REPORT AND ACCOUNTS 9 PARTICIPATION 15 BALANCE SHEET 19 INCOME STATEMENT 23 CASH FLOW STATEMENT 27 STATEMENT OF CHANGES IN EQUITY 31

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3 REPORT AND ACCOUNTS 2016

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5 Project: Belavista_ House and Real Estate. V.N. Famalicão Client: Pontalta ( Real Estate) INDEX MESSAGE 5 REPORT AND ACCOUNTS 9 PARTICIPATION 15 BALANCE SHEET 19 INCOME STATEMENT 23 CASH FLOW STATEMENT 27 STATEMENT OF CHANGES IN EQUITY 31 ANNEX TO THE FINANCIAL STATEMENTS 35 REPORT AND SOLE SUPERVISOR OPINION 61 LEGAL CERTIFICATION OF ACCOUNTS 65 INTERNATIONAL 69 5

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7 Project: Expansion of the Orthopedic Hospital Sant Ana - Parede. Lisboa Client: Santa Casa da Misericórdia de Lisboa MESSAGE (1/2) In 2016, the strategic guidelines set by the company three years ago were strengthened. In Portugal, the company had to resort to the private market to achieve the turnover needed to overcome the almost non-existent public investment, and specifically by means of works of greater technical complexity. In the external market, the company diversified its geographies to attract investments with a better margin and a better guarantee of payments ensured by credible and sustainable institutional multilateral entities supporting developing countries. Internally, we must highlight the execution of a highly challenging and iconic project, which was the Construction of the New Plant (steel industry) for the SAKTHI multinational company. This large scale project of over m2 of construction, with an aesthetically bold architectural project from architect Alexandre Burmester, had a very tight deadline 10 months - and the simultaneous intervention of three other heavy equipment supply companies from several countries (powerful overhead cranes, electric furnaces, dedusting network, etc). The work awarded in April 2016 had to be concluded in February 2017 and we were requested that the virtual start-up of the plant and the cast of the first part be in December These deadlines were all met. In Portugal, most of our projects are concentrated in the industrial construction, hotel projects and urban regeneration areas. While it is acknowledged that the construction sector in Portugal accelerated more in 2016, we cannot forget how low the level used for the comparison is. Concrete consumption is below the number of 30 years ago and the number of housing construction is only about 10% of what it was at the beginning of this century. It has been tourism, in Lisbon and to a much lesser extent in Oporto, which has almost exclusively boosted hotel construction projects and building recovery projects. The attraction of foreign investment in property will probably keep increasing and thus this sector will probably continue with very high levels of activity. With the beginning of the new European Funding Framework, the 2020 Program, some public projects of great impact were expected, such as renewing the rail network, as well as projects which belonged to the PETI3+ Program and which were already ongoing. This has not taken place yet and funding is still very low and aimed mainly at low-level Engineering projects. 7

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9 Project: Sakthi Client: Sakthi Portugal SP21, S.A MESSAGE (2/2) The fact that this situation has been ongoing for some years is causing the loss of competencies in the most prominent construction companies which used to compete on equal terms in external markets with foreign companies. If this situation does not turn around, we may even lose eligibility conditions for international tenders. It is thus urgent that the needed procedures study, projects, tenders to develop works become faster. In the end of 2016 and in the external market, our company was awarded an important project in Honduras, in the amount of approximately USD. This comprises the construction of two sets of national roads with approximately 75 km, a work funded by RIB (European Investment Bank) and BCIE (Central American Bank for Economic Integration). It is the company s first project in Latin America. In Africa, we won the first work in Senegal, in the city of Dakar, as well as the second project in Zambia. Besides those countries, we continue our activity in Cape Verde, Angola and Mozambique. As we mentioned in the 2015 Report, African markets have been strongly impaired by the suffocating competition from the Chinese companies whose setting of prices is far from being understood by the economic logic. It is by applying to projects backed by multilateral entities imposing criteria of greater transparency regarding the company s corporate nature and price credibility that Gabriel Couto will seek to flourish. In 2017 we expect a turnover in line with the one reached in 2016, being that the International part will increasingly gain greater prominence. We appreciate all those who have supported us, from our collaborators and particularly those in distant lands and who, sometimes in harsh environments, promote not only our company s know-how but also the Portuguese Engineering. Likewise, we acknowledge bank entities that have supported us particularly with regard to the internationalization effort, as well as all our suppliers. Lastly, a word of recognition to our clients for the trust they have placed in our company by entrusting us with projects which are very important for their activity, duties and businesses. 9

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11 REPORT AND ACCOUNTS 2016 Project: Expansion of the Orthopedic Hospital Sant Ana - Parede. Lisboa Client: Santa Casa da Misericórdia de Lisboa

12 REPORT AND ACCOUNTS 2016 (1/2) 1. MANAGEMENT REPORT In accordance with the applicable legal and statutory requirements, we present the Management Report and Accounts that reflect the economic and financial activity of our company during the financial year of MACROECONOMIC AND SECTORIAL FRAMEWORK The world economic growth is still quite fragile and the world GDP increase in 2016 is of only 2.3% which will be the weakest increase since the year of the great recession (2009). The Portuguese economy slowed down when compared to 2015, with a 1.4% growth, which was slightly lower than the previous year. This slowdown was particularly felt during the first semester due to an investment slump and the international trade weakness, with the exception of the tourism sector. The second half of the year was considerably more positive. The last quarter even recorded an increase in consumption and a similar and quarterly recovery of investment. Despite this growth dynamics of the last months, a reduction of 0.3% in investment when compared to the previous year was not avoided. In 2016, the unemployment rate was of 11.1%, the lowest since the 10.8% recorded in Regarding the inflation rate, there was a slight increase to 0.6%. Despite the recovery that occurred the last quarter of 2016, and specifically a recovery within residential buildings, the Construction sector production decreased 3.3%. This negative annual evolution resulted in a decrease of 4.4% when compared to the previous year which also reflects the decrease in the construction investment and GAV. Despite this annual negative evolution, there was an increase in the construction employment (+4.5%), the no. of housing permits (+37.5%) the area licensed for housing (+30.8%) and non-residential (+24%), as well as the value of public work contracts (+16.2%). One of the factors contributing to this improvement was the strong increase of new operations to acquire housing (+44.3%) which were partially neutralized by the credit decreases to construction entities (-11.9%). 1.2 THE COMPANY S PERFORMANCE IN 2016 In 2016, the company totalled 91.4 M in sales and service provision, of which 35.4 M in the external market (38.7% of the total). Amounts in euros Turnover 2016 National 56,0 Exports (Branches) 35,4 Mozambique 22,2 Swaziland 4,8 Cape Verde 5,8 Zambia 2,5 Total 91,4 The sales and services provision increased approximately 0.3% when compared to Considering the limited public investment in Portugal, the results obtained as turnover stem from a bet on the construction private market, and specifically on industrial units, logistic infrastructures and hotel units. As relevant works, we highlight the industrial unit of SAKTHI, IKEA, APDL, Metropolitano de Lisboa, Continental Mabor, Embraer, among others. The external market significant presence was maintained. In Mozambique, we continued the construction of important works for ANE Agência Nacional de Estradas, the Maputo Municipal Council, 12

13 the Corredor de Desenvolvimento do Norte (CDN), among others. In Zambia, at the end of the previous year, we started an important drainage work for a client for whom we had previously develeoped high quality works in Mozambique, the Millennium Challenge Account, a support entity present in several countries with lack of infrastructures, namely in Africa. In Cape Verde, we are still working on the construction of 390 social housing for the Cape-Verde Ministry of Housing. HUMAN RESOURCES In average, the staff was comprised of 234 workers, of which 33 are posted in different countries where we develop our activity, mainly in Mozambique. In addition to these national employees, the company employs approximately 426 employees from the different geographic areas where we are working in abroad. One of the company s concerns is that all these employees are ministered training sessions to reinforce their competences and give them new ones in order to continuously improve the performance and the quality of the work delivered. QUALITY, SAFETY AND ENVIRONMENT POLICIES The company has Quality, Safety and Environment policies duly set and certified by APCER. This is one of the company s administration guideline and commitment as its members are aware of their importance as a tool for the company s success. BRIEF ECONOMIC AND FINANCIAL ANALYSIS In 2016, the exploitation indicators have remained steady in terms of sales volume and service provision (91.4 M ) and EBITDA, except the nonrecurrent key factors (8.9M ). Due to the disposal of Scut Algarve e Norte shareholdings, which implied a gains reversal in shareholdings in subsidiaries of 1.9 M (in 2015) for a loss of 0.4M (in 2016) and the recognition of clients impairments of 1.2M, there was an impact of 3.5M in EBITDA. This effect was partially diluted due to the level of activity and an important decrease of net financial expenditure which allowed a positive net result of 1.6 M. (Amount in M ) 2014 (Annual) 2015 (Annual) 2016 (Annual) Income (Tunover) ME* and Impairments 94,9 91,1 91,4 6,1 1,9-1,6 EBITDA 15,9 10,6 7,3 Financial Results -6,3-4,4-3,5 Net Income 6,0 2,6 1,6 * EM: Equity Method Regarding financial indicators, note the reinforcement of the financial autonomy (16.8 M ) and overall liquidity (1.30). OVERALL LIQUIDITY 1,32 1,30 1,28 1,26 1,24 Financial Autonomy / Overall Liquidity 1,22 1, ,0% 14,5% 15,0% 15,5% 16,0% 16,5% 17,0% FINANCIAL AUTONOMY In 2016, the investment was approximately of 0.5M, and mainly in equipment modernization

14 REPORT AND ACCOUNTS 2016 (2/2) RELEVANT FACTS AFTER THE END OF THE FINANCIAL YEAR After the end of the financial year no relevant facts took place that would materially affect this report. SITUATION IN TERMS OF STATE AND SOCIAL SECURITY The company has fulfilled all its obligations with the State and Social Security. 1.3 PERSPECTIVES FOR YEAR 2017 The company s perspective for the near future and specifically 2017 is based on its order book. On 31/12/2016, this order book totalled approximately 98 million euros, and was reinforced at the beginning of 2017 with 75 million euros with the Honduras operation, thus totalling 173 million euros. In geographical terms, as a result of the internationalization markets diversification strategy, the order works portfolio develops across three continents. Amounts in M Works Portfolio 2016 National 35,1 Exports 137,8 Mozambique 28,9 Swaziland 1,3 Cape Verde 0,9 Zambia 23,5 Senegal 8,0 Honduras 75,2 Total 172,9 Roads and Infrastructures are the main activity with million euros while the civil construction activity is worth approximately 33 million euros. In the end of 2016, we were awarded important works in Portugal which will be very relevant in 2017, such as the logistic units for APDL and Torrestir and the hotel units for Vila Galé and Marec. Internationally, we would like to highlight the road infrastructures in Honduras and Senegal and the water infrastructures in Zambia. 1.4 OTHER RELEVANT INFORMATION The company has no branches in the national territory. Abroad, the company has the following branches: Construções Gabriel A.S.Couto, SA - Zambia branch Construções Gabriel A.S.Couto, SA - Cape Verde branch Construções Gabriel A.S.Couto, SA - Swaziland branch Construções Gabriel A.S.Couto, SA - Mozambique branch During the economic period, there was no acquisition or disposal of equity. The entity holds own shares in the amount of 500, No business operations took place between the company and its board members. These were not granted any loans or advances on the account of profit. The entity is not exposed to financial risks that might produce relevant and material effects to its financial position and the continuity of its operations. Decisions taken by the management body were based on the rules of prudence and thus the entity believes that the obligations undertaken do not create risks which cannot be supported by the entity. 14

15 1.5 ACKNOWLEDGEMENTS We acknowledge the effort and collaboration of all the Company s Collaborators, Clients, Suppliers and Financial institutions which have collaborated with us, as we are aware that without their assistance, the difficulties would have been greater and the performance of lower quality. We acknowledge the remaining Corporate Bodies and especially the Sole Supervisor and the Chartered Account for their commitment to the company PROPOSAL FOR APPROPRIATION OF RESULTS Pursuant to the legal and statutory terms, we propose that the net result of 2016 in the amount of 1,620, Euros be applied under Retained Earnings. In accordance to the company s policy for the past years, no profit distribution to shareholders will take place in order to consolidate the company s Equity. Vila Nova de Famalicão, May 16, 2017 Board of Directors, Project: Warehouse Construction of lot 13 of Pole 2 of the Logistics Platform of Leixões Client: APDL - Administration of Ports of Douro, Leixões and Viana do Castelo, SA

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17 PARTICIPATION Project: High School Frei Gonçalo Azevedo, Lisboa Client: Parque Escolar, E.P. E (National Schools Administration) João Morgado

18 PARTICIPATION OF THE MANAGEMENT AND SUPERVISORY BODIES IN THE SHARE CAPITAL OF CONSTRUÇÕES GABRIEL A. S. COUTO, S.A.. Pursuant and for the purposes of article 447 of the Code of Commercial Companies, the number of shares listed by each holder on December 31, 2016 is as follows: BOARD OF DIRECTORS: Carlos Alberto Freitas Couto António Gabriel Freitas Couto Avelino Jorge da Silva Oliveira shares shares shares No other member of the Management and Supervisory bodies declared having or having had shares or bonds from CONSTRUÇÕES GABRIEL A. S. COUTO, S.A. in

19 LIST OF SHAREHOLDERS WHO HOLD AT LEAST ONE TENTH OF THE SHARE CAPITAL OF CONSTRUÇÕES GABRIEL A.S. COUTO, S. A. In compliance with article 448 of the Code of Commercial Companies, the following is the list of shareholders who hold at least one tenth of the share capital of the Company: Maria da Conceição Ferreira de Freitas share (53,93%) Vila Nova de Famalicão, May 16, 2017 Board of Directors, 19

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21 BALANCE SHEET ON DECEMBER 31, 2016 Project: Warehouse Construction of lot 13 of Pole 2 of the Logistics Platform of Leixões Client: APDL - Administration of Ports of Douro, Leixões and Viana do Castelo, SA

22 ITEMS NOTES euros PERIODS ASSETS Non-current assets Tangible fixed assets 7, 8 and , ,99 Investment properties 6 and , ,81 Intangible assets 5 and , ,22 Financial shareholdings - equity method 10,11 and , ,14 Other financial investments 10, 11 and , ,00 Assets per deferred taxes , , , ,37 Current assets Inventories , ,55 Clients , ,94 Advances to suppliers , ,62 State and other public entities , ,79 Other accounts receivable , ,88 Deferrals , ,57 Cash and bank deposits , , , ,01 Total assets , ,38 22

23 ITEMS NOTES euros PERIODS EQUITY AND LIABILITIES EQUITY Subscribed capital , ,00 Own shares (parts) ( ,00) ( ,00) Legal reserves , ,00 Other reserves , ,19 Results carried forward , ,02 Adjustments to financial assets ( ,10) ( ,16) Revaluation surplus , , , ,86 Net result for the period , , , ,39 Total equity , ,39 LIABILITIES Non-current liabilities Provisions , ,84 Loans obtained , ,52 Liabilities per deferred taxes , ,00 Other payables , , , ,63 Current liabilities Suppliers , ,47 Advances from clients , ,39 State and other public entities , ,01 Loans obtained , ,81 Other payables , ,75 Deferrals , , , ,36 Total liabilities , ,99 Total equity and liabilities , ,38 Certified Accountant Board of Directors 23

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25 INCOME STATEMENT BY NATURE AT DECEMBER Project: Carmo Convent Recovery Client: Municipality of Torres Novas

26 REVENUES AND EXPENSES NOTES euros PERIODS Sales and services provided , ,92 Gains / losses attributed to subsidiaries, associates and joint ventures 25 ( ,55) ,89 Change in production inventories ,33 ( ,42) Cost of goods sold and materials consumed 27 ( ,78) ( ,61) External supplies and services 28 ( ,46) ( ,29) Expenses with Staff 29 ( ,52) ( ,74) Bad debt expenses (losses / reversals) ( ,41) -- Provisions (increases / reductions) ,54 (75 165,49) Fair value increases / reductions ,39 (222,60) Other revenues , ,60 Other expenses 31 ( ,68) ( ,65) Earnings before depreciation, funding expenses and taxes , ,61 Expenses / reversals of depreciation and amortization 5,6, 7 e 12 ( ,36) ( ,25) Operating earnings before depreciation, expenses and taxes , ,36 Interest and similar income obtained , ,13 Interest and similar expenses paid 32 ( ,60) ( ,90) Earnings before taxes , ,59 Income tax of the period 18 ( ,28) ( ,06) Net result for the period , ,53 Certified Accountant Board of Directors 26 Project: Jardins da Ponte _ House and Real Estate. V.N. Famalicão Client: Pontalta ( Real Estate)

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29 CASH FLOW STATEMENT OF THE PERIOD ENDING DECEMBER 31, 2016 Project: Sakthi Client: Sakthi Portugal SP21, S.A

30 ITEMS NOTES euros PERIODS Cash flow of operating activities - direct method Receivables from Clients , ,89 Payments to Suppliers ( ,93) ( ,60) Payments to staff ( ,16) ( ,09) Cash generated by operations ( ,75) ,20 Payments / receivables from income tax ( ,43) ( ,27) Other receivables / payments ,95 ( ,75) Cash flow of operating activities (1) ( ,23) ,18 Cash flow of investment activities Payments related to: Tangible fixed assets ( ,70) ( ,31) Intangible assets Financial investments -- (4 994,36) Other assets Receivables from: Tangible fixed assets , ,19 Intangible assets Financial investments , ,00 Other assets Investment grants Interest and similar income , ,13 Dividends , ,05 Cash flow of investment activities (2) , ,70 30

31 ITEMS NOTES euros PERIODS Cash flow of funding activities Receivables from: Loans obtained Capital increases and other equity instruments -- Loss coverage Donations Other funding operations Payments related to: Loans obtained ( ,27) ( ,27) Interest and similar expenses ( ,60) ( ,90) Dividends Capital decreases and other equity instruments Other funding operations Cash flow of funding activities (3) ( ,87) ( ,17) Changes in Cash and Equivalents (1+2+3) ( ,86) ,71 Effect of changes in exchange rates Cash and its Equivalent at the beginning of the period , ,95 Cash and its Equivalent at the end of the period , ,66 Certified Accountant Board of Directors 31

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33 STATEMENT OF CHANGES IN EQUITY CHANGES IN EQUITY FOR 2016 CHANGES IN EQUITY FOR 2015 Project: Ikea Client: IKEA Centres Portugal

34 CHANGES IN EQUITY FOR 2015 euros EQUITY ALLOCATED TO PARENT COMPANY SHAREHOLDERS ITEMS NOTES Paid in Capital Own shares (parts) Other equity instruments Issuance premiums Legal reserves Other reserves Results carried forward Adjustments to financial assets Revaluation surplus Other changes in equity Net result for the period Total MINORITY INTERESTS TOTAL EQUITY POSITION AT THE BEGINNING OF ,00 ( ,00) , , ,15 ( ,23) ,16 -- ( ,48) , ,75 Changes during the period First adoption of new accounting references Accounting policies changes Financial statements exchange differences Realization of revaluation surplus Revaluation surplus Adjustments per deferred taxes (423,65) , Other changes recognized in the equity ( ,52) ( ,93) ,48 ( ,89) -- ( ,89) ( ,87) ( ,93) 423, ,48 ( ,89) -- ( ,89) NET RESULT FOR THE PERIOD , , ,53 COMPREHENSIVE RESULT 4=2+3 ( ,95) ( ,95) -- ( ,95) OPERATIONS WITH EQUITY HOLDERS DURING THE PERIOD Capital increases Carrying out issuance premium Distributions Entries to cover losses Other operations POSITION AT THE END OF = ,00 ( ,00) , , ,02 ( ,16) , , , ,39

35 STATEMENT OF CHANGES IN EQUITY FOR 2016 euros EQUITY ALLOCATED TO PARENT COMPANY SHAREHOLDERS ITEMS NOTES Paid in Capital Own shares (parts) Other equity instruments Issuance premiums Legal reserves Other reserves Results carried forward Adjustments to financial assets Revaluation surplus Other changes in equity Net result for the period Total MINORITY INTERESTS TOTAL EQUITY POSITION AT THE BEGINNING OF ,00 ( ,00) , , ,02 ( ,16) , , , ,39 Changes during the period First adoption of new accounting references Accounting policies changes Financial statements exchange differences Realization of revaluation surplus Revaluation surplus Adjustments per deferred taxes (1 181,51) , Other changes recognized in the equity ( ,89) , ( ,53) ( ,36) -- ( ,36) ( ,40) , ,51 -- ( ,53) ( ,36) -- ( ,36) NET RESULT FOR THE PERIOD , , ,37 COMPREHENSIVE RESULT 4=2+3 ( ,16) ( ,16) -- ( ,16) OPERATIONS WITH EQUITY HOLDERS DURING THE PERIOD Capital increases Carrying out issuance premium Distributions Entries to cover losses Other operations POSITION AT THE END OF = ,00 ( ,00) , , ,62 ( ,10) , , , ,40

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37 ANNEX TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2016 Project: Contract of Blue Line Extension and Finishes of Reboleira Station Lisbon Subway Client: Metropolitano de Lisboa, E.P.E

38 ANNEX TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2016 (1/12) (Amounts in Euros) 1. ENTIFICATION OF THE ENTITY 1.1 CORPORATE NAME: Construções Gabriel A. S. Couto, SA 1.2 HEAD OFFICE: Rua S. João de Pedra Leital, Vila Nova de Famalicão 1.3 TYPE OF ACTIVITY: Civil construction and public works. 2. ACCOUNTING STANDARDS FOR THE FINANCIAL STATEMENTS PREPARATION 2.1 The Financial Statements of Construções Gabriel A. S. Couto, SA (Gabriel Couto) were prepared on a going concern basis of the operations and based on the historic cost and they reflect the company income of its operations and its financial situation during the financial year ending 31/12/2016. The financial statements of Gabriel Couto have been prepared based on the assumption of continuity and on the accounting records and pursuant to Accounting Standardisation System (SNC) governed by the following legal texts: - Decree-Law no. 158/2009, of July 13, with the wording given by Decree-Law no. 98/2015, of June 2 (Accounting Standardisation System), - Ordinance no. 220/2015, of July 24 (Financial Statements Models); - Notice no. 8254/2015, of July 29 (Conceptual Structure); - Notice no. 8256/2015, of July 29 (Accounting and Financial Report Standards); - Ordinance no. 218/2015, of July 23 (Code of Accounts); The main accounting policies adopted by the Entity to prepare the attached financial statements are the ones described below and were consistently applied to the financial years stated, except regarding investment proprieties. To prepare the attached financial statements, estimates and assumptions were made that affect the implementation of accounting policies and the value of the assets, liabilities, expenses and revenues. All estimates and assumptions were made based on the historical experience and the best knowledge available at the time of approval of the financial statements, events and ongoing transactions. 2.2 No derogations to the SNC provisions were made, thus there were no consequences to the Financial Statements of the entity. 2.3 There are no contents that affect the accounts of the Balance Sheet and the Income Statement that are not comparable to the previous period. 3. MAIN NEEDED ACCOUNTING POLICIES, ESTIMATES AND JUDGEMENTS 3.1 BASES FOR THE PRESENTATION The attached financial statements were prepared according to the bases of presentation of financial statements (BADF). The statements are expressed in euros as it is the operational and presentation currency Going concern assumption Within the scope of the going concern assumption, the entity assessed the information available and its future expectations considering the entity s ability to proceed with its business. The assessment showed that the business is able to continue its operations Accrual basis assumption The financial statements elements are recognized when they satisfy the definitions and recognition 38

39 criteria pursuant to the conceptual structure, regardless of the time of payment or collection Consistency of presentation The presentation and classification of items in the financial statements is retained from one period to the next Materiality and aggregation The materiality depends on the dimension and nature of the omission or error, assessed within the circumstances around it. Omissions or incorrect reporting of items are materially relevant if, individually or collectively, they are able to influence the economic decisions taken by the users based on the financial statements. An item that is nor materially relevant to justify its separated presentation in the financial statements can nevertheless be materially relevant for it to be individually presented in the notes of this annex. Financial statements result from processing large numbers of transactions or other events that are aggregated into classes according to their nature or function The final stage in the process of aggregation and classification is the presentation of condensed and classified data, which form line items on the face of the balance sheet, income statement, statement of changes in equity and cash flow statement, or in the notes Offset Assets and liabilities, revenues and expenses are not offset, except if required or allowed by a Standard. Thus, the revenue must be measured taking into account the amount of any trade discounts and volume rebates. The entity undertakes other transactions that do not generate revenue but are incidental to the main revenue generating activities. The results of such transactions are presented, when this presentation reflects the substance of the transaction or other event, by netting any income with related expenses arising on the same transaction. Gains and losses arising from a group of similar transactions are reported on a net basis, for example, gains and losses from exchange differences or gains and losses from financial instruments held for negotiation. If materially relevant, these gains and losses are reported separately Comparative Information Comparative information is disclosed in respect of the previous period for all amounts reported in the financial statements. Comparative information was included for narrative and descriptive information when it was relevant to an understanding of the current period s financial statements, unless a standard allowed or required differently. Narrative information provided in the financial statements for the previous period(s) continues and which is still relevant in the current period is disclosed again. The comparison of the information of several periods is ongoing as it helps users allowing them to make economic decisions and assess trend in the financial information to make forecasts. 3.2 RECOGNITION AND MEASUREMENT POLICIES Tangible fixed assets Tangible fixed assets are stated at acquisition cost, less the accumulated corresponding depreciations and losses per impairment. Depreciations are calculated, after the date on which the goods are available to be used, by the straightline method in accordance to the estimated useful life period for each group of goods. 39

40 ANNEX TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2016 (2/12) The depreciation rates used correspond to the following estimated useful life (in years): Buildings and other constructions 10 to 50 Basic equipment 3 to 15 Transport equipment 4 to 10 Office equipment 4 to Intangible assets Intangible assets are stated at acquisition cost, less the accumulated corresponding amortizations and losses per accrued impairment. Amortizations are calculated, after the date on which the goods are available to be used, by the straight-line method in accordance to the estimated useful life period Investment properties Investment properties are comprised of land and buildings whose purpose it to obtain rents and/or the valuation of the capital invested and not to be used in production or the supply of goods or services or for administrative purposes or to be sold during the business current activities. Investment properties are recorded at their fair value calculated according to the enforceable current prices in the market in question. Changes in investment properties fair value are recognized directly in the income statement of the financial year under the item change of value in investment properties. Costs incurred with investment properties used, namely, maintenance, repairs, insurance and taxes on properties (Municipal Tax on Real Estate) are recognized in the income statement of the period concerned Leases Leasing operations are classified as financial or operational leases in accordance to their substance and not their legal form. Financial leases are operations in which the risks and rewards of ownership of an asset are transferred to the lessee. All remaining leasing operations are classified as operational leases. Operational leases Payments made pursuant to operational lease contracts are stated in the item expenses of the periods concerned. Financial leases Tangible fixed assets acquired under the financial lease regime are stated at their value under the asset and the corresponding responsibility under the liability. Depreciations of these goods were carried out in accordance to point and stated under the depreciation expenses of the period. The part of the capital included in the rents paid is deducted to the amount of the stated responsibility recorded in the liability, being the interests there included accounted for as financing expenses of the period Financial investments Purchases and sales of financial investments are recognized on the dates of the transaction. They are initially stated at acquisition value, which is the fair value of the price paid, including transaction expenses. The company performs an evaluation when there is evidence that the asset might be in impairment, being the losses per impairment stated as cost under the income account when there is proof that they exist. 40

41 Financial investments in the group s companies and associates are stated at acquisition cost, being their value adjusted by the equity method later, and at the end of each period, except in situations stated in notes 9 and Inventories Merchandises, raw materials and consumables are valued at either acquisition cost or net realizable value, whichever is lower. The cost method used in the movement of raw materials and consumables is the average weighted cost. Finished products, semi-products and work in progress are valued at either production cost or net realizable value, whichever is lower. Production costs include the cost of incorporated raw material, direct labour and general manufacturing costs. The cost method is the average cost Third Party Payables and Receivables Third party receivables and payables are stated at their nominal value since they usually do not bear interests Cash and cash equivalents The amounts under Cash and equivalents correspond to cash flow, bank deposits and term deposits that can be readily released on demand Loans Loans are stated under Liability at their nominal value. Financial charges with interests and similar charges are stated in the income statement in accordance to the accruals basis for the financial year Provisions Provisions are recognized, only and when, the company has a current (legal or implicit) obligation resulting from a past event, being probable that the resolution of that obligation will imply an exit of resources and the amount of the obligation can be reasonably estimated. Provisions are reviewed on the date of each balance sheet date and adjusted in order to reflect the best estimate on that date Income tax The Charge related to «Income tax of the period» represents the sum of current tax plus the deferred tax. The Current tax is calculated on the basis of the taxable results of the company in accordance with the tax rules in force, while deferred taxes are the temporary differences between the figures for assets and liabilities for the purposes of financial reporting (carrying amount) and the respective amounts for taxation purposes (tax basis). Assets and liabilities per deferred taxes are calculated and periodically evaluated using the tax rates in force or announced to be in force on the expectable date of the temporary differences. Assets per deferred taxes are only recognized when it is probable that future tax profits shall be enough for their use or when there are taxable temporary differences that compensate the taxable temporary differences of the reversal period. At the end of each period, a revision of the deferred tax is performed, being the latter decreased whenever their future use is no longer probable. Deferred taxes are stated as charge or income of the financial year, except if they are the result of amounts directly recorded under equity, case in which the deferred tax is also stated under the same item. Assets per deferred taxes are provisions and total ,34. 41

42 ANNEX TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2016 (3/12) Liabilities per deferred taxes are: Item Assets per deferred taxes Liabilities per deferred taxes Assets per deferred taxes Provisions , ,34 Liabilities per deferred taxes Revaluation reserves , ,36 Financial Gains Profits to be allocated , , , , , , Recognition of income and expenses Financial statements are prepared in accordance to the accrual basis accounting (periodization). By means of this accounting method, the effects of transactions and other events (income or charges) are recognized when they occur, no matter the date they were received or paid, being stated in the accounting under items Deferrals and stated in the financial statements of the periods to which they are related to. For the recognition of income or charges of construction contracts, the completion percentage method was used. In accordance to this method, the income directly related to the work in progress is recognized in the income statement according to its completion percentage, which is determined by the ratio between incurred costs up to the balance sheet date and total estimated costs of the works Contingent assets and liabilities Contingent assets are not recognised in the company s financial statements, but they are disclosed when it is likely that there will be a future economic inflow Judgements and estimates In preparing the financial statements, the company made a number of estimates and assumptions that affect the assets, liabilities, income and expenses stated. All estimates and presuppositions were made by the management body based on best knowledge of ongoing events and transactions on the date of the financial statements approval. Estimates were determined based on the best information available on the date of the preparation of the income statement and based on the best knowledge and experience of passed and/or current events. Nevertheless, subsequent situations can take place that are not predictable on that date and that were thus not taken into account in these estimates. Changes to these estimates that occur after the date of the financial statement, will be prospectively corrected in the income statement. 4. CASH FLOW For purposes of the Cash Flow Statement, Cash and its equivalents include cash, demand bank deposits and are as follows: Contingent liabilities are not recognised in the company financial statements, but they are disclosed. 42

43 (amounts in euros) Item Cash , ,89 Readily convertible bank deposits , ,51 Term deposit , ,26 Cash and Equivalents , ,66 5. INTANGIBLE ASSETS During the period that ended December 31, 2015 and 2016, the operations that occurred in the amounts of intangible assets, as well as in the corresponding accumulated amortisations, were as follows: Year 2015 Initial balance Increases Disposals / Transfers Exchange Differences Final balance Gross amounts Computer software ,89 0,00 0,00 0, ,89 Others 0, ,22 0,00 0, ,22 TOTAL , ,22 0,00 0, ,11 Accrued amortizations Computer software , ,29 0,00 0, ,89 TOTAL , ,29 0, ,89 Net Amount 5 887, ,22 43

44 ANNEX TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2016 (4/12) Year 2016 Initial Balance Increases Disposals / Transfers Exchange Differences Final Balance Gross amounts Computer software ,89 0,00 0,00 0, ,89 Others ,22 0,00 0,00 0, ,22 TOTAL ,11 0,00 0,00 0, ,11 Accrued amortizations Computer software ,89 0,00 0,00 0, ,89 TOTAL ,89 0,00 0,00 0, ,89 Net Amount , ,22 6. INVESTMENT PROPERTIES At December 31, 2015 and 2016, the item Investment properties is as follows: (amounts in euros) Gross Amounts Buildings and other constructions Accrued depreciations Final balance Item Year 2015 Sales Financial year depreciations Reversal Depreciations Valuation Year , , , , , , , ,54 0,00 Net Amount , , ,00 In 2016, the accounting valuation methodology of the elements which are part of investment properties was changed from production cost to fair value which resulted in an increase of valuation of 284, TANGIBLE FIXED ASSETS 7.1 Groo values and accrued depreciations During the periods ending December 31, 2015 and 2016, the operations that occurred in the amounts of tangible fixed assets, as well as in the corresponding accumulated depreciations, were as follows: 44

45 Year 2015 (amounts in euros) Initial Balance Increases Disposals / Transfers / Write-offs Exchange Differences Final Balance GROSS AMOUNTS Land and natural resources , ,00 0,00 0, ,91 Buildings and other constructions , , , , ,70 Basic equipment , , , , ,89 Transport equipment , , , , ,48 Office equipment , ,53 0, , ,04 Other fixed tangible assets ,60 0,00 0, , ,23 On-going 0,00 0,00 0,00 0,00 0,00 Advances for investments ,00 0,00 0,00 0, ,00 TOTAL , , , , ,25 ACCRUED DEPRECIATIONS Initial Balance Reinforcement Exchange Differences Write off/ Reversals Final Balance Buildings and other constructions , , ,88 0, ,66 Basic equipment , , , , ,18 Transport equipment , , , , ,58 Office equipment , , ,75 0, ,17 Other fixed tangible assets , ,60-763,77 0, ,67 TOTAL , , , , ,26 Net Amount ,99 45

46 ANNEX TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2016 (5/12) Year 2016 (amounts in euros) Initial Balance Increases Disposals / Transfers / Write-offs Exchange Differences Final Balance GROSS AMOUNTS Land and natural resources ,91 0,00 0,00 0, ,91 Buildings and other constructions ,70 0,00 0, , ,63 Basic equipment , , , , ,77 Transport equipment , , , , ,63 Office equipment , ,86 0, , ,22 Other fixed tangible assets ,23 0,00 0, , ,13 On-going 0,00 0,00 0,00 0,00 0,00 Advances for investments ,00 0,00 0,00 0, ,00 TOTAL , , , , ,29 ACCRUED DEPRECIATIONS Initial Balance Reinforcement Exchange Differences Write off/ reversals Final Balance Buildings and other constructions , , ,93 0, ,68 Basic equipment , , ,23 0, ,37 Transport equipment , , , , ,69 Office equipment , , ,47 0, ,86 Other fixed tangible assets ,67 785, ,99 0, ,27 TOTAL , , , , ,87 Net Amount ,42 Revaluation year Legal Statutes 7.2 Fixed tangible assets expressed in revalued amounts During the period there were no revaluations of the Fixed tangible assets. In previous periods revaluations were performed based on the following legal statutes: 1986 Dec.- Law no. 118-B/86, of May 27, 1991 Dec.- Law no. 49/91, of January 25, 1993 Dec. - Law no. 264/92, of November 24, 46

47 Project: Ikea Client: IKEA Centres Portugal

48 ANNEX TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2016 (6/12) Discriminative table of revaluations done in the mentioned periods: (amounts in euros) Item Historical Costs Revaluations Revalued Accounting Amounts Land and natural resources , , ,91 Buildings and other constructions , , ,88 TOTAL , , ,79 8. LEASES 8.1 Financial Leases The company owns tangible fixed assets included in the Balance sheet through the financial lease regime. At December 31, 2016 the values of those assets were as follows: (amounts in euros) Item Gross Amounts Depreciations Net Amount Basic equipment , , , The liability stated in the Balance sheet regarding financial lease contracts was the following: (amounts in euros) Year 2016 In current liabilities ,46 In non-current liabilities 9 384,78 TOTAL , Financial Leases The amount regarding the minimum payment of financial lease contracts is the following: (amounts in euros) Year 2016 Up to 12 months , Operational Leases The amount regarding rent payments of operational leases is the following: (amounts in euros) Year 2016 Up to 12 months ,19 Over 12 months ,86 48

49 9. INTERESTS IN JOINT VENTURES At December 31, 2016, the jointly controlled companies, integrated by the proportional method and proportion in the said companies were the following: Name Vias, Gabriel Couto, Electren - Reabilitação Sistema Mondego, ACE Shareholding 30,00% CEGA Construção Scut dos Açores, ACE 25,00% CMGE Construtoras Escolares, ACE 33,33% Alberto Couto Alves, Construções Gabriel A S Couto, ACE 50,00 % FEAG, ACE 15,00 % Escola FGA, ACE 50,00 % FGC - Ferreira Construções, Gabriel Couto 50,00% At December 31, 2016, the aggregated amounts, calculated through the joint controlled percentage of the current assets, non-current assets, current liabilities, non-current liabilities, income and charges from the mentioned complementary groups of the company were as follows: (amounts in euros) Name Assets Assets Liabilities Liabilities Expenses Income Net non-current current non-current current V,GC,E, ACE 0, ,72 0, ,28 750,35 0,00-750,35 CEGA, ACE 0, ,15 0, , ,24 0, ,24 CMGE, ACE 261, ,19 0, , , , ,19 ACA,CGC, ACE 0, ,86 0, , , , ,41 FEAG, ACE , ,47 0, ,69 0,00 0,00 0,00 FGA, ACE 0, , , , , , ,50 FGC,FC,GC 0, , , , , , ,38 49

50 ANNEX TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2016 (7/12) 10. INVESTMENTS IN ASSOCIATES AND SUBSIDIARIES At December 31, 2016, financial shareholdings in associates were as follows: (amounts in euros) Company Head Office % Equity Equity Net Res. Year Obs Comasa-C. Civil e O.Públicas, Lda V.N. Famalicão 80, , , a) Abrical-Areias, Brit. E Calcários, Lda Miranda Douro 50, , , a) Socojol-Eng. Const. Civil, Lda Mozambique 91,70 b) b) b) Gabriel Couto (Mozambique),SARL Mozambique 57,00 b) b) b) ParqF-Parques Estac Famalicão Braga 39, , , a) AGE Energias Renováveis, Lda V.N. Famalicão 50, , , a) Mopre Pré Fabric Betão, Lda Mozambique 90,00 b) b) b) GCM-Eng e Const Lda Mozambique 88,04 b) b) b) Bemoz. Lda. Mozambique 85,00 b) b) b) JV Gabriel Couto A.Carvalho Rosas Const (Moldavia) Moldavia 33,33 b) b) b) GMCP, Lda V.N. Famalicão 50,00 b) b) b) GCM Engª Const. Mozambique Mozambique 88,04 b) b) b) a) The amount of these financial shareholdings is calculated in accordance to the equity method. b) The amount of shareholdings is evaluated at acquisition cost. These companies have been incorporated but did not start their production activity, being thus inactive There are no remunerations to the Board members of this company, resulting from any of the entities regarded as related parties Operations with related companies In 2016, transactions between the related companies and the entity were as follows: (amounts in euros) Invested Sales Purchases Comasa-Const. Civil O. Públicas, Lda 4 403, ,40 50

51 11. OTHER FINANCIAL INVESTMENTS 11.1 Investments in other companies (amounts in euros) Name/Company % Amount Obs Euroscut-Soc Concessionária da Scut do Algarve, SA ,00 b) Auto-Estradas Norte Litoral Soc Conc AENL, SA --- 1,00 b) Vialivre, SA 3, ,52 a) Lamegorenova-Const e Gestão Equipamentos, SA 10,200 0,00 a) Gabriel Couto, SGPS, SA --- 1,00 b) Gabriel Couto Angola, Lda 7, ,62 b) Norgarante ,00 b) Catim ,00 b) Banif ,45 b) Montepio ,00 b) Loans granted: Gabriel Couto, SGPS, SA --- 0,32 b) AGE Energias Renováveis, Lda ,90 a) ParqF ,01 a) TOTAL ,23 a) the amount of these shareholdings is estimated by the equity method b) the amount of these shareholdings is estimated by the acquisition method Other financial investments At December 31, 2016, financial investments refer to: C.G.D. Insurance , DEPRECIATIONS OF THE PERIOD (amounts in euros) Financial year depreciations Investment properties 7 959, ,18 Fixed tangible assets , ,72 Fixed intangible assets 5 887,29 Reversals Investment properties ,54 TOTAL , ,36 51

52 ANNEX TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2016 (8/12) 13. FINANCIAL INVESTMENTS At December 31, 2016 the amount of Financial Investments totalled 1,401, Throughout the year, the following movement occurred: Investment Initial balance Increases Disposals Tranf/Write-offs/ Exc. Dif. (amounts in euros) Final Balance In Equity Method associates , , , ,39 Other investments in other companies , ,36 Other CGD investments , ,40 Other financial investments , ,76 TOTAL , , , , INVENTORIES At December 31, 2016 and 2015, Inventories were as follows: Item Raw materials, subsidiary and consumption materials , ,48 Sub-products and works in progress , ,00 Finished and intermediate products , ,19 Goods 8 919, , CONSTRUCTION CONTRACTS TOTAL , ,55 For the recognition of income or expenses of construction contracts, the completion percentage method was used. Therefore, the income directly related to the work in progress is recognized in the income statement according to its completion percentage, which is determined by the ratio between incurred costs up to the balance sheet date and total estimated costs of the works. 16. REVENUE At December 31, 2016 and 2015, Sales and service provisions per market were as follows: (amounts in euros) Market National market Sales Finished products 0, ,00 Sub-total 0, ,00 Service provision , ,39 Extra-community market Sub-total , ,39 Service provision , ,53 Sub-total , ,53 Overall Total , ,92 52

53 Project: Avantgarde Hotel Porto Norte Client: Marec-Hotel Activities

54 ANNEX TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2016 (9/12) 17. PROVISÕES The operations occurred under Provisions in periods 2016 and 2015, were as follows: (amounts in euros) Provisions Guarantees to clients Initial balance 2 631, ,15 Increase , ,42 Other adjustments , ,15 Onerous contracts Final balance , ,42 Initial balance , ,81 Increase 1 994, ,53 Reversals , ,46 Other adjustments , ,54 Final balance , , INCOME TAX At December 31, 2016 and 2015, Income tax stated could be broken down as follows: (amounts in euros) Tax Current tax , ,24 Deferred tax , ,82 Total , , TRADE RECEIVABLES AND OTHER RECEIVABLES Trade receivables and other receivables at December 31, 2016 and 2015 are as follows: (amounts in euros) Item Clients: Clients Current account , ,30 FINAL OVERALL BALANCE , ,84 Clients - guarantee retention 6 399, ,64 Bad debts , ,57 Provisions Losses per accrued impairments , ,57 Guarantees to clients Increase , ,42 Onerous contracts Increase 1 994, ,53 Reversals , ,46 Final balance , ,49 TOTAL , ,94 Other accounts receivable: Advances to staff 3 125, ,97 Debtors per income increase , ,18 Other debtors , ,73 TOTAL , ,88 54

55 20. SUPPLIERS, OTHER PAYABLES AND ADVANCES FROM CLIENTS At December 2016 and 2015, the amount payable to suppliers, other payables and advances from clients were as follows: (amounts in euros) Item Suppliers: Clients Current suppliers , ,65 Clients Current investment suppliers 0, ,53 Suppliers - Bills payable , ,27 Suppliers - Guarantees retention 0, ,45 Suppliers - Invoices pending , ,57 TOTAL , ,47 Other non-current payables: Advances from clients , ,47 Other creditors , ,80 TOTAL , ,27 Other current payables: Remunerations to be paid 1 792, ,72 Creditors per accrued expenses , ,68 Other creditors , ,78 Amounts allocated to shareholders ,09 Other operations with shareholders ,57 TOTAL , ,75 Advances from clients , ,39 55

56 ANNEX TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2016 (10/12) 21. LOANS OBTAINED Loans btained are broken down into Bank Loans, Financial Leases and Other Financial Institutions. At December 2016 and 2015, such amounts were as follows - divided into Current Liability and Non-current Liability: (amounts in euros) Item In non-current liabilities: Bank loans , ,47 Other financial institutions , ,05 Financial leasing 9 384,78 0,00 TOTAL , , SHARE CAPITAL The company share capital is represented by shares, with a value of 5 euros each, and it is fully paidup. 24. STATE AND OTHER PUBLIC ENTITIES Assets and liabilities amounts of State and other public entities were presented as follows in the balance sheets of 2016 and 2015: (amounts in euros) Item In current assets: Income statement , ,88 In Current liabilities: Bank loans , ,38 Other financial institutions 0, ,76 Financial leasing , , DEFERRALS TOTAL , ,81 At December 2016 and 2015, Deferrals were as follows: Value added tax , ,91 In current liabilities: TOTAL , ,79 Income tax , ,99 Income tax withholding Remaining taxes - Stamp duty Social Security contributions , ,50 69,71 272, , ,06 TOTAL , ,01 (amounts in euros) Item In current assets: Expenses to be recognized , ,57 In current liabilities: Income to be recognized , , GAINS/LOSSES ALLOCATED TO SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES At December 31, 2016 and 2015, Gains/Losses allocated to subsidiaries, associates and joint ventures were as follows: 56

57 Item Revenues and gains by applying the equity method , ,38 Other revenues and gains , ,05 Dividends obtained , ,02 Expenses and losses by applying the equity method , ,26 Other expenses and losses , ,30 TOTAL , , COST OF GOODS SOLD AND MATERIALS CONSUMED The cost of goods sold and materials consumed stated at the end of periods 2016 and 2015 were as follows: (amounts in euros) Item Goods Initial balance 8 919, ,88 Purchases 0,00 0,00 Final balance 8 919, , CHANGE IN PRODUCTION INVENTORIES At December 31, 2016 and 2015, the following change was stated in production inventories: Cost 0,00 0,00 Raw materials, subsidiary and consumption materials (amounts in euros) Item Finished and intermediate products: Final balance , ,19 Stock Adjustment Initial balance , ,82 Purchases , ,27 Final balance , ,48 Cost , ,61 Initial balance , ,14 Changes 0, ,95 Cost of goods sold and materials consumed , ,61 Products and works in progress Final balance , ,00 Initial balance , ,47 Changes , ,53 Changes in production inventories , , SUPPLIES AND EXTERNAL SERVICES At December 31, 2016 and 2015, the amount of Supplies and External Services stated the amounts in the table below, per items: 57

58 ANNEX TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2016 (11/12) (amounts in euros) Item Subcontracts , ,07 Specialized works , ,60 Advertising and propaganda 8 369, ,71 Monitoring and safety , ,51 Fees , ,46 Commissions , ,94 Conservation and repair , ,58 Other services 701, ,13 Rapid wear tools , ,91 Technical books and documents , ,59 Office material , ,60 Corporate gifts 9 845, ,12 Cleaning, hygiene and comfort materials 7 021, ,96 Other materials 2 865, ,54 Electricity , ,89 Fuel , ,72 Water , ,06 Oils 1 312, ,26 Gas , ,16 Travel and accommodation , ,85 Staff transport 0,00 41,94 Goods Transport , ,20 Other transports , ,46 Rents and leases , ,18 Communication , ,03 Insurances , ,23 Litigation and notaries , ,12 Representation expenses , ,45 Cleaning. Hygiene and comfort , ,36 Other services , , EXPENSES WITH STAFF TOTAL , , The broken down Expenses with staff accounted for in periods 2016 and 2015 were as follows: (amounts in euros) Item Corporate bodies remunerations , ,36 Staff remuneration , ,36 Compensations , ,15 Charges with remunerations , ,65 Insur. for accid at work and occup dis , ,99 Welfare expenses , ,49 Other staff expenses , ,74 TOTAL , , In 2016 the corporate bodies remunerations were: Board of Directors ,83 The remuneration allocated to the supervisory body was 13, in 2016 and

59 30. FAIR VALUE INCREASES / REDUCTIONS At December 31, 2016, due to fair value increase, the company s gain was as follows: (amounts in euros) Item Gains in investment properties Losses in financial investments ,39-222,60 TOTAL ,39-222, OTHER INCOMES AND EXPENSES In 2016 and 2015 Other income and gains and Other expenses and losses were as follows - pursuant to the following breakdown: (amounts in euros) Item Other revenues: Supplementary revenues , ,31 Prompt Payment Discounts , ,87 Revenues and gains in remaining investments Income and gains Nonfinancial investments , , , ,90 Interest obtained , ,80 Others , ,38 Of which: Correc. to prev. year report , ,37 Others non-specified , ,08 Benefits from Contractual Benefits Recovery of financial expenditure ,87 0, , ,93 Item Other expenses: Taxes , ,53 Prompt payment discounts granted Default and compensatory interest 5 785, , , ,87 Other interest , ,61 Foreign exchange losses , ,18 Other funding expenses and losses , ,99 Others , ,74 Of which: Corrections to previous years reports , ,47 Contractual penalties ,43 0,00 TOTAL , , INTEREST AND SIMILAR EXPENSES In 2016 and 2015 Interest and similar expenses were as follows - pursuant to the following breakdown: (amounts in euros) Item Interest and similar income: Interest from funding granted , ,03 Foreign exchange losses 0, ,10 TOTAL , ,13 Tax estimates surplus 0,00 0,00 TOTAL , ,60 59

60 ANNEX TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2016 (12/12) Interest and similar costs: Interest charges , ,32 Exchanges differences related to funding obtained Other funding expenses and losses , ,10 Related to funding obtained , ,48 TOTAL , ,90 provided through the mortgage of units not sold from the real estate development of Louredo, located in Avª 25 de Abril, in Vila Nova de Famalicão. 35. FOREIGN CURRENCY QUOTATIONS On the Balance Sheet date, and for purposes of conversion of the amount originally expressed in foreign currency to euros, the official quotations of December 31, 2016 were used: ACCOUNTS CONSOLIDATION Pursuant to Decree-law no.158/2009, wording given by Decree-Law no. 98/2015, of June 2, the entity is exempted from consolidation since it does not control subsidiaries and those in which its shareholding is higher than 50% of the share capital, they jointly do not exceed the limitations stated in article 7 of the mentioned Decree-law. 34. GUARANTEES PROVIDED 34.1 At December 31, 2016, the amount of bank guarantees and surety bonds provided by the company to third parties was of 52,069, Euros, among which are the following amounts in foreign currency for work contract guarantees. Metical (MZM) American dollars (USD) To guarantee all short, medium and long term loans, as well as the bank guarantees provided by Banco Santander Totta, the Head office building was encumbered through a mortgage in favour of the bank To guarantee the medium/ long term loan granted by Banco Comercial Português in the initial amount of 2,200,000.00, and which on the date of 31/12/2016 is of 690,711.45, a rem guarantee was Currency 1 EURO 1 EURO USD 1,0541 1,0887 New Leu (Romania) 4,539 4,524 Kwanzas (Angola) 184, ,8315 Meticais (Mozambique) 74,54 49,29 SZL (Swaziland) 14,457 16,953 Zambian Kwacha 10, ,9757 CVE (Cape Verde Escudo) 110, , DISCLOSURES REQUIRED BY LEGAL STATUTES Pursuant to Decree-Law no. 534/80 of November 7, the entity s payments to the State are up to date. Pursuant to Decree-Law no. 411/91 of October 17, the entity s payments to the Social Security are up to date. 37. EVENTS AFTER THE BALANCE SHEET DATE At the moment of preparation of this document, there are no known subsequent events that would significantly modify the financial statements of December 31, After the end of the reporting period until the preparation of this attachment, no other facts susceptible of modifying the accounts were recorded. 60

61 38. DATE ON WHICH THE FINANCIAL STATEMENTS ARE AUTHORIZED FOR ISSUE The Financial Statements of the period ending on December 31, 2016 were approved by the Board of Directors and authorized for issue on May 16, Chartered Accountant Board of Directors Project: High School D. Dinis. Santo Tirso Client: Parque Escolar, E.P. E (National Schools Administration)

62 62

63 REPORT AND SOLE SUPERVISOR OPINION Project: Avantgarde Hotel Porto Norte Client: Marec-Hotel Activities 63

64 REPORT AND SOLE SUPERVISOR OPINION 2016 To the shareholders:: Pursuant to the legal and statutory precepts, we submit our Supervisory Report and Opinion on the Management Report, Accounts and Proposals presented by the Board of Directors of the Company CONSTRUÇÕS GABRIEL A. S. COUTO, S.A., related to the financial year of During the financial year under analysis, we followed the Company s activity as Sole Supervisor and maintained regular contacts with the board of Directors and its collaborators who provided all the information on the issues under analysis and whose collaboration we acknowledge. 2. To our knowledge, there was no situation that would not respect the legal and statutory standards. 3. We analysed the analytical Balance sheet, the Income Statement per Nature and the Statement of Changes in Equity, the Cash Flow Statement, the attachment and the Management Report from the Board of Directors and the Legal Certification of Accounts, which are an integral part of this Report and we agree with the said documents. 4. The accounting policies adopted allow for a correct valuation of the assets and income which are mentioned in note 3 of the annex. In view of the above, our opinion is that: a) The Management Report from the Board of Directors and the accounts of 2016 are to be approved; b) The proposal from the Board of Directors related to the appropriation of net Results is to be approved; c) The Company s Administration and Supervision general assessment is to be carried out. Trofa, May 31, 2017 SOLE SUPERVISOR ARMINDO COSTA, SERRA CRUZ, MARTINS E ASSOCIADOS Company of Chartered Accountants no. 57 Represented by António Serra Cruz Chartered Accounted no

65 Project: Polo 1 Logistics Plataform Leixões Client: APDL Administration the Port of Leixões

66

67 LEGAL CERTIFICATION OF ACCOUNTS (Statutory Auditors) Project: Expansion of the Orthopedic Hospital Sant Ana - Parede. Lisboa Client: Santa Casa da Misericórdia de Lisboa

68 LEGAL CERTIFICATION OF ACCOUNTS REPORT ON THE FINANCIAL STATEMENTS AUDIT OPINION We have examined the financial statements attached from CONSTRUÇÕES GABRIEL A. S. COUTO, S.A., which include the balance sheet on December 31, 2016 (which stated a total of ,23 euros and a total equity of ,40 euros, including a net Income of ,37 euros), the Income Statement per Nature, the Statement of Changes in Equity, the Cash Flow Statement related to the year ending on such date and the Attachment which includes a summary of the significant accounting policies. In our opinion, the attached financial statements truly and fully present, in all material aspects, the financial situation of CONSTRUÇÕES GABRIEL A. S. COUTO, S.A. as at December 31, 2016 and the cash flow related to the year ending on that date, pursuant to the Accounting and Financial Report Standards adopted in Portugal through the Accounting Standardization System. BASES FOR THE OPINION Our examination was carried out pursuant to the International Audit Standards and remaining standards and technical and ethical guidelines from the Portuguese Institute of Statutory Auditors. Pursuant to the said standards, our responsibilities are described under the section Responsibilities of the auditor in the financial statements audit below. Pursuant to the law, we are an independent entity and comply with the remaining ethical requirements pursuant to the Code of Ethics of the Portuguese Institute of Statutory Auditors. It is our opinion that the evidence provided for the audit is sufficient and appropriate and provides an acceptable basis for the expression of our opinion. RESPONSIBILITIES OF THE MANAGEMENT BODY WITH REGARD TO THE FINANCIAL STATEMENTS The management body is responsible for: - preparing the financial statements that truly and appropriately present the financial position, financial performance and cash flow of the Entity pursuant to the Accounting and Financial Report Standards adopted in Portugal through the Accounting Standardization System: - elaboration of the management report pursuant to the legal and regulatory terms applicable: - creation and update of an appropriate internal control system to allow preparing financial statements with no material distortion due to fraud or error; - adoption of accounting policies and criteria appropriate to the circumstances; and - assessment of the Entity according to the going concern principle, being that if applicable, the entity will disclose the matters that might raise significant doubts on the continuity of its activities. RESPONSIBILITIES OF THE AUDITOR WITH REGARD TO THE FINANCIAL STATEMENTS AUDIT Our responsibility is to obtain an acceptable degree of assurance as to whether or not the financial statements contain materially relevant distortions due to fraud or error and issue a report stating our opinion. An acceptable degree of assurance is not a guarantee that the audit performed pursuant to the IAS will detect all material distortions when present. Distortions can be the consequence of fraud or error and are regarded as materially relevant if, individually or collectively, they can be expected to influence economic decisions taken based on the said financial statements. 68

69 Pursuant to the IAS, and as part of our audit, we make professional judgements and we are professionally sceptical during the audit and we also: - identify and assess the risks of material distortions in the financial statements due to fraud or error, design and conduct procedures of audit that answer the said risks and obtain proof of audit that is sufficient and appropriate to base our opinion. The risk of not detecting a material distortion due to fraud is higher than the risk of not detecting a material distortion due to error, as fraud can involve collusion, forgery, intentional omissions, false statements or internal control overlap; - we analyse and obtain an understanding of the internal control which is relevant to the audit in order to design procedures of audit which are appropriate in the said circumstances, but not to express an opinion on the efficiency of the Entity s internal control; - we assess the adequacy of the accounting policies used and the reasonability of the accounting estimates made and corresponding disclosures made by the management body: - we conclude on the adequacy of the use by the management body of the going concern assumption and based on the evidence obtained from the audit we also concluded if there is any material uncertainty related to the events or conditions that might raise significant doubts on the Entity s ability to continue its activities. If we conclude that there is a material uncertainty, we must highlight the related disclosures included in the financial statements in our report or, if the said disclosures are not appropriate, change our opinion. Our conclusions are based on the audit evidence obtained up to the date of our report. Nevertheless, future events or conditions may cause the Entity to discontinue its activities; - assess the financial statements presentation, structure and global content, including the disclosures and if the said financial statements represent the underlying transactions and events in order to obtain an appropriate presentation; - we communicate with the governance officers about the scope, calendar planned for the audit and the significant audit conclusions including any significant internal control deficiency identified during the audit, among other issues. Our responsibility also includes verifying the consistency of the information present in the management report with the information in the financial statements. REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS On the management report In line with article 451 (3) e) of the Code of Commercial Companies, our opinion is that the management report was prepared in accordance to the applicable legal and regulatory requirements in force, the information within in it is consistent with the audited financial statements, and, considering the knowledge and assessment of the Entity, we did not identify material inaccuracies. Trofa, March 31, 2017 ARMINDO COSTA, SERRA CRUZ, MARTINS E ASSOCIADOS Company of Chartered Accountants no. 57 Represented by António Serra Cruz Chartered Accounted no

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71 INTERNACIONAL CAPE VERDE Project: Buildings for 390 Apartments. Palmerejo Grande.Praia. Santiago Island. Cape Verde Client: State of Cape Verde

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73 INTERNACIONAL CAPE VERDE Project: Buildings for 390 Apartments. Palmerejo Grande.Praia. Santiago Island. Cape Verde Client: State of Cape Verde

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75 INTERNATIONAL SWAZILAND Project: Upgrading of the St Phillips Road (continuation) and Usutfu River Bridges Client: European Union and Government of the Kingdom of Swaziland

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77 INTERNATIONAL ZAMBIA Project: Construction of Mazyopa Drainage System, Lusaka Client: Lusaka Water and Sewerage Company in Zambia MCA-Millenium Challenge Account Zambia

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79 INTERNATIONAL HONDURAS Project : Construction works for the Rehabilitation of the West in the Department of Copan, Honduras, C.A. Lot No. 1 The Entrance - Santa Rosa de Copán Lot No. 2 The Entrance - Los Ranchos Client: Secretary of State in the Offices of Infrastructure and Public Services (INSEP) - General Direction of Roads (DGC)- Government of the Republic of Honduras

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81 INTERNATIONAL MOZAMBIQUE Project: Rehabilitation of N221 Caniçada / Chicualacuala.Gaza State Client: ANE- State Road Administration Mozambique 81

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83 INTERNATIONAL MOZAMBIQUE Project: Rehabilitation of N13. Nampula/Cuamba (Project Nacala Corridor). Lot C Malema/Cuamba Client: ANE State Road Administration Mozambique 83

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85 INTERNATIONAL MOZAMBIQUE Project: Construction of Interference Road Of 710 M With N13, According Ane Specifications - Nampula, Mozambique Client: Vale Mozambique Lda. 85