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ALBERTO COU TO A LVE S, SG P S, S . A .

M A N AG E M E N T R E P O RT A N D F I N A N C I A L STAT E M E N T S 2017

A L B E R TO CO U TO A LV E S , S G P S , S . A . R E L ATÓ R I O D E G E S TÃ O & CO N TA S CO N S O L I DA DA S 2 0 1 7 3

TA B L E O F CO N T E N T S

1 . I D E N T I F I CAT I O N O F T H E PA R E N T CO M PA N Y 42 . M I S S I O N , V I S I O N A N D VA LU E S O F A CA 53 . S U B S I D I A R I E S 64 . S N A P S H OT O F K E Y E CO N O M I C A N D F I N A N C I A L I N D I CATO R S 75 . R E L E VA N T FA C T S F O R T H E Y E A R 86 . CO N C LU D E D A N D O N G O I N G W O R K S 9

I - CO N S O L I DAT E D M A N AG E M E N T R E P O RT 1 0

1 . C E O ’ S M E S S A G E 1 12 . M A C R O E CO N O M I C E N V I R O N M E N T 1 3

A ) P O R T U G A L 1 3B ) A N G O L A 1 5C ) B R A Z I L 1 7D ) F R A N C E 1 9

3 . G LO B A L A S S E S S M E N T O F T H E A C T I V I T Y 2 04 . R E L E VA N T FA C T S A F T E R T H E E N D O F T H E Y E A R 2 35 . O U T LO O K F O R 2 0 1 8 2 46 . OT H E R L E G A L I N F O R M AT I O N 2 47 . P R O P O S A L F O R T H E D I S T R I B U T I O N O F R E S U LT S 2 58 . CO N TA C T S 2 59 . A C K N O W L E D G M E N T S 2 6

I I - F I N A N C I A L I N F O R M AT I O N 2 7

1 . CO N S O L I DAT E D F I N A N C I A L S TAT E M E N T S 2 82 . CO N S O L I DAT E D P R O F I T I N D I CATO R S 3 13 . F I N A N C I A L A N A LY S I S O F T H E CO N S O L I DAT E D B A L A N C E S H E E T 3 44 . F I N A N C I A L A N A LY S I S TO T H E CO N S O L I DAT E D F I N A N C I A L S TAT E M E N T S 3 55 . I N V E S T M E N T A N D D I S I N V E S T M E N T 3 66 . F I N A N C I N G A N D CO N S O L I DAT E D N E T D E B T 3 77 . CO N S O L I DAT E D CO M PA N I E S 3 8

I I I - N O N - F I N A N C I A L R E P O RT 3 9

1 . E X P O S U R E TO R I S K FA C TO R S 4 02 . H U M A N R E S O U R C E S 4 43 . Q UA L I T Y, E N V I R O N M E N T, S A F E T Y 4 9

I V - A N N E X TO T H E CO N S O L I DAT E D F I N A N C I A L R E P O RT 5 4

V - R E P O RT A N D O P I N I O N O F T H E STAT U TO R Y AU D I TO R 1 0 4

V I - L E G A L C E RT I F I CAT I O N O F ACCO U N T S 1 0 7

1 . I D E N T I F I CAT I O N O F T H E PA R E N T CO M PA N Y

T R A D I N G N A M E Alberto Couto Alves, SGPS, S.A.

T Y P E O F CO M PA N Y Public Liability Company

M A I N O F F I C E Avenida dos Descobrimentos, Edifício Las Vegas 3, nº63, Vila Nova de Famalicão

S H A R E CA P I TA L EUR: 30.050.000,00, represented by 6,010,000 shares with a nominal value of EUR 5.00

I N S C R I PT I O N Registered at Vila Nova de Famalicão’s Commercial Registry under number 505839547

CO M PA N Y VAT N U M B E R : 505839547

M A I N ACT I V I T Y ( CO D E )

70100-R3 - It comprises the supervision and management of other units of the group or company, particularly regarding strategical and organizational planning, as well as the decision-making process. It includes the provision of administrative services by the corporate headquarters to the group companies

CO R P O R AT E P U R P O S E Management of holdings in other companies, as an indirect way of carrying out economic activities

G OV E R N I N G B O D I E S

CHAIRMAN OF THE GENERAL MEETING António Manuel Sousa Barbosa da Frada

VICE-PRESIDENT OF THE GENERAL MEETING Maria dos Anjos Costa Mesquita e Guimarães

SECRETARY Filipa Manuel Salgado Castro Marques Vieira

BOARD OF DIRECTORS

Alberto Augusto Couto Alves – CEOJoão Paulo Barcelos de Morais Barbot – Voting Member António José Veloso dos Santos – Voting Member Bruno Filipe Cardona Serra – Voting Member

STATUTORY AUDITOR Gaspar Castro, Romeu Silva & Associados, S.R.O.C., repre-sented by Gaspar Vieira de Castro, Statutory Auditor no. 557

DEPUTY STATUTORY AUDITOR Fátima Cristina dos Santos Amorim Barroso Gonçalves, Statutory Auditor no. 1279


A L B E R TO CO U TO A LV E S , S G P S , S . A . M A N A G E M E N T R E P O R T A N D F I N A N C I A L S TAT E M E N T S 2 0 1 7 5

2 . M I S S I O N , V I S I O N A N D VA LU E S O F A CA

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

M I S S I O N Offer the best possible answer to market demands, ensuring the protection of the environment and allowing employees to safely execute their tasks;

Produce well, efficiently and effectively;

Strengthen the involvement of individuals within a collective goal of continuous improvement (individual, organisational and community development).

VA LU E S O F ACA365 days with our values.

P R O F E S S I O N A L I S M

E Q UA L I T Y

R I G O U R

E XC E L L E N C E

CO O P E R AT I O N

Q UA L I T Y

6A L B E R TO CO U TO A LV E S , S G P S , S . A . R E L ATÓ R I O D E G E S TÃ O & CO N TA S CO N S O L I DA DA S 2 0 1 7

3 . S U B S I D I A R I E S

On 31st December, 2017, the companies integrating the ACA Group included:

1 AmbiÁfrica also holds 1% of this company2 ASGest also holds 5% of this company

CA PT I O Na) The companies in dark blue are held via financial investments and will include the full consolidation method;b) Companies in light blue are controlled in their operational and financial activities by GACA and will be included using the full consolidation method;c) Companies in orange will include the equity method of accounting;d) Companies in grey will be included using the proportional method.e) Companies in grey include companies registered at cost of acquisition.

When compared to 31st December 2016, the company:• sold the 49.39% holding of the share capital of company GolfInvest;• increased the holding at company Alea, from 20.00% in 2016 to 99.00% in 2017;• created the company ACA São Tomé e Príncipe.

S GP S2 0 1 7

ACA

97,10%5,2%

AS GEST

CONTROLO

ACA WIND

80%

ANGOLACA

MIN ERSOLO AMBIÁFRICA

SOLAMBA

AGRO ANGOLA

CONCIVA2

53,75%

33%

40%

85,01%

40%

0,15%

85,01%

NORTEPOLIS

100%

ACA BU D

100%

IELAC

85%

ÁLEA

99%

VIVASUPER

CONTROLO

GS

53,57%

ACE ACA-FERREIRA

50%

PARQ G

75%

AMBIÁGUA

85,64%

ACA BRASIL

GV

CONCIVA1

51%

40,33%

48%

RRI

77,4%

VIVANGOLA

CONTROLO

ANGULO RECTO

WICON

85%

60%

ACE GABRIEL COUTO

50%

VID GARDEN

50%

51%

CONSMAR PT

CONSMAR FR

51%

100%

ACA S. TOMÉ E PRINCIPEACA FRANCE

51%

15% 49% 20% 10,71% 15%

7A L B E R TO CO U TO A LV E S , S G P S , S . A . R E L ATÓ R I O D E G E S TÃ O & CO N TA S CO N S O L I DA DA S 2 0 1 7

EBITDA = Earnings + Depreciation and Provisions + Impairment of Inventories + Impairment of receivables + Impairment of non-Depreciable Investments + Impairment of depreciable assets.

4 . S N A P S H OT O F K E Y E CO N O M I C A N D F I N A N C I A L I N D I CATO R S

2015 2015

155 25121 520

2016 2016

126 603 16 493

TURNOVER (IN ‘000 EUR) EBITDA (IN ’000 EUR)

2017 2017

206 646 26 379

2015 2015

21 180 2858

2016 2016

6 174

1897

CAPEX (IN ’000 EUR) AVERAGE NUMBER OF EMPLOYEES

2017 2017

13 5952019

2015 2015

32 034

0,0020 000

1,0026 000

2,0032 000

0,5023 000

1,5029 000

2,5035 000

1,49

435 443

2016 2016

32 318

1,96 376 772

NET DEBT (IN ’000 EUR) AND NET DEBT / EBITDA BACKLOG (IN ’000 EUR)

2017 2017

24 620

0,93

507 509

2015

2017

0 500 1000 1500 2000

2466

PORTUGAL

ÁFRICA SUBSARIANA

EUROPA E NORTE DE ÁFRICA

AMÉRICA LATINA477501475

9478961911

145141132

450359340

2016

2016

1849

AVERAGE NUMBER OF EMPLOYEES END OF YEAR AVERAGE NUMBER OF EMPLOYEES BY REGION

2017

2015

2076


5 . R E L E VA N T FA C T S F O R T H E Y E A R

• Strong recovery of turnover when compared to the previous year with an extremely significant growth;

• Increase in the average number of employees by 6.4%.

• Absolute increase and relative maintenance of operational profitability;

• Maintenance of the company’s investment pace, with a total investment value of more than € 10 million in tangible fixed assets;

• Growing affirmation in international markets;

• Reduction of the ACA Group’s net debt by 23.8% and from 1.96 X EBITDA 2016 to 0.93 x EBITDA 2017;

• Portfolio of works at the end of the year corresponding to 2.44x the turnover of 2017.

• Creation of a new department of geotechnics in Portugal and continuation of the commercial commitment towards the expansion of the company internationally, in the search for new markets.

6 . CO N C LU D E D A N D O N G O I N G W O R K S

M A I N W O R K S CA R R I E D O U T I N 2 0 1 7

CO U N T R Y C L I E N T W O R K

Po r t u g a l Instituto das Irmãs Hospitaleiras Casa de Saúde do Bom Jesus

Po r t u g a l Ministry of Urban Planning and Housing of Angola Catapa Reserve

Po r t u g a l Celtejo – Empresa de Celulose SA Water Treatment Plant + Landfill Aterro Celtejo

Po r t u g a l Douro Azul – Sociedade Marítima Commercial Area and Parking Lot - Gaia

Po r t u g a l Municipality of Guimarães Taipas’ School - Caldelas

Po r t u g a l Celtejo – Empresa de Celulose SA CELTEJO - Turbin Building

Po r t u g a l Puratos – Prod e Art Alimentares Warehouse expansion

Po r t u g a l Private client Login Foz Building

A n g o l a Provincial Government of Huambo Several improvement works City of Huambo

A n g o l a China Railway 20 Group International Improvement of pavement Express way

A n g o l a Carmon Engenharia Zango Node, Camama Node, Kilamba Route

A n g o l a Carmon Engenharia Improvement of pavement Cacuso / Malange

A n g o l a Carmon Engenharia Improvement of pavement Talamungongo / Cambundi

A n g o l a KORA Angolaca Construction of road accesses Quilomoço

A n g o l a Ministry of Energy and Water Rehabilitation and Expansion of the Water Supply System to Balombo

A n g o l a Ministry of Energy and Water Collection Na Sra. Do Monte – Lubango

A n g o l a Ministry of Energy and Water Design/Construction of WWTP at Zango

A n g o l a Ministry of Energy and Water Rehabilitation and Expansion of the Water Supply System to Caculama

A l g e r i a Fundo de Turismo Público CET Tipasa

B ra z i l Vale SA Açailandia

B ra z i l Vale SA Maintenance of infrastructure

B ra z i l Ferrovia Norte Sul SA TC Tocatins

B ra z i l Ferrovia Norte Sul SA TC Maranhão

B ra z i l Vale SA Buriticupu

B ra z i l Vale SA Marabá

B ra z i l Ferrovia Norte Sul SA Imperatriz Fase II

Fra n c e INSTITUTION BETH RIVKAH BETH RIVKAH

Fra n c e NEXITY APOLLONIA SCI BORDEAUX BLANQUI



CO N S O L I DAT E D M A N A G E M E N T R E P O R T

C H A P T E R I

Dear Shareholders,

In compliance with by-laws and applicable legal standards, the Board of Directors hereby submits the Management Report and the Financial Statements for the financial year of 2017.


1 . C E O ’ S M E S S A G E

Dear Shareholders, Staff members, partners and stakeholders,

This Report discloses the consolidated accounts regarding the year ended in 31st December 2017.

The year of 2017 was marked mostly by the operational growth of the ACA Group virtually across every market and geographies where we operate.

Naturally, this was due to a renewed commercial effort, but also because we now have a greater knowledge of the markets where we operate, and more importantly, these also recognize the GROUP as a credible and proven partner.

In Portugal, turnover grew over 90%, with sales and provision of services surpassing MEUR 67.4, an amount never before reached by company Alberto Couto Alves SA.

Considering the Investment Plans announced until 2020 in Railroads and Ports, we have established new partnerships with companies operating in the industry, which has allowed us, already in 2017, to begin our application to railroad works, with the singing of a contract for our first maritime work.

Internally, we draw attention to the creation of a new Department of Geotechnics at ACA, scheduled to begin its activity as early as January 2018. Thus, in 2017, we began recruiting specialized staff, duly recognized in the industry. At the same time, we also began purchasing equipment for this industry.

In Angola, turnover grew 190% naturally, taking advantage of the country’s general economic recovery and resurgent public investment. Here, our subsidiary AngolACA benefited from its differentiating stance in that market, since it is a company strongly implemented in the great majority of the territory of that country. This enabled it to promptly respond to the challenges of new investments that arose in 2017.

Argelia also experienced a meaningful activity growth, about 5 times that of 2016: if 2016 was practically the starting year for the project being executed in Tipasa, in 2017, as the result of a constant learning process of the market and how to best operate, the volume of services provided increased exponentially. For the first time, we feel rewarded for all the effort and resilience we have put in, with the State publicly recognizing our work.

In France and for the 2017, we would like to underline the acquisition, already in the third quarter of the year, of a set of works that will allow the Group to virtually triple our activity in that Country and to move, within the market, with a greater level of confidence.

Brazil, which has been enduring, as is well known, a very broad political crisis, we can say with great satisfaction that we have been able to maintain the levels of activity and profitability of the previous years.


For 2017, we would also like to emphasize that we have added to our portfolio new contracts from private clients, who have already worked with us and, because we have already completed other successful projects and mutual recognition of professionalism and capabilities.

Since we believe in our project, in our services and our people, several actions have been started as to diversify the markets where the ACA Group operates, always taking into account the premises of profitability and sustainability, with very controlled risks, which will allow us to maintain our growth.

A word of appreciation must go out to all our collaborators for their commitment, professionalism, resilience and abilities. To all our stakeholders, a word of appreciation for their support and trust given to the Group.

The scope of our operations across different geographical areas, the rigorous compliance with our operational plan, cost and risk control, the quality of our collaborators and the much-needed flexibility imposed by the markets in which we operate, will allow us to ensure a consolidated and sustainable path. We want to be stronger and more competitive. This sustained and responsible growth is one of our goals. Therefore, the presentation of the 2017 Annual Report is a time to highlight the commitment towards the future. For this project, we rely on the commitment, capacity and competence of our collaborators and remaining stakeholders, to be able to do more and better.

CEO Alberto Augusto Couto Alves


2 . M A C R O E CO N O M I C E N V I R O N M E N T

A ) P O RT U G A L

According to the projections presented by the Bank of Portugal in the December 2017Economic Bulletin, the process of expansion of the Portuguese economy is expected to continue in the coming years. After a 2.6% increase in 2017, economic activity will continue to show a growth profile over the projection horizon, albeit at a progressively lower pace (2.3%, 1.9% and 1.7% respectively in 2018, 2019 and 2020) (table below).

WEIGHTS 2016

EB DECEMBER 2017EB

OCTOBER 2017

EB JUNE 2017

2016 2017 (p) 2018 (p) 2019 (p) 2020 (p) 2017 (p) 2017 (p) 2018 (p) 2019 (p)

GROSS DOMESTIC PRODUCT 100 1,5 2,6 2,3 1,9 1,7 2,5 2,5 2,0 1,8

PRIVATE CONSUMPTION 66 2,1 2,2 2,1 1,8 1,7 1,9 2,3 1,7 1,7

PUBLIC CONSUMPTION 18 0,6 0,1 0,6 0,4 0,2 0,3 0,4 0,6 0,3

GROSS FIXED CAPITAL FORMATION 15 1,6 8,3 6,1 5,9 5,4 8,0 8,8 5,3 5,5

DOMESTIC DEMAND 99 1,6 2,7 2,5 2,2 2,1 2,5 2,6 2,2 2,1

EXPORTS 40 4,1 7,7 6,5 5,0 4,1 7,1 9,6 6,8 4,8

IMPORTS 39 4,1 7,5 6,7 5,5 4,8 6,9 9,5 6,9 5,2

CONTRIBUTION TO GDP GROWTH, NET OF IMPORTS (IN P.P.) (a)

DOMESTIC DEMANDEXPORTS

0,70,9

1,21,5

1,21,2

1,00,9

1,00,7

1,01,5

0,81,8

0,81,2

0,80,9

Empolyment (b) 1,6 3,1 1,6 1,3 0,9 3,1 2,4 1,3 1,3

UNEMPLOYMENT RATE (IN % OF THE LABOUR FORCE) 11,1 8,9 7,8 6,7 6,1 9,0 9,4 8,2 7,0

CURRENT PLUS CAPITAL ACCOUNT (% OF GDP) 1,7 1,5 2,3 2,2 2,2 1,8 2,1 2,4 2,4

TRADE BALANCE (% OF GDP) 2,2 1,8 1,6 1,6 1,5 1,7 2,0 2,2 2,0

HARMONIZED INDEX OF CONSUMER PRICES 0,6 1,6 1,5 1,4 1,6 1,6 1,6 1,4 1,5

Sources: Statistics Portugal and Banco de Portugal. Notes: (p) - projected, (p.p.) - percentage points. For each aggregate, this table shows the projection corresponding to the most likely value, conditional on the set of assumptions considered. (a) The demand aggregates net of imposts are obtained by subtracting an estimate of the imports needed to meet each component. The import content calculations were based on 2013 data. For more information, see the box 2 of this Bulletin “The import content of global demand in Portugal”. (b) Total employment, in number of persons according to the national accounts concept.


At the end of the projection horizon, GDP is expected to be around 4% higher than the level reported before the international financial crisis. Projected growth rates are higher than the average estimates of the potential growth of the Portuguese economy and should translate into a positive output gap in the coming years. GDP growth in Portugal quite similar to the euro area average over the projection horizon. In terms of per capita GDP, real convergence vis-à-vis the euro area is expected to continue in the coming years, even if slightly, partly reflecting the reduction in the population in Portugal. As such, these developments will be insufficient to offset the actual divergence accumulated by 2013.

The Construction Industry

With regard to the evolution of the economy supply, the recovery has been transversal to the main sectors of activity. In construction, the recovery of Gross Value Added (GVA) started only at the end of 2016, after the reductions recorded previously.

GFCF IN CONSTRUCTION, IN REAL TERMS (year-on-year rate of change, in percentage)

SOURCES: CIMPOR, STATISTICS PORTUGAL E SECIL AND BANCO DE PORTUGAL

In 2017, the variation of the production index in construction was + 2.2% (-3.9% in 2016). Both segments of the construction sector reported positive variations, with a greater intensity in the “civil engineering” segment (+3.4%) than in “building construction” (+ 1.3%).

-20

20

-40

0

40

2012

T1

2014

T1

2016

T1

2013

T1

2015

T1

2017

T1

2012

T3

2014

T3

2016

T3

2013

T3

2015

T3

2017

T3

-20,0-12,2

-3,6 -0,34,9

CEMENT SALES GFCF IN CONSTRUCTION GFCF IN CONSTRUCTION, ANNUAL RATE OF CHANGE (T.V.A.)


Investment in housing, after a downwards trend reported since the beginning of the decade of 2000, started recovering in 2015, with projects for a more robust growth of this segment in 2017-2020. Investment in this industry has benefited from an increase in the demand from both residents and non-residents, in a context of positive financing conditions and increased attractiveness of this asset, given the sharp rise in housing prices, which is expected to persist over the projection, albeit more moderately.

After a steep reduction in 2016, which determined the slowdown of total GFCF for that year, public investment should have a significant growth in 2017 and 2018, slowing down to a growth rate roughly in line with the GDP over the remaining projection horizon.

The projected evolution for consumption and investment implies an increase in the financial debt of families and companies over the projection horizon, in line with credit recovery, but at a slower rate than the growth of disposable income and GDP.

B ) A N G O L A

The Angolan economy has experienced, since the second semester of 2014, an adverse economic and financial period, brought on by an external impact that produced serious implication in the country’s tax accounts, in the balance of payments, in the exchange rate market and in the real economy.

From June 2014 to the first quarter of 2017, the oil prices fell by more than 51%. In this period, it suffered periods during which prices were quite repressed, especially in the first quarter of 2016, when it reached levels of USD 28 per barrel.

In the meantime, the year of 2017 managed to present some stability, with the average price, during the first half of the year, to be fixed at USD 54 - USD 13.30 higher than the average price observed in 2016 and USD 25.42 above of the price observed during the same period.

CONSTRUCTION PRODUCTION INDEX - AVERAGE VARIATION OVER LAST 12 MONTHS

-1,0% -1,0%

-3,0% -3,0%

-4,0% -4,0%

-2,0% -2,0%

-5,0% -5,0%

0,0% 0,0%

1,0% 1,0%

2,0% 2,0%

3,0% 3,0%

4,0% 4,0%

DEZ -

15

DEZ -

16

DEZ -

17

FEV -

16

FEV -

17

ABR -

16

ABR -

17

AGO

-16

AGO

-17

JUN

-16

JUN

-17

OUT -

16

OUT -

17

-3,9%

2,2%

-3,7%

1,3%

-4,1%

3,4%

TOTAL CONSTRUCTION OF BUILDINGS

2016 2017

CIVIL ENGINEERING SOURCE: INE


The oil price shock produced, among other, several impacts, both direct and indirect:

a): Oil exports and tax revenue were substantially reduced, not only due to the decrease of export prices, but also due to an increase of the cost oil weight in sale revenues for each barrel;

b) GDP growth was deteriorated, becoming stagnated during 2016;

c) Inflation rate sped up, essentially in 2016, reaching levels not reported since 2004, reducing purchase power;

d) The imbalance in the exchange rate maker grew deeper, with offer being substantially reduced, pushing exchange rates to devalue Kwanzas;

e) Net International Reserves took a downward path;

f) Reduction of liquidity in the relevant financial markets, with effects on market interest rates, debt service and investment levels of the economy.

The Angolan Government adopted several measures to management this conjuncture, to mitigate the impacts of the oil price shock, among which:

(i) Regarding taxes. The non-oil primary deficit, which before 2014 accounted for 44.6% of non-oil GDP, fell to 13.0% of GDP in 2017, according to the most recent estimates. To this end, the tax adjustments carried out by cutting the expenditure (with emphasis on the reform of fuel benefits), the re-registration of staff, the adoption of a program to boost tax revenues and a new package of tax legislation;

(ii) Regarding currency. The benchmark exchange rate was relaxed, leading to a cumulative depreciation of the local currency by about 70% between 2014 and 2016. At the same time, in the period 2014-2017, the main interest rates of the National Bank of Angola were adjusted, to adjust demand to supply conditions.

Recent economic developments and prediction on the evolution of the oil market have shown, as stated by authorities, that a profound transformation is required in the country’s economic management model, in particular the basis for its growth.

The effects of low oil prices continued to negatively impact the Angolan economy in 2017, reflecting a moderate recovery in GDP growth of around 1.1%, 1pp below the State’s Budget (OGE), due to the performance, below originally planned, for both the oil sector and the non-oil sector.

In the non-oil sector, the emphasis must be given to the manufacturing sector, which was severely affected by the scarcity of foreign exchange resources. Contrary to OGE 2017’s forecast – growth rate of 2.3% -, new forecasts reduce non-oil GDP growth expectations to 1.9%. However, when compared to 2016, these projections show a slight improvement of around 0.7 pp for growth in the non-oil sector.

This new spirit of the non-oil sector was supported by the growth expected in the energy (40.2%), agriculture (4.4%), construction (2.2%), fisheries (2.2%), and trade services (1.3%) industries.

The current closure prospects for 2017 indicate an inflation rate of around 25.0%, about 10 pp above the target set in the General State Budget for 2017, which was 15.8%.

Also for 2017, balance of payments projections indicate that the economy is expected


to close with external financing needs, measured by the combined current and capital account balances, estimated at 5.5% of GDP, which is 2016 amounted to 3% of the GDP.

The Construction Industry

This sector saw a slight reduction in its growth prospects, from the 2.3% forecast in OGE 2017 to 2.2%. This downward revision is justified by the under-execution of capital expenditure and, in particular, by the Public Investment Program, due to the limited absorption capacity of the projects included in the credit lines that did not experienced the dynamism envisaged in terms of physical execution.

C ) B R A Z I L

According to IBGE - Instituto Brazileiro de Geografia e Estatística, in 2017, GDP grew 1.0% after two consecutive years of declines, both by 3.5% in 2015 and 2016. However, the evolution registered in 2017 was quite dispersed: the result obtained is mainly due to the growth of 13.0% in the agricultural sector and 0.3% in Industry. In a Federation with a population of more than 209 million, GDP per capita grew 0.2% in real terms to R $ 31,587.

GDP and GDP per capita ((%) of annual growth)

-4,0

4,0

0,0

8,0

-6,0

-2,0

6,0

2,0

10,0

2000

2004

2008

2014

2002

2006

2012

2010

2016

2001

2005

2009

2015

2003

2007

2013

2011

2017

4,4

1,4

3,1

1,1

5,8

3,24,0

6,1

7,5

4,0

1,9

3,0

0,5

-3,5

-4,3

-3,5

-4,2

1,0

5,1

-0,1

2,9

0,0

1,7

-0,2

4,4

2,02,8

4,94,0

-1,2

6,5

3,0

1,02,1

-0,4

0,2

GDP GDP per capita


The increase in agriculture was mostly due to the performance of agriculture, with an emphasis for corn (55.2%) and soy (19.4%) crops. In Industry, the highlight was the increase in Extractive Industries activity (4.3%), and the decrease in Construction (-5.0%).

When analyzing internal demand, gross fixed capital formation decreased 1.8%, following the decrease in Construction and government consumption expenditure fell by 0.6%. Household consumption expenditure grew by 1.0% in relation to the previous year (down 4.3%), which may be explained by the behavior of inflation, interest, credit, employment and income indicators in 2017.

Externally, goods and service exports grew 5.2%, whereas goods and service imports advanced 5.0%.

The investment rate for 2017 was 15.6% of GDP, below the reported figure in the previous year (16.1%). The savings rate was 14.8% in 2017 (compared to 13.9% in the previous year).

The National Civil Construction Index (SINAPI), calculated by IBGE, which covers quantity effect and price effect, presented a monthly variation of 0.18% in December 2017. The indicator accumulated for the year was 3.82%, below 6.64% registered in 2016, and the result obtained in 2017 was the lowest accumulated annual result since 2013, when it reached 0.52%, with a decisive influence on the impact of the payroll tax reduction initiated in that year.

The average cost per square meter in construction in December was R $ 1,064.76, of which R $ 544.97 related to materials and R $ 521.71 to labor.

The share related to the cost of labor was decisive for this year’s result, since it grew 5.17%, the lowest rate for the group since 2013, when the payroll tax reduction was discharged. Since then, the lowest change had occurred in 2015 (7.55%), while it reached 10.89% last year.

VARIATION OF COST PER M2 IN 2013/1017 – CIVIL CONSTRUCTION Considering the reduction of the tax burden in the payment sheet

2

6

4

1

0

3

7

5

2014 201620152013 2017

0,52%

3,82%


2017 came to an end with an average unemployment rate of 9.1%, but one must take into account that, for the first time in France since 2009, the unemployment rate was below 9% in the last quarter of 2017 - 8.6%. Also in 2017, the national minimum wage was revalued by 0.93% against 0.6% on January 1, 2016, which corresponds to a gross salary of € 1,480.27 per month for 35 hours per week.

In terms of the projections available for 2018, the OFCE - the Observatoire Français des Conjonctures Économiques – forecasts that the French economy should stabilize its growth by 2.0% in 2018 and could reach a growth of 2.1% in 2019.

D ) F R A N C E

According to the INSEE - Institut National de la Statistique et des Etudes Économiques, the French economy grew by 2.0% in 2017, higher than the 1.1% increase reported in 2016, which demonstrates a clear acceleration of activity, observable in the elements below:

RÉSUMÉ DE LA PRÉVISION FRANCE Variations par rapport à la période précédente, en %

2017 2018 2019 2017 2018 2019T1 T2 T3 T4 T1 T2 T3 T4 T1 T2 T3 T4

PIB 0,7 0,6 0,5 0,7 0,3 0,4 0,5 0,7 0,5 0,5 0,5 0,6 2,0 2,0 2,1PIB PAR HABITANT 0,6 0,5 0,4 0,6 0,2 0,3 0,4 0,6 0,4 0,4 0,4 0,5 1,5 1,6 1,7CONSOMMATION DES MÉNAGES 0,2 0,3 0,5 0,2 0,2 0,4 0,5 0,8 0,5 0,5 0,5 0,6 1,3 1,5 2,2CONSOMMATION PUBLIQUE 0,3 0,5 0,6 0,3 0,3 0,2 0,1 0,1 0,1 0,1 0,1 0,1 1,6 1,2 0,6FBCF TOTALE DONT:

SOCIÉTÉS NON FINANCIÉRESLOGEMENTPUBLIQUE

1,7 0,9 0,9 1,1 0,7 0,9 0,9 0,9 0,7 0,7 0,7 0,8 3,8 3,6 3,12,4 1,0 1,1 1,5 0,8 1,1 0,9 1,1 0,7 0,7 0,8 0,9 4,4 4,3 3,51,8 1,4 0,9 0,6 0,5 0,4 0,5 0,4 0,2 0,3 0,2 0,2 5,3 2,5 1,3-0,6 0,1 -0,2 0,5 0,8 0,9 1,0 1,0 1,0 1,0 1,0 1,0 -1,0 2,6 4,0

EXPORTATIONS DE BIENS ET SERVICES -0,7 2,2 1,0 2,5 0,6 0,4 0,8 1,0 1,0 0,8 0,9 1,0 3,3 4,6 3,6IMPORTATIONS DE BIENS ET SERVICES 1,2 0,0 2,2 0,3 0,8 0,9 0,8 1,1 1,0 0,7 0,8 0,8 4,1 3,5 3,6CONTRIBUTIONS:

DEMANDE INTÉRIEURE HORS STOCKSVARIATIONS DE STOCKSCOMMERCE EXTÉRIEUR

0,6 0,5 0,6 0,5 0,3 0,5 0,5 0,7 0,5 0,5 0,5 0,6 1,9 2,0 2,10,7 -0,5 0,3 -0,4 0,1 0,1 0,0 0,0 0,0 0,0 0,0 0,0 0,4 -0,1 0,0-0,6 0,7 -0,4 0,7 -0,1 -0,2 0,0 0,0 0,0 0,0 0,0 0,0 -0,3 0,2 0,0

PRIX À LA CONSOMMATION (IPCH)* 1,5 1,0 0,9 1,2 1,6 1,2 1,5 1,4 1,3 1,4 1,7 1,8 1,2 1,4 1,6TAUX DE CHÔMAGE 9,3 9,1 9,3 8,6 8,6 8,6 8,5 8,4 8,3 8,2 8,1 7,9 9,1 8,5 8,1SOLDE PUBLIC, EM % DU PIB -2,6 -2,4 -2,5DETTE PUBLIC, EM % DU PIB 97,0 96,6 95,4IMPULSION BUDGÉTAIRE, EM POINT DE PIB 0,2 0,0 -0,2PIB DE LA ZONE EURO 0,6 0,7 0,7 0,6 0,5 0,5 0,5 0,5 0,5 0,5 0,4 0,5 2,5 2,2 1,8

* Pour les trimestres, glissement annuel, Pour les années, moyenne annuelle. SOURCES: INSEE, prévision OFCE avril 2018.


The construction sector

Throughout 2017, the French construction industry was quite dynamic, with a composite growth of 4.8%, particularly in investments in urban rehabilitations.

For the FFB – Fédération Française du Bâtiment – in 2018, the construction sector will witness an increase of 2.4%, growing twice as much as in 2017. Despite the decrease in the number of awarded contracts by around 10,000 units, attributable to the provisions laid down by the Finance Law, housing construction will continue to increase, albeit more modestly by +3.4%. This increase will be almost exclusively for the construction of new houses, which will increase by 5.2% in volume. Its counterpart will come from the maintenance/renovation with a weak growth, closely linked to the revision of the CIT (Crédit Impôts Transition Energétique) and measures affecting the social housing sector (VAT rate increase, reduction of lease values). At constant prices, the level of activity in the construction sector foreseen for 2018 will be substantially the same as in 2013, still far from the levels achieved in the period 2006 to 2008, but equivalent to the long-term average calculated on the basis of the period between 1995 and 2017.

Regarding employment, more than 30000 positions (permanent and temporary) shall be created in this industry during 2018, an increase of 2.6%. the different measures of the Finance Law regarding the real estate industry will have little or more weight on this industry’s activity for 2018.

• Extension of the PTZ (0% interest rate loans);

• Loi Pinel – Investment mechanism for leases, in force until 2021.

3 . G LO B A L A S S E S S M E N T O F T H E A C T I V I T Y

2017 was marked by a strong recovery of the Group’s turnover, driven by the effect of the global economic recovery experienced in 2017 and in particular in the construction sector, as well as a progressive increase in turnover in Portugal, Algeria and Angola.

The key factors for the operating and economic performance seen in 2017 were:

• Orders received in 2016 and 2017;

• diversification of the customer base and type of work;

• reinforcement of competences, not only with the creation of the new geotechnical department, but also through the acquisition of skills that allow the company to become competitive in other types of works;

• economies of scale due to the increased turnover, allowing the company to gain prominence among suppliers and sub-contractors;

• rigor during the operation and execution of works;

• high reduction of the dependence on public works and gradual emphasis in private works;


• maintenance of a good organizational climate and careful management of the organization’s human resources, in order to maintain and captivate performance and trust, which are increasingly essential to organizations;

• simplification of the existing structure, with greater proximity and a faster decision-making process;

• focus on the company’s core business, doing what the group does best, reducing dispersion and accentuating the focus on the essential;

• maintenance of the investment rhythm of repositioning and reinforcing equipment, essential for the execution of the existing works.

The results obtained in 2017 are not simply a consequence of the management and execution occurred in 2017: this is a continuous process, which involves interpreting the market signals and adaptation to reality, agility in execution and rapid response capacity, increasingly important factors.

In light of the above, the results obtained are remarkable:

• an increase in turnover of more than 60% for a total of over EUR 206 millions;

• EBITDA of EUR 26.4 million, with EBITDA = EBITDA = Earnings + Depreciation and Provisions + Impairment of Inventories + Impairment of receivables + Impairment of non-Depreciable Investments + Impairment of depreciable assets.

• sharp reduction of net bank debt by 23.8%;

• investments exceeding EUR 13.5 million;

• an increase in the average number of employees, from 1849 in 2016 to 2019 in 2017;

• order book for 2018 2.44x higher than the turnover for 2017.

After this global analysis, we will know carry out an analysis by region and business segment.

In terms of business segment, the ACA Group may be characterized by 3 major business areas and respective companies that enter the consolidation perimeter:

• Engineering & Construction - including Infrastructures (road, railway, sports facilities, urban renewal, landscaping, ports and maritime requalification), civil construction (residential, non-residential, industrial, rehabilitation and remodeling) and specialized activities (geotechnics and special foundations, electrical installations and air conditioning, laboratory, research and development). Companies: ACA SA, IELAC Angolaca, Consmar, ACA France, ACA Brasil, Global Stadium, Ângulo Recto, ACA BUD, ACE Gabriel Ferreira, ACE Gabriel Couto;

• Environment and Renewables - encompasses the areas of waste management, water and renewable energy management and treatment. Companies: RRI, Ambiágua and Ambiáfrica, ACA Wind;

• Other business areas/activities - encompassing companies ACA SGPS SA, G Park, AgroAngola, Álea Seguros SA, Vivangola, VivaSuper, ASGEST, NortePolis and Wicon.


Considering this segmentation of businesses and the associated companies, it is possible to decompose the results for 2017 as follows, in comparison to 2016:

TURNOVER BY BUSINESS SEGMENT

MARKET 2017 % 2016 % VARIATION

Environment and renewables 29 957 116 14,50% 20 370 725 16,1% 47%

Engineering and construction 172 921 583 83,68% 96 683 935 76,4% 79%

Others 3 767 770 1,82% 9 548 577 7,5% -61%

206 646 469 100,0% 126 603 237 100,0%

EBITDA BY BUSINESS SEGMENT


Environment and renewables 2 555 617 9,7% 2 334 301 14,2% 9%


Others 684 647 2,6% -247 658 -1,5% -376%

26 379 492 100,0% 16 493 464 100,0%

OPERATING INCOME BY BUSINESS SEGMENT


Environment and renewables 1 403 570 9,8% 260 007 2,5% 440%


Others -275 387 -1,9% -719 013 -7,0% -62%

14 291 270 100,0% 10 228 987 100,0%

EBITDA = Earnings + Depreciation and Provisions + Impairment of Inventories + Impairment of receivables + Impairment of non-Depreciable Investments + Impairment of depreciable assets.


We may also carry out a similar analysis by market, also considering 2016 as the basis for comparison:

TURNOVER BY GEOGRAPHICAL REGION


Angola 93 250 842 45,1% 41 564 711 32,8% 124%

Brazil 15 500 577 7,5% 24 021 116 19,0% -35%

France 9 614 389 4,7% 11 202 721 8,8% -14%

Poland 496 027 0,2% 975 571 0,8% -49%

Portugal 87 784 635 42,5% 48 839 118 38,6% 80%

206 646 469 100,0% 126 603 237 100,0%

EBITDA BY GEOGRAPHICAL MARKET


Angola 24 027 015 91,1% 13 677 588 82,9% 76%

Brazil -808 893 -3,1% -59 781 -0,4% 1253%

France 105 787 0,4% 493 838 3,0% -79%

Poland -70 481 -0,3% -143 823 -0,9% -51%

Portugal 3 126 064 11,9% 2 525 641 15,3% 24%

26 379 492 100,0% 16 493 464 100,0%

OPERATING INCOME BY GEOGRAPHICAL MARKET


Angola 14 650 372 102,5% 10 210 415 99,8% 43%

Brasil -1 221 792 -8,5% -330 542 -3,2% 270%

França 73 782 0,5% 180 095 1,8% -59%

Polónia -70 481 -0,5% -143 823 -1,4% -51%

Portugal 859 389 6,0% 312 842 3,1% 175%

14 291 270 100,0% 10 228 987 100,0%

4 . R E L E VA N T FA C T S A F T E R T H E E N D O F T H E Y E A R

There were no material events after the end of the year that deserve specific mention.


5 . O U T LO O K F O R 2 0 1 8

For 2018, we anticipate the continuation of an increase in the turnover and profitability of the group, ebing quite confident, due to the following structuring factors:

• the continuous and constant process of controlling the Group’s fixed cost structure;

• a balanced works portfolio, including high visibility works and which will inevitably have a different execution rhythm in 2018;

• prudent management principles, which materialized in a reduced leveraging of the Group’s balance, within a continuous trajectory of reducing the Group’s net debt.

As for subsidiaries and for each of the geographies, we anticipate a positive 2018 , a year of consolidation and growth, and potentially with the implementation of the Group in a new geography, given the ongoing commercial efforts:

• for Portugal, there is a positive sentiment resulting from the commercial efforts that have been carried out, with visible results;

• in France, with a new market and commercial dynamic, and with a business portfolio that is already unprecedented for this market;

• in Algeria and Poland, markets where the company has been gaining credit and recognition, both from developers and from final customers;

• in Angola, the Group has been taking on works with guaranteed funding via international financing lines;

• in new markets in the African continent that offer a comfortable risk-return rate.

6 . OT H E R L E G A L I N F O R M AT I O N

No authorizations or contracts were awarded to Directors or Managers pursuant to Article 418 of the LSC, in any of the companies belonging to the ACA Group.

None of the companies that make up the ACA Group has outstanding debts, neither to the Social Security nor to the respective Tax Authorities of the territories where they operate.

None of the companies belonging to the ACA Group have own shares/quotas.

At 31 December 2017, the subsidiary Alberto Couto Alves SA had two branches:

• Alberto Couto Alves SA – Angola branch – no activity;

• Alberto Couto Alves SA – Argélia branch – with activity.


7 . P R O P O S A L F O R T H E D I S T R I B U T I O N O F R E S U LT S

Although this topic is not to be discussed in terms of consolidated turnover, one should refer that the earnings generated individually by each entity that make up the consolidation perimeter in 2016 have been applied to create and/or reinforce Legal Reserves (when applicable) and the transfer of the remaining portion to the Retained Earnings or Other Reserves heading, with the intention of reinforcing equity in the entities, in detriment of the distribution of dividends, a policy that has been consistently followed up to date.

One should also mention that minority interests underlined in Net Earnings and Equity are to a large extent directly or indirectly controlled by the Group’s ultimate beneficial owner.

8 . CO N TA C T S

For more information, make suggestions or simply pay us a visit, see:

www.grupo-aca.comWe’re looking forward to hear from you!


9 . A C K N O W L E D G M E N T S

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

It is, therefore, unavoidable, even necessary to express our gratitude:

• To our clients, with whom we learn and grow and who motivate us to be better each day;

• To our suppliers, our partners in the creation of value;

• To our employees, who embrace projects and are true associates in the materialisation of dreams;

• To financial institutions, for continuing to believe in this project;

• To our Statutory Auditor, for being, unconditionally, a paradigm of rigor while encouraging our constant improvement;

• To the shareholders, for continuing to believe in the project;

• To all entities that support the Group in its project.

MANY THANKS!TO ALL!

Vila Nova de Famalicão, 27th July 2018

The Board of Directors,

Alberto Augusto Couto Alves

João Paulo Barcelos de Morais Barbot

António José Veloso dos Santos

Bruno Filipe Cardona Serra


F I N A N C I A L I N F O R M AT I O N

C H A P T E R I I


1 . CO N S O L I DAT E D F I N A N C I A L S TAT E M E N T S

SNC SNC SNC ('000 EUR)

EUR '000 2015 % 2016 % D 16/15 2017 % ∆ 17/16

Sales and services provided 155 251,0 99,7% 126 603,2 99,4% -18,5% 206 646,5 99,5% 63,2%Operating Subsides 30,3 0,0% 25,6 0,0% -15,6% 48,1 0,0% 87,9%Gains/losses allocated of subsidiaries, associated companies and joint ventures (527,2) -0,3% 151,7 0,1% -128,8% (521,3) -0,3% -443,7%

Works for own entity 105,9 0,1% 106,1 0,1% n.a. 567,6 0,3% 434,7%VARIATION IN PRODUCTION STOCKS 868,8 0,6% 461,5 0,4% -46,9% 1 025,7 0,5% 122,3%TOTAL OPERATING GAINS 155 728,7 100,0% 127 348,2 100,0% -18,2% 207 766,5 100,0% 63,1%

Cost of sold goods, consumed materials and subcontracts (38 037,3) -24,4% (29 962,2) -23,5% -21,2% (66 603,5) -32,1% 122,3%

External Supplies and services (58 499,4) -37,6% (56 248,6) -44,2% -3,8% (74 273,0) -35,7% 32,0%Staff expenses (36 301,4) -23,3% (28 075,1) -22,0% -22,7% (39 068,6) -18,8% 39,2%Fair value increases/reductions (118,5) -0,1% 21,2 0,0% -117,9% 0,0 0,0% -100,0%Other income and gains 18 530,4 11,9% 17 428,5 13,7% -5,9% 9 613,3 4,6% -44,8%Other expenses and losses (19 782,1) -12,7% (14 018,6) -11,0% -29,1% (11 055,2) -5,3% -21,1%CASH FLOW OPERATIONAL (EBITDA) 21 520,5 13,8% 16 493,5 13,0% -23,4% 26 379,5 12,7% 59,9%

Amortizations and Provisions (9 128,2) -5,9% (5 729,3) -4,5% -37,2% (8 390,3) -4,0% 46,4%Impairment of inventories (losses/reversals) 0,0% 0,0 0,0% s.s. (0,0) 0,0% s.s.Impairment of receivables (losses/reversals) (477,5) -0,3% (574,3) -0,5% 20,3% (3 557,9) -1,7% 519,5%Provisions (increases/decreases) (786,4) -0,5% 41,2 0,0% -105,2% (140,1) -0,1% -439,6%Non-depreciable / amortizable impairment of investments (losses/reversals) 0,0 0,0% (2,1) 0,0% n.a. 0,0 0,0% s.s.

Impairment of depreciable/amortizable (losses/reversals) 0,0 0,0% 0,0 0,0% n.a. 0,0 0,0% s.s.

OPERATING RESULTS 11 128,3 7,1% 10 229,0 8,0% -8,1% 14 291,3 6,9% 39,7%

Financial Results (5 703,7) -3,7% (6 083,9) -4,8% 6,7% (7 800,6) -3,8% 28,2%EARNING BEFORE TAXES 5 424,6 3,5% 4 145,1 3,3% -23,6% 6 490,7 3,1% 56,6%

Income Tax for period (3 272,1) -2,1% (2 826,0) -2,2% -13,6% (3 365,8) -1,6% 19,1%CONSOLIDATED NET RESULT BEFORE MINORITY INTERESTS: 2 152,5 1,4% 1 319,1 1,0% -38,7% 3 124,9 1,5% 136,9%

Net result tributable to minority interests (1 300,8) -0,8% (1 146,3) -0,9% -11,9% (2 038,5) -1,0% 77,8%NET RESULT FOR PERIOD 851,7 0,5% 172,8 0,1% -79,7% 1 086,4 0,5% 528,7%


EVOLUTION OF PARTIAL YIELDS OF 2017 EBITDA VERSUS 2016 EBITDA

‘000

EUR

EBITDA 2016 EBITDA 2017CMVMC PSE’S STAFF EXPENSESIMPACT OF TOTAL VARIATION OF OPERATING GAINS

OTHER OPERATING GAINS AND LOSSES

16 493,5

10 415 -17 568 17 496

6 736 -7 040

26 379


SNC SNC SNC ('000 EUR)

EUR '000 2015 % 2016 % D 16/15 2017 % ∆ 17/16

ASSETSTangible fixed assets 71 173,1 13,1% 56 741,9 12,1% -20% 58 455,6 10,5% 3,0%Goodwill 10 390,9 1,9% 9 351,8 2,0% -10% 8 312,7 1,5% -11,1%Intangible assets 55,2 0,0% 47,7 0,0% -14% 0,7 0,0% -98,4%Investments -equity method 26 311,9 4,8% 21 110,8 4,5% -20% 21 278,2 3,8% 0,8%Investments -other methods 130,0 0,0% 0,0 0,0% -100% 0,0 0,0% s.s.Receivables 1 762,3 0,3% 7 720,4 1,6% 338% 5 449,4 1,0% -29,4%Other finantial assets 11 175,8 2,1% 11 191,4 2,4% 0% 10 285,4 1,9% -8,1%Deferred tax assets 24,4 0,0% 188,2 0,0% 672% 107,8 0,0% -42,7%Current Assets 121 023,7 22,3% 106 352,2 22,6% -12% 103 889,8 18,7% -2,3%Inventories 17 343,4 3,2% 13 635,1 2,9% -21% 15 738,8 2,8% 15,4%Clients 281 856,3 51,8% 244 959,0 52,1% -13% 294 253,8 53,0% 20,1%Advances to suppliers 28 234,2 5,2% 0,0 0,0% -100% 0,0 0,0% s.s.Shareholders/partners 7,7 0,0% 0,0 0,0% -100% 0,0 0,0% s.s.State and other public entities 5 698,7 1,0% 6 298,0 1,3% 11% 8 913,1 1,6% 41,5%Other receivables 71 399,5 13,1% 78 508,3 16,7% 10% 116 581,2 21,0% 48,5%Paid capital, not realized 0,0 0,0% 440,5 0,1% s.s. 0,0 0,0% -100,0%Deferrals 1 880,6 0,3% 1 731,8 0,4% -8% 691,3 0,1% -60,1%Financial assets held for negotiation 656,8 0,1% 0,0 0,0% -100% 0,0 0,0% s.s.Non-current assets held for sale 0,0 0,0% 176,6 0,0% n.a. 176,6 0,0% 0,0%Cash flow and bank deposits 15 736,9 2,9% 17 742,9 3,8% 13% 15 380,7 2,8% -13,3%Current Assets 422 814,1 77,7% 363 492,2 77,4% -14% 451 735,6 81,3% 24,3%TOTAL ASSETS 543 837,8 100,0% 469 844,4 100,0% -14% 555 625,3 100,0% 18,3%EQUITYPaid-in capital 30 050,0 5,5% 30 050,0 6,4% 0% 30 050,0 5,4% 0%Legal Reserves 1 112,0 0,2% 1 298,5 0,3% 17% 1 335,6 0,2% 3%Other reserves 123 014,0 22,6% 140 568,9 29,9% 14% 140 788,0 25,3% 0%Carried forward results 52 101,2 9,6% 58 036,1 12,4% 11% 55 977,8 10,1% -4%Adjustments in financial assets 12 181,7 2,2% 0,0 0,0% -100% 0,0 0,0% s.s.Other variatios in equity (33 967,5) -6,2% (59 899,9) -12,7% 76% (61 609,6) -11,1% 3%Net result of period 851,7 0,2% 172,8 0,0% -80% 1 086,4 0,2% 529%Minority Interests 155 453,7 28,6% 110 933,1 23,6% -29% 111 088,5 20,0% 0%TOTAL EQUITY 340 796,7 62,7% 281 159,4 59,8% -17% 278 716,7 50,2% -1%LIABILITIESProvisions 2 462,8 0,5% 1 999,8 0,4% -19% 2 139,7 0,4% 7%Suppliers 0,0% 0% 0,0 0,0% s.s.Obtained loans 14 531,7 2,7% 22 164,7 4,7% 53% 17 388,4 3,1% -22%Deferred tax liabilities 0,0% 0,0% s.s. 140,0 0,0%Other payables 450,0 0,1% 1 879,3 0,4% 0% 4 017,3 0,7% s.s.Non-current liabilities 17 444,5 3,2% 26 043,8 5,5% 49% 23 685,4 4,3% -9%Suppliers 70 820,4 13,0% 75 686,2 16,1% 7% 105 723,5 19,0% 40%Advances to suppliers 28 460,4 5,2% 31 107,7 6,6% 9% 77 895,3 14,0% 150%State and other public entities 4 184,2 0,8% 4 017,8 0,9% -4% 5 070,0 0,9% 26%Shareholders/partners 0,1 0,0% 0,0 0,0% -100% 0,0 0,0% 0%Funding obtained 45 071,7 8,3% 39 264,0 8,4% -13% 33 074,4 6,0% -16%Other payables 28 328,8 5,2% 10 823,5 2,3% -62% 25 863,1 4,7% 139%Deferrals 8 730,9 1,6% 1 742,0 0,4% -80% 5 597,0 1,0% 221%Current liabilities 185 596,5 34,1% 162 641,2 34,6% -12% 253 223,2 45,6% 56%TOTAL LIABILITIES 203 041,0 37,3% 188 685,0 40,2% -7% 276 908,7 49,8% 47%

TOTAL ASSETS AND LIABILITIES 543 837,8 100,0% 469 844,4 100,0% -14% 555 625,3 100,0% 18%

1,49 1,96 0,93Total interest-bearing debt (MLP and CP) ('000EUR) 59 603,4 61 428,7 3,1% 50 462,8 -17,9%

Working capital ('000 EUR) 228 379,3 182 908,0 -20% 204 269,1 12%

Working capital (% of sales and provisions of servicies)) 147,1% 144,5% -2% 98,8% -32%

Interest 3,19 x 2,38 x -25% 3,07 x 29%

Number of workers at the end of the year 2 466 1 849 -25% 2 019 9%

Sales per emplpyee ('000 EUR) 63,2 68,9 9% 102,9 49%


2 . CO N S O L I DAT E D P R O F I T I N D I CATO R S

LIQUIDITY RATIOS 2015 2016 2017

Global Liquidity Ratio= CURRENT ASSETS / SHORT TERM LIABILITIES 2,38 2,24 1,78

Reduced Liquidity Ratio= (SHORT TERM DEBTORS + CASH & CASH EQUIVALENTS) / SHORT TERM LIABILITIES 1,94 1,72 1,31

Imediate Liquidity Ratio= CASH AND CASH EQUIVALENTS / SHORT TERM LIABILITES 0,09 0,11 0,06

ECONOMIC AND FINANCIAL RATIOS SNC SNC SNC

FINANCIAL GEARING RATIOS 2015 2016 2017

Debt Ratio= NON SHAREHOLDERS’ FUNDS / TOTAL ASSETS 0,15 0,18 0,15

Financial Autonomy= SHAREHOLDERS’ FUNDS / TOTAL ASSETS 62,7% 59,8% 50,2%

Debt to Equity= TOTAL LIABILITIES / EQUITY 0,60 0,67 0,99

Structure Ratio= MLT DEBT / EQUITY 0,04 0,08 0,06

Debt Recover Ratio= TOTAL DEBT / EBITDA 2,77 3,72 1,91

CAPEX Coverage= EBITDA / FINANCIAL CHARGES 3,19 2,38 3,07

Assets Coverage Ratio= PERMANENT CAPITAL / FIXED ASSETS 2,94 2,87 2,89

Grau de cobertura do activo= PERMANENT CAPITAL / TOTAL NET ASSETS 0,65 0,65 0,53

Inventories Coverage Ratio = WORKING CAPITAL / INVENTORIES 13,17 13,41 12,98

DUPONT ANALYSISReturn on equity was established in 0.37% in 2017, an amount higher than the one of 2016, but, nonetheless, remains at a low level both for the construction industry and across other industries, due to the non-distribution of dividends, which causes total equity to grow every year, but also due to a greater tax burden and a lower non-operating profitability when measured by sales.


EXTENDED DUPONT ANALYSIS

(amounts in % or in thousands of euros)2015 2016 2017

IBT / CI

100,0% 100,0% 100,0%

GROSS MARGIN

117 691 141 16397 386

SALES

155 729 207 766127 348

NET ASSETS

543 838 555 625469 844

EQUITY

340 797 278 717281 159

OI / NA

2,0% 2,2% 2,6%

OI / SALES

7,1% 8,0% 6,9%

OI / GM

9,5% 10,5% 10,1%

NET ASSETS / EQUITY

159,6% 167,1% 199,4%

CI / OI

48,7% 40,5% 45,4%

SALES / NET ASSETS

28,6% 27,1% 37,4%

GM / SALES

75,6% 76,5% 67,9%

FINANCIAL LEVERAGE

77,8% 67,7% 90,5%

RDE

0,25% 0,06% 0,39%

NI / IBT

15,7% 4,2% 16,7% NET INCOME

852 173 1 086

INCOME BEFORE TAXES

5 425 4 145 6 491

CURRENT INCOME

5 425 4 145 6 491

OPERATIONAL INCOME

11 128 10 229 14 291

OPERATIONAL INCOME

11 128 10 229 14 291

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

• Operating efficiency, which is measured by profit margin;

• Asset use efficiency, which is measured by total asset turnover;

• Financial leverage, which is measured by the equity multiplier.


FUNCTIONAL BALANCE

Fixed Assets Fixed AssetsFixed Assets

Current Assets

Equity Equity Permanent Capital

Current Liabilities

MLT Debt MLT Debt

Other MLT L

CCN NT = SCN - CCN

NT = 0CCN

SCN

SCN - Structural Cash NeedsCCN - Current Cash needs

SCN

ST Debt

Current AssetsWorking Capital

Cash & Equiv

SCN

2015 2015 2015

121 024 121 024121 024

406 420

340 797 340 797 355 328

-48 708

14 532 14 532

2 913

455 129 NT = -220 824

NT = 0

NT < 0

CCNSCN > 0 CCN > 0 NT < 0

234 305

185 597

406 420 234 305

16 394

2016 2016 2016

106 352 106 352106 352

345 749

281 159 281 159 303 324

-34 331

22 165 22 165

3 879

380 080 NT = -183 108

NT = 0

NT < 0


SCN

196 972

162 641

345 749 196 972

17 743

2017 2017 2017

103 890 103 890103 890

436 355

278 717 278 717 296 105

61 008

17 388 17 388

6 297

375 347 NT = -183 132

NT = 0

NT < 0


SCN

192 215

253 223

436 355 192 215

15 381


3 . F I N A N C I A L A N A LY S I S O F T H E CO N S O L I DAT E D B A L A N C E S H E E T

The year of 2017 closed with a total asset growth of 18.3%, being that:

• Non-current assets reported a slight decrease (-2.3%);

• Current assets reported a growth of 24.3%.

Although fixed tangible assets increased EUR 1.7 million (due to investments surpassing EUR 10 million and the amortizations during the year), the reduction observed in non-current assets happens due to three factors, essentially:

• Reduction of EUR 1 million in goodwill amortization, essentially in ACA SA and Angolaca Construções SA;

• - Reduction of EUR 0.9 million in other financial investments, essentially due to the effect of the transference of company Couto Alves Eng.º e Infraestruturas (a company headquartered in Brazil dedicated to financial investments in the Minha Casa Minha Vida projects) for financial investments to MEP;

• a reduction of EUR 2.27 million in other accounts receivable.

Regarding current assets, in consolidated terms, these reported a growth of 24.3% ou EUR 88.2 million, the result of the combined effect of the following variations:

• Growth of EUR 49.3 million in customers, mainly in the companies ACA SA and Angolaca Construções SA. It should be noted that, in consolidated terms, the average delivery period increased from 706 days of sales in 2016 to 520 days of sales in 2017;

• Growth of EUR 38.1 million in other accounts receivable.

Regarding non-current liabilities, the reduction of EUR 2.4 million was originated by the variation in two items of non-current liabilities:

• Reduction of EUR 4.8 million in obtained funding;

• Increase of EUR 2.1 million in Other Payables, consisting of withholding of guarantees to suppliers, outstanding balances with ResortACA and balance of EUR 0.45 million of the Consmar subsidiary with the remaining minority shareholders.

Regarding current liabilities, which reported a growth of 56% or EUR 90.6 million, we highlight:

• growth of EUR 30.0 million in suppliers, consequence of the normal increase in turnover. It should be noted, however, that, considering the total purchases of goods, materials consumed and service providers and suppliers, the average payment term was reduced by 60 days;

• Increase of EUR 46.8 million in customer advances. This amount must be combined with the amount in customers current account on the asset side, contributing to a combined reduction in the average collection period;

• reduction of EUR 6.2 million in obtained funding;


4 . F I N A N C I A L A N A LY S I S TO T H E CO N S O L I DAT E D F I N A N C I A L S TAT E M E N T S

The 2017 financial year closed with an increase in total operating income of more than 60% to more than EUR 207.7 million, based on a more diversified portfolio of clients and works.

In terms of cost structure, the different items had different variations:

• The item of cost of sold goods and consumed raw materials, which includes components such as concrete, steel or different goods, increased its relative weight with regard to turnover, registering an increase of 8.%. This is due to the general increase observed in the price of commodities in 2017 compared to 2016, and also in the type of works actually carried out;

• The item on external supplies and services reduced its relative weight in total turnover by 8.5%. The largest weight here corresponds to subcontracts, in its most diverse specialties, with emphasis on electrical installations, mechanical installations and air conditioning, hydraulic installations, aluminum window frames, milling and manual labor;

• The item “Staff costs”, despite having increased by 39.2% over the previous year, reduced its relative weight in turnover from 22.0% in 2016 to 18.8% in 2017.

Regarding the items of other income and other expenses, the variations that occurred in relation to the previous year of 2016 are derived from:

• positive exchange rate variations arising from the activity carried out by the branch in Algeria;

• other income and gains arising from the gain recorded by ACA SA in the sale of credits from ParqG.

• growth of EUR 15.0 million in other payables, with the main components referring to investment suppliers, creditors due to accrued expenses and advances on sales. The total of EUR 25.6 million in other payables is mainly concentrated in the subsidiaries ACA SA (EUR 2.5 million), Angolaca (EUR 18.0 million) and Ambiáfrica (EUR 1.6 million);

• growth of EUR 3.86 million in deferrals to a total of EUR 5.6 million, almost all of which refers to income to be recognized in the provision of services.

Regarding short-term and long-term financial debt, total net financial debt decreased by EUR 7.7 million or 23.8%, to 0.96x EBITDA in 2017, which places the ACA Group with a financial leverage only reported before 2015.


All of the factors described above resulted in one:

• an EBITDA growth of EUR 16.5 million in 2016 to EUR 26.4 million in 2017, or 60.3%;

• an increase in operating income from EUR 10.2 million in 2016 to EUR 14.36 million in 2017.

The growth in operating income was lower than the EBITDA, mainly due to:

• the EUR 3.5 million impairment in customers, in particular a private customer in Angola;

• the increase in depreciation for the year by EUR 2.7 million.

As for the other items of the financial statement:

• negative financial results reduced their relative weight in total turnover from 4.8% to 3.8% in 2017, but in absolute terms increased by 28.1%. This adverse evolution is due to the increase in interest rates in the Angolan macro-region and the evolution of the debt curve throughout the year, which, as a result of the collections obtained, registered a significant reduction at the end of 2017, 2018.

All of the aforementioned facts impacted the consolidated net income for the year, before minority interests, which increased by 136.9% yoy to EUR 3.125 million, representing 1.5% of total turnover .

5 . I N V E S T M E N T A N D D I S I N V E S T M E N T

As far as investment and divestment activities are concerned, there are no relevant facts to be highlighted other than the normal ones arising from the evolution of the operational activity in each macro-region, namely:

• an increase in the investment in means of production in Portugal;

• an increase in the investment in means of production in Angola.

Total CAPEX for the year surpassed EUR 10 million.


6 . F I N A N C I N G A N D CO N S O L I DAT E D N E T D E B T

During the year 2017, the main financing activities carried out by the ACA Group consisted in ensuring the necessary liquidity for normal operations, at the most competitive cost, favouring direct financing in each of the markets where the Group operates.

Similarly, the ACA Group has been developing strong long-term relationships with some Financial Institutions, always guided by high rigor and transparency, seeking to create lasting and trusting relationships.

The ACA Group closed 2017 with a reduction of its net financial debt of cash and cash equivalents of EUR 7.7 million, decreasing the net interest-bearing debt / EBITDA ratio from 1.96 to 0.93. It should be noted that this ratio includes public debt securities received as payment for debts with the Angolan State and which are reported under

“Other Financial Assets” in non-current assets, which were already sold in 2018.

It is the ACA Group’s constant objective to conduct a careful and rigorous management of its financial resources, in a conservative approach in terms of risk.


7 . CO N S O L I DAT E D CO M PA N I E S

2017 2016

LIST OF SIGNIFICANT INVESTMENTS IN

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES

Head-quarters/

Country of activity

Equity in invested companies Total %

in voting rights

Method used in

accounting

Head-quarters/

Country of activity

Equity in invested companies Total %

in voting rights

Method used in

accounting% of direct capital

% of indirect capital

% of direct capital

% of indirect capital

SUBS

IDIA

RIES

ACA Portugal 97,10% 97,10% Full Portugal 97,10% 97,10% Full

ANGOLACA Angola 5,20% 52,19% 57,39% Full Angola 5,20% 52,19% 57,39% Full

AMBIÁGUA Portugal 83,16% 83,16% Full Portugal 85,64% 85,64% Full

RRI Portugal 77,40% 77,40% Full Portugal 77,40% 77,40% Full

GLOBAL STADIUM Portugal 10,71% 52,02% 62,73% Full Portugal 15,00% 15,00% Full

IELAC Portugal 15% 82,54% 97,54% Full Portugal 95,00% 4,86% 99,86% Full

Ângulo Recto Portugal 15% 82,54% 97,54% Full

Wicon Portugal 58,52% 58,52% Full

NORTEPÓLIS Portugal 100,00% 100,00% Full Portugal 100,00% 100,00% Full

PARQ G Portugal 75,00% 75,00% Full Portugal 75,00% 75,00% Full

ÁLEA Portugal 80,00% 20,00% Full Portugal 20,00% 20,00% Full

ACA WIND Portugal 20,00% 77,68% 97,68% Full Portugal 89,00% 89,00% Full

ACA BRASIL Brazil 49,00% 49,52% 98,52% Full Brazil 73,58% 25,65% 99,23% Full

ACA FRANCE France 49,52% 49,52% Full France 49,52% 49,52% Full

CONSMAR PT Portugal 49,52% 49,52% Full Portugal 49,52% 49,52% Full

CONSMAR FR France 49,52% 49,52% Full France 49,52% 49,52% Full

ACA BUD Poland 97,10% 97,10% Full Poland 97,10% 97,10% Full

VIVANGOLA Angola Full Angola Full

VIVASUPER Angola Full Angola Full

AS GEST Angola Full Angola Full

AMBIAFRICA Angola 48,79% 48,79% Full Angola Full

AGROANGOLA Angola 48,86% 48,86% Full Angola Full

ACA São Tomé & Príncipe

São Tomé & Príncipe 49,52% 49,52% Full

ACE ACA / FERREIRA Portugal 50,00% 50,00% Propor-

tional Portugal 50,00% 50,00% Propor-tional

ACE ACA / GABRIEL COUTO Portugal 50,00% 50,00% Propor-

tional Portugal 50,00% 50,00% Propor-tional

ASSO

CIAT

ES

GOLFINVEST Portugal 0,00% 0,00% Equity Method Portugal 49,39% 49,39% Equity

Method

MINERSOLO Angola 18,94% 18,94% Equity Method Angola 18,94% 18,94% Equity

Method

GV Brazil 39,73% 39,73% Equity Method Brazil 39,73% 39,73% Equity

Method

VID GARDEN Portugal 50,00% 50,00% Equity Method Portugal 50,00% 50,00% Equity

Method

SOLAMBA Angola 23,91% 23,91% Equity Method

CONCOPA Angola Equity Method

CONCIVA Angola 19,52% 19,52% Equity Method


N O N - F I N A N C I A L R E P O R T

C H A P T E R I I I

Dear Shareholders,

In compliance with Articles 65, 66, 451 and 528 of the Portuguese Companies Code, we submit for your consideration the non-financial report for the year 2017.


1 . E X P O S U R E TO R I S K FA C TO R S

The Board of Alberto Couto Alves SGPS SA presents the following risk factors to which the company, its subsidiaries and branches are exposed and which may potentially affect, to a greater or lesser extent, the respective business evolution, profitability and solvency.

A ) G E N E R I C R I S K S R E L AT E D TO T H E PA R E N T CO M -PA N Y A N D S U B S I D I A R I E S

Alberto Couto Alves SGPS SA and its subsidiaries (hereinafter referred to individually as ACA SGPS SA and in its entirety as “ACA Group”) are engaged in the construction business, having a wide experience of more than 35 years in the construction of communication, specialized structures, buildings and other constructions in the national territory, so that the capacity to fulfill its obligations stems from its ability to perform operationally and profitably in its principal activity. At the same time, ACA SGPS SA carries out its construction activity in other territories through subsidiaries and branches, and indirectly, compliance with the Group’s obligations also depends on the cash flows generated by its subsidiaries. In particular, ACA SGPS SA’s ability to meet those obligations depends on the dividends distributed, interest paid, loans repaid and other cash flows that are delivered by those companies. The ability of these companies, on the one hand, to monetize the invested capital and, on the other, to pay interest and repay loans (in particular those granted by ACA SGPS SA) is naturally conditioned to their ability to generate positive cash-flows, the results obtained, the reserves available, their financial structure, their financial and non-financial assets, and any statutory, fiscal or even foreign exchange restrictions.

Some of the businesses carried out by ACA SGPS SA may need additional investments, which may or may not be executed, depending on the present and future financial background. Likewise, the businesses developed by the subsidiaries of ACA SGPS SA and its branches may require additional investments, which may imply the reinforcement of ACA SGPS SA’s investment. This reinforcement may be effected by means of own capital and / or third party funds. ACA SGPS SA cannot ensure that such funds, if necessary, are obtained, or that they are obtained under the necessary, as any other company that is present in the market and that does not completely dominate all the risk factors. In the case of the need to resort to third-party capital in its domestic market, the current macroeconomic and financial framework is considered to be moderately positive, and a considerable probability of success is expected. As far as its subsidiaries are concerned, they are present in markets with different frameworks:

• France: the French market is experiencing a favorable macroeconomic and financial environment, with the French economy registering economic growth rates higher than in previous years;


• Algeria: the presence of the ACA Group in the Algerian market is carried out through a permanent establishment, without local entities controlling any equity which could, directly or indirectly, condition the company’s management and strategy. In any case, and because it is a stable establishment, the ACA Group is not even authorized to seek local financing, so it is not even an issue; in this market, the most prominent risks are operating, business and exchange rates variation risks;

• Poland: the presence of the ACA Group in the Polish market has the least weight if one considers the sum of all the national and international markets in which the Group operates. In any case, the Polish economy has reported higher levels of economic growth than in previous years;

• Angola: The Angolan economy is undergoing a significant recovery process, associated to a change in its economic fabric, with a great effort towards industrialization and reduction of the dependence on oil and derivatives. The recovery of the price of the barrel of brent in international markets, along with measures already implemented, such as the opening of traditionally protected sectors to competition and private initiative, are very significant and encouraging signs. After two particularly challenging years, 2016 and 2017, the main international financial institutions, such as the IMF, point towards a recovery in economic growth and a gradual recovery of structural imbalances in the Angolan economy;

• Brazil: After a period of political crisis and widespread confidence, transversal to all sectors of activity, which probably peaked between the third quarter of 2016 and the first quarter of 2017, we have witnessed a slow recovery in economic growth, with a disconnection between business and investment decisions and the political context, with investment and consumer decisions being resumed and no longer postponed, either by companies or individuals, also supported by the consecutive decrease of the SELIC interest rate of the Central Bank of Brazil, at historical lows.

In this context, the financing of possible future investments of ACA SGPS SA and/or its subsidiaries, or the eventual possibility to ensure, for these companies, the refinancing of operations that originate in their current activity, cannot be taken for granted. ACA SGPS SA considers the Group holds all the assets necessary for a sustainable operation of its current activity, however, in case of not accessing the necessary funds, the business development objectives or operational plans may have to be changed or deferred.

Some of ACA SGPS SA’s subsidiaries are exposed to exchange rate risks, in their operations

Some of SGPS SA’s subsidiaries operate in international markets. These subsidiaries are subject to the risk of exchange rate variation, both in terms of commercial transactions carried out in currencies other than the euro and in the amount of capital invested in foreign subsidiaries outside the Euro zone. When considered appropriate, the company uses financial instruments that facilitate a mitigation of the impacts of exchange rate variations on the income statements, cash flows and the value of investments.


The activity of ACA SGPS SA and its subsidiaries is influenced by the risks associated with the evolution of the interest rate.

Most of the financing mechanisms of ACA SGPS SA and its subsidiaries are indexed to variable interest rates, exposing the cost of debt to a interest rate risk. The impact of this volatility on the results or equity of the Group is mitigated by the following factors: (a) possibility of using derivative instruments to hedge interest rate risk, as referred to below; (b) a possible correlation between the level of market interest rates and economic growth, causing therefore a positive effect on other results of the ACA Group (namely operational), thus partially offsetting the increased financial costs (“natural hedge”); and (c) the existence of cash or cash equivalents, which also bear interest at variable rates. The ACA Group uses derivative instruments or similar transactions for the purpose of hedging interest rate risks considered significant.

The volatility in financial markets may impact the liquidity position of ACA SGPS SA and its subsidiaries

Over the past three years, the ACA Group has achieved a significant reduction in its leverage ratio on its balance sheet. However, the high volatility of the financial markets makes its evolution unpredictable, which prevents the ACA Group from forecasting future credit conditions and the Group’s ability to refinance its debt or to refinance under the conditions considered the most favorable ones, which may produce material impacts in liquidity and operating conditions.

The activity developed by ACA SGPS SA’s subsidiaries is subjected to competition

The activity developed by ACA SGPS SA and its subsidiaries is subject to competition in all markets where the Group operates. Such competition may have a negative impact on margins and results, as the scarcity of works to be carried out or a more aggressive pricing policy practiced by those competitors could result in a loss of customers or the need for downward revision of the prices charged, with the consequent reduction of the margins obtained.

The activity developed by ACA SGPS SA and its subsidiaries is subject to the legal, fiscal and legal framework of the markets in which it operates

ACA SGPS SA, and its subsidiaries, are subject to the national and local laws and regulations for each market in which the Group operates and should ensure, among others: tax obligations, customer safety and protection, workers’ rights, protection of the environment, land-use planning and the maintenance of an open and competitive market. In this way, they are naturally exposed to possible regulatory changes that may modify how they conduct their business, impact their ability to generate funds and results and, consequently, hinder or prevent the achievement of strategic objectives.


B ) R I S K S R E L AT E D TO S P E C I F I C ACT I V I T I E S CA R R I E D O U T BY ACA S G P S S A , I T S B R A N C H E S A N D S U B S I D I A R I E S

The construction activity carried out by the subsidiaries of ACA SGPS SA is influenced by the macroeconomic conjunctures and profiles of the markets where they operate.

The activity of the subsidiaries of ACA SGPS SA is legally dependent on the renewal of its building permit and this also applies to subsidiaries in international markets, and which stems from specific regulation of the construction sector.

The subsidiaries of ACA SGPS SA carry out their activity mainly in construction industry. To this extent, the ACA Group’s business may be adversely affected by periods of economic recession, in particular by the deterioration of public and private investment, which in turn is influenced, among other things, by the existing levels of trust and funding available.

Taking into account the specific construction activity developed by ACA SGPS SA and its subsidiaries, all are subject to operational risks arising from adverse price variations that cannot be reflected in the final sale price to be paid by the client, operational risks arising from capacity, speed and lack of budgeting errors in present and future works, and the ability to control and/or cause to reproduce, in the sale price, adverse variations in the sale price of some of its main productive inputs, such as fuel, concrete, bitumen, bituminous, parts and equipment to be assembled in the work and parts and equipment for executing the work.

ACA SGPS SA is 99.99% controlled by Mr. Alberto Augusto Couto Alves.

C ) R I S K S O F CO N TAG I O N B E T W E E N ACA S G P S S A , I T S B R A N C H E S A N D S U B S I D I A R I E S

Whereas ACA SGPS SA, its branches and subsidiaries:

• are companies incorporated and duly registered under the laws of the Sovereign State where they operate;

• are fully capable of carrying out their activities, which are executed in compliance with the laws in force;

• are under a relationship of control or group, pursuant to and for the purposes of the provisions of (1) of art. 486 of the Portuguese Companies Code;

• due to this relationship, they are interested in the businesses carried out by each one of them, especially in the resultant profit;

• establish, whenever possible, contractual and economic partnerships that facilitate the development of joint ventures;

• Engage in negotiations to find solutions that avoid cash constraints, namely, but not limited to, those arising from the exchange risk/devaluation, necessary for the payment of the provision of goods and services and other commercial transactions that they establish with Customers;


• Are mutually interested in streamlining the management of the business group that they integrate, namely through intra-group funding;

• promote the development and sustainable and competitive growth of the group of which they are part, thus opting to be financed under more advantageous conditions than those currently practiced in the national and international market.

There are potential risks of contagion between ACA SGPS SA, its branches and subsidiaries, of which the Board of Directors of ACA SGPS SA, its branches and its subsidiaries are fully aware and which are always taken into account during the decision making process, always considering the individual independence, profitability and solvency of each company, and collective while belonging to an Economic Group.

2 . H U M A N R E S O U R C E S

O R G A N I Z AT I O N A L C L I M AT E

One of the key policies of the ACA Group in terms of Human Resources is the continuous assessment and improvement of the collective feeling and attitude of workers, in other words, of the so-called organizational behavior.

With the intention of promoting a positive organizational climate, adequate to the development of the business and the professional satisfaction of the workers as people who need to feel accomplished, the ACA Group annually conducts the Study of Organisational Climate.

This study covers all employees of the Group, i.e. includes both employees working for companies in Portugal and abroad.

The dimensions included cover a wide range of issues that, in our opinion, have a direct impact on the organizational climate, i.e. the well-being of workers, their motivation and optimism towards the future, namely:

• Satisfaction in the workplace

• Commitment

• Leadership

• Work relations

• Corporate responsibility

• Direction and strategy

• Training and Development

• Working conditions

• Communication

• Functional mobility

• Geographical mobility

• Rewards and Benefits


The results obtained each year create a longitudinal study, materialized in a barometer of the organizational climate of sorts. Therefore, it is possible to monitor the evolution of the organizational climate throughout the years.

The analysis of the results identifies areas where an intervention is needed, which leads to the definition and implementation of action plans validated by the Board of Directors.

A summary of the results is communicated to the workers, so that they know the final output to which they have contributed their opinions and suggestions.

The barometer of organizational climate of the last three years allows us to conclude that the levels of job satisfaction are quite positive. We summarize the overall results.

For a better interpretation, we present the caption of the scale used.

SCALE

1 - Strongly disagree; 2 - Disagree; 3 - Slightly disagree

4 - Slightly agree; 5 - Agree; 6 - Strongly agree

2015

COMMITMENT

WORK RELATIONSHIPS

WORK CONDITIONS

MANAGEMENT AND STRATEGY

REWARDS AND BENEFITS

COMMUNICATION

SOCIAL RESPONSABILITY

TRAINING AND DEVELOPMENT

JOB SATISFACTION

LEADERSHIP

MOBILITY

Average of positive answers: 83,55%

57.1

77.8

80

87.5

85.7

87.5

85.7

88.9

88.9

90

90

2016

WORK RELATIONSHIPS

COMMITMENT


JOB SATISFACTION


LEADERSHIP

WORK CONDITIONS


COMMUNICATION

GEOGRAPHICAL MOBILITY


FUNCTIONAL MOBILITY


8624

8228

8921

8515

919

8713

919

8911

928

928

964

964


2017

WORK RELATIONSHIPS

COMMITMENT

LEADERSHIP

JOB SATISFACTION

COMMUNICATION

WORK CONDITIONS





FUNCTIONAL MOBILITY

GEOGRAPHICAL MOBILITY


6436

5842

6634

7228

8218

8020

8218

8119

8614

8812

919

919

The barometer for the organizational climate reveals there was a positive trend between 2015 and 2016, but in 2017 there was a decrease in results. Some organizational development measures were taken, namely the reinforcement of investment in vocational training and updating some salaries. Regarding this last measure, we sought to achieve the best balance between internal equity and external equity to retain talent and financial sustainability of companies.

E Q UA L O P P O RT U N I T I E S A N D N O N - D I S C R I M I N AT I O N

Another policy with great practical relevance in the management of Human Resources of the ACA Group is the assurance of equal opportunities and non-discrimination.

This policy is based on two ethical principles contained in the Code of Ethics of the ACA Group, namely:

Equality – respecting the right to difference and avoiding all practices of discrimination against individual rights, be they racial, sexual, religious, social class, nationality, age or physical condition, repudiating threats or harassment of any kind.

Justice at work – all employees have the right to see their value recognized, based on their personal and professional merit and their potential for progression, ensured by the proper conduct of the recruitment and selection, hiring, and performance evaluation processes shared with their leaders.

The Code of Ethics explicitly states, regarding the relationships between managers and employees and others alike, between peers: “The expected behavior of each person in contact with his peers or other individuals of the Organization must be based on good manners and respect towards others, repudiating acts of discrimination, any kind of harassment or use of personal favors, denouncing the existence of situations that are expressly excluded herein, which come to their knowledge.

Compliance with these principles is monitored by all employees of the Group, and everyone has not only the right but also the obligation to report any act that goes against these internal rules, which, moreover, correspond to legal imperatives.


In order to enforce the Code of Ethics, the Disciplinary Regulation of the Code of Ethics was drafted and published, which provides for a set of disciplinary sanctions to be applied in the event of non-compliance with the rights for equal opportunities and non-discrimination.

The ACA Group creates conditions for internal supervision and prevention of any kind of discrimination, both in Portugal and in its international operations. There is, in fact, a particular focus on some forms of discrimination that the Group repudiates and prevents, namely:

• Discrimination based on disability;

• Discrimination based on race and ethnicity;

• Discrimination based on age;

• Discrimination based on religious belief;

• Discrimination based on gender, sexual orientation and gender identity.

Apart from its ethical sense, conscience and respect for the dignity of the human person, the ACA Group has a deep knowledge of the so-called Anti-Discrimination Law. We refer essentially to Articles 23 to 32 of the Portuguese Labor Code (Law No. 7/2009 of 12th February) on equality and non-discrimination and prohibition of harassment, in conjunction with Article 13 of the Constitution of the Portuguese Republic and with the law of the European Union. In relation to the latter, we highlight:

• Directive 78/2000/EC of 27th November on the establishment of a general framework for equal treatment in employment and occupation;

• Directive 43/2000/EC of 29th June on the implementation of the principle of equal treatment of persons irrespective of racial or ethnic origin;

• Directive 54/2006/EC of 5th July 2006 on the application of the principle of equal opportunities and equal treatment of men and women in matters of employment and occupation;

• Jurisprudence of the European Court of Human Rights;

• Jurisprudence of the Court of Justice (European Union).

To illustrate our policy of ensuring equal opportunities and non-discrimination, we would like to point out that the ACA Group employs several workers with physical disabilities.

Finally, no discriminatory behavior was identified by managers or workers, which is a sign of respect for people within the ACA Group.

R E S P E CT F O R H U M A N R I G H T S

Once again guided by its ethical sense and respect for the dignity of the human person, the Group guarantees respect for human rights, complying with the Universal Declaration of Human Rights, as well as the recommendations of the International Labor Organization, both in Portugal and in all its international operations.

However, the ACA Group believes that corporate social responsibility must go far beyond merely observing human rights are respected in an exclusively legal sense. We should, whenever possible, create opportunities for workers and their families to improve their living conditions, especially in the African countries where we operate.


We have carry out many social responsibility initiatives, namely in Angola, such as the reconstruction of primary schools; loans to workers to construct or rebuild their homes, delivery of Christmas baskets to workers so they can offer their families a more comfortable Christmas dinner.

Up to the present date, the company has not identified any behavior by employees or managers who constituted disrespect for human rights.

P R E V E N T I O N O F CO R R U PT I O N

We will return to the Code of Ethics of the ACA Group to highlight the ethical principles that are directly related to the prevention of corruption: integrity and confidentiality.

Integrity – honest behavior equals honesty, diligence, and responsibility, which provides the basis for trusting relationships.

Confidentiality – respect for the value and ownership of the information accessed, while maintaining confidentiality regarding professional matters and respecting the image of the Organization. The disclosure of information of the Organization should only occur through circumstances related to legal obligations or to the performance of professional duties.

Regarding prevention of corruption, the Code of Ethics expressly states, the following general obligations within the framework of relations between the Organization and managers and employees in general and others treated as such:

1. The expected posture from all members of the Organization, regardless of the relationship established with the Group, is one of loyalty and rejection of potential conflicts of interest that, in any case, may offer them any specific advantages, to the detriment of the Group’s interests;

2. Specific advantages shall be those which arise, inter alia, from:

a. Use of the functional framework to obtain material compensation, regarding favoring third parties;

b. Using inside information (not known to the general public, but relevant to influence judgments and decisions) to obtain personal benefits of any kind;

c. Taking part in private businesses with third parties, related to the Organization, obtaining or with the potential of obtaining special advantages, related to the position/ function occupied within the Group;

d. Conduct recruitment and selection processes in a manner that deviates from the recommendation made in the ACA Group’s Corporate HR Policy, in order to improve the positioning of related third parties, whether family, friends, or others suggested by any member of the Organization or similar;

3. There is also the obligation, applied to all, to protect the Organization against any damage to the Group’s assets, tangible or not, as well as to its image, and situations must be reported to the Ombudsman established for this purpose and supervised by the Chairman of the Board of Directors.

As we have seen previously, in this case the Disciplinary Regulation of the Code of Ethics also provides for disciplinary measures appropriate to violations committed in the field of corruption, the most serious of which is lawful dismissal with no right to compensation.


It is of capital importance to point out that to date no conduct has been identified that indicates corruption. The Group highlights, with great satisfaction, the ethical behavior shown by the workers, which is an expression of our own organizational culture.

3 . Q UA L I T Y, E N V I R O N M E N T, S A F E T Y

Q UA L I T Y

Increasingly more client satisfaction, continuous improvement of production processes and products and inevitably obtaining the best possible results are some of the current challenges that companies face. In order to respond to these needs, organizations have developed internal management tools that can add value, improve process performance, efficiently control operational costs and enhance the resources available to them.

An integrated Management System must support the entire strategy of the organization, as well as the decision making processes and the continuous improvement of production and commercial process, thus driving the organization to achieve the outlined objectives, guarantee stability and reliability regarding the techniques, equipment and resources used, support the necessary integration and alignment of activities with the same processes and procedures and thus ensure the production and marketing of products and services of excellence.

The ACA Group, guided by its sustainable growth, has invested in the future, in technological innovation and in the development of the best solutions for its business. At the forefront, the Group’s responsibilities towards quality, the environment and the safety of everyone around us are clear.

The Group has implemented a solid and efficient Integrated Management System, which ensures consistency with its policies and values, based on an awareness of environmental responsibility, fostering optimization of resources, rationalization of consumption and reduction of impacts, as well as the continuous promotion in the minimization of risks and in the development of methods and procedures that contribute towards the safety and health of its employees.

Its Integrated Management System is certified according to standards ISO 9001, ISO 14001 and OHSAS 18001. The maintenance and evolution are based on a continuous improvement methodology, according to which the action of “Planning”, “Executing”,

“Verifying” and “Acting” are inherent to each of the processes.

As to assess and promote the efficiency of its integrated management system, the ACA Group annually programmes an audit programme, including audits promoted by the certifying body and internal audits conducted by our internal auditors.

During the course of 2017, the ACA Group was submitted to a further evaluation by SGS, which resulted in zero requests for corrective actions, which shows that the system implemented and developed complies with the requirements of the reference standards.


Since organizations depend on their clients and that the focus on the client, rather than a quality principle, should be understood as a way of operating, the ACA Group systematically evaluates the satisfaction of its clients.

The 92% index obtained in 2017 allows us to affirm that customers who choose to work with the ACA Group are satisfied customers.

E N V I R O N M E N T

The ACA Group promotes and integrates environmental management in its global management. This aim is the result of a rational and efficient use of natural and energy resources, of the selective separation of waste produced in order to maximize recovery and to give priority to their incorporation in the production process, through the prevention and minimization of negative environmental impacts; compliance with applicable environmental laws and regulations, strengthening the awareness of our employees and the influence on the suppliers of products and services to acquire environmentally responsible behaviours and practices.

The management of the environmental aspects of the ACA Group has the constant objective of minimizing the potential negative impacts arising from its activities.

The Group is committed towards the environment, as to attain a sustainable and environmentally sustainable economic growth, protecting and preserving the environment, focusing on four great guidelines: optimization of consumed material, reduction of energy and water consumption, protection of biodiversity and minimization of produced emissions,

In addition to complying with current legal and operational requirements, measures are implemented to minimize the environmental risk of these activities, in order to optimize environmental performance.

As such, our environmental management system enables the Group to reconcile economic and social development with environmental protection.

WA ST E M A N AG E M E N T

Alberto Couto Alves, SA adopts a methodology for waste management which enables the implementation of the principles of prevention and reduction and the hierarchy of waste management operations and stimulates the prolongation of the life cycle of materials through the awareness-raising of all stakeholders.

In all facilities, conditions are created to ensure the triage of waste produced, correct storage and packaging according to characteristics, as to enable its forwarding, according to flows and type of materials, privileging recycling or other transformation mechanisms.

The procedures implemented in their management prove the consistency in the treatment given to produced waste over the years. In 2015, 98% of waste produced in our facilities were rerouted for valorisation operations.

Alberto Couto Alves, SA also had the objective of raising our subcontractors’ awareness for the correct rerouting of the waste they produce. Several training sessions were


taught and close monitoring was promoted, regarding this theme, particularly in the identification of waste, packaging methods, selection of couriers and authorised waste management operators, clarifications on legal obligations, registration in SILIAMB portal, among others. This sharing of responsibility and awareness raising process, for the importance of a correct waste management, culminated in a percentage of 7% of waste produced being separated and rerouted for their final destination by our subcontractors.

Regarding the use of Demolition Waste (DWs) during works is a practice amply fostered by the Group., safeguarding the quality of the material, which is ensured with the compliance with the technical requirements. In 2017, 37% of waste produced was incorporated in works, which is added value from an economic and environmental standpoint by prolonging the life of the materials and by minimizing the environmental impact associated with waste treatment.

N AT U R A L R E S O U R C E S

Natural resources, apart from their intrinsic value, are essential and indispensable items for humans, since they are real or potential sources of wealth, occurring in nature. For Alberto Couto Alves, SA it is essential to measure and control the conscious use of such resources, as to ensure a sustainable economic development, by reducing the use of raw materials, water and energy in its operations.

WAT E R CO N S U M PT I O N

Another aspect that becomes quite relevant for our works is the management of water sources. The Group privileges, where possible, the use of water from surface consumption for less noble uses. In these sense, four new harvesting licences were requested to the Agência Portuguesa do Ambiente.

The natural resource was preserved, avoiding the use of treated water, in an amount of 5478m3. Compared to the previous year, there was a decrease of 2948 m3.

In our works, given their type (mostly civil construction), we try, whenever possible, to use rain water (for instance, rain water stored in reservoirs, reuse of water using for washing in the production of mortar) and eventually surface water.

F O S S I L F U E L CO N S U M PT I O N

Aware of the importance of the diesel consumption for its activity and its impact on the environment, both by depleting natural resources and by emission of compounds (carbon dioxide and nitrous oxides), responsible for the greenhouse effect, the company fosters the implementation of good practices in the management of this energy resource.

Regarding the fossil fuel consumption data for 201, one observes the continuation of the trend seen in the previous year, with the increase in activity, there was a significant reduction of the impact of the fleet in the global fuel consumption.

The investment made in fleet management software for has become an important tool in the optimization of routes and reduction of consumption.


H E A LT H A N D S A F E T Y I N T H E W O R K P L AC E

The safety and health of workers is currently a matter that raises serious media attention. This is due to the increasing value that current society gives to human life, which is transformed into specific legislation that tends to minimize the risks in the workplace, while preventing the occurrence of accidents and occupational diseases.

These are the priorities and approaches of Alberto Couto Alves, SA, in an industry that has been for long considered to be an area prone to the increase of statistics on work accidents and occupational diseases.

The Group has a Workplace Health and Safety Management System, implemented and certified under the OHSAS 18001 standard, which is implemented in all locations where the Group works, with the necessary adaptations according to the requirements of clients, law and partners.

The Workplace Health and Safety policy allows the permanent knowledge and compliance with all legal and normative requirements that should be enforced in the organization and its operations, as well as the Group’s internal guidelines. Therefore, it is essential to set out guidelines, following a policy that privileges the following objectives:

• Promoting the existence of a culture of safety applied to the entire Group;

• Developing technical conditions to apply preventive measures on Safety and Health in the Workplace;

• Ensuring effective protection of workers, in favour of a lower accident ratio;

• Promoting and ensuring compliance with all laws in force;

• Commitment towards prevention of injuries and affections of health and improving the management and performance of the Health and Safety at Work;

• Promoting life-long training regarding the prevention, safety and health, organizing general or specific awareness-raising campaigns and refresher courses, so that all workers can identify hazards and assess risks associated with their work;

• Establishing and maintaining, in case of risk, emergency plans in force to mitigate the possible consequences;

• Promoting accountability of all those intervening in the work.

The attainment of these goals will help the Group, across its entire extension, obtain high levels of security, making each job position an ideal and secure place.

Next, the main relevant facts that took place in 2017 regarding health and safety in the workplace:

The Group’s accident rate is measured essentially via three indicators: (1) frequency rate, (2) severity rate and (3) incidence rate. After collecting and processing the respective data, when compared to 2016, we observed:

• Number of accidents: equal;

• Days lots: decrease by 75.50%;

• Frequency rate: decrease by 27.04%;


• Severity rate: decrease by 82.12 %;

• Incidence rate: decrease by 30.43%;

Next, statistics and accident rates for 2017 and 2016:

2016 2017 CHANGE (%)

Incident

Without sick leave 0 0 -

With sick leave 12 12 -

Deadly 0 0 -

Totals 12 12 0%

Total of lost days (days) 604 148 -75,50%

Total number of employees (men) 68 98 +43,73%

Total of hours worked (hours) 489.660 671.151 +37,06%

STATISTICAL DATA

2016 2017

Frequency index 24,51 17,88

Incidence index 37,50 122,12

Severity index 1473,84 220,52

Awareness-raising campaigns were carried out in all locations where we operated. During 201, 5391 staff members (from the ACA Group and subcontrators) took part in such campaigns.

Noise is a physical agent present in the vast majority of construction processes. Therefore, it becomes a nuisance for workers, often becoming the main cause for work-related hearing losses. De maneira a minimizar as consequências da exposição dos trabalhadores ao ruído, realizamos, no ano de 2017, medições de ruído ocupacional.

The Board of Directors of the companies of the ACA Group, for the second consecutive year, made the flu shot available to all staff members. 50 employees joined this program.

In the scope of Occupational Medicine, during 2017 some activities were carried out to promote the health of the employees of the ACA Group, including:

• Healthy Eating at Work;

• Sun and Heat at Work;

• Exercising in the workplace;

• Prevention of Cardiovascular Diseases, focusing on the negative impacts of high cholesterol in health.


A N N E X TO T H E CO N S O L I DAT E D F I N A N C I A L R E P O R T

C H A P T E R I V


CO M PA N Y: A L B E RTO CO U TO A LV E S S . G . P. S . , S . A .Co n s o l i d a t e d B a l a n c e o n 3 1 . 1 2 . 2 0 1 7 a n d 3 1 . 1 2 . 2 0 1 6

ITEMS NOTES 31.12.2017 31.12.2016

ASSE

TS

Non-

curre

nt As

sets

Tangible fixed assets 9 58 455 589,87 56 741 852,40

Goodwill 8 8 312 712,44 9 351 801,49

Intangible assets 8 741,94 47 687,66

Financial investments - equity method 13 21 278 153,10 21 110 845,27

Other financial instruments; 13 10 285 353,09 11 191 370,60

Receivable credits 23.4 5 449 380,90 7 720 438,74

Deferred tax assets 20 107 828,39 188 182,83103 889 759,74 106 352 179,00

Curre

nt As

sets

Stocks 15 15 738 828,87 13 635 103,42

Clients 21 294 253 805,40 244 959 019,98

State and other public entities 23.1 8 913 096,04 6 297 974,70

Paid capital, not realised - 440 484,94

Other receivables 23.4 116 581 241,78 78 508 338,73

Deferrals 23.2 691 300,49 1 731 799,41

Non-current assets held for sale 10 176 637,96 176 637,96

Cahs and bank deposits 5 15 380 668,28 17 742 854,74451 735 578,82 363 492 213,87

TOTAL ASSETS 555 625 338,56 469 844 392,87

LIABI

LITIE

S

Equi

ty

Paid-in capital 22 30 050 000,00 30 050 000,00

Legal Reserves 22 1 335 627,92 1 298 518,03

Other reserves 22 140 787 963,35 140 568 885,93

Carried forward results 22 55 977 805,57 58 036 085,24

Adjustments/Other variations in equity 22 (61 609 606,43) (59 899 916,84)

Net result of period 1 086 394,34 172 793,83

Minority Interests 22 111 088 482,77 110 933 076,58

Total Equity 278 716 667,52 281 159 442,77

Liabi

litie

s

Non-

curre

nt li

abili

ties Provisions 18 2 139 721,06 1 999 806,36

Obtained funding 11 17 388 406,73 22 164 675,38

Deferred tax liabilities 20 140 000,51 -

Other payables 23.3 4 017 317,44 1 879 291,15 23 685 445,74 26 043 772,88

Curre

nt li

abili

ties

Suppliers 21 105 723 487,66 75 686 154,23

Advances from clients 21 77 895 320,75 31 107 740,50

State and other public entities 23.1 5 070 023,41 4 017 756,75

Obtained funding 11 33 074 365,93 39 264 012,85

Other payables 23.3 25 863 053,63 10 823 503,60

Deferrals 23.2 5 596 973,92 1 742 009,30253 223 225,30 162 641 177,22

Total Liabilities 276 908 671,04 188 684 950,10

TOTAL EQUITY AND LIABILITIES 555 625 338,56 469 844 392,87

(Currency: Euros)


E N T I DA D E : A L B E RTO CO U TO A LV E S S . G . P. S . , S . A .Co n s o l i d a t e d Re s u l t s ’ S t a t e m e n t s p e r Ca t e g o r y f o r t h e p e r i o d s e n d i n g o n 3 1 . 1 2 . 2 0 1 7 a n d 3 1 . 1 2 . 2 0 1 6

REVENUES AND EXPENSES NOTES 2 017 2 016

Sales and services provided 16, 17 206 646 469,04 126 603 236,54

Operating subsidies 48 084,00 25 589,15

Gains/losses allocated of subsidiaries, associated companies and joint ventures 14 (521 342,75) 151 80,45

Variation in production stocks 15 1 025 719,23 461 504,43

Works for own entity 567 561,64 106 145,38

Cost of sold goods and consumed materials 15 (66 603 541,13) (29 962 184,13)

Supplies and external services 23.5 (74 272 987,81) (56 248 590,96)

Staff expenses 23.6 (39 068 557,51) (28 075 087,70)

Impairment of inventories (losses/reversals) (0,08) -

Impairment of receivables debts (losses / reversals) 12 (3 557 901,55) (574 335,22)

Provisions (increases/reductions) 18 (140 062,78) 41 240,22

Impairment of depreciable/redeemable investments (losses/ reversions) - (2 050,00)

Fair value increases/reductions 21 - 21 247,80

Other income 23.8 9 613 322,90 17 428 522,60

Other expenses 23.7 (11 055 235,62) (14 018 601,36)

Earnings before depreciations, interests and taxes 22 681 527,59 15 958 317,22

Expenses / reversals of depreciation and amortization 8, 9 (8 390 257,66) (5 729 329,64)

Operating result (before interests and taxes) 14 291 269,94 10 228 987,58

Interests and similar revenue obtained 23.9 795 273,69 833 044,64

Interest and similar expenses incurred 23.9 (8 595 885,54) (6 916 933,94)

Earnings before taxes 6 490 658,09 4 145 098,28

Income Tax for period 20 (3 365 761,32) (2 825 973,64)

Consolidated net result before minority interest 3 124 896,78 1 319 124,20

Net result of the period attributable to:

Shareholders 23.10 1 086 394,34 172 793,83

Minority Interests 23.10 2 038 502,44 1 146 330,37

Net result of period 3 124 896,78 1 319 124,20

(Currency: Euros)


CO M PA N Y: ACA S . G . P. S . , S . A .Co n s o l i d a t e d s t a t e m e n t o f c h a n g e s i n e q u i t y i n 2 0 1 6

DESCRIPTION NOTESEQUITY GIVEN TO HOLDERS OF CAPITAL OF PARENT-COMPANY

MINORITY INTERESTS

TOTAL EQUITY

Paid up capital Legal Reserves Other reserves Carried forward results

Adjustments/Other variations in

equity

Net result of period Total

POSITION AT THE BEGINNING OF 2016 6 30 050 000,00 1 111 951,49 123 013 973,18 52 101 233,38 (21 785 812,70) 851 663,01 185 343 008,35 155 453 713,10 340 796 721,45

CHANGES IN THE PERIOD

Effect of the change in the consolidation perimeter:

-

Entrance of Angulo Recto and Wicon 59 279,40 13 758,45 (13 855,55) 124 052,77 183 235,07 (81 776,38) 101 458,69

Equity Method Effect - Minersolo, Conciva, Concopa and Solamba

143 137,94 143 137,94 143 137,94

Effect of the Change in Holding Percentage at Agro-angola and Ambiáfrica

9 753 17 237 832 1 095 020 (4 845 546) 13 497 058,52 (13 497 058,52) 0,00

Differences of conversion in financial statements

(31 706 356,84) (31 706 356,84) (31 706 356,84)

Other recognised variations in equity 117 534,20 303 322,76 4 853 687,80 (1 829 392,42) (851 663,01) 2 593 489,33 (30 941 801,63) (28 348 312,30)

7 - 186 566,55 17 554 912,75 5 934 851,87 (38 114 104,14) (851 663,01) (15 289 435,98) (44 520 636,53) (59 810 072,51)

NET RESULT FOR PERIOD 8 172 793,83 172 793,83 - 172 793,83

FULL RESULTS 9=7+8 (678 869,18) (15 116 642,15) (44 520 636,53) (59 637 278,68)

OPERATIONS WITH EQUITY OWNERS IN THE PERIOD

- -

Capital subscriptions - -

10 - - - - - - - -

POSITION AT THE END OF THE PERIOD - 201611=6+7+8

+1030 050 000,00 1 298 518,03 140 568 885,93 58 036 085,24 (59 899 916,84) 172 793,83 170 226 366,19 110 933 076,58 281 159 442,77

(Currency: Euros)

CO M PA N Y: ACA S . G . P. S . , S . A .Co n s o l i d a t e d s t a t e m e n t o f c h a n g e s i n e q u i t y i n 2 0 1 7

DESCRIPTION NOTESEQUITY GIVEN TO HOLDERS OF CAPITAL OF PARENT-COMPANY

MINORITY INTERESTS

TOTAL EQUITY

Paid up capital Legal Reserves Other reserves Carried forward results

Adjustments/Other variations in

equity

Net result of period Total

POSITION AT THE BEGINNING OF 2017 6 30 050 000,00 1 298 518,03 140 568 885,93 58 036 085,24 (59 899 916,84) 172 793,83 170 226 366,19 110 933 076,58 281 159 442,77

CHANGES IN THE PERIOD

Effect of the change in the consolidation perimeter:

-

GolfInvest Exit (15 078,68) (15 078,68) (15 078,68)

Equity Method Effect: Minersolo, Conciva, Concopa and Solamba

0,00 0,00

Equity Method Effect: Aca Energia Imolot and Couto Alves Engenharia

(144 675,31) (144 675,31) (144 675,31)

Differences of conversion in financial statements

(1 293 623,85) (1 293 623,85) (1 293 623,85)

Other recognised variations in equity 37 109,89 219 077,42 (2 058 279,68) (256 311,74) (172 793,83) (2 231 197,94) 155 406,19 (2 075 791,75)

7 - 37 109,89 219 077,42 (2 058 279,68) (1 709 689,59) (172 793,83) (3 684 575,79) 155 406,19 (3 529 169,60)

NET RESULT FOR PERIOD 8 1 086 394,34 1 086 394,34 - 1 086 394,34

FULL RESULTS 9=7+8 913 600,51 (2 598 181,45) 155 406,19 (2 442 775,26)

OPERATIONS WITH EQUITY OWNERS IN THE PERIOD

- -

Capital subscriptions - -

10 - - - - - - - -

POSITION AT THE END OF THE PERIOD - 201711=6+7+8

+1030 050 000,00 1 335 627,92 140 787 963,35 55 977 805,57 (61 609 606,43) 1 086 394,34 167 628 184,74 111 088 482,77 278 716 667,51

(Currency: Euros)


CO M PA N Y: A L B E RTO CO U TO A LV E S S . G . P. S . , S . A .Co n s o l i d a t e d Re s u l t s ’ S t a t e m e n t s p e r Ca s h f l o w s f o r t h e p e r i o d s e n d i n g o n 3 1 . 1 2 . 2 0 1 7 a n d 3 1 . 1 2 . 2 0 1 6

ITEMS PERIODS

2 017 2 016

Cash flow for operating activities - direct method

Amounts received from clients + 182 897 843,90 106 834 318,04

Payments to suppliers - (138 745 444,43) (77 174 407,36)

Payments to staff - (30 129 495,22) (26 237 962,15)

Cash flow from operations +/- 14 022 904,25 3 421 948,53

Payables/receivables from income tax -/+ (1 680 961,10) (2 519 589,84)

Other receivables/payables +/- (2 569 216,45) (9 667 348,76)

Cash flow for operations (1) +/- 9 772 726,69 (8 764 990,07)

Cash flow from investment activities

Payments referring to:

Tangible fixed assets - (2 959 329,16) (3 237 173,43)

Intangible Assets

Financial investments - (238 254,93) (3 121,61)

Other assets - (216 056,39) (242 007,94)

Receivables from:

Tangible fixed assets + 2 026 022,40 2 450 143,48

Financial investments + 6 536,15 146 279,96

Other assets 750 890,06 546 564,04

Investment subsidies

Interests and similar revenue + 1 132 348,16 601 167,41

Dividends + 38,25

Cash flow from investment activities (2) +/- 502 194,53 261 851,91

Cash flow from financing activities:

Receivables from:

Obtained funding + 45 674 250,13 43 138 385,06

Other financing operations + 3 490 683,60 10 085 853,58

Payments referring to:

Obtained funding - (51 455 746,15) (33 945 816,31)

Interests and similar expenses - (7 833 624,87) (7 709 140,61)

Other financing operations - (1 964 215,40) (2 940 882,90)

Cash flow from financing activities: (3) (12 088 652,69) 8 628 398,80

Variation of cash flow and cash equivalents (1)+(2)+(3) (12 088 652,69) 8 628 398,80

Effects of exchange rates differences +/- (548 454,84) 1 865 462,10

Cash flow and cash equivalents at the beginning of the period +/- 17 742 854,74 15 736 910,58

Effect of the perimeter change in the balance at the be-ginning of the period 15 221,40

Cash flow and cash equivalents at the end of the period +/- 15 380 668,28 17 742 854,74

(Currency: Euros)


N OT E 1 . I D E N T I F I CAT I O N O F T H E E N T I T Y

The entity now reporting the financial year of 2017 is called Alberto Couto Alves, SGPS, S.A., headquartered at Avenida dos Descobrimentos, Edifício Las Vegas 3, no. 63, Vila Nova de Famalicão, Portugal. The company’s main activity is the management of investments in other companies.

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

The Group is formed by the participated companies below:

• Alberto Couto Alves SGPS, S.A. (“ACA SGPS”);

• Alberto Couto Alves S.A. (“ACA”);

• Álea – Sociedade de Mediação de Seguros, S.A. (“Álea”);

• Ambiágua – Gestão de Equipamentos de Águas, S.A. (“Ambiágua”);

• RRI – Recolha de Resíduos Industriais, S.A. (“RRI”);

• Parq G – Estacionamentos, S.A. (“Parq G”);

• NORTEPOLIS – Promoção Imobiliária, S.A. (“Nortepolis”);

• IELAC – Instalações Elétricas e Ar Condicionado, Lda. (“Ielac”);

• Global Stadium – Relvados Sintéticos, Lda. (“GS”);

• Consmar Construção Civil (“Consmar Construção Civil”);

• Consmar SAS (“Consmar France”);

• ACA France SAS (“ACA France”);

• Alberto Couto Alves Brasil Ltda. (“ACA Brasil”);

• G.V. Group Produtos Esportivos S.A. (“GV”);

• Angolaca Construções S.A. (“Angolaca”);

• Minersolo – Inertes e Mineração, S.A. (“Minersolo”);

• Agro-Angola, S.A. (“Agro-angola”);

• Ambiáfrica, S.A. (“Ambiáfrica”);

• Vivangola S.A. (“Vivangola”);

• Viva Supermercados. S.A. (“Vivasuper”);

• ASGEST S.A. (“ASGEST”);

• ACA BUD Sp.z.o.o. (“ACA Bud”);

• ACAWIND Energias Renováveis, S.A. (“ACA Wind”);

• Ângulo Recto – Construções, Lda (“Ângulo Recto”);

• ACA S. Tomé e Príncipe, Lda (“ACA S. Tomé e Príncipe”);

• Wicon - Wide Consulting, Lda (“Wicon”);


• Vid Garden, Lda. (“Vid Garden”);

• Ferreira Construção, Alberto Couto Alves – Engenharia, ACE (“ACE ACA/Ferreira”);

• Alberto Couto Alves, Construções Gabriel A.S. Couto, ACE (“ACE ACA/Gabriel Couto”);

• CONCOPA - Construção Civil e Obras Públicas, S.A.;

• SOLAMBA - Soluções de Ambiente de Angola, S.A.;

• CONCIVA – Construção Civil, S.A.;

• Couto Alves Engenharia e Infraestruturas LTDA (“Couto Alves Engenharia”);

• Imolot Empreendimentos Imobiliários LTDA (“Imolot”);

• ACA Energia, LTDA (“Ambirecic”).

1 AmbiÁfrica also holds 1% of this company2 ASGest also holds 5% of this company

S GP S2 0 1 7

ACA

97,10%5,2%

AS GEST

CONTROLO

ACA WIND

80%

ANGOLACA

MIN ERSOLO AMBIÁFRICA

SOLAMBA

AGRO ANGOLA

CONCIVA2

53,75%

33%

40%

85,01%

40%

0,15%

85,01%

NORTEPOLIS

100%

ACA BU D

100%

IELAC

85%

ÁLEA

99%

VIVASUPER

CONTROLO

GS

53,57%

ACE ACA-FERREIRA

50%

PARQ G

75%

AMBIÁGUA

85,64%

ACA BRASIL

GV

CONCIVA1

51%

40,33%

48%

RRI

77,4%

VIVANGOLA

CONTROLO

ANGULO RECTO

WICON

85%

60%

ACE GABRIEL COUTO

50%

VID GARDEN

50%

51%

CONSMAR PT

CONSMAR FR

51%

100%

ACA S. TOMÉ E PRINCIPEACA FRANCE

51%

15% 49% 20% 10,71% 15%


The Group is composed of subsidiaries, associates and other companies, whose common link is the operational and financial control and significant influence over holdings.

In companies ACA, Angolaca, Ambiágua, RRI, Ielac, Aca Brasil, Parq G, Nortepolis, ACA Bud, Ângulo Recto, Global Stadium, Wicon, ACA Wind and Álea, Aca SGPS has investments of 50% or above. In companies ACA France, Consmar Construção Civil, Consmar France, Agro-angola, and Ambiáfrica, the Group’s position is lower (but close to) 50%, although the Group holds the operational and financial control.

In companies Vivangola, Vivasuper and ASGEST operational and financial control is carried out without any financial holding. The control of the aforementioned companies, assessing all facts and circumstance, is carried out by the CEO of the Group, who has the power to manage the entities’ financial and operational management. All of the entities mentioned above are included in these consolidated statements via the full equity method.

In the companies Vid Garden, GV and Solamba e ACA S. Tomé e Príncipe, the Group’s participation is lower than 50% (and higher than 20%), where the Group only exerts significant influence, which is why they were included in the consolidation process using the equity method. Also included using the same method, albeit with investments lower than 20% are the companies Conciva and Minersolo, where a significant influence is also exerted. Concopa, registered also using the equity method, is owned by ASGest, with operational and financial control.

Companies Imolot, Couto Alves Engenharia and Ambirecic, held by ACA Brasil, the market where they operate, are registered in those accounts using the equity method, since, although investments are higher than 90%, there isn’t a full control over operations.

Still within the perimeter, ACA Construção holds 50% of two jointly-controlled companies, hereinafter called ACE ACA/FERREIRA and ACE ACA/Gabriel Couto, the incorporation of which in these consolidated statements is made by the proportional method.

The distribution of subsidiaries by continents is as follows:

• Macro sub-Saharan region: Angolaca, Ambiáfrica, Vivangola, Vivasuper , Agro-angola, ASGEST, Minersolo, and ACA STP;

• Macro region of Latin America: ACA Brasil, Imolot, Ambirecic, Couto Alves Engenharia and GV;

• Macro region of Europe and North Africa: all the subsidiaries that operate in Portugal, ACA France, Consmar France and ACA Bud.

This is the distribution of the ACA Group’s main operations in the European, African and American continents.

Within this construction activity, its core business is composed by these companies: ACA, Angolaca, Agro-angola, Global Stadium, Ângulo Recto, ACA Brasil, GV, ACA France, Consmar Construção Civil, Consmar France, Ielac, ACA Bud and ACA STP.

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


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

The company Nortepolis is engaged in real estate activities and Parq G- Parking of Gondomar carries out parking and parking activities. ACA Wind, incorporated in the year 2015, operates in the processes of assembly, installation and maintenance of wind towers.

The consolidated financial statements included in this Annex refer to the financial year of 2017. Amounts are presented in Euros and rounded off to the nearest hundredth.

N OT E 2 . ACCO U N T I N G F R A M E W O R K F O R T H E P R E PA R AT I O N O F F I N A N C I A L STAT E M E N T S

2.1. ACCOUNTING FRAMEWORK

The following financial statements have been elaborated and are compliant to the International Financial Reporting Standards (IFRS) established by the Portuguese Accounting Normalization System (ANS), approved by Decree-Law no. 158/2009, 13th July, rectified by Amendment no. 67-B/2009, 11th September, and with the alterations introduced by Law no. 20/2010, 23rd August, by Decree-Law 36-A/2011, 9th March, by Decree-Law 98/2015, 2nd June, and by Decree-Law 192/2015, 11th September.

ANS is regulated by the following legal diplomas:

• Notice no. 8254/2015, 29th July, with the wording introduced by rectification no. 917/2015, 19thOctober (Conceptual Structure);

• Ordinance no. 220/2015, 24th July (Models for Financial Statements);

• Ordinance no. 218/2015, 23rd July, with the wording introduced by rectification no. 41-A/2015 of 21st September (Code of Accounts);

• Notice no. 8256/2015, 29th July, with the wording introduced by rectification no. 918/2015, 19th October (Accounting Rules for Financial Reports);

• Notice no. 8258/2015, 29th July (Rules for Interpreting)

The financial statements have been produced for the end of the year, assuming the company will continue operating and according to an accrual system, with expression in the respective amounts in Euros.

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


2.2. INDICATION AND JUSTIFICATION OF SNC’S DISPOSITIONS THAT, EXCEPTIONALLY, MAY HAVE BEEN DEROGATED

During the periods encompassed in the current financial statement, no disposition of the SNC were derogated that have produced materially relevant effects and that may jeopardize a true and appropriate image. Therefore, it is considered that the applicable ASFRs provide an appropriate presentation of the various assets.

2.3. INDICATION AND COMMENTS ON THE ACCOUNTS OF THE BALANCE AND FINANCIAL STATEMENTS WITH RESULTS THAT CANNOT BE COMPARED TO THE PREVIOUS FISCAL YEAR

There are no balance records or financial statements that cannot be compared with previous fiscal years. Nevertheless and during 2016, there were alterations as far as the consolidations goes, which must be taken into account for comparison purposes.

During 2016, new investments were made, reinforcing some of the already existing investments, transferring other investments within the consolidation perimeter and reassessing the principles of the integration methods of companies in Group ACA’s statements, namely:

• Capital increase of AmbiÁfrica, after Angolaca became a new shareholder holding 85.01% of the company;

• Capital increase of Agro-Angola, after Angolaca became a new shareholder holding 85.01% of the company;

• Acquisition, by ACA SGPS (15%) and ACA (85%) of the total capital of Ângulo Recto – Construções, Lda;

• Transfer, by ACA SGPS SA of 10,122,430 shares of Aca Brasil; ACA SGPS now holds 49% of this company, whereas ACA holds 51%;

• Tansfer, by ACA SGPS SA to ACA, of the investment held in Ambiágua; ACA now holds 85.64% of this company;

• Transfer of ACA WIND shares, of which 80% is now held by ACA and 20% by ACA SGPS;

• Transfer, by Ângulo Recto to ACA, of the investment held in Global Stadium and later capital increase, with ACA SA now holding 53.57% of the share capital of this company and ACA SGPS 10.71%;

• Partial transfer, by ACA SGPS to ACA SA, of the investment held in IELAC; ACA holds 85% of the share capital of IELAC, SA, whereas ACA SGPS holds 15%

In 2017, subsidiary “Golfinvest” bought 136,600 own shares to ACA SGPS, reason why this company, which until 31st December 2016 integrated the consolidated perimeter via the equity method, was sold, having therefore left the consolidated perimeter in 2017.

AcaMedco still has not been included in the consolidation perimeter, since this entity is inactive from an operational point of view and undergoing the legal process aimed at its future dissolution.

The subsidiary VCP has prepared financial statements regarding the year of 2016 which will lead up to liquidation, as to prepare the company to stop operations and subsequently liquidation, following the conclusion of the Arbitration that was


underway, and the corresponding Transaction Agreement concluded in 2017 between the parties involved. Thus, according to article 8 (3) (a) of Decree-Law no. 98/2015, of 2nd June, this company was excluded from consolidation for the years of 2016 and 2017.

When this report was created, the company had already been wounded up.

In May 2017, a sentence was passed in which the parties - Municipality of Gondomar, Parque G and ACA, SA - agreed to revoke the building lease contract, the payment of EUR 3,100,000 to the consortium as compensation for damages caused by non-performance of contracts, with the withdran of requests made during arbitration and the deferral of the delivery of the park and other assets associated to operation until 31st May 2018, as well as the division of arbitration costs. Following arbitration started in 2016, already during 2017, the building lease contract was revoked and the public deed was signed, for the future winding up of Parque G – Estacionamentos, SA in its current state or, at least, a substantial change of the structure and mode of operations, since the objective for which the company was created no longer exists.

During this year, this company still integrated the Group’s consolidated accounts via the equity method, since the operational management of the park was still under the scope of the ACA Group during 2017.

N OT E 3 . F I R ST-T I M E A D O PT I O N O F I N T E R N AT I O N A L F I N A N -C I A L R E P O RT I N G STA N DA R D S – T R A N S I T I O N A L D I S C LO S U R E

The set of rules that integrate ANC was used, for the first time, in 2010 for the creation of complete financial statement, becoming the base guidelines for all subsequent period. These rules were also applied to the period beginning in 01/01/2009, as to ensure the necessary expression and presentation for comparison purposes.

The company does not present impact, in their financial statements, that may need reporting due to the first-time adoption of IFRSs.

N OT E 4 . K E Y ACCO U N T I N G P O L I C I E S

4.1. MEASUREMENTS USED TO PREPARE THE FINANCIAL STATEMENTS

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

The Group has adopted the dispositions contained in the IFRS, based on the following accounting policies:


a) Consolidation Principle

(I) Investment in Subsidiaries

The financial participations in companies of which the Group controls directly and indirectly more than 50% of the share capital or voting rights in Shareholders’/Partners Meetings and/or power to control its operational and financial policies, including companies serving special purposes, according to articles of Decree-Law no. 158/2009, were included in the Consolidated financial statements using the comprehensive method. Equity and Net Result of these companies, corresponding to third-party participations, are presented separately in the Consolidated Balance and at the Consolidated Financial Statement under “Minority Interests”. Companies included in the financial statements using the comprehensive method are detailed in note 1.

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

Adjustments to the financial statements of Group companies are performed, whenever necessary, in order to adapt accounting policies to those used by the Group. All intra-group transactions, balances, income and expenses and distributed dividends are eliminated on consolidation process, as well as results originating from intra-group transactions that are recognized as assets.

(II) Investments in jointly controlled entities

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

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

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

(III) Investments in associated companies

Investments in associated companies are accounted for in accordance with the equity method. The Group considers associated companies those companies where the Group has significant influence but does not control nor jointly controls such companies in the financial and operating decisions of a company – normally investments between 20 and 50% of a company’s share capital.

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

Results occurring from transactions between an investor, including consolidated subsidiaries, and an associated company are recognized at the investor’s financial


statements only as to correspond to the interests of other investors in the associated company (not related to the investor), being, therefore, eliminated the investor’s part in the associated company’s results that occur from such transactions.

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

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

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

Financial investments in associated companies are disclosed in Note 13.

(IV) Goodwill

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

In 2016, following the changes introduced by Decree-Law no. 98/2015, 2nd June, “goodwill” began being amortised and will continue to be tested whenever there is evidence of impairment.

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

(V) Conversion of financial statements of subsidiaries in foreign currency

Foreign entities are considered to be those which operate abroad, and have organisational, economic and financial autonomy and whose operating currency is different from the parent company. The assets and liabilities in the financial statements of foreign entities are converted to Euros using the exchange rates at the date of the balance, and costs and income and cash flow in those financial statements are converted to Euros, according to the provisions set forth in ASN23 – Effects of Changes in Exchange Rates. The resulting exchange difference is recorded in own capital under “Adjustments/Other Changes in Equity”.

“Goodwill” and fair value adjustments resulting from the acquisition of foreign entities are treated as assets and liabilities of that entity and converted to Euros according to the exchange rate at the date of the balance. Whenever a foreign entity is sold, the accumulated exchange difference is recognised in the profit and loss statement as an alienation gain or loss. The exchanged rates used to convert the accounts of group companies, jointly controlled bodies and


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

CURRENCY ENTITIESPrices 2017 Prices 2016

Closing Average Closing Average

Kwanzas (Angola) Banco Nacional de Angola 186,303 185,393 186,282 182,935

Real (Brazil) Banco de Portugal 3,973 3,643 3,431 3,856

(Algerian) Dinar Banco de Portugal 137,619 126,650 116,368 120,798

USD Banco de Portugal 1,1993 1,1370 1,0541 1,1069

ZLOTY Banco de Portugal 4,1770 4,2430 4,4100 4,3630

b) Tangible fixed assets

Fixed tangible assets are items held to be used in the production or provision of services, to be leased to third-parties or to be used for administrative purposes and that will be used for more than a single period.

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

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

Expenses with substitutions or large repairs are included in the asset’s carrying amount when there are additional economic benefits occurring in the future, being depreciated during the asset’s remaining useful life or during its own useful life, if lower.

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

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

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


ITEMS USEFUL LIFE

Buildings and other construction 20 – 50

Basic equipment 4 – 12

Transport equipment 4 – 8

Tools and utensils 4 – 8

Administrative equipment 3 – 8

Tangible fixed assets 3 – 6

c) Intangible Assets

Intangible assets are recorded at acquisition cost, minus accumulated depreciations and impairment losses.

Intangible assets are only recognised if they are likely to produce future economic benefits for the Group, can be controlled by the Group and if their value can be reasonably measured.

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

Amortization for the year of intangible assets and goodwill are reported in these financial statements in the item “Expenses/reversals with depreciation and amortization”.

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

d) Leases

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

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

In the case of leases considered as operating, minimum down payments are recognised as expenditure in the profit and loss statement during the period of the lease agreement and on a straight line basis.


e) Financial investments

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

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

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

f) Stocks

Goods and raw materials, subsidiaries and consumption are recognized at the lowest amount between cost or net realizable value (estimated normal price of sale minus estimated costs of lease). Cost is determined on a weighted average basis. If the net realisable value is lower, specifically due to market share reduction, deterioration or obsolescence, increased finishing costs or those needed to perform the sale, of the recoverable value for the use in the conversion of finished products whose market share has been reduced, one justifies the recognition of impairments during the periods in which adjustment needs are observed, using reposition cost as a reference.

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

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

Expenditure on sold stocks are recorded in the same reporting period in which the revenue is recognised.

The Group uses the regimen of permanent inventory, according to the dispositions article 12(1) of Decree-Law no. 98/2015, 2nd June.

g) Receivables

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

Impairment losses are reported after the event occurred indicate, objectively and quantifiably, that part of or the total debt will not be received.


h) Cash and bank deposits

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

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

i) Impairment of Assets

An impairment assessment is made at the time of each balance, as to establish whether or not an asset may be in impairment. Whenever the figure registered for the asset is higher than its recoverable value, this is recognised as an impairment loss, registered in the profit and loss statement, under “Impairment of depreciable/redeemable investments” or “Impairment of non depreciable/redeemable investments”. The recoverable amount is either the net sales price or the use value, whichever is the higher. The net sales price is the amount obtained from alienating the asset in a transaction accessible to the parties involved minus the costs directly attributable to the alienation. The value-in-use is the current value of estimated future cash flows that are expected and that arise from constant use of the asset and its alienation at the end of its useful life. The recoverable amount is estimated for each asset individually, or, if this is not possible, for the cash generating unit to which the asset belongs.

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

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

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

• Has significant financial difficulties;

• Is significantly delayed in the payment of interests and other main payments;

• Is likely to enter a restructuring process or bankruptcy.

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

Reversion of impairment losses recognised in previous years is registered when there are indications that the recognised impairment losses no longer exist or have diminished. This analysis is carried out when there is evidence that the previously recognised impairment loss has reverted. The reversion of impairment losses is recognised in the profit and loss statement as operational results. However, reversion of impairment loss is carried out up to the limit of the amount recognised should the impairment loss not have been registered in previous years.


j) Loans

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

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

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

k) Payables

Accounts payable are registered at nominal value (using the actual interest rate method).

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

l) Discounted notes and receivables sold in “factoring”

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

m) Financial liabilities and equity instruments

An instrument is classified as an equity instrument according to the contractual obligation of the transaction, independently from its legal form.

An instrument is classified as a financial liability when it contains a contractual obligation to liquidate capital and/or interests, through delivering cash or other financial asset. Financial liabilities are initially recognised at cost minus transaction costs and, subsequently, amortised cost based on effective interest paid.

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

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


n) Provisions, contingent liabilities and contingent assets

Provisions are recognised when, and only when, the Group has an obligation (legal or constructive) resulting from a past event, it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate can be made of that obligation. Provisions are reviewed and adjusted at the balance sheet date to reflect the best estimate as of that date. Restructuring provisions are recorded by the Group whenever a formal and detailed restructuring plan exists and that plan has been communicated to the parties involved.

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

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

o) Accrual basis

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

p) Revenue

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

Revenue from the sales of goods (merchandising products) is recognised in the income statement when: (i) the significant risks and benefits of ownership of the assets have been transferred to the buyer, (ii) the Group does not retain continued management involvement of the asset sold to a degree usually associated with ownership or effective control over it, (iii) the amount of revenue can be reliably measured, (iv) it is likely that the economic benefits associated with the transaction will flow to the Group, and (v) the costs incurred or to be incurred with the transaction can be reliably measured. Sales are recognised net of taxes, discounts and other costs, including commissions, at the fair value of the amount received or receivable.

Revenue from services rendered is recognised in the income statement taking into consideration the stage of completion of the transaction (percentage of completion


method) at the balance sheet date, if the outcome is reliably predictable. If such fails to happen but if the expenses are recoverable, revenue will only be recognized according to the expenses already incurred and recognized, according to the null profit method. If the outcome cannot be estimated and if the expenses cannot be recoverable, no revenue will be recognized and expenses cannot be deferred. In the case of continued provision of services, the revenue is recognized in a straight line method. Interests are recognized using the effective interest method.

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

q) Construction contracts

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

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

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

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

r) Borrowing Costs

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

s) Benefits of Employees

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

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


According to the applicable labour legislation, the right to holidays and holiday bonus for the period, since it coincides with the calendar year, reaches its maturity on 31st

December of each year, but the amount is paid during the following period; therefore, the corresponding expenses are recognized as short-term benefits, according to what was previously mentioned.

Benefits occurring due to cessation of employment, both by the company’s unilateral decision and by mutual agreement are recognized as expenses in the periods in which they occur.

t) Foreign currency balances and transactions

All foreign currency assets and liabilities are converted into functional currency, according the directions given by ISRF 23 - Effects of alterations in exchange rates. Exchange gains and losses resulting from differences between the exchange rates in force on the date of the transactions and those in force on the date of collections, payment or the balance sheet date are recognised as gain or loss in the income statement of the period, except if they qualify as cash flow coverage or net investment coverage.

u) Subsequent events

Events after the balance sheet date that provide additional information on conditions existing at the balance sheet date are reflected in consolidated financial statements and disclosed in the annex to the financial statements.

If there are any materially relevant events after the balance sheet date that do not provide additional information on conditions existing on the balance sheet date, these will be disclosed in the annex to the financial statements.

4.2. OTHER RELEVANT ACCOUNTING POLICIES

a) Cash Flows

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

The consolidated cash-flow statement is classified into operating, financing and investment activities. Operating activities encompass receivables from clients, payments to suppliers, staff payments and others related to operating activities. Cash-flows encompassed by investment activities include, specifically, acquisitions and sales of investments in participated companies and receivables from the sale and purchase of assets.

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

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


4.3. JUDGMENTS BY THE MANAGEMENT BODY

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

Accounting estimations significantly reflected in the consolidated financial statements for the periods ending on 31st December, 2016 and 2016 include, among others:

• Useful life of tangible and intangible assets;

• The method of amortization/depreciation to apply and the estimated losses occurring from the substitution of equipment before the end of their useful life, by reason of technological obsolescence;

• Useful life of goodwill;

• Recognition of investment impairment;

• Report of provisions;

• Liabilities by deferred taxes;

• Recognition of revenues in works in course.

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

4.4. KEY ASSUMPTIONS FOR THE FUTURE

The financial statements herein were prepared with the assumption that operations will continue, from the Company’s records and accounting documents, maintained according to the accounting principles generally accepted in Portugal.

Events after the balance sheet date that provide additional information on conditions existing at the balance sheet date are reflected in consolidated financial statements and disclosed in the annex to the financial statements.

If there are any materially relevant events after the balance sheet date that do not provide additional information on conditions existing on the balance sheet date, these will be disclosed in the annex to the financial statements.

4.5. MAIN UNCERTAINTY FACTORS ON ESTIMATES

Estimations of future values that are recognized in the consolidated financial statements are based on the final information known to the date. Such estimates are reviewed annually, bearing in mind several variables, evolution and uncertainties of the activity, client portfolio, business plan, among others, as to anticipate potential alterations.


N OT E 5 . CA S H F LO W S

5.1. COMMENTS BY THE BOARD OF DIRECTORS ON SIGNIFICANT CASH AND CASH EQUIVALENT BALANCES NOT AVAILABLE FOR USE

There are no cash elements or cash equivalents that are not available for use. The cash-flow balance, on 31st December, 2017 and 2016, is decomposed in the following manner:

NET FINANCIAL MEANS REPORTED ON THE BALANCE

31.12.2017 31.12.2016

Amounts available

for use

Amounts unavailable

for useTotal

Amounts available

for use

Amounts unavailable

for useTotal

CASH

- -FL

OW

Cash 1 074 263,05 - 1 074 263,05 2 050 412,14 - 2 050 412,14

Subtotal 1 074 263,05 - 1 074 263,05 2 050 412,14 - 2 050 412,14

BANK

DEP

OSITS

Checking’s’ account 6 274 698,14 - 6 274 698,14 6 452 300,34 - 6 452 300,34

Term deposits 7 548 671,43 - 7 548 671,43 6 811 940,44 - 6 811 940,44

483 035,66 - 483 035,66 2 428 201,82 - 2 428 201,82

Subtotal 14 306 405,23 - 14 306 405,23 15 692 442,60 - 15 692 442,60

TOTALS 15 380 668,28 - 15 380 668,28 17 742 854,74 - 17 742 854,74

(Amounts in euros)

N OT E 6 . ACCO U N T I N G P O L I C I E S , C H A N G E S I N ACCO U N T I N G E ST I M AT E S A N D E R R O R S

During the period there were no changes in accounting policies followed in the previous period.

N OT E 7 . R E L AT E D PA RT I E S

7.1. WAGES PAID TO KEY MANAGEMENT PERSONNEL

a) Total remunerations

Key management personnel includes (within the company and as a vital structure with key influence on the planning, guidance and control of activities) the group of board members that aggregate board functions and operational departments.

Next, the corresponding benefits are presented on the table that closes this press release.


WAGES PAID TO KEY MANAGEMENT PERSONNEL PERIOD OF 2017 PERIOD OF 2016

Short-term employee benefits: 2 887 575,88 2 562 957,31

(Amounts in euros)

7.2. TRANSACTIONS BETWEEN RELATED PARTIES

a) Transações entre as partes relacionadas

PERIOD OF 2017

TRANSACTIONS BETWEEN RELATED PARTIES

Sales Provision of Services

Purchase of goods and

servicesOther debits Other credits Loans granted Loans obtained Receivables Payments

Coviaca - 709 288,00 380 256,77 17 499,87 73 219,24 - - - 105 000,00

Incentiverde 266,00 193 314,02 28 287,99 34 443,90 - 3 890,55 - 23 227,62 -

Resifluxo 19 386,04 45 964,21 198 984,67 69 774,54 - 49 182,41 - 98 954,38 80 506,76

Marechal - 1 100 000,00 - - - - - 1 150 000,00 -

VID GARDEN - - - - - 850,00 - - -

GOLFINVEST - - - - - 400,00 20 000,00 136 200,00 -

ACA S. TOMÉ - - - - - 10 000,00 - - -

Valorec - 1 275 863,25 3 813 666,74 240 078,30 9 104,42 400,60 612,54 663 971,91 1 973 789,97

Prontiquest 10,92 - - 25 205,66 - - 1 138 475,00 - -

Cronorigem - - - 5 333,66 - - 2 465,05 3 550,23 -

Estudograma - - - 3 560,97 - 15 312,83 - - -

Acamedco - - - 938,10 - - - - -

VCP - - - 500 936,07 - - 301 073,49 800 000,00 -

Resort ACA 6 809,21 3 236,37 64 727,36 - - 2 500,00 46 228,77 - 588 000,00

Arvest 7 471,97 158 653,58 34 837,60 - 269,02 - - - -

Subtotal 33 944,14 3 486 319,43 4 520 761,14 897 771,07 82 592,68 82 536,39 1 508 854,85 2 875 904,14 2 747 296,73

TOTAL 33 944,14 3 486 319,43 4 520 761,14 897 771,07 82 592,68 82 536,39 1 508 854,85 2 875 904,14 2 747 296,73

PERIOD OF 2016

TRANSACTIONS BETWEEN RELATED PARTIES

Sales Provision of Services

Purchase of goods and

servicesOther debits Other credits Loans granted Loans obtained Receivables Payments

Coviaca - 620 367,10 179 922,07 46 765,33 40 412,49 5 485,00 11 077,18 548 957,52 151 814,32

Incentiverde - 34 648,55 194 667,90 59 885,36 12 452,34 8 000,00 18 000,00 107 908,30 335 830,36

Resifluxo 5 365,55 61 559,98 262 508,04 88 156,62 122 466,35 - - 171 876,47 304 521,39

Marechal - 31 464,44 - 102,16 - - 35,75 - -

Valorec - 1 625 834,09 3 077 725,84 92 081,03 52 342,71 2 171 698,51 428 062,10 1 262 486,84 2 183 635,84

Prontiquest - - - 49 362,51 - 743 750,00 426 000,00 - -

Cronorigem - - - 4 104,65 - 16 087,01 8 918,44 - -

Estudograma - - - 223,73 - 605,00 - - -

Acamedco - - - 938,10 - - - - -

VCP - - - 49 320,12 - 302 974,45 - - -

Resort ACA 1 919,25 6 386 352,00 4 247 836,06 610 605,16 115 558,70 - - - 1 108 479,80

Global Stadium Angola - - - - - - - 31 896,79 -

Arvest 10 739,64 21 407,61 9 246,26 121 901,25 137,75 - - - -

Subtotal 18 024,44 8 781 633,77 7 971 906,17 1 123 446,02 343 370,34 3 248 599,97 892 093,47 2 123 125,92 4 084 281,71

TOTAL 18 024,44 8 781 633,77 7 971 906,17 1 123 446,02 343 370,34 3 248 599,97 892 093,47 2 123 125,92 4 084 281,71


a) Outstanding balances

PERIOD OF 2016

Amounts of outstanding balances with related parties, their accumulated impairment losses and expenses due to bad debts of doubtful loans

Outstanding balances on 31.12.2016

Commecial balances Other balances

Coviaca 881 529,58 417 623,88

Incentiverde 133 354,03 (6 564,72)

Resifluxo 550 264,81 49 164,60

Marechal 34 042,70 1 975,34

Valorec (364 188,89) 1 452 169,96

Prontiquest 223 627,81 (1 065,72)

Cronorigem (43 171,06) 4 703,52

Estudograma 2 956,95 15 917,83

VID GARDEN 7 739,13 18 715,63

GOLFINVEST - 27 960,00

ACA S. TOMÉ - 10 000,00

ACA CONGO - 137 830,20

Acamedco 576 959,62 189 517,61

VCP - 1 900,96

Resort ACA 7 594 670,70 1 634 470,27

Arvest (2 323 752,91) 345 161,57

Subtotal 7 274 032,48 4 299 480,93

TOTAL 7 274 032,48 4 299 480,93

PERIOD OF 2017

Amounts of outstanding balances with related parties, their accumulated impairment losses and expenses due to bad debts of doubtful loans

Outstanding balances on 31.12.2017

Commecial balances Other balances

Coviaca 23 973,75 417 623,88

Incentiverde (42 316,46) (10 000,00)

Resifluxo 298 566,51 (44 770,33)

Marechal 83 991,45 1 975,34

Valorec 68 356,76 1 394 880,96

Prontiquest 534 505,74 1 147 409,28

Cronorigem (45 703,35) 7 168,57

Estudograma 223,73 605,00

Acamedco 576 018,95 189 517,14

VCP 96 476,05 302 974,45

Resort ACA 6 828 867,76 (1 112 679,18)

Arvest (2 445 477,62) (177 102,48)

Subtotal 5 977 483,26 2 117 602,64

TOTAL 5 977 483,26 2 117 602,64


N OT E 8 . I N TA N G I B L E A S S E T S

8.1. GOODWILL

Measured Goodwilll, translated into the positive consolidation differences, represents the excess of acquisition costs on the equity of the associated company at date of purchase, of changes in control that force the alteration of the consolidation method or of the first consolidation.

During 2016, following the changes introduced by Decree-Law no. 98/2015, 2nd June, Goodwill is now amortised and impairment losses or any indication of an eventual loss are deducted from its value.

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

GOODWILL 2017 2016

ACA 3 233 480,55 3 637 665,62

Angolaca 4 544 490,06 5 112 551,32

Ambiágua 107 478,84 120 913,70

RRI 191 368,33 215 289,37

Parq G 104 349,85 117 393,58

ÁLEA 10 800,00 12 150,00

Consmar Construção Civil 120 744,80 135 837,90TOTAL 8 312 712,44 9 351 801,49

(Amounts in euros)

The reduction that took place between 2017 and 2016 is the result of the amortisation of the period, calculated considering a useful life of 10 years.

INTANGIBLE ASSETS GOODWILL 31.12.2017 GOODWILL 31.12.2016

On 31.12.2016(01.01.2017)

Gross carrying amounts 10 390 890,19 10 390 890,19

Accumulated impairment losses and amortisations (1 039 089,02) -

Net carrying amounts 9 351 801,17 10 390 890,19

Amortisations (1 039 088,73) (1 039 088,02)

On 31.12.2017

Gross carrying amounts 10 390 890,19 10 390 890,19

Accumulated impairment losses and amortisations (2 078 177,75) (1 039 089,02)

Net carrying amounts 8 312 712,44 9 351 801,17

(Amounts in euros)


According to the provisions set out in the new wording of NCRF 14 – Concentrations of Business Activities, the purchaser must measure goodwill acquired in a concentration of business activities at cost, minus accumulated amortisations and any impairment losses.

Under NCRF 6, goodwill must be amortized over its useful life or after 10 years if useful life cannot be reliably estimated. In addition, impairment should be tested if events or changes in circumstances indicate that it may be impaired, as required by NCRF 12 - Impairment of Assets.

In 2015, the Group performed impairment tests on goodwill recorded in the consolidated financial statements, complying with the condition imposed by the regulations then in force, subject to annual impairment tests, and concluded that there were no indications of impairment, as well as the reasonableness of the carrying amount of that asset.

In the course of 2016 and 2017, there were no material changes in circumstances that could lead to a different conclusion from that previously obtained, which is also highlighted by the positive performance of the Group during the years of 2017 and 2016 and by the underlying perspectives of the Business Plans of the main areas, which point to a generalised growth in operations and results of future operations.

In view of the above, the Group did not subject the goodwill recorded in the consolidated balance sheet of 31st December 2017 to new impairment tests, insofar the conclusions obtained for the year of 2015 are considered to be valid (and further strengthened).

8.2. OTHER INTANGIBLE ASSETS

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

The reconciliation of initial gross values for the periods ending on 31st December, 2016 and 2015, as well as the respective movements, are brought together on the table below:


INTANGIBLE ASSETS Computer software

Industrial propertyOther intangible

assets TotalCopyrights, patentes e outros direitos

On 31.12.2015 (01.01.2016)

Gross carrying amounts 1 286,47 - 68 388,94 69 675,41

Accumulated impairment depreciations and losses - - (14 477,56) (14 477,56)

Net carrying amounts 1 286,47 - 53 911,38 55 197,85

Increases 950,73 - - 950,73

Other changes in assets - 48 488,94 (48 488,94)

Amortisations (614,04) (1 212,22) (6 634,66) (8 460,92)

Other changes in amortisation (1 212,22) 1 212,22

On 31.12.2016

Gross carrying amounts 2 237,20 48 488,94 19 900,00 70 626,14

Accumulated impairment depreciations and losses (614,04) (2 424,44) (19 900,00) (22 938,48)

Net carrying amounts 1 623,16 46 064,50 - 47 687,66

Exchange rate updating (345,47) - - (345,47)

Sales, accidents and write-offs - (44 953,29) - (44 953,29)

Amortizations (685,19) (1 111,21) - (1 796,40)

Exchange rate updating - - 149,44

On 31.12.2017

Gross carrying amounts 1 891,73 3 535,65 19 900,00 25 327,38

Accumulated impairment depreciations and losses (1 149,79) (3 535,65) (19 900,00) (24 585,44)

Net carrying amounts 741,94 - - 741,94

(Amounts in euros)

N OT E 9 . TA N G I B L E F I X E D A S S E T S

9.1. DISCLOSURE ON TANGIBLE FIXED ASSETS

a) Measurement used to determine the gross carrying amount:

The initial measurement is made considering the cost and then adjusted according to the accumulated depreciations and impairment losses, which were not observed.

Companies integrating the consolidated accounts under the full consolidation method suffered consolidation adjustments, both in gross carrying amounts and depreciations, reason why the subsequent measurement will reflect such adjustments.

b) Depreciation methods used

The assets’ useful life is limited and defined according to the usefulness expected by the company. Therefore, it is assessed annually.

The depreciation method used for all assets is the straight-line depreciation method, which reflects an expected and constant consumption of economic benefits.

The reconciliation of initial gross values, final gross values, increases, amortizations and alienations, and initial and final gross depreciations values of subsidiaries that integrate the consolidated accounts of ACA SGPS is presented in the table below. One


should highlight the changes in the consolidation period, reflected in the conciliation of the final balances of 2015 and the initial balances of 2016.

The conciliation between the final balance of 2015 and the initial balance of 2016 is the result of a change of perimeter, with the entrance of Ângulo Recto and Wicon.

TANGIBLE FIXED ASSETSBuildings and other constructions Basic equip-

mentTransportation

equipmentAdministrative

equipmentOther tangible

fixed assetsOn-going fixed

assetsConsolidation

Adjustments TotalLands Buildings

On 31.12.2015 (01.01.2016)

Gross carrying amounts 20 183 728,15 19 546 777,87 69 525 874,80 30 382 176,56 2 168 308,96 3 864 978,16 14 091 542,57 - 159 763 387,06

Accumulated impairment depreciations and losses 0,00 (6 294 088,39) (50 572 271,09) (28 063 025,58) (2 020 135,31) (1 521 719,09) - - (88 471 239,47)

Net carrying amounts 20 183 728,15 13 252 689,47 18 953 603,71 2 319 150,97 148 173,65 2 343 259,06 14 091 542,57 - 71 292 147,59

Increases - 322 929,60 3 546 584,45 1 400 884,23 148 643,56 888,55 754 175,63 - 6 174 106,01

Transfers - 53 657,10 - - - - (53 657,10) - -

Relisting of non-current assets held for sale - - (92 260,44) (84 377,52) - - - - (176 637,96)

Sales, accidents and write-offs - - (5 107 595,17) (1 902 309,26) 663 235,95 (61 403,37) (715 647,41) - (7 123 719,26)

Consolidation Adjustments to depreciation of fixed assets - - - - - - - (184 598,52) (184 598,52)

Changes on the consolidation perimeter - (47,93) (4 057,40) (10 818,38) - - - - (14 923,71)

Exchange rate differences - - - - - - (19 738,85) - (19 738,85)

Annulment of depreciation of the alienated assets - - 3 215 406,12 1 732 379,10 5 445,38 4 093,56 - - 4 957 324,16

Consolidation Adjustments to amortisation of fixed assets - - - - - - - 17 367,73 17 367,73

Depreciations - (418 964,70) (2 936 287,08) (940 511,98) (127 848,13) (275 535,50) - - (4 699 147,38)

Exchange rate differences (4 166 126,83) (2 207 626,01) (3 432 632,79) (316 494,87) (2 977,36) (466 863,38) (2 887 606,15) - (13 480 327,40)

On 31.12.2016(01.01.2017)

Gross carrying amounts 20 183 728,15 19 923 316,64 67 868 546,23 29 785 555,63 2 980 188,47 3 804 463,33 14 056 674,84 (184 598,52) 158 417 874,77

Accumulated impairment depreciations and losses (4 166 126,83) (8 920 679,10) (53 725 784,85) (27 587 653,33) (2 145 515,42) (2 260 024,41) (2 887 606,15) 17 367,73 (101 676 022,36)

Net carrying amounts 16 017 601,31 11 002 637,54 14 142 761,39 2 197 902,30 834 673,06 1 544 438,92 11 169 068,69 (167 230,79) 56 741 852,40

SI Concilia-tion 2017

Change in gross carrying amounts - (1 239,65) (11 003,03) 10 818,38 (8 074,27) 353 580,46 (542 956,90) 194 123,83 (4 751,19)

Change in accumulated depreciations - 1 239,65 11 002,81 (10 818,38) 7 974,79 435,39 62 656,82 99 391,20 171 882,28

On 31.12.2016 (01.01.2017)

Gross carrying amounts 20 183 728,15 19 922 076,99 67 857 543,20 29 796 374,01 2 972 114,20 4 158 043,79 13 513 717,94 9 525,30 158 413 123,58


Net carrying amounts 16 017 601,31 11 002 637,54 14 142 761,17 2 197 902,30 834 573,58 1 898 454,77 10 688 768,61 126 284,23 56 908 983,50

Increases - 283 189,41 10 316 002,42 2 315 622,95 72 563,95 34 342,29 573 174,20 - 13 594 895,23

Transfers - 2 600 146,26 - - (84 644,52) - (2 600 146,26) - (84 644,52)

Relisting of non-current assets held for sale - - (4 256,66) (11 379,70) - (62 182,74) 361,04 - (77 458,06)

Consolidation Adjustments to depreciation of fixed assets - (3 261 494,72) (2 810 043,21) (401 068,24) (146,64) - - - (6 472 752,82)

Changes on the consolidation perimeter - - - - - - - 528 245,15 528 245,15

Exchange rate differences (1 805,50) (45 019,73) (369 554,84) (2 629,76) (20 785,92) (188,56) (1 201,87) (1,45) (441 186,18)

Annulment of depreciation of the alienated assets - 913 437,53 163 988,08 398 584,05 163 748,54 - - - 1 639 758,20

Depreciations - (716 358,43) (4 722 055,19) (1 178 181,68) (253 431,74) (341 768,17) (1 699,96) - (7 213 495,17)

Exchange rate differences 4 248,84 51 237,68 6 184,85 2 910,79 8 663,71 - - 73 245,87

On 31.12.2017

Gross carrying amounts 20 181 922,65 19 498 898,20 74 989 690,92 31 696 919,26 2 939 101,08 4 130 014,78 11 485 905,05 537 769,11 165 460 221,05


Net carrying amounts 16 015 795,81 10 780 786,69 16 768 079,45 3 325 034,77 714 788,04 1 537 321,29 8 659 255,76 654 528,04 58 455 589,87

(Amounts in euros)


N OT E 1 0 . N O N - C U R R E N T A S S E T S H E L D F O R S A L E A N D D I S CO N T I N U E D O P E R AT I O N A L U N I T S

10.1 NON-CURRENT ASSETS LISTED AS HELD FOR SALE DURING THE PERIOD

During the period ended on 31st December 2016, subsidiary RRI opted to discontinue their operations in Urban Cleaning in Lisbon and Guarda, which represented a significant part of the company’s turnover and which are an integral part of a coordinated plan to stop operations. The activity carried out in these operations was deficient and required management and treasury efforts that were not appropriated. Following this decision assets associated with these operations were considered as non-current assets held for sale.

Subsidiary RRI has plans to be sold and buyers interested in such equipment and sale operations are expected to happen in 2018. In fact, apart from external buyers, one is currently analysing the hypothesis of selling such non-current assets to affiliated companies operating in external markets, where this sector of activity is growing, which forces companies operating in such segments to have a greater response capacity.

On 31st December 2017, non-current assets held for sale were:

ANALYSIS OF THE MAIN CLASSES OF ASSETS AND LIABILITIES HELD FOR SALE

Period of 2017 Period of 2016

Heavy goods vehicles Totals Heavy goods

vehicles Totals

ASSETSTransport equipment 176 637,96 176 637,96 176 637,96 176 637,96

TOTALS 176 637,96 176 637,96 176 637,96 176 637,96

N OT E 1 1 . CO ST S O F O B TA I N E D LOA N S A N D F I N A N C I N G D E TA I L S

On 31st December, 2017 and 2016, the item “Obtained loans” was as presented below:


ITEMS2017 2016

Non-current Current Non-current Current

Bank loans 7 910 393,45 8 148 283,95 11 080 086,92 5 053 197,09

Cautioned accounts - 21 525 666,68 - 26 717 325,97

Confirming - 970 586,10 - 3 304 549,23

Finance leases 3 517 482,68 1 241 031,86 2 116 298,21 1 091 394,81

Participants in equity 1 033 653,94 - 4 349 988,61 1 748 574,15

Others 4 926 876,67 1 188 797,33 4 618 301,64 1 348 971,60

TOTAL 17 388 406,73 33 074 365,93 22 164 675,38 39 264 012,85

(Amounts in euros)

The non-current component of bank loans is essentially due to subsidiary Angolaca, which reported, on 31st December 2016, an amount of approximately 7 MEUR in loans (approximately 11 million on 31st December 2016). From a global perspective, we have witnessed a maintenance in the amount of bank loans and a significant reduction in cautioned and confirming accounts (approximately MEUR 5.2 and MEUR 1.5, respectively).

The section of participants in equity substantially reduced the amount via payments made to shareholder Alberto Augusto Couto Alves to amounts that were dedicated to the Group’s new investments in the previous years.

N OT E 1 2 . I M PA I R M E N T O F A S S E T S

Losses and reversions of impairment for the period ending on 31st December 2017 and 2016 were recognized as:

AMOUNT OF LOSSES DUE TO IMPAIRMENT AND RESPECTIVE REVERSIONS RECOGNIZED DURING THE PERIOD Other receivables Clients Total

PERIOD OF 2017 Impairment losses recognized in results

Increases - (3 575 698,47) (3 575 698,47)

Reversions - 17 796,92 17 796,92

TOTAL - (3 557 901,55) (3 557 901,55)

PERIOD OF 2016 Impairment losses recognized in results

Increases - (1 262 600,13) (1 262 600,13)

Reversions - 688 253,76 688 253,76

TOTAL - (574 346,36) (574 346,36)

(Amounts in euros)

The amounts registered under client impairments result from an analysis of the collectability prospects of the respective outstanding balances, taking into account the best available evidence to date, in order to adjust the carrying forward amount to the amounts expected. Therefore, the reinforcement of impairment losses for Clients for 2017 and 2016 are essentially related to subsidiaries Angolaca (3,531,832 EUR and 684,302 EUR, respectively) and ACA France (14,385 EUR and 291,443 EUR, respectively). Impairment losses reversals for clients in 2016 was reported by Angolaca,


a result of the recovery of amounts that had been considered lost by impairment in previous years.

In view of the above, the Group did not subject the goodwill recorded in the consolidated balance sheet of 31st December 2017 to new impairment tests, insofar the conclusions obtained for the year of 2015 are considered to be valid (and further strengthened).

N OT E 1 3 . I N V E ST M E N T S I N S U B S I D I A R I E S A N D OT H E R CO M PA N I E S

13.1 LIST OF SIGNIFICANT INVESTMENTS IN SUBSIDIARIES AND JOINTLY CONTROLLED COMPANIES

INVESTMENTS IN SUBSIDIARIES, ASSOCIATED COMPANIES AND JOINTLY-CONTROLLED ENTITI

Main OfficesTotal %

of voting rights

Carrying forward amount at the

end of the period

Financial information of the associated

Equity Net earnings

PERI

OD O

F 201

7

Subsidiaries and Associated

Reco

gnise

d via

equi

ty m

etho

d

Minersolo Angola 33,00% 20 258 852,45 77 363 543,45 7 038,94Vid Garden Portugal 50,00% 5 075,50 10 150,99 (26,00)

S. Tomé S. Tomé 59,52% 6 193,76Solamba Angola 49,00% 71 428,18 145 768,65 (641,80)

Conciva Angola 40,00% 339 296,82 849 206,10 197 369,61Concopa Angola 48,00% 0,00 (123 717,76) (47 573,21)

GV Brasil 40,33% 0,00 888 952,00 (649 879,41)

Couto Alves Engenharia Brasil 99,99% 597 306,40 574 637,93 (274 036,34)

Imolot Brasil 99,99% 0,00 (2 482,00) (2 788,33)

Ambirecic Brasil 99,99% 0,00 (43 289,02) (51 505,19)

Subtotals 21 278 153,10


Reco

gnise

d at

cost

Agro-angola Angola 1,00% 98,77Concopa Angola 1,00% 107,36Conciva Angola 5,00% 536,76Norplan Brasil 0,00% 37 755,80Aca Cabo Verde Cabo Verde 98,43% 22 645,79Valorec Portugal 13,63% 7 500,00Brancelhe Portugal 2 493,99Mirandela XXI Portugal 4 462,00Norgarante Portugal 51 600,00Lisgarante Portugal 2 500,00Garval Portugal 2 500,00Aca Brasil - Consórcio Brasil 66 352,63ACA Ferrovias Brasil 60,00% 151 022,38Adrave Portugal 5 100,00Subtotais 354 675,48

Other financial positions

Reco

gnise

d at

fair

valu

e by r

esul

ts

Public Debt Bonds Angola 9 874 910,02BPRP shares França 50,00Work Compensation Fund Portugal 55 717,60

Subtotals 9 930 677,62

TOTAL 31 563 506,20

(Amounts in euros)


INVESTMENTS IN SUBSIDIARIES, ASSOCIATED COMPANIES AND JOINTLY-CONTROLLED ENTITI

Main OfficesTotal %

of voting rights

Carrying forward amount at the

end of the period

Financial information of the associated

Equity Net earningsPE

RIOD

OF 2

016

Subsidiaries and Associated Re

cogn

ised

via eq

uity

met

hod Minersolo Angola 33,00% 20 258 824,52 77 356 504,51 5 528,92

Golfinvest Portugal 49,39% 514 418,52 1 050 242,50 (6 481,93)

Vid Garden Portugal 50,00% 5 088,50 10 176,99 (80,00)

Solamba Angola 49,00% 71 749,75 0,00 0,00Conciva Angola 40,00% 260 763,99 0,00 0,00Concopa Angola 48,00% 0,00 0,00GV Brasil 40,33% 0,00 0,00 0,00Subtotals 21 110 845,27


Reco

gnise

d at

cost

Agro-angola Angola 1,00% 98,77Concopa Angola 1,00% 107,36

Conciva Angola 5,00% 536,82Ambirecic Brasil 99,99% 43 725,11Couto Alves Engenharia Brasil 99,99% 1 113 540,01Imolot Brasil 99,99% 2 914,74Norplan Brasil 0,00% 43 725,40Aca Cabo Verde Cabo Verde 98,43% 22 645,79Aca S. Tomé S. Tomé 3 071,59Valorec Portugal 13,63% 7 500,00Brancelhe Portugal 2 493,99Mirandela XXI Portugal 4 462,00Norgarante Portugal 34 100,00Lisgarante Portugal 2 500,00Garval Portugal 2 500,00Adrave Portugal 5 100,00Subtotals 1 289 021,58

Other financial positions

Reco

nhec

ido a

o jus

to

valo

r por

resu

lt ado

s Public Debt Bonds Angola 9 874 766,77BPRP shares França 50,00Work Compensation Fund Portugal 27 532,24

Subtotals 9 902 349,01

TOTAL 32 302 215,87

(Amounts in euros)


N OT E 1 4 . I N V E ST M E N T S I N S U B S I D I A R I E S A N D CO N S O L I DA -T I O N S CO P E

14.1. GAINS AND LOSSES IN FINANCIAL INVESTMENTS

GAINS/LOSSES FROM SUBSIDIARIES, ASSOCIATED COMPANIES AND JOINT VENTURES


Gains from subsidiaries,

associated companies and joint ventures

Losses from subsidiaries,


Gains from subsidiaries,


Losses from subsidiaries,


SUBS

IDIA

RIES

AND

ASSO

CIAT

ES

ACE ACA/Somague - - 719,99 -

Minersolo 2 322,85 - 1 824,54 -

GV - - - (174 878,99)

Vid Garden - (13,00) - (40,00)

Ângulo Recto - - 301 429,68 -

Conciva 78 947,85 - 19 383,36 -

Solamba (314,48) 10 740,05 -

Álea 43 757,12 - - -

ACA Energia - (8 958,32) - -

Couto Alves Engenharia - (274 008,94) - -

IMOLOT - (334,00) - -

Golfinvest - (362 741,83) - (7 498,18)

TOTAL 125 027,82 (646 370,57) 334 097,62 (182 417,17)

(Amounts in euros)

The profit of EUR 2,322.85 reported for 2017 (EUR 1,824.54 for 2016) refers to the application of the equity method by Angolaca over its subsidiary Minersolo, where the company has a holding of 33%. In turn, the loss of EUR 8,958.32, EUR 274,008.94 and EUR 334.00 reported in the table above result from the application of the equity method by Aca BRasil over subsidiaries Ambirecic, Couto Alves Engenharia and Imolot, respectively. The profits of EUR 78,947.85 and the loss of EUR 314.48 refer to the application of the equity method by AmbiÁfrica to their subsidiaries Conciva and Solamba, respectively.

The profit of EUR 301,429.68 reported in 2016 refers to the profit made by ACA and ACA SGPS following the acquisition of the financial holding in Ângulo Recto, which happened on 30th December 2016.

The amount of EUR 362,741.83 reported in 2017 refers to the loss sustained by the sale, to the company, of the shares held by ACA SGPS in Golfinvest. Following such sale, the Group no longer has interests in such company, which left the consolidation perimeter.


N OT E 1 5 . I N V E N TO R I E S

a) The carrying amount in the companies integrally consolidated is of EUR 15,738,828.87 according to the table below.

CARRYING AMOUNTS OF STOCKS

31.12.2017 31.12.2016

Gross amounts Accumulated impairments

Net carrying amounts Gross amounts Accumulated

impairmentsNet carrying

amounts

Goods 1 390 846,23 - 1 390 846,23 1 279 982,51 - 1 279 982,51

Materials / Subsidiaries and Consumption 9 065 082,12 - 9 065 082,12 8 231 718,42 - 8 231 718,42

Finished and semi-finished products 3 056 758,37 - 3 056 758,37 2 747 430,57 - 2 747 430,57

Products and works in progress 1 521 948,08 - 1 521 948,08 954 459,22 - 954 459,22

Advances made on purchases 704 194,07 - 704 194,07 421 512,70 - 421 512,70

TOTAL 15 738 828,87 - 15 738 828,87 13 635 103,42 - 13 635 103,42

(Amounts in euros)

b) The amount of stock recognized as expenses during 2017 and 2016 is distributed as:

AMOUNT OF STOCK RECOGNIZED AS EXPENSES DURING THE PERIOD


GoodsMaterials /

Subsidiaries and Consumption

Total GoodsMaterials /

Subsidiaries and Consumption

Total

Stat

emen

t of t

he co

st of

goo

ds so

ld

and

cons

umed

raw

mat

erial

s

Stocks at beginning of period + 1 285 393,16 8 239 659,31 9 525 052,47 1 907 457,18 11 112 267,73 13 019 724,91

Conciliation of SI2017 with SF2016 +/– - 54 977,79 54 977,79 708 829,57 (1 215 600,44) (506 770,87)

Stocks at beginning of period – 1 285 393,16 8 294 637,10 9 525 052,47 2 616 286,75 9 896 667,29 12 512 954,04

Purchases

Purchases + 8 702 896,44 62 121 313,17 70 006 553,67 9 544 303,36 22 378 394,71 31 922 698,07

Purchase returns – - (822,36) (822,36) - (390,56) (390,56)

Rebates and bonuses in purchases – - - - - - -

Reclassifica-tions, regulari-zations

Reclassifications +/– - - - -499 077,98 496 677,55 (2 400,43)

Stocks at the end of period (1 395 798,23) (9 073 422,13) (10 423 961,73) (1 285 393,16) (8 239 659,31) (9 525 052,47)

Correction/repositioning of cost of goods – - (3 535 355,86) (3 535 355,86) - (3 713 674,32) (3 713 674,32)

Exchange differences 11 489,55 193 210,29 204 699,83 (12 867,42) (1 219 082,78) (1 231 950,20)

Cost of sold goods and consumed materials 8 603 980,91 57 999 560,21 66 603 541,13 10 363 251,55 19 598 932,57 29 962 184,12

(Amounts in euros)


c) Variation of production inventories reported in 2017 is EUR 1,025,719.23 according to the table below:

STATEMENT OF CHANGES IN PRODUCTION INVENTORIES


Finished and semi-finished

products

Products and works in progress Total

Finished and semi-finished

products

Products and works in progress Total

Inventories at beginning of period (SI) – (2 747 430,57) (954 459,22) (3 701 889,79) (3 998 217,98) - (3 998 217,98)

Reclassifications and regularisations Reclassifications +/– - - - 35 989,61 - 35 989,61

Stocks at the end of period + 3 056 758,37 1 521 948,08 4 578 706,45 2 747 430,57 954 459,22 3 701 889,79

Correction/reposition of Production variation

147 138,41 - 147 138,41 - - -

Exchange rate differences +/– 1 764,15 - 1 764,16 721 843,02 - 721 843,02

Variations in production stocks 458 230,37 567 488,86 1 025 719,23 (492 954,78) 954 459,22 461 504,44

(Amounts in euros)

N OT E 1 6 . CO N ST R U CT I O N CO N T R ACT S

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

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

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

• Proportion of costs incurred compared to total estimated costs;

• Survey of works conducted;

• Conclusion of a physical proportion of the works contracted.

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

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

The revenue recognized as such for the period was EUR 150,450,228.36 and is the result of:


CONSTRUCTION CONTRACTS

Amounts recognized in the period

Results

Revenue Expenses, including expected losses Results

PERIOD OF 2017

ACA 43 013 132,27 (41 752 721,85) 1 260 410,42

Angolaca 63 170 080,79 (49 701 086,38) 13 468 994,41

Ambiáfrica 18 373 742,28 (13 825 238,74) 4 548 503,54

Aca France 4 486 285,29 (3 948 090,53) 538 194,76

Aca Brasil 15 500 577,03 (10 264 930,35) 5 235 646,68

Global Stadium 3 065 620,92 (2 878 677,29) 186 943,63

ACA BUD 496 027,28 (496 027,28)

Angulo Recto 2 344 762,49 (2 248 677,25) 96 085,24

TOTAL 150 450 228,36 (125 115 449,67) 25 334 778,69

PERIOD OF 2016

ACA 33 732 203,61 (28 947 593,68) 4 784 609,93

Angolaca 23 319 733,80 (19 897 383,79) 3 422 350,01

Ambiáfrica 14 394 074,73 (11 201 614,58) 3 192 460,16

Aca France 6 078 444,31 (6 510 704,29) (432 259,98)

Aca Brasil 24 021 115,63 (19 529 362,30) 4 491 753,33

Global Stadium 916 402,26 (804 015,87) 112 386,39

ACA BUD 975 571,23 (975 571,23) -

TOTAL 103 437 545,57 (87 866 245,74) 15 571 299,83

(Amounts in euros)

It is important to mention that the Portuguese and French markets use, as an instrument to measure the works executed, the proportions of paid costs regarding the total estimated costs, whereas in Angola and Polland they conduct a survey of the work carried out, thus ensuring the reliability of paid costs and, when it’s not possible to reliably attest the outcome of the contract, no profit is recognised, as is observed form Polland.

N OT E 1 7 . R E V E N U E

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

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

The evolution of the revenue from sales and provision of services in 2017 and 2016 is found in the table below:


AMOUNTS OF REVENUES RECOGNISED IN PERIOD

31.Dez.2017 31.Dez.2016

Revenues recognised in period

Proportion of total revenues

recognized in the period

Percentage variation in relation

to the revenues recognised in the

previous period

Revenues recognised in period

Proportion of total revenues

recognized in the period

Percentage variation in relation

to the revenues recognised in the

previous period

Sales 15 830 869,87 7,66% 50,31% 10 532 125,17 8,32% -30,38%

Provisions of services 190 815 599,18 92,34% 64,40% 116 071 111,37 91,68% -17,16%

Construction contracts 150 450 228,36 72,81% 45,45% 103 437 545,57 81,70% -16,91%

Other provisions of services 40 365 370,82 19,53% 219,51% 12 633 565,80 9,98% -19,23%

TOTAL 206 646 469,04 100% 63,22% 126 603 236,54 100% -18,45%

(Amounts in euros)

In 2017 there was an overall increase of 63.22% in turnover compared to the same period of the previous year. This increase is essential the result of subsidiary companies in Angola and Portugal, the operations of which suffered a significant growth.

In terms of distribution of the Group’s turnover, between domestic market and external market, we have the following:

DISTRIBUTION OF TURNOVER 2017 TN Weight 2017 2016 TN Weight 2016

National market 87 784 634,62 42,48% 48 839 117,53 38,58%

External market 118 861 834,42 57,52% 77 764 119,01 61,42%

TOTAL 206 646 469,04 100,00% 126 603 236,54 100,00%

N OT E 1 8 . P R OV I S I O N S , CO N T I N G E N T L I A B I L I T I E S A N D CO N T I N G E N T A S S E T S

18.1. PROVISIONS

PROVISIONS Warranties to clients Onerous contracts Other provisions Total

Accumulated on 31.12.2015 (01.01.2016) 2 794 313,87 - (331 510,97) 2 462 802,90

By new provisions 183 278,66 112 735,85 - 296 014,51

Amounts reverted in the period (337 254,73) - - (337 254,73)

Effects of exchange rates differences - - (421 756,32) (421 756,32)

Accumulated on 31.12.2016 (01.01.2017) 2 640 337,80 112 735,85 (753 267,29) 1 999 806,36

By new provisions 94 982,89 221 463,24 - 316 446,13

Amounts reverted in the period (44 347,49) (132 035,86) - (176 383,35)

Effects of exchange rates differences (148,08) - - (148,08)

Accumulated on 31.12.2017 2 690 825,12 202 163,23 (753 267,29) 2 139 721,06

(Amounts in euros)


The reinforcement of provisions reported in 2017 relates to guarantees given to clients under construction contracts in progress, through contributions from subsidiaries ACA (EUR 297,451.47), Ambiágua (EUR 93,112.22) and Ielac (EUR 1,870.67 Euros). On the other hand, the subsidiary ACA recorded reversals of provisions amounting to EUR 44,347.49 for works still covered by the warranty period.

The reinforcement of EUR 221,463.24 reported under the item Onerous Contracts was reported by the subsidiaries ACA, Ambiágua e Ângulo Recto, in the amounts of EUR 182,971.23, EUR 10,823.91 and EUR 27,668.10 respectively. In tunr, the reduction of EUR 132,035.86 was registered by subsidiaries ACA (EUR 19,300.01), Ambiágua (EUR 75,424.51) and Ielac (EUR 37,311.34), a consequence of the works completed in 2017.

18.2. CONTINGENT LIABILITIES

a) Guarantees

Bank guarantees for successful implementation and after sales provided by the subsidiary ACA for construction contracts in progress and works already completed but still without a final receipt amount to EUR 11,883,014.91 (EUR 11,082,309.94 in 2016).

This subsidiary also provided bank guarantees of good payment in the amount of EUR 2,625,313.92 (563,837.66 in 2016), guarantees in favour of related entities in the amount of 6.289.186,15 (14,427,109.16 Euros in 2016) and guarantees of other natures in 2017 and 2016 in the amount of 265,148.63 Euros.

b) Notes Payable

There is a note payable to Banco Millennium BCP, for ownership and warranty of any liabilities and responsibilities assumed and to be assumed by the Programa de Emissões de Papel Comercial Grupado up to EUR 1,500,000, jointly subscribed by Alberto Couto Alves S.A. and Alberto Couto Alves S.G.P.S. S.A. There is another note payable to Caixa Económica Montepio Geral for ownership and warranty of any liabilities and responsibilities assumed and to be assumed by the Programa de Emissões de Papel Comercial up to EUR 1,000,000, subscribed by Alberto Couto Alves S.A.

c) Ongoing Lawsuits

On 31st December 2017, there were cases filed against subsidiary ACA amounting to approximately MEUR 1.0, but the Board of Directors is convinced of the unlikelihood of an unfavourable outcome, which may result in finanicla outflow for the Entity.


18.3. CONTINGENT ASSETS

ACA’s contingent assets are a consequence of the following situations:

a) Legal actions:

Lawsuits filed by ACA and that, according to the Board of Directors, may lead to an influx of future economic advantages.

The following table presents a synthesis of the lawsuits filed by ACA, by type of case:

TYPE OF LAWSUITS AMOUNT

Administrative 6 186 476,41

Civil 440 663,20

TOTAL 6 627 139,61

(Amounts in euros)

N OT E 1 9 . E V E N T S A F T E R T H E B A L A N C E S H E E T DAT E

The issuance of the financial statements was authorized by the Company’s legal representatives on 27th July 2018, who have the power to alter them in the General Meeting, during which the statements will be assessed.

No facts or circumstances were known after the balance sheet date that could represent a change in the conditions and assumptions existing as of 31st December 2017 or that, due to their materiality, should be disclosed in this Annex , in accordance with the criteria defined by NCRF 24 - Events after the balance sheet date.

N OT E 2 0 . I N CO M E TA X E S

In 2016 and 2017, the chapter of income tax had the following composition:

INCOME TAXES 2017 2016

Current Tax (3 146 781,74) (2 920 028,88)

Deferred taxes (218 979,57) 94 055,24

Income taxes (3 365 761,32) (2 825 973,64)

(Amounts in euros)


It is important to mention that, in this respect, the increase of deferred tax expesnes in 2017, when compared to 2016, happens mostly due to the margin cancellation operations following the sale of fixed tangible assets carried out in 2017 between subsidiaries.

N OT E 2 1 . F I N A N C I A L I N ST R U M E N T S

The Group’s policy is to recognize an asset, a financial liability or an equity instrument according to the conditions set forth in NCRF 27 – Financial Instruments.

Financial assets held for trading are measured at fair value in the parent company ACA SGPS and its subsidiary ACA, and the amount reported reflects the variation between the acquisition value and the quoted value of the same at the closing date of the financial year

For the remaining financial assets and liabilities, the measurement basis is cost or amortized cost, if it can be reliably measured and the difference between them is materially significant, minus impairment losses.

Gains and losses reported in 2017 and 2016 regarding fair value of financial assets and liabilities are presented below:

NET GAINS AND NET LOSSES RECOGNIZED OF FINANCIAL ASSETS AND LIABILITIES

Períod of 2017 Períod of 2016

Gains Losses Net gains (and losses) Gains Losses Net gains

(and losses)

Financial assets

Measured at fair value through profit or loss

Financial assets held for trading - - - 21 247,80 - 21 247,80

TOTAL - - - 21 247,80 - 21 247,80

The detail of financial assets and liabilities on 31st December 2017 and 2016 is presented below:

CARRYING AMOUNTS UNDER EACH CLASS OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES 31.12.2017 31.12.2016

FINAN

CIAL

ASSE

TS

Non-current Assets Other financial instruments 10 285 353,09 11 191 370,61Receivable credits 5 449 380,90 7 720 438,74Subtotal 15 734 733,99 18 911 809,35

Current Assets

Financial assets at fair value by compensation in results

Financial assets held for trading - - Subtotal - -

Financial assets at amortised costs minus impairment

Clients 294 253 805,40 244 959 019,98State and other public entities 8 913 096,04 6 297 974,70Other receivables 116 581 241,78 78 948 823,66Cash and bank deposits 15 380 668,28 17 742 854,74Subtotal 435 128 811,50 347 948 673,08

TOTAL 450 863 545,50 366 860 482,44

(Amounts in euros)


Of the amount reported under “Other financial assets” as of 31st December, 2017, EUR 9,874,910 (9,874,767 on 31st December 2016) refer to public debt securities held by the subsidiary Angolaca, which are valued at amortised cost and there hasn’t been any indication of impairment.

These public debt securities were delivered by the Angolan Ministry of Finance as payment for works executed and completed until 2014, consisting of 4 lots:

• 2689 (two thousand six hundred and eighty-nine) ISIN bonds with AOTNOI04D014, and date of maturity on 12/16/2018;

• 2689 (two thousand six hundred and eighty-nine) ISIN bonds with AOTNOI05D014, and date of maturity on 12/16/2019;

• 1754 (one thousand, seven hundred and fifty-four) bonds with ISIN AOTNOI040F15, and date of maturity on 02/13/2019;

• 1754 (one thousand seven hundred and fifty-four) ISIN bonds with AOTNOI050F15, and maturity date on 02/13/2020.

CARRYING AMOUNTS UNDER EACH CLASS OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES 31.12.2017 31.12.2016

FINAN

CIAL

ASSE

TS

Non-current liabilities

Financial liabilities measured at amortized cost

Obtained funding 17 388 406,73 22 164 675,38Other payables 4 017 317,44 1 879 291,15Subtotal 21 405 724,17 24 043 966,53

Financial liabilities measured at amortized cost

Suppliers 105 723 487,66 75 686 154,23Advances from clients 77 895 320,75 31 107 740,50State and other public entities 5 070 023,41 4 017 756,75Obtained funding 33 074 365,93 39 264 012,85Other payables 25 863 053,63 10 823 503,60Subtotal 247 626 251,38 160 899 167,93

TOTAL 269 031 975,55 184 943 134,46

(Amounts in euros)

N OT E 2 2 . E Q U I T Y

On 31st December 2017 and 2016, the Group’s Equity is detailed below:

ITEMS 2017 2016

Paid-in capital 30 050 000,00 30 050 000,00

Legal reserves 1 335 627,92 1 298 518,03

Other Reserves 140 787 963,35 140 568 885,93

Carried forward results 55 977 805,57 58 036 085,24

Adjustments/Other variations in equity (61 609 606,43) (59 899 916,84)

Net result of period 1 086 394,34 172 793,83

Minority Interests 111 088 482,77 110 933 076,58

TOTAL EQUITY 278 716 667,52 281 159 442,77

(valores expressos em euros)


The section “Adjustments / Other changes in shareholders ‘equity” includes the effects on equity by applying the equity method over the subsidiaries included in the consolidation perimeter using this method, as well as the effects of the exchange rate conversion of the financial statements of the holdings, whose functional currency is different from the Euro, in accordance with the criteria defined in NCRF 23.

Share capital is EUR 30,500.000, broken down into 6,010,000 shares, fully subscribed and paid for, with a nominal value of EUR 5 each.

CATEGORY OF ISSUED SHARES

Quantity of shares Nominal value of shares

Issued SharesOwn shares

Shares held by subsidiaries or

associated

Issued SharesOwn shares

Shares held by subsidiaries or

associatedFully paid Non paid Total Fully paid Non paid Total

ACA S.G.P.S. 6 010 000 6 010 000 5,00 € 5,00 €

(Amounts in euros)

N OT E 2 3 . OT H E R R E L E VA N T I N F O R M AT I O N

23.1. STATE

STATE AND OTHER PUBLIC ENTITIES2017 2016

Assets Liabilities Assets Liabilities

241 – Income Tax 4 900 218,83 2 938 815,20 2 592 593,73 2 218 264,13

242 - Withholding income taxes 1 484,93 544 562,93 563,70 410 657,54

243 – Added Value Tax 2 247 873,36 955 467,35 1 588 557,37 397 364,12

244 – Other taxes 1 033 288,73 55 647,74 1 112 698,89 454 364,26

245 – Contributions for Social Security 709 523,20 450 645,58 996 378,76 536 187,51

248 – Other tax 20 707,00 124 884,60 7 182,26 919,19

TOTAL 8 913 096,04 5 070 023,41 6 297 974,70 4 017 756,75

(Amounts in euros)

One should emphasise that the largest portion of the balance under “State and other Public Entities” refers to income tax, attributable to the contribution of the subsidiary AngolACA and AmbiÁfrica.

23.2. DEFERRALS

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


The detail of Deferrals of assets and liabilities on 31st December 2017 and 2016 was:

DEFERRALS2017 2016

Assets Liabilities Assets Liabilities

Expenses to recognise 691 300,49 - 1 731 799,41 -

Insurance 413 127,66 - 340 408,01 -

Rents 5 010,38 - 20 914,60 -

Other deferred expenses 273 162,45 - 1 370 476,80 -

Revenue to be recognised - 5 596 973,92 - 1 742 009,30

Services provided - 5 327 514,10 - 1 671 795,22

Grants - 5 209,47 - 7 117,43

Other income to be recognised - 264 250,35 - 63 096,65

(Amounts in euros)

The amount reported in Revenues to be recognised – Services rendered, which on 31st

December 2017 amounted to MEUR 5.3 (MEUR 1.7 on 31st December 2016), is basically due to the application of the percentage of completion method, in accordance with the criteria recommended by NCRF 19 - Construction Contracts.

23.3. OUTRAS DÍVIDAS A PAGAR

A rubrica “Outras dívidas a pagar”, em 31 de Dezembro de 2017 e 2016, apresenta a seguinte composição:

ITEMS2017 2016


Clients - 98 036,76 - 153 059,15

Staff - 5 718 086,90 - 1 898 264,37

Investment suppliers - 8 437 816,50 - 970 259,46

Creditors by increased expenses - 4 336 961,21 - 3 621 288,87

Remunerations - 2 335 017,24 - 2 078 292,28

Other increases of costs - 2 001 943,96 - 1 542 996,59

Advances on sales - 750 249,97 - 631 307,97

Other creditors 4 017 317,44 6 521 902,29 1 879 291,15 3 549 323,80

TOTAL 4 017 317,44 25 863 053,63 1 879 291,15 10 823 503,60

(Amounts in euros)

The item “Creditors by increased expenses” reports the best estimation for expenses referring to the period being reported, but the financial outflow of which will only happen in future periods.


23.4. OTHER RECEIVABLES

ITEMS2017 2016


Suppliers - 31 459 226,27 905,00 9 524 793,01

Staff - 6 087 200,31 - 1 728 640,99

Debtors by increased revenue - 38 672 095,01 - 29 613 861,81

Provision of services - 35 461 633,02 - 18 584 763,22

Other increases in gains - 3 210 461,98 - 11 029 098,60

Other debtors 5 449 380,90 40 362 720,21 7 719 533,74 37 641 042,92

TOTAL 5 449 380,90 116 581 241,78 7 720 438,74 78 508 338,73

(Amounts in euros)

The item “Debtors by increased expenses” reports the best estimation for expenses referring to the period being reported, but the financial outflow of which will only happen in future periods, considering the principle of periodicity.

One should emphasise that a significant portion of the balance under “Debtors by increased expenses”, ““Creditors” by increased expenses” and “Deferrals (assets and liabilities) is related to construction contracts and the application of the criteria set forth in NCRF 19.

23.5. SUPPLIES AND EXTERNAL SERVICES

The expenses incurred in the periods of 2017 and 2016 with External Supplies and Services are presented, when detailed by categories, as follows:


EXTERNAL SUPPLIES AND SERVICES 2017 2016

Subcontracts 42 192 815,14 30 413 996,43

Specialised works

Expert works 7 659 712,79 4 766 411,09 Marketing and promotion 76 229,90 98 129,52 Surveillance and security 1 085 522,35 445 906,41 Payment fees 491 791,69 518 407,66 Commissions 12 453,75 - Conservation and repair 1 045 425,95 1 414 126,36 Other 1 016 073,20 2 788 892,26

Mterials

Quick wear tools and utensils 652 753,68 184 310,07 Books and technical documents 721 936,67 254 649,74 Office supplies 230 822,06 220 929,67 Gifts 9 498,83 26 298,64 Other materials 133 526,68 81 363,09

Energy and fluids

Electricity, water and other fluids 167 316,77 332 674,33 Fuel 1 737 091,12 1 747 132,92 Water 97 290,01 - Other fluids 22 775,61 -

Travel and accommodation

Travel and accommodation 2 308 878,73 1 990 699,37 Transportation of staff - Goods transportation 3 282 768,61 487 903,34 Other 1 183,49 203,85

Different services

Rents and leases 8 457 008,24 7 539 580,22 Communication 510 838,49 410 150,22 Insurances 850 466,98 1 132 142,98 Legal and notary fees 244 348,37 175 940,97 Representation fees 262 762,01 181 543,51 Cleaning, hygiene and comfort 241 354,28 114 783,51 Other services 760 342,41 922 414,83

TOTAL 74 272 987,81 56 248 590,97

(Amounts in euros)

Subcontracting expenses amounted to MEUR 42 in 2017, representing around 57% of the total amount of the item. These basically include subcontracting services contracted to third parties, which highlights the contribution of companies ACA, Ambiágua, Aca France, Ambiáfrica and also Angolaca.

Compared with the previous year, there was an increase of 32% in the total amount of costs in external supplies and services, the result of a significant increase also verified in turnover.


23.6. EXPENSES WITH STAFF

In 2017 and 2016, the expenses with staff members, when detailed per type, were those presented below:

STAFF 2017 2016

Remuneration of Board of Directors 849 549,48 730 200,11

Remuneration of Staff 28 534 955,80 20 055 914,52

Post-employment benefits - 8 714

Compensations 3 756,00 106 919,82

Expenses with wages 4 949 679,47 4 647 802,45

Insurance for work accidents and professional illnesses 904 798,84 511 725,99

Other staff expenses 3 825 817,91 2 013 810,54

TOTAL 39 068 557,51 28 075 087,70

(Amounts in euros)

A large part of the amount registered under “Other expenses with staff” is related to the subsidiariesAngolaca, Ambiáfrica, Consmar France and Aca Brasil and essentially includes expenses with food, medicine and travel expenses of collaborators, among others.

23.7. OTHER EXPENSES

Other Expenses, for 2017 and 2016, had the following distribution:

ITEMS 2017 2016

Taxes 2 107 554,49 1 335 127,30

Prompt payment discounts 3 345 305,17 7 047,83

Unfavourable exchange rates 2 493 021,87 9 147 185,03

Inventory losses 36 336,70 63 052,40

Expenses and losses on financial investments 45 020,90 191 854,37

Expenses and losses on non-financial investments 902 264,76 100 130,83

Other expenses and losses 2 125 731,73 3 174 203,59

TOTAL 11 055 235,62 14 018 601,36

(Amounts in euros)

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


presented above reflect losses incurred after the liquidation of transactions in foreign currency. The main contribution was from the subsidiaries Angolaca, AmbiÁfrica and Vivangola

The amount recorded under “Others” includes approximately MEUR 1.1 ( MEUR 1.5 in 2016) of the subsidiary Angolaca, mainly related to tax fines, corrections from previous years and expenses of a financial nature, namely expenses with banking services.

23.8. OTHER REVENUE

Other Revenues, for 2017 and 2016, had the following distribution:

ITEMS 2017 2016

Complementary revenue 693 760,73 1 355 791,55

Prompt payment discounts 210 826,32 -

Gains in stocks 232 800,63 92 623,16

Favourable exchange rates 3 648 840,79 5 890 718,14

Revenue and gains in other financial assets 77 947,96 133 091,74

Revenue and gains in non-financial investments 832 888,21 2 511 545,54

Other revenue and gains 3 916 258,27 7 444 752,47

TOTAL 9 613 322,90 17 428 522,60

(Amounts in euros)

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

Regarding “Favourable exchange rates”, once more the contribution of subsidiaries AngolACA and AmbiÁfrica (EUR 1,927,400 and EUR 1,069,480, respectively) comes forward, since the amount above is largely related to the gains occurring from the liquidation of transactions and conversion to the rate at the time of the balance of fiduciary assets and liabilities in kwanzas.

“Other revenue and gains” include the amount of EUR 716.904,77 reported by Angolaca, referring to 2017, after ACA SGPS received the credit it had over Parq G, credits that were acquired during 2014 to FDO for an amount lower to its nominal amount.


23.9. FINANCIAL RESULTS

The items “Interests and similar revenue obtained” and “Interests and similar expenses paid” may be seen in the table below for the period of 2017 and 2016, respectively:

ITEMS 2017 2016

Obtained interest 795 273,69 832 966,64

Other similar revenue - 78,00

TOTAL 795 273,69 833 044,64

(Amounts in euros)

ITEMS 2017 2016

Paid interest 7 219 718,05 6 832 831,23

Unfavourable Exchange rates 367,42 272,77

Other financing expenses 1 375 800,06 83 829,94

TOTAL 8 595 885,54 6 916 933,94

(Amounts in euros)

Interest expenses are mainly from Angolaca, representing approximately 70% of the Group’s total interest in 2017 (83% in 2016).

Of the amount reported under “Interest income” in 2017, EUR 762,466 came from the Angolaca subsidiary.

23.10. OTHER INFORMATION

The breakdown of the consolidated net Result for 2016 and 2017 between the parcel attributable to shareholders of the parent company and non-controlling minority interests is presented below:

2017 2016

Net result of the period attributable to:

Shareholders 1 086 394,34 172 793,83

Non-controlling interests 2 038 502,44 1 146 330,37

Net Result for the Period 3 124 896,78 1 319 124,20

(Amounts in euros)

The increase in net income in relation to 2016 essentially reflects the effect of the increase in turnover, more than proportional to the increase in operating expenses.Regarding the application of the individual net income for the years of 2016 and 2017 of the entities that make up the consolidation perimeter, it should be noted that, in


general, one privileged the creation / strengthening of legal reserves (when applicable) and the transfer of the remaining portion to the items of Carried Forward Results or Other Reserves, for which a strengthening of the equity of the entities was sought, in detriment of the distribution of dividends.

It should also be noted that the minority interests evidenced in Net Profit and Equity are to a large extent directly or indirectly controlled by the Group’s UBO.

N OT E 2 4 . L E G A L LY R E Q U I R E D D I S C LO S U R E S

Of the information required by law:

a) The Group had no outstanding debts to the State or Social Security;

b) The Parent Company has no own shares and did not, until this moment, carry on any transactions involving such securities;

c) There were no transactions between the parent company or any other entity included within the consolidation perimeter and the members of the respective boards;

d) The fees invoiced by the Company of Statutory Auditors (and Statutory Audito) regarding the legal verification of the consolidated accounts were EUR 20.500 (VAT not included).

V.N. Famalicão, 27th July 2018.


R E P O R T A N D O P I N I O N O F T H E S TAT U TO R Y AU D I TO R

C H A P T E R V


R E P O RT A N D O P I N I O N O F T H E STAT U TO R Y AU D I TO R

EXERCÍCIO DE 2017

Dear Shareholders:

According with the applicable legal provisions and as the Single Auditor of ALBERTO COUTO ALVES, S.G.P.S., SA. I submit to your appreciation, the report and opinion on the report, the statements and the proposals presented by the Board of Directors, regarding the consolidated statements reported on 31st December 2017.

1. Pursuant to the applicable legal and statutory norms, we carried out:

• The supervision of the actions undertaken by the Board of Directors, based on the accounting documents of the Group, as well as the clarifications requested;

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

• The verification of documents, records and supporting documentation;

• The analysis of the Consolidated Financial Statements and the underlying accountancy principles and the Consolidated Management Report;

• The delivery of a letter of recommendations to the Board;

• The analysis of the Report of the Statutory Auditor, which we attach to this Report and Opinion.

2. The abovementioned actions have allowed me to conclude that:

• The Accounting, Consolidated Financial Statements and the Consolidated Management Report comply with legal and statutory dispositions and reflect the Group’s operations during the year under analysis, as well as its financial and economic situation;

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

• The statements must be analysed in light of all previously mentioned documents, particularly the Consolidated Management Report and Legal Certification of Accounts, which we issued as statutory auditors, without reservations or emphasis, with which we naturally agree.


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

• Should discuss and approve the Consolidated Financial Statements and Management Report, produced by the Board of Directors, for 2017;

• Should assess the results’ distribution proposal, contained in the Consolidated Annual Report;

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

Braga, 13th August 2018

The Statutory Auditor

G. Castro, R. Silva, A. Dias & F. Amorim, SROC, Lda. (Authorized Company no. 153, Registered at CMVM under nr. 20161463)

Represented by

Fátima Amorim (Statutory Auditor 1279, registered at CMVM no. 20160890)

Gaspar Vieira de Castro (Statutory Auditor 557, registered at CMVM no. 20160219)


L E G A L C E R T I F I CAT I O N O F A CCO U N T S

C H A P T E R V I


L E G A L C E RT I F I CAT I O N O F ACCO U N T S

REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS

Qualified Opinion

We have examined the consolidated financial statements of Alberto Couto Alves, S.G.P.S., S.A., (the Group) consisting of the Balance Sheet as on December 31st 2017 (which reveals a total of 555 625 339 Euros and total equity of 278 716 668 Euros, including a net income of 1 086 394 Euros), the Statement of Income per Category, Statement of Alteration in Equity and Statement of Cash-flows referring to the year ended on that date and the annex to the consolidated financial statements that include a synthesis of the main accounting policies.

In our opinion, the accompanying consolidated financial statements offer a true and accurate view, in all material aspects, of the financial position of Alberto Couto Alves, S.G.P.S., S.A. on 31st December 2017 and the company’s financial performance and cash flows for the year then ended in accordance with the Accounting and Financial Reporting Standards adopted in Portugal via the Accounting Normalisation System.

Basis for our opinion

Our examination was conducted in accordance with the International Standards on Auditing (ISAs) and other technical and ethical standards and guidelines approved by Ordem dos Revisores Oficiais de Contas [Portuguese Council of Statutory Auditors]. Our responsibilities, pursuant to such standards, are described under “Responsibilities of the auditor for the audit of the financial statements”, below. We are independent from the audited Entity, according to the law, and we comply with the other ethical requirements under the Code of Ethics of the Portuguese Council of Statutory Auditors.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion.

Responsibilities of the Board of Directors for the consolidated financial statements

The Board of Directors is responsible for:

• preparing the Consolidated Financial Statements that accurately and appropriately disclose the Groups’s financial standing, financial performance and cash flow, according to the Accounting and Financial Reporting Standards adopted in Portugal via the Accounting Normalisation System;

• preparation of the annual report, pursuant to the law and applicable legislation;

• creation and maintenance of an appropriate internal control system to enable the preparation of financial statements that are free from material distortion due to fraud or error;

• adoption of accounting policies and criteria adequate to the circumstances; and


• assessment of the Group’s ability to continue operating, reporting, whenever applicable, the areas that may give rise to significant questions about the application of the going concern principle.

Responsibilities of the auditor for the audit of the financial statements

Our responsibility consisted of obtaining reasonable assurance about whether the consolidated financial statements as a whole are free from material distortions due to fraud or error, and issuing a report stating our opinion. Reasonable assurance is a high level of safety, but it is not a guarantee that an audit performed in accordance with ISA will always detect a material distortion when such exists. Distortions may be caused by fraud or error and are considered to be material if, when alone or in combination, may be reasonably expected to influence the economic decisions taken on the basis of such financial statements.

For audits conducted under ISA, we make professional judgments and maintain professional scepticism throughout the audit and also:

• we identify and assess the risks of material distortion of consolidated financial statements, due to fraud or error, we produce and carry out audit procedures that answer to such risks, thus obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material distortion due to fraud is greater than the risk of not detecting a material distortion due to error, since fraud may involve collusion, falsification, intentional omissions, false statements or overlap in the internal control;

• we obtain an understanding of the internal controls relevant to the audit so as to create audit procedures that are adequate, but not to pass an opinion on the effectiveness of the Group’s internal control;

• we assess the appropriateness of the accounting policies used and the reasonableness of estimations and respective disclosures carried out by the Board of Directors;

• we assess the applicability of the use, by the management body, of the going concern basis and, based on the audit evidence obtained, whether or not there is any material uncertainty relating to events or conditions that may cast significant doubts on the Group’s ability to continue its activities. If we conclude that there is a material uncertainty, we will draw attention, in our report, to the related disclosures included in the financial statements or, if such disclosures are not appropriate, modify our opinion. Our conclusions are based on the audit evidence by the closing date of our report. However, future events or conditions may force the Group to stop operations;

• we assess the presentation, structure and content of the consolidated financial statements, including the disclosures, and whether or not such financial statements represent the underlying transactions and events in order to produce a fair presentation;

• we obtain sufficient and appropriate audit evidence regarding the financial information of entities or activities within the Group to issue an opinion on the consolidated financial statements. We are responsible for the guidance, supervision and performance of the audit of the Group and we are the final responsible entity for our audit opinion;


• we communicate with those in charge of governance, among others, the scope and schedule programmed for the audit and any significant conclusions of the audit, including any significant deficiency in internal control identified during the audit;

Our responsibility also includes the verification of the information contained in the management report with the consolidated financial statements.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

On the Management Report

In compliance with article 451 (3) (e) of the Portuguese Companies Code, it is our opinion that the Management Report has been prepared according to the applicable legal and regulatory requirements in force, the information in it is consistent with the audited financial statements and, taking into account the knowledge and assessment of the entity, we have not identified any material inconsistencies.

Braga, 13th August 2018

G. Castro, R. Silva, A. Dias & F. Amorim, SROC, Lda. (Authorized Company no. 153, Registered at CMVM under nr. 20161463)

Represented by:

Fátima Amorim (Statutory Auditor 1279, registered at CMVM no. 20160890)

Gaspar Vieira de Castro (Statutory Auditor 557, registered at CMVM no. 20160219)


Documents

ALBERTO COUTO ALVES, SGPS, S.A. - Grupo ACA › storage › app › uploads › public › 5...alberto couto alves, sgps, s.a. relatÓrio de gestÃo & contas consolidadas 2017 3 table