Annual report 2015 dst sgps

Consolidated Annual Report dst – sgps, s.a.

December 31, 2015

Index

A) 1.

2.

3.

4.

5.

6.

7.

B)

CONSOLIDATED MANAGEMENT REPORT TO THE BOARD OF DIRECTORS MACROECONOMICS FRAMEWORK ECONOMIC AND FINANCIAL ANALYSIS MATERIAL EVENTS OCCURRING AFTER THE END OF THE PERIOD FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES INFORMATION REQUIRED BY LEGISLATION AUTHORIZED DISCLOSURE DATE FOR ISSUE THE FINANCIAL STATEMENTS FINAL NOTE CORPORATE SOCIAL RESPONSABILITY

3 3 25 47 47 47 48 48 49

HUMAN RESOURCES SAFETY, HYGIENE AND HEALTH R&D AND INNOVATION SOCIETY ENVIRONMENT QUALITY AND CERTIFICATIONS

49 51 53 54 56 59

C)

ANNEX TO THE BOARD OF DIRECTORS CONSOLIDATED REPORT

61

D)

CONSOLIDATED FINANCIAL INFORMATION

63

CONSOLIDATED BALANCE SHEET CONSOLIDATED INCOME STATEMENT CONSOLIDATED STATEMENT OF EQUITY CHANGES IN 2015 CONSOLIDATED STATEMENT OF EQUITY CHANGES IN 2014 CONSOLIDATED CASH FLOWS STATEMENT ANNEX AT DECEMBER 31, 2015

63 64 65 66 67 68

E)

LEGAL CERTIFICATION OF CONSOLIDATED ACCOUNTS

119

F)

REPORT AND OPINION OF THE SOLE FISCAL AUDITOR

120

Consolidated Annual Report 2015

A)

Consolidated Management Report to the Board of Directors

Dear Shareholders,

In compliance with the legal and statutory regulations, the Board of Directors presents the management report for 2015 fiscal year.

As the environment where we operate is directly related to the positive evolution or downturn of the global economy, before presenting the entity’s financial information and its business centers we will do a slight approach to the most important national and international macroeconomic data.

1.

Macroeconomics framework

1.1

International macroeconomics framework

The world economy projections, presented recently by the International Monetary Fund (IMF), point to a strengthening of global growth after the slowdown seen in 2015, anticipating a recovery of gross domestic product (GDP) compared to the stabilization around 3, 4% in the last two years. Regarding international trade developments, there was a global intensification of trade, albeit less dynamic compared to that observed before the international financial crisis. Current prospects indicate an upward revision for the advanced economies. So in the coming years, it is expected an improvement in the world economy performance, based on growth strengthening of the advanced economies, where it is expected a relatively moderate growth in the United States of America (USA), an improvement in Japan and a moderate recovery in the European Union (EU), in which all Member States should return to growth, a fact that did not happen since 2007 (Croatia is expected to register the weakest growth and Ireland the strongest one).

Growth expectations for major emerging countries (except India) have been revised downwards, especially for Russia and Brazil, reflecting lower prices of raw materials that impact on the external imbalance and budget equilibrium, weakening the financial system, causing to socio-political instability and worsening geopolitical tensions in some of these countries (with emphasis on the Russia / Ukraine crisis and the Middle East instability). Among the emerging countries, GDP growth was again negative in Brazil and had a less robust growth in China.

In the case of the Eurozone, beyond a stronger GDP growth than in the previous period, the European economy evolution will be influenced by an higher oil and other non-energy raw materials market price decline, by an effective weaker euro and by the impact of the current unconventional monetary policy measures of the European Central Bank dst - sgps, s.a.

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(ECB) - Quantitative Easing – reverberating in financing conditions improvement of the economies and strengthening domestic demand.

Therefore, both for the European Union and the Eurozone, it is expected a gradual economic recovery, coupled with the improvement in exports and the increase in public consumption, with GDP increasing to about 1.9% and 1.6%, respectively, also as a result of the positive development of confidence indicators, in particular the improvement of building contractors confidence.

Macroeconomic Indicators

2013

2014

2015(e)

2,2 0.0 -0.5 1.5

2.4 1.4 0,9 -0.1

2.6 1.9 1.6 0.7

GDP: USA EUROPEAN UNION EUROZONE JAPÃN

Source: GPEARI Finanças Reading: Percentage variationl (e) - estimated

However, as a result of a still weak economic activity resulting from the adjustment process of public and private sector balances in several Member States, the Eurozone labor market conditions still showed a fragile situation. During 2015, there has been a gradual improvement in employment, highlighting a decline in the unemployment rate to 9.5% in the European Union and to 10.9% in the Eurozone, thereby recording the lowest values since late 2011 and mid-2009 respectively. At the end of 2015, Eurozone business expectations and job creation improved for manufacturing, services and construction, and got worse for the retail trade.

As for inflation, IMF forecasts point to a significant decrease for most advanced economies and a slight acceleration for all the emerging countries, standing at high levels in some Latin America countries (Brazil), Asia (India) and Russia.

Thus, in 2015, the Eurozone inflation rate decreased to zero (+ 0.4% in 2014), mainly reflecting a decrease in energy prices, which fell on average 6.9% (-1, 9% in 2014). On the contrary, prices of unprocessed food products increased on average 1.7% in 2015 (-0.9% in 2014). US annual inflation rate dropped to 0.1% in 2015 (+ 1.6% in 2014).

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Consolidated Annual Report 2015

2013

2014

2015(e)

USA

1.5

1.6

0.1

EUROPEAN UNION

1.5

0.5

0.0

EUROZONE JAPĂƒN

1.4 0.4

0.4 2.7

0.0 0.8

5.3

Macroeconomic Indicators Inflation:

Unemployment rate:: USA

7.4

6.2

EUROPEAN UNION

10.8

10.2

9.5

EUROZONE JAPAN

11.9 4.0

11.6 3.6

10.9 3.4

USA EUROPEAN UNION

1.9 -0.5

3.7 1.1

1.3 1.7

EUROZONE JAPAN

-0.7 -0.6

0.8 2.1

1.4 -0.8

Industrial Production Index:

Source: IMFI/ European Commission/ Eurostat/ GPEARI Finance Reading: Percentage variation (e) - estimated

The prices of non-energy raw materials recorded again in 2015 a slowdown, which is more pronounced than that recorded in 2014 due to a higher price fall of food and agricultural products, as well as in metal prices, which contributed to the economic slowdown in China. Oil prices decelerated sharply in 2015, to stand on average at $ 53.6/bbl (48 EUR/bbl), revealing the excess supply in a weakening global economic environment. The low oil price is due to fears of a world economy weaker development, the expectation of a production increase by Iran, the maintenance of OPEC production quota and the high level of crude stocks in the US. At December 31, 2015, the oil price reached a record low since the beginning of 2005, standing at $ 31.6/bbl.

The oil prices reduction for an importing oil economy, as is the case of the Portuguese economy, has a positive impact on GDP growth, by reducing production and transportation costs and its transmission to consumer prices. The impact on consumer prices reflects either the direct effect from the price reduction of petroleum products, or the indirect effect caused by the reducing of other goods production costs. Furthermore, the inflation reduction through lower oil prices has a positive effect on real disposable income of households and, consequently, on private consumption.

Despite the direct effect of oil price reduction stated above, there are a considerable effect on this matter, in particular the one of this raw material falling price in net oil-exporting economies, through the significant reduction in revenue associated with this raw material extraction, as is the case of Angola. As oil production the main source of export and tax dst - sgps, s.a.

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earnings, Angola is suffering the impact of this raw material sharp fall, whose price per barrel has a cumulative reduction of about 43% since 2014 second half.

In this context, and given the strong link of the Portuguese market to Angola, there is a sharp contraction in external demand from Angola, which has significantly affected the Portuguese exports.

Raw materials

Brent oil USD/Barrel (1) Agricultural goods (2) Metal (2)

2013

2014

2015(e)

108.6 1.6 -4.3

99.5 1.9 -10.3

53.6 -13.4 -23.1

Source: Ministry of Finance / Bank of Portugal Reading: (1) Barrel average price/USD / (2) Percentage variation (e) - estimated

In December 2015, the Eurozone exchange rate depreciated against major international currencies, with the euro traded at $1.089 by the end of the year, representing an homologous reduction of 10,3% ($1.214). This derogatory trend registered during the year 2015, in part, reflects the divergent direction of US and Eurozone monetary policy.

At 2015 year’s end, some forex market volatility was also witnessed up, especially the depreciation of some emerging countries’ currencies against the dollar (China, Russia and Brazil).

Foreign currencies

EUR/USD EUR/JPY EUR/GBP EUR/CHF

2013

1.379 144.72 0.834 1.228

2014

1.214 145.23 0.779 1.202

2015

1.089 131.07 0.734 1.084

Source: Ministry of Finance / Bank of Portugal Reading: Foreign currencies parity at the end of the period

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Consolidated Annual Report 2015

The European Central Bank (ECB) held during 2015, a set of unconventional monetary policy measures, keeping the main refinancing operations rate at 0.05%. The interest rates of the Euro money market continued the downward movement of the previous period, renewing historically low levels. In the US, at the period end, 3 months interest rates accentuated the upward movement, as a result of a less expansionary stance of the US Federal Reserve. So by December 2015 end, Euribor 3, 6 and 12 months interest rates stood at -0.13%, -0.04% and 0.06%, respectively. In the US, short-term interest rates rose to 0.61%.

Reference interest rates

2013

2014

2015

Eurozone USA Japan

0.25 0.25 0.10

0.05 0.25 0.10

0.05 0.25 0.10

United Kingdom

0.50

0.50

0.50

2013

2014

2015

0.45 0.22 0.29 0.39 0.56

0.14 0.02 0.08 0.17 0.33

-0.13 -0.21 -0.13 -0.04 0.06

0.24

0.26

0.61

0.15

0.11

0.08

Source: Ministry of Finance / Bank of Portugal Reading: Percentage at the end of the period

Monetary Market interest rates

Eurozone Eonia Euribor 1 month Euribor 3 months Euribor 6 months Euribor 12 months USA Libor 3 months Japan Libor 3 months Source: Ministry of Finance / Bank of Portugal Reading: Percentage, annual average

At 2015 end, there was an unfavorable evolution of the main international stock indexes. The stock prices decline was influenced by the negative performance of the Chinese stock market, by the significant oil prices decline and by some instability in the financial sector.

Stock markets

Dow Jones EURO STOXX Nikkei 225 Standard & Poors 500

2013

2014

2015

17.5 48.7 19.1

13.1 14.2 17.5

11.8 23.9 6.8

Source: European Central Bank Reading: Percentage variation

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Consolidated Annual Report 2015

Notwithstanding the emergence of new positive factors in 2015, including low energy prices, the uncertainty associated with global economic prospects remains high and the intensifying downward risks revision is itself related to geopolitical tensions, to volatility reappearance in financial and exchange markets in the context of divergent monetary policies among major economies, and to incomplete implementation of structural reforms. Moreover, a prolonged period of very low inflation or even deflation will also be detrimental both to the global growth outlook and, European in particular, or to the persistence of excessive public and private debt, despite the strong deleveraging effort over the most recent period.

On the other hand, the monetary policy is not yet fully defined by the US Federal Reserve for years to come, unknowing the time of the possible increase in federal interest rates, kept in the range between 0.00% and 0.25 % since the end of 2008. In this regard, any more restrictive monetary policy, with the possible rise of the directors’ interest rates, could have an impact on the US economy growth rate and increasing uncertainty in international financial markets.

In the Eurozone a reduction in financial risks associated with sovereign debt has been seen in 2015, due to the persistence of a markedly accommodative monetary policy of the ECB, by applying conventional instruments and nonconventional measures of liquidity provision. These measures aim to encourage lending concessions to economic agents, in order to stimulate the economy and prevent the continuation of deflation. Also some progresses in building the Banking Union to limit the financial fragmentation and divergence in financial conditions between these area countries have been achieved.

1.2

National macroeconomic framework

The moderate growth of the Portuguese economy in 2015 is close to the average growth rate projected by the ECB for the Eurozone. Current projections point to a continuation of the economic activity gradual recovery initiated in 2013. This trend should result in an average annual GDP growth rate of 1.6% in 2015, followed by 1.7% and 1.8% in 2016 and 2017, respectively. The current pace of recovery of the Portuguese economy has been relatively subdued, given the severity of the contraction observed in recent years, reflecting the need for further adjustment of the economic players’ balances, public and private ones, on the aftermath of the Eurozone international financial and sovereign debt crisis.

The dynamics of the Portuguese economy is expected to remain largely ensured by the robust growth of goods and services exports along with a recovery in domestic demand, consistent with the leverage level reduction of households and non-financial companies. The strong growth in domestic demand components with high import content, as private consumption of durable goods, and the Gross Fixed Capital Formation (GFCF) dynamism in equipment and transport equipment, has led to significant imports acceleration.

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Consolidated Annual Report 2015

The Gross Value Added (GVA) showed a moderate recovery in 2015, after an increase of 0.6% in 2014. It is expected a GVA recovery in agriculture, manufacturing and services, favored by the exports growth of goods and services and the domestic demand recovery. After a long period of successive falls, the activity in the construction sector showed a slight recovery in 2015, although this sector activity level is due to be within 35% lower than in 2008.

Macroeconomic Indicators Expenditure and GDP - Private Consumption - Public Consumption - GFCF - Exports - Imports - GDP at market prices Inflation Industrial Production Index Industrial Turnover Index PSI 20 Index Unemployment rate

2013

-1.4 -1.9 -6.3 6.4 3.6 -1.4 0.4 0.8 -0.5 16.0 16.2

2014

2015(e)

2.2 -0.5 2.8 3.9 7.2 0.9 -0.2 1.8 -1.2 -26.8 13.9

2.7 0.1 4.8 5.3 7.3 1.6 0.6 0.9 0.2 10.7 12.3

Source: Ministry of Finance / Bank of Portugal Reading: Percentage variation, excepting unemployment rate (e)- Estimatied

Private consumption is expected to grow 2.7% compared to a fall of 2.2% in 2014, benefiting from favorable developments in households’ real disposable income and from an improvement in expectations about permanent income, within a framework of high levels of consumer confidence maintenance. The increasing of disposable income in 2015 reflects the improvement of labor market conditions and the reversal of some fiscal consolidation measures implemented in recent years. Additionally, it also reflects the positive effect of oil price decline.

After growing by 2.8% in 2014, Gross Fixed Capital Formation is expected to grow 4.8% in 2015, recovering from a context of very sharp falls in the period 2009-2013. It should be noted that in the current period of economic recovery, the increased weight of GFCF in GDP has been much more moderate than in previous recoveries, which is an extensible phenomenon to other developed countries and is one of the factors which explain the slower economic activity recovery compared to previous cycles. Regarding business investment, it is projected a growth of 4.6% in 2015, although conditioned by the need to reduce the companies’ indebtedness level. The acceleration of exports in 2015 to 5.3% reflects, on the one hand, additional market share gains in a strong context of Euro depreciation, and secondly, temporary factors associated with fuel goods exports. The upcoming years do not anticipate significant market share gains for Portuguese companies, since the additional market share potential gains from the Euro exchange rate depreciation are partially offset by temporary effects on energy products exports and by the effect, which is assumed to be permanent, of the exports drop to Angola.

Inflation in Portugal has registered low values since 2013, in a context of reduced inflationary pressures both internal and external. After a deflation of 0.2% in 2014, inflation measured by the change rate of the Harmonised Index of Consumer Prices (HICP) in 2015 shows an increase to 0.6%. The price increase in 2015 reflects the evolution of non-energy dst - sgps, s.a.

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Consolidated Annual Report 2015

component, especially unprocessed food products and services, since the energy prices should continue to fall. The recent increase in expected inflation reflects the expectations of moderate economic recovery in the Eurozone and Portugal and continuation of the ECB expansionary monetary policy, despite some uncertainty factors relating in particular to oil raw-material price evolution.

Additionally, there was an improvement of consumer and business qualitative indicators compared to those observed in 2014, leading to an increase in economic sentiment indicator. Regarding market conditions, there are also signs of a moderate improvement in employment and a reduction in the unemployment rate, which stood at 12.3% at the end of 2015, compared to 13.9% in 2014.

Despite the gradual recovery projections of the Portuguese economy continues to face a number of challenges of utmost importance. On the one hand, it is crucial to ensure a significant increase in productivity, as well as grant that the economic growth benefits are distributed in order to contribute to a high degree of social cohesion. These objectives require strengthening incentives for innovation, factor mobility and human and capital investments. On the other hand, the progress made to correct accumulated macroeconomic imbalances that still characterize the Portuguese economy is intensified. Current external financing conditions represent an opportunity to guide public policies to increase the Portuguese economy resilience to cope with future adverse shocks. The sustained decline in public and private debt levels are of paramount importance. In this sense, the Portuguese economy success depends on the medium term pursuit of a public accounts balance close to the equilibrium level, in line with the European fiscal framework rules.

1.2.1

The Construction Sector

In a moderate recovery economics environment, the construction sector's situation in 2015 was marked by the reversal of the declining trend in important set of indicators that measure the evolution of demand, production and employment.

Indeed, construction investment and GVA growth rates positive throughout the year 2015, the first positive growth since 2007, being fact that the investment in construction increased by 4.7% and the GVA of the sector increased by 4.6 % in the third quarter 2015.

Throughout the year 2015, the Portuguese entrepreneurs’ confidence indicator of the construction sector maintained a positive change from the assessment produced in the same period, estimating a growth of 16.3%. These favorable developments results from an improvement of 37.5% in the entrepreneurs’ opinion regarding the progress of the order book, 3.6% in the prospects for job creation in the sector and 4.0% of the financial situation, YoY. However, the quantitative indicators related to building permits and construction works completed have maintained a downward trend in 2015, although more moderate than in 2014.

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In the first six months of 2015 there was an increase of 31.4% in housing transacted over the same period by checking a variation of 39.9% of total housings and 6.9% in the new quarters. In this period, the loans granted to individuals for house purchase increased by 58.6% to 1,665 million euros, up 515 million euros compared to 1,050 million euros granted in the same period last year. Accompanying the growth of transactions and loans, the average value of bank evaluation of housing observed an increase of 2.4% over the same period of 2014.

As for loans to construction companies, remained in 2015 the tendency of strong reduction in recent years, which is one of the main constraints to the construction companies’ activity. Conversely, the credit’s value to the sector classified as doubtful continued its upward trend, corresponding already about 32% of loans to the sector.

The concrete consumption in the national territory increased by 6.9% in 2015, signaling a possible reversal of the cycle of 7 consecutive years of falls in consumption of this raw material essential for the sector, in line with the moderate recovery in construction activity. However, in November 2015, the licensing of construction continues to fall (-11.5% in 2015, compared to -5.2% in 2014). This drop is less pronounced in new construction works licensed, representing 63.6% of the total (-2.9% in 2015 and -5.7% in 2014).

In the housing segment, the new housing building permits increased by 5.5% compared to 2014. In the third quarter of 2015, the number of licensed dwellings in new housing grew 19.1%, while in the building rehabilitation works housing was found a decrease of 11.8%. With regard to the construction of non-residential buildings, there were breaks both in terms of new construction, both in terms of rehabilitation licenses. In terms of the licensed area we observed an overall decline in non-residential housing market. By type of building, highlighting increases in the licensed area in non-market buildings, transport and communications, trade and tourism, and a decrease in buildings for agriculture and industry.

In the segment of public works, although the number of contracts in 2015 being higher than 2014, the total value of contracts decreased 37.6% compared to 2014. On average, each contract was concluded for about 79,000 euros, value which represents a decrease of 44% from the average of 141 thousand euros seen in 2014. In the contests promoted to public works there was a reduction in value of 38%, despite an increase of 6% recorded in the number of competitions.

In the first half of 2015, the employment provided by the construction sector increased by 4.8% over the same period, standing at 277,600 jobs, which means a recovery of 12,800 posts work compared to 264,800 recorded in the first half of 2014. As a result of these positive developments, the weight of the number of construction workers in total employment recovered to 13.7% and the number of registered unemployed in the centers of jobs arising in the sector construction reached 65,800, reflecting a decline year on year by 21.3%. The job prospects for the coming months are positive, by observing an indicator increase of 8.3% YoY.

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Sector Indicators Concrete sales Building licenses Construction – Works completed: - Buildings - Total - Buildings - Family Housing - Dwellings - Family Housing GFCF (Construction)

2013

2014

2015(e)

-22,8 -21,5

-9,5 -5,2

6,9 -4,8

-16,9 -21,7 -31,3 -12,2

-31,1 -39,4 -45,9 -3,2

-24,8 -25,0 -26,8 2,1

Source: Ministry of Finance Percentage variation (e) - estimated

In Angola, the construction sector is leading the job losses seen in 2015 due to the financial and economic crisis facing the country. The sharp drop of crude oil barrel price in the period did decrease the Angolan tax revenues from oil exports, leading the government to cut a third of all planned public expenditure, including contracts given to the state, thus affecting businesses Portuguese oriented to the Angolan market. Public works portfolio decreased dramatically, hence companies laid off workers, causing many Portuguese connected to this area begin returning to Portugal. At the end of 2015 it was estimated that about 80 thousand Portuguese workers had wage arrears in Angola.

On the other hand, construction companies will experience late payments, recurring situation in Angola. The revenue conversion of kwanzas for dollars and your expatriation to Portugal will be a growing problem due to the lack of currency in the market. Consequently, the Angolan crisis will have a negative impact on the Portuguese companies’ margin, and Angola is the largest market for Portuguese construction companies, representing 38% of total activity outside Portugal.

1.2.2

The Renewable Energy Sector

The Climate Conference which took place in 2015 and culminated in the so-called Paris Agreement, valid from 2020, commits all participants in the fight against climate change. The long-term goal of the agreement is to keep global warming below 2°C, since this is the point from which the scientific community believes that the planet would be subject, irreversibly, to potentially catastrophic effects of climate changes.

In this context, it was also decided that the funding of the necessary measures to be taken in developing countries to achieve this goal will be the responsibility of the developed countries, amounting to 100 billion euros per year.

It's up to each country to define, on a voluntary basis, their reduction targets of gas emission with greenhouse effect, in order to mitigate the effects of climate change.

It was thus clear that decarbonizing the economy is a path of no return, confirming the bet made by dst group, for some time already, in the Environmental Economics and specifically in the Renewable Energy sector. Programs such as dst - sgps, s.a.

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electric mobility, smart cities and energy storage, will provide new business opportunities that the group will be attentive in order to continue to be a benchmark company in the sector.

On the other hand, committed to reducing external energy dependence, increasing energy efficiency and reducing CO2 emissions, the Government set strategic guidelines for the energy sector, approving the National Energy Strategy (ENE 2020), which estimates that until 2020 will be reduced the external energy dependence by 74%.

Thus, renewable energy will have a key role to play, it is expected for the year 2020 an installed capacity of 8,500 MW in wind power, 8,600 MW in hydropower and 1,500 MW in solar energy.

In this sense, the renewable energy sector assumes increasingly a prominent position in Portugal. At the end of 2015, renewable installed capacity total reached 12.203MW, having annual production based on renewable sources of 26.052GWh. Thus, in 2015, 49.2% of the electricity consumed in Portugal was originated on renewable sources.

In this context, the Operational Programme for Sustainable and Efficient Use of Resources 2014-2020 will be a structural tool in the activity development of the energy production based on renewable sources, with the main goal to achieve a sustainable growth path, supported by a competitive development model, in order to mitigate consumption of natural resources and energy, while it generates new employment opportunities and economic development.

The fundamental transition to a low carbon economy will have to be necessarily supported by the development of energy efficiency and energy production based on renewable sources, themes supported in the Operational Programme mentioned above.

Wind Energy In Portugal, the North and Centre regions are the ones that have the higher concentration of national wind farms, due to the greater availability of resources. The installed capacity of wind power in Portugal at the end of 2015 stood at 4.990 GW, spread by 245 wind farms. The production in 2012 was 11,482 GWh. Most wind turbines currently in operation was installed between 2005 and 2012, and this technology is responsible for the production of more than 12 TWh since 2013.

The evolution of this sector will go through over equipping the existing parks or the installation of offshore wind farms.

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Solar Energy Due to its energy potential, the photovoltaic solar energy is one of the most promising energy resources. In 2015, the photovoltaic sector consolidate the global position achieved in previous years, as the third most important source of renewable energy.

In Portugal, the installed capacity at the end of the year 2015 reached approximately 454 MW, compared with 418, 299 and 244 MW in the years 2014, 2013 e 2012, respectively.

The year 2015 was marked by the entry into force of the self-consumption legal framework, which comes to liberalize the sector, allowing any electrical energy consumer to produce its own energy, exporting the surpluses to the grid utility.

Evens so, the business model supported by self-consumption eventually did not evolve as expected, since the technical regulations that support these installations was eventually published several months after the entry into force of the legislation.

Thus, it is expect that in 2016 corresponds to an effective increase in turnover associated with self-consumption, with the stabilization of the regulatory framework and the entry into operation of the first systems at this level.

The Hydropower The hydropower is the worldwide leading source of renewable energy, being one of the most attractive for its maturity and predictability, as well as for its ability to compete economically with other non-renewable energy sources. China is by far the world largest producer of hydroelectric power, followed by Canada, USA, Brazil and Russia.

In Portugal, the installed capacity is stabilized with a value of approximately 6,024 MW, which, on an average year, corresponds to slightly more than 30% of the electricity consumed in Portugal.

In 2007, the hydroelectric sector in Portugal was marked by the launch of the National Programme for High-Potential Hydroelectric Dams, which are currently running. This Programme foresees the Hydroelectric Exploitations implementation of Padroselos, Daiv천es, Vidago, Gouv찾es, Foz Tua, Pinhos찾o, Frid찾o, Girabolhos, Alvito and Almourol.

The completion of these projects will result in an increase of installed capacity of 1.054 MW. By 2020, it is expected to reach 7,000 MW of installed capacity, according to the targets set.

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1.2.3

The Telecommunications Sector

The year 2015 marks a major restructuring in the telecommunications sector, both nationally and internationally.

Therefore, it should be pinpointed the following events that took place during this year in the global context:  It was the year of the twenty-first century with more merger and acquisition of technology and telecom operators’ business operations. One of the largest operations in the history was the acquisition of Time Warner

by Charter Communications (US $ 78,7b);

 A globally sustained growth between 3% and 4% of the operators’ revenues. In Europe, particularly in Portugal, revenues are still shrinking, as a result of macroeconomic crisis, albeit at lower rates to those seen in previous years;

 An explosive revenue growth of "over-the-top players" (OTT), which now account for 25% of the global telecommunications market and have gained market share in traditional services such as voice, but especially in mobile applications.

As regards the European context, the following events pinpoints: 

The European Commission (EC) launched initiatives to achieve the Digital Single Market. To this end, the EC has defined several actions based on three main pillars, namely: (i) better access for consumers and businesses to goods and digital services across Europe, (ii) the creation of appropriate and fair competitive conditions for digital networks and innovative services the development,, and (iii) the optimization of the digital economy growth potential.

Source: http://europa.eu/rapid/press-release_IP-15-4919_pt.htm



Multiple mergers and acquisitions of operators swept across Europe, such as the purchase of EE by BT in the United Kingdom (£ 12b), the merger of Telenor’s Danish operations and Telia, the purchase by Altice of the remaining 20% of SFR (€ 1 95b);



The further consolidation of telecom operators’ equipment suppliers, with the purchase of Alcatel-Lucent by Nokia (€ 15,6b).

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In the national context, the telecommunications sector was marked by the following events: 

Altice bought PT for a total of 5,789 billion Euros, of which 4.920 million Euros were received directly by Oi and the remaining amount (EUR 869 million) was intended to PT’s debt discharge. As a result of this operation, Altice was forced sale to sale ONI and Cabovisão, by imposition of the competition regulator, which were acquired by Apax Partners Fund.;



The launch of new initiatives to increase the country optical fiber coverage (PT and Vodafone ads);



Huge investments were made by operators in the sports segment, particularly in football. Contracts were signed by NOS and PT Portugal with several clubs of professional football leagues including the three nationwide biggest clubs. Investment in television rights and advertising of these clubs exceeds EUR 1.3 billion.

Regarding the most relevant operational data, there is the development of FTTH - Fiber To The Home. The table below shows the number of residential customers in Portugal with High Speed networks services in fixed location, as well as the number of subscribers in December 2015.

As can be seen, this ratio has been growing considerably. Between the 2nd quarter 2015 and 3rd quarter of the same year there was a growth of around 4%. This positive variation is even more pronounced when comparing 3rd quarter 2015 with its previous period (18.4% increase).

2ndQ15 NUTS II

N. of residential customers

3rdQ15

Residential customers per 100 households

N. of residential customers

Residential customers per 100 households

Variation 3rdQ15/ 2ndQ15

Variation 3rdQ15/3rdQ14

NORTH

479

25,6

505

26,9

5,3%

24,2%

CENTRE LISBON MUNNNICIPALITIES ASSOCIATION

194

13,2

205

14,0

5,7%

32,00%

758

50,7

779

52,0

2,7%

11,3%

ALENTEJO

36

7,6

39

8,2

7,2%

34,6%

ALGARVE AZORES AUTONOMOUS REGION MADEIRA AUTONOMOUS REGION

53

13,8

55

14,4

4,0%

24,1%

29

26,4

30

27,0

2,4%

16,3%

47

35,5

48

36,9

3,8%

14,9%

1.596

26,9

1.661

28,0

4,0%

18,4%

TOTAL Source: IPC - ANACOM

dst - sgps, s.a.

Page 16 of 120

Consolidated Annual Report 2015

Given that dst group telecommunications companies are focused on the wholesale market, it should be examined the demand evolution for retail services bearable in their network.

On that basis, and according to the quarterly indicators published by the Portuguese National Regulatory Authority (ICPAnacom), pay-TV subscribers (considering not only wireline solutions but also satellite - DTH - Direct to Home) reached, at the end of 3rd quarter 2015, 3.47 million subscribers, more 43 thousand subscribers than in the previous quarter.

When compared with the last year same period, there is an increase of 5.5%, i.e. 180,000 more subscribers.

The increase in the subscribers’ number of television service technology by subscription in 3Q15 was due to the growth of products supported in optical fiber (FTTH / B), which grew in 2015 mora than 6.4% compared to 3Q14. In this period and in the opposite direction, the number of cable TV subscribers felt slightly.

Table A – Trend in the total number of television services subscribers by technology

3.500

number of subscribers

3.000 2.500 2.000 1.500 1.000

0

1T03 3T03 1T04 3T04 1T05 3T05 1T06 3T06 1T07 3T07 1T08 3T08 1T09 3T09 1T10 3T10 1T11 3T11 1T12 3T12 1T13 3T13 1T14 3T14 1T15 3T15

500

xDSL+FWA

FTTH

DTH

Cable

Source: IPC - ANACOM

dst - sgps, s.a.

Page 17 of 120

Consolidated Annual Report 2015

Analyzing the distribution of television services subscribers by technology, at the end of the third quarter of 2015, cable TV services represented 39% of total subscribers, while DTH and xDSL represented 17.5% and 22% respectively, and optical fiber (FTTH/B) accounted for 22%.

In the economic reporting period and based on the 3rdQ15, NOS Group held the largest market share of TV subscribers with 43.7%, followed by Altice Group with 41.1% and Vodafone and Cabovisão with 9.6% and 5.4% respectively.

At the 3rdQ15 end and according to information provided by the Telecommunications Barometer of Marktest Fixed Network, about 71.9% of households with pay-TV had over 80 channels, representing an increase of 7.9 percentage points compared with the 3rdQ14. On the other hand, access to premium channels decreased by 1.5 percentage points YoY. (Source: IPC - ANACOM).

There also has been an increase in the number of fixed Internet access services customers. According to data disclosed

by ANACOM, in 3rdQ15 it increased 10.8% compared to the same 2014 quarter and reached 2.9 million customers.

Table B – Trend of the customers’ total number of fixed internet access 3rd Q14 Broadband customers (fixed) Dial-up access customers Total number of Customers

4th Q14

1stQ15

2n d Q15

3rd Q15

Δ 3rd Q15 vs 3rd Q14 unit

%

2.639

2.732

2.796

2.860

2.927

288

10,9%

23

23

23

22

22

-1

-4,3%

2.662

2.755

2.819

2.882

2.949

287

10,8%

So urce: ICP - A naco m

Unit: Tho usands o f custo mers

Like 2014, ADSL remained in 2015 the main technology for fixed broadband internet access, which represents a 34.4% of the total share with reference to the third quarter of 2015, notwithstanding having suffered a slight decline compared to the 2014 counterpart period. The number of cable modem access services represents 34.2% of the total services. On the other hand, the internet access services supported on optical fiber (FTTH/B) showed an increase of 4.4% comparing to the same period of 2014, being this technology the one that has grown the most. The number of licensed users to access Internet by mobile broadband increased 4.1% compared to the previous quarter. This number increases to 22.6% when compared to the same period of 2014 The evolution of mobile broadband has been driven mainly by the increasing number of smartphone users. (Source: IPC - ANACOM).

dst - sgps, s.a.

Page 18 of 120

Consolidated Annual Report 2015

Table C – Trend of broadband accesses number (fixed access) 3rd Q14

2nd Q15

3rd Q15

Total accesses of which:

2.767

3.002

Accesses ADSL

1.083

% of Total fix ed broadband Acesses modem cable % of Total fix ed broadband Accesses FTTH/B % of Total fix ed broadband Others % of Total fix ed broadband

Δ% 3rd Q15/2nd Q15

3rd Q15/3rd Q14

3.074

2,4%

11,1%

1.069

1.056

-1,2%

-2,5%

39,1%

35,6%

34,4%

1.001

1.034

1.052

1,8%

5,1%

36,2%

34,5%

34,2%

577

723

774

7,2%

34,3%

20,8%

24,1%

25,2%

107

176

191

9%

79%

3,8%

5,9%

6,2%

So urce: ICP - A naco m

Unit: Tho usands o f accesses

Regarding the market shares for fixed broadband access, and as can be seen in the following table, by the end of the third quarter of 2015, Altice Group market share stood at 45%.

Table D – Trend of broadband accesses market share (fixed access) 2014 Operador

rd

3 Q14 Altice Group

1)

MEO

st

4 Q14

5,7%

2nd Q15

1 Q15

5,5%

-

3rd Q15

5,2%

51,0%

45,0%

-

46,0%

45,0%

-

Cabov isão

5,5%

5,2%

5,0%

4,7%

-

ONITELECOM

0,3%

0,3%

0,3%

0,2%

-

48,9%

48,10%

47,20%

-

-

48,9%

48,10%

47,20%

-

-

0%

0,00%

-

-

-

34,6%

34,7%

35,0%

35,50%

36,00%

32,2%

32,4%

32,70%

33,30%

33,70%

NOS Madeira

1,6%

1,5%

1,50%

1,50%

1,50%

NOS Azores

0,8%

0,8%

0,80%

0,80%

0,70%

10,4%

11,3%

12,3%

13,2%

14,0%

-

-

-

-

4,7%

Cabov isão

-

-

-

-

4,5%

ONITELECOM

-

-

-

-

0,2%

0,3%

0,3%

0,2%

0,2%

0,3%

PT Group PT Comunicações / MEO TMN / MEO NOS Group NOS Comunicações

Vodafone Apax Group

Other Services Providers So urce: ICP - A naco m

dst - sgps, s.a.

2015 th

Unit: %

Page 19 of 120

Consolidated Annual Report 2015

At the 2ndQ15 end, Cabovisão and ONI acquisition process had not yet been over, and for this reason, both appear integrated in the Altice Group.

NOS Group has an accesses market share of 36%, resulting from the merger of ZON Group with Optimus undertaken in the 3rdQ2013.

For Vodafone, it should be noted the increasing pace in the capture of new subscribers per quarter, reached a market share of 14% in the third quarter of 2015 (+3.6 percentage points over the 3rdQ14).

Regarding the number of main telephone accesses, it recorded a positive annual change of 1.8%, and there was a growth of VoIP / VoB accesses of about 14.6%, which include the networks supported access FO (FTTH / FTTB), which increased 31%, and the cable TV networks (+ 2.9%).

With reference to the end of the third quarter 2015, the Altice Group granted a customers’ share of 45% in this segment.

ZON Group is the 2nd largest provider, with a share of 36%.

Table E - Number of accesses of fixed telephone system

Total Main Access Analogue Accesses (of w ich) Publique Pay Phones ISDN and Diginet Accesses

Variation

Variation

3rd Q15 / 2nd Q15

3rd Q15 / 3rd Q14

4.654

0,3%

1,8%

1.875

1.839

-1,9%

-6,2%

22

22

-1,4%

-3,7%

3rd Q14

2nd Q15

3rd Q15

4.572

4.641

1.961 23 496

443

433

-2,3%

-12,7%

Basic

248

212

206

-2,7%

-16,9%

Primary

243

228

223

-1,9%

-8,2%

3,841

4

3,572

-2,8%

-7,0%

1

1

1

0,7%

-56,9%

468

497

493

-0,7%

5,4%

1.647

1.826

1.888

3,4%

14,6%

Fractioned Other digital accesses GSM / UMTS VoIP / VoB So urce: ICP - A naco m

Unit: Tho usands o f accesses

For the period of 2016-2018, ICP - ANACOM provides a set of strategic objectives which are directed to the following points:  Warranty and protection of citizens' rights;  Promotion of competition between markets;  Ensuring the efficient management of public resources;  Promotion of institutional and technical cooperation;  Promotion of the internal efficiency and effectiveness.

dst - sgps, s.a.

Page 20 of 120

Consolidated Annual Report 2015

1.2.4

The Real Estate Sector

The Sector Construction and Real Estate environment, in 2015, was marked by the reversal of the declining trend in an important set of indicators that measure demand, production and employment evolution. Indeed, construction sectorial investment and GVA registered in the first half of this year, the first increase since 2007.

On employment, it was witnessed by the years end an increase of 4.8% of the jobs provided by the sector and a reduction of 21.3% in the number of unemployed registered in the IEFP from construction companies.

In the housing market, a segment that shows greater dynamism, in the 1st half 2015, YoY, there was an increase of 39.9% in housing transactions, 58.6% in housing loans concessions, 2.4% in housing bank evaluation values and 19.5% in the number licensed dwellings for new construction (APEMIP data).

According to this information, they were transacted between 106,000 to 111,000 real estate assets (housing and real estate rental business) in 2015, which represents a 30% increase over the year 2014.

In this period, it was also noted that households loans house purchase increased by about 50/60% to over EUR 3,000 million.

Following the growth of transactions and loans, bank evaluation average value of the country's total stood at 1,050 euro/m2 in December, which represents an increase of 4.5% YoY. For the whole 2015, the average assessment was set at 1,034 euros/m2, which resulted in an increase of 2.6% over the previous year.

Noteworthy the clear foreign investment recovery in Portugal carried out, mainly in the residential sector in Lisbon and Algarve, by the Golden Visa effect and the framework given to non-habitual residents, which is expected to remain for the year 2016.

It should also be noted the fact that very significant amounts of transactions (more than 2 billion euros) have been recorded, including the sale of shopping centers, hotels, office buildings and some retail areas in the metropolitan areas of Lisbon and Oporto, as well as in some smaller cities.

Still in this segment, a yields squeeze on all sectors was observed, except for retail parks and shopping centers, recovering to pre-crisis values, to stand at 5.25% for street trading, 5.5% for offices and shopping centers, 7% for industrial and 7.5% for retail parks.

dst - sgps, s.a.

Page 21 of 120

Consolidated Annual Report 2015

For 2016 overall, forecasts point to a continued sectorial growth, supported by the key factors the strength underlying the growth seen in 2015 and the persistence of a relatively low interest rate environment.

1.2.5

The Environment Sector

In Portugal there are 385 management companies, of which 277 dedicated to public water supply (excluding about 85 micro entities formed by parish councils or users associations), 283 urban waste water sanitation and 282 entities within municipal waste management activities.

The sector is characterized by a great diversity of realities that are observed not only in the scale and resources of the managing bodies, but in the very management model adopted.

According to ERSAR (RASARP 2014), as water supply service accessibility in “high” is concerned, the inter-municipal concessions cover the largest number of municipalities (167) and population (4.9 million inhabitants), also being the model with greatest national coverage, about 70%.

The type of the most representative model used in sanitation in “high” activity is also the inter-municipal concessions, with 196 municipalities and 6.9 million inhabitants, covering 76% of the country’s area.

Management Entities in “High”

Water

Sanitation

Inter-municipal Concessions

11

16

Municipal Concessions

1

2

State Delegations

1

-

State / Municipal Partnerships

1

1

Municipal or Inter-municipal Companies

1

-

15

19

TOTAL Source: ERSAR, RASARP, 2014

There are 347 management companies in “low” operating in water supply, broken down by eight State / Municipal Partnerships management models and 264 in waste water sanitation, broken down by 5 management models.

Regarding water supply services in "low", municipal services are the management model with greater representation, covering 3 million inhabitants, followed by the local authority or inter-municipalized services with 2.3 million inhabitants, and finally municipal concessions with about 2 million inhabitants.

dst - sgps, s.a.

Page 22 of 120

Consolidated Annual Report 2015

At the waste water sanitation in “low” leval, municipal services have the highest representation, covering about 3.8 million inhabitants and 197 municipalities, followed by municipal concessions (1.7 million inhabitants), municipal or intermunicipal companies (1.8 million) and municipal or inter-municipalized services (2.3 million).

Management Entities in “Low”

Water

Saneo

Inter-municipal Concessions

1

-

Municipal Concessions

28

23

State Delegations

1

-

State / Municipal Partnerships

1

1

Municipal or Inter-municipal Companies

23

24

Local Councils/ Users’ Associations

85

-

Municipalized or Inter-municipalized Services

20

19

Municipal Services

188

197

TOTAL

347

264

Source: ERSAR, RASARP, 2014

According to ERSAR (RASARP 2013) the water supply service accessibility in “low” is good for the mainland. As for sanitation, it is good in predominantly urban areas and median in predominantly rural areas and moderately urban ones:

Water supply in mainland Portugal “Low” service (for 90% of the entities

Wastewater treatment in mainland Portugal “Low” service (for 89% of the entities)

Physical accessibility of the service

95%

Physical accessibility of the service

83%

Predominantly urban areas

100%

Predominantly urban areas

97%

Moderately urban areas

94%

Moderately urban areas

78%

Predominantly rural areas

92%

Predominantly rural areas

70%

Source: ERSAR, RASARP, 2014

1.2.6

The Capital Venture Sector

The Capital Venture industry is actually passing a new growth stage in Portugal. The lack of liquidity in the markets lead to an increase of the demand for venture capital in order to the companies reinforces their capital. Consequently, in 2015, were created two 2 venture capital companies and 13 new venture capital funds. According to CMVM, actually there are 86 venture capital funds and 39 venture capital companies. The data provided by CMVM also indicates the dynamism that resides in the capital venture sector is mainly due to the growth of capital venture funds instead of the capital venture companies due to the fact that the funds detain nearly 94% of the total capital under management.

dst - sgps, s.a.

Page 23 of 120

Consolidated Annual Report 2015

In Portugal the investments made in the venture capital sector have an atypical behaviour, due to the fact the operators tend to resort more to shareholders loan that is very similar to a bank credit instead of assuming shareholders risk investment. Hence, the risk of the investment is significantly lower since that the capital remuneration ceases to depend solely on profits from the activity itself or sale of share participations.

The operational programs of COMPETE under the Support Financing and Risk Sharing System of Innovation (SAFPRI), had a significant importance in the sector expansion since it continued to support, in 2015, 22 venture capital funds that are focused in SME’s investments in the initial steps of its life as well on their expansion phase.

On the European scene, similarly to the Portuguese scene, the funds raised by the venture capital have been mainly invested in the venture capital funds with private equity characteristics mainly focused in buyout transactions involving the acquisition of a majority position in the entity’s capital with an eventually use of substantial debt amounts.

After the transposition of Directive No. 2011/61 / EU and Directive No. 2013/14 / EU of the European Parliament and European Council of June 8, 2011 and May 21, 2013 respectively, by the law no. 18/2015 is important to highlight the main changes of the regulatory framework of venture capital investment in Portugal: (i) introduces regulation on investment in social entrepreneurship and specialized alternative investment; (ii) possibility of fund management regulation to predict funds background division in several independent compartments patrimonial rules; and (iii) a new more demanding regime that now large management companies are subject.

In 2016 is expected the creation of new funding lines for the venture capital within the European community program 2020 horizon, which predicts that should be available 2 thousand million euros for projects in the seed stage or in the early stage. Was published on 9 of October the law No. 225/2015, which had created the Capital and almost Capital fund that has as manager the entity Financial Development Institution, S.A. (FDI). The fund is directed for the creation and reinforcement of financial capitalization instruments of companies, in particular, in the early creation stages (start-up, seed and early stages). Also the fund is directed to invest in companies that have a growth project, internationalization project and development of new product and services or with innovative new processes for products, organization or marketing among others. With the creation of these funding lines is expected a growth of the activity in the Venture sector for 2016 with the creation of new venture capital funds and consequently the growth of the investment operations.

dst - sgps, s.a.

Page 24 of 120

Consolidated Annual Report 2015

2.

Economic and financial analysis

Global analysis of 2015 period The 2015 period reflects dst group remarkable ability to maintain positive economic and financial results in a macroeconomic framework of reduced growth, and still affected by the adjustment process of the Portuguese economy's imbalances.

PROPORTIONAL TURNOVER CONSOLIDATED EBITDA

350,0 50,0

300,0

279,8

250,0

283,2

40,0 39,7

200,0

M€

M€

46,5

303,6

36,0 30,0

150,0 20,0

100,0 50,0

10,0

2013

2014

2015

2013

2014

2015

The proportional turnover evolution to € 283.2M, the maintenance of an operating profitability, measured by EBITDA, around € 39.7M and, in particular, the debt levels evolution (-26.3% compared to 2013), reflects the progressive and successful consolidation that dst group has been recording in recent years and in several business areas that has a presence.

In this context, the group’s international operations growth and its investment strengthening in human capital had particular relevance, which are two vectors of action involving an immediate and significant investment, but simultaneously prepare the group for the growing challenges of responsiveness and innovation that today’s world demands from the big economic groups.

Thus, in the period under review, dst group’s consolidated turnover reached € 206.2M, and its proportional turnover, regardless the adopted consolidation method, exceeded € 283.2M. Notwithstanding the slight contraction observed of dst group’s turnover (-3.9%), accompanied by a less than proportional reduction of its operational profitability (only -1.68%), the group's profitability levels remained very robust values, with consolidated EBITDA to exceed € 39.7M in 2015, equivalent to an EBITDA margin of 19.2%. Also it is worth to be noted that its net profit after minority interests in absolute terms show an increase of € 1.3M, approaching the € 15.2M in the period´s end. dst - sgps, s.a.

Page 25 of 120

Consolidated Annual Report 2015

It is important to highlight the positive effect that the dst group’s diversification entails in terms of maintaining positive levels of operating profitability: the business areas of Renewable Energy and Environment & Water account for 37.9% of consolidated EBITDA in 2015 and totalized a net income for the period of € 8.3M (after minority interests).

Nevertheless, the business area which was dst group’s genesis - Engineering & Construction - maintained a remarkable performance in the period, in that it represents 85% of its consolidated turnover and 56.9% of the corresponding EBITDA.

EBITDA

TURNOVER 56,9%

85,0%

26,7% 0,6% 1,9%

9,1% 2,2%

10,2%

Eng&Const Telecommunications Real Estate

0,9% Environment Ren Energy

Eng&Const Ren Energy Telecommunications

11,2% Environment Real Estate

dst group’s excellent activity performance in 2015 reflects the strong performance of its core business area, Engineering & Construction, whose turnover for the period amounted to € 175.4M and whose respective net profit exceeded € 14.3M (+16.6% compared to 2014).

Moreover, the Environment business area recorded a consolidated turnover increase of more than € 1.9M YoY (i.e. +10.2%), reaching € 21.1M. In turn, its operational profitability developed positively compared to 2014 values, reinforcing its contribution to dst group´s EBITDA in 2015 period, reaching 26.7%.

In the reporting period, the contribution of Renewable Energy business area to the group’s operating profit amounted to € 4.4m, i.e. 11.2% of the total period. Despite the turnover and net profit decrease of this business area, the contribution to dst group’s consolidated net income remains very positive, reaching 25.8%.

After a major investment period in the Telecommunications business area has been completed, its turnover recorded, in the 2015 period, a remarkable growth of more than € 3.4M (+ 324.3% YoY). Although this business area does not yet present a relevant turnover to dst group global sphere, this came up, in the period under review, to € 4.5M. It should be dst - sgps, s.a.

Page 26 of 120

Consolidated Annual Report 2015

noted that this business area had a positive EBITDA amounting to € 3.6M in 2015. Despite the impact of depreciation and amortization from the high investments made by the group in this business implies that its net income for the period is necessarily negative, to the tune of €2.2M. Also dst group’s presence in Ventures business area is noteworthy, with the implementation by 2bpartner – Group’s venture capital company – of a number of analysis processes and due diligence projects, which materialized themselves in the realization of two new investments during the period, in parallel with the development, led by innovationpoint – investigação e desenvolvimento, s.a., of several innovative projects. In 2015, 2bpartner was awarded the prize "Investment Firm of the Year" of the UP 2015 Awards granted by Portugal Startups.

In this context, naturally, Ventures business area does not yet have a turnover that may be representative of its potential growth, remaining as a big bet vector in the future by dst group.

As is to reveal the presence of the dst group in Real Estate, where portfolio current projects portfolio are noteworthy: Villas de Palmeira urbanization, corporate business center of Adaúfe, Urbo Building in Matosinhos and a multipurpose allotment in Barcelinhos .

Economic and financial summary (year 2015) dst group’s consolidated net income in 2015 was approximately € 15.8M (€ 15.2M after minority interests), representing an increase of 9% YoY, being the highest consolidated net income in dst group’s history. values in M €

Economical analysis Turnover EBI TDA EBIT Financial Results Net I ncome before Taxes Taxes Consolidated Net Income To: Minority Interest dst group

2013

2014

2015

235.068,0 214.646,9 206.290,2 46.527,9 36.027,9 39.682,5 24.606,9 22.308,2 24.348,1 -8.510,1 -7.058,1 -6.922,5 16.096,8 15.250,1 17.425,6 -2.181,2 -775,2 -1.653,4 13.915,5 14.474,9 15.772,2 607,0 13.308,6

569,3 13.905,6

589,2 15.183,0

∆

∆%

-8.356,7

-3,9%

3.654,6

10,1%

2.039,9

9,1%

135,6

-1,9%

2.175,5

14,3%

-878,2

113,3%

1.297,3

9,0%

19,9

3,5%

1.277,3

9,2%

On the other hand, there was a significant improvement in financial results compared to previous periods (which decreased by around € 1.6M compared to 2013), due to the progressive reduction of dst group’s debt levels and a strict credit risk management policy. dst - sgps, s.a.

Page 27 of 120

Consolidated Annual Report 2015

EBITDA

Deprec and amort

Financial Income

Corporate Income Tax

Minority Interests

1.653

589

RLE 2015

44.000 40.000 36.000 11.074 32.000

m€

28.000 24.000 6.923

20.000 16.000

39.682

12.000 8.000

15.183

4.000 0

During the year 2015, dst group’s Engineering & Construction business area had a consolidated net profit that exceeds € 14.3M (+16.6% compared to 2014). In spite of the slight decrease in its consolidated turnover to € 175.4M (-4.1%), the profitability of this business area remained positive, with its EBITDA increasing 12.7%, whose value stood at € 22.6M at 2015 period end.

Nevertheless, the importance of dst group other business areas, Engineering & Construction business area consolidated its importance for this year the dst group’s positive consolidated net income, representing 94.4% of the 2015 total (€ 14.3M).

In this context, in 2015, the Renewable Energies business area strengthened its relevance in the contribution to dst group’s consolidated net income (28.9% of total which, in absolute terms represent € 4.4M). While the Renewable Energy business area has retained its relevance, contributing with € 3.9M, equivalent to 25.8% of the group’s total consolidated net profit.

dst - sgps, s.a.

Page 28 of 120

Consolidated Annual Report 2015

NET INCOME 2015 -1,3% -20,0% -14,4% -13,4%

94,4%

28,9%

Eng & Const

Environment

Holding and Others

Ventures

Telecommunications

Real Estate

25,8%

Ren Energy

In terms of the Telecommunications business area, the 2015 period was featured by the operational use and maintenance of the networks developed in previous years, with the provision of telecommunications infrastructure for national telecommunications retail operators in several Portuguese municipalities. dst group’s tangible fixed assets remains one of the items with upmost impact on group’s consolidated assets. In late 2015, the value of tangible fixed assets stood at € 86M, contributing to a group’s total net assets greater than 431m € at the end of the period under review.

Meanwhile, dst group’s equity amounted to € 139M at 2015 end, with an ordinary shared capital of € 30M, and a financial autonomy ratio of 32.3%.

The total liabilities of the group showed a favorable trend in 2015 course, insofar as it declined € 3.5M compared to December 2014, standing at € 291.8M at the year’s end.

dst - sgps, s.a.

Page 29 of 120

Consolidated Annual Report 2015

International activity In pursuit of international expansion that dst group has been promoting, the international activity of the dst group during 2015, continued to be significantly strengthened, in particular by sales and provision of services in different geographic areas.

Indeed, in pursuit of international expansion that the group has been promoting, there were operations in 11 countries, either in the demanding African geographies, both in developed and sophisticated European markets, among others.

On the other hand, were several commercial initiatives and proposals in 14 other countries, scattered throughout the Americas, Africa, Europe and Asia.

Also at the international level, the group's focus remains on a strictly selected geographical diversification according to the business opportunities that are underlined, in order to optimize the associated investment and, thus relativize the importance of the Angolan market within the group's international operations given the time of some economic instability plaguing that country.

In this sense, so much so that the international dst group projects have been developed in different business areas, namely, Engineering & Construction, Renewable Energy and Environment.

dst - sgps, s.a.

Page 30 of 120

Consolidated Annual Report 2015

International operation

40.000

thousand €

32.000

24.000

16.000

8.000

0

2013

2014

2013

2014

2015

2015

So, because of all the conscious effort and based on a prudent policy regarding markets and related investments approach associated to the ongoing internationalization process, the dst group’s international business turnover at the end of 2015, highlighted the consolidation of growth over the same period of 2014 (+53,6%), having already surpassed the € 40.2M, a figure that rises to 19.5% of the total consolidated turnover of the dst group.

INTERNATION TURNOVER 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2013 Angola Algeria

dst - sgps, s.a.

2014 France Venezuela

2015 Congo Republic Unite d Kingdom

Mozambique

Page 31 of 120

Consolidated Annual Report 2015

It should be noted that for the group’s excellent international performance during 2015, contributed the operations in France, Venezuela and Algeria, as well as the beginning of the bysteel uk activity, while dst group company in UK.

Debt levels In 2015, the total net debt was down from € 100M (€ 99.5M in the reporting period, € 95.4M in the same period and € 135.1M in 2013).

Although this amount constitute an increase of € 4.1M (+ 4.3%) from the end of 2014, to 2013 shows a marked reduction of € 35.5M (-26.3%). For this performance contributed, among other factors, the sale of some non-strategic assets and amortization of medium and long-term debt plans (MLP).

Net Debt 150.000

thousand €

125.000

-26,3%

100.000

75.000

50.000

2013

Note that at the end of 2015, the net debt allocated to the

2014

2015

DEBT BY BUSINESS AREA 2015

Real Estate area, amounting to € 23.6M, represented 23.7% of the consolidated total.

2,6% 23,7%

22,3%

In turn, the Telecommunications business area has medium and long-term financing of € 25.9M essentially contracted to build the Next Generation Networks (NGN), which contributed

13,6%

to a sectorial net debt of € 23.4M (23.5% of dst group’s total consolidated net debt). It follows the environment area with a contribution of 22.3% (€ 22.2M in absolute terms).

dst - sgps, s.a.

16,0%

23,5%

Eng & Const Ener Ren

Ambiente Telecom

holding Real Estate

Page 32 of 120

Consolidated Annual Report 2015

The dst group’s financial capacity remained so in 2015, a sustainable stability, with the financial autonomy ratio to settled at 32.3% at the end of the period (34,38% at December 31, 2014).

Indeed, the stability of the group's debt levels, combined with profitability excellent levels of the dst group in 2015, is reflected in a slight improvement in the Net Debt / EBITDA ratio, which stood at 2.51 at the end of 2015 (2.65 in 2014).

NET DEBT / EBITDA 3,00

2,90 2,65

2,51

2,50

2,00

1,50

1,00 2013

2014 Net debt EBITDA

2015

The next chapter of this report details the analysis of the results and the activity of each one of dst group business areas in 2015.

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Consolidated Annual Report 2015

Business Areas

ENGINEERING & CONSTRUCTION

NET INCOME

PROPORTIONAL TURNOVER

240,0

14,0 12,0

160,0

10,0

Mio €

120,0

239,8 208,3

198,7

Mio €

200,0

8,0 14,3 12,3

6,0

80,0 4,0 40,0

2,0

0,0

5,0

0,0 2013

2014

2015

2013

2014

2015

Turnover

Engineering & Construction was at the origin of dst group and, despite the successful and progressive diversification process, this business area is still maintains its vital relevance in the group sphere, having recorded in the period under review a proportional turnover of € 198.7M.

Although in 2015 its turnover has registered a decrease of € 9.6M, the performance of this business area continued to reflect the strength of the group's position in the market for engineering and construction and highlights the extraordinary responsiveness of dst group to the adverse macroeconomic environment, particularly which the industry and its key players are living.

For this record achieved in 2015 is worth considering the positive impact of the ongoing internationalization process, whose international operations within this business area exceeded € 40.2M (+53.6% YoY), and the group significantly extended the geographical areas in which it is presence, by focusing investment in commercial relationships and partnership in other jurisdictions with favorable business potential.

In order to enable its profitability levels and quality safeguarding of the Engineering & Construction provided services, dst group undertook an optimization exercise of its operational activity in this sector. Thus, the year 2015 was marked by the increase of operating profitability levels, with an EBITDA margin of 12.9% (€ 22.6M) reflecting, among other things, the group's concern on maximizing its operations efficiency. Moreover, it is noteworthy the continued reduction of this business area debt level, even though, in the period under review, the net financial expenses were increased by € 2.3M, dst - sgps, s.a.

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Consolidated Annual Report 2015

to a total of € 2.6M recorded in 2015 (compared to € 0.3M in the same period), largely explained by the strong contraction in interest and similar income earned.

It is remarkable that the year 2015 was characterized by the contribution that this sector has to dst group’s consolidated net income, whose positive amount of € 14.3M recorded in this business area account for 94.4% of total earnings and show a € 2M growth compared to 2014. dst group has a wide scope of strong technical skills that allow it to be perceived by the market as a landmark of rigour and service quality in Engineering & Construction field. Not only this is taken for granted already for many years at the national market level as, increasingly, it is perceived by key international players with which the group works in its international operations.

As such, in 2015, dst group made several works of recognized impact and technical complexity, as is the case, among others, the following contracts:

EDIA - Block of Pias

APAE Expansion

Hydraulic Circuit Caliços – Machados

WWTP Esposende

Lisbon 8 Building

Vygon

IKEA Braga

WWTP Marinhas

Construction of Landfill Gestal

Graciosa Energy System

Factory Paper Production Fortissue 2nd Phase

Allotment IKEA - Loulé

Moreover, dst group incorporates in its operations the entire value chain of the business sector, particularly in the award of electrical installations, heating, ventilation and air conditioning (HVAC), hydraulic works and telecommunications through dte – instalações especiais, s.a. (“dte”) - and the construction and assembly of steel structures and roofs and facades coating, such as industrial and commercial buildings, rehabilitation of buildings, art works, housing and offices, through bysteel, s.a. (“bysteel”). Therefore, dst group has significant competitive advantages in relation to its main competitors in the Engineering & Construction area. bysteel keeps its focus on attracting international reference customers (e.g., Angola, France and the UK) as well as on geographies diversification in which is present reflecting the growing international reputation that has been achieving as a result of its rigor, service quality and responsiveness to customer needs.

Industrial production unit turned 6,780 tons of steel in 2015, which shows a decrease of 13% year on year, without negatively influencing the total turnover in the period. This was only possible through the strengthening of the position in the national market and the UK. Indeed, the diversification of the customer base continues to be a concern of bysteel,

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Consolidated Annual Report 2015

notably by reducing the presence in Angola and Congo which represented, respectively, in 2015, only 8% and 15% of total turnover.

Bysteel continues to deserve the trust of the European and worldwide reference customers with the celebration of several project design, manufacture and implementation of metallic structures with Bouygues and Vinci groups, among other customers, from which enhance the expansion of the Lyon Airport and construction of Bureaux A9A2 Lot et A9B (office buildings in Paris, France) and the expansion of the Queen Mary University (UK).

Notwithstanding the weight of bysteel international operations correspond to 61.53% of its turnover in 2015, this does not neglect any business opportunities in the domestic market, continuing with similar major projects implementation, examples of which are the works of the “Museu de Arte, Arquitetura e Tecnologia“ (Art, Architecture and Technology Museum) in Belém historic, in Lisbon, the “Continente” of Vila Praia de Âncora, the IKEA in Paços de Ferreira and the expansion of the IKEA Food Court in Matosinhos.

In turn, in 2015, dte activity recorded an overall increase compared to 2014, reaching a turnover of € 27.2M (which represents an increase of 8.18% over the same period), and translated the consolidation of a unique knowledge over other competitors.

This good performance was reflected in the level of the three main dte business areas. Thus, the electricity area turnover exceeded € 13.6M in 2015 (+ 30.09% YoY), contributing 51.1% of the total turnover. The turnover of AVAC area (heating, ventilation and air conditioning) and hydromechanical area in 2015 reached € 6.4M and € 6.2M, respectively, and represent 24.2% and 23.4% of the dte total turnover. The telecommunications area with a turnover of almost € 0.4 M had a residual representation of 1.3%.

During this period, dte participated in major projects in the specialties in which it operates, examples of which are the New Lidl headquarters in Linhó, IKEA Braga, the Irrigation Infrastructure – Block of Pias, the Hydraulic Circuit Caliços Machado, and WWTP of Marinhas, among others. Indeed, at the level of this dst group society, it should be noted the growth of its operations in Angola, under which also already present in several projects, in particular through the implementation of electricity works and HVAC.

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RENEWABLE ENERGIES

PROPORTIONAL TURNOVER

NET INCOME 8,0

30,0

7,0

25,0

6,0 5,0

32,8

15,0

24,2

27,6

Mio €

Mio €

20,0

4,0

7,5

3,0

10,0

2,0

5,0

1,0

3,9 1,7

0,0 0,0

2013 2013

2014 Turnover

2014

2015

2015

dst group's participation in the Renewable Energies business area is developed through a set of businesses diversified in technological terms, namely, wind, solar photovoltaic, solar thermal, hydro and from the oceans.

In parallel, the group develops various activities and operations related to energy efficiency.

Therefore, and as a corollary of sustained growth during several years of investment, the proportional turnover of Renewable Energy business area reached € 32.8M in 2015, representing an increase of 18.8% compared to the same period of 2014.

It should be noted that this business area recorded a positive EBITDA that exceeded € 4.4M in 2015, corresponding to 11.2% of dst group’s consolidated total in the year, and the period contribution to net income amounted to € 3.9M (i.e., 25.8 % of consolidated net profit of the year).

In wind energy, the activity started in the mid-90s, making dst group one of the pioneers betting in this technology in Portugal. In 2008, came into operation the Wind Farm of Alto Minho I, with an installed capacity of 240 MW, thus expanding the group associated companies’ capacity up to 294.40 MW. With further investment, dst group installed power overpassed 68.41 MW.

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The dst group’s wind portfolio is displayed as shown below:

dst group also intends to extend its investments and to strengthen its position in the wind energy sector, both nationally and internationally, and it currently has ongoing wind projects evaluation processes.

With regard to photovoltaics, the year 2014 was marked by the completion of a photovoltaic module new model certification, which has enhanced the competitiveness of global sun, s.a., increasing its orders and turnover (exceeding the â‚Ź 5.7M in 2014). This amount was all the more significant by the fact that in the same year occurred the transition of the legal framework, from micro and mini generation to self-consumption, leading to a turnover reduction associated with this industry.

The year 2015 was marked by the entry into force of Law- Decree No. 153/2014 of 20 October, which establishes the legal framework for self-consumption, which liberalized the sector and it allows each consumer has the opportunity to produce their own energy.

Thus, the a dst solar, s.a. diversified its activity, directing it to other areas, including energy efficiency projects implementation, both in the private sector and the public sector, notably through the implementation of energy efficiency measures in pools, pavilions and other social facilities.

During the 2015 year, the projects undertaken by dst solar stand out the ETAS of Tavira and Alcantarilha (860 kW of installed power) and the Photovoltaic Park on the island of Graciosa (1 MW of installed capacity), which, as a whole, they accounted for about 50% of the entity's turnover in the year under review.

In the hydropower area, dst hydro s.a. continues to carry out a constant activity of developing "greenfield" project as well as analyzing partnership proposals for building and managing hydroelectric exploitations.

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ENVIRONMENT

PROPORTIONAL TURNOVER 4,5

28,0

4,0

24,0

3,5

33,1

33,2

36,6

12,0

3,0 Mio €

Mio €

20,0 16,0

NET INCOME

5,0

32,0

2,5

4,4

2,0 1,5

8,0

1,0

4,0

2,9 2,1

0,5

0,0

0,0 2013

2014 Turnover

2015

2013

2014

2015

During the year 2015, Environment activities remained stable and, as such, it kept the unavoidable relevance it gathered in dst group since the acquisition by the company Criar Vantagens, Lda. – dst group’s associated company – of the entire share capital of Aquapor – Serviços, S.A. (“Aquapor”) in late 2008.

The proportional turnover of this business area amounted to € 36.6M in 2015 (+10.2% over the same period), and its contribution to dst group’s consolidated net income amounted to € 4.4M, corresponding to 28.9% of its total and representing an increase of € 1.5M (+50.33%) compared to 2014.

The main group’s objectives for Environment business area undergo the strengthening of its presence in the sector, either by organic or via acquisition and for the moment there is an ongoing process leading to an increase of its capital share in Aquapor.

Regarding this associated company, the group’s most immediate goals are business diversification and internationalization, especially in the Maghreb countries, the PALOP (African Countries of Portuguese Official Language) and Brazil, either by identifying potential local partners to develop operations in this activity sector, either through consolidation of existing businesses and the development of opportunities that may arise in markets where it is already present.

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TELECOMMUNICATIONS

PROPORTIONAL TURNOVER

NET INCOME

12,0

0,0

10,0

-0,5

8,0

11,8

-1,0 Mio €

Mio €

6,0 8,5

-1,1 -2,1

-2,2

2014

2015

-1,5

4,0 2,0

-2,0

1,0

-2,5

0,0 2013

2014

2015

2013

The telecommunications sector, one of the largest global industries, and the main engine of the information society has evolved significantly in recent years, in Portugal, despite all the setbacks that the global economic crisis caused in Portugal in various areas.

Next Generation Networks (NGN) optical fiber was considered as a strategic priority in the electronic communications sector, in which dstelecom focused its investment. The targets set in the Digital Agenda 2015 included the national coverage of fixed NGNs, particularly in rural areas by the end of 2012, and mobile by the end of 2015, placing Portugal at the forefront of development of this sector and ensuring thus a positive cross-impact on the economy, for which the dstelecom Norte and dstelecom Alentejo e Algarve contributed with a significant impact to the coverage of rural areas.

Despite the sector's uncertainty from the date of its constitution, in 2008 and the following years, dstelecom, s.a. (dstelecom) has to assume a position in the domestic high-value market.

The goal is to foster the development of the Digital Society and allow access to technologically innovative products and services for all consumers, with significant impacts on the functioning of businesses and the lives of citizens.

The year 2015 consolidated this group’s strategic focus, expressing their success, in so far as this business area recorded a very sharp global growth of its operating activities, reaching a turnover proportional of € 11.8M, and represents an increase of € 3.2M or 37.7% over the same period. It should be noted that this business area had a positive EBITDA amounting to € 3.6M in 2015.

To this evolution has contributed a more aggressive commercial strategy and a broader portfolio of services offered to customers and potential customers, which was consolidated in the exponential growth levels registered by dstelecom companies, derivadas e segmentos, s.a., blu, s.a. and v partner, s.a.. dst - sgps, s.a.

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Consolidated Annual Report 2015

Indeed, the year 2015 consolidates the growth already recorded in the 2014, in the second year of NGN implementation project operational activity in the north and south of Portugal. Nevertheless, the group continues to invest in construction of new lines in areas not funded by the NGN, expanding its network, enabling a wider spectrum of end-users and generate new synergies to the infrastructure already created.

In this period there was a strong growth in the services provided to one of the largest telecom operators in Portugal.

Negotiations have also developed with two other large national operators, having reached a commercial agreement with one of them in the second half, and it is estimated that to start the operation in 2016.

Thus, dstelecom strengthened the provision of services to external customers, especially, the rental Fiber Dark Optics (FSO), DROP, Bitstream Access and rental of infrastructure to telecommunications operators such as Vodafone, ONI, NOS and MEO, among others, which had an exponential growth over the year.

In the year under review there was an overall increase in the activity of minhocom, gestão de infraestruturas de telecomunicações, eim (“minhocom”) and valicom, gestão de infraestruturas de telecomunicações, eim (“valicom”) subsidiaries, as a result of more aggressive commercial strategy and extending the portfolio of services, with constant growth in terms of attracting new customers, and most notably that for the second consecutive year these companies had positive results.

During 2015, the dstelecom group continued the process of consolidating their skills in this business through the strengthening of its staff, their training and experience, particularly to meet the maintenance and marketing requirements of the extensive fiber optic network which holds in the northern and southern areas of Portugal, whose configuration is shown in the beside map. dstelecom skills combined with the fact that presents itself to the market with a truly differentiating product of the currently existing in the Portuguese market, i.e. a model of "operator of operators" which is based on the concept of networks open to all operators “equal acess network”, increases exponentially its potential for market success and in foreign markets by exporting the model developed in Portugal.

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Increasingly confirms the conviction of dstelecom group that this operating model will be of great contribution to the sectorial growth, to improve the services provided quality to the final customer and for enhancing competition between the various market players.

As a final note, although it should be pinpointed that, in order to support the growing option for higher bandwidth, optical fiber remains as the technology that has grown the most in Portugal, replacing copper as the preferred business market.

REAL ESTATE During the second half of 2015 dst group has carried out a corporate reorganization, which is no more than the formalization of different business areas in which it operates, with the last and main purpose of the preparation - or rather, the anticipation - the future.

Indeed, the dst group decided to formalize its different business areas, including Real Estate, whose activity was already in development, although scattered by the remaining five business areas previously existing (especially in the field of Engineering & Construction).

PROPORTIONAL TURNOVER

6,0 5,0

3,0

Mio â‚Ź

Mio â‚Ź

4,0

5,5

2,0

2,0

1,0

1,3

0,0 2013

2014 Turnover

3,0 2,5 2,0 1,5 1,0 0,5 0,0 -0,5 -1,0 -1,5 -2,0 -2,5 -3,0

2015

NET INCOME

2,5 1,0

-3,0

2013

2014

2015

dst group decided at the start of 2015 to formalize this new business area as a natural consequence of an activity that has been developing over the past few years, and more than that, due to the combination of two factors that generate undeniable competitive advantages of the group against the market: (i) its long experience in urban rehabilitation work and (ii) its high financial capacity. The combination of these two factors allows the dst group to address high-impact projects in the context of urban renewal with flexible value propositions to their customers or partners, in particular as regards the various methods of financing of investments to be made.

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Consolidated Annual Report 2015

The evolution shown by the Real Estate turnover does not reflect at all, the conviction that the dst group has in its potential growth and it leading to its autonomy as a new business area within the group, initiating significant investment promotion estate.

However, in cyclical terms, the year 2015 was marked by a reversal of the declining trend in an important set of indicators that measure the evolution of demand, production and employment, and the investment in construction and the gross value added of the sector increased for the first time since 2007 It should be noted that this business area had a proportional turnover of € 1.3M and a positive EBITDA higher to € 0.3M in 2015, which still represents only 1.0% of the dst group consolidated total in the period, not despite its contribution to net income for the period is negative at € 3M. This value is strongly conditioned by the recognition of impairment losses of inventories, value loss reflects the real estate suffered due to the crisis that the industry has passed.

VENTURES The conviction with which dst group embraces innovation, entrepreneurship and creativity is already a trademark since long years ago, always with a business imprint widely recognized, particularly regarding the economic rationale that it addresses the investment opportunities in this business area.

During 2015, Ventures business area had a turnover amounting to € 0.2M, which does not reflect at all, its potential growth, notably through 2bpartner, the management company of Minho Innovation and Internationalization Fund ("MII"), and also through innovationpoint.

The main activity of 2bpartner is focused in carrying out venture capital investments and in venture capital funds management, through purchasing shares.The certainty with which the dst group embraces the areas of innovation, entrepreneurship and creativity is already a brand image since for many years, always openly recognized business nature, in particular as regards the economic rationale that addresses the opportunities investment in this business area.

After having carried out several steps necessary for the effective start of its activity - including some changes in its shareholder structure, culminating in the acquisition of its share capital majority by dst group - 2bpartner effectively started their operations in 2013. In this regard, in previous year, were approved 6 investments, having a total of 8 contracted investments, with an average value of dst - sgps, s.a.

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Consolidated Annual Report 2015

investment per project of € 0.3M.

During the first half of 2015 were contracted two new investments (Top Docs and Watt-IS), and the strengthening of investment in two subsidiaries. In addition, also find themselves in analysis a very significant number of projects that resulted from the intensive exploration carried out during this period.

It is remarkable that in 2015, the 2bpartner was awarded the prize "Investment Firm of the Year" of the UP 2015 Awards granted by Portugal Startups, having defeated Caixa Capital and Portugal Ventures, finalists in the same category. This event aims to bring together all the Portuguese ecosystem of entrepreneurship, as well as showing some of the best work done in the venture capital sector in Portugal, from Startups to organizations and notable people within this community.

Sphere Ultrafast Photonics, a company of 2bpartner, was considered the “Most Promising Technology Innovation” of UP Awards 2015 Portugal Startups. It competed with another subsidiary company of the dst group, which also reached finalist: AddVolt. innovation point – investigação e desenvolvimento, s.a., hereinafter referred to innovationpoint or entity, is a dst group company geared to enhance, evaluate, produce and commercialize innovative ideas in particular by creating new products, services or business models categories that challenge established paradigms and generate significant added value for consumers, for customers and for dst group itself The dynamism of innovationpoint is the basis of many innovative projects, examples of which are the following projects: 

Shair – a platform for art and emerging artist dissemination and marketing. The platform concept provides an opportunity given to artists to exhibit their works subjecting them to public scrutiny, and an expert invited by dst group, and the most voted ones will then be publically exhibited at the Emerging dst Gallery. The platform was developed in the beginning of the year 2014 and after its release has had more than a million visits, thousands of registered users and thousands of works available for sale;



Powertracker – a monitoring platform for energy production from mini powers plants and micro generation. It allows you to track automatic production of each season form, receive alerts categorized by its gravity center if it does not have production or is below expectations for the period in question, as well as have access to other information provided by the counter for diagnostic purposes. The platform currently operates exclusively in a web environment, properly adjusted for desktop and tablet environments, but has the possibility of expansion to mobile platforms. The platform monitors the daily production of hundreds of stations that dst solar has in operation, so as

dst - sgps, s.a.

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Consolidated Annual Report 2015

to have expertise faster when there is a problem and can intervene more rapidly, ensuring that the production of the core is as estimated. The access to the platform is also marketed to customers of dst solar, in order to monitor and know the state of their plants;



MyPick – an application for smartphones that assists users in making simple decisions of their day-to-day life, and the result does not have major consequences and allowing the user to be released from the choice burden. The application already contains a number of lists for standard situations and allows the user to create their own lists, share them and get from the community. It was developed at the end of the year 2014 and is aimed at younger audiences, previously identified as the one that consumes this type of applications. The application follows the freemium model, allowing to generate revenue through advertising presentation in the free version which, in turn, is more limited in terms of features, and a premium version, which is paid by the user for a symbolic value, removing this way advertising and unlock additional features. The application is available in the Apple and Google app stores;



Embedded systems. – during the second half the innovation point started exploring this area with the

development of terminals that incorporate the electronic design component, with the software and product design, to offer solutions "turnkey" that best meet customer needs. Among the experiences developed in the dst group was set up a terminal that interacts with RFID cards of employees and allows, through a touch screen, record the consumption group in the restaurant. We are currently developing terminals for access control to rooms and to datacenter of the group with support to the employee card, PIN and allowed access times, as well as the study of a terminal to log access to works with biometric support;



Vocation – software for mobile devices developed in partnership with the multinational SHL human resources that enables simple and fairly accurate, that the user perform a battery of tests to determine their skills and interests in order to determine their real vocation. Vocation is available in the three major domestic carriers and around the world, in the Apple Store and Google Play (formerly Android Market) and Windows Phone Marketplace;



Rayleague.com – social networking football scouting that aims to democratize the process of selection of players worldwide, helping their promotion and opportunity to live her dream. The Rayleague.com has visits distributed by 178 countries and has athletes from 136 countries, clearly assuming itself as an international product.

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Consolidated Annual Report 2015

innovationpoint is a certified entity in NP4457 standard (SGIDI), in line with dst group’s innovation commitment, which has also been translated in support several group companies searching for innovative solutions for the daily challenges faced by them.

JOINT VENTURES During the second half of 2015, dst group has embarked on a corporate restructuring in order to formalize the various business areas in which it operates, with the last and main purpose of the preparation - or rather, the anticipation - the future.

Thus arises the dst group business area Joint Venture, whose operations were already under development, although dispersed by the remaining five areas of previously existing business (especially in the field of Engineering & Construction). dst group is used to working with partners to develop projects and investments in its various business areas and geographies in Joint Venture relationships based on a win win optical, that are good examples, among others, the longtime holdings the dst group has with other shareholders (public or private) in the business area of Engineering & Construction (eg, Caminhaequi, Barcelos Futuro) and other in which it operates. dst group has the firm conviction that the focus on partnership relations can function as approach leverages national and international projects in various business areas, with special focus on their business area Engineering & Construction.

CORPORATE SERVICES In 2015, the Corporate Services of the dst group were set up under the corporate reorganization, with the last and main purpose of the preparation - or rather, the anticipation - the future.

Indeed, the business area of Corporate Services, which was already in development, although scattered by the remaining five previously existing business areas, mainly in the Engineering & Construction, and its object of activity includes: 

Environment;



Quality;



Safety;



Purchases;



Financial;

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3.



Communication;



Heritage, insurance and facilities;



Strategic planning;



Human Resources;



Information systems



Innovation and development;



Internal audit; and



Risk Control.

Material events occurring after the end of the period

After the period end, and to date, there were no events that may have a significant impact on the financial statements at December 31, 2015

4.

Financial risk management objectives and policies

Within the economic and financial context in which the entity operates is essential to have a risk management strategy fully integrated into the overall strategy of the organization that increase its degree of resilience and gradually become immune to unforeseen and adverse effects. Therefore, risk analysis is ensured by the group’s different business units in which the entity operates. A prior identification study of the risks classified as the most critical is undercooked, and risk management strategies are defined for control procedures implementation that reduce them to an acceptable level.

Through the control procedures implementation the entity seeks to ensure the efficiency and effectiveness of its operations, as well as assets safeguarding, financial reporting reliability and compliance with laws and regulations. The ultimate goal will be the trade-off maximization between risks and business margins, in order to achieve, in a sustained way, the group’s strategic objectives in which it operates.

5.

Information required by legislation

The Board of Directors advises that the entity does not have debts in arrears to the State, in compliance with the terms of Law-decree number 534/80 of November 7.

In compliance with the provisions of the Article 210th of the Contributory Code, published by the Law number 110/2015 of September 16, the Board advises that the situation of the entity before the Social Security is regularized within the legally stipulated deadlines. dst - sgps, s.a.

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6.

Authorized disclosure date for issue the financial statements

The financial statements for the period ended December 31, 2015 were approved by the Management Board for issue on April 15, 2016.

7.

Final note

The Management Board expresses a word of recognition to all employees and of gratitude to everyone who in one way or another cooperated with the entity. Special gratitude is hereby expressed to the Sole Fiscal Auditor, trade creditors and banking entities that very much honor us with valuable relationship.

Braga, April 15, 2016

The Board of Directors,

José Gonçalves Teixeira; Executive Chairman

Avelino Gonçalves Teixeira; Executive Vice-Chairman

Joaquim Gonçalves Teixeira; Non-Executive Vice-Chairman

Hernâni José Gonçalves Teixeira; Non-Executive Member of the Board of Directors

João Martins Negrais de Matos; Executive Member of the Board of Directors

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B)

Corporate Social Responsability

Since its genesis, dst group pursues a policy of social responsibility based on sustainability strategies that include the concern for the collective welfare and the social and environmental effects of its activities. dst group’s programme for social responsibility covers areas as culture, education, health, safety, environment and knowledge. This program’s curriculum is transversal to the group and is developed in internal and external context involving all employees, aligned with dst group’s values: Ambition, Passion, Loyalty, Solidarity, Good Taste, Courage, Respect and Rigour.

The concern of dst group for social responsibility matters not only increases the personal wealth of each employee as well as contributes to the environment in which it operates transmitting to the market the position of an "cult, cosmopolitan and cool" group, projecting an image of modernity and of social, cultural and economic dynamism.

Human Resources In terms of general characterization of dst group as of December 31, 2015, its population was constituted by 1,072 employees, of which 213 were female and the remaining 859 were male, with an average age of 38.1 years, which represents an increase of 1.5% YoY. Number of employees Female Male Total Average senority Average age

2014

2015 YoY 14/15

197 859 1.056 8.1 37.9

213 859 1.072 8.06 38.1

8,1% 0,0% 13.4% -4% 20%

Of the 1,072 employees, it should be noted the 17 professional trainees who were hired after the probationary period end. In 2015 from a total of 24 professional trainees dst group ended up contracting 70.83% in a total of 17 professionals.

Professional traineeships (start) Professional traineeships (term) Hired traineeships

dst - sgps, s.a.

2014

2015

24 26 24

7 24 17

YoY 14/15

-70,83% -7,69% -29,17%

Page 49 of 120

Consolidated Annual Report 2015

Concerning the turnover rate, which remained relatively stable in comparison with the previous year, it is noteworthy that, in 2015, 180 employees ended up their connection to dst group, and 185 new admissions were approved.

Turnover index Employees entries Employees exits Turnover index Net job creation

2014 243 118 17,09% 125

2015 185 180 17,02% 5

Regarding the 185 new admissions in 2015 the average age is 34.05 years, which reflects the renewal and growth by hiring young graduates as well as employees with different levels of professional experience. This reality, combined with the fact that 45.41% of these net jobs had as minimum education level a graduation, reveals a more professional group as a way to cope with the constant challenges, as well as its continuous search for improvements, efficiency, organizational growth and maturity.

This reality is only possible due to the group’s aggressive policy regarding the continuous investment in executive training of its staff. It is clear from dst group genetic synthesis that training is a concern and is regard as a key success factor, particularly in terms of human capital management practices, wherein the bet on increasing skills necessary for personal and professional development meets its strategic objectives, contributing effectively to its success.

In 2015 dst group maintained its strategy of investing in training and sought to invest in innovative and multidisciplinary areas in order to respond to the continuous challenges and needs of the employees as a best practice management of human capital.

This continuous formation strategy grants new knowledge, technical skills, relationships skills, and above all promote the sense of organization membership resulting in the acquisition of self-confidence and assuredness.

All stages of the training process, since the planning until the evaluation process, result in Diagnosis of Training Needs that is made with collaboration with the direction of each department and with the collaboration of the administration of each company in the group.

Throughout the year 2015 were substantially more streamlined actions that then previous year, with different durations.

The shorter duration formation were focus on more technical areas well oriented for companies such as dte and bysteel as well the increase participation in seminars and workshops in a total of 37 different seminars in 2015.Has been kept the investment made in transversal formation actions such as various levels of French and advanced Excel with an increased focus on macros and VBA knowledge. Furthermore there was an increase investment in the safety area with dst - sgps, s.a.

Page 50 of 120

Consolidated Annual Report 2015

actions such as first aid courses. Moreover, there were some formation actions in various fields such as taxation, budgeting, real estate and purchasing management. There were also some innovative actions as in the case of Information Design and Speaking workshops.

Based on the participation of the employees in these actions, we can evidence that there were a higher heterogeneity in the function performed in the group compared to the previous year.

During 2015, a total of 8,729 certified hours and 206 hours of training / internal awareness uncertified were involved: - 401 employees in 176 certified actions; - 213 employees in 40 non-certified actions.

In the following table the main indicators are presented: No. of certified actions

No. of employees

Hours of formation

No. Of noncertified internal actions

176

401

8.729

40

No. of Hours of employees formation 213

206

Safety, Hygiene and Health dst group annually develops a comprehensive program of Hygiene, Health and Safety audits, covering constructions yards and production centers. These audits, according to its nature and extent may take the form of Management System audits or technical audits.

Throughout the year of 2015, 1,000 training/awareness actions were held for dst group's employees and 1,560 actions for sub-contractors' employees. Additionally, throughout the year were carried out multiple awareness-raising campaigns by the Health and Security Department in order to draw attention, in a different way, for some matters that are essential to safety and health of workers, such as falls from height, burial and hygiene at workplaces.

Continuity was given to the project "Safety Moment", in which posters with allusive Hygiene, Health and Safety issues are placed at strategic points. These posters were updated monthly.

In May dst group promoted the month of safety at work having several formation actions including seminars and simulacrum in work.

dst - sgps, s.a.

Page 51 of 120

Consolidated Annual Report 2015

dst group in partnership with XZ consulting organized a workshop in the groups’ headquarters in Braga in the 28th of April of 2015 to mark the National Day of Prevention and Safety at Work.

This activity had the participation of Doctor Cleuta Fraga in a session of laught terapy, Doctor André Pinto that spoke about “stress management” finalizing with a Pilates session oriented for body posture by professor Rui Lemos This workshop maked the opening of a series of diverse formations and activities dedicated to several themes such as simulacrum directed to employees and to business partners.

It was released a challenge for the best photo with the theme “security at work”. The winners will be exhibited at Minh Center from 25 to 29 of May. The activities organized by the group aim to raise awareness and draw attention to the importance of safety in everything we do, directing all our employees for security policy with zero tolerance.

In September we promoted the week of heal and welfare with speeches related with healthy alimentation with several outdoor activities that occur in our sports complex.

During 2015, were performed noise measurements and exposure to chemicals where needed and as result some measures where needed in some risk places to minimize the risk.

As in previous years, the examinations and consultations of occupational medicine were carried out at dst group’s medical facilities. The services are assured by four nurses, one occupational doctor and two doctors of curative medicine, being one nurse permanently present in the group’s facilities.

Moreover, dst group has dental services and gives them free access to its employees.

Beyond medical examinations compliance, the "Healthy Living" program has begun, which consists in screening for high cholesterol and diabetes. All employees with high levels will be subject to training / information for changing eating habits. Besides this training, employees in such a situation are referred to a dietician. After 6 months of follow-up new test tests will be performed and medical appointments arranged. Also during 2015 other screening tests were also performed, such as Spiro metric and audiometric exams.

Within emergency situations management, simulacra exercises were performed throughout all dst group, aiming to test the respective emergency plans. dst - sgps, s.a.

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Consolidated Annual Report 2015

The performance of our subcontractors / suppliers is essential to the group’s success. We believe that relationships based upon trust, cooperation and shared value creation with our subcontractors / suppliers result in the ability to innovate and strengthen Safety, Hygiene and Health policies, and at the same time, improve the quality of the provided safety and health services.

Regardless the type and scale of the construction or the work involved, the use of subcontractors has always implied at each hiring stage, strictly service quality control, in which safety and health at work are determinant factors.

Therefore, security technicians interfered in all construction works, in order to regulate subcontractors / suppliers activity as follows: 

In the procurement procedures (binding obligations on Safety, Hygiene and Health);



During works (subcontractors’ performance in terms of Safety, Hygiene and Health is accompanied by safety technicians through methodologies for security level assessing and to verify compliance with legal requirements).

In general, the attribution of personal protective equipment (PPE) per worker follows the risk assessment process of the activities developed by him / her and that are in compliance with our risk assessment matrix. However, dst group emphasizes the organizational and collective protection measures in performed activities complemented with the use of PPE and appropriate clothing. The PPE's delivery action is preceded by an awareness session and training regarding their proper use, conducted by a Safety, Hygiene and Health technician.

R&D and Innovation Since an early stage dst group embraced Research & Development as a key activity for its diversification strategy, which implies a clear commitment to new technologies.

Accordingly, the group acquired innovationpoint, a company dedicated to enhance, evaluate, produce and commercialize innovative ideas. This company is focused on the creation of new product categories, services or business models that challenge established paradigms and generate significant added value for consumers, for customers and for dst group itself.

The dynamism of innovationpoint is the basis of many innovative projects, supra presented on the Ventures business area analysis.

dst - sgps, s.a.

Page 53 of 120

Consolidated Annual Report 2015

Nevertheless, the research and development activity is not limited to innovationpoint. dst group has partnerships with research centres, universities or national and international companies.

At this point we have 4 R&D projects in wide range of fields such as efficient management of water supply networks, energy efficiency, monitoring and ventilation of moisture in buildings and smart lightning.

All these projects involve partnerships with universities and investigation centres and other multinational and national companies, proving the dynamism and capacity of building relations that characterize our group.

The RDI certification renewal by four group companies previously certified attest the existing good practices within the group and the open cases quality.

Crosswise to the whole group is fostered an active culture of innovation to all its employees, which the internal communication campaign "decidinovar" (I decided to innovate) and the encouragement given by the Board of Directors for all employees to devote at least half an hour a day exclusively to creativity and innovation are good examples.

Society dst group's extensive program for social responsibility also kept the emphasis on patronage, focusing on promotion and on the dissemination of culture and education. As a group based under the triple C - cultured, cosmopolitan and cool concepts, it prioritizes cultural activities since its inception, raising its positioning and differentiating itself in the way of doing business.

Among various activities and initiatives undertaken in 2013, the following deserve recognition: 

Main Maecenas of the Theatre Company of Braga, and the two-year patronage protocol has been renewed by the amount of € 50k;



Main Maecenas of Braga Book Fair being conceded a donation of 7,5m€ and also a participation of the group in the fair with book recitations "Claudio and Constantine" the Reading Community Drama BragaCult the Project;



Award of dst XX Grand Literature Prize, with a monetary value of € 15k, to Luisa Costa Gomes, being the 2015 edition dedicated to prose works published in 2013 or 2014. The event also included a video produced by our communication team with a partnership with RUM – University of Minho Radio with statements of some winning authors of previous editions and also an excerpt from the work on stage by Braga Theatre Company;



Maecenas of Dance Circle “Dance dance with their feet”, which took place during 2015 at Theatro Circo and promoted national and internacional shows such as “Talk to the Demon”, “Your Majesties, Welcome to the

dst - sgps, s.a.

Page 54 of 120

Consolidated Annual Report 2015

Antropocene”, “Pele”, Robot”, “Pântano”. In addition dst group maintained its support with Theatro Circo, allowing employees to attend the cultural events in dst cabin; 

Renewal patronage to Comedies do Minho - Association for the Promotion of Cultural Activities in the Minho Valley for the period 2015-2017, promoting this cultural project that is developed in the municipalities of Melgaço, Monção, Paredes de Coura, Valencia and Vila Nova Cerveira;



Sponsorship of the radio program "Books with RUM", the University of Minho Radio, where guest writers talk to António Ferreira about his most recent works. The project included the participation of authors such as Valter Hugo Mãer, Sandro William Junqueira, Vergílio Alberto Vieira and Luísa Costa Gomes;



Alumni Conference 2015 Sponsorship as part of the celebrations of the 41st anniversary of University of Minho where Dava J. Newman, vice president of North American Space Agency (NASA), spoke on the theme "Challenges and innovation in space ... and in earth "in the Palace of the Dukes of Bragança in Guimarães;



Signing of a Memorandum of Understanding with the Braga Hospital and Primavera BSS in order to create synergies that allow this health facility increase innovation culture among its employees, with the strategic objective to identify and explore potential innovative projects promoting sustainable development of the entity;



Support to sport and, more specifically, the Sporting Clube de Braga, keeping a cabin at the Municipal Stadium in Braga;



Support for several organizations and events: the Magic Walk by CERCI Braga and the Alqueva Tour by CERCI Beja, the commemoration of the 150th anniversary of the Portuguese Red Cross, the Conservatory Calouste Gulbenkian Music, the Rodellus Music Fest and the Prison Facility of Braga;



Continued development of books and reading support policy. A book is offered in the anniversary of each employee. dst group's newsletter is issued relying on the active contribution of employees who participate by submitting articles, with unrestricted subjects.Additionally, the group also promotes reading by offering books for school libraries, beyond internally provide its own library with all kinds of literary works for its employees disposal;



dst group strongly encourages the participation of its employees in voluntary work. Therefore, the group continues to actively collaborate with Habitat and with the Portuguese Institute of Blood and Transplant, wherewith in partnership a blood collection campaign was organized on dst group facilities;



Continuation of the project that aims to help emerging artists to get the proper recognition and remuneration for their efforts and work, allowing them to display their works of art at a global level, through an online platform with real galleries associated: shairart ( www.shairart.com).

dst - sgps, s.a.

Page 55 of 120

Consolidated Annual Report 2015

Environment Environmental certification dst group maintained in 2015 the environmental management system certification NP EN ISO 14001: 2012 in the areas of “construction and public works, maintenance of vehicles and equipment”, “manufacture of wood products and furniture”, “production and assembly of metal structures”, and maintained the certification by the NP EN ISO 14001:2004 norm in “solar panels’ production”. Likewise, dst group renewed EMAS registration, in the areas of “maintenance of vehicles and equipment”, “manufacture of wood products and furniture” and “design, development, production and assembly of metal structures”. The certification and EMAS registration are sustained and improved through systematic audits from APCER (Portuguese Certification Association). Environmental claims related to EMAS registrations are available on the dst group website (www.dstsgps.com).

Controlo Operacional 

Cele and gas emission- in 2014 CO2 emissions were 1186t having been awarded 1345 emission licenses (EL). The verification was made in March. In 2015 the quatity of CO2 emitted was aproximatly lower and inferior to the number of EL that has been granted in 2015. All fixed sources of air emissions that had to be monitored in 2015 complied with the emission limit values (ELVs).



Fluorinated gases - were reported (Portuguese Environment Agency) the quantities of fluorinated gases in the equipment installed in the group and was performed the detection of leaks in equipment with more than 5 tons of CO2 equivalent. The dte is the company responsible for making the annual detection of leaks, whether the devices containing substances that deplete the ozone layer or the equipment containing fluorinated greenhouse gases effect.

The dte was certified to perform "maintenance and servicing of stationary refrigeration, air conditioning and heat pump equipment containing fluorinated greenhouse gases effect." This year has also communicated the quantities purchased of fluorinated gases.



Waste production - for construction activity, the dst group proceeds systematically the implementation of Environmental Management Plans in their works, with the objective to minimize the negative impacts that their activities may cause, in particular the waste management. In 2015 were produced and managed 20,023 t of waste in the group. In construction sites were managed 15,969 tons of waste, the highest value since there is a systematic control and registration. Of these, 68.7 t were hazardous wastes, including waste oils. This increase is explained by the increase of urban renewal works it is necessary to demolish the old building.

dst - sgps, s.a.

Page 56 of 120

Consolidated Annual Report 2015

RESIDUALS PRODUCTION (TONS) 20.000

15.000

10.000

5.000

0 2010

2011

2012

2013

2014

2015

Likewise the reception of waste in the Waste Management Unity had a very significant increase in 2015. This increase is related with the increase of rehabilitation works and the adoption of a more assertive trade policy. In November of 2015 the dst group began the exploration activity of inert landfills integrated in requalification of Montesinho Quarry.

WASTE RECEPTION (TONS) 14.000 12.000 10.000 8.000 6.000 4.000 2.000 0

dst - sgps, s.a.

UGR

UGR

UGR

UGR

UGR

UGR

Landfill

2010

2011

2012

2013

2014

2015

2015

Page 57 of 120

Consolidated Annual Report 2015

Environmental awareness In the year of 2015 were conducted 541 awareness actions in a total of 192 hours. Most of them in the environmental monitoring of contracts with a particular emphasis on waste separation, cleaning the construction site and actions in case of spill with chemicals.

The campaigns GreenCork of Quercus and “I reduce 20� were kept.

As already has been customary dst group participated in the European Week for Waste Reduction, this year under the theme of dematerialization. It was made a very attractive campaign on the intranet, awareness and distribution of posters in order to reduce the consumption of paper, plastic cups, jug of water, energy, procedures. This week we reduced 685 impressions and distribute 151 bags of reusable cloth by our employees.

The dst group continues to participate in the Eco-School Council at High School Vila Verde, participating in meetings of the Council. In this context welcomed two interns from a professional training course Environmental Management Technician.

Environmental management costs The main part in environmental management, more than 90%, corresponds to waste management. Costs for other environmental management, environmental permits in the works correspond to 52.7%, the audits to 27.3%, the environmental monitoring to 12.6% and rates to 7.4%.

dst - sgps, s.a.

Page 58 of 120

Consolidated Annual Report 2015

Quality and certifications The reason for the existence of organizations comes from its Mission, which should be framed by values that lead to a responsible performance at social, economic, financial, ethical and technological level. In summary, it must convey confidence in relations with stakeholders.

Organizations exist as have customers, so their confidence is very important to us. The dst group permanently affixed on continuous improvement, working every day to increase productivity, quality, eliminating the cost of non-quality.

Understanding what customers want and provide him with products and services that meet their expectations is the primary focus of the organization's quality management.

The dst group leadership provides, at all levels, the conditions for commitment of people to achieve the organization's objectives, it is necessary that these act as a whole, know and understand the purpose and direction of the organization and at the same time , feel supported and encouraged in their pursuit. It is essential for the organization that people are competent and committed to deliver value, constantly looking for the best results.

In addition to the relationship with customers, the relationship with suppliers is also very important, as it must be based on a spirit of cooperation to promote the commitment of both in the quality of the final product or service. The dst group sees its suppliers as a key part of its development, and has set up procedures to evaluate and select, so that they can increase their level of quality in order to meet the level of demand that the dst group calls.

The strong commercial competition, competitiveness and profitability make dst group increasingly invest in rules and good construction practices, qualifications of its human resources and appropriate technological facilities. dst group objectives are consistent with the current management policy, with clear and measurable indicators and targets, providing a periodic review leading to an action plan implementation capable to define and detect improvement opportunities.

The concern for quality starts in budgeting. Quality Plans drawn up for tender are made with the accuracy required so that, in the project implementation phase, customer requirements and rules applied to the sector are fulfilled and, on the other hand, customers’ expectations are always exceeded. In the year 2015, 89 quality plans for tenders were drown up for public competitions.

Strengthening the culture of innovation supported by an enhanced creativity, surveillance, production and knowledge are also fundamental purposes for the sustainability of dst group. dst - sgps, s.a.

Page 59 of 120

Consolidated Annual Report 2015

dst group maintained during the 2014 year its quality certifications granted by APCER according to NP EN ISO 9001:2008 in the following areas: 

Design, development, production and application of bituminous concrete;



Construction and public works, laboratory testing, maintenance of equipment and vehicles, design, development and manufacture of wood and products of wood, furniture and assembly work – dst, s.a.;

 

Conception, development and production of concrete – tconcrete, s.a.; Conception, development, production and assembly of metal structures and design of engineering projects – bysteel, s.a.;



Transformer stations installations and public lighting. Extension installation medium-voltage and low-voltage, electrical installations using electrical energy and heating installations, ventilation, air conditioning and refrigeration.

Design and optical fiber installations – dte, instalações especiais, s.a.;



Production of photovoltaic panels: global sun, s.a.

Regarding bituminous mixtures, dst, s.a. complies with the Regulation (EU) No 305/2011, and the bituminous mixtures produced in its central hold the EC label, according to the norm EN 13108-1:2011.

In 2015 was CE marked in our recycled aggregates produced in our Unit Wast Management (UWM), according to the norm NP EN 13242: 2002 + A1: 2010.

The UWM is to promote the recovery of waste and the use of recycled aggregates, minimizing the consumption of natural resources, thus contributing to the preservation of the environment.

dst - sgps, s.a.

Page 60 of 120

Consolidated Annual Report 2015

C)

Annex to the Board of Directors Consolidated Report

In compliance with the terms and for the effects of the number 5 of article 447th and number 4 of article 448th of the Trading Companies Code (“CSC – Código das Sociedades Comerciais”), approved by Law-decree number 262/86 of September 2, hereby is presented the list of shares regulated by such diplomas:

1. The members of the Board of Directors covered by paragraph 5 of article 447th of CSC were holders on December 31, 2015 of the following shares:



José Gonçalves Teixeira held: 1.230.000 shares with a nominal value of six Euros each;



Joaquim Gonçalves Teixeira held: 1.230.000 shares with a nominal value of six Euros each;



Avelino Gonçalves Teixeira held: 1.230.000 shares with a nominal value of six Euros each;



Hernâni José Gonçalves Teixeira held: 1.230.000 shares with a nominal value of six Euros each.

2. The Statutory Auditor and the Deputy Statutory Auditor did not have any company’s shares at December 31, 2015, neither from companies with which the company is in a relationship of control or group.

dst - sgps, s.a.

Page 61 of 120

Consolidated Annual Report 2015

3. The following shareholders covered by paragraph 4 of article 448th of the CSC, were the holders, a on December 31, 2015, at least one-tenth of the capital 

José Gonçalves Teixeira, with 24,60% of the capital;



Joaquim Gonçalves Teixeira, with 24,60% of the capital;



Avelino Gonçalves Teixeira, with 24,60% of the capital;



Hernâni José Gonçalves Teixeira, with 24,60% of the capital.

Braga, April 15, 2016 The Board of Directors,

José Gonçalves Teixeira; Executive Chairman

Avelino Gonçalves Teixeira; Executive Vice-Chairman

Joaquim Gonçalves Teixeira; Non-Executive Vice-Chairman

João Martins Negrais de Matos; Executive Member of the Board of Directors

Hernâni José Gonçalves Teixeira; Non-Executive Member of the Board of Directors

dst - sgps, s.a.

Page 62 of 120

Consolidated Annual Report 2015

D)

Consolidated Financial Information

Consolidated Balance sheet For the years ended December 31, 2015 and 2014.

Translation of financial statements originally issued in Portuguese. In case of discrepancy the Portuguese version prevails.

Amounts expressed in euros NOTES

DATES 31-12-2015

31-12-2014

ASSETS Non-current assets Tangible fixed assets Investment properties Goodwill Intangible fixed assets Financial investments - equity method valuation Financial investments - other method valuation Other financial assets Deferred tax assets

6 and 7 8 9 10 11 12 15 24

86.013.937,64 16.736.382,35 96.605.722,29 34.596.435,06 47.869.125,56 1.896.246,19 1.169.396,87 284.887.245,95

91.058.248,31 16.469.811,19 119.149.220,59 32.356.554,06 45.089.861,82 2.434.917,91 943,36 1.522.388,87 308.081.946,10

13 14 22 17 16 and 24 18 4

27.043.172,62 51.047.468,45 2.916.671,84 4.523.394,91 30.005.878,72 1.090.417,65 29.553.298,05 146.180.302,22 431.067.548,17

30.937.170,99 46.323.883,81 3.817.389,60 5.739.605,86 15.193.475,92 1.543.528,02 38.492.257,16 142.047.311,34 450.129.257,44

19 19

30.000.000,00 23.700.000,00 8.012.875,97 165.440,00 15.821.458,95 4.909.096,54 39.799.371,28 15.182.955,40 1.643.955,10 139.235.153,24

30.000.000,00 23.700.000,00 6.602.827,72 165.440,00 25.690.927,43 12.073.677,14 41.065.851,80 13.905.620,15 1.557.633,96 154.761.978,19

Liabilities Non-current liabilities Provisions Loans Deferred tax liabilities Financial instruments Other payables

20 7 and 21 24 15 23

5.156.787,57 95.601.828,88 9.988.788,10 742.748,42 14.652.204,16 126.142.357,13

4.360.499,45 101.700.412,76 10.299.229,11 882.145,71 15.784.655,40 133.026.942,43

Current liabilities Trade creditors Prepayments Taxation payable Loans due within 1 year Other payables Deferrals

22 14 17 7 and 21 23 and 24 18

56.631.672,95 127.434,63 2.138.703,56 35.170.215,23 54.085.327,21 17.536.684,24 165.690.037,81 291.832.394,94 431.067.548,17

58.835.669,07 1.079.828,66 3.142.503,92 34.376.280,99 51.460.222,79 13.445.831,41 162.340.336,83 295.367.279,26 450.129.257,44

Current assets Stocks Trade debtors Prepayments Taxation receivable Other receivables Deferrals Cash in hand, at bank and bank term deposits Total assets EQUITY AND LIABILITIES Equity Ordinary share capital Share premiuns Legal Reserve Other reserves Retained profit Financial assets adjustments Other changes in equity Net profit/(loss) for the period Minority interests Total equity

Total liabilities Total equity and liabilities

Braga, April 15, 2016 the Board of Directors, dst - sgps, s.a.

the Certified Accountant number 55854, Page 63 of 120

Consolidated Annual Report 2015

Consolidated Income Statement For the years ended December 31, 2015 and 2014.

Translation of financial statements originally issued in Portuguese. In case of discrepancy the Portuguese version prevails.

Amounts expressed in euros PERIODS NOTES

2015

2014

Turnover Subsidies

25

206.222.477,80 494,83

214.607.925,45 -

Gains/(losses) on subsidiary, associates companies and joint ventures

11

7.706.913,63

11.741.331,75

Changes in production stocks and work in progress Capitalization of own costs Cost of sales Other external charges Staff costs Impairment of inventory net of reversals Trade debtors impairment (losses/written off) Provisions (incresase/decrease) Increase/decrease in fair value Other operating income Other operating charges

13 26 13 27 28 13 14 20 12 29 30

1.369.061,39 67.696,63 (62.816.984,57) (94.259.690,19) (28.055.897,40) (3.102.462,05) 1.422.446,41 (731.734,29) (266.139,32) 17.724.257,79 (8.275.864,95)

8.317,12 38.998,03 (69.742.416,40) (95.345.395,66) (27.481.972,34) (4.603.641,00) 1.538.947,82 (1.414.460,59) (303.820,91) 17.930.613,42 (12.004.805,24)

37.004.575,71 (12.656.481,74) 24.348.093,97 1.052.111,46 (7.974.612,41) 17.425.593,02 (1.653.441,84) 15.772.151,18

34.969.621,46 (12.661.470,27) 22.308.151,19 2.971.249,23 (10.029.314,97) 15.250.085,45 (775.204,84) 14.474.880,61

15.182.955,40 589.195,78 15.772.151,18

13.905.620,15 569.260,46 14.474.880,61

3,15

2,89

Net operating profit/(loss) before depreciation and amortization, interests and taxes Depreciation, amortization and other amounts written off tangible and Net operating profit/(loss) before interets and taxes Income from interests Interest payable and similar charges Net Profit/(loss) before taxes Corporation tax Net Profit/(loss) for the period

Net profit/(loss) for the period attributable to: Shareholders Minority interests

Earnings per share

6 31 32 33

Braga, April 15, 2016 the Board of Directors,

dst - sgps, s.a.

the Certified Accountant number 55854,

Page 64 of 120

Consolidated Annual Report 2015

Consolidated Statement of Equity Changes in 2015 Translation of financial statements originally issued in Portuguese. In case of discrepancy the Portuguese version prevails.

Amounts expressed in euros Notes

On January 1, 2015 Changes during the year Application of 2014 result Changes in other Equity variations: Equity method Investment subsidy Differences from financial statements convertion Adjustments for deferred taxes Other variations recognized in equity

Share capital

Share premiuns Legal Reserve

Other Reserves

Retained Earnings

Financial Assets Adjustments

Other changes Net Profit / Loss in equity of the period

On December 31, 2015

Total

30.000.000,00

23.700.000,00

6.602.827,72

165.440,00

25.690.927,43

12.073.677,14

41.065.851,80

13.905.620,15

1.557.633,96

154.761.978,19

-

-

1.416.175,33 -

-

12.489.444,82 (4.470.872,93) -

(3.589.507,32) -

(1.179.554,63)

(13.905.620,15) -

-

0,00 (8.060.380,25) (1.179.554,63)

-

-

(6.225,08) 1.409.950,25

- (19.513.180,76) - (11.494.608,86)

(901.952,91) (1.047.979,98) (5.539.440,21)

(86.925,89) (1.266.480,52)

103.515,48 (13.905.620,15) 103.515,48 15.182.955,40 589.195,78 15.182.955,40 2.250.345,22

(86.925,89) (901.952,91) (20.463.870,33) (30.692.684,00) 15.772.151,18 17.433.300,62

30.000.000,00

23.700.000,00

98,00 98,00 8.012.875,97

(1.625.140,39) (1.625.140,39) 4.909.096,54

39.799.371,28

Net Profit / Loss for the period Comprehensive income for the year Operations with Shareholders Retained profits from subsidiaries Distributions Others operations

Minority interests

165.440,00

1.625.140,39 1.625.140,39 15.821.458,95

15.182.955,40

(606.390,12) (606.390,12) 1.643.955,10

(606.390,12) 98,00 (606.292,12) 139.235.153,24

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the Certified Accountant number 55854,

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Consolidated Annual Report 2015

Consolidated Statement of Equity Changes in 2014 Translation of financial statements originally issued in Portuguese. In case of discrepancy the Portuguese version prevails.

Amounts expressed in euros Notes

On January 1, 2014 Changes during the year Application of 2013 result Changes in other Equity variations: Equity method Investment subsidy Differences from financial statements convertion Other variations recognized in equity

Share capital

Share premiuns Legal Reserve

Other Reserves

Financial Assets Adjustments

Retained Earnings

Other changes Net Profit / Loss in equity of the period

On December 31, 2014

-

Total

25.000.000,00

50.000.000,00

5.187.379,11

165.440,00

22.890.925,18

11.003.496,07

39.631.289,51

13.308.556,55

1.373.503,45

168.560.589,88

-

-

1.409.223,53 -

-

11.899.333,03

371.311,80 -

1.610.268,95

(13.308.556,55)

-

-

-

-

-

-

-

-

-

(170.369,12)

-

-

(170.369,12)

-

-

6.225,08 1.415.448,61

-

(2.202.847,19) 3.635.617,67

(136.746,15) 234.565,65

(5.337,54) 1.434.562,29

213.847,16 (13.308.556,55) 213.847,16 13.905.620,15 569.260,45 13.905.620,15 2.156.611,06

(2.124.858,64) (6.374.515,19) 14.474.880,60 16.062.231,21

26.300.000,00 (26.300.000,00) (21.300.000,00) 5.000.000,00 (26.300.000,00) 30.000.000,00 23.700.000,00 6.602.827,72

165.440,00

(835.615,42) (835.615,42) 25.690.927,43

835.615,42 835.615,42 12.073.677,14

41.065.851,80

(6.059.629,02) (1.239,16)

Net Profit / Loss for the period Comprehensive income for the year Operations with Shareholders Share premium realizations Restitution to shareholders Retained profits from subsidiaries Distributions Others operations

Minority interests

13.905.620,15

(5.688.317,22) 1.609.029,79

(617.326,43) 18.349,33 (598.977,10) 1.557.633,96

(21.300.000,00) (617.326,43) 18.349,33 (21.898.977,10) 154.761.978,19

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the Certified Accountant number 55854,

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Consolidated Annual Report 2015

Consolidated Cash Flows Statement For the years ended December 31, 2015 and 2014.

Translation of financial statements originally issued in Portuguese. In case of discrepancy the Portuguese version prevails.

Description

Notes

Amounts expressed in euros PERIODS 2015 2014

Operating activities - direct method Received from trade debtors

127.550.395,85

106.993.489,85

Payments to trade creditors

(99.767.753,78)

(74.215.746,35)

(17.780.140,19)

(12.932.230,85)

10.002.501,88

19.845.512,66

Payments to and on behalf of employees Cash flow from operations Corporate Tax payments/receivables Operating cash flow (1)

(1.395.791,25)

1.453.754,52

8.606.710,63

21.299.267,17

Investment activities Payments for: Financial investments

(1.641.237,40)

(2.190.477,49)

Tangible fixed assets

(6.854.856,09)

(24.145.923,51)

Intangible assets

(4.547.756,39)

(1.524.290,89)

Loans

-

(991.413,81)

Other assets

-

-

(13.043.849,88)

(28.852.105,69)

Financial investments

1.628.737,40

2.973.767,11

Tangible fixed assets

2.488.044,09

137.789,78

699.424,89

58.207.220,21

Revenues from:

Other assets Loans

-

-

Investment subsidies

-

2.342.489,14

Interests

1.090.171,08

1.203.659,13

Dividends

4.030.807,46

5.913.047,45

9.937.184,92

70.777.972,82

(3.106.664,96)

41.925.867,13

-

-

-

-

(12.160.240,69)

(46.676.352,47)

Investment cash flow (2)

Financing activities Revenues from: Loans obtained

Payments for: Loans granted Interests

Financing cash flow (3) (Decrease)/ Increase in cash in the year (1) + (2) + (3)

(4.781.010,49)

(5.472.713,41)

(16.941.251,18)

(52.149.065,88)

(16.941.251,18)

(52.149.065,88)

(11.441.205,51)

11.076.068,42

cash and cash equivalents at the begining of the period

4

40.994.503,56

29.918.435,13

cash and cash equivalents at the end of the period

4

29.553.298,05

40.994.503,56

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Consolidated Annual Report 2015

Annex at December 31, 2015 Translation of financial statements originally issued in Portuguese. In case of discrepancy the Portuguese version prevails.

1.

Entity Identification

dst group was constituted in 1999, its registered office is in Palmeira – Braga, being the shareholder company DST – SGPS, S.A., which object is the management of shareholdings from other entities as an indirect form of exercises the economic activities in engineering and construction sector, water and sanitation, renewable energies, telecommunications and other services.

These financial statements are the Entity's individual financial statements.

All the amounts presented in these notes are expressed in Euros, unless otherwise stated.

2.

Accounting referential for the financial statements preparation

2.1.

Accounting Normalization System (“SNC – Sistema de Normalização Contabilística”)

The financial statements herewith were prepared in accordance with all standards comprised in the SNC. It should be considered that as part of SNC are the Basis for the presentation of financial statements, the Financial Statements Models, the Accounting Code, the Financial Reporting and Accounting Standards (“NCRF”) and the Interpretive Guidelines.

These standards of SNC are regulated by the following legislation: 

Law-decree number 158/2009 of July 13 (SNC), with amendments introduced by law number 20/2010 of August 23;



Ordinance number 986/2009 of September 7 (Financial Statements Models);



Notice number 15652/2009 of September 7 (Conceptual Framework);



Notice number 15655/2009 of September 7 (Financial Reporting and Accounting Standards);



Ordinance number 1011/2009 of September 9 (Accounting Code).

In order to ensure the proper and true expression of the financial position and the entity’s performance, were used the standards that integrate the SNC, referred to above, in all aspects pertaining to the recognition, measurement and disclosure.

However where the SNC do not respond to particular aspects of transactions or situations are complementarily applied in the following order, the International Accounting Standards, as adopted pursuant to Regulation (EC) number

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1606/2002 of the European Parliament and Council of July 19, the International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS) as issued by the IASB, and respective SIC-IFRIC interpretations.

3.

Main accounting policies

The main accounting policies used for the preparation of the financial statements are stated below.

3.1. Presentation basis The accompanying financial statements have been prepared assuming the business continuity, based on the historical cost convention and prepared from the entity’s accounting records, kept in accordance with IFRS in force at the date of the financial statements preparation.

The group adopted the provisions of IFRIC 12 - Service Concession Arrangements and SIC 29 - Disclosure - Service Concession Arrangements. The IFRIC 12 defines the rules to be followed in the concession arrangements, given the services provided and its control power over the concession assets.

Under the concession activity, the Group recognized an intangible asset that represents the right to the infrastructure use and exploitation provided by the Grantor.

Although it is the group responsibility to finance the infrastructure construction, since all goods are to integrate the concession and automatically will be subject to the non-transferability terms and assets reversal, are not considered as assets controlled by the Group, and therefore not recognized as tangible fixed assets. Through the analysis performed to the economic and financial rebalancing conditions provided on the concession agreement, it is founded that certain rebalancing conditions are directly associated with the demand risk, while others are on the Grantor’s dependence or other associated entities, and from the interest rates fluctuations in financial markets. And based on this analysis it was concluded that the rebalancing conditions act as a Grantor’s guarantee, limiting the margin earned by the Group and by placing a ceiling on the grant return. But that does not constitute a right to receive from the Grantor or his behalf, whereby the values invested in the concession were recognized as an intangible asset.

Based on the IFRS provisions and complementarily on the IFRIC 12, the accounting policies adopted by the Company were as follows:

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3.1.1. Continuity assumption Under the continuity assumption, the entity has evaluated the information available and its future expectations, taking into account the entity's ability to continue with your business. Of the evaluation resulted that the business is able to proceed assuming its continuity.

3.1.2. Accruals assumption (or economic periodization) The entity records its income and expenses in accordance with the rules of the increase, by which income and expenses are recognized as they are generated, regardless of when they are received or paid.

The differences between the amounts received and paid and the corresponding income and expenses are recognized under "Deferrals" or "Other payables or other receivables."

3.1.3. Consistency of presentation The items presentation and classification in the financial statements are consistent from one period to another.

3.1.4. Materiality and aggregation The materiality depends on the size and nature of the error or omission, sober in the circumstances that surround it. It is considered that the omissions or incorrect statements are materially relevant items if they can, individually or collectively, influence the economic decisions taken by users of financial statements. An item that is not materially relevant to justify its separate presentation on the face of the financial statements can however be relevant material to be presented separately in the notes to this annex.

3.1.5. Compensation The assets and liabilities, income and costs are reported separately in the respective items of the balance sheet and the income statement, so that no assets were compensated for any liability or any expense for any income, both vice-versa.

Gains and losses arising from a group of similar transactions are reported on a net basis, ie, gains and losses from exchange rate differences and gains or losses arising on financial instruments held for trading. These gains and losses are reported separately if they are materially relevant.

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3.1.6. Comparative Information The accounting policies and measurement bases adopted at December 31, 2015 are comparable with those used in preparing the financial statements for December 31, 2014.

The comparability of the information between periods is continuously improvement object in order to be increasingly an instrument of help to users allowing them to take economic decisions and assessing the trends in financial information for forecasting purposes.

3.2. Recognition and measurement policies used in the preparation of financial statements

3.2.1.

Transactions in foreign currency

The entity’s financial statements are presented in euros; the euro is the functional and presentation currency.

The transactions in foreign currency (currency other than the functional currency of the entity) are recognized at exchange rates of the dates of the transactions. At each reporting date, the carrying amounts of monetary items denominated in foreign currency are updated at the exchange rates that date. The carrying amounts of non-monetary items are recognized at fair value denominated in a foreign currency are updated to the exchange rates of the dates on which the respective fair values were determined. The carrying amounts of non-monetary items are recognized at historical cost, denominated in a foreign currency are not upgraded.

Positive or negative exchange differences driven out from differences between the exchange rates in force at the transaction dates and at the dates of collection, payment or of balance sheet are recognized as income and/or expenses in the period’s income statement as foreign exchange gains and/or losses.

3.2.2.

Tangible fixed assets

Tangible fixed assets are recognized at acquisition cost, net of related depreciation and any impairment losses. The acquisition cost includes all expenditure directly attributable to the acquisition of such assets and to their availability in local and operational conditions required.

Subsequent charges are included in the acquisition cost of the asset or recognized as separate assets, as appropriate, when it is probable that future economic benefits will flow to the entity through its use and its cost can be reliably measured.

Tangible assets in progress, fixed assets still under construction or completion, are accounted for at acquisition cost dst - sgps, s.a.

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deducted of eventual impairment losses. The depreciation of these assets starts at the moment that they are available for use.

Depreciation are calculated from the straight-line method, applied annually under duodecimal attribution since the date the assets are ready for use and in the required conditions in terms of quality and technical, to operate according to intended by the entity, considering the most appropriate economic rates to allow the full reintegration of the assets during their estimated useful lives. The estimated useful lives is determined taking into account the expected use of the asset by the entity, the natural wear expected, the subjection to technical obsolescence and salvage value attributable.

Provided that the entity does not have a reliable estimate of the residual value of its assets it was considered null value for depreciation of tangible fixed assets purposes. Whenever there is evidence that a significant change occurred in the useful life or in the residual amount of an asset, its depreciation is reviewed on a prospective basis in order to reflect such new expectations.

The average annual depreciation rates and the useful lives were considered as follows: Useful live

Annual Rate (%)

10 to 50

2 to 10

Basic equipment

2 to 20

5 to 50

Transport equipment

2 to 10

10 to 50

Office equipment

2 to 16

6.25 to 50

Artistic patrimony

8

12.5

4 to 20

5 to 25

Buildings and other structures

Other tangible fixed assets

The depreciation method and useful lives of the various assets are reviewed annually. The effect of any changes to these estimates will be recognized prospectively in the income statement.

Repairs and maintenance expenses that do not increase the useful life of the assets and do not results in significant improvements in the elements of tangible fixed assets are recognized as an expense in the period in which they are incurred.

The major repairs relating to the replacement of equipment are recorded in tangible fixed assets and depreciated at rates corresponding to the residual life of the respective assets. dst - sgps, s.a.

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The gains or losses resulting from the write-off or sale of tangible fixed assets are determined by the difference between the amount received from the sale and the assets' carrying amount and are recognized in the income statement as "Other revenues and income" or "Other losses and expenses", respectively.

3.2.3.

Intangible assets

Intangible assets are accounted for at acquisition cost deducted from amortizations and any accumulated impairment losses. Intangible assets only are recognized if it is probable that they will produce future economic benefits to the entity and if they are controllable and can be reliably measured.

Most intangible assets consist of software and are amortized in accordance with the straight-line method with duodecimal attribution since the date the assets are ready for use, considering the most appropriate economic rates to allow the full reintegration of the assets during their estimated useful lives. No residual value is considered.

The average annual depreciation rates and the useful lives were considered as follows: Useful live

Annual Rate (%)

2 to 41

2.46 to 54.12

3

33.33

Industrial property

3 to 48

2.08 to 33.33

Others intangible assets

3 to 42

2.36 to 33.33

Granting rights Software

The gains or losses resulting from the write-off or sale of intangible fixed assets are determined by the difference between the sale price and the assets' carrying amount and are recognized in the income statement as "Other revenues and income" or "Other losses and expenses", respectively.

The amortization cost of intangible assets with finite useful lives is recognised in the income statement under the heading "Depreciation and amortization net of reversals".

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There are some details below regarding the concession rights:

Concession rights related to the concession activity For the goods (which arise in infrastructure usage rights – IFRIC 12) with useful lives above the concession period, the amortization of initial investment or which may be subsequently adopted or imposed by the Grantor and that materialize in expansion or modernization of initial obligations, should normally be for a period of the concession. However, additional investments, modernization or expansion whose lifetime extends beyond the term of the concession, and that present residual value shall give rise to compensation equivalent to the amount not yet amortised at the date of the end of the concession.

Depreciation is calculated by the sum of units, i.e. by depreciation of contractual investment in economic and financial feasibility study used, based on effluent flow rates charged during this period and the effluent to invoice until the end of the concession provided for in the feasibility study.

3.2.4.

Investment properties

Investment properties consist of land and buildings and other constructions whose purposes are to obtain rents and equity valorization and not for administrative purposes nor for sale in the course of the entity’s current activity.

Investment properties are measured at cost less any accumulated impairment losses.

The costs incurred with investment properties in use, such as maintenance, repairs, insurance and property taxes are recognized in the income statement of the period to which they relate. The improvements in respect of which it is estimated that generate future additional economic benefits are capitalized under investment properties.

The average annual depreciation rates and the useful lives were considered as follows:

3.2.5.

Useful live

Annual Rate (%)

Land natural resources

5

20

Buildings and other constructions

10 to 100

1 to 10

Goodwill

The Goodwill corresponds to future economic benefits arising from assets which are not able to be individually identified and separately recognized.

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The Goodwill on Subsidiaries encompassed in the consolidation is reflected in their individualized heading in the balance sheet. The Goodwill on Subsidiaries not encompassed in the consolidation, the Associates and joint ventures is reflected in the value of the corresponding financial participation are presented in the balance sheet under the heading Financial investments – the equity method or Financial investments – other methods, as the case may be.

In January 1, 2009 (date of transition to the NCRF) the company has adopted the exemption of the NCRF 3 - firsttime adoption of the NCRF, concerning Business Combinations and adopted as deemed cost at that date, the value of Goodwill in its accounts prepared in accordance with the POC (acquisition cost less accumulated depreciation until December 31, 2008 and less any impairment loss recorded on that date),rather than calculating goodwill retrospectively to the date of the combination on the basis of information available at that date. Full implementation of this exemption to specific cases did not result from:

Any adjustment to Goodwill arising:  From the recognition of intangible assets that were not recognized separately from Goodwill;  From the derecognition of intangible assets recognised separately from Goodwill incorrectly;  From the contingencies that might affect the price of the transaction and whose outcome could already be known at the date of transition.

Any adjustment in shareholders equity due to:  The derecognition of assets and liabilities that wouldn't qualify for recognition in the balance sheet of the acquiree;  The derecognition of assets and liabilities that do not qualify for recognition under the NCRF. In the subsequent acquisitions January 1, 2009, Goodwill is measured at cost, which is the excess of the cost of business combinations which it concerns over the Group's interest in the fair value of the assets, liabilities and contingent liabilities identifiable at the time of concentration.

Where the acquirer's interest in the fair value of the assets, liabilities and contingent liabilities identifiable exceeds the cost of the business combination, the difference is immediately recognized in the results of the period after reevaluation of the identification and measurement of assets, liabilities and contingent liabilities identifiable from the acquiree and the measurement of the cost of the concentration.

When Goodwill is part of a cash-generating unit and part of an operation within that unit is disposed, the Goodwill associated with the alienated operation is included in the book value of the transaction to determine the gain or loss dst - sgps, s.a.

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of operation. Goodwill derecognised under these circumstances is measured on the basis of relative values between the alienated operation and portion of the cash-generating unit maintained.

Impairment Impairment of Goodwill is tested at least annually. If events or changes in circumstances indicate that it might be impaired according to the NCRF 12 — impairment of assets, impairment of Goodwill is tested more frequently, i.e., whenever conditions so determine.

Impairment losses of Goodwill cannot be reversed.

3.2.6.

Financial investments

a)

Financial investments - equity method

Investments in subsidiaries and associates are valued according to the equity method, defining themselves as such entities over which the Group exercises control or significant influence, generally investments representing more than 20% of the capital of a company, and they are not Joint Ventures.

For the determination of control or significant influence are taken into consideration the interests existing at the present date in accordance with potential voting rights.

According to the equity method, the financial investments are recognized at their acquisition cost, adjusted by the amount corresponding to the company participation in the net results of associates and subsidiaries, against profit or loss for the period, and by the dividends received, net of accumulated impairment losses.

Any excess of the acquisition cost over the value of the equity percentage held is considered "Goodwill", being added to the value of the financial asset and its recovery analyzed annually as part of the investment, and if the difference is negative ("Badwill"), after reassessment of the valuation process and if it remains in the income statement.

Is performed an assessment of investments in subsidiaries and associated companies or other when there are indications that the asset may be impaired, and recognized a loss in the income statement whenever it is confirmed.

When the proportion of the entity in accumulated losses of associated company or subsidiary exceeds the value of the investment is recognized, the investment is reported at nil value while the equity of the associated company is

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not positive, except when the entity has made commitments to the associated our subsidiary company, registering such cases a provision under the liability item 'Provisions' to meet these obligations.

The unrealized gains on transactions with associated companies are eliminated in proportion to the interest of the company in the associated company against the investment in these companies. The unrealized losses are similarly disposed, but only to the extent that the loss does not evidence that the asset transferred is in impaired.

At the date of acquisition of the investment, the difference between the cost of the investment and the group's share in the fair value of the assets, liabilities and contingent liabilities identifiable of the acquired company was accounted in accordance with the NCRF 14 — business combinations. In this way: 

The related Goodwill is included in the carrying amount of the investment. However, the amortisation of Goodwill is not permitted and is therefore not included in the determination of results resulting from reported;



The excess of the group's share in the fair value of the assets, liabilities and contingent liabilities identifiable from reported above the cost of the investment were excluded from the carrying amount of the investment and were included as income in the period in which the investment was acquired.

Subsequent to the date of acquisition, the carrying amount of investments: 

Was increased or decreased to recognise the part on the results of the investee after the date of the acquisition;



Was reduced by distributions of received results;



Was increased or decreased to reflect, by contrast, changes in the equity of the group in the reported interest in proportion resulting from these changes in equity that are not recognised in their results.

In the measurement of these investments it was still respected the following provisions concerning the application of this method: 

The financial statements of joint ventures were already prepared, or were adjusted extra accounting, in order to match the Group's accounting policies before they can be used in the determination of equity effects;



The financial statements of joint ventures used in determining the equity effects consist of the same date of the Group;



The results arising from transactions ' ascendants ' and ' descendants ' are recognised only insofar as they correspond to the interests of other investors in associated, not related to the investor.



When the value of the investment is reduced to zero, additional losses are taken into account by the recognition of a liability when the company incurs legal obligations or constructive. When later the joint ventures report profits, the Group invested resumes its recognition only after its share of the profits equals the share of losses not recognized.

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Impairment Impairment of these assets was determined on the basis of the criteria described in note 3.2.2 - Tangible fixed assets.

b)

Financial investments - other methods

The entity uses the cost model in relation to investments in other entities in which the equity or proportional consolidation methods are not mandatory and in which it is unable to reliably determine their fair value, namely investments in companies with securities out of a regulated market.

According to the cost model investments are initially recognized at acquisition cost, which includes transaction costs, and subsequently its value is decreased by eventual impairment losses.

The entity uses the fair value model in financial investments in companies listed on a regulated market, whose fair value can be obtained and reliably determined.

Impairment The company evaluated the impairment of these assets at the end of the year. Whenever there was an objective evidence of impairment, the company recognized an impairment loss in the income statement.

Objective evidence of impairment took into account observable data that called the attention about the following loss events: 

Significant financial difficulty of the issuer;



The disappearance of an active market for financial asset due to financial difficulties of the debtor;



Observable data indicating that there is a decrease in the measurement of the estimated future cash flows of a financial group assets since its initial recognition;



Significant changes with an adverse effect occurring in the technological environment, market, economic or legal under which the issuer operates.

All equity instruments were individually assessed for impairment.

The company uses the fair value model in financial investments in companies listed on a regulated market and whose fair value can be obtained and reliably determined.

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3.2.7. Inventories Goods, raw materials, subsidiary and consumable materials are valued at the lower of their average acquisition cost and net realizable value (estimated sales price net of costs to be incurred for their disposal), using the FIFO as cost formula.

The finished and semi-finished products, by-products and products and work in progress are valued at production cost or net realizable value (if this is lower). The production costs include the cost of raw materials, direct labor and manufacturing overheads.

If the net realizable value is lower, in particular due to the decrease in the market price, deterioration or obsolescence, rising of finishing or necessary costs to perform the sale, or of the recoverable value by using the conversion into finished products whose market price has been reduced, it is justified the recognition of impairments in the periods that the adjustment needs are found, using replacement cost as a reference.

The reversal of impairment losses recognized in prior periods is recorded when there is evidence that impairment losses are no longer justified or decreased, being expressed in the income statement as "Impairment of inventory net of reversals". However, the reversal is only done up to the amount of the accumulated impairment losses.

The expenses related to inventory sold are recorded in the same reporting period in which revenue is recognized.

3.2.8.

Leases

The classification as operating or financial leases depends on the respective contract’s substance and not on its form.

Lease contracts are classified as finance leases, if through tem are substantially transferred all the risks and rewards of ownership of the asset leased or otherwise as operating leases.

Financial leases Tangible fixed assets acquired through financial lease contracts and their correspondent liabilities are recognized in accordance with the provisions of NCRF 9 - Leases. According to this method the cost of the asset is recorded as tangible fixed asset, the correspondent responsibility is accounted for as a liability and the financial charges included in the rent and the depreciations of the leased assets are recognized as expenses in the income statement in the period to which they relate.

Operating leases In leases considered operational, the rents payable are recognized as expense in the income statement over the period of the lease and in accordance with the obligations inherent to these. dst - sgps, s.a.

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3.2.9.

Contingent assets and liabilities

Contingent assets are possible assets arising from past events and whose existence will only be confirmed if occurs, or not, one or more uncertain future events not wholly within the entity’s control. If it is probable the existence of future economic benefits, the entity does not recognize this contingent asset in its financial statements but promotes its disclosure.

Contingent liabilities are defined as: (i) possible obligations arising from past events and whose existence will only be confirmed if occurs, or not, one or more uncertain future events not wholly within the entity’s control; or (ii) current obligations arising from past events that are not recognized because it is unlikely that resources flows affecting economic benefits are required to offset the obligation or because the amount of the obligation cannot be measured with enough reliability.

Contingent liabilities are not recognized in the entity's financial statements but are disclosed unless the possibility of a funds outflow affecting future economic benefits is remote, in which case they are not even disclosed.

3.2.10. Provisions Provisions are recognized in accordance with the effectively required amounts to cover estimated losses, are revised at each balance sheet date and are adjusted to reflect the best estimate at that date.

Provisions are recognized if and only if the entity has a present liability (legal or constructive) resulting from a past event and if it is probable that for the resolution of such obligation a resources outflow occurs and that the amount of the obligation can be reasonably estimated.

Provisions for future operating losses are not recognized.

3.2.11.

Employee benefits

Short-term benefits The employees’ short-term benefits include wages, salaries, Social Security contributions, food allowances, holidays and Christmas subsidies and any other retribution eventually decided by the Board of Directors.

Obligations resulting from short-term benefits are accounted for as expenses in the period in which the employee has provided services on an undiscounted basis against a liability that is extinguished with the payment.

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According to applicable labor legislation, the right to vacation and holiday allowance for the period, for this match the calendar year expires on 31 December of each year, being paid only during the following period, the corresponding expenses are recognized as short-term benefits and treated in accordance with the mentioned above.

The benefits resulting from the employment’s cessation, either by unilateral decision of the entity, or by mutual agreement, are recognized as an expense in the period in which they occurred.

Long-term benefits The long-term benefits include a health insurance that covers all employees.

3.2.12.

Financial assets and liabilities

The financial assets and liabilities are accounted for in accordance with the following criterions:

Trade debtors and other receivables Trade debtors and other receivables balances are accounted for at their nominal value and disclosed in the balance sheet, deducted from any accumulated impairment losses, recognized under “Impairment on trade receivables net of reversals”, so as to reflect their net realizable value. These items when current do not include interest because they would be immaterial for the impact of discounting.

At the end of each reporting period trade debtors balances are analyzed in order to assess whether there is any objective evidence that they are not recoverable.

Impairment losses are recognized after events that indicate, objectively and in a quantifiable manner, that all or part of the balance will not be received. For this purpose, the entity takes into consideration market information that demonstrates that the trade debtor is in breach of its responsibilities, as well as historical information of overdue and not received balances. Objective evidence of impairment for a portfolio of receivables could include past experience of collecting payments, an increase in the number of delayed payments in, as well as changes in national or local economic conditions that correlate with default on receivables.

The impairment loss is recognized as an expense in the income statement.

Whenever defined / agreed with a client the settlement of respective debt into several installments, the dst group opted to value this same debt at amortized cost, satisfying all the conditions set out in IAS 27, namely that: dst - sgps, s.a.

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- have a defined maturity; - returns to the holder are fixed amount, variable interest rate during the instrument life, with a typical index for financial market (Euribor) and plus a spread (5%); - does not contain any contractual clause that may result to the holder in loss of par value and accrued interest (excluding the typical cases of credit risk).

Thus the difference between the nominal value and the initial fair value is recognized in the income statement over the period specified, using the effective interest method.

Advances to trade creditors These balances are stated at their cost less impairment losses, whenever applicable.

Trade creditors and other payables Debts to suppliers or other third parties are accounted for at nominal value as they do not bear interest and the effect of discounting is immaterial.

Its non- recognition only occurs when they cease their obligations under the contracts, particularly when there has been a liquidation, cancellation or expiration.

Advances from customers The Advances from customers are stated at nominal value.

Discounted bills The entity writes-off financial assets from its financial statements only when it substantially transfers all the risks and benefits inherent to the ownership of such assets to a third party. If the entity substantially retains the risks and benefits inherent to the ownership of those assets, it continues recognizing them in its financial statements as liabilities related to obtained loans correspondent to the monetary counter-entry for the transferred assets.

State and others public entities The balance assets and liabilities under this heading are established on the basis of existing legislation.

With regard to assets was not recognized any impairment by if it considers that this is not applicable given the specific nature of the relationship.

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Loans and other non-current payables Loans and other non-current payables are accounted for at cost as liabilities, net of transaction costs that are directly attributable to the issuance of these liabilities, being expressed in the balance in current or non-current liabilities depending on their maturity occurs within or more than one year, respectively.

Its non- recognition only occurs when they cease their obligations under the contracts, particularly when there has been a liquidation, cancellation or expiration.

The interest and other costs incurred in financings are calculated according to the effective interest rate and recognized in the income statement for the period in accordance with the increase presupposition.

Financial assets The entity uses the fair value model in the valuation of shares held in companies listed on a regulated market, whose fair value can be obtained and determined viably.

Cash and cash equivalents The cash and cash equivalents balance includes cash, bank deposits and other short-term investments that can be immediately mobilized without significant risk of value fluctuations.

Financial liabilities and equity instruments Financial liabilities and equity instruments are classified according to the substance of the contractual transaction, regardless of their legal form.

A financial instrument is classified as a financial liability when there is a contractual obligation to their settlement to be effected by delivering cash or another financial asset. Financial liabilities are initially recorded at cost, net of transaction costs incurred.

An equity instrument is classified as such when there is not a contractual obligation to their settlement to be effected by delivering cash or another financial asset, evidences a residual interest in the assets of an entity after deducting all of its liabilities.

Costs directly attributable to issue of equity instruments are recognized in equity as a deduction of issue. Amounts paid or received for purchases and sales of equity instruments are recognized in equity, net of transaction costs.

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Other financial liabilities This heading includes derivative financial instruments for which there is actual coverage under the NCRF 27.

Are only considered financial instruments to hedge the effective portion of derivatives that are designated as such and that the entity expects that the changes in fair value or cash flows attributable to the hedged item, that risk is being covered, will compensate for virtually any changes in fair value or cash flows of the hedging instrument.

Changes in the fair value of derivative instruments risk coverage of interest rate variability are recognized in equity in the rubric "Financial assets adjustments " in its effective component and in results, under the heading "Increase/decrease in fair value", in its actual not component. The values recorded under the heading "Financial assets adjustments" are transferred to results for the heading "Increase/decrease in fair value" in the period in which the hedged item has no effect on results.

Hedge accounting is discontinued when the hedging instrument reaches maturity, when it is sold or exercised or when the relationship ceases to meet the coverage requirements on NCRF 27 - Financial Instruments.

The effective portion of the hedge derivative instruments are presented in the balance sheet under "Other financial assets" or "Other financial liabilities" depending on their nature is, respectively, a debtor or creditor and as non-current or current depending on the heading where as their instruments covered are presented in the balance sheet.

3.2.13. Equity items Financial assets adjustments This account includes the adjustments related to the application of the equity method, namely the ownership of changes in equity of the subsidiaries and unassigned profits.

Minority interests Minority interests are part of the results and of the net assets of subsidiaries attributable to equity interests which are not owned, directly or indirectly through subsidiaries, by the shareholder company.

This heading includes: 

Capital;



Results for the period;

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

Other items of capital whose variations of the year, together with the results of the period, make up the full result

3.2.14.

Revenue

Revenue comprehends income associated with sales and services rendered. Revenue is recognized on sales when the buyer takes the risks and benefits inherent to the ownership of the goods sold and as what concerns to services revenue is recognized in the income statement when such services are rendered, taking into consideration the proportion of services rendered in the period and the total services agreed.

Revenue is not recognized when it is related to situations of uncertainty of acceptance or payment of those services.

Whereas invoiced services are higher than the services rendered, the difference is recorded as income to be recognized and is accounted for in the income statement at the time such services are rendered and the correspondent expenses are incurred.

3.2.15.

Construction contracts

The entity recognizes the construction works’ results contract per contract in accordance with the completion percentage method, which is understood to be as the relationship between the expenses incurred on each work at a determined date and the sum of those expenses with the expenses estimated to be incurred for its completion. The differences between the amounts resulting from the application of the completion percentage method with the estimated income and invoiced amounts are accounted for as non-invoiced production or advanced invoicing, which are included within as "Other receivables - Receivables from accrued income " (Asset) or "Deferred - Income to recognize" (Liability).

Changes in work from the amount of revenue settled in the correspondent contract are recognized in the period’s results when it is probable that the customer accepts the revenue amount arising from the variation and that this can be reliably measured.

Claims for costs reimbursement not included in the contract price are included in the contract’s revenue when negotiations are at such an advanced stage that it is probable that the customer accepts the complaint and that it is possible to measure it reliably.

When it is probable that the construction contract’s total expenses exceed the income defined therein, the expected loss is immediately recognized in the period’s income statement.

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3.2.16.

Subsidies and Government assistance

Government subsidies are recognized at their fair value when there is sure to be received and that the entity will comply with the conditions of the grant.

Operational subsidies are intended to cover expenses incurred and recorded, particularly with the development of vocational training actions, and they are recognized as income as the expenses are incurred, regardless of the time of receipt of the grant.

The outright grants, to finance tangible and intangible assets are recognized in equity and recognized in the income statement in proportion to the respective depreciation and amortization of subsidized assets.

3.2.17.

Impairment of assets

At each reporting date, and whenever are disclosed an event or changes in circumstances indicating that the asset’s recorded amount may not be recoverable an impairment of assets evaluation is assessed.

Whenever the amount by which the asset is recorded is higher than its recoverable amount, is recognized as an impairment loss recorded in the income statement as "'Impairment of investments depreciables/amortizables net of reversals� or as "Impairment on trade receivables net of reversals", if it respects the non-depreciable assets.

The recoverable amount is the higher of the net selling price and value in use. The net selling price is the amount obtainable from the sale of the asset in a transaction between independent entities, less the costs directly attributable to the sale. The value in use is the present value of estimated future cash flows that are expected to arise from the continued use of the asset and from its sale at the end of its useful life. The recoverable amount is estimated for each asset individually or, if not possible, to the unit generating cash flows to which the asset belongs.

After the recognition of an impairment loss, the expense related to the amortization/depreciation of the asset is adjusted in future periods to allocate the asset's revised carrying amount, less its residual value (if any) on a systematic basis over the useful life remaining.

Whenever events or changes in circumstances indicate that the carrying amount of an asset is recorded can not be retrieved, it made a new assessment of impairment.

Reversal of impairment losses recognized in previous years is registered when it is concluded that previously recognized impairment losses no longer exist or have decreased. A reversal of an impairment loss is recognized in the income

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statement under aforementioned. The reversal of the impairment loss is made up to the amount that would be recognized (net of amortization or depreciation) if the impairment loss had not been recorded in previous periods.

3.2.18.

Income tax

The expense relating to period’s income tax corresponds to the sum of current and deferred taxes.

Current income tax is based on the entity’s taxable profits in accordance with the enforceable tax regulations, whilst deferred taxes result from temporary differences between accounting and tax assets and liabilities. The taxable profit is different from the accounting result, provided that it excludes expenses and revenues that are taxable or deductible in other periods. The taxable profit also excludes expenses and revenues that will never be taxed or deducted.

The entity shall record deferred taxes related to temporary differences between the carrying amount of assets and liabilities and the corresponding tax base as provided in NCRF 25 - Deferred income taxes, whenever it is probable that future taxable profits will be generated against which the differences temporary and can be used based on the standard rate of corporation tax to the balance sheet date. Deferred taxes assets and liabilities are calculated and annually evaluated based under the tax rates in force or announced to be in force at the time of the expected reversal of temporary differences.

The deferred tax assets are recognized only when there is a reasonable expectation of future taxable profits to be deducted from such assets, or in situations where there are taxable temporary differences to offset the deductible temporary differences in the period of its reversal.

At each reporting date a review of those deferred tax assets is carried out and such are adjusted in accordance with the expectations concerning their future use.

Current and deferred taxes are accounted for in the income statement except when are related to items directly recognized as equity. In these cases, the correspondent deferred taxes are also recognized as equity.

Tax returns may be subject to review and possible corrections by the tax authorities for a period of four years (five years for Social Security). So corrections may be made for the years 2012 and following, not being expected, however, that the possible course corrections will significantly affect the financial statements.

The above time limit may be extended or suspended provided that tax benefits have been obtained, there are inspections, claims or contestations ongoing, or has been tax losses, in which, over a period of six years after its

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occurrence, relatively to previous periods to 2010, four years for the period from 2010 to 2013 and five years for subsequent periods, these are susceptible of deduction to the taxable income that may be generated.

The taxes are not paid, relating to the current period or the previous are recognized as a liability at the amount that is estimated to be paid based on the rates and tax laws applicable to the balance sheet date. However, if the amounts already paid in respect of such periods exceed the amounts due, are recognized as assets to the extent of the excess.

Current tax is also conditioned by the adjustments, positive or negative, which are to be recognized in the period for current tax of previous periods. The tax effects of the transition adjustments resulting from the succession of accounting standards are regulated by article 5 of the Law-decree number 159/2009 of July 13, which provides that such adjustments contribute to the formation of profit taxable in a 5 year period, in equal parts, beginning in 2010 and ending in 2015.

3.3.

Other significant accounting policies:

Basis of consolidation The consolidated financial statements include, as at December 31, 2015 and 2014, the assets, liabilities and results of group companies, understood as a set of dst group and its subsidiaries, which are presented in note 5.

As described in no. 6 of Law-Decree no. 158/July 13, 2009, approving the SNC, the entity presents the consolidated accounts of the group constituted by itself and by all subsidiaries on which: a)

Regardless of the ownership of capital, it is found that, in alternative:



Is able to exercise, or actually exercises, dominant influence or control;



Pursuing the management as if the two constitute a single entity;

b)

Being holder of capital, when one of the following situations occurs:



Has a majority of the voting rights, unless it is demonstrated that such rights do not confer the respective control;



Has the right to appoint or remove a majority of the members of the management board of an entity with the power to govern the financial and operating policies of that entity;



Exercises a dominant influence over an entity, pursuant to a contract celebrated with this entity or from another clause of this social contract;



Holds at least 20% of the voting rights and the majority of the holders of the management board of an entity empowered to govern the financial and operating policies of that entity, reports during the financial year to which the

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consolidated financial statements, as well as, in the preceding financial year and up to the moment they are prepared, have been appointed solely as a result of the exercise of its voting rights; 

Available, by itself or by virtue of an agreement with other holders of the capital of this entity, a majority of its voting rights of capital holders.

Subsidiaries are companies controlled by the dst group and are consolidated by the full consolidation method since the date of acquisition, which is the date on which the group gets control, and continue to be consolidated until the date that control ceases to exist.

In the consolidation process, transactions, balances and unrealised profits on intragroup transactions and dividends between group companies are eliminated. Unrealised losses are also eliminated, unless the transaction reveals evidence of the existence of impairment in assets transferred and not alienated.

The jointly controlled financial investments are included in the consolidation by the proportional consolidation method, from the date that joint control is acquired until the date on which it actually ends. Under this method, assets, liabilities, income and expenses of these businesses were incorporated in consolidated financial statements, line by line, in proportion to the assigned control of dst group.

Associated companies are entities over which the investor has significant influence and which are not considered subsidiaries or joint ventures.

The financial participations in associated companies are consolidated by the equity method, that is, the financial statements include the Group's interest in the total of income and expense recognised of the associate, from the date that significant influence begins until the date on which it actually ends. The dividends received from these companies are recorded as a reduction in the value of financial holdings.

The shares, in relation to which the group does not carry significant influence over their activity, are recognized at the lower value between the purchase cost and the value of achievement.

The amounts of equity of consolidated subsidiaries by integral method, attributable to the shares held by third parties unrelated to the companies included in the consolidation are included in the consolidated balance sheet under the heading of minority interests.

Minority interests on the net income of consolidated subsidiaries are identified and adjusted against the results of the Group and included in the consolidated income statement under the heading of minority interests. dst - sgps, s.a.

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3.4. Judgments and estimates (assumptions and uncertainties) The preparation of financial statements in conformity with NCRF standards requires the consideration of certain accounting estimates and assumptions that affect the reported assets and liabilities or revenues and expenses amounts.

When necessary, all estimates and assumptions considered by the Board of Directors were made based under its best knowledge of events and transactions in progress at the date of the approval of the financial statements.

Changes to these estimates, which occur after the date of the financial statements, will be recognized in the income statement prospectively.

3.5. Main assumptions concerning the future The financial statements were prepared on a going concern basis from the books and accounting records of the entity.

4.

Cash flow

The cash flow statement is prepared in accordance with the direct method, disclosing receipts and cash payments by operating, investing and financing activities.

The cash and bank deposits present the following composition:

Cash in hand Cash at bank Term deposits Total cash in hand, at bank and term deposits

31.12.2015

31.12.2014

84.307,47 14.242.428,96 15.226.561,62 29.553.298,05

182.395,59 12.745.451,09 25.564.410,48 38.492.257,16

There are no amounts of cash and cash equivalents unavailable for use.

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5.

Related parties

a)

Group companies included in consolidation by the full consolidation method

The companies included in consolidation in December 31, 2015 and 2014, their registered offices and proportion of capital held directly and indirectly are as follows COMPANIES 2bpartner, sociedade capital de risco, s.a. blu, s.a. bysteel uk limited bysteel, s.a. derivadas e segmentos, s.a. despertavantagem, s.a. domingos da silva teixeira - angola, s.a. domingos da silva teixeira - imobiliária, s.a. domingos da silva teixeira, s.a. dst - wind, s.a. dst 2gether II - s.a. dst 2gether, sgps, s.a. dst ambiente, sgps, s.a. dst center, s.a. dst energias renováveis, sgps, s.a. dst engenharia & construção, sgps, s.a. dst hydro,s.a. dst internacional II, sgps, s.a. dst Internacional III, sgps, s.a. dst internacional, sgps, s.a. dst moçambique, lda. dst real estate, sgps, s.a. dst solar, s.a. dst telecomunicações, sgps, s.a. dst ventures, sgps, s.a. dstelecom, alentejo e algarve, s.a. dstelecom, norte, s.a. dstelecom, s.a. dte, instalações especiais, s.a. global sun, s.a. hci - energia, lda. innovation point - investigação e desenvolvimento, s.a. investhome - construção e imobiliária, s.a. ipplus, s.a. monte dourado - hipermecados e imobiliária, s.a. perfil dinamico, lda tagregados, s.a. tconcrete, s.a. tgeotecnia, s.a. tmodular, s.a. tstone, s.a. v partner, s.a.

dst - sgps, s.a.

Headquarters Braga Braga London, United Kingdom Braga Braga Braga Luanda, Angola Braga Braga Braga Braga Braga Braga Braga Braga Braga Braga Braga Braga Braga Maputo, Mozambique Braga Braga Braga Braga Braga Braga Braga Braga Braga Braga Braga Braga Braga Braga Braga Braga Braga Braga Braga Braga Braga

% Participation dez-15 dez-14 85,81% 85,81% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 60% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% -

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b)

Associated companies

The associated companies valued by the equity method, their registered offices and proportion of capital held directly, less than 50%, are as follows: COMPANIES

Headquarters

Barcelos Futuro, S.A. CAM - Centro de Atracções Mineiras, S.A. Caminhaequi, S.A. dst áfrica, lda.

EOL Verde - Energia Eólica, S.A. Geswater - Águas e Resíduos, S.A. MINHOCOM Gestão de Infraestruturas de telecomunicações, EIM Parque Eólico Alto Vaca, Lda. Porto Digital, Operador Neutro de Telecomunicações, S.A. VALICOM Gestão de Infraestruturas de telecomunicações, EIM VentoMinho - Energias Renováveis, S.A. WAY2B, SGPS, S.A.

c)

Companies consolidated by proportional method COMPANIES Agonia Parque Construção, ACE Assoc - Obras Públicas, ACE Assoc/Soares da Costa, ACE Construtores Águas da Linha, ACE Criar Vantagens - Águas e Resíduos, Lda. DST Visabeira, ACE Parque Emp. de Tavira, ACE Steelgreen, S.A. Teatro Circo, ACE Unifacere, ACE Way2B, ACE

d)

Barcelos Fundão Caminha Maputo, Mozambique Esposende Braga Valença Porto Porto Arcos de Valdevez Esposende Braga

% Participation dez-15 dez-14 25,50% 25,50% 20,50% 51,00% 25,50% 49,00% 49,00% 25,00% 25,00% 33,33% 33,33% 48,49% 48,49% 25,00% 25,00% 49,00% 48,49% 48,49% 25,63% 25,63% 20% 20%

Headquarters Viana do Castelo Braga Braga Braga Braga Lisbon Tavira Braga Braga Braga Braga

% Participation dez-15 dez-14 33,33% 33,33% 14,29% 14,29% 14,29% 14,29% 12,50% 12,50% 33,33% 33,33% 50% 50% 50% 50% 50% 50% 25% 25% 33,33% 33,33% 20% 20%

Other indirectly subsidiaries, which percentage of participation is less than 20%, and the investment is registered by the cost method are as follows: COMPANIES Conceito Original, S.A. PERM - Parque Empresarial de Recuperação das Terras de Santa Maria, EIM

dst - sgps, s.a.

Headquarters Braga

% Participation dez-15 dez-14 20% 20%

Lisbon

17,15%

17,15%

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Consolidated Annual Report 2015 e)

Remuneration of Corporate Bodies

The Corporate Bodies’ remuneration of the dst group in the exercise of their duties in the periods of 2w15 and 2014 was as follows:

Board of directors Auditors

6.

2015

2014

1.096.559,82 110.196,96 1.206.756,78

1.215.917,46 78.295,68 1.294.213,14

Tangible fixed assets

Information relating to the carrying amounts of tangible fixed assets with reference to 2015 period may be analyzed as follows: Description 1 Initial gross book value 2 Initial accumulated depreciations 3 Initial accumulated impairment losses 4 Initial net carrying amount (4 = 1 - 2 - 3) 5 Movements of the period:(5 = 5.1 - 5.2 + 5.3 + 5.4) 5.1

5.2

5.3 5.3 5.5 5.6 6

Total additions New acquisitions Other acquisitions Others Total disposals Depreciations Sales Reductions Reversals of impairment losses Transferences of TFA under construction Transferences of/for financial assets available for sale Other transferences Final net book value (6 = 4 + 5)

dst - sgps, s.a.

Land and other resources

Buildings and other structures

Basic equipment

Transport equipment

Administrative equipment

2.357.256,92 70.732.081,44 37.632.161,00 12.437.686,32 1.049.321,13 3.868.380,59 23.412.660,81 10.738.203,83 1.307.935,79 66.863.700,85 14.219.500,19 1.699.482,49

Artistic patrimony

TFA under construction

Others

Total

5.915.747,73 5.288.375,98 627.371,76

7.500,00 4.843,75 2.656,25

7.164.488,12 2.203.764,28 4.960.723,85

1.376.877,14 137.623.798,66 46.565.550,36 1.376.877,14 91.058.248,31

124.987,96 1.243.124,02 848.294,98 363.763,92 31.065,12 1.118.136,06 805.317,90 285.055,57 27.762,59 -

(32.120,08) 244.791,45 236.004,26 6.906,94 1.880,25 278.449,18 273.268,67 5.742,39 (561,88) 1.537,64

(937,50) 937,50 937,50 -

(656.955,89) 160.244,93 158.809,76 580,00 855,17 817.856,22 773.874,95 44.372,92 (391,65) -

(444.915,80) 903.856,73 903.856,73 (345.715,83)

(5.044.310,67) 6.917.343,66 5.715.288,14 1.139.567,95 62.487,57 10.959.253,03 8.435.653,42 2.488.044,09 35.555,52 -

-

-

-

-

-

-

-

355.695,27 64.961.738,22 13.039.333,98

1.824.470,45

595.251,67

1.718,75

655,40 4.303.767,96

(1.003.056,70) 931.961,34

(1.002.401,30) 86.013.937,64

(952.240,52) (1.901.962,63) (1.180.166,21) 324.554,78 2.426.226,00 1.614.545,75 1.990.468,88 1.577.853,53 324.554,78 435.445,17 8.317,14 311,95 28.375,08 1.276.795,30 4.335.062,58 3.132.016,20 3.605.994,72 2.976.259,69 1.276.795,30 724.292,96 151.784,95 4.774,90 3.971,56 6.873,95 337.304,24 -

-

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Annual Report 2015 Information relating to the carrying amounts of tangible fixed assets with reference to 2014 period may be analyzed as follows: Land and other resources

Description 1 Initial gross book value 2 Initial accumulated depreciations 3 Initial accumulated impairment losses 4 Initial net carrying amount (4 = 1 - 2 - 3) 5 Movements of the period:(5 = 5.1 - 5.2 + 5.3 + 5.4) 5.1

5.2

5.3 5.4 5.5 5.6 6

Total additions New acquisitions Others Total disposals Depreciations Sales Reductions Others Reversals of impairment losses Transferences of TFA under construction Transferences of/for financial assets available for sale Other transferences Final net book value (6 = 4 + 5)

Buildings and other structures

Basic equipment

Transport equipment

Administrative equipment

7.732.257,18 77.565.164,25 35.958.856,16 11.311.190,08 1.049.321,13 919.455,07 20.210.873,44 9.893.480,24 6.682.936,05 76.645.709,18 15.747.982,72 1.417.709,84 (5.375.000,26) (9.782.008,33) (1.528.482,53) 1.073.021,01 1.699.995,62 1.071.790,63 1.621.123,19 1.230,38 78.872,43 5.375.000,26 10.916.400,21 3.225.134,82 2.948.925,52 3.201.787,37 5.370.665,26 7.967.474,69 26.497,11 4.335,00 (3.149,66) 61.370,87 -

-

281.772,65 1.179.084,25 1.147.935,04 31.149,21 897.405,25 844.723,59 73.421,64 (20.739,98) -

Artistic patrimony

TFA under construction

Others

Total

5.766.095,34 4.950.409,61 815.685,74

7.500,00 3.906,25 3.593,75

7.033.871,13 1.105.542,09 5.928.329,05

1.446.465,37 146.821.399,50 38.132.987,82 1.446.465,37 108.688.411,69

(188.313,98) 178.172,95 175.347,53 2.825,42 364.526,93 337.966,37 16.413,94 (1.756,35) 11.902,97 -

(937,50) 937,50 937,50 -

(967.605,20) 130.641,32 114.285,66 16.355,66 1.098.246,52 1.098.222,19 24,33 -

(69.588,23) (17.630.163,38) 1.361.333,82 5.622.248,97 1.361.333,82 5.491.815,87 130.433,10 1.360.425,93 23.238.077,42 8.432.562,54 1.329.079,29 14.783.551,93 31.346,64 10.059,98 11.902,97 (61.370,87) -

-

-

-

-

-

-

-

(3.343,33) 1.307.935,79 66.863.700,85 14.219.500,19

93,65 1.699.482,49

(1.960,00) 627.371,76

2.656,25

4.960.723,85

(9.125,25) 1.376.877,14

(14.334,93) 91.058.248,31

In the periods of 2015 and 2014, the “Costs and reversals of depreciation and amortization” had the following composition: 2015 Description

Tangible fixed assets Investment properti es Intangible assets

Depreciation and Reversals of amortization depreciation and costs amortization

Total

Depreciation and Reversals of amortization depreciation and costs amortization

Total

(8.435.653,42)

-

(8.435.653,42)

(8.432.562,54)

-

(265.828,84)

-

(265.828,84)

(631.745,08)

-

(631.745,08)

(3.954.999,49)

-

(3.954.999,49)

(3.597.162,65)

-

(3.597.162,65)

- (12.656.481,74)

(12.661.470,27)

(12.656.481,74)

dst - sgps, s.a.

2014

(8.432.562,54)

- (12.661.470,27)

Página 94 de 120

Consolidated Annual Report 2015 Tangible fixed assets are recognized in accordance with the accounting policy described in Note 3 above.

The net tangible fixed assets are in their entirety affects to the only activity of the entity and there are no assets held by third parties.

In the period were not recorded any impairment losses, due to be convinced of the Administration that the recoverable amount of the asset exceeds its carrying amount.

7.

Leases

The information concerning leases as of December 31, 2015 is as follows: Financial Leases Description

1 Initial gross book value 2 Accumulated amortizations / depreciations 4 Final net book value (4 = 1 - 2 - 3) 5 Total future minimum lease payments at balance sheet date: 5.1 Up to one year 5.2 From one to five years

Tangible fixed Investment assets properties 4.346.666,93 1.714.824,71 2.631.842,22 3.032.684,82 866.531,50 2.166.153,32

549.501,33 78.998,77 470.502,56 473.162,80 62.640,09 410.522,71

Total

4.896.168,26 1.793.823,48 3.102.344,78 3.505.847,62 929.171,59 2.576.676,03

The information concerning leases as of December 31, 2014 is as follows: Financial Leases Description

1 Initial gross book value 2 Accumulated amortizations / depreciations 4 Final net book value (4 = 1 - 2 - 3) 5 Total future minimum leas e payments at balance sheet date: 5.1 Up to one year 5.2 From one to five years

dst - sgps, s.a.

Tangible fixed assets

Investment properties

Total

4.603.187,67 1.922.788,33 6.525.976,00 2.576.864,84 254.901,04 2.831.765,88 2.026.322,83 1.667.887,29 3.694.210,12 2.394.114,90 639.524,10 3.033.639,00 755.573,99 162.997,74 918.571,73 1.638.540,91 476.526,36 2.115.067,27

Pรกgina 95 de 120

Consolidated Annual Report 2015

8.

Investment properties

The information related to the carrying amounts of investment properties, with reference to the 2015 period can be analyzed as follows: Cost model Description

1 2 3 4 5 5.1 5.2 6

Initial gross book value Initial accumulated depreciations Initial accumulated impairment losses Initial gross carrying amount (4 = 1 - 2 - 3) Movements of the period:(5 = 5.1 - 5.2) Total additions Outras Total disposals Depreciations Final net book value(6 = 4 + 5)

Land and other Buildings and resources other structures

Total

4.674.468,70 4.674.468,70

12.150.592,08 355.249,59 11.795.342,49

16.825.060,78 355.249,59

369.909,46 380.372,14 380.372,14 10.462,68 10.462,68 5.044.378,16

(103.338,30) 152.027,86 152.027,86 255.366,16 255.366,16 11.692.004,19

266.571,16 532.400,00 532.400,00 265.828,84 265.828,84 16.736.382,35

16.469.811,19

The information related to the carrying amounts of investment properties, with reference to the 2014 period can be analyzed as follows: Cost model Description

1 2 3 4 5

Initial gross book val ue Initial accumulated depreciations Initial accumulated impairment losses Initial gross carrying amount (4 = 1 - 2 - 3) Movements of the period:(5 = 5.1 - 5.2) + 5.3 + ..‌+ 5.9) 5.1 Total additions Outras 5.2 Total disposals Depreciations Sales 6 Final net book value(6 = 4 + 5)

dst - sgps, s.a.

Land and other Buildings and resources other structures

8.882.879,81 8.882.879,81

40.049.229,53 4.233.788,62 35.815.440,91

Total

48.932.109,34 4.233.788,62 44.698.320,72

(4.208.411,11) (24.020.098,42) (28.228.509,53) 3.750.000,00 11.250.000,00 15.000.000,00 3.750.000,00 11.250.000,00 15.000.000,00 7.958.411,11 35.270.098,42 43.228.509,53 631.745,08 631.745,08 7.958.411,11 34.638.353,34 42.596.764,45 4.674.468,70 11.795.342,49 16.469.811,19

PĂĄgina 96 de 120

Consolidated Annual Report 2015

9.

Goodwill

The consolidation differences ("Goodwill") are the result of positive differences between the acquisition cost of the shares and the proportion of their capital at the time of purchase.

In December 31, 2015 and 2014 this item displays the following composition: Consolidation Differences dez-15 dez-14

COMPANIES investhome - construção e i mobili ária, s.a.

Domingos da Silva Teixeira, S.A. Domingos da Silva Teixeira - Imobiliária, S.A. VentoMi nho - Energi as Renováveis, S.A. Criar Vantagens - Águas e Resíduos, Lda. - consolidated Total

61.436.723 19.992.500 15.176.499 96.605.722

12.897.316 61.436.723 9.646.182 19.992.500 15.176.499 119.149.221

The movement occurred in Goodwill in the period is indicated in the following table: COMPANIES

investhome - construção e i mobi liária, s.a. domi ngos da sil va teixeira, s.a. domi ngos da sil va teixeira - imobil iári a, s.a.

VentoMinho - Energi as Renováveis, S.A. Criar Vantagens - Águas e Resíduos, Lda. - consol idated Total

dst - sgps, s.a.

Opening Balance

12.897.316 61.436.723 9.646.182 19.992.500 15.176.499 119.149.221

Acquisitions

Other variations

-

(12.897.316) (9.646.182) (22.543.499)

Final balance

61.436.723 19.992.500 15.176.499 96.605.722

Página 97 de 120

Consolidated Annual Report 2015

10. Intangible assets Information related to the carrying amount of intangible assets with reference to the 2015 period may be analyzed as follows:

Description

With fini te useful economi c life: 4 Initial gross book value 5 Initi al accumulated depreci ations 6 Initi al accumulated i mpai rment losses 7 Initial net carrying amount (7 = 4 - 5 - 6) Movements of the peri od:(8 = 8.1 - 8.2 + 8.3 + 8 8.4 + 8.5 + 8.6) 8.1 Total additions New acquisi tions Others 8.2 Total disposals Depreciations Sales Reducti ons 8.3 Transferences Reversals of impairment losses of Intangible assets under 8.4 construction 8.6 Other transferences 9 Final net book value (9 = 7 + 8)

Concession rights

Software

Industrial Property

Others

Intangible assets under construction

Total

50.662.734,20 3.942.570,02 352.738,38 892.588,10 21.079.112,69 2.079.094,02 202.192,77 386.142,63 29.583.621,51 1.863.476,01 150.545,62 506.445,47

252.465,46 56.103.096,16 - 23.746.542,10 252.465,46 32.356.554,06

3.016.665,97 5.843.491,66 5.843.491,66 2.923.724,95 2.894.169,94 29.555,01 96.899,26 32.600.287,48

31.304,64 2.239.881,00 132.053,77 6.135.953,58 132.053,77 6.132.754,95 3.198,63 3.493,20 3.988.052,59 - 3.954.999,49 3.493,20 3.493,20 29.559,90 (97.255,93) 91.980,00 283.770,10 34.596.435,06

(796.986,03) (10.289,16) (814,43) 118.149,10 2.213,49 40.045,56 118.149,10 2.213,49 36.846,93 3.198,63 1.007.115,13 12.502,65 41.216,66 1.007.115,13 12.502,65 41.211,77 4,89 356,67 91.980,00 1.066.489,98 140.256,46 505.631,05

Information related to the carrying amount of intangible assets with reference to the 2014 period may be analyzed as follows:

Description

With finite useful economi c life: 4 Initial gros s book value 5 Ini tial accumulated depreciations 6 Ini tial accumulated impairment losses 7 Initial net carrying amount (7 = 4 - 5 - 6) Movements of the period:(8 = 8.1 - 8.2 + 8.3 + 8 8.4 + 8.5 + 8.6) 8.1 Total additions New acquis itions 8.2 Total disposals Depreciations Reductions Others 9 Final net book value (9 = 7 + 8)

dst - sgps, s.a.

Concession rights

Software

Industrial Property

Others

Intangible assets under construction

Total

50.487.683,51 3.752.193,54 323.630,83 850.831,48 18.481.675,19 1.130.512,79 176.471,67 331.465,25 32.006.008,32 2.621.680,75 147.159,16 519.366,23

225.899,84 55.640.239,20 - 20.120.124,90 225.899,84 35.520.114,30

(2.422.380,96) (758.204,75) 3.387,13 (12.928,71) 214.884,32 190.376,48 16.150,00 18.391,01 214.884,32 190.376,48 16.150,00 18.391,01 2.637.265,28 948.581,23 12.762,87 31.319,72 2.604.647,66 948.581,23 12.762,87 31.170,89 32.617,62 148,83 29.583.627,36 1.863.476,00 150.546,29 506.437,52

26.567,05 (3.163.560,24) 26.567,05 466.368,86 26.567,05 466.368,86 - 3.629.929,10 - 3.597.162,65 32.617,62 148,83 252.466,89 32.356.554,06

Pรกgina 98 de 120

Consolidated Annual Report 2015

11. Financial investments - equity method Variations in “Financial investments – equity method”, with reference to the 2015 period are as follows: Investments in associated companies Equity method: Initial gross book value Initial net carrying amount Movements of the period Other acquisi tions Share of associates' profits Dividends received from associates Changes of investee's equity not recognised in the i ncome statement Sales Other movements of the period Final net book value

Total

45.089.861,82 45.089.861,82 45.089.861,82 45.089.861,82 2.779.263,74 2.779.263,74 12.750,00 12.750,00 7.709.894,86 7.709.894,86 4.030.807,46 4.030.807,46 724.192,56

724.192,56

8.028,82 8.028,82 (1.628.737,40) (1.628.737,40) 47.869.125,56 47.869.125,56

Variations in “Financial investments – equity method”, with reference to the 2014 period are as follows: Investments in associated companies Equity method: Initial gross book value Initial net carrying amount Movements of the period Other acquisitions Share of associates' profits Dividends received from associates Changes of investee's equi ty not recognised in the income statement Sales Other movements of the period Final net book value

dst - sgps, s.a.

Total

43.977.130,83 43.977.130,83 43.977.130,83 43.977.130,83 1.112.730,99 1.112.730,99 6.419,31 6.419,31 8.209.936,59 8.209.936,59 6.077.266,58 6.077.266,58 (2.550.771,57) (2.550.771,57) 38.389,16 38.389,16 1.562.802,40 1.562.802,40 45.089.861,82 45.089.861,82

Página 99 de 120

Consolidated Annual Report 2015

In the periods of 2015 and 2014, the “Gains/losses charged to subsidiaries, associates and joint-ventures” had the following composition:

Description

Losses and expenses Revenues and income

2015

2014

(103.057.580,72)

(5.848.664,94)

110.764.494,35

17.589.996,69

7.706.913,63

11.741.331,75

12. Financial investments - other methods Variations in “Financial investments – other methods” in reference to the 2015 period are as follows: Investments Other financial in others investments companies Other methods: Initial gross book value Initial net carrying amount Movements of the period: Other acqui siti ons Sales Other movements of the period Final net book val ue

2.168.717,68 2.168.717,68 (435.916,26) 1.544,26 49.880,78 (387.579,74) 1.732.801,42

266.200,22 266.200,22 (102.755,45) 69.140,93 171.737,06 (159,32) 163.444,77

Total

2.434.917,91 2.434.917,91 (538.671,71) 70.685,19 221.617,84 (387.739,06) 1.896.246,19

Variations in “Financial investments – other methods” in reference to the 2014 period are as follows: Investments Other financial in others investments companies Other methods: Initial gross book value Initial net carrying amount Movements of the period: Other acquisitions Sales Other movements of the period Final net book value

dst - sgps, s.a.

1.873.554,32 5.115.911,08 1.873.554,32 5.115.911,08 295.163,36 (4.849.710,86) 126.030,00 9.394,90 15.575,00 4.981.539,98 184.708,36 122.434,22 2.168.717,68 266.200,22

Total

6.989.465,40 6.989.465,40 (4.554.547,50) 135.424,90 4.997.114,98 307.142,58 2.434.917,91

Página 100 de 120

Consolidated Annual Report 2015

In the periods of 2015 and 2014, the “Increase/decrease in fair value” decomposed as follows: 2015 Description

Financial investments

Reductions

Increases

2014 Total

Reductions

Increases

Total

(266.528,95)

389,63 (266.139,32)

(449.677,01) 145.856,10 (303.820,91)

(266.528,95)

389,63 (266.139,32)

(449.677,01) 145.856,10 (303.820,91)

13. Inventories As of December 31, 2015 and 2014, inventories’ balance was as follows:

Description

31.12.2015

31.12.2014

15.686.521,38

17.206.312,03

Raw, subsidiary and consumable materials

5.623.272,96

8.008.737,60

Finished goods

1.339.575,13

89.925,15

Products and work in progress

3.082.264,83

4.420.659,07

Prepayments

1.311.538,32

1.211.537,14

27.043.172,62

30.937.170,99

Goods

During 2015 period, the “Changes in production stocks and work in progress” was as follows:

Description 1 2 3 4

Closing stocks Stocks reclassification and regularization Opening stock Changes in stocks (4 = 1 + 2 - 3)

Finished goods

Products and work in progress

Total

1.339.575,13 3.082.264,83 4.421.839,96 889.727,69 (2.347.533,33) (1.457.805,64) 89.925,15 4.420.659,07 4.510.584,22 359.922,30

1.009.139,09

1.369.061,39

During 2014 period, the “Changes in production stocks and work in progress” was as follows:

Description 1 Closing stocks 2 Stocks reclassification and regularization 3 Opening stock 4 Changes in stocks (4 = 1 + 2 - 3) dst - sgps, s.a.

Finished goods

Products and work in progress

Total

89.925,15 4.420.659,07 4.510.584,22 23.203,66 23.203,66 757.594,47 3.721.468,96 4.479.063,43 (690.872,99)

699.190,11

8.317,13 Página 101 de 120

Consolidated Annual Report 2015

The movements occurred in the “Cost of goods sold” balance in 2015 was as follows: Description 1 2 3 4 5

Goods

Raw, subsidiary and consumable materials

Openi ng stocks 17.197.713,15 Purchases (699.461,94) Stocks recl assi fi cation and regul arization Cl osi ng s toks 15.683.413,27 814.837,94 Cost of goods sold (5 = 1+ 2 + 3

8.017.336,48 59.611.191,22 5.626.381,07 62.002.146,63

Total 25.215.049,63 58.911.729,28 21.309.794,34 62.816.984,57

The movements occurred in the “Cost of goods sold” balance in 2014 was as follows:

1 2 3 4 5

Description

Goods

Opening stocks Purchases Stocks reclassification and regularization Closing stoks Cost of goods sold (5 = 1+ 2 + 3 - 4)

23.394.074,64 (5.166.470,86) 17.197.713,15 1.029.890,63

Raw, subsidiary and consumable 6.140.322,02 70.589.905,50 (365,27) 8.017.336,48 68.712.525,77

Total 29.534.396,66 65.423.434,64 (365,27) 25.215.049,63 69.742.416,40

14. Trade debtors As of December 31, 2015 and 2014, the balance of “Trade debtors” was as follows:

Description

31.12.2015

31.12.2014

Trade debtors - current accounts

47.566.266,93

42.115.532,46

Trade debtors - bills of exchange

594.905,95

903.554,04

2.886.295,58

3.304.797,26

Trade debtors - with guarantee Trade debtors - doubtful accounts

Accumulated impairment losses

dst - sgps, s.a.

8.862.469,84

17.148.124,77

59.909.938,29

63.472.008,52

(8.862.469,84)

(17.148.124,72)

51.047.468,45

46.323.883,81

Página 102 de 120

Consolidated Annual Report 2015

As of December 31, 2015 and 2014, the balance of trade debtors’ doubtful debts was as follows: 31.12.2015 Rel ati ng to i nsolvency and busi ness recovery or enforcement proceedi ngs

31.12.2014

416.253,71

231.171,57

Li ti gati on claims

5.400.148,69

6.988.613,83

Del ayed receivabl es

3.046.067,44

9.928.339,37

8.862.469,84 17.148.124,77

As of December 31, 2015 and 2014, the balance of prepayments was as follows: Description

31.12.2015

Trade debtors - current accounts

127.434,63 127.434,63

31.12.2014

1.079.828,66 1.079.828,66

In the periods of 2015 and 2014, the “Impairment losses” in receivable accounts balance was as follows:

Impairment losses

Description

Trade debtors

(372.425,58) (372.425,58)

2015 Reversals of impairment losses 1.794.871,99 1.794.871,99

Total

1.422.446,41 1.422.446,41

2014 Reversals of impairment losses

Impairment losses

(11.373.534,13) 12.912.481,95 (11.373.534,13) 12.912.481,95

Total

1.538.947,82 1.538.947,82

15. Financial assets As of December 31, 2015 and 2014, the balance of “Financial assets” was as follows: Description

31.12.2015

31.12.2014

Non-current assets Financial investments - other method valuation

-

943,36

-

943,36

742.748,42

882.145,71

742.748,42

882.145,71

Non-current liabilities Derivatives with effective coverage Variable interest rate swaps

dst - sgps, s.a.

Página 103 de 120

Consolidated Annual Report 2015

16. Other receivables As of December 31, 2015 and 2014, the balance of “Other receivables” was as follows:

Description

31.12.2015

31.12.2014

Interests Rents

1.737.519,11

1.733.153,64

-

-

Works in progress

2.082.801,53

2.717.740,74

Servi ces

1.548.290,66

459.519,14

442.292,49

399.767,71

1.234.391,68

1.471.934,78

Debtors for income accruals

Water sales Others Other debtors

7.045.295,47

6.782.116,01

22.960.583,25

8.411.359,91

30.005.878,72

15.193.475,92

17. State and other entities As of December 31, 2015 and 2014, the “State and other entities’” balance was as follows:

Description

31.12.2015

31.12.2014

Assets 371.294,30

637.355,12

3.734.676,38

4.814.367,56

417.424,23

287.883,18

4.523.394,91

5.739.605,86

Corporate tax

594.480,95

2.209.009,08

Income tax wi thholdi ng

367.846,89

321.399,92

Corporate tax Val ue added tax Others Liabilities

83.570,81

76.980,53

Social Security contributi ons

762.906,60

458.031,35

Others

329.898,32

77.083,04

2.138.703,56

3.142.503,92

Val ue added tax

dst - sgps, s.a.

Página 104 de 120

Consolidated Annual Report 2015

18. Deferrals As of December 31, 2015 and 2014, the deferrals’ balance was as follows:

Description

31.12.2015

31.12.2014

Deferred costs 557.871,04

1.004.268,99

Adverti sing

18.000,00

17.999,99

Insurance

69.851,98

75.330,66

136.140,72

125.888,41

41.444,54

10.680,43

104.074,75

130.023,91

163.034,62 1.090.417,65

179.335,63 1.543.528,02

Future services already invoiced

Rents Interest payabl e Bank charges Other costs

Deferred income 541.358,87

923.988,55

16.933.967,97

12.457.243,97

61.357,40

58.788,20

-

5.810,69

17.536.684,24

13.445.831,41

Future services already invoiced Constructi on contracts Rents Other income

19. Share capital The entity's share capital remained unchanged in the period, consisting of 5.000,000 shares, registered and nominative, with a nominal value of six euros. The share capital is totally realized.

20. Provisions As of December 31, 2015 and 2014, the “Provisions” balance was as follows:

Description

31.12.2014

Provisions for investments replacement

764.926,37

837.399,11

Sludges provisions

333.333,00

333.333,00

49.596,62

49.596,62

2.344.028,18

1.906.437,52

Current litigation

666.774,22

670.450,63

Provisions work in progress - NCRF 19

786.920,52

363.423,21

Other provisions

211.208,66

199.859,36

5.156.787,57

4.360.499,45

Taxes provisions Provisions for guarantees to trade debtors

dst - sgps, s.a.

31.12.2015

Página 105 de 120

Consolidated Annual Report 2015

The increase / decrease in the “Provisions” balance during the 2015 and 2014 periods, were as follows: 2015 Description

Reinforcement

Other provisions

Reversal

Final Balance

Reinforcement

Reversal

Final Balance

-

(41.955,00)

(41.955,00)

(413.181,38)

215.201,36

(197.980,02)

(677,98)

73.150,55

72.472,57

-

91.173,63

91.173,63

(989.689,01)

227.437,15

(762.251,86)

(1.307.654,20)

- (1.307.654,20)

(990.366,99)

258.632,70

(731.734,29)

(1.720.835,58)

306.374,99 (1.414.460,59)

Current liti gation Provis ions for i nves tments replacement

2014

21. Loans obtained As of December 31, 2015 and 2014, the balance of “Loans obtained” was as follows: Description

31.12.2015

31.12.2014

Long term loans

86.072.642,27

87.342.773,53

Financial leases

2.576.676,03

2.115.067,27

Commercial paper

3.875.000,00

8.560.000,00

Investment projects

2.836.777,46

3.441.838,84

240.733,13

240.733,13

95.601.828,88

101.700.412,76

Short-term loans

13.940.538,28

11.361.381,98

Revolving credit

16.954.928,67

15.781.930,20

3.092.015,93

5.353.802,74

Financial leases

929.171,59

918.571,73

Investment projects

253.560,77

960.594,33

35.170.215,23

34.376.280,99

Non-current liabilities

Outros Current liabilities

Overdrafts

22. Trade creditors As of December 31, 2015 and 2014, the balance of “Trade creditors” was as follows: Description

31.12.2015

31.12.2014

42.271.740,25

44.773.803,77

Trade creditors - bills of exchange

4.235.987,97

5.320.746,56

Trade creditors - invoices in conference

3.063.356,59

2.288.303,35

Trade creditors - with guarantee

6.718.658,74

6.214.166,03

341.929,40

238.649,36

56.631.672,95

58.835.669,07

Trade creditors

Others

dst - sgps, s.a.

Página 106 de 120

Consolidated Annual Report 2015

As of December 31, 2015 and 2014, the balance of “Trade creditors’ advanced payments” was as follows: Description Trade creditors Trade creditors - other markets Trade creditors - Intra-Community

31.12.2015

31.12.2014

2.908.596,40

3.544.002,66

-

5.595,91

8.075,44

267.791,03

2.916.671,84

3.817.389,60

23. Other payables As of December 31, 2015 and 2014, the balance of “Other payables” was as follows: Description

31.12.2015

31.12.2014

14.705.954,16

15.784.655,40

14.652.204,16

15.784.655,40

Staff costs

1.153.590,58

1.144.777,27

Investment trade creditors

1.054.908,52

1.401.867,77

Prepayments

1.092.221,00

368.618,58

Non-current liabilities Concession revenue Current liabilities

Creditors for costs acrruals Insurances Staff costs

5.293,60 3.510.655,73

236.090,01

477.858,27

General and administrative expenses

2.837.919,90

3.070.050,21

Other costs accruals

1.172.143,13

3.584.580,84

7.663.667,45-

10.648.438,65-

Interests

Deferred tax li abiliti es Factoring Confirmi ng Concession revenue Loans obtained Others

dst - sgps, s.a.

668.211,02 2.749.303,40

710.899,13

707.037,53

3.110.290,79

8.223.262,03

18.215.044,65

17.090.278,61

-

2.849.985,41

4.237.191,67

4.749.132,05

16.847.513,42

4.276.824,90

54.085.327,21

51.460.222,79

Página 107 de 120

Consolidated Annual Report 2015 24. Deferred tax assets and liabilities The changes in the balance of “Deferred tax assets and liabilities”, with reference to the 2015 period was as follows: 01.01.2015 Balance Tax Deferred tax assets Trade debtors impairments Reportable tax losses NCRF 19 - Provisions Provisi ons for other risks and charges Publ ic goods obtai ned from concedi ng Swaps' fair value recogniti on Depreciated cost

Non-current Current Deferred tax liabilities Investment subsi dy

Non-current Current

dst - sgps, s.a.

3.341.134,37 208.647,36 63.337,87 1.186.298,66 353.608,80 748.991,43 165.933,40 6.067.951,89

813.421,39 47.251,39 15.517,78 308.481,29 93.706,33 198.482,73 45.527,97 1.522.388,87

Variation Balance Tax (1.393.714,06) (166.385,08) 172.048,80 47.921,92 (118.355,66) (3.265,03) (1.461.749,11)

(324.756,25) (47.453,04) 38.710,98 12.699,31 (31.364,25) (828,75) (352.992,00)

1.522.388,87 -

52.414.317,56 11.006.266,65 52.414.317,56 11.006.266,65 10.299.229,12 707.037,53

30.06.2015 Balance Tax 1.947.420,30 42.262,28 235.386,67 1.234.220,59 353.608,80 630.635,77 162.668,37 4.606.202,78

488.665,14 (201,66) 54.228,76 321.180,60 93.706,33 167.118,48 44.699,22 1.169.396,87 1.169.396,87 -

(1.459.901,59) (1.459.901,59)

(306.579,41) (306.579,41)

50.954.415,97 10.699.687,24 50.954.415,97 10.699.687,24 9.988.788,11 710.899,13

Página 108 de 120

Consolidated Annual Report 2015 The changes in the balance of “Deferred tax assets and liabilities”, with reference to the 2014 period was as follows: 01.01.2014 Balance Tax Deferred tax assets Trade debtors impairments Reportable tax losses NCRF 19 - Provisions Cancellation of intangible assets Written-off assets Provisions for other risks and charges Shares' fair value adjustment Written-off integrated assets and assets acquisitions and their depreciation by DC4 Concessions recognition Public goods obtained from conceding Swaps' fair value recognition Depreciated cost Others

Non-current Current Deferred tax liabilities NCRF 19 - Construction Contracts Investment subsidy Shares' fair value adjustment Effect of Concession revenue by DC4 Concessions recognition Depreciated cost Written-off revenue already delivered to the Others

Non-current Current

dst - sgps, s.a.

Variation Balance Tax

31.12.2014 Balance Tax

1.430.390,00 402.461,14 860,94 62,40 1.234.956,51 1.444.504,81

282.783,21 89.531,79 228,15 6,20 321.725,82 332.236,10

1.910.744,37 (193.813,78) 63.337,87 (860,94) (62,40) (48.657,85) (1.444.504,81)

530.638,18 (42.280,41) 15.517,78 (228,15) (6,20) (13.244,53) (332.236,10)

3.341.134,37 208.647,36 63.337,87 1.186.298,66 -

813.421,39 47.251,39 15.517,78 308.481,29 -

1.508.094,08

399.644,93

(1.508.094,08)

(399.644,93)

-

-

897.937,47 1.797.550,42 583.308,83 168.248,73 316.083,55 9.784.458,88

237.953,43 476.350,86 154.576,84 46.268,40 83.779,40 2.425.085,13

(897.937,47) (1.443.941,62) 165.682,60 (2.315,33) (316.083,55) (3.716.506,99)

(237.953,43) (382.644,53) 43.905,89 (740,43) (83.779,40) (902.696,26)

353.608,80 748.991,43 165.933,40 6.067.951,89

93.706,33 198.482,73 45.527,97 1.522.388,87

2.104.776,91 320.308,22 629.914,99 166.496,18 54.782.136,01 12.706.791,85 117.505,65 27.026,31 456.153,02 120.880,55 280.745,63 74.397,26 24.790,84 6.197,71 511.864,91 135.644,20 162.706,68 43.117,27 56.965.817,73 13.280.551,33 12.422.248,72 858.302,61

1.522.388,87 (629.914,99) (166.496,18) (2.367.818,45) (1.700.525,21) (117.505,65) (27.026,31) (456.153,02) (120.880,55) (280.745,63) (74.397,26) (24.790,84) (6.197,71) (511.864,91) (135.644,20) (162.706,68) (43.117,27) (4.551.500,17) (2.274.284,69)

52.414.317,56 11.006.266,65 52.414.317,56 11.006.266,65 10.299.229,12 707.037,53

Página 109 de 120

Consolidated Annual Report 2015 25. Sales and services rendered In the periods of 2015 and 2014, the balance of “Sales and services rendered” was as follows: 2015 Description

Real estate sales Goods sales Products sales Services

National market

2014

Foreign market

Total

National market

Foreign market

Total

128.000,00

-

128.000,00

27.730,00

-

27.730,00

10.353.671,87 5.986.992,59

56.438,55 8.529.719,35

10.410.110,42 14.516.711,94

9.936.608,98 5.921.373,30

787.864,86 10.884.664,07

10.724.473,83 16.806.037,37

154.946.476,26 26.221.179,18 181.167.655,44

173.547.948,51

13.501.735,75 187.049.684,26

171.415.140,72 34.807.337,08 206.222.477,80

189.433.660,78

25.174.264,68 214.607.925,45

26. Own work In the periods of 2015 and 2014, this balance was as follows:

Description

Tangible fixed

dst - sgps, s.a.

2015

2014

67.696,63

38.998,03

67.696,63

38.998,03

Página 110 de 120

Consolidated Annual Report 2015

27. Other external charges In the periods of 2015 and 2014, this balance was as follows:

Description

2014

57.378.459,35

54.771.557,07

Electricity

2.737.134,21

2.365.413,46

Fuels

4.442.942,63

5.703.077,69

Water and other fluids

743.835,16

642.804,55

Tools

610.307,46

531.263,66

78.661,35

101.057,26

12.196.144,14

13.769.201,80

59.404,35

49.778,81

Communication

501.419,17

480.621,28

Insurance

818.735,75

628.456,78

Subcontractors

Office stationeries Rents and rentals Representation expenses

Transport of goods Travel and accommodation

450.738,99

521.216,57

1.987.281,37

2.134.539,60

86.781,29

9.724,89

Fees

474.983,58

329.027,90

Legal expenses

202.320,29

383.174,20

Comissions

3.272.265,63

3.329.130,11

Advertising and promotion

165.946,28

89.049,46

Cleaning and hygiene

142.265,37

100.998,99

Security

795.257,92

809.034,09

4.999.692,26

6.770.281,68

Software licenses

588.780,01

440.282,90

Tolls

717.277,14

641.523,56

Others

809.056,52

744.179,39

94.259.690,19

95.345.395,66

Maintenance and repairs

Specialised labour

dst - sgps, s.a.

2015

Pรกgina 111 de 120

Consolidated Annual Report 2015

28.

Employees benefits, number of employees and staff costs

28.1. Number of employees Companies

31.12.2015

31.12.2014

dst - sgps, s.a.

5

5

dst center, s.a.

98

-

i nvesthome - construção e imobili ária, s.a.

16

25

dst engenharia & construção, sgps, s.a. domingos da silva teixeira, s.a. domingos da silva teixeira - i mobi liária, s.a. dte, instalações especiais, s.a. i nvesthome - sgps, s.a.

525

2

-

125

117

-

-

177

187

tgeotecnia, s.a.

-

-

tconcrete, s.a.

4

3

tagregados, s.a.

5

6

steelgreen, s.a.

17

19

cari construtores, s.a.

-

-

dst real estate, sgps, s.a.

-

-

i pplus, s.a.

-

-

perfil dinamico, l da.

-

-

despertavantagem, s.a.

-

-

dst energias renováveis, sgps, s.a.

-

-

dst - wind, s.a.

1

1

global sun, s.a.

23

15

dst sol ar, s.a.

9

6

dst hydro, s.a.

1

1

dst tel ecomunicações, sgps, s.a.

-

-

42

26

bysteel, s.a.

dstelecom, s.a. derivadas e segmentos, s.a.

-

-

blu, s.a.

1

1

dst ventures, sgps, s.a.

-

-

i nnovation point - investigação e desenvolvimento, s.a.

4

4

2bpartner, scr, s.a.

2

1

dst ambiente, sgps, s.a.

-

-

dst internacional , sgps, s.a.

-

-

dst internacional II, sgps, s.a.

-

-

dst moçambique, lda.

3

5

domingos da silva teixeira - angol a, s.a.

73

43

dst 2gether, sgps, s.a.

-

-

dst 2gether II - s.a.

-

-

dstelecom, norte, s.a.

-

-

dstelecom, alentejo e algarve, s.a.

-

-

bysteel uk li mited

-

-

734

605

criar vantagens - águas e resíduos, lda. way2b, ace Total

dst - sgps, s.a.

469

-

9

1.810

1.604

Página 112 de 120

Consolidated Annual Report 2015

28.2. Staff costs In the periods of 2015 and 2014, this balance was as follows:

Description

Board of directors remmunerations Salaries Compensations

2015

2014

1.096.559,82

1.215.917,46

21.111.872,89

20.865.757,51

190.600,00

149.343,76

4.485.921,97

4.349.762,94

Working and professional illness insurance

412.804,25

340.029,80

Social action costs

350.554,32

269.991,29

88.842,93

32.126,13

Health and life insurance

148.665,47

100.994,65

Other staff costs

170.075,77

158.048,81

28.055.897,40

27.481.972,34

2015

2014

Social charges

Formation

29. Other revenues and income In the periods of 2015 and 2014, this balance was as follows:

Description

Other operating income

2.708.091,07

5.606.640,65

Financial investments

4.450.000,00

-

Sale of non-financial investments

479.327,52

3.694.567,13

Exchange gains

1.428.717,85

636.501,07

Cash discounts

137.566,44

412.351,17

Prior years adjustments Overestimated tax provision Other subsidies Investment subsidies Contractual penalities Gains in stocks Other extraordinary income

dst - sgps, s.a.

748,61

83.096,59

2.510.097,28

1.762.746,35

11.675,53

3.871,25

4.266.016,25

3.732.173,01

186.038,68

190.259,88

3.999,29

5.044,74

1.541.979,28

1.803.361,58

17.724.257,79

17.930.613,42

Pรกgina 113 de 120

Consolidated Annual Report 2015

30. Other losses and expenses In the periods of 2015 and 2014, this balance was as follows:

Description

2015

Taxes and charges

790.551,13

Cash discounts Bad Debts

2014

871.157,09

25.243,21

69.830,07

1.346.988,15

1.201.549,60

Financial i nvestments Sale of non-financial i nvestments Prior years adjustments Donations Contributions Underestimated tax provi sion

42.791,78

-

838.974,78

4.600.145,23

21.394,65

582.160,87

156.431,17

690.067,73

21.823,25

22.695,60

4.158,38

467.188,24

Exchange losses

1.917.141,71

667.712,69

Bank guarantees costs

1.219.001,95

1.018.900,89

Bil l of exchange costs

631,66

2.907,23

Factoring costs

141.833,57

170.627,59

Confi rming costs

104.490,53

68.846,75

Self-confirming costs

245,21

3.204,83

711.650,99

118.301,99

28.947,76

7.935,98

Compensations

3.672,08

8.520,23

Losses i n stoks

3.451,91

922,72

Banki ng services

635.775,92

882.801,91

Other losses and expenses

260.665,19

549.328,02

8.275.864,95

12.004.805,24

Fines and penalties Damages on third parties

31. Interest and other similar revenues In the periods of 2015 and 2014, this balance was as follows:

Description

2014

Contractual interests and interests for del ayed receivabl es interest Current loans

280.445,42

1.257.630,55

263.683,71

247.769,98

Bank deposits interest

157.716,86

613.603,28

Other short-term investments interest

193.692,08

230.861,57

Bonds interest Other financial income

dst - sgps, s.a.

2015

-

16.296,46

156.573,39

605.087,39

1.052.111,46

2.971.249,23

Pรกgina 114 de 120

Consolidated Annual Report 2015

32. Interest and other similar expenses In the periods of 2015 and 2014, this balance was as follows:

Description

2015

Bank loans interest Factoring interest

2014

4.194.787,40

6.356.947,28

147.481,43

582.448,36

Lease interest

75.556,74

81.430,76

Confirming interest

46.889,63

32.215,24

Self-confirming i nterest

9.411,90

1.712,98

26.229,63

441.822,39

409.953,13

246.832,55

9.224,77

19.223,21

2.689.605,07

1.880.861,21

Banking services

102.312,56

105.832,52

Guarantees commissions

196.803,99

252.446,69

66.356,16

27.541,78

7.974.612,41

10.029.314,97

Penalty interests and interests for delayed Other loans payments interest Bil l of exchange interest Other interest Other financial costs

Others

33. Income tax

The current tax expense (income) is indicated in the following table: Description

Taxes Corporation tax Deferred taxes

dst - sgps, s.a.

2015

2014

2.358.510,00

3.116.212,76

(705.068,16)

(2.341.007,92)

1.653.441,84

775.204,84

Pรกgina 115 de 120

Consolidated Annual Report 2015

34. Commitments related to obtained guarantees As of December 31, 2015 the entity had bank guarantees to replace bidders’ bails amounting to 71,926,149.08 Euros, 1,147,500 USD, 190,142,000 kwanzas, 500.000 meticais and 8.480.100,08 cape verde escudo as follows: International

National Euros

USD

AKZ

MZN

CVE

Banco BIC

5.164.042,04

-

-

-

-

BANCO POPULAR

1.520.470,17

-

-

-

-

BANIF

923.927,52

-

-

-

-

BARCLAYS

209.316,14

-

-

-

-

BBVA

648.350,02

-

-

-

-

BCP

2.930.710,91

-

-

-

-

BPI

14.625.225,90

-

-

500.000,00

-

CGD

18.173.201,44

Novo Banco

10.056.958,09

-

-

-

-

SANTANDER

5.925.784,48

997.500,00

-

-

-

10.078.886,82

-

-

-

-

1.669.275,54

-

-

-

Grantors entiti es Others BARCLAYS

TOTAL 71.926.149,08

150.000,00 190.142.000,00

1.147.500,00 190.142.000,00

- 8.480.100,08

500.000,00 8.480.100,08-

As of December 31, 2014 the entity had bank guarantees to replace bidders’ bails amounting to 72,926,149.08 Euros, 1,148,000 USD, 95,071,000 kwanzas and 10,000,000 meticais, as follows: International

National Euros

AKZ

MZN

SANTANDER

7.340.592

997.500

-

-

BCP

3.478.016

-

-

-

BPI

15.437.988

170.500

-

-

1.171.193

-

-

-

BBVA BARCLAYS Novo banco CGD BANIF BANCO POPULAR Banco BIC Grantors entities Others BARCLAYS

dst - sgps, s.a.

USD

660.945

-

-

-

7.711.770

-

-

-

16.804.257

280.000

95.071.000

10.000.000

1.146.143

-

-

-

565.098

-

-

-

4.605.333

-

-

-

10.610.122

-

-

-

2.488.018

-

-

-

TOTAL 72.019.475

1.448.000

95.071.000

10.000.000

Página 116 de 120

Consolidated Annual Report 2015

35. Events after the balance sheet date Between the reporting date of the Financial Statements (December 31, 2015) and the clearance date for its disclosure (April 15, 2016), there were no material facts warranting disclosures or changes to the Financial Statements for the period.

36. Disclosures required by law The Management Board reports that the entity has no debts to the State in arrears in accordance with Law-decree number 534/80 of November 7.

Pursuant the requirements of the Article 210 of the Contributory Code, published by the Law number 110/2009 of September 16, the Management Board informs that the situation of the entity with respect to Social Security is regularized within the legally stipulated deadlines.

Pursuant to the requirements of the Article 66º of the Code of Commercial Companies, the entity informs that the Statutory Auditor’s charged fees (Chartered Accountant) amounted to 110,196.96 Euros, which solely cover the statutory audit services.

During the period ended December 31, 2015, the entity has incurred in susceptible investments to be eligible for the use of the tax regime of the Tax Incentive System for Research and Business Development II (SIFIDE II), provided in Chapter V of the New Investment Tax Code, approved by Law-Decree No. 162/2014 of 31 October, and the amount of the tax benefit amounted to € 752,125, having been deducted in its entirety in this period.

Pursuant to the requeriments of paragraphs 1 and 2 of Article 23 of Investment Tax Code (ITC), dst group considered an tax benefit related to the tax regime of investment support (TRIS) relative to 2015 of 2,472.75 euros, corresponding to 25% of the eligible investment of this year (9,711 euros).

dst - sgps, s.a.

Página 117 de 120

Consolidated Annual Report 2015

37. Clearance date to financial statements disclosure The financial statements for the period ended December 31, 2015 were approved by the Board of Directors and authorized to disclosure on April 15, 2016.

Braga, April 15, 2016

The Board of Directors,

The Certified Accountant number 55854,

José Gonçalves Teixeira; Executive Chairman

Susana Maria Macedo Queirós

Avelino Gonçalves Teixeira; Executive Vice-Chairman

Joaquim Gonçalves Teixeira; Non-Executive Vice-Chairman

João Martins Negrais de Matos; Executive Member of the Board of Directors

Hernâni José Gonçalves Teixeira; Non-Executive Member of the Board of Directors

dst - sgps, s.a.

Página 118 de 120

Consolidated Annual Report 2015

E)

Legal Certification of Consolidated Accounts

dst - sgps, s.a.

Pรกgina 119 de 120

Consolidated Annual Report 2015

F)

Report and Opinion of the Sole Fiscal Auditor

dst - sgps, s.a.

Pรกgina 120 de 120