributions behind such growth came from the construction business in Brazil, water supply and sanitation in Portugal, food retail in Angola and the consolidation of companies Consmar PT and Consmar FR. The increased weight of the food retail business in the consolidated data of the Group, together with an effective reduction in the operating margin of some works, caused an increase in cost of sold goods and consumed materials in 4 p.p., of which 1.5% are precisely related to the impact of the increased sales of the food retail business in 2014.

Observing the structure of costs and their behaviour, there was a 5% increase when compared to the previous year in external supplies and services, therefore above the growth registered for total consolidated sales and provision of services. This slight loss in profitability was due to an increased use of subcontracts, albeit partially offset by a reduction in maintenance and repair costs, as well as an increase in expenses with specialized services, other materials and rents and leases - again

due to the growth seen in the food retail business, as well as the aforementioned process of expanding to other geographies.

Regarding staff expenses, 2014 witnessed a 20.3% increase. This significant increase is a consequence of the local management team being reinforced, as well as the necessary costs naturally associated with an international expansion process, as the one the Group is currently carrying out.

Finally, before analysing the operating cash flow, one needs to emphasize the reduction of provisions in EUR 4 million recorded in the accounts. This is due to the maturity of the warranty process of some works that came to an end, for which such provisions had been created and also because there was an adjustment of the provisions been taken up for current works.

The following chart highlights the EBITDA evolution:

Evolution of efficiencies of EBITDA 2014 versus EBITDA 2013 52.000,00

1.852

-7.762

49.352,9

49.000,00 46.000,00

-1.262

43.000,00

9.832

46.846

Other operating gains and losses

EBITDA 2014

-5.166

40.000,00 37.000,00 34.000,00 EUR ‘000

EBITDA 2013

Impact of total variation of operating gains

CMVMC

FSE’s

Stadd expenses

All facts mentioned above, topped by a reduction of annual depreciations of approximately of EUR 2 million, contributed towards a marginal reduction of operating results of 1,1% for a percentage of 18.6%, 0.9% below the figure obtained in 2013.

Finally, the following elements should be emphasized: • An increase of 35% in negative financial results. Over 90% of interest paid comes from Angolaca, which recorded a significant increase in interest paid during the year.

Although the debt registered a significant reduction at the end of 2014, such reduction occurred only at the end

of the year by the progression of the works and respective payments, reason why, for the most part of the year, debt sock was higher and called for a greater financial effort; • An increase of more than 170% in taxes payable. Again, more than 90% of the tax payable is from the Angolan subsidiaries, with emphasis to Angolaca, due to the end of tax benefits on industrial tax that the company had been enjoying until the end of 2013.

Domingos de Abreu School Centre – Vieira do Minho, Portugal

Consolidated Balance Considering the consolidated balance, particularly assets, it is important to mention: • The increase of more than EUR 30 million in noncurrent assets. Such is due to the recognition of a holding of 33% in the share capital of Minersolo, dedicated to the quarrying industry;

EUR '000

• A reduction of more than EUR 30 million in current assets. This is due to a reduction of more than EUR 50 million in other receivables; nevertheless, it has been accompanied by an increase of more than EUR 17 million in customers, arising an increased debt by the Angolan State to our subsidiary AngolACA.

2012

%

2013

% △ 13/12

Tangible fixed assets

32 346,3

6,1%

67 501,7

11,5%

Goodwill

10 227,0

1,9%

11 529,8

2,0%

2014

%

△ 14/13

109%

68 413,5

11,6%

1%

13%

10 390,9

1,8%

-10%

ASSETS

2,5

0,0%

2,1

0,0%

-16%

638,9

0,1%

30487%

Investments - equity method

Intangible fixed Assets

551,8

0,1%

1 884,3

0,3%

241%

32 437,0

5,5%

1621%

Investments - other methods

338,6

0,1%

74,8

0,0%

-78%

83,3

0,0%

11%

0,0

0,0%

0,0

0,0%

n.a.

0,1

0,0%

n.a.

844,9

0,2%

645,3

0,1%

-24%

211,1

0,0%

-67%

Shareholders/partners Other receivable accounts Other financial assets

9,2

0,0%

8,0

0,0%

-12%

3,1

0,0%

-61%

615,3

0,1%

171,5

0,0%

-72%

54,4

0,0%

-68%

44 935,7

8,5%

81 817,5

13,9%

82%

112 232,3

19,1%

37%

3 963,6

0,7%

9 214,5

1,6%

132%

12 295,3

2,1%

33%

368 588,1

69,6%

276 620,4

47,1%

-25%

293 730,2

50,0%

6%

23 727,4

4,5%

21 498,6

3,7%

-9%

23 016,9

3,9%

7%

6 519,4

1,2%

9 331,9

1,6%

43%

10 098,1

1,7%

8%

Other receivable accounts

56 017,8

10,6%

151 634,1

25,8%

171%

101 303,9

17,2%

-33%

Deferrals

11 229,9

2,1%

8 502,8

1,4%

-24%

8 128,1

1,4%

-4%

4 599,6

0,9%

4 625,7

0,8%

1%

8 123,4

1,4%

76%

Assets from deferred taxes Non-current Assets Inventories Clients Advances to suppliers State and other public entities

Financial assets held for negotiation Non-current assets held for sale Cash flow and bank deposits Current Assets Total Assets

63,0

0,0%

63,0

0,0%

0%

0,0

0,0%

-100%

10 181,1

1,9%

24 485,2

4,2%

140%

18 674,4

3,2%

-24%

484 889,8

91,5%

505 976,3

86,1%

4%

475 370,3

80,9%

-6%

529 825,5

100,0%

587 793,8

100,0%

11%

587 602,5

100,0%

0%

EUR '000

2012

%

2013

% △ 13/12

2014

%

△ 14/13

Paid-in capital

30 050,0

5,7%

30 050,0

5,1%

30 050,0

5,1%

0%

Legal reserves

1 022,4

0,2%

1 043,4

0,2%

2%

1 109,8

0,2%

6%

Other reserves

0,0

0,0%

0,0

0,0%

n.a.

122 995,0

20,9%

n.a.

169 976,0

32,1%

209 574,3

35,7%

23%

52 062,2

8,9%

-75%

(65,3)

0,0%

(93,5)

0,0%

43%

16 648,9

2,8%

-17 908%

(7 317,9)

-1,4%

(21 684,3)

-3,7%

196%

(9 873,1)

-1,7%

-54%

EQUITY

Carried forward results Adjustments in financial assets Other variations in equity Net profit for the period

0%

36 060,9

6,8%

15 115,0

2,6%

-58%

12 381,4

2,1%

-18%

Minority Interests

156 126,4

29,5%

156 079,0

26,6%

0%

189 995,2

32,3%

22%

Total Equity

385 852,5

72,8%

390 083,8

66,4%

1%

415 369,4

70,7%

6%

11 930,5

2,3%

11 279,5

1,9%

-5%

2 007,9

0,3%

-82%

4 068,5

0,8%

3 577,4

0,6%

-12%

2 046,8

0,3%

-43%

75,7

0,0%

67,8

0,0%

-11%

0,0

0,0%

-100%

Non-current liabities

16 074,7

3,0%

14 924,6

2,5%

-7%

4 054,7

0,7%

-73%

Suppliers

56 915,6

10,7%

40 446,5

6,9%

-29%

49 997,4

8,5%

24%

Advances to clients

14 977,0

2,8%

15 216,2

2,6%

2%

22 921,4

3,9%

51%

870,1

0,2%

4 138,8

0,7%

376%

8 667,1

1,5%

109%

0,0

0,0%

0,1

0,0%

n.a.

0,1

0,0%

0%

Obtained loans

35 760,4

6,7%

60 421,8

10,3%

69%

45 664,1

7,8%

-24%

Other payable accounts

17 562,6

3,3%

58 951,6

10,0%

236%

33 027,4

5,6%

-44%

1 812,6

0,3%

3 610,4

0,6%

99%

7 902,8

1,3%

119%

LIABILITIES Provisions Loans obtained Deferred tax liabilities

State and public entities Shareholders/partners

Deferrals Current liabilities

127 898,3

24,1%

182 785,3

31,1%

43%

168 180,5

28,6%

-8%

Total Liabilities

143 973,0

27,2%

197 710,0

33,6%

37%

172 235,2

29,3%

-13%

Total Equity & Liabilities

529 825,5

100,0%

587 793,8

100,0%

11%

587 602,5

100,0%

0%

Total Paid Debt (MLP e CP) ('000 EUR)

39 828,9

63 999,2

60,7%

47 710,9

-25,5%

315 636,0

245 388,5

-22%

256 028,1

4%

Working Capital (in % of sales and provision of services)

153,8%

133,5%

-13%

134,3%

1%

Interest covering ratio

21,47 x

7,19 x

4,53 x

-37%

Working Capital ('000 EUR)

Equity had an increase of more than EUR 25 million, which, in turn, increased the ratio of financial autonomy in 5%, from 66% to 71%, via the increase in minority interests, mostly due to the holding in Minersolo.

As for liabilities, these had a reduction of more than EUR 25 million and one should highlight the reduction of more than EUR 16 million in short, medium and long-term financial debt. This caused the paid net debt/ EBITDA ration to increase from 0.71% to 0.45%.

Financial Balance 2012 44 936

2012 385 853

44 936

4 068 470 109

12 006

14 781

127 898

2013 81 818

44 936

385 853 4 068

687 196

344 985

390 084

81 818

476 865

11 347

29 111

182 785

2014

81 818

390 084 3 577

605 924

311 844

112 232

2 047 448 573

2 008

26 798

168 181

393 661

NT= -294 080 476 865

112 232

2 047

585 574

305 182

In terms of working capital, it is still negative, due to a functional working capital lower than the needs of working capital. The unbalance has been being reduced since 2012, with an accumulated reduction, since that

417 414

NT= -280 392 448 573

344 985

CCN NT<0 SCN

NT=0

SCN>0 CCN>0 NT<0 311 844

CCN NT<0 SCN

-129 058

2014 415 367

NT=0

SCN<0 CCN<0 NT>0

-217 087

2013

2014 415 367

389 921

NT= -342 211 470 109

2013

3 577

112 232

2012

NT=0

SCN>0 CCN>0 NT<0 305 182

CCN NT<0 SCN

-137 001

period, of approximately EUR 62 million, but such unbalance continues to be greatly influenced by the average payment periods in the Macro-region of Angola.

Extended Dupont Analysis Return on equity was 3.0% in 2014, lower than in 2013 and it has been decreasing, year after year, due to the non-distribution of dividends, which causes equity to grow every year, but also due to greater tax demands and lower operating gains if measured in terms of sales.

ROA 12,4%

Return on Equity 9,3%

3,9%

3,0%

6,2%

6,1%

Financial Leverage 129,8%

122,9%

105,8%

EBT / CURR R 100,0%

100,0%

100,0%

Subtitle: NI / EBT 2012 2013 2014 (Valores em % ou em Milhares de EUR)

58,1%

51,2%

46,3%

Operating Results 65 599

OR / GM 38,6%

OR / SAL 32,0%

19,5%

18,6%

23,5%

23,5%

83,1%

79,1%

38,7%

31,5%

32,7%

137,3%

150,7%

152 193

185 439

192 397

Net Assets 529 825

NA / E

154 170

Sales 204 779

SAL / NA

35 757

Gross Margin 169 800

GM / SAL 82,9%

36 156

141,5%

587 794

587 603

Equity 385 853

390 084

415 367

Operating Results

CURR R / OP A 94,5%

81,6%

74,8%

65 599

36 156

35 757

Current Results 62 014

29 497

26 753

Earnings Before Taxes 62 014

29 497

26 753

Net Income 36 061

15 115

12 381

2

3

Investment and Disinvestment

Financing and Consolidated Net Debt

Regarding investment and disinvestment activities, one should emphasize, in 2014:

Throughout 2014, the main financing activities carried out by the Group had the objective of ensuring the necessary liquidity for normal operations, at the most competitive cost, favouring direct financing in each of the markets where it operates.

a) Investment: • Acquisition of 51% of equity in company Consmar, S.A., entity controlling 100% of Consmar FR SARL; • Acquisition of 66.67% of equity of GV; • 50% equity in ACE ACA/Ferreira; • Investment in production equipment; • 33% equity in Minersolo. b)Disinvestment: • Alienation of 47.85% of the equity of ACA France SARL; the subsidiary ACA SA now holds 51% of ACA France SARL; • Merger by incorporation of the subsidiaries ACA GEST and Impact Evolution into company VALOREC company, which is not part of the consolidation perimeter.

Similarly, the Group has developed long-term solid relationships with some financial institutions, always guided by high accuracy and transparency, in the attempt to create lasting and reliable relationships.

During 2014, the Group registered a reduction in net financial debt of more than EUR 16 million, mainly in short-term debt. This caused the paid net debt/EBITDA ration to increase from 0.71% to 0.45%.

One of the Group’s objectives is to carry out a thorough and rigorous management of its financial resources, within a conservative approach in terms of risk.

4

Consolidated Companies

List of significant investments in subsidiaries, jointly controlled entities and associates

Subsidiaries

Aca Angolaca

Country of incorporation / main office

Equity held % direct capital

%

% Voting rights

Accounting method

indirect capital

Portugal 97,10% Angola

2013

5,20% 52,19%

97,10%

Consolidation

57,39%

Consolidation

Country of incorporation / main office

Equity held % direct capital

% indirect capital

Portugal 97,10% Angola

% Voting Accounting rights method

97,10%

Consolidation

5,20% 52,19% 57,39%

Consolidation

Minersolo

Angola

18,94%

18,94%

Equity

Angola

Acamedco

Morocco

3,70% 93,50%

97,20%

Consolidation

Morocco

Ambiágua

Portugal 85,64%

85,64%

Consolidation

Portugal 85,64%

85,64%

Consolidation

RRI

Portugal 77,40%

77,40%

Consolidation

Portugal 77,40%

77,40%

Consolidation

Global Stadium

Portugal 15,00%

15,00%

Consolidation

Portugal 15,00%

15,00%

Consolidation

Ielac

Portugal 95,00%

99,86%

Consolidation

Portugal 99,85% 0,15%

100,00%

Consolidation

Nortepólis

Portugal 100,00%

100,00%

Consolidation

Portugal 100,00%

100,00%

Consolidation

Parq G

Portugal 74,00%

74,00%

Consolidation

Portugal 73,00%

73,00%

Consolidation

Álea

Portugal 20,00%

20,00%

Consolidation

Portugal 20,00%

20,00%

Consolidation

100,00%

Consolidation

100,00%

Consolidation

Aca Brasil Aca France Vid Garden Aca Cabo Verde

Associates

2014

Brazil 99,90% France

4,86%

0,10% 49,52%

Portugal 50,00% Cape Verde 49,96% 48,47%

49,52%

Consolidation

50,00%

Equity

98,43%

Cost

Consmar Pt

Portugal

49,52%

49,52%

Consolidation

Consmar Fr

France

49,52%

49,52%

Consolidation

Vivangola

Angola

Consolidation

3,70% 93,50% 97,20%

Brazil 99,89% 0,11% France

Consolidation

95,98% 95,98%

Consolidation

50,00%

Equity

Cape Verde 49,96% 48,47% 98,43%

Cost

Portugal 50,00%

Control

Vivasuper

Angola

Control

Ambiafrica

Angola

Control

Agroangola

Angola

Control

ACE ACA / Ferreira

Portugal

Golfinvest VCP

50,00%

50,00%

Proportion

Portugal 49,39%

49,39%

Equity

Portugal

47,81%

Cost

1,00% 46,81%

Portugal 49,39% Portugal

49,39%

Equity

1,00% 46,81% 47,81%

Cost

Bruno Maia

Site Manger – Production Department (Ambiágua)

Excellence

4.

Supervision Report

1

Legal Certification of Accounts

CSA Auditores Gaspar Castro, Romeu Silva & Associados, S.R.O.C., Lda.

STATUTORY AUDITORS’ REPORT Introduction 1. We have examined the consolidated financial statements of Alberto Couto Alves, S.G.P.S., S.A., consisting of the Balance Sheet as on December 31st 2014 (which reveals a total of 587,602,545 Euros and total equity of 415,367,351 Euros, including a net income of 12,381,355 Euros), the Statement of Income per Category, Statement of Alteration in Equity and Statement of Cash-flows referring to the year ended at that end and corresponding attachments.

Responsibilities 2. The Board of Directors is responsible for preparing the financial statements that truly and clearly present the Company’s financial position, the result of its operations and cash-floes, as well as the adoption of adequate accounting policies and criteria and the maintenance of an adequate internal control system.

3. Our responsibility is to express a professional and independent opinion, based on our examination of the abovementioned financial statements.

Scope 4. Our audit was performed under the Technical Standards and Audit Directives of the Certified Accountants Council, which require an audit to be planned and performed with the objective of achieving an acceptable degree of assurance as whether or not the financial statements are exempt from materially relevant distortions. To this end, the audit included: -

verification that the financial statements of the companies included in this consolidation have been properly examined and, when such hadn’t occurred, the verification, based on samples, of the amounts of disclosures contained therein and the assessment of estimations, based on judgments and criteria previously defined by the Board of Director, during their preparation;

Gaspar Castro, Romeu Silva & Associados – SORC, Lda. Tax payer no 504 078 500 – Auditors no. 153 – Share capital 10.000,00 Euros

Edifício Parque das Hortas, nº 220 –M/N - 4810-275 GUIMARAES Tel: +351 253 439 250 – Fax: +351 253 439 25

Praça Camilo Castelo Branco, nº 31 – Sala 43 - 4700-209 BRAGA Tel: +351 253 201 300/5 – Fax: +351 253 201 302

CSA Auditores -

Gaspar Castro, Romeu Silva & Associados, S.R.O.C., Lda.

-

verification of the consolidation operations and application of the equity method of accounting;

-

appraisal on the adequacy of the adopted accounting policies, their uniform application and their disclosure, bearing in mind the circumstances;

-

verification of the applicability of the continuity principle, and

-

appraisal of the global adequacy of the presentation of the consolidated financial statements.

5. Our examination also comprised the compliance of the financial information featured on the management report with the information contained on the financial statements.

6. We consider that the audit provides an acceptable basis for the expression of our opinion.

Opinion 7. In our opinion, these financial statements truly and adequately present, across all materially relevant aspects, the financial situation of Alberto Couto Alves, S.G.P.S., SA as on December 31st 2014, as well as the company’s operating results and cash-flows during the year ended at the same date, in accordance with the accounting principles generally accepted in Portugal.

Report on other legal requirements 8. It is also our opinion that the information presented on the management report complies with the year’s financial statements.

Highlights: 9. Without prejudice of our opinion expressed above, referring to the legal certification of accounts for previous years and the references made in the Consolidated Annex and in the Consolidated Final Report of 2014, we underline that, considering the macroeconomic context and the national and

Gaspar Castro, Romeu Silva & Associados – SORC, Lda. Tax payer no 504 078 500 – Auditors no. 153 – Share capital 10.000,00 Euros

Edifício Parque das Hortas, nº 220 –M/N - 4810-275 GUIMARAES Tel: +351 253 439 250 – Fax: +351 253 439 25

Praça Camilo Castelo Branco, nº 31 – Sala 43 - 4700-209 BRAGA Tel: +351 253 201 300/5 – Fax: +351 253 201 302

CSA Auditores Gaspar Castro, Romeu Silva & Associados, S.R.O.C., Lda.

international market, particularly in the Angolan market, the restructuring and reorganization policy defined by the administration of Alberto Coutro Alves, SGPS, SA began taking its first steps and, therefore, producing accounting effects.

This process will lead, on a medium term, to the implementation of the reorganization of international investments and the alteration of the current financial parities, shareholding structure and decision-making centers and the administration considers that, like so, the Group will comply with the strategic purpose for the reinforcement or alienation of current investments and with the expansion into new geographic and business areas, thus allowing for a smaller exposure to risk management, by the group, regarding each entity.

Braga, 8th July, 2015

Gaspar Castro, Romeu Silva & Associados, SROC, Lda (no 153) Represented by Gaspar Vieira de Castro, Auditor no. 557 [signature]

Gaspar Castro, Romeu Silva & Associados – SORC, Lda. Tax payer no 504 078 500 – Auditors no. 153 – Share capital 10.000,00 Euros

Edifício Parque das Hortas, nº 220 –M/N - 4810-275 GUIMARAES Tel: +351 253 439 250 – Fax: +351 253 439 25

Praça Camilo Castelo Branco, nº 31 – Sala 43 - 4700-209 BRAGA Tel: +351 253 201 300/5 – Fax: +351 253 201 302

Sangalhos National Velodrome â&#x20AC;&#x201C; Anadia, Portugal

2

Report and Opinion of the Statutory Auditor

CSA Auditores Gaspar Castro, Romeu Silva & Associados, S.R.O.C., Lda.

REPORT AND OPINION OF THE STATUTORY AUDITOR YEAR OF 2014

Dear Shareholders,

According with the legal provisions found on paragraph g), no. 1 of article 420th of the Portuguese Commercial Societies Code, the Only Auditor of ALBERTO COUTO ALVES, SGPS, SA presents, to your appreciation, the report on their functions and provide their opinions on the report, the statements and the proposals presented by the Board of Directors, regarding the fiscal year ended at December 31st 2014.

1. According to the applicable statutory and legal standards and pursuant to articles 420th, 421st and 452nd of the Portuguese Companies’ Code, we have conducted the following actions throughout the year and after the statements have been concluded:

•

The supervision of the actions undertaken by the Board of Directors, based on the elements provided by the accountancy department and information and clarifications given by the Board;

•

The supervision that the law and the company’s Rules of Incorporation have been complied with;

•

The verification of documents, records and supporting documentation;

•

The analysis of the Consolidated Financial Statements, the underlying accountancy principles and the Consolidated Final Report;

•

The analysis of the Report of the Statutory Auditor.

Gaspar Castro, Romeu Silva & Associados – SORC, Lda. Tax payer no 504 078 500 – Auditors no. 153 – Share capital 10.000,00 Euros

Edifício Parque das Hortas, nº 220 –M/N - 4810-275 GUIMARAES Tel: +351 253 439 250 – Fax: +351 253 439 25

Praça Camilo Castelo Branco, nº 31 – Sala 43 - 4700-209 BRAGA Tel: +351 253 201 300/5 – Fax: +351 253 201 302

CSA Auditores Gaspar Castro, Romeu Silva & Associados, S.R.O.C., Lda.

2. The abovementioned actions have allowed us to verify and/or conclude that: •

The Consolidated Financial Statements and the Consolidated Management Report comply with legal and statutory dispositions and reflect the Group’s activity during the year being analyzed, as well as its financial situation;

•

The actions taken by the Board of Directors that we know of comply with the law and the company’s rules of incorporation.

•

The Legal Accountants’ Certificate, with which we agree, does not include any caveat regarding the presented financial statements, highlighting some specific aspects regarding the beginning of the materialization of the process of international reorganization of the group and respective accounting effects that took place during 2014.

3. On this basis and in conclusion, we are of the opinion that the Shareholders: •

Should discuss and approve the Consolidated Financial Statements and Consolidated Management Report for 2014, presented by the Board of Directors;

•

Generally assess the Board of Directors and the Company’s Auditors and to draw conclusions pursuant to the disposition of article 455th of the Portuguese Companies’ Code.

Braga, 8th July, 2015

The Statutory Auditor [signature] Gaspar Castro, Romeu Silva & Associados, SROC, Lda (no 153) Represented by Gaspar Vieira de Castro, Auditor no. 557

Gaspar Castro, Romeu Silva & Associados – SORC, Lda. Tax payer no 504 078 500 – Auditors no. 153 – Share capital 10.000,00 Euros

Edifício Parque das Hortas, nº 220 –M/N - 4810-275 GUIMARAES Tel: +351 253 439 250 – Fax: +351 253 439 25

Praça Camilo Castelo Branco, nº 31 – Sala 43 - 4700-209 BRAGA Tel: +351 253 201 300/5 – Fax: +351 253 201 302

Elsa Fernandes

Senior Technician of Health and Safety at Work Prevention and Safety Department

Equality

5.

I. Governance

1

Introduction

The Alberto Couto Alves Group is strongly committed towards the implementation and development of best practices in governance, as a means to reduce the risks and uncertainties that may affect the maximum creation of value for shareholders. A good corporate governance must include responsible management practices and a broad methodology, encompassing environmental, social and ethical themes.

The Rules of Incorporation of the parent company and its subsidiaries do not grant any share attribution plan and/or purchase options for employees and/or members of the board.

On 31st December, 2014, the Members of the Board of the Parent Company held the following shares of the company and, in 2014, the following transactions took place:

Over the last few years, the Group has been adopting a zero dividend pay-out policy, as a consequence of the intense expansion process underway.

Board of Directors

Held on 01-01-2014

Purchases

Sales

Held on 31-12-2014

6.099.993

0

0

6.099.993

João Paulo Barcelos de Morais Barbot

0

0

0

0

Hugo Manuel de Oliveira Gonçalves

0

0

0

0

António José Veloso dos Santos

0

0

0

0

Joaquim Cândido Castelo e Veiga Ribeiro

0

0

0

0

Alberto Augusto Couto Alves

Retail Park - Matosinhos, Portugal

2

3

Organisational Structure and Corporate Functioning

Risk Management

The Group’s growth strategy triggered a reflection regarding its organisational structure, specifically regarding its adaptation to meet the demands of a diversified growth, in an ever more complex surrounding environment.

Although the Group’s administration has, in the past, been settled within a philosophy of prudent control and management, guaranteed by the involvement of the top management in the operations and respective limiting of the global risk, the new organisational model favoured the autonomy of the internal Control and risk management area, in order to ensure a systematic and structured approach to these issues.

In fact, between late 2013 and early 2014, a preview of increased exposure to risk has become more pressing, through the consolidation of an expansion strategy based on a diversification process, either of markets or business areas.

The perception of the increased complexity of management processes, particularly the management of the risks associated with operations, has given rise to a new governance model, with new features aligned in different organisational levels. The Internal Audit function was created and implemented therein, guided by the respective Corporate Policy, transversal to all business areas and regions.

The objective of this function is to carry out independent and objective audit and consultancy services, guided by the principle of enriching the operations of the Group.

It supports the entity in the execution of its objectives, through a systematic and disciplined approach, to assess and develop the efficiency of its risk management system, of the implemented controls and the Organisation’s management processes.

During 2014 it advised for the conception and implementation of the new governance model, which is still ongoing on this Report’s preparation date, particularly collaborating with the Board of Directors and the Corporate Departments.

These guidelines have been perennially established in the respective Corporate Policy, which provides the bases for the implementation of a common corporate risk management methodology and due monitoring, within a principle of continuous improvement.

The identification of possible risks and the analysis of the impact of its materialization, regarding their expected success, is the mission of the entire organisation, but the analysis of the most significant areas of risk and the identification of potential risks must be led by the Administrations at different levels of the organisational structure.

Boavista Square â&#x20AC;&#x201C; Porto, Portugal

4

5

Corporate Rules

Shareholdings between the Parent Company and Controlling or Group Subsidiaries and among the latter

The company is dedicated to the management of investments in other companies, by indirectly executing economic activities.

During 2014, there were no selling of shares or exchange of investments between the parent company - Alberto Couto Alves SGPS SA – and any of its controlling or group subsidiaries. Regarding the financial operations carried out between the parent company, Alberto Couto Alves SGPS SA, and controlling or group subsidiaries, the businesses carried out with the Group took place under their current activity and under normal market conditions. Further information may be found in the Notes to the Accounts.

The principles and values of the Group have been widely spread and deeply rooted in the company’s culture, including among others the constant search for rigor, high quality standards, excellence and professionalism.

In the Company’s strategic and daily management, the Group has been adopting, increasingly more, risk management policies in the different scopes of its operations, whether foreign exchange risk or operational risk. To that extent, the Group has been implementing and developing processes, rules and governance procedures, according to best practices.

The Company is unaware of any known Shareholders’ Agreements.

Professionalism

Rosa Tomรกs

Cleaner & Laundry Assistant (VivAngola)

6.

Consolidated Financial Report

Consolidated Balance Sheet for the period between 31.12.2014 and 31.12.2013

in (Euro)

Items

Notes

31.12.2014

31.12.2013

Tangible fixed assets

8

68 413 488,93

67 501 747,01

Goodwill

7

10 390 890,19

11 529 759,57

Intangible Assets

7

638 894,92

2 088,77

Investments - equity method

12

32 437 011,77

1 884 321,37

Investments - other methods

12

83 326,32

74 799,71

Shareholders/partners

20

66,07

20 22.4

211 117,40

645 310,31

Other financial assets

20

3 131,18

8 047,37

Deferred tax assets

20

ASSETS NON-CURRENT ASSETS

Other receivables

54 357,03

171 453,20

112 232 283,81

81 817 527,32

Current Assets Stocks

14

12 295 332,33

9 214 527,33

Clients

6, 20

293 730 214,38

276 620 432,03

Advances to suppliers

20

23 016 939,73

21 498 551,23

State and other public entities

20, 22.1

10 098 116,90

9 331 869,47

Other receivables

20, 22.4

101 303 854,84

151 634 109,69

22.2

8 128 055,93

8 502 849,16

20

8 123 356,92

4 625 686,28

Deferrals Financial assets held for negotiation Non-current assets held for sale Cash flow and bank deposits Total ASSETS

9

-

62 993,70

4, 20

18 674 390,15

24 485 247,82

475 370 261,18

505 976 266,71

587 602 544,99

587 793 794,02

Items

Notes

31.12.2014

31.12.2013

Paid-in capital

21

30 050 000,00

30 050 000,00

Legal reserves

21

1 109 809,38

1 043 372,78

Other reserves

21

122 995 003,68

Carried forward results

21

52 060 164,56

209 574 305,54

Adjustments in financial assets

21

16 648 946,45

(93 491,40)

Other variations in equity

21

(9 873 089,80)

(21 684 345,61)

Net result for period

21

12 381 354,69

15 115 010,49

Minority Interests

21

189 995 162,12

156 078 963,86

415 367 351,08

390 083 815,68

17

2 007 902,84

11 279 461,32

10, 20

2 046 775,07

3 577 419,45

20

-

67 755,48

4 054 677,91

14 924 636,25

6, 20

49 997 440,97

40 446 496,47

20

22 921 411,26

15 216 155,43

22.1

8 667 149,39

4 138 787,35

EQUITY AND LIABILITIES EQUITY

Total Equity LIABILITIES Non-current Liabilities Provisions Obtained loans Deferred tax liabilities Current Liabilities Suppliers Advances to suppliers State and other public entities

20

147,28

147,28

Obtained loans

Shareholders/partners

10, 20

45 664 110,33

60 421 792,35

Other payables

20, 22.3

33 027 443,58

58 951 608,99

22.2

7 902 813,19

3 610 354,21

168 180 516,00

182 785 342,09

Deferrals Total Liabilities Total Equity & Liabilities

172 235 193,91

197 709 978,34

587 602 544,99

587 793 794,02

Consolidated Results’ Statements per Category for the periods ending on 31.12.2014 and 31.12.2013

in (Euro)

Revenues and Expenses

Notes

2014

2013

Sales and services provided

6, 15, 16

190 656 819,75

183 815 895,16

21 529,92

19 712,58

Operating subsidies Gains/losses allocated of subsidiaries, associated companies and joint ventures

13

616 683,38

1 083 332,58

Variation in production stocks

14

1 102 336,93

519 843,95

Cost of sold goods and consumed materials

14

(40 204 826,83)

(31 268 989,54)

Supplies and external services

22.5

(74 142 090,18)

(70 243 849,49)

Staff expenses

22.6

(37 542 031,71)

(31 204 869,88)

Impairment of receivables debts (losses / reversals)

11

(254 954,36)

221 834,53

Provisions (increases/reductions)

17

4 041 904,54

(72 681,58)

Non-depreciable/amortisable impairment of investments (losses/ reversions)

11

-

(102 500,00)

Fair value increases/reductions

20

120 323,06

26 643,12

Other income and gains

22.8

12 733 898,01

6 312 231,57

Other expenses and losses

22.7

(10 303 764,72)

(9 753 690,98)

46 845 827,77

49 352 912,01

(11 089 072,64)

(13 196 490,40)

Earnings before depreciations, interests and taxes Expenses / reversals of depreciation and amortization

7, 8

35 756 755,12

36 156 421,61

Interest and similar expenses obtained

Operating result (before interests and taxes) 22.9

1 344 994,83

200 252,08

Interest and similar expenses incurred

22.9

(10 348 297,10)

(6 859 737,23)

26 753 452,86

29 496 936,45

(8 086 497,50)

(2 982 067,58)

18 666 955,36

26 514 868,87

(6 285 600,66)

(11 399 858,37)

12 381 354,69

15 115 010,49

Holder of equity in Parent Company

18 666 955,36

26 514 868,87

Minority Interests

(6 285 600,66)

(11 399 858,37)

Net Result for Period

12 381 354,69

15 115 010,49

Earnings before taxes Income Tax for period

19 Result before minority interests

Net result of the period attributable to: Minority Interests Net Result for Period:

Net result of the period attributable to:

Ribeira Brava Stadium â&#x20AC;&#x201C; Cape Verde

Consolidated Cash Flow Statements for the fiscal years ending on 31.12.2014 and 31.12.2013

in (Euro)

ITEMS

Periods 2014

2013

Cash flow for operating activities - direct method Amounts received from clients

+

198 415 466,27

287 932 425,39

Payments to suppliers

-

(119 106 204,44)

(154 666 275,16)

Payments to staff Cash flow from operations Payables/receivables from income tax Other receivables/payables Cash flow from operations

(1)

-

(34 551 311,67)

(30 177 022,44)

+/-

44 757 950,16

103 089 127,80

-/+

(863 021,24)

(1 972 834,65)

+/-

(15 175 630,70)

(82 949 913,91)

+/-

28 719 298,22

18 166 379,24

-

(7 616 214,12)

(13 608 591,02)

Cash flow from investment activities Payments referring to: Tangible fixed assets Intangible Assets

-

(68 388,94)

(124,13)

Financial investments

-

0,00

0,00

Other assets

-

(3 063 791,77)

(1 473 940,24)

Tangible fixed assets

+

447 739,19

1 947 598,09

Intangible Assets

+

Receivables from: 0,00

Financial investments

1 233 424,60

Other assets

+

2 477 117,99

162,76

Investment subsidies

+

8 950,00

0,00

Interests and similar revenue

+

1 214 139,37

478 247,73

Dividends

+

9 957,08

19 248,44

+/-

(6 590 491,20)

(11 403 973,77)

+

32 125 893,51

69 904 463,90

Paid-in capital and other equity instruments

+

1 413 500,00

Loss coverage

+

Cash flow from investment activities

(2)

Cash flow from financing activities Receivables from: Obtained loans

0,00 0,00

Donations

+

Other Financing Activities

+

0,00

2 747,91

0,00

Obtained loans

-

(50 975 563,92)

(53 764 373,89)

Interests and similar revenue

-

(10 799 231,52)

(8 751 319,05)

(29 516,75)

Payables from:

Dividends

-

Capital reductions and other equity instruments

-

Other Financing Activities

Cash flow from financing Activities

Variation of cash flow and cash equivalents

0,00 0,00

(1 329 900,51)

(478 907,65)

(3)

(29 594 819,19)

6 912 611,22

(1)+(2) +(3)

(7 466 012,17)

13 675 016,69

Effects of exchange rates differences

+/-

(170 867,14)

(343 605,60)

Cash flow and cash equivalents at the beginning of the period

+/-

24 485 247,83

10 181 080,61

Effect of the consolidation in the balance at the beginning of the period

+/-

1 826 021,62

972 756,14

Cash flow and cash equivalents at the end of the period

+/-

18 674 390,15

24 485 247,83

(1) - 1 - In Euros, admitting, according to the dimension and demands of the report, the possibility to express amounts in thousands of Euros.

Toural - Guimar達es, Portugal

Consolidated statement of changes in equity in 2013

in (Euro)

Description

Equity attributable to holders of capital in parent-company Paid-up capital

Position at the Beginning of 2013

6

30 050 000,00

Own shares Supplementary

payments and other equity instruments

-

Issuance bonus

Legal Reserves

Other reserves

-

1 022 374,16

-

-

Changes in Period Effect of the change in the consolidation perimeter: 468,82

Álea, Aca France, Aca Brasil, Ambiáfrica, Agro-angola, Vivangola, Vivasuper Alteration of accounting policies Differences in the conversion of financial statements Other recognized changes in equity

20 529,81 7

Net Income for Year Full Results

-

-

-

-

20 998,63

-

10

-

-

-

-

-

-

11=

30 050 000,00

-

-

-

1 043 372,79

-

8 9=7+8

Operations With Equity Owners Capital subscriptions Issuance of premiums Distribuitions Loss coverage Other operations Position at the End of 2013

6+7+8+10 (1) - In Euros, admitting, according to the dimension and demands of the report, the possibility to express amounts in thousands of Euros.

Transit results

169 975 998,98

Adjustments to financial assets

Revaluation surplus

Other variations in equity

Net result of period

Total

(65 294,06)

-

(7 317 866,70)

3 778 044,49

197 443 256,87

Minority

Total

Interests

Equity

156 126 372,16

353 569 629,03

(283 522,43)

(283 053,61)

(283 053,61)

1 299,20

1 299,20

1 299,20

(14 366 475,03)

(14 366 475,03)

3,88

(14 366 478,91)

39 880 525,91

(28 197,34)

39 598 306,56

(28 197,34)

-

(14 366 478,91)

(3 778 044,49)

36 094 813,89

(47 408,30)

36 047 405,59

(3 778 044,49)

21 446 584,45

(47 408,30)

21 399 176,15

15 115 010,49

15 115 010,49

11 336 966,01

36 561 594,95

15 115 010,49 (47 408,30)

36 514 186,65

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

209 574 305,54

(93 491,40)

-

(21 684 345,61)

15 115 010,49

234 004 851,82

156 078 963,86

390 083 815,68

Consolidated statement of changes in equity in 2014

in (Euro)

Description

Equity attributable to holders of capital in parent-company Paid-up capital

Position at the Beginning of 2014

6

30 050 000,00

Own shares Supplementary

payments and other equity instruments

-

Issuance bonus

Legal Reserves

Other reserves

-

1 043 372,79

-

3 971,00

15 226,00

-

Changes in Period Effect of the change in the consolidation perimeter: Entrance of Consmar Construção Civil, Consmar France e GV e saída de Acamedco, Aca Gest and Impact Evolution Effect of reclassifications sale of credits

122 979 777,68

Equity Method Effect Minersolo Alteration of accounting policies Differences in the conversion of financial statements Other recognized changes in equity

62 465,59 7

Net Income for Year Full Results

-

-

-

-

66 436,59

122 995 003,68

10

-

-

-

-

-

-

11=

30 050 000,00

-

-

-

1 109 809,38

122 995 003,68

8 9=7+8

Operations With Equity Owners Capital subscriptions Issuance of premiums Distribuitions Loss Coverages Other operations Position at the End of 2014

6+7+8+10 (1) - In Euros, admitting, according to the dimension and demands of the report, the possibility to express amounts in thousands of Euros.

Minority

Total

Interests

Equity

234 004 851,82

156 078 963,86

390 083 815,68

(466 166,81)

7 458 577,67

6 992 410,86

Adjustments to financial assets

Revaluation surplus

Other variations in equity

Net result of period

Total

209 574 305,54

(93 491,40)

-

(21 684 345,61)

15 115 010,49

(1 299,20)

(484 064,61)

Transit results

(122 979 777,68)

-

-

17 271 991,25

17 271 991,25

-

-

(9 873 089,80)

(9 873 089,80)

(9 873 089,80)

21 684 345,61 (15 115 010,49)

(27 946 752,19)

26 457 620,60

(1 489 131,59)

11 811 255,81

(21 014 017,55)

33 916 198,26

12 902 180,71

33 916 198,26

25 283 535,40

17 271 991,25

(34 533 064,11)

(45 488,79)

(157 514 140,98)

16 742 437,85

-

(15 115 010,49) 12 381 354,69

12 381 354,69

(2 733 655,80)

(8 632 662,86)

12 381 354,69

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

52 060 164,56

16 648 946,45

-

(9 873 089,80)

12 381 354,69

225 372 188,96

189 995 162,12

415 367 351,08

Massaku Pedro

Truck Driver - 1st Level (VivAngola)

365 days with our values

Annex to the Consolidated Financial Report

Note 1

Identification of the Entity

The entity now reporting the financial year of 2014 is called Alberto Couto Alves, SGPS, S.A., headquartered at Avenida dos Descobrimentos, Edifício Las Vegas 3, no. 63, Vila Nova de Famalicão, Portugal. The company’s main activity is the management of investments in other companies.

This business group, called ACA Group, has been conquering new international markets within its core business, thus broadening its main operations, while also maintaining diversity in the areas already conquered. The current business areas are: Civil Construction and Public Works, Water Equipment Management, Industrial Waste Collection, Electrical Installations and Air Conditioning, Construction and Operation of Leisure Facilities (artificial turf ), Concessions and services, Insurance, Management of car parks, Real Estate and Tourism Ventures.

The Group is formed by the participated companies indicated here:

97,10% 5,2%

20% 3,7%

ACA

Álea

53,75%

96,29%

AngolACA

ACAMedCo

33%

Minersolo

85,64% 1%

77,4% 95%

Ambiágua

RRI

48%

5%

VCP

IELAC

1%

SGPS 2014

15%

Control

Control

Control

74%

100%

50%

GS

Vivangola

Vivasuper

AmbiĂ frica

Parq G

Nortepolis

VID Garden

99,99%

49,39%

0,10%

51%

Control

50%

51%

ACA Brasil

ACA France

Agro Angola

ACE ACA-Ferreira

Consmar PT

66,67%

100%

GV

Consmar FR

Golfinvest

The Group is composed of subsidiaries, associates and other companies, whose common link is the operational and financial control in the controlled companies.

In the companies Aca, Angolaca, Ambiágua, RRI, Ielac, Aca Brasil, GV Produtos Esportivos S.A, Aca France, Consmar Construção Civil, Consmar France, Parq G, Nortepolis and Vid Garden, Aca SGPS has investments of 50% or above. In the companies Global Stadium and Álea, investments are of 20% or below and in the companies Agro-angola, Ambiáfrica, Vivangola and Vivasuper, it only holds the operational and financial control. The control of the companies Agro-angola, Vivangola, Vivasuper, Ambiáfrica, Global Stadium and Álea, assessing all facts and circumstances that allow for the exercise of eventual voting rights, is held by the CEO of the Group, who has the power to manage the entities’ financial and operational management. All of the entities mentioned above are included in these consolidated statements via the full equity method.

Still within the perimeter, ACA Construção holds 50% of a jointly-controlled company, hereinafter called ACE ACA/FERREIRA, whose incorporation in these consolidated statements is made by the proportional method.

The distribution of our subsidiaries is: ACA, Álea, Ambiágua, RRI, Global Stadium, Parq g, Nortepolis, Vid Garden, Ielac and Consmar Construção Civil, which operate in Portugal; Angolaca, Ambiáfrica, Vivangola, Vivasuper and Agro-angola, in the Angolan market; ACA BRASIL and GV in Brazil; ACA France and Consmar France, which operate in the French market. This is the distribution of the Group’s main operations across the European, African and American continents.

One should emphasize the continuous investment in the European and American continents, with the new acquisitions, in 2014, of Consmar France and GV Produtos Esportivos S.A., respectively, while remaining true what the Group knows how to make best: construction.

Within this construction activity, its core business is composed by these companies: Aca, Angolaca, Agroangola, Global Stadium, Aca Brasil, GV, Aca France, Consmar Construção Civil, Consmar France and Ielac.

In the domestic market we have followed the commitment towards diversification, working with Ambiágua, dedicated to the installation, trade, management and maintenance of the treatment of waste or non-waste water stations; RRI collects and treats industrial waste; Global Stadium, which installs artificial turf, as well as other

marketing activities and the necessary infrastructure; Ielac, dedicated to electrical installations, and lastly Alea, dedicated to the management and marketing of insurance.

Nortepolis, which has been 100% owned by the Group since 2012, is dedicated to real estate activities and Parq G- Parking Gondomar, who has also been owned

by ACA Group by 73% since 2012 and by 74% in 2014, is dedicated to parking and parking activities.

The subsidiary Vi Garden integrates the consolidated accounts also using the equity method, since the Group holds 50% of its equity and the same control over its operational and financial policies. ACA Cabo Verde is integrated at cost, since the company still hasn’t started its activity and had no accounts.

In the international market, the diversification continues with the continuous investment in Ambiáfrica, dedicated to water treatment and leaning on Ambiágua’s know-how, in Vivangola and in Vivasuper, dedicated to supermarkets, both for retail and distribution and the placement of goods in retail outlets.

The consolidated financial statements included in this Annex refer to the financial year of 2014. Amounts are presented in Euros and rounded off to the nearest hundredth.

Note 2

Accounting Framework for the Preparation of Financial Statements

2.1. Accounting Framework The following financial statements have been elaborated according to the dispositions in force in Portugal, approved by Decree-Law no. 158/2009, 13th July, and according to the conceptual structure, accounting and financial reporting norms and applicable interpretation norms for the year ended in 31/12/2014.

• Decree-Law No. 158/2009 of 13th July (Accounting Normalization System), as amended by Law No. 20/2010 of 23rd August; • Ordinance No. 986/2009 of 7th September (Models for Financial Statements); • Notice No. 15652/2009 of 7th September (Framework); • Notice No. 15655/2009 of 7th September (Accounting Standards and Financial Reporting); • Ordinance No. 1011/2009 of 9th September (Code of Accounts).

As to ensure the true and appropriate report both of the financial position and the company’s performance, one used the standards that integrate the abovementioned Accounting Standardization System, in all aspects regarding the recognition, measurement and disclosure, without prejudice of the supportive use of the International Financial Reporting Standards (IFRS), as adopted in the European Union, under European Council and Parliament Regulation (CE) no. 1606/2002 of 19 July and also the International Standards for Financial Reporting issued by the International Accounting Standard Board and respective interpretations (SICIFRIC), when the SNC fails to tackle specific aspects of the transactions conducted and the flows and situations in which the company is involved.

These financial statements have been elaborated with a reporting period that coincides with the calendar year, assuming the continuation of the Group’s operations and an accrual regimen, using the templates for financial statements provided for on article 1, Ordinance No. 986/2009 of 7th September, especially the balance, the statement of results by categories, the statement of changes in equity, the statement of cash flows and the annex. All figures are in Euros.

2.2. Indication and justification of snc’s disposition that, exceptionally, may have been derogated During the periods encompassed in the current financial statement, no disposition of the SNC were derogated that have produced materially relevant effects and that may jeopardize a true and appropriate image. Therefore, one considered that the applicable IAS provide an appropriate presentation of the different assets.

2.3. Indication and comments on the accounts of the balance and financial statements with results that cannot be compared to the previous fiscal year There are no balances or result statements with contents that cannot be comparable to the previous year. Nevertheless, there are alterations as far as the consolidations goes, which must be taken into account for comparison purposes.

In 2014, new entities were constituted, investments were reinforced and the methods for the integration of companies for accounting purposes were reassessed.

Regarding acquisitions, i.e., increases in perimeter, Consmar Construção Civil is highlighted, with a 51%-share, which in turn holds 100% equity of Consmar France.

In the Brazilian market, during 2014 ACA Brasil acquired a 66.67% share in the company GV Produtos Esportivos S.A., over which the first has control over operations and financial policies.

As mentioned earlier, the company Vid Garden, up until now included in the consolidated accounts using the equity method, now integrates the 2014 accounts under a full consolidation method, not only due to the investment – still 50% - but rather by the control held by the Group’s CEO, who has power to manage financial and operational policies.

Still regarding the perimeter, ACA Construção owns 50% in a jointly controlled entity, here called ACE ACA / FERREIRA, whose incorporation in the consolidated accounts was conducted using the proportional method.

Note 3

Main Accounting Policies

The entry of these companies in the consolidation perimeter using the full consolidation method created the impacts listed below, in terms of individual aggregate contributions: • Assets: 9.139.253€ • Liabilities: 5.967.013€

3.1. Measurements used to prepare the financial statements Accounting policies are the specific principles, bases, conventions, rules and practices applied by an entity in preparing and presenting financial statements.

• Equity: 3.172.240€

The Group has adopted the disposition contained in the IAS, based on the following accounting policies:

• Net Result = (140.134)€

a) Consolidation Principle

Regarding reduction of the perimeter, it is important to refer that the entities Aca Gest and Impact Evolution, which in 2013 had been integrated into the accounts using the full consolidation method, underwent a merger process in 2014 with another entity from the Group, giving origin to a company called Valorec, on which ACA S.G.P.S. holds a 13.63% share. The Group had no control nor significant influence over their business policies or strategies in this company and, for that reason, the company was not included in the consolidation perimeter and, therefore, this investment was registered at cost.

AcaMedco, which had been included under the full consolidation method in 2013, did not integrate the consolidation perimeter in the current year, since this entity is inactive from an operational point of view and undergoing the legal process aimed at future dissolution.

The subsidiary VCP is also waiting for resolving outstanding issues with the relevant authorities, which will lead to its dissolution, and, therefore, considering the substance of the share and its effective contribution for the Group, it was excluded from the consolidation perimeter in 2014.

(I) Investment in Subsidiaries The financial participations in companies of which the Group controls directly and indirectly more than 50% of the share capital or voting rights in Shareholders’/ Partners Meetings and/or power to control its operational and financial policies, including companies serving special purposes, according to article 6th of DecreeLaw no. 158/2009, were included in the Consolidated financial statements using the comprehensive method.

Equity and Net Result of these companies, corresponding to third-party participations, are presented separately in the Consolidated Balance and at the Consolidated Financial Statement under “Minority Interests”.

Companies included in the financial statements using the comprehensive method are detailed in note 1.

When losses attributable to minority interests exceed the minority interest in the equity of the subsidiary, the excess, and any further losses attributable to minority interests, are charged against the equity holders of the Group, except to the extent that minority shareholders have a binding obligation and are able to cover such losses. If the subsidiary subsequently reports profits, such profits are allocated to the equity holders of the Group until the minority’s share of losses previously absorbed by the equity holders of the Group has been recovered.

The results of Group companies acquired or disposed of during the period are included in the consolidated income statement from the effective date of acquisition or up to the effective date of disposal, as appropriate.

Adjustments to the financial statements of Group companies are performed, whenever necessary, in order to adapt accounting policies to those used by the Group.

All intra-group transactions, balances, income and expenses and distributed dividends are eliminated on consolidation process, as well as results originating from intra-group transactions that are recognized as assets.

(II) Investments in jointly controlled entities Investments in jointly controlled companies are included in the accompanying consolidated financial statements in accordance with the proportionate consolidation method as from the date joint control is acquired. In accordance with this method the Group includes in the accompanying consolidated financial statements its share of assets, liabilities, income and expenses of these companies, on a line-by-line basis, in the proportion attributable to the Group.

An assessment of investments in associated companies is performed when there is an indication that the asset might be impaired. Any impairment loss is disclosed in the income statement.

When the Group’s share of losses exceeds the carrying amount of the investment, the investment is reported at nil value and recognition of losses is discontinued, unless the Group is committed beyond the value of its investment. In such cases, a provision is registered to fulfil such obligations.

Investments in jointly controlled companies are classified as such based on shareholders’ agreements that establish joint control, in the effective percentage of control and/or voting rights.

Investments in associated companies are disclosed in Note 13.

When necessary, adjustments will be made to the jointly controlled companies’ financial statements, as to adequate their accounting policies to those being used by the Group.

Any positive difference between the cost of acquisition of financial investments in subsidiaries and jointly controlled companies and the amount given to fair value of assets and liabilities of such companies at the date of acquisition is recognised as goodwill. If the difference is negative, after the attributed fair value is reassessed, this is recognized directly in the statement of results.

(III) Investments in associated companies Investments in associated companies (companies where the Group has significant influence but does not establish financial and operational policies – usually corresponding to holdings between 20% and 50% in a company’s share capital) are accounted for in accordance with the equity method.

Under the equity method, investments are initially recorded at cost, adjusted by the amount corresponding to the Group’s share of changes in equity (including net profit) of associated companies and to dividends received.

Results occurring from transactions between an investor, including consolidated subsidiaries, and an associated company are recognized at the investor’s financial statements only as to correspond to the interests of other investors in the associated company (not related to the investor), being, therefore, eliminated the investor’s part in the associated company’s results that occur from such transactions.

Any excess of the cost of acquisition over the Group’s share in the fair value of the identifiable net assets acquired is recognised as goodwill, which is included in the caption Investment in associated companies. If the difference between cost of acquisition and fair value of the identifiable net assets is negative, after the attributed fair value is validated once more, this is recognized as a gain during the fiscal year.

(IV) Goodwill

Any negative difference between the cost of acquisition of financial investments in subsidiaries and jointly controlled companies and the amount given to fair value of assets and liabilities of such companies at the date of acquisition is recognised as gain, after the attributed fair value is reassessed and the assets and liabilities of such companies are confirmed.

Goodwill is not amortised, but it is subject to impairment tests on an annual basis, to verify the existence of impairment losses.

Impairment losses observed during the fiscal year are reported and in the year’s financial statement, affecting financial results and may not be reversed.

(V) Conversion of financial statements of subsidiaries in foreign currency Foreign entities are considered to be those which operate abroad, and have organisational, economic and financial autonomy and whose operating currency is different from the parent company. The assets and liabilities in the financial statements of foreign entities are converted

to Euros using the exchange rates at the date of the balance, and costs and income and cash flow in those financial statements are converted to Euros, according to the provisions set forth in ASN23 – Effects of Changes in Exchange Rates. The resulting exchange difference is recorded in own capital under “Other Changes in Equity”.

jointly controlled bodies and foreign associates to Euros were as follows, with the average exchange rates being calculated from the monthly exchanges that took place during this year, according to the following entities:

“Goodwill” and fair value adjustments resulting from the acquisition of foreign entities are treated as assets and liabilities of that entity and converted to Euros according to the exchange rate at the date of the balance.

Whenever a foreign entity is sold, the accumulated exchange difference is recognised in the profit and loss statement as an alienation gain or loss. The exchanged rates used to convert the accounts of group companies, > Currency

Entity

Exchange Rate 2014 31-12-2014

Exchange Rate 2013

Average

31-12-2013

Average

Kwanzas (Angola)

Banco Nacional de Angola

125,195

129,953

134,717

127,995

Dirhams (Morocco)

Bank Al - Maghrib

n.a.

n.a.

11,264

11,161

Real (Brazil)

Banco de Portugal

3,2207

3,1211

3,258

2,869

b) Fixed Tangible Assets Fixed tangible assets are items held to be used in the production or rendering of services, to be leased to thirdparties or to be used for administrative purposes and that will be used for more than a single period.

Tangible assets acquired up to 1st January, 2009 (transition date to IFRS) are recorded at acquisition cost, or revalued acquisition cost, in accordance with generally accepted accounting principles in Portugal until that date, net of depreciation and accumulated impairment losses.

Tangible assets acquired after that date are recorded at acquisition cost, net of depreciation and accumulated impairment losses.

Maintenance and repair costs that fail to extend those assets’ useful life will be reported as expenses in the year they are incurred.

Expenses with substitutions or large repairs are included in the asset’s carrying amount when there are

additional economic benefits occurring in the future, being depreciated during the asset’s remaining useful life or during its own useful life, if inferior.

Gains or losses on sale or disposal of tangible assets are calculated as the difference between the selling price and the carrying amount of the asset at the date of its sale/ disposal. These are recorded in the income statement under either “Other operational income” or “Other operational expenses”.

Depreciations are calculated on a straight line basis once the assets are in conditions to be used and are applied systematically throughout the useful life of the assets, which is determined in function of the expected use of the asset by the Group, the natural wear and tear expected, the likelihood of technical obsolescence and the residual value attributable. The residual value attributable to the asset is determined on the basis of estimated value recoverable at the end of its useful life.

The depreciation rates used correspond to the following estimated useful life periods:

Items Buildings and other constructions Basic equipment

Useful Life (years) 20 – 50 4 – 12

Transportation equipment

4–8

Tools and utensils

4–8

Administrative equipment

3–8

Other fixed tangible assets

3–6

c) Intangible Assets Intangible assets, with the exception of “goodwill”, are recorded at acquisition cost, minus accumulated depreciations and impairment losses. Intangible assets are only recognised if they are likely to produce future economic benefits for the Group, can be controlled by the Group and if their value can be reasonably measured.

These assets are amortized from the moment they are concluded or in use, using the straight line basis, consistently and by applying the amortization rates that correspond to the years of useful life.

Amortization of the year with intangible assets are reported in these financial statements in the item “Expenses with depreciation and amortization and impairment losses”.

Gains or losses on sale or disposal of tangible assets are calculated as the difference between the selling price and the carrying amount of the asset at the date of its sale/ disposal. These are recorded in the income statement under either “Other operational income” or “Other operational expenses”.

d) Leases Lease agreements are classified as financial or operational based on their substance and not by means of contracts. Lease contracts where the company is the lessee are classified as financial leases if all risks and advantages inherent to ownership are substantially transferred and as operating leases if such fails to happen.

In financial leases, the value of the goods is registered as asset and the responsibility is registered in liabilities, under “Obtained Loans” and the interest included in minimum payments and the depreciation of the asset are registered as gains in the result statements of that period.

In the case leases are considered as operating, minimum payments are recognized as expenses in the result statements, in a linear basis, during the lease period.

e) Financial Investments Financial investments are recognized at the date the risks and rewards inherent thereto are substantially transferred. They are initially recorded at acquisition price, i.e. the fair value of the price paid including transaction expenses.

Financial investments in associated companies are recognized using the equity method. The remaining financial investments are reported according to cost of acquisition or, when loans are granted, at cost or amortized cost.

When there is indication that an asset is impaired, the financial investments are assessed, reporting as expenses the eventual impairment losses. Gains obtained from these financial investment (dividends or profits distributed) are reported in the financial statement of the year when its distribution is decided upon and disclosed.

f ) Stocks Consumer goods and raw materials are stated at the lower of cost or net realisable value (estimation of their price of sale deduced from the costs occurring with their sale).

Cost is determined on a weighted average basis. If the net realisable value is lower, specifically due to market share reduction, deterioration or obsolescence, increased finishing costs or those needed to perform the sale, of the recoverable value for the use in the conversion of finished products whose market share has been reduced, one justifies the recognition of impairments during the periods in which adjustment needs are observed, using reposition cost as a reference.

Finished and semi-finished products, sub-products and products and work in progress are valued at either production cost or net realizable value, whichever is the lower. Production costs include the cost of raw material, direct labour and general manufacturing costs. When the net realisable cost is lower than the cost, impairment losses are recognized. The imputation of general fixed manufacturing expenses is based on the normal capacity of facilities.

The reversion of impairment losses recognized in previous periods is reported when there are evidences that impairment losses are no longer justified or have decreased, being reported under the item “Stock impairment (losses/reversions)”. However, reversions are only made until the limit of the amount of previously recognized impairment losses.

Expenses related to sold stocks are reported over the same reporting period when the revenue is recognized.

The Group uses the regimen of permanent inventory, according to the dispositions of no. 1, article 12th of Decree-Law no. 158/2009, 3th July.

g) Accounts receivable Receivables are stated at cost or amortized cost, using the actual interest method and, when reported in the balance, corresponding to their nominal value less impairment losses, recorded under the caption Impairment losses in accounts receivable, and thereby reflect their net realisable value.

Impairment losses are reported after the event occurred

indicate, objectively and quantifiably, that part or the total debt will not be received.

h) Cash and cash equivalents The amounts included under “Cash and equivalents” correspond to cash flow, bank deposits and term deposits and other short-term cash applications that can be mobilized without significant risk of alterations in value. If their maturity date is under 12 months, they are recognized as current assets; otherwise and when there are limitations to their availability or movements, they are recognized as non-current assets.

Bank overdrafts are included under “Financing obtained”, expressed in the “Current Liabilities”

i) Impairment of Assets An assessment of impairment is made at the time of each balance, and whenever an event or change in circumstances indicates that the figure registered for the asset may not be recovered. Whenever the figure registered for the asset is higher than its recoverable value, this is recognised under the item “Impairment of depreciable/amortisable investments” or “Impairment of non-depreciable/amortisable investments”. The recoverable amount is either the net sales price or the use value, whichever is the higher. The net sales price is the amount obtained from alienating the asset in a transaction accessible to the parties involved minus the costs directly attributable to the alienation. The valuein-use is the current value of estimated future cash flows that are expected and that arise from constant use of the asset and its alienation at the end of its useful life.

The recoverable amount is estimated for each asset individually, or, if this is not possible, for the cash generating unit to which the asset belongs.

After an impairment loss is recognized, the expenses with the amortization/depreciation of the asset is adjusted in future periods for the asset’s carrying amount, minus its residual value according to a systematic basis, during the remaining life.

When there is an event or alteration in the circumstances that indicate that the amount according to which the asset is reported cannot be recovered, a new impairment assessment is carried out.

The evidence of the existence of impairment on receivable is true when the counterpart:

l) Discounted notes and receivables sold in “factoring”

• Has significant financial difficulties;

The Group derecognises financial assets when all rights to future cash flows have expired. In a transfer of assets, derecognition can only occur either when risks and rewards have been substantially transferred or the Group does not maintain control over the assets. Consequently, clients’ balance with discounted and non-matured notes and receivables sold in factoring (as a resource) to the date of the balance are reported as liabilities, under “Obtained Loans”.

• Is significantly delayed in the payment of interests and other main payments; • Is likely to enter a restructuring process or bankruptcy.

In the case of stocks, any reduction for the net realizable value is calculated according to market values and several stock rotation indicators.

Reversion of impairment losses recognised in previous years is registered when there are indications that the recognised impairment losses no longer exist or have diminished. The reversion of impairment losses is recognised in the profit and loss statement as operational results. However, reversion of impairment loss is carried out up to the limit of the amount recognised (net of amortization or depreciation) should the impairment loss not have been registered in previous years.

j) Loans Loans are registered under liabilities at nominal value or amortized cost (using the actual interest rate method), deduced from transaction costs that are directly attributable to the issuance of such liabilities, being reported under the current and non-current liabilities, whether its maturity date is under or over one year, respectively.

Derecognition only happens when the binding obligations of the contracts cease to exist, namely when liquidation, cancelation or expiration takes place.

Financial costs in banking interest and similar costs (namely Stamp Duty), are registered in the consolidated statement of profit and loss according to the accruals basis for the years, with any amounts due and not paid at the date of the balance being classified under “other current liabilities”.

k) Accounts Payable Accounts payable are registered at nominal value (using the actual interest rate method). Usually these third party debts do not attract interest.

Derecognition only happens when the binding obligations of the contracts cease to exist, namely when liquidation, cancelation or expiration takes place.

m) Financial liabilities and equity instruments An instrument is classified as an equity instrument according to the contractual obligation of the transaction, independently from its legal form.

An instrument is classified as a financial liability when it contains a contractual obligation to liquidate capital and/or interests, through delivering cash or other financial asset, independently of its legal form.

Financial liabilities are initially recognised at cost minus transaction costs and, subsequently, amortised cost based on effective interest paid.

A financial instrument is classified as an equity instrument when there is no contractual obligation at settlement to deliver cash or other financial asset to another entity, independently of its legal form, and there is a residual interest in the assets of an entity after deducting all its liabilities.

Costs directly attributable to the issuance of equity instruments are recognised in equity, as a deduction to the amount issued. Amounts paid or received relating to sales or acquisitions of equity instruments are recognised in equity, net of transaction costs.

n) Provisions, contingent liabilities and contingent assets Provisions are recognised when, and only when, the Group has an obligation (legal or constructive) resulting from a past event, it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate can be made of that obligation. Provisions are reviewed and adjusted

at the balance sheet date to reflect the best estimate as of that date. Restructuring provisions are recorded by the Group whenever a formal and detailed restructuring plan exists and that plan has been communicated to the parties involved.

Contingent liabilities are defined by the Group as (i) possible liabilities arising from past events, the existence of which will only be confirmed by the occurrence, or not, of one or more uncertain future events not under full control of the Company, or (ii) present obligations arising from past events, but which are not recognised because it is unlikely that there will be an outflow of financial benefits to settle the obligation or the amount of the obligation cannot be reliably measured. Contingent liabilities are not recorded in the consolidated financial statements, but are disclosed, unless the probability of an outflow of funds affecting future financial benefits is remote.

Contingent assets are possible assets arising from unplanned events or others expected that will originate the possibility of a beneficial economic inflow. The Group does not recognize contingent assets in the balance but they are disclosed when the Group considers that the resulting economic results are likely. When the results are virtually certain, then the asset is not contingent and the recognition is appropriate.

o) Accrual basis Income and expenses are reported during the period they are referred, independently of when they are received or paid. The differences between the amounts received and paid and the corresponding income and expenses generated are recorded under “Other receivables and payables” or “Deferrals”.

p) Revenue Revenue obtained by sales, provision of services, interest, royalties and dividends, resulting from the Group’s ordinary activity, is recognized for its fair value, e.g. as was freely established by the contracting parties on an independent basis; regarding sales and provision of services, fair value reflects eventual given discounts and does not include any taxes charged in the invoices.

Revenue from the sales of goods (merchandising products) is recognised in the income statement when: (i) the significant risks and benefits of ownership of the

assets have been transferred to the buyer, (ii) the Group does not retain continued management involvement of the asset sold to a degree usually associated with ownership or effective control over it, (iii) the amount of revenue can be reliably measured, (iv) it is likely that the economic benefits associated with the transaction will flow to the Group, and (v) the costs incurred or to be incurred with the transaction can be reliably measured.

Sales are recognised net of taxes, discounts and other costs, including commissions, at the fair value of the amount received or receivable.

Revenue from services rendered is recognised in the income statement taking into consideration the stage of completion of the transaction (percentage of completion method) at the balance sheet date, if the outcome is reliably predictable. If such fails to happen but if the expenses are recoverable, revenue will only be recognized according to the expenses already incurred and recognized, according to the null profit method. If the outcome cannot be estimated and if the expenses cannot be recoverable, no revenue will be recognized and expenses cannot be deferred. In the case of continued provision of services, the revenue is recognized in a straight line method. Interests are recognized using the effective interest method.

Dividends are recognised as gains in the year they are attributed to the shareholders.

q) Construction contracts The group recognizes the results of the works contract by contract, according to the percentage of completion method, perceived as the relation between costs of each work and the sum of such expenses with the estimated costs to complete the work.

When the outcome cannot be reliably estimated, revenue is recognized up until the point where it is likely that costs incurred of the contract are recoverable.

When, after considered the expenses incurred and to be incurred under the contract, the sum of these is likely to exceed the total of revenue recognized and to be recognized, a loss is recognized in the results for the period during which it is observed, as a provision.

The Group annually recognizes liabilities to face up to the expenses needed during the work’s guarantee period, which is established bearing in mind the annual production volume and the history of costs with the works.

r) Borrowing Costs Borrowing costs are recognised on an accruals basis in the income statement for the period in which they are incurred, except when they are directly attributable to the acquisition, construction or production of tangible assets, of which the period of time to be prepared for the needed use is substantial, when they are capitalized up until the moment in which all activities necessary to prepare the eligible asset for use or sale are concluded.

s) Employeeâ&#x20AC;&#x2122;s Benefits Short-term employee benefits include wages, salaries, nigh-time bonus, eventual bonus for extraordinary work, productivity prices and assiduity, food allowance, holiday and Christmas bonus, cashierâ&#x20AC;&#x2122;s allowances and other additional deductions eventually decided by the Management. Apart from that, one includes Social Security contributions, according to the contribution basis resulting from applicable legislation, authorized and paid absences and also eventual participation in profits and bonuses, as long as the payment occurs within 12 months from the end of the period.

Obligations occurring from short-term benefits are recognized as expenses for the period when the services are rendered, being measured on an undiscounted basis. This liability is extinguished with the respective payment.

According to the applicable labour legislation, the right to holidays and holiday bonus for the period, since it coincides with the calendar year, reaches its maturity on 31st December of each year, but the amount is paid during the following period; therefore, the corresponding expenses are recognized as short-term benefits, according to what was previously mentioned.

Benefits occurring due to cessation of employment, both by the companyâ&#x20AC;&#x2122;s unilateral decision and by mutual agreement are recognized as expenses in the periods in which they occur.

t) Foreign currency balances and transactions All foreign currency assets and liabilities are translated to Euro at the official year-end exchange rates. Exchange gains and losses resulting from differences between the exchange rates in force on the date of the transactions and those in force on the date of collections, payment or

the balance sheet date are recognised as gain or loss in the income statement of the period, except if they qualify as cash flow coverage or net investment coverage. In such cases, they are reported as equity.

u) Subsequent events Events after the balance sheet date that provide additional information on conditions existing at the balance sheet date are reflected in the consolidated financial statements.

S. Salvador Town Square â&#x20AC;&#x201C; Matosinhos, Portugal

3.2. Other Relevant Accounting Policies a) Cash Flows The consolidated cash-flow statement is prepared using the direct method. The Group classifies under the item “Cash and equivalents” the cash amounts, bank deposits, fixed-term deposits and other financial instruments with a maturity date lower than 3 months, for which the risk for alteration is insignificant.

The consolidated cash-flow statement is classified into operating, financing and investment activities.

Operating activities encompass receivables from clients, payments to suppliers, staff payments and others related to operating activities. Cash-flows encompassed by investment activities include, specifically, acquisitions and sales of investments in participated companies and receivables from the sale and purchase of assets.

Cash-flows encompassed by financial activities include, specifically, payments and receivables referring to loans obtained, financial lease contracts and payment of dividends.

One should refer that all amounts are available to be used.

3.3. Value Judgments by the Management Body While preparing the consolidated financial statements, the Group’s Board of Directors uses estimations and assumptions that affect the application of policies and the amounts reported. Estimations and judgements are continuously assessed and are based on the experience of past events and other factors, including expectations regarding future events considered to be likely to happen considering the circumstances on which the estimations are based or the results of information or experience acquired.

Accounting estimations significantly reflected in the consolidated financial statements for the periods ending on 31st December, 2011 and 2010 include: • Useful life of tangible and intangible assets; • The method of amortization/depreciation to apply and the estimated losses occurring from the substitution of equipment before the end of their useful life, by reason of technological obsolescence;

• Impairment tests performed to “goodwill” and other assets and their recognition; • Recognition of impairment in investments; • Report of provisions; • Liabilities for deferred taxes; • Recognition of revenues in works in course.

Estimations were determined based on the best available information at the time of the preparation of the financial statements. However, unforeseeable events may happen in subsequent period that, since they could not be foreseen up until this date, were not considered in such estimations. Alterations to these estimations that occur after the date of the financial statements will be corrected in the results, prospectively.

3.4. Key Assumptions for the Future The consolidated financial statements herein were prepared with the assumption that operations will continue, from the Group’s records and accounting documents, maintained according to the accounting principles generally accepted in Portugal.

Events occurring after the balance sheet date that affect the value of the assets and liabilities existing to the balance sheet date are considered in the preparation of the consolidated financial statements for the period.

These event, if significant, are disclosed in the note to the financial statements.

3.5. Main Uncertainty Factors on Estimates The estimations of future values that had grounds to be recognized in the consolidated financial statements reflect the foreseeable evolution of the Group within the framework of its strategic plan and the available information regarding past events and equivalent situations in the industry.

Note 4

Cash Flows

4.1. Comments by the Board Of Directors on Significant Cash and Cash Equivalent Balances not Available for Use There are no cash elements or cash equivalents that are not available for use.

The cash-flow balance, on 31st December, 2014 and 2013, is decomposed thusly: (amounts in euros)

Liquid funds in the balance

Cash-flow Bank Deposits

31.12.2013

Amounts Amounts available for unavailable for use use

Total

Amounts Amounts available for unavailable for use use

Total

Cash

618 948,78

-

618 948,78

1 702 316,80

-

1 702 316,80

Subtotals

618 948,78

-

618 948,78

1 702 316,80

-

1 702 316,80

Checking’s’ account

8 175 570,30

-

8 175 570,30

11 738 707,08

-

11 738 707,08

Other bank deposits

9 879 871,07

-

9 879 871,07

11 044 223,94

-

11 044 223,94

18 055 441,37

-

18 055 441,37

22 782 931,02

-

22 782 931,02

18 674 390,15

-

18 674 390,15

24 485 247,82

-

24 485 247,82

Subtotals Totals

31.12.2014

Note 5

Accounting Policies, Changes in Accounting Estimates and Errors

During the period there were no changes in accounting policies or prior period errors.

Superior Platform and Access to the Workshops and Maintenance Park â&#x20AC;&#x201C; GuifĂľes, Portugal

Railway Overpass â&#x20AC;&#x201C; Vila Nova de Gaia, Portugal

Note 6

Related Parties

6.1. Remuneration Paid to Key Management Personnel a) Total remunerations Key management personnel includes (within the company and as a vital structure with key influence on

the planning, guidance and control of activities) the group of board members that aggregate board functions and operational departments.

Next, the corresponding benefits are presented on the table that closes this report. (amounts in euros)

Remunerations of key management personnel Short-term employee benefits

2014

2013

4 318 686,23

3 399 558,02

4 318 686,23

3 399 558,02

Post-retirement benefits Other long-term benefits Benefits for cessation of employment Share-based payments Total

6.2. Related Parties Transactions a) Transactions and outstanding balances

(amounts in euros)

Transaction between related parties Acamedco Subtotals Associated companies

Servicesâ&#x20AC;&#x2122; acquisition

-

-

-

0,00

0,00

0,00

-

-

-

-

-

485,10

0,00

0,00

-

38 938,62

117 759,61

22 578,23

1 224 824,06

201 013,70

-

22 467,51

84 204,13

Resifluxo

2 636,81

88 908,90

52 665,33

Marechal

-

49 280,31

-

Valorec

-

332 599,50

5 279 684,85

3,08

897 707,01

364 882,56

2 705,04

6 101,31

298 229,35

Prontiquest

-

3 279,86

31 663,36

Cronorigem

-

3 412,54

161 085,31

Estudograma

-

-

-

Verde Virtual

-

-

-

Gota Absoluta

-

-

-

Subtotals Ă&#x201A;ngulo Recto Coviaca Incentiverde

Aca Gest Impact Evolution

Subtotals Total

Services provided

485,10

VCP Golfinvest

Other related parties

Sales

27 923,16

2 667 519,62

6 591 188,21

28 408,26

2 667 519,62

6 591 188,21

2014 Other debits

Other credits

Loans granted

Obtained loans

Collections

Payments

-

-

1840,00

-

99 536,32

-

0,00

0,00

1 840,00

0,00

99 536,32

0,00

-

-

362 280,22

-

-

-

-

-

-

-

4 570,36

-

0,00

0,00

362 280,22

0,00

4 570,36

0,00

-

-

6 748,01

23 988,49

84 852,19

468 730,12

-

-

107,18

-

1 894 524,19

255 368,31

-

-

12 000,00

23 817,82

25 759,93

83 094,13

-

-

0,50

2,15

39 465,37

70 498,83

-

-

35,75

-

-

-

-

-

2 096 158,68

2 156 000,00

5 074,70

4 521 052,57

-

-

117 540,52

257 267,93

1 062 480,58

449 973,21

-

-

119 324,50

588 270,73

392 828,52

264 122,56

-

-

1 433 583,08

961 557,77

213 623,33

177 397,44

-

-

460 016,10

460 018,85

40 853,23

1 046 842,59

-

-

299 350,88

-

296 744,88

-

-

-

85,00

80,00

948,86

-

-

-

80,00

2 735,00

944,37

-

0,00

0,00

4 545 030,20

4 473 738,74

4 058 100,15

7 337 079,76

0,00

0,00

4 909 150,42

4 473 738,74

4 162 206,83

7 337 079,76

Transaction between related parties Subsidiaries

Sales

Services provided

Services’ acquisition

0,00

0,00

0,00

Vide Garden

Associated companies

Golfinvest

Other related parties

Ângulo Recto

Subtotals Coviaca

0,00 4 794,01

Incentiverde Resifluxo

1 006,46

Marechal

0,00

0,00

20 984,13

188 186,45

949 984,05

105 009,37

6 598,99

510,00

19 668,13 1 720,41

Valorec

132 965,64

Prontiquest Cronorigem

44 269,02

265,54

975,42

1 166,00

124 130,56

Estudograma Verde Virtual Gota Absoluta Subtotals Total

50 069,49

1 000 387,25

551 777,44

50 069,49

1 000 387,25

551 777,44

N’Dalatando Requalification - Angola

2013 Other debits

Other credits

7 363,00 7 363,00

0,00

Loans granted

Obtained loans

9 164,00

150 000,00

9 164,00

150 000,00

Collections

Payments

0,00

0,00

7 512,60 0,00

0,00

5 270,55 6 560,61

14 926,00

7 512,60

0,00

0,00

0,00

967,72

662,68

380 000,00

405 421,53

40 000,00

40 059,95

197 712,26

53 962,57

73,66

3,32

451 757,18

947,10

35 792,43

697,32

249 098,84

24 812,83

1 275 699,98

259 789,25

278 000,00

638 096,45

11,00 605,27

292 260,29

1 873 566,73

2 901,47

564 606,20

309 750,00

150 218,41

309 375,14

160 000,00

47 344,72

90 000,00

10 000,00

80,00 80,00 201 422,40

14 926,00

1 255 425,71

2 474 039,36

2 832 268,26

1 393 029,73

208 785,40

14 926,00

1 272 102,31

2 624 039,36

2 832 268,26

1 393 029,73

b) Outstanding balances Outstanding balances between related parties Subsidiaries

Acamedco

(amounts in euros)

2014

2013

Outstanding balances on 31.12.2014 Commercial balances

Other balances

523 913,31

37 010,14

Vid Garden Subtotals

523 913,31

37 010,14

Associated companies

VCP

2 014 244,07

1 278 173,99

Subtotals

2 014 244,07

1 278 173,99

Other related parties

Golfinvest Ă&#x201A;ngulo Recto Coviaca Incentiverde Resifluxo Marechal

Outstanding balances on 31.12.2013 Commercial balances

Other balances

7 363,00

15 606,00

7 363,00

15 606,00

17,52 (277 091,32)

(12 098,49)

(21 702,67)

107,18

512,33

(11 814,50)

27 560,00 (559 211,05)

5 141,99 (13 795,00)

2,58

3,32

367 841,46 52 188,62

2 000,09

Valorec

368 150,51

(57 803,52)

Aca Gest

45 647,79

Impact Evolution

(53 801,52)

31,74

Prontiquest

514 622,19

1 237 659,28

Cronorigem

(887 099,31)

Estudograma

(0,04) (54 472,73)

Verde Virtual Gota Absoluta Subtotals Total

109 268,08

1 103 626,53

(559 208,47)

18 910,31

2 647 425,46

2 418 810,66

(551 845,47)

34 516,31

Note 7

Intangible Assets

7.1. Goodwill The measured Goodwilll, translated into the positive consolidation differences, represents the excess of acquisition costs on the equity of the associated company at date of purchase, of changes in control that force the alteration of the consolidation method or of the first consolidation. Goodwill is not amortised and any annual impairment losses will be discounted, as well as any loss of value.

The impairment of Goodwill was analysed, with a 10-year projection, and an adjustment was made to the goodwill recognised in 2008 to the participated company Nortepolis, since its current value was deemed inadequate. This real estate company was not a part of the consolidated accounts of 2011, a fact disclosed in such reports, and the recognition of impairment of Goodwill was only possible this year, because it was considered that the future economic benefits expected from the company failed to happen, a consequence of the country’s recession, plus the specific difficulty the industry is facing. The outlook for real estate is also not favourable, but the Group is hoping to revert such situation, still in the long term, by continuing to expand to new markets.

Below, goodwill by company, controlled by Alberto Couto Alves S.G.P.S., S.A. Goodwill

2014

2013

ACA

4.041.850,69

4.041.850,69

Angolaca

5.680.612,58

6.969.853,21

Acamedco

n.a.

559,75

Ambiágua

134.348,55

134.348,55

RRI

239.210,05

239.210,05

Parq G

130.437,31

130.437,31

ÁLEA

13.500,00

13.500,00

150.931,00

-

10.390.890,19

11.529.759,56

Consmar Construção Civil TOTAL

The reduction of Goodwill, considering AngolACA, in 1.289.240,63€, results from the clarification of an investment reserve disclosed in AngolACA until 2013 and, materially, will only need to pay supplementary obligations to its subsidiary Aca, S.A.

7.2. Other Intangible Assets For the remaining intangible assets herein, initial measurements are made at cost, subsequently adjusted by accumulated depreciations. The depreciation method used for all assets is the straight-line depreciation method.

Intangible Assets

The reconciliation of initial gross values for the periods ending on 31st December, 2013 and 2014, as well as the respective movements, are brought together on the table below:

(amounts in euros)

Computer Software

Industrial Propriety Heading and publications

On 31.12.2012 (01.01.2013)

Gross carrying amounts

3 141,21

Depreciations and losses accumulated impairment

(654,47)

Net carrying amounts

2 486,74

Increases

124,13

Amortisations

(519,92)

Exchange differences On 31.12.2013

Gross carrying amounts Depreciations and losses accumulated impairment Net carrying amounts

Conciliation 2014

Change in gross carrying amounts Change in accumulated depreciations

On 31.12.2013 (01.01.2014)

Gross carrying amounts Depreciations and losses accumulated impairment Net carrying amounts

Increases Amortisations On 31.12.2014

Gross carrying amounts Depreciations and losses accumulated impairment Net carrying amounts

(2,18) 3 265,34 (1 176,57) 2 088,77 (3 265,34) 1 176,57

Licenses and franchise

Copyrights, patents and other rights

Other Intangible Assets

On-going Intangible assets

Total

108 750,00

111 891,21

(103 750,00)

(104 404,47)

5 000,00

7 486,74 124,13

(5 000,00)

(5 519,92) (2,18)

108 750,00

112 015,34

(108 750,00)

(109 926,57) 2 088,77

(108 750,00)

(112 015,34)

108 750,00

109 926,57

9 388,39

68 388,94

(1 609,95)

(6 632,67)

9 388,39

68 388,94

(1 609,95)

(6 632,67)

7 778,44

61 756,27

One should note that the conciliation between the final balance for 2013 and the initial balance for 2014 is a consequence of the inclusion of companies Acamedco and Impact Evolution, whose final balance was fully consolidated.

569 360,22

647 137,55 (8 242,62)

569 360,22

647 137,55 (8 242,62)

569 360,22

638 894,92

Note 8

Fixed Tangible Assets

8.1. Disclosure on Tangible Fixed Assets a) Measurement used to determine the gross carrying amount The initial measurement is made considering the cost and then adjusted according to the accumulated depreciations and impairment losses, which did not happen in this case.

Companies integrating the consolidated accounts under the full consolidation method suffered consolidation adjustments, both in gross carrying amounts and depreciations, reason why the subsequent measurement will reflect such adjustments. b) Depreciation methods used The assetsâ&#x20AC;&#x2122; useful life is limited and defined according to the usefulness expected by the company. Therefore, it is assessed annually.

The depreciation method used for all assets is the straight-line depreciation method, which reflects an expected and constant consumption of economic benefits. c) The reconciliation of initial gross values, final gross values, increases, amortizations and alienations, and initial and final gross depreciations values of subsidiaries that integrate the consolidated accounts of ACA SGPS is presented in the table below. One should highlight the changes in the consolidation period, reflected in the conciliation of the final balances of 2013 and the initial balances of 2014.

Gondomar Riverside - Portugal

Tangible Fixed Assets

On 31.12.2012 (01.01.2013) with new perimeter

Buildings and other Constructions

Gross carrying amounts

Land

Buildings

167 182,89

10 819 188,38

62 756 461,58

(4 184 467,06)

(40 872 632,05)

167 182,89

6 634 721,32

21 883 829,53

22 127 056,62

10 980 780,11

8 693 943,26

Depreciations and losses accumulated impairment Net carrying amounts

Increases

Basic Equipment

Transfers

(669,01)

Disposals, accidents and losses

(275 521,92)

(1 265 052,46)

51 377,30

660 716,55

Consolidation adjustments to gross carrying amounts in Fixed Assets Revocation of depreciations of alienated assets Consolidation adjustments and accumulated depreciations Depreciations Exchange differences On 31.12.2013

Gross carrying amounts

(962 530,92)

(7 098 313,37)

(10 069,34)

(173 605,02)

(707 494,58)

22 284 170,17

21 350 841,55

69 477 188,79

(5 095 620,68)

(47 310 228,87)

22 284 170,17

16 255 220,87

22 166 959,92

1 829 522,00

900 123,91

757 603,47

47 579,86

814 359,54

22 250 965,46

70 234 792,26

(5 048 040,82)

(46 495 869,33)

17 202 924,63

23 738 922,93

880 592,45

2 846 781,44

(210 265,78)

(158 469,59)

37 847,87

104 338,61

(981 172,80)

(5 395 470,63)

22 921 292,13

72 923 104,11

(5 991 365,76)

(51 787 001,36)

16 929 926,37

21 136 102,75

Depreciations and losses accumulated impairment Net carrying amounts Conciliation of changes in perimeter 2013 Conciliation SI 2014

Change in gross carrying amounts Change in accumulated depreciations

On 31.12.2013 (01.01.2014) with new perimeter

Gross carrying amounts

24 113 692,17

Depreciations and losses accumulated impairment Net carrying amounts

24 113 692,17

Increases Transfers Disposals, accidents and losses

(273 404,78)

Consolidation adjustments to gross carrying amounts in Fixed Assets Revocation of depreciations of alienated assets Consolidation adjustments and accumulated depreciations Depreciations On 31.12.2014

Gross carrying amounts

23 840 287,39

Depreciations and losses accumulated impairment Net carrying amounts

23 840 287,39

Transportation Equipment

Administrative Equipment

Other fixed tangible assets

Tangible fixed assets under development

Consolidation Adjustments

33 824 174,99

2 197 472,89

1 986 672,56

111 751 153,29

(24 425 271,14)

(1 848 439,06)

(1 251 599,89)

(72 582 409,20)

9 398 903,85

349 033,83

735 072,67

39 168 744,09

2 800 679,08

49 664,13

72 496,04

200 014,70

Total

44 924 633,94

669,01 (2 502 226,58)

(40 260,43)

(351 669,18)

(4 434 730,57) (1 006 166,44)

1 918 023,23

17 139,32

264 500,69

(1 006 166,44) 2 911 757,09

(558,63)

209 531,53

209 531,53

45 595,77

(13 190 970,49)

(4 878 306,86)

(95 736,64)

(201 119,84)

(154 662,40)

(4 776,23)

(30 444,61)

33 967 965,09

2 202 769,37

1 677 054,86

200 014,70

(1 006 166,44)

150 153 838,09

(27 385 554,77)

(1 927 036,38)

(1 188 219,04)

(558,63)

255 127,30

(82 652 091,07)

6 582 410,32

275 732,99

488 835,82

199 456,07

(751 039,14)

67 501 747,02

61 362,05

(142 090,47)

1 172 623,17

15 212,59

1 006 166,44

5 600 523,15

340 681,69

49 791,08

(262 901,85)

558,63

(255 127,30)

734 941,65

34 029 327,14

2 060 678,90

2 849 678,03

215 227,29

(27 044 873,08)

(1 877 245,30)

(1 451 120,89)

6 984 454,06

183 433,61

1 398 557,14

215 227,29

73 837 211,83

2 656 452,63

97 275,36

4 689 341,20

432 998,81

11 603 441,90

(962,95)

(3 828 283,70)

(1 081 052,18)

155 754 361,25 (81 917 149,42)

(189 000,00) (1 192 555,64)

(189 000,00) (5 663 942,44) (697 891,38)

1 014 183,73

6 286,54

39 486,07

(4 409 372,11)

(102 919,46)

(250 653,56)

35 304 224,13

2 156 991,32

3 710 735,53

(30 440 061,46)

(1 973 878,22)

(1 662 288,39)

4 864 162,67

183 113,10

2 048 447,14

The conciliation between the final balance of 2013 and the initial balance of 2014 results from changes in perimeter, with the exit of Impact Evolution, Aca Gest

(697 891,38) 1 202 142,81

648 226,10

648 226,10

58 758,56

(11 080 830,02)

(597 643,77)

(597 643,77)

(1 295 535,15)

160 209 325,56

58 758,56

(91 795 836,63)

(1 236 776,59)

68 413 488,93

and Acamedco and the entrance of Consmar Construção Civil, Consmar France and GV.

Note 9

Non-Current Assets Held for Sale and Discontinued Operations

9.1 Non-Current Assets Classified as “Held for Sale” During the Period a) Description of non-current assets Breakdown of the major classes of assets and liabilities classified as “held for sale”

2014 Equipment for road construction

2013

Heavy good vehicle

Total

Equipment for road construction

Heavy good vehicle

Total

Transportation equipment

-

-

-

62.993,70

62.993,70

Total

-

-

-

62.993,70

62.993,70

b) Description of facts and circumstances that lead to the expected alienation: The dimension of the national market where the subsidiary ACA operates and the slowing down of its operations generated the need to sell some equipment in previous years. The classification of these assets as “held for sale” in 2013 was based on selling plans and interested purchasers and these selling operations were carried out in 2014.

Note 10

Costs of Obtained Loans and Financing Details

10.1. Expenses will loans obtained are disclosed as results for the period.

On 31st December, 2014 and 2013, the item “Obtained loans” was as presented below: (amounts in euros)

Items

31.Dec.2014

31.Dec.2013

Non-current

Current

Non-current

Current

739.885,17

39.213.652,75

1 132 833,53

48 596 024,22

Cautioned accounts

-

2.540.000,00

5 132 950,93

Confirming

-

2.161.292,89

3 482 041,39

1.270.974,76

903.355,48

1 177 483,69

618 362,37

28.816,46

621.821,32

1 267 102,24

973 013,95

Other

7.098,67

223.987,89

Total

2.046.775,07

45.664.110,33

Bank loans

Financial leases Participants in equity

Of the financing regarding financial leases on 31st December, 2014, approximately 1.200.000€ is related to the subsidiary AngolACA, while the remaining balance (approximately 900.000€) mainly refers to lease contracts for transportation equipment in Portuguese subsidiaries - ACA, Ambiágua, RRI and Global Stadium.

1 619 399,49 3 577 419,45

60 421 792,35

Note 11

Asset Impairment

Losses and reversions of impairment for the period ending on 31st December, 2014 were recognized thusly: Amount of losses by impairment and respective reversions recognized during the period

Other receivables

Financial investments

Clients

Total

Increases

(240.000)

-

(22.696,93)

(262.696,93)

2014

2013

Impairment losses recognized in results Impairment losses recognized in results

Reversions

-

-

7.742,57

7.743

Total

(240.000,00)

-

(14.954,36)

(254.954,36)

Increases

-

(102.500,00)

(8.315,47)

(110.815,47)

Reversions

-

-

230.150,00

230.150,00

Total

-

(102.500,00)

221.834,53

119.334,53

The amounts registered under client impairments result from an analysis of the collectability prospects of the respective outstanding balances, taking into account the best available evidence to date, in order to adjust the carrying forward amount to the amounts expected.

During the period, there were impairment losses for customers of the subsidiaries Ambiágua and RRI, amounting to € 22,696.93, and impairments had been recorded in prior periods were reversed in the subsidiary Angolaca in the amount of € 7,742.57.

In the subsidiary ACA, in turn, 2014 registered an impairment loss in the amount of 240.000€, registered under “Other receivables”.

The impairment recorded for financial investments in 2013 was intended to reduce to zero the recoverable amount of investments in the subsidiary VCP, which in 2014 was not included in the consolidation.

The annual test to goodwill impairment allowed for the conclusion that there was no impairment, which may be described according to the following paragraphs: Used Methodologies and Assumptions a. The test carried out was based on a 5-year cash-flow projections, calculated from EBITDA, for the two entities in the consolidation perimeter that detain a significant weight in the Group’s financial investments – ACA and AngolACA; b. Inflation rates and discount rates: information was

researched on 31/12/2014 on official websites (central banks and statistics institutes), resulting in the following references: inflation rate in Portugal = 0.2% and inflation rate in Angola = 8%. c. The 5% discount rates for Portugal and 9% for Angola reflect the opportunity cost; in the case of effective rates, the weighted average cost of capital.

For each one of the cases and for the purpose of updating cash flows, these rates were applied, which are considered to be the actual rates for each company. d. For the purpose of projections, the estimated range of business growth was increased by the expected inflation, which remained at the horizon forecasts. The annual cash flows were then deflated and updated according to actual rates. e. In the projections carried out and despite the continuity principle, residual components were not taken into account, given the market conditions, with a special emphasis for the risk of the country, in the case of Angola.

From the tests carried out according to the best available information at the time, there is no need to recognise impairments as Goodwill in both situations.

Sanitary Landfill – Guimarães, Portugal

Note 12

Investments in Subsidiaries and Other Companies

12.1 List of Significant Investments in Subsidiaries and Jointly Controlled Companies Investments in subsidiaries, associated companies and jointly controlled entities 2014

Headquarters

Total % of voting rights

Carrying amount of the investments at the end of the period

Financial information of the associated company Equity

Net Income

87.888.536,16

13.398,37

Subsidiaries and Associated companies Recognized using the Equity method

Minersolo

Angola

33,00%

30.105.417,04

Golfinvest VCP

Portugal

49,39%

525.431,59

1.063.841,04

(4.187,53)

Portugal

50,00%

0,00

(1.092.363,99)

(406.415,18)

25.261.597,71

18.321.037,74

Subtotals

30.630.848,63

Jointly controlled companies Recognized using the Equity method

S. Gonรงalo

Brazil

25,00%

Subtotals

1.806.163,13 1.806.163,13

Subsidiaries and Associated companies Recognized at Cost

Solamba

Angola

49,00%

7.827,79

Conciva

Angola

40,00%

6.390,03

Agro-angola

Angola

1,00%

146,97

Concopa

Angola

1,00%

159,75

Aca Cabo Verde

Cape Verde

98,43%

22.645,80

Valorec

Portugal

13,63%

7.500,00

Brancelhe

Portugal

2.493,99

Mirandela XXI

Portugal

4.462,00

Norgarante

Portugal

21.600,00

Lisgarante

Portugal

2.500,00

Garval

Portugal

2.500,00

Adrave

Portugal

5.100,00

Subtotals Total

83.326,33 32.520.338,09

Investments in subsidiaries, associated companies and jointly controlled entities 2013

Headquarters

Total % of voting rights

Carrying amount of the investments at the end of the period

Financial information of the associated company Equity

Net Income

2.928,04

Subsidiaries and Associated companies Recognized using the Equity method

Vid Garden

Portugal

50,00%

9.828,78

19.657,55

Golfinvest VCP

Portugal

49,39%

527.499,81

1.068.028,57

(4.843,26)

Portugal

50,00%

0,00

(685.948,81)

(419.016,92)

Subtotals

537.328,59

Jointly controlled companies Recognized using the Equity method

S. Gonรงalo

Brazil

25,00%

Subtotals

1.346.992,74 1.346.992,74

Subsidiaries e Associated companies Recognized at Cost

Solamba

Angola

49,00%

7.274,51

Conciva

Angola

40,00%

5.938,37

Agro-angola

Angola

1,00%

136,58

Concopa

Angola

1,00%

148,46

Cape Verde

98,43%

22.645,79

Aca Cabo Verde Brancelhe

Portugal

2.493,99

Mirandela XXI

Portugal

4.462,00

Norgarante

Portugal

21.600,00

Lisgarante

Portugal

2.500,00

Garval

Portugal

2.500,00

Adrave

Portugal

5.100,00

Subtotals Total

74.799,70 1.959.121,03

7.503.584,08

Note 13

Investments in Subsidiaries and Consolidation

13.1. Gains and Losses in Financial Investments Gains/losses from subsidiaries, associated companies and joint ventures

Subsidiaries and Associated companies

2014 Gains from subsidiaries, associated companies and joint ventures recognized during the period

Losses from subsidiaries, associated companies and joint ventures recognized during the period

Gains from subsidiaries, associated companies and joint ventures recognized during the period

Losses from subsidiaries, associated companies and joint ventures recognized during the period

-

(20.625,83)

1.065.739,80

-

4.421,40

-

18.520,82

-

-

ACE ACA/ SOMAGUE ANGOLACA Consmar Construção Civil

30.949,00

GV

604.007,03

-

-

Subtotals

639.377,43

(20.625,83)

1.084.260,62

Vid Garden

-

-

1.464,05

-

Golfinvest

-

(2.068,22)

-

(2.392,09)

(2.068,22)

1.464,05

(2.392,09)

(22.694,05)

1.085.724,67

(2.392,09)

Subtotals Total

2013

639.377,43

O ganho de 4.421,46€ registado nas contas da subsidiária Angolaca refere-se à aplicação do método da equivalência patrimonial sobre a sua participada Minersolo, na qual esta detém uma participação de 33%.

A perda registada de 20.625,83€ refere-se à apropriação por parte da subsidiária ACA, da sua quota-parte do resultado do ACE com a entidade Somague.

No que se refere à GV e Consmar Construção Civil, os ganhos registados respeitam ao badwill apurado no âmbito das suas aquisições, por parte das subsidiárias Aca Brasil e ACA, respetivamente.

Note 14

Inventories

a) The carrying amount in the companies integrally consolidated is of 12.295.332,33€€, according to the table below.

Carrying amounts of stocks

One should emphasize the difference in stocks between 2013 and 2014, which results from a change in perimeter, the effects of which should be taken into account for the analysis of the data described.

31.12.2014

31.12.2013

Gross amounts

(Net) carrying amounts

Gross amounts

(Net) carrying amounts

Goods

2.991.566,14

2.991.566,14

2.224.183,95

2.224.183,95

Materials / Subsidiaries and Consumption

4.535.494,28

4.535.494,28

4.300.283,90

4.300.283,90

Finished and semi-finished products

3.722.495,84

3.722.495,84

2.426.523,43

2.426.523,43

Advances made on purchases

1.045.776,07

1.045.776,07

263.536,05

263.536,05

12.295.332,33

12.295.332,33

9.214.527,33

9.214.527,33

Total

Parking Lot – Gondomar, Portugal

b) The amount of stock recognized as expenses during the periods is distributed thusly:

Purchases

2014 Goods

Materials / Subsidiaries and Consumption

+

2.224.183,95

4.300.283,90

Purchases

+

14.353.306,01

29.430.202,42

Purchase returns

-

239.524,63

(77.094,79)

Rebates and bonuses in purchases

-

(1.584.110,84)

(44.455,08)

Stocks at beginning of period

and consumed

Statement of the cost of goods sold

Amount of stock recognized as expenses during the period

Advances made on purchases Reclassifications

Stock at the end of the period

Correction / Reposition of cost of goods

1.291,61 +/-

(4.535.494,28)

(332.938,69)

(407.954,85)

11.908.398,91

28.296.427,93

-

Exchange differences Cost of goods sold and consumed materials

(2.991.566,14)

=

(370.351,00)

Caluquembe Bridge - Angola

2013 Totals

Goods

Materials / Subsidiaries and Consumption

Totals

6.524.467,85

974.980,33

2.253.939,89

3.228.920,22

43.783.508,43

17.991.243,01

25.121.892,96

43.113.135,97

162.429,84

(675.418,47)

(36.828,35)

(712.246,82)

(1.628.565,92)

(1.044.917,12)

(19.625,99)

(1.064.543,11)

263.536,05

263.536,05

1.291,61 (33.299,52) (7.527.060,42)

(2.224.183,95)

(370.351,00)

(33.299,52) (4.563.819,95)

(6.788.003,90)

(8.196.551,51)

(8.196.551,51)

(740.893,55)

351.835,71

1.106.206,45

1.458.042,16

40.204.826,83

15.340.239,99

15.928.749,55

31.268.989,54

c) Variation of production inventories in 2014 is 1.102.336,93â&#x201A;Ź is presented below:

Disclosure of variation in production inventories

2014

2013

Finished and intermediate goods

Total

Finished and intermediate goods

Total

Inventories at beginning of period

-

(2.426.523,43)

(2.426.523,43)

(2.031.684,18)

(2.031.684,18)

Inventories at end of period

+

3.722.495,84

3.722.495,84

2.426.523,48

2.426.523,48

Exchange differences

+/-

(193.635,48)

(193.635,48)

125.004,65

125.004,65

Variation in Production Inventories

=

1.102.336,93

1.102.336,93

519.843,95

519.843,95

Note 15

Construction Contracts

In construction contracts with fixed price, the parties agree in fixating a price or a rate per input unit, which does not mean that, upon request from the client, variations may be admitted in the works to be executed, with consequent reflections in revenue. In case specific clauses for the definition of incentives are established, the corresponding revenue can only be recognized if, considering the circumstances according to which the works are being conducted, they are likely to be demanded and, in such case, are quantifiable in a contract.

The revenue from contracts with reliably estimated outcomes is recognized using the percentage of completion method, according to which the revenue is balanced with contractual expenses until the work is finished, which is translated into the recognition of the revenue, expenses and profits, attributable when the work is concluded.

To determine the completion stage of the contracts on the balance sheet date, it is important to assess the work executed by using the most adequate method in regards to the contracts, namely: >

• Proportion of costs incurred compared to total estimated costs; • Survey of works conducted; • Conclusion of a physical proportion of the works contracted.

When the sum of the incurred expenses and the future expenses under the contract can be estimated to exceed the total of recognized and to be recognized revenue, a loss is recognized in the results for the period during which it is observed, as a provision.

When the outcome cannot be reliably estimated, revenue is recognized to the extent to which it is likely that incurred contract costs are recoverable.

The revenue recognized as such for the period was EUR 161.186.090,16€ and is the result of:

(amounts in euros)

Construction Contracts

Amounts recognised during the period Results

2014

Revenues

Expenses, including expected losses

Results

ACA

21 358 724,39

(16 357 020,40)

5 001 703,99

Angolaca

94 001 779,33

(72 309 061,02)

21 692 718,31

Ambiáfrica

24 907 236,88

(21 658 466,86)

3 248 770,03

Aca France

12 056 756,49

(12 210 380,47)

(153 623,98)

Aca Brasil

8 664 059,46

(7 217 590,06)

1 446 469,40

Global Stadium

197 533,61

(161 544,47)

35 989,14

161 186 090,16

(129 914 063,28)

31 272 026,89

8 411 053,68

(6 990 953,64)

1 420 100,04

118 641 793,55

(91 262 918,12)

27 378 875,44

461 472,30

(480 266,37)

(18 794,07)

Ambiáfrica

24 562 487,64

(21 358 684,91)

3 203 802,74

Aca France

1 626 167,79

(1 615 181,39)

10 986,40

Aca Brasil

5 326 925,31

(2 466 361,97)

2 860 563,34

159 029 900,27

(124 174 366,39)

34 855 533,88

Totals 2013

ACA Angolaca Acamedco

Totals

It is important to mention that the Portuguese and French markets use, as an instrument to measure the works executed, the proportions of paid costs regarding

the total estimated costs, whereas in Angola and Brazil they conduct a survey of the work carried out, thus ensuring the reliability of paid costs.

Note 16

Revenue

Generated revenues from consolidated companies result from services provided and sales. The recognition is made with the transfer of propriety and all risks inherent to ownership in case of sale. Considering service provision, recognition occurs after their execution.

Revenues recognized during the period

The measurement of revenues in construction contracts is done according to by IAS 19, while the rest of the services provided are measured according to the contract value and its scheduled execution.

2014

2013

Revenues recognized during the period

Revenues recognized during the period

17 956 147,30

15 541 404,29

172 700 672,45

168 274 490,87

161 186 090,16

159 029 900,27

11 514 582,28

9 244 590,60

190 656 819,75

183 815 895,16

Sales Provision of sales Construction contracts Other provisions of services Total

The evolution of revenue coming from sales and provision of services in 2014 and 2013 is featured below:

Revenues recognized during the period

Sales

31.Dec.2014 Revenues recognized during the period

31.Dec.2013

Percentage Proportion Revenues Percentage Proportion compared to change compared recognized compared to change compared to revenues total revenue to revenues during the period total revenue recognized recognized in the recognized recognized in the previous period during the period previous period during the period

17.956.147,30

9,42%

15,54%

15.541.404,29

8,45%

(-7,92%)

Provision of sales

172.700.672,45

90,58%

2,63%

168.274.490,87

91,55%

(10,65%)

Total

190.656.819,75

100%

3,72%

183.815.895,16

100%

(10,43%)

In terms of turnover distribution of the Group, between national and foreign markets, one finds the following data: Distribution of Turnover

2014

Weight

2013

Weight

Var. %

National market

26.823.965,07

14,07%

26.426.431,70

14,38%

1,50%

Foreign market

163.832.854,68

85,93%

157.389.463,46

85,62%

4,09%

Total

190.656.819,75

100,00%

183.815.895,16

100,00%

3,72%

As is easily observable, there was a 3.72% increase in turnover, when compared to the previous period.

Although there was a favourable evolution both in the national and in the foreign market, the contribution of foreign markets was unquestionably more relevant, representing almost 86% of the Group’s total turnover.

this market when compared to 2013, a consequence of the increased contribution of France and Brazil, which resulted from the Group’s expansion strategy in such markets and the dynamisation of the operations already in place.

In such foreign market, Angola jumps to the foreground, representing approximately 71% of turnover. Even so, there was a reduction of 8 p.p. in the relative weight of Foreign market

TO 2014

Weight

TO 2013

Weight

Angola

135.120.253,92

70,87%

150.001.065,85

78,68%

France

14.925.281,48

7,83%

1.600.000,00

0,84%

Brazil

13.787.319,28

7,23%

5.326.925,31

2,79%

0,00

0,00%

461.472,30

0,24%

163.832.854,68

85,93%

157.389.463,46

82,55%

Morocco International total

Rehabilitation and construction of “Village” a Luxury Tourist Complex – Tipaza, Algeria

Note 17

Provisions, Contingent Liabilities and Contingent Assets

Exchange differences reflect the updates of the accrued amounts by AngolACA between 2013 and 2014. Also, the correction made in the period related to estimated amounts in prior periods, as well as the reversal of provision for guarantees given to customers, relate to Provisions Accrued on 31.12.2012 (01.01.2013) Elimination of the effect of exchange rate differences from the previous year Increases

Securities to clients

Onerous contracts

Other provisions

Total

11.915.361,69

14.361,79

798,19

11.930.521,67

348.139,72

7.932,13

66.025,08

13.884,23

87.841,44

(14.362,60)

(797,26)

(15.159,86)

(127,88)

(1.071.881,65)

13.757,28

11.279.461,32

Amounts used in the period by provisioned events Amounts reversed during the period

Exchange rate differences

(1.071.753,77)

Accrued on 31.12.2013 (01.01.2014)

11.199.679,77

Elimination of the effect of exchange rate differences from the previous year Increases

348.139,72

By reinforcement of provisions already recognized in previous periods By new provisions

Reductions

that subsidiary. This reversal results from a judgment made by the Board based on the historical analysis of the entityâ&#x20AC;&#x2122;s data, which gave a new estimate in late 2014, based on current assumptions and requirements.

By reinforcement of provisions already recognized in previous periods

66.024,27

1.071.753,77

1.071.753,77

15.217,34

15.217,34

By new provisions Reductions

Correction of provisions recognised in previous periods

(5.465.406,39)

Amounts reversed during the period

(3.991.097,61)

Exchange rate differences

(822.244,04)

Accrued on 31.12.2014

2.007.902,84

(13.757,28) (66.024,27)

(5.479.163,67) (4.057.121,88) (822.244,04)

0,00

0,00

2.007.902,84

Note 18

Note 19

Events After the Balance

Income Taxes

The disclosure of these consolidated financial statements was authorized by the company’s legal representatives on 30th June, 2015, the latter having the power to enforce changes during the General Shareholders’ Meeting with the objective of assessing the statements.

In the periods of 2014 and 2013, the chapter income tax had the following composition:

No information was received after the balance sheet date that could hinder such assumptions.

Current taxes Active deferred taxes Passive deferred taxes Income Tax

2014

2013

(8.075.691,67)

(3.012.314,88)

(10.805,82)

42.904,56

-

(12.657,26)

(8.086.497,50)

(2.982.067,58)

It is important to mention that expenses with current taxes, which were more than 8.075.691,67€ in 2014, result, in approximately 90%, of the results obtained in Angolan subsidiaries, with particular emphasis to AngolACA.

Note 20

Financial Instruments

The Groupâ&#x20AC;&#x2122;s policy is to recognize an asset, a financial liability or an equity instrument only when it becomes part of the instrumentâ&#x20AC;&#x2122;s contractual provisions.

measurement is made at cost or amortised cost, if it can be reliably measured and if the difference between them is materially meaningful, minus impairment losses.

Financial assets held for negotiation are measured at fair value in the parent company, ACA SGPS and subsidiary ACA. The value reflects the variation between cost of acquisition and the price at the closing date of the fiscal year.

The details on financial assets and liabilities on 31st December, 2014 and 2013 is found below:

For the rest of financial assets and liabilities, the > (amounts in euros)

Carrying amounts under each class of financial assets and financial liabilities Financial assets

31.12.2014

31.12.2013

Carrying amounts

Carrying amounts

Financial investments

3.131,18

8.047,37

Shareholders/partners

66,07

-

Assets by Deferred Tax

211.117,40

645.310,31

Other Financial Assets

54.357,03

171.453,20

268.671,67

824.810,89

Financial assets held for negotiations

8.123.356,92

4.625.686,28

Subtotals

8.123.356,92

4.625.686,28

293.730.214,38

276.620.432,03

23.016.939,73

21.498.551,23

10.098.116,89

9.331.869,47

101.303.854,84

151.634.109,69

18.674.390,15

24.485.247,82

446.823.515,99

483.570.210,24

455.215.544,58

489.020.707,41

2.046.775,07

3.577.419,45

Non-Current Assets

Subtotals Current Assets Financial assets at fair value through profit in results

Financial assets measured at cost Clients minus impairment Advanced Payments to Suppliers State and other public entities Other receivables Cash and Bank Deposits Subtotals TOTAL Financial liabilities

Non-Current Liabilities Financial liabilities measured at amortized cost

Obtained loans Liabilities by Deferred Taxes

67.755,48

Subtotals

2.046.775,07

3.645.174,94

Suppliers

49.997.440,97

40.446.496,47

Advanced payments to clients

22.921.411,26

15.216.155,43

State and other public entities

8.667.149,39

4.138.787,35

147,28

147,28

Obtained loans

45.664.110,33

60.421.792,35

Other payables

33.027.443,58

58.951.608,99

160.277.702,82

179.174.987,88

162.324.477,89

182.820.162,81

Current Liabilities Financial liabilities measured at amortized cost

Shareholders/partners

Subtotals TOTAL

Gains and losses registered in 2014 and 2013 refer to fair value variations in financial assets and liabilities are described below: Net gains and net losses recognized as financial assets and liabilities Financial assets

Total

Measured at fair value through profit in results

Financial assets held for negotiation

2014 Gains

Losses

181.459,04

(61.135,98)

181.459,04

(61.135,98)

2013 Net gains (and losses)

Gains

Losses

Net gains (and losses)

120.323,06

137.523,74

(110.880,62)

26.643,12

120.323,06

137.523,74

(110.880,62)

26.643,12

Bridge over Homem River â&#x20AC;&#x201C; Vila Verde, Portugal

Note 21

Equity

On 31st December, 2014 and 2013, the composition of the Group’s Equity was as below: 31.12.2014

31.12.2013

30.050.000,00

30.050.000,00

Legal reserves

1.109.809,38

1.043.372,78

Other reserves

122.995.003,68

Paid-in capital

Retained earnings

52.060.164,56

209.574.305,54

Adjustments in financial assets

16.648.946,45

(93.491,40)

Other variations in equity

(9.873.089,80)

(21.684.345,61)

Net result for period Minority interests Total Equity

12.381.354,69

15.115.010,49

189.995.162,12

156.078.963,86

415.367.351,08

390.083.815,68

Equity is more than 30.050.000€ and is made up of 6.010.000 shares, fully subscribed and paid for, with a nominal value of 5€ each.

Category of issued shares

Quantity of shares Issued Shares Fully Paid

ACA S.G.P.S.

6.010.000

Not paid

Issued Shares Total

6.010.000

Shares held by Subsidiaries or Associated companies

Nominal value of shares Issued Shares Fully Paid

Not paid

5,00 €

The amount found under “Other Reserves”, on 31st December, 2014, 122.995.003,68€, mostly results from reclassifications carried out on the chapter “Carried forward results”, made by the subsidiary AngolaACA. The chapter “Adjustments in Financial Assets” essentially includes the effect on equity of the application of the equity method over subsidiaries outside the consolidation perimeter. The identified variation, when compared to the previous year, is essentially due to the

Issued Shares Total

Shares held by Subsidiaries or Associated companies associadas

5,00 €

proportion given to equity holders of the effect of the application of the equity method by AngolACA to its subsidiary Minersolo.

As stated on Note 3, the chapter “Other variations in equity” includes the effect of exchange rates in the financial statements of subsidiaries that operate with a currency other than Euro, according to IAS 23.

Note 22

Other Relevant Information

22.1. State State and Other Public Entities 241 – Income Tax 242 - Withholding income taxes 243 – Added Value Tax

31.Dec.2014

31.Dec.2013

Assets

Liabilities

Assets

Liabilities

9.317.418,18

6.874.183,58

594.965,08

2.566.044,50

22.066,74

647.726,40

7.246.868,17

150.785,66

757.313,83

588.334,04

1.485.208,97

403.868,93

244 – Other taxes

-

98.209,29

4.827,25

653.269,92

245 – Contributions for Social Security

-

388.409,34

-

364.818,34

1.318,15

70.286,75

-

-

10.098.116,89

8.667.149,39

9.331.869,47

4.138.787,35

248 – Other tax TOTAL

As mentioned earlier in Note 19, the largest portion of the balance under “State and other Public Entities” refers to income tax, attributable to the contribution of the subsidiary AngolACA.

22.2. Deferrals Income and expenses are reported during the period they refer to, regardless of having been paid or received, according to an accrual basis. Therefore, the chapters Recognisable Expenses and Recognisable Income register amounts paid/received that correspond to expenses/deferrals that will be deferred in future periods.

Deferrals

31.Dec.2014 Assets

Expenses to be recognized Insurance Rents Other deferred expenses

31.Dec.2013 Liabilities

Assets

8.128.055,93

8.502.849,16

48.826,64

188.448,78

698.288,47

544.304,82

7.380.940,83

7.770.095,56

Liabilities

Income to be recognized

7.902.813,19

3.610.354,21

Provisions of services

7.885.509,09

3.598.691,62

Other deferred gains Subsidies Other recognisable income

4.091,87

11.630,07

13.212,23

32,52

22.3. Other Payables Under “Other Payables”, on 31st December, 2014 and 2013, the following information was found: Items

(amounts in euros)

31.Dec.2014

31.Dec.2013

Non-current

Current

Non-current

Current

Staff

-

1 719 859,24

-

173 681,45

Investment suppliers

-

635 062,17

-

(730 050,53)

Creditors by increased expenses

-

21 038 680,99

-

17 194 580,90

Remunerations

-

1 942 635,69

-

1 830 460,14

Other increases in expenses

-

19 096 045,29

-

15 364 120,76

Other creditors

-

9 633 841,17

-

42 313 397,18

TOTAL

-

33 027 443,58

-

58 951 609,00

Under “Creditors by increased expenses”, one registered the best possible estimation for expenses taking place during the period under analysis, whose outflow should only happen in future periods.

22.4. Other Receivables Under “Other Receivables”, on 31st December, 2014 and 2013, the following information was found: Items

31.Dec.2014

31.Dec.2013

Non-current

Current

Non-current

Current

Staff

0,00

176 755,52

0,00

0,00

Debtors by increased revenue

0,00

39 612 696,78

812,36

24 578 416,61

Provision of services

-

36 988 461,64

-

15 648 895,42

Other increased gains

-

2 624 235,14

812,36

8 929 521,19

Other debtors

211 117,40

61 514 402,54

644 497,95

127 055 693,07

TOTAL

211 117,40

101 303 854,84

645 310,31

151 634 109,68

Under “Debtors by increased revenue”, one registered the best possible estimation for expenses taking place during the period under analysis, whose inflow should only happen in future periods, according to accounting accrual principles.

One should refer that a significant portion of the items “Debtors by increases revenue”, “Creditors by increased expenses” and “Deferrals (assets and liabilities) is related to construction contracts and the application of the criteria established in IAS 19.

22.5 External Supplies and Services The expenses incurred in the periods of 2014 and 2013 with External Supplies and Services are presented, when detailed by categories, as follows: External Supplies and Services Subcontracts

2014

2013

28.735.975,49

19.444.427,60

Specialised works Expert works

11.693.958,76

8.780.398,79

Marketing and promotion

386.867,44

238.583,89

Surveillance and security

943.948,79

578.617,51

Payment fees

219.199,07

702.829,79

Commissions

63,81

-

Conservation and repair

9.338.333,17

18.620.609,01

Other

1.734.263,00

3.790.557,79

Materials Quick wear tools and utensils Books and technical documents Office supplies Gifts Other materials

2.153.430,53

2.540.649,52

79.611,35

78.647,97

560.203,09

388.601,83

771.498,24

710.172,77

2.621.366,61

287.178,24

Energy and fluids Electricity Fuel Water Other fluids

178.559,80

124.165,05

3.701.748,14

5.515.237,40

138.933,22

136.731,72

540,95

118,18

Travel and accommodation Travel and accommodation Staff transportation Goods transportation Equipment transportation Other

8.800,23 1.588.393,99

1.221.920,66

-

235,28

464.859,21

121.732,29

-

-

120,00

325,79

Different services Rents and leases

4.283.618,48

2.149.051,10

Communication

699.798,59

795.072,01

Insurances

962.828,41

470.823,92

24.073,18

-

Legal and notary fees

257.555,67

337.663,30

Representation fees

242.973,82

141.761,85

Royalties

Cleaning, hygiene and comfort Other services TOTAL

227.182,32

233.794,90

2.132.185,05

2.825.141,10

74.142.090,18

70.243.849,49

Expenses with subcontracts were, in 2014, approximately 28.7 million Euros, representing about 40% of the total value of this chapter. This essentially include subcontract services, hired to third party entities, with an emphasis to the contribution of companies such as ACA, ACA France, Angolaca and AmbiĂĄfrica.

Landscaping The Governorâ&#x20AC;&#x2122;s Palace in Benguela - Angola

22.6 Expenses with Staff In 2014 and 2013, the expenses with staff members were those presented below:

Staff Remuneration of Board of Directors Remuneration of Staff Compensation Expenses with remuneration of Board of Directors Expenses with remuneration of Staff Insurance for work accidents Post-employment benefits TOTAL

2014

2013

1.082.685,88

818.047,38

30.492.266,20

24.884.614,49

468,39

538,80

81.049,62

64.019,36

2.553.699,73

1.724.837,79

735.178,44

254.941,70

2.596.683,45

3.457.870,36

37.542.031,72

31.204.869,88

2014

2013

2.868.131,72

2.244.038,67

2.981,60

3.958,45

5.245.290,07

-

A large part of the amount registered under “Other expenses with staff” is related to the subsidiary Angolaca and essentially includes expenses with food (cafeteria), medicine and travel expenses of collaborators, among others. One should also mention that, for this Group, expenses with staff represent approximately 65% of all Consolidated Expenses, shown above.

22.7 Other Expenses and Losses For 2014 and 2013, the item “Other expenses and losses” had the elements presented below: Items Taxes Prompt payment discounts Unfavourable exchange rates Losses in stocks Expenses and losses on financial investments Expenses and losses on non-financial investments Other expenses and losses TOTAL

Transactions in currencies other than Euro are converted into functional currency using exchange rates at the time of the transactions. Exchange rate gains or losses resulting from the liquidation of transactions and the conversion, according to such rate and at the time of the balance, of fiduciary assets and liabilities in currencies other than Euros are recognised in the

-

46,33

163.136,18

-

54.967,36

567.170,04

1.969.257,78

6.938.477,50

10.303.764,72

9.753.690,98

Statements. Therefore, unfavourable exchange rate differences presented above reflect losses incurred after the liquidation of transactions in foreign currency. The main contribution was from the subsidiary ANGOLACA Construções, S.A., due to the currency depreciation that witnessed during the period.

22.8 Other Revenue and Gains For 2014 and 2013, the item “Other Revenue and Gains” had the elements presented below: Items

2014

2013

3.882.331,61

251.612,62

Prompt payment discounts

80.521,96

53.123,07

Favourable exchange rates

3.160.487,79

-

Revenue and gains in other financial assets

2.595.072,15

665.796,08

133.654,56

594.122,06

2.881.829,94

4.747.577,74

12.733.898,01

6.312.231,57

Complementary revenue

Revenue and gains in non-financial investments Other revenue and gains TOTAL

The item “Complementary revenue” includes income coming in from services provided by the companies of the Group, namely related to studies, projects and technological assistance.

Regarding “Favourable exchange rates”, once more the contribution of the subsidiary AngolACA comes forward, since the amount above is largely related to the gains occurring from the liquidation of transactions and conversion to >

the rate at the time of the balance of fiduciary assets and liabilities in kwanzas.

As for “Revenue and gains in other financial assets”, the amount disclosed above includes approximately 2.136.000 Euros of gains obtained by ACA, a subsidiary, with transaction of financial assets held for negotiation.

22.9 Financial Results The items “Interests and similar revenue obtained” and “Interests and similar expenses paid” may be seen in the table below for the periods of 2014 and 2013 respectively: Items Obtained interest Other similar revenue TOTAL

2014

2013

1.083.375,95

184.442,38

261.618,88

15.809,70

1.344.994,83

200.252,08

Items

2014

2013

9.666.564,37

6.816.947,58

Unfavourable Exchange rates

-

32.304,43

Other financing expenses

681.732,73

10.485,22

10.348.297,10

6.859.737,23

Paid interest

TOTAL

Over 90% of the total interest paid by the Group respects to the subsidiary Angolaca and such influence comes from the combination of the level of debt and an unfavourable economic climate, which provided a significant increase in interest expenses in 2014.

Note 23

Legally Required Disclosures

Of the information required by law: a) The Group had no outstanding debts to the State or Social Security; b) The Group has no own shares and did not, until this moment, carry on any transactions involving such securities; c) There were no business between the Group and the members of the Board.

V.N. Famalic達o, 30th June, 2015