2014-03 relatório e contas - consolidado - total -...

SAG GEST – Soluções Automóvel Globais, SGPS, S.A. – Sociedade Aberta C.R.C. Amadora n.º 503219886 – Capital Social: EUR 169.764.398 – Contribuinte N.º 503 219 886

Sede: Estrada de Alfragide, n.º. 67 – 2614-519 Amadora 1

CONSOLIDATED REPORT 1ST QUARTER 2014



SAG GEST – Soluções Automóvel Globais, SGPS,S.A. Listed Company Registered Share Capital: Eur 169,764,398 Taxpayer no: 503 219 886 Registered at the Amadora Registrar of Companies under no. 503 219 886 Head-office: Estrada de Alfragide, nº. 67 – 2614-519 Amadora Offices: Alfrapark – Edifício SGC, Piso 2 2614-519 Amadora Tel: 21 359 66 64 Fax: 21 359 66 74 E-mail: [email protected] Web: http://www.sag.pt



CONSOLIDATED MANAGEMENT REPORT

1st QUARTER 2014



MANAGEMENT REPORT 1st QUARTER 2014

To the Shareholders,

In accordance with the applicable regulations, the Board of Directors of SAG Gest – Soluções Automóvel Globais, SGPS SA hereby submits the Management Report and the Consolidated Financial Statements in respect of the three months ended 31 March 2014.

1. ACTIVITIES

1.1. Portugal – Automotive

1. ACTIVITIES 1.1. Portugal – Automotive During the 1st Quarter 2014, the passenger car (PC) market volume increased 40.5% when compared with the same period in 2013, to 33,954 units. Volume in the light commercial vehicle (LCV) market was 5,764 units, a 66.5% increase when compared with the same period in the previous year.

In the passenger car market (PC), the total volume for the Brands represented by SIVA was 5,490 units, representing an increase of 25.9% and corresponding to a 16.2% market share, which allowed SIVA to maintain its leadership position in this market.

In the light vehicle market (PC + LCV), SIVA’s volume increased 27.5%, with a 15.0% market share.

In the passenger car market, Volkswagen’s volume was 2,953 cars, representing an increase of 22.4% when compared to the same period in the previous year, and an 8.7% market share. Audi’s market share was 5.7%, corresponding to 1,930 vehicles, a 26.6% increase when compared to the same period in 2013. Skoda, with 606 cars, increased 44.3% and achieved a 1.8% share. Volkswagen Commercial Vehicles increased 49.5% when compared to the same quarter in 2013, with 462 vehicles.

1.2. Brazil Unidas’ activity during the 1st Quarter 2014 again recorded a solid growth, in both operational and financial indicators.

Net revenue from Rent-a-Car increased 44.8% in comparison to the amounts in the same period in 2013, which resulted from a 55.1% volume increase (measured in daily rentals).

In the Renting segment, net revenue increased 12.1%, with an average fleet of approximately 18,500 vehicles (4.7% more than in the 1st Quarter 2013).

Total turnover for the 1st Quarter 2014 increased 23%, EBITDA increased 32%, EBIT increased 76.9%, and the Net Result (R$ 17.0 million) more than tripled when compared to the Net Result for the same period in 2013.

Unidas has continued to strengthen its financial position, and net debt is now equivalent to two times the EBITDA.

Unidas’ fleet increased 6.3%, from 34,870 vehicles at the end of the 1st Quarter 2013 to 37,063 vehicles on 31 March 2014.

2. CONSOLIDATED RESULTS FOR THE 1st QUARTER 2014 Consolidated Turnover for the 1st Quarter 2014 was Eur 105.0 million, representing a 20% increase when compared to the same period in 2013, reflecting the increased activity of the automotive sector in Portugal.

Consolidated EBITDA was Eur 2.7 million, a 21.8% increase when compared with the 1st Quarter 2013.



Consolidated Financial Result represented a cost of Eur 5.0 million in the Quarter, similar to the amount recognized during the same period in the previous year which, however, included an amount of Eur 0.9 million representing the appropriation of SAG Gest's share in Unidas' net result.

Net Interest decreased 17.9% in comparison with the 1st Quarter 2013, essentially as a result of a net debt decrease related to the Supplementary Capital Payments performed in August 2013, as well as of the decrease, on the same date, of the interest rate applying to a substantial portion of consolidated debt.

Consolidated Earnings Before Taxes were Eur 3.0 million negative, posting an 11% improvement in comparison to the amount recorded during the 1st Quarter of the previous year.

Consolidated Net Profit attributable to SAG Gest was a loss of Eur 3.5 million, which represents a 5.5% improvement in comparison with the loss of Eur 3.7 million posted during the 1st Quarter 2013. However, the two amounts are not directly comparable since, in 2014, Unidas’ contribution (which was positive in 2013) was not considered.

In fact, Consolidated Net Profit for the 1st Quarter 2014 does not include SAG Gest’s appropriation of its share in Unidas’ net result, unlike what happened during the 1st Quarter 2013 where, as mentioned above, a Eur 0.9 million appropriation was considered. Had the proportional method been applied to Unidas during the 1st Quarter 2014, as was the case in the 1st Quarter of 2013, the appropriation of SAG Gest’s share in Unidas’ net profit would represent a reduction of Eur 1.1 million (approximately 31%) in the loss recorded in respect of the 1st Quarter 2014.

SAG Gest's Consolidated Net Debt, as at 31 March 2014, was Eur 298.5 million, a Eur 34.3 million increase when compared to the amount of Net Debt as at 31 December 2013. This change is essentially the result of the increase in cash flow requirements following the increase in business volume in the Portuguese automotive industry during the 1st Quarter of the year.

3. RISK MANAGEMENT SAG Gest’s risk management policy aims at ensuring an accurate identification of the risks inherent to the activities performed by its Subsidiaries and Affiliates, as well as at adopting and implementing the measures required to minimize the negative impacts that adverse developments of factors inherent to those risks can have on the Group’s financial structure and sustainability.

The identification of risks in Companies that are materially relevant to the SAG Group has enabled the identification of the main risks to which the Group is exposed:

Strategic Risk

The strategic plan which was drawn in 2008, which included the now completed sale of several non-strategic assets, aimed and still aims fundamentally to ensure the Group’s profitability and sustainability. It provided for the adoption of measures which would ensure optimization of the value of the holding in Unidas, in such a way that its sale would enable a reduction in Group debt and, consequently, the consistent and sustainable reestablishment of the Group’s traditional profitability levels, as well as the implementation of a reimbursement plan involving the loans advanced to the SGC - SGPS Shareholder.

Implementation of the final steps of this plan is exposed to two main risks:

1. The return of the Portuguese automotive market to levels enabling the Group’s activities in the Automotive Distribution and Retail areas to increase their profitability, in line with its historical trend; Progression of the automotive market during the 2nd Half of 2013, and the positive prospects for 2014 seem to point in that direction. In fact, in 2014 the market is expected to still be far from its estimated level of balance, and the return to more material results from its import and retail activities, which are indispensable to SAG’s overall profitability, depends of developments this and subsequent years.

2. Completion of the sale of SAG Gest’s holding in Unidas for an amount that is consistent with the investment made by SAG Gest. The progression of the Brazilian economy and the performance of its capital markets, particularly in a year, such as in 2014, during which presidential elections are to be held in Brazil, are determining factors for the success of this transaction.

Reliance on Suppliers



The activities of the SIVA Subsidiary are based upon Distribution Agreements entered into with the Volkswagen Group, for an undetermined period, subject to the relevant EU regulations, which have been fully complied with and successively maintained in force for more than 25 years. However, maintenance of these Agreements depends on the continuation of the Volkswagen Group distribution policies, as well as on the performance of the represented Brands in the Portuguese market.

Financial Risks

The main financial risks identified are the liquidity risk, the exchange rate risk, interest rate risk and the credit risk.

The management of the liquidity risk involves the dynamic monitoring and measuring of this type of risk in order to ensure the fulfillment of all short and medium-term financial responsibilities (cash outflows) by SAG Group companies towards entities doing business with them.

Portugal’s current economic situation, particularly in what relates to the availability of financial resources, has substantially increased the liquidity risks. The Group has reacted by implementing judicious and intense cash flow management procedures, together with a constant communication with the major Portuguese Financial Institutions.

Exchange rate risk management controls the impact that exchange rate changes may have on the Group’s equity and attempts to ensure the accurate measurement and the dynamic management of the global exchange risk. Furthermore, the adopted exchange risk management policy also defines the limits of exposure to this risk, as well as suitable coverage levels. However, it was resolved that no coverage instruments should be used for this purpose, due to the potential impact that the available coverage instruments could have on the Group’s liquidity level.

Interest rate risk management aims to ensure the assessment and dynamic management of this risk through the definition of exposure limits of the Group’s Statement of the Financial Position and of the Statement of Comprehensive Income to interest rate changes. The adopted policy aims at selecting suitable strategies for each business area in order to ensure that this risk factor does not negatively impact the relevant operational capacity. On the other hand, exposure to interest rate risk is further monitored through simulation of adverse scenarios having some degree of probability and which could negatively affect the Group's results.

In what relates to credit risk management, the development of the Group's Client portfolio and each business unit's exposure are monitored on a monthly basis. The Group adopted in 2001 a Credit Risk Manual establishing policies, criteria and procedures to be adopted in the credit control area. The Credit Risk Manual is regularly updated and includes criteria to be used in determining a credit rating.

Operational Risk

Operational risk management is based on the assignment of functional responsibilities and formal definition of internal control procedures, at a business area level.

4. OUTLOOK FOR THE REMAINDER OF 2014 It is expected that the recovery signs displayed by the Portuguese automotive market during the 2nd Half 2013 will continue in the following quarters, which should result in a positive trend of the market which, however, will probably remain at relatively low levels, when compared with what was achieved in a not very distant past. If this growth in the automotive market materializes, profitability of the Group’s operational activities will improve, but will not yet be sufficient to fully cover interest costs.

5. TREASURY STOCK INFORMATION

On 31 December 2013, the Company directly owned 16,760,815 treasury stock, with the nominal value of Eur 1 each, and also indirectly controlled a further 5,100 shares held by the Rolporto Subsidiary, as well as 5,100 shares held by the Loures Automóveis Subsidiary, all with a nominal value of Eur 1 each.

During the three months ended on 31 March 2014, SAG Gest did not purchase or sell any treasury stock and, therefore, on 30 September 2013, the Company directly owned 16,760,815 treasury stock, with the nominal value of Eur 1 each, and also controlled indirectly a further 5,100 shares held by Affiliate Rolporto, as well as 5,100 shares held by affiliate Loures Automóveis, all with a nominal value of Eur 1 each.



The portfolio of treasury stock held directly and indirectly corresponded to 9.879% of the total shares representing the Company’s share capital on 31 March 2014, with an average unit price of Eur 1,9760.

6. FINANCIAL INFORMATION COMPLIANCE STATEMENT In compliance with the legal and statutory provisions, the Board of Directors firmly believes that, to the best of its knowledge, the information contained in the Consolidated Financial Statements as at 31 March 2014 and relating to the three months then ended, was prepared in compliance with the applicable accounting standards and reflects accurately and adequately the Group’s assets and liabilities, financial situation and results, and that the Management Report accurately reflects the development of business, performance and position of the Group and contains a description of the main risks and uncertainties that confronts it.

Alfragide, 22 May 2014

The Board of Directors



CONSOLIDATED FINANCIAL STATEMENTS

1st QUARTER 2014 (Unaudited)

C.R.CSAG GEST – Soluçõ

C. Amadora n.º 5032198Sede: E

es Automóvel Globais, S86 – Capital Social: EURstrada de Alfragide, n.º. 6

SGPS, S.A. – Sociedade AR 169.764.398 – Contribu67 – 2614-519 Amadora

Aberta inte N.º 503 219 886

12



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1st QUARTER 2014 (Unaudited)



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

31 MARCH 2014 (Unaudited)

1. GENERAL INFORMATION IN RESPECT OF THE GROUP’S ACTIVITY The Consolidated Financial Statements of SAG Gest - Soluções Automóvel Globais SGPS, SA (hereafter SAG Gest) as at 31 March 2014 have been approved and authorized for release by the Board of Directors on 22 May 2014.

The Financial Statements are consolidated in Portugal. The SAG Group, of which SAG Gest is the parent company, includes Companies operating in different business areas in Portugal, which include:

• distribution and retail operations of new cars of the Volkswagen, Volkswagen – Commercial Vehicles, Audi, Škoda, Bentley and Lamborghini Brands

• distribution and sale of automotive parts and accessories,

• provision of after sales services (repair and maintenance) of cars

• sales of multi-brand used cars

• preparation of new vehicles and body repairs SAG Gest is a holding Company with headquarters at Estrada de Alfragide, 67 – Alfragide, Amadora, Portugal.

2. SUMMARY OF THE MAIN ACCOUNTING POLICIES 2.1 Bases for preparation The Consolidated Financial Statements were prepared on the basis of historical cost, at the revalued amount for Land and Buildings, and at the fair value for Investment Properties and Derivative Financial Instruments.

The Consolidated Financial Statements were prepared in accordance with IAS 34 – Interim Financial Reporting.

The Consolidated Financial Statements, as well as the Separate Financial Statements of the Companies included in SAG Gest’s current consolidation perimeter (as described in Note 3), relate to the three months ended 31 March 2014, and were prepared using accounting policies that are consistent among them.

All amounts shown in the Notes herein are expressed in thousands of Euros (Eur 000), except where otherwise stated.

2.2 Compliance statement The Consolidated Financial Statements are prepared in accordance with the International Financial Reporting Standards (IFRS), as adopted by the European Union, in force on 31 March 2014.

2.3 Changes in accounting policies 2.3.1 New rules and interpretations applicable to financial year started 1 January 2014 Effective 1 January 2014, the European Union (EU) endorsed the following issues, revisions, amendments and improvements to Standards and Interpretations:



SAG Gest has confirmed that the issuances, revisions, changes and improvements to the above mentioned Standards have not caused material impact to its Consolidated Financial Statements.

Effective 1 January 2013 SAG Gest early adopted the following Standards and consequently the method used in the consolidation of Unidas S/A was changed. Until 1 January 2013, Unidas S/A was included in the Consolidated Financial Statements using the Proportional Consolidation Method. Thereafter, Unidas S/A was considered using the Equity Method. Therefore, the mandatory adoption of these Standards for the period started on 1 January 2014 had no impact on the Consolidated Financial Statements, since the said Standards had already been adopted effective 1 January 2013.

2.3.2 New Standards and Interpretations already issued, but not yet mandatory The new Standards and Interpretations recently issued by IASB that are not yet endorsed by the European Union (EU) are as follows:

SAG Gest does not expect that issuances, revisions, changes and improvements to the above mentioned Standards will cause a material impact to its Consolidated Financial Statements.

2.4 Bases for Consolidation Consolidation using the Full Consolidation Method

a) The Consolidated Financial Statements include the Financial Statements of SAG Gest and of the Subsidiaries in whose Share Capital SAG Gest holds a direct or indirect majority stake or controls management. Control corresponds to the capacity to manage the entity’s financial and operational policy in order to obtain benefits from its activities.

b) Entities controlled by SAG GEST are considered as Group Companies. Control exists when SAG Gest has either direct or indirect power to conduct financial and operational policies of



an Entity. Potential exercisable voting rights are taken into account when determining whether control exists. Control is deemed to exist when the stake held is more than 50%. The Financial Statements of such Entities were consolidated using the Full Consolidation Method.

c) Subsidiaries are consolidated using the Full Consolidation Method from the date when SAG Gest obtains control until the date when control is lost. Financial Statements of these Subsidiaries are prepared with reference to the same period of the Financial Statements of the Parent Company, applying accounting principles that are consistent between them.

d) Changes in the percentage of interests in those Subsidiaries, where no loss of control occurs, are recognized as equity transactions, in accordance with IFRS 10 – Consolidated Financial Statements.

Consolidation using the Equity Method

e) Affiliates where SAG Gest has a significant influence, namely the Autolombos and Manheim Affiliates, were consolidated using the equity method. The Unidas S/A Affiliate was consolidated using this method until 30 June 2013, and since 1 July 2013 has been recognized as a Non-Current Asset Held for Sale, as disclosed in Notes 3.2 and 15.

Non-Controlling Interests

f) The amounts representing participations held by unrelated third parties is included in the Consolidated Statement of the Financial Position and in the Consolidated Statement of Profit and Loss and Other Comprehensive Income under Non-Controlling Interests.

g) Losses are attributed to Non-Controlling Interests, even where that results in a negative amount for Non-Controlling Interests. Non-Controlling Interests represent the interests held by unrelated third parties in the Rolporto, Rolvia and Loures Automóveis Subsidiaries.

h) Non-Controlling Interests are measured at their fair value or according to the acquired proportion of the identifiable net assets. Acquisition related expenses are recognized as costs.

Effects of changes in control

i) When, as a consequence of a transaction, SAG Gest loses control of a Subsidiary, the following procedures are adopted:

• All assets (including Goodwill) and liabilities relating to that Subsidiary are de-recognized

• The amount of any Non-Controlling Interests is de-recognized

• Any Cumulative Translation Adjustments included in Equity and relating to such Subsidiary are reclassified and included in the results for the year

• The fair value of the consideration received, if any, is recognized

• The fair value of interest retained is recognized

• Any remaining balances are recognized in the result of the year in which the transaction is completed

• Any other items related to the Subsidiary that have affected Comprehensive Income are recognized against income for the year

Consolidation process

j) Inter-company balances and inter-company transactions (with their corresponding income and expenses) between the Entities included in the consolidation perimeter were eliminated in the consolidation process.



k) Dividends paid between Group Companies and jointly controlled Companies are eliminated in the consolidation process, in the proportion of the share of control attributable to SAG Gest.

Business Combinations and Goodwill

l) SAG Gest adopted IFRS 3 – Business Combinations, effective 1 January 2004, and therefore, as from that date depreciation of Goodwill is no longer recognized. The value of Goodwill became subject to impairment tests on an annual basis and whenever necessary. Management considers that the amount of Goodwill shown in the Consolidated Statement of the Financial Position is close to the relevant fair value, as disclosed in Note 19.

m) From 1 January 2009 onwards, SAG Gest applied the revised IFRS 3 – Business Combinations. Business acquisitions are recognized using the purchase method, with cost being measured as the sum of (i) the fair value as at the acquisition date, (ii) the consideration paid and (iii) the value of any Non-Controlling Interests in the acquired Entity.

n) When acquisitions of businesses are performed in stages, the fair value on the date of each purchase of previously acquired interests is re-measured at the fair value on the date of each subsequent purchase, and corresponding gains or losses are recognized in the results for the year.

Any contingent consideration is measured at its fair value on acquisition date. Any subsequent changes to this fair value that is considered as an asset or a liability will be recognized according to IAS 39 – Financial Instruments: Recognition and Measurement, in the Consolidated Statement of Other Comprehensive Income. If that contingency is considered as Equity, it shall not be re-measured until it is established as a component of Equity.

o) Differences between the book value of Financial Investments and the acquisition values of the Entities consolidated are reported as follows:

• Where the acquisition price is higher than the acquired Entity’s equity value, such difference is recognized as Goodwill, within Intangible Assets

• Where the acquisition price is lower than the acquired Entity’s equity value, such differences affect Net Result in the financial year in which the acquisition occurs

First consolidation adjustments

p) Differences determined on the date of the first consolidation (in 1998) regardless of their (positive or negative) nature, were recognized directly against Consolidated Equity, under First Consolidation Adjustments and are as follows:



2.5 Main Accounting Policies

Income Recognition (Note 4) Income is recognized as such to the extent that the Entity is likely to derive future economic benefits and that the amount of such Income can be measured reliably.

In order for Income to be recognized, the following criteria must be fulfilled:

a) Sales of goods

Income is recognized when the significant economic risks and benefits resulting from the ownership of the asset have been passed to the Buyer and such Income can be measured reliably.

In the case of cars, Income recognition usually coincides with car ownership transfer, which occurs, in most cases, simultaneously with the issuing of the corresponding sales invoice.

In transactions where, simultaneously with the issuing of the sales invoice, the Selling Entity or any other Entity included in the consolidation perimeter, undertakes a repurchase commitment for the same vehicle (transactions with “buy-back” clauses), the principles set forth in IAS 18 – Revenue are applied. Therefore, the amounts invoiced for such transactions are not recognized as Income, and other expenses or income relating to this kind of transaction are recognized on a straight-line basis during the period in which these commitments are in force, which generally corresponds to the period of time between the invoice date and the date on which the vehicle is repurchased.

b) Services

Income from Services is recognized during the period in which the services are actually provided, regardless of whether or not an invoice was issued.

c) Interest

Interest Income is accrued so that it is recognized in the corresponding period, regardless of whether or not the corresponding support document was generated.

d) Dividends Dividend income is recognized when, in substance, the reporting Entity has an obligation to declare a Dividend.

Non-Current Assets Held for Sale (Note 15)

Non-Current Assets Held for Sale are recognized as such where their carrying amount is expected to be recovered principally through a sale transaction rather than through its continuing use. For this to be the case: a) The Asset must be available for immediate sale in its current condition, subject only to terms

that are usual and customary for the sale of such assets, i.e., the Group has the intention and ability to transfer the asset to a buyer in its current condition;

The sale must be highly probable, and for that purpose, management must be committed to a sale plan and shall initiate its implementation. The actions required to complete the plan should indicate that it is unlikely that significant changes will be made or that the plan will it be withdrawn. In addition, the sales price shall be appropriated when compared to the asset’s current fair value;

b) A sale transaction shall be expected to qualify for recognition as a completed sale within one year from date of recognition of the asset as a Non-Current Asset Held for Sale. This period may be extended should any events or circumstances occur that are beyond SAG Gest's control, and if the intention to sell the asset is maintained.

c) The sale shall be genuine, i.e., the asset shall not be abandoned.

Non-Current Assets Held for Sale shall be measured at the lower of:



a) its carrying amount; and

b) its fair value, less costs to sell.

Before recognition as Non-Current Assets Held for Sale, an asset's carrying amount shall be determined in accordance with the applicable IFRS. Where the asset to be transferred corresponds to an investment in an Affiliate, its carrying amount shall represent the amount resulting from applying the Equity Method on transfer date. Should such asset be devalued, the corresponding impairment loss shall be established and recognized in the Consolidated Statement of Profit and Loss and Other Comprehensive Income, under Impairment of Assets.

Should there be a valuation of the asset, a gain must be recognized in the period under Impairment of Assets. However, such gain shall not exceed the cumulative impairment loss that has already been recognized.

Recognized impairment losses or any subsequent gains shall decrease or increase the carrying amount of Non-Current Asset Held for Sale.

Any loss or gain that was not previously recognized as at the date of sale a Non-Current Asset Held for Sale shall be recognized on the date of de-recognition.

With effect from 1 July 2013, SAG Gest recognized its investment in Unidas S/A as Non-Current Asset Held for Sale, as disclosed in Note 15.

Income Tax (Note 16)

a) Changes to tax regulations For the year 2014, with the enactment of Law no. 2/2014 of 16th January, Article 69 of the Portuguese Corporate Income Tax Code (“CIRC”), establishing the scope and conditions of application of the Special Regime of Taxation of Groups of Companies (“RETGS”), was amended.

Paragraph 2 of the said article establishes that for an Entity to be considered as a controlled Entity, for the purposes of adoption of the “RETGS” regime, the percentage held directly or indirectly by a Shareholding Entity in that Entity is 75% (previously 90%), provided that such holding provides 50% of the voting rights. Should this be the case, the Entity will become included in the “RETGS” perimeter headed by its Shareholding Entity.

As a consequence of this amendment, and since the other requirements of article 69 of the “CIRC” were met, SAG Gest now has, as of 1 January 2014, a new controlling Entity for tax purposes (SGC-SGPS, S.A., SAG Gest’s majority Shareholder) and is now included in the “RETGS” perimeter of SGC-SGPS, S.A.

In addition, and also as a result of the above changes, the other Entities previously included in SAG Gest’s “RETGS”, which are directly or indirectly held by SGC SGPS in excess of 75%, have become included in the “RETGS” perimeter of SGC-SGPS, S.A., with effect from 1 January 2014. The option for maintaining this tax regime was communicated to the Tax Authorities by the controlling Entity on 25 March 2014.

On same date, and in accordance with paragraphs 3 and 4 of Article 71 of the “CIRC”, a Request was submitted for the maintenance of the SAG Group’s tax losses carried forward from previous years, established under the “RETGS” headed by SAG Gest, as well as for the allocation of individual tax losses of Entities that were part of the previous “RETGS” led by SGC-SGPS.

b) Tax return reviews In accordance with current legislation, Portuguese tax returns are subject to review and correction by the Tax Authorities within a four-year period (five to ten years for Social Security, depending on the application of the transitional regime).Hence, the tax returns of the Companies



included in the consolidation in respect to the years 2010 to 2013 may still be subject to review by Tax Authorities, although SAG Gest considers that any possible corrections resulting from tax reviews to such tax returns will not have any material impact on the Consolidated Financial Statements as at 31 March 2014. The corporate income tax rate applied during 2014 is 23%. The income tax surtaxes are detailed in Note 16. c) Calculation of current income tax

Portuguese Income Tax is the result of the addition of individual income tax amounts due by each of the Entities included in consolidation.

d) Deferred income tax

SAG Gest adopted the recognition of deferred taxes, in accordance with the terms and conditions set forth in IAS 12 – Income Taxes, as a way of suitably matching the tax effects of its operations and to exclude distortions associated with tax criteria that would affect the economic results of certain transactions.

Deferred Tax Assets are recognized whenever there is reasonable certainty that future profits will be generated against which the assets may be used. Deferred Tax Assets are annually revised and reduced whenever it is no longer likely that they might be used.

The amount of Deferred Taxes is determined by using tax rates (and laws) enacted or substantially enacted on reporting date and expected to be applied during the time of recovery of the Deferred Tax Asset or of payment of the Deferred Tax Liability. According to current legislation in Portugal, the 23% corporate income tax rate was considered and, in situations not related to tax losses, 1.5% income tax surtax (“Derrama”) was considered in calculating Deferred Tax Assets or Liabilities resulting from for temporary differences between the tax and book basis of assets and liabilities.

The changes recorded during the period, the reconciliation between the Provision for Income Taxes for the period and Current Income Tax, as well as the breakdown of Deferred Taxes are disclosed in Note 16.

Property, Plant and Equipment (Note 18)

Property, Plant and Equipment, with the exception of Buildings, are recognized at cost, which includes all costs associated with their respective acquisition. Buildings are recognized at their revalued amount. Depreciation is calculated based on cost or re-valued amounts, using the straight-line method, except in the case mentioned below, in order to fully depreciate the assets until the end of their estimated useful life, as follows:

% Buildings and Other Constructions 2.00 to 16.66 Basic Equipment 10.00 to 31.25 Autos and Trucks 14.28 to 25.00 Tools 10.00 to 25.00 Office Equipment 10.00 to 33.33 Other Tangible Assets 10.00 to 33.33

In the Globalrent Subsidiary, depreciation of vehicles recorded as Basic Equipment assigned to the Rent-a-Car operations (short-term car rental without a driver), is calculated so as to reflect the estimated loss in the value of the car during the time of its planned usage, using the straight-line method.

Expenses incurred in connection with the repair and maintenance of equipment are recognized as expenses in the period in which they are incurred.



Intangible Assets (Notes 19 and 20)

a) Goodwill The positive consolidation differences (Goodwill) represent the excess of the acquisition cost over identifiable Equity as at acquisition date, as at the date of the change in control that requires a change in the consolidation method, or as at the date of first consolidation. Goodwill is assigned to the cash generating units for the performance of impairment tests. Goodwill is not amortized, and its value is reduced by any impairment losses. Impairment losses are determined annually on reporting date, or whenever there are signs of a loss in value. Any loss in value (impairment) is recognized on the result for the period, and cannot be subsequently reversed.

Gains or losses arising from the sale of an Entity / cash-generating unit are calculated with the inclusion of the relevant Goodwill amounts.

As set forth in Appendix B of IFRS 1 – First Time Adoption of International Financial Reporting Standards, SAG Gest chose to neither apply calculations retroactively to determine the value of Goodwill in accordance with IFRS 3 – Business Combinations, nor to retroactively apply IAS 21 – Effects of Changes in Exchange Rates, in respect of acquisitions completed on or before 1 January 2004.

b) Store Key-money Key-money expenses are recognized during the period of the applicable rental agreement. The amount related to Store Key-money was allocated to the cash-generating units for the performance of impairment tests.

c) Other Intangible Assets Other Intangible Assets are measured at cost. Depreciation is calculated on a straight-line basis, using depreciation rates that allow full depreciation of such assets until the end of their useful life.

Investments in Affiliates (Note 21) SAG Gest’s investments in Affiliates are recognized using the Equity Method. In accordance with this method, investments are recognized at their acquisition cost, adjusted by the percentage held by SAG Gest in eventual subsequent changes affecting the equity of those Entities. If any signs of impairment are identified, such Financial Investments are subject to impairment tests. The results of the period reflect the appropriation by SAG Gest of its share in the results of the Affiliates’ operations.

Dividends recognized during the year are deducted from the carrying amount of Financial Investments.

When SAG Gest loses significant influence, the retained Financial Investment is recognized at its fair value (with impact on the year’s results).

Investment Properties (Note 22)

Investment Properties relate to land and buildings held for income and/or capital valuation, or both, that are not used in current business operations (rendering of services or sales).

Investment Properties are recognized at their fair value, reflecting market conditions on reporting date. Changes in valuations are recognized in the Consolidated Statement of Profit and Loss and Other Comprehensive Income under Fair Value Adjustments for the relevant year. Expenses incurred (maintenance, repairs, insurance and property tax), as well as any income and rentals received from Investment Properties, are recognized in the Consolidated Statement of Profit and Loss and Other Comprehensive Income for the relevant year.



Inventories (Note 23)

Inventories are measured at the lowest of cost or net realizable value. Net realizable value represents the expected sales price less costs to sell.

Cost is determined as follows:

• New Cars – acquisition cost plus any other additional purchase expenses;

• Used Cars - When vehicles recognized in Inventory result from trade-in transactions, they are valued at the purchase cost determined at the trade-in valuation;

• Vehicles under a ‘buy-back’ regime – The recognized cost corresponds to the acquisition value agreed for the Buy-Back date, after deduction of any impairment losses;

• Spare parts and other saleable goods – average purchase cost plus any other expenses incurred prior to the respective entry into Inventories.

The amount of the Parts Inventory Adjustment is determined on the basis of stock turnover, by type of material, calculated from inventory transactions recorded during the last 24 months. This criterion is applied consistently.

Cash and Cash Equivalents (Note 31)

In the Consolidated Statement of Cash Flows, the Cash and Banks balances shown in the Consolidated Statement of the Financial Position (amounts with a maturity of three months or less) are considered at their value, net of bank overdrafts, which are reported in the Consolidated Statement of the Financial Position under Current Liabilities.

Equity Instruments (Note 32) Equity Instruments are classified according to contract terms, regardless of their legal form. Equity Instruments issued by Companies included in consolidation are recognized at the amount received, net of the costs incurred with their issuing. Provisions (Note 35) Provisions are recognized when the Company has an obligation (legal or constructive) resulting from past actions, that is likely to result in a future outflow of economic resources in connection with such obligation, and the latter can be measured reliably.

Contingent Assets and Liabilities (Note 44)

Contingent Assets are not recognized in the Consolidated Financial Statements, and are only disclosed when there is likelihood of a future economic benefit.

Contingent Liabilities are not recognized in the Consolidated Financial Statements and are disclosed in the Notes, unless the likelihood of an outflow of funds is remote, in which case they are not disclosed.

Subsequent Events (Note 45)

Events taking place after reporting date that provide additional information on the conditions prevailing on reporting date are reflected in the Consolidated Financial Statements. Events taking place after reporting date that provide additional information on the conditions prevailing after the reporting date are disclosed in the Notes to the Consolidated Financial Statements, if material.

Financial Assets (other than Financial Investments)

Depending on the intention of the Board of Directors at the time of the acquisition of the Financial Assets, they may be classified as described below

a) Loans and Receivables

b) Held-to-Maturity Investments



c) Investments Held for Trading measured at their fair value through profit and loss d) Financial Assets Available for Sale

a) ) Loans and Receivables (Notes 24, 25 and 26) These include non-derivative financial assets with fixed or determinable payments. Customer and Other Debtors are recognized at their nominal value, after deduction of any impairment losses, so that the amounts included in the Consolidated Financial Statements represent their net realizable value.

b) Investments Held-to-Maturity Investments Held-to-Maturity are recognized as Non-Current Investments, except if their maturity occurs less than 12 months from reporting date. Investments with a set maturity, which SAG Gest has the intention and ability to hold until such date, are recognized under this item. Investments Held-to-Maturity are recognized at their amortized cost, less impairment losses, if any.

During the three months ended 31 March 2014, no situation existed to which the above mentioned policy would apply.

c) Investments Held for Trading measured at their fair value through profit and loss This category, which is reported as Current Assets, includes non-derivative Financial Assets held for trading, and derivative financial instruments that do not qualify for hedge accounting purposes.

A Financial Asset is considered to be held for trading if: • it was acquired or incurred with the objective of being sold or repurchased within a very

short term;

• it is part of a portfolio of identified financial instruments that are jointly managed and for which there is evidence of an actual recent model of a short-term profit-taking transaction;

• it is a derivative (except where a derivative is a designated and effective coverage instrument).

Gains or losses resulting from changes in the fair value of Investments Held for Trading measured at fair value through profit and loss are included in the Consolidated Statement of Profit and Loss and Other Comprehensive Income, for the period during which those changes occur, under Fair Value Adjustments.

During the three months ended 31 March 2014, no situation existed to which the above mentioned policy would apply.

d) Financial Assets Available for Sale Financial Assets Available for Sale are Non-Derivative Financial Assets that:

• SAG Gest intends to keep for undetermined period of time, or • Are designated as such at the moment of acquisition, or • Do not fit any of the remaining categories of Financial Assets. These Assets are presented as Non-Current Assets, except if there is an intention to sell them within 12 months of reporting date.

Following initial recognition, Financial Assets Available for Sale are measured at their fair value, by reference to the relevant market value on reporting date, with no deduction of transaction costs which may occur until their sale. Investments that are not listed and whose fair value is impossible to determine are held at cost, less impairment losses, if any.



Gains or losses resulting from changes in the fair value of a Financial Asset Available for Sale must be recognized under Other Comprehensive Income, except in the case of impairment losses and of gains or losses in exchange rates, until the Financial Asset is derecognized. On that moment, the accrued gain or loss previously recognized under Other Comprehensive Income shall be reclassified from Equity into profit or loss, as reclassification adjustments. When any of these situations occurs, accrued gains or losses are recognized in the Consolidated Statement of Profit and Loss and Other Comprehensive Income, under Financial Income and Expenses. During the three months ended 31 March 2014, no situation existed to which the above mentioned policy would apply.

Impairment of Assets On each reporting date, SAG Gest evaluates any signs of impairment which could affect the value of its Assets. Whenever these occur, or whenever the IFRS require the performance of impairment tests, SAG Gest estimates the recoverable amount of the Asset, which corresponds to the Asset’s highest market value, less costs to sell, or the asset’s value in use. In the event of an impairment situation, the value of the Asset is reduced in order to reflect its net realizable value.

Financial Liabilities

Financial Liabilities are classified according to contract terms, regardless of their legal form, and are classified as follows:

a) Financial Liabilities measured at fair value through profit and loss

b) Bank Loans

c) Accounts Payable

a) Financial Liabilities measured at fair value through profit and loss This category includes Financial Liabilities held for trading, and derivatives that do not qualify for hedge accounting purposes and that are presented in this manner on initial recognition.

Gains or losses resulting from changes in the fair value of Financial Liabilities measured at fair value through the profit and loss are recognized in the Consolidated Statement of Profit and Loss and Other Comprehensive Income for the period, under Fair Value Adjustments.

During the three months ended 31 March 2014, no situation occurred to which the above policy could apply.

b) Bank Loans Loans are measured at their amortized cost, and the amount received is net of charges incurred with issuing such Loans. Financial Expenses are calculated using the effective interest rate method and are recognized in the Consolidated Statement of Profit and Loss and Other Comprehensive Income, under Financial Expenses, on an accrual basis.

c) Accounts Payable Trade Suppliers and Other Creditors are initially recognized at their nominal value, which is deemed to represent their fair value, and are subsequently recognized, where applicable, at their amortized cost, using the effective interest rate method.

Leasing

Fixed Assets acquired under financial lease contracts, or other contractual instruments that, in substance, represent financial leases, are recognized as financial leases, in accordance with the provisions set forth in IAS 17 – Leases.

Accordingly, on the one hand, Tangible Assets are recognized after deduction of their respective cumulative depreciation and, on the other, Liabilities representing the outstanding principal payments are recognized at their amortized cost, using the effective interest rate method.



Interest expenses included in contractual installments and depreciation are recognized as expenses in the relevant period. Foreign Currency Denominated Transactions The functional currency used in the preparation of the Consolidated Financial Statements of SAG Gest and its Subsidiaries, Affiliates and Associates is the Euro, except for Unidas S/A, whose functional currency is the Brazilian Real. The Financial Statements of Unidas S/A for the period ended 30 June 2013 were translated into Euros in accordance with the following procedures:

• The Statement of the Financial Position was converted to Euros using the exchange rate prevailing at the close of business on reporting date;

• The Income Statement expressed in Euros was the result of adding all monthly Income Statements after each one of them is converted into Euros using the exchange rate prevailing at the end of each month.

As a result of the facts disclosed in Note 15, the amount recognized in Consolidated Equity as Cumulative Translation Adjustments of the Unidas S/A’s Financial Statements represents the cumulative amount until 30 June 2013. Thereafter Unidas S/A was recognized as Non-Current Assets Held for Sale.

Transactions denominated in foreign currencies (outside the Euro Zone) are converted into Euros using the exchange rate prevailing on transaction date. Foreign currency denominated accounts receivable and payable are converted into Euros using the exchange rate prevailing on reporting date. Non-currency assets and liabilities denominated in foreign currency, and recognized at their fair value, are converted into the functional currency of each Subsidiary or Affiliate, using the exchange rate prevailing on the date the relevant fair value is determined. Subsequently, and for each reporting date, those amounts are reconverted to SAG Gest’s functional currency using the exchange rate prevailing on reporting date. All exchange rate differences determined following the application of these procedures are recognized as Income or Expense for the period, except for Cumulative Translation Adjustments resulting from the process of translating Unidas S/A Financial Statements which, as mentioned above, were recognized against Consolidated Equity in the period ended 30 June 2013.

Exchange differences arising from the conversion of balances between Group Companies are recognized as Income or Expenses of the period in the Consolidated Financial Statements, unless those balances are considered as part of the net investment in a foreign Subsidiary, in which case they are recognized in Equity.

2.6. Management Judgments In the preparation of the Consolidated Financial Statements in accordance with IFRS, the Board of Directors uses estimates and assumptions that affect the application of policies and the reported amounts. Estimates and judgments are consistently evaluated and are based on the experience of past events and other factors, including expectations in respect of future events that are considered to be likely in view of the circumstances on which the estimates were based or are the result of an acquired information or experience. The most significant accounting estimates contained in the Consolidated Financial Statements are as follows: a) Analysis of Goodwill Impairment

Goodwill is tested annually and whenever circumstances arise which may lead to believe that its book value could be in an impairment situation. The recoverable amounts of cash generating units have been determined based on value-in-use calculations. The use of this method requires the estimate of the future cash flows expected to arise from the continuing operation of the cash generating unit and the choice of a suitable discount rate.



b) Valuation and Useful Life of Intangible Assets SAG Gest has used various assumptions in estimating future cash flows resulting from Intangible Assets acquired as part of processes of acquisition of Entities, which include an estimate of future revenues, discount rates and the useful life of said assets.

c) Recognition of Provisions and Adjustments SAG Gest is currently party to various legal cases for which, based on the opinion of its Legal Advisors, an assessment is made to determine whether a Provision should be recorded in respect of such contingencies.

Adjustments for Accounts Receivable are essentially calculated based on the ageing of the open items that correspond to the balances of Accounts Receivables, the Clients’ risk profile and their financial condition. Estimates related to Adjustments for Accounts Receivable differ from business to business. Adjustments for Inventories are calculated on the basis of the expected sales price of the relevant goods.

d) Assessment of the market value of Financial Instruments SAG Gest chooses the valuation method that it considers appropriate to determine the market value of Financial Instruments not listed in an active market based on its best knowledge of the market and the assets. In this process, the Group applies the valuation techniques commonly used by market practitioners, and uses assumptions based on market rates.

e) Going Concern Activities by the Group’s operational units have contributed positively to the Consolidated Net

Result, but this contribution has not been sufficient to offset the Group’s financial expenses that are essentially linked to investments made by SAG Gest in the acquisition of the portfolio of businesses conducted by the Group, particularly the investment performed in the acquisition of the Unidas S/A Affiliate. The strategic plan which is being implemented since 2008 included the now completed sale of several non-strategic assets, and aims to ensure SAG’s Group profitability and sustainability. It provided for the adoption of measures which ensure optimization of the value of the holding in Unidas, in such a way that its sale would enable a reduction in Group debt and, consequently, together with recovery in the volumes of the Portuguese automotive market, the consistent and sustainable reestablishment of SAG’s Group historical profitability levels

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• Other Operations include

i. activities of the Group’s Holding company,

ii. activities of the Group’s shared services unit,

iii. activities involving new car preparation,

iv. Rent-a-Car activities in Portugal,

v. the result of Unidas S/A which, in the reporting periods up to 30 June 2013 was included in SAG Gest’s Consolidated Financial Statements using the Equity Method,

vi. the result of Manheim Affiliate, which is included in SAG Gest’s Consolidated Financial Statements using the Equity Method

Operating results of the cash generating units are monitored separately with the objective of deciding in respect of allocation of resources and monitoring performance. Performance of each segment is evaluated on the basis of the net operating income and on their contribution to the net consolidated operating income.

However, Group financing and taxes are mostly managed on a Group basis and are not allocated to operational segments.

Transfer prices applied to transactions between segments are determined on an arm’s length basis, similar in all aspects to transactions conducted with unrelated bona fide third parties.



Business segments

The following disclose the results, assets and liabilities as at 31 March 2014 and 31 March 2013 of the various business segments where the Group develops its operations:



(1)As a result of the facts disclosed in Note 15, the amount of Eur 918.7 thousand reported under Other Operations as Current Result of Non Current Assets Held for Sale, represents the Unidas S/A result appropriated by SAG Gest in the three months ended 31 March 2013.

To remove any signs of impairment in respect of the Non-Current Assets Held for Sale which corresponds to SAG Gest’s stake in Unidas S/A, Unidas was evaluated using the “Free Cash Flow to Equity” method, as disclosed in Note 15.

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219 886

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219 886

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219 886

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Future Cash Flows were discounted using the Cost of Equity ('ke') determined as follows:

For the calculations of the future Cash Flows to be discounted, several assumptions were established in respect of the development of the economy and of the renting and rent-a-car markets in Brazil, and assumptions were established for the development of the Company’s business areas, namely in what relates to production and profitability indicators.

The development of the production indicators, both in rent-a-car (number of rental days) and in renting (number of contracts) are closely related to the trends of the Brazilian GDP. These two business segments have not yet reached, in Brazil, the level of development as in countries with mature markets, and for this reason their growth rate is currently higher, but is expected to decrease gradually, as the market approaches the development stage of such more mature markets (USA and Western Europe). The main assumptions used in the projection of Unidas’ future activity can be summarized as follows:

RAC

• The volume of rental days was projected considered a Brazilian GDP growth multiple which is gradually reduced, from the historical figure observed in 2013 until its stabilization at 2.5x GDP in 2019.

• The average price of rental days (the Average Ticket) progresses in accordance with the projection for the Brazilian inflation rate (IPCA).

Renting

• Progression of the portfolio and of the number of contracts considers a Brazilian GDP growth multiple which decreases with time until it stabilizes at 3.0x GDP in 2019.

• The average length of the contracts is 26 months, according to the recent historical average.

• Average depreciation per contract is 33.8%.

• The interest spread is kept at historical levels, and only progresses in accordance with interest rate performance (CDI).

Other assumptions

• The vehicles purchase price progresses in accordance with inflation.

• A 7% margin was considered in the sale of vehicles, representing the margin represented between the sales price and the car’s book value at the end of its activity period.

Cost of Equity (ke) 2013

Risk Free Rate 2.6%Country Risk Rate ‐ Brazil 2.3%Market Risk Premium 5.5%

Unlevered Beta (bU) 0.65Levered Beta (bL) 1.00

Cost of Equity (ke) ‐ USD 10.4%

Inflation Country Difference Premium 3.0%

Cost of Equity (ke) ‐ BRL 13.7%

Tax Rate 34.0%

E / (E+D) 55.0%D / (E+D) 45.0%D / E 81.8%



• Direct costs during the projection period vary between 18.5% and 20% of Net Revenue, in line with historical values.

• Overheads change from 26% of Net Revenue to 22% in 2018, reflecting the dilution effect of overheads in the growing turnover.

The assumptions with higher impact on the valuation are as follows:

- GDP growth multiple, in both RAC and Renting

- Average Ticket trend, in RAC

- Average term of contracts, in Renting

- Average annual depreciation of vehicles, in Renting A sensitivity analysis was performed on all the above parameters in BRL, and the results were subsequently converted into Eur (thousand) using the 3.1 EUR/BRL exchange rate prevailing on 31 March 2014. The result of the sensitivity analysis is shown in the tables below:

RAC:

• GDP growth multiple in RAC

• Average Ticket trend in RAC

Renting

• GDP growth multiple in Renting

• Average term of contracts in Renting

• Average annual depreciation of vehicles in Renting

450,181 1.5x 2.0x 2.5x 3.0x 3.5x12.7% 463,837 485,343 508,091 532,091 557,36413.2% 436,798 456,693 477,734 499,930 523,29913.7% 412,231 430,677 450,181 470,752 492,40814.2% 389,829 406,964 425,079 444,182 464,29014.7% 369,330 385,277 402,132 419,905 438,609

PIB Growth Multiple

Ke

450,181 0.2x 0.3x 0.5x 0.8x 1.0x12.7% 387,756 420,697 508,091 601,937 696,53313.2% 365,811 396,457 477,734 564,983 652,95813.7% 345,854 374,428 450,181 531,473 613,47014.2% 327,637 354,332 425,079 500,975 577,55414.7% 310,950 335,936 402,132 473,123 544,775

IPCA Growth Multiple

Ke

450,181 2.0x 2.5x 3.0x 3.5x 4.0x12.7% 478,841 493,152 508,091 523,658 539,85713.2% 450,693 463,924 477,734 492,123 507,09413.7% 425,128 437,387 450,181 463,509 477,37414.2% 401,823 413,204 425,079 437,449 450,31614.7% 380,505 391,089 402,132 413,634 425,597

Ke

PIB Growth Multiple

450,181 22 24 26 28 3012.7% 585,680 543,670 508,091 477,570 451,11213.2% 550,148 510,940 477,734 449,248 424,55213.7% 517,913 481,239 450,181 423,536 400,43314.2% 488,562 454,188 425,079 400,105 378,45014.7% 461,744 429,466 402,132 378,681 358,344

Contract Length

Ke



Evaluation Summary

The carrying amount of this asset as recognized in Non-Current Assets Held for Sale in the Consolidated Statement of the Financial Position as at 31 March 2014 is Eur 157,608.1 thousand, which corresponds to its carrying amount as at 30 June 2013. Therefore, and in view of the results of the asset’s evaluation, the asset’s carrying amount shows no sign of being in an impairment situation.

450,181 10.0% 12.5% 15.6% 17.5% 20.0%12.7% 481,281 493,286 508,091 517,150 529,05113.2% 452,651 463,884 477,734 486,209 497,34113.7% 426,662 437,196 450,181 458,126 468,56214.2% 402,982 412,880 425,079 432,543 442,34714.7% 381,331 390,650 402,132 409,158 418,386

Annual Depreciation

Ke

430,952 1.0% 1.5% 2.0% 2.5% 3.0%

12.7% 476,634 491,662 508,091 526,126 546,01413.2% 449,821 463,183 477,734 493,642 511,10413.7% 425,319 437,241 450,181 464,272 479,67714.2% 402,857 413,531 425,079 437,611 451,25814.7% 382,206 391,793 402,132 413,318 425,457

G

Ke



16. INCOME TAX The Income Tax amount recognized in the Consolidated Statement of Results and Other Comprehensive Income for the three month periods ended on 31 March 2014 and 31 March 2013, as well as the reconciliation between the statutory income tax rate and the effective income tax rate are as follows:

Note 1: The Local Surtax of 1.5% applies to taxable income on an individual Entity basis, for

each of the Entities included in the consolidation that do business in Portugal. In the three months ended 31 March 2014, SIVA, Soauto, AA00, Rolporto, Globalrent, Rolvia, Frotarent, LGA, Loures and Imocar Subsidiaries recorded positive taxable income.

Note

Incomreporapplic

Deferthe ta

Deferas de

Tax LTax Aexpecaccum

The tFinan

C.R.C

2: In 2014, and Eur 7Eur 7,500in excessincluded March 201,500.0 th

me Tax has rting date incable tax reg

rred Tax balax and the re

rred Taxes inetailed in the

Losses CarriAssets, per cts that posmulated tax l

table below dncial Position


S

the 3% Stat7,500.00 tho0.00 thousans of Eur 35,in the conso014, the SIVhousand

been calcun each coungulations.

ances are aseporting base

ncluded in thtables above

ied Forward year of orig

sitive taxablelosses.

discloses then in respect o


e Surtax appousand and and and Eur 3,000.0 thouslidation that

VA Subsidiar

lated accordntry where ta

s shown in tes for the cor

he results fore.

which can bin and expir

e income wil

e entries recoof income tax


plies to taxaa 5% State 35,000.00 thsand, on ando business

ry recorded

ding to tax raxable incom

the table belrresponding

r the period

be used in try date, arell be genera

orded in the xes during th


ble income bSurtax appliousand and individual b

s in Portugal.positive tax

rates enacteme is gener

ow, which inAssets and/o

represented

he future, andetailed in

ated in the f

items of the he three mon


between Eures to taxabl7% in positi

basis, for ea. In the threeable income

ed or substarated, in acc

nclude the dior Liabilities:

a cost of Eu

nd the corresthe table befuture allowi

Consolidateths ended 3

219 886

r 1,500.0 thoe income beive taxable iach of the Ee months ende in excess

antially enaccordance w

ifferences be:

ur 166.7 tho

sponding Deelow. Managng the use

ed Statement1 March 201

40

ousand etween ncome Entities ded 31 of Eur

ted on ith the

etween

usand,

eferred gement

of the

t of the 4:

17. EAs atDurinsaleson 31

The n

C.R.C

EARNINGS Pt 31 March 2ng the three s) involving tr1 December

nominal valu


S

PER SHARE2014, the SAmonths endreasury stoc2013 remain

e of SAG Ge


AG Group owed 31 Marchk, and for th

ned unchang

est shares is


wned 16,771h 2014, no t

hat reason thged.

Eur 1 each.


1,015 SAG Gransactions

he number of


Gest shares were performf shares held

219 886

as treasury med (purchad as treasury

41

stock. ases or y stock

18. PROPERTY

Changes in the

Y, PLANT AND E

Tangible Fixed A

SAC.R.C. Ama

EQUIPMENT

Assets accounts d

AG GEST – Soluções Autoadora n.º 503219886 – C

Sede: Estrada

uring the three an

omóvel Globais, SGPS, SCapital Social: EUR 169.7

de Alfragide, n.º. 67 – 26

nd twelve months

S.A. – Sociedade Aberta64.398 – Contribuinte N.º

614-519 Amadora

ended 31 March

º 503 219 886

2014 and 31 Deccember 2013 were

42

e as follows:



The Group considers that, as at 31 December 2013, no impairment signs exist in respect of its Tangible Fixed Assets.

19. INTANGIBLE ASSETS – GOODWILL In December 2013, SAG Gest performed valuations using the Discounted Cash Flows (DCF) method, supporting the recoverability of the Goodwill amount recognized in the Consolidated Statement of the Financial Position, as in its opinion these estimates remain valid as at 31 March 2014:

1. The amount of Goodwill at 31 March 2014, determined in accordance with the disclosed procedure was as follows:

2. As at 31 December 2013 the amount of Goodwill determined in accordance with the disclosed procedure, adjusted in accordance with the facts mentioned in Note 3.2., was as follows:

3. For the purposes of determining the existence of impairment signs in respect of the above-mentioned Goodwill amounts, these have been allocated to the relevant business segments.

For each of the Entities being considered, the Discounted Cash Flows (DCF) method was used to establish the Entity’s Enterprise Value and Equity Value.

Future Cash Flows were discounted using the WACC (Weighted Average Cost of Capital), calculated as follows:

Todto

Tma

Tccoms

P

C.R.C

To determineof the develoderived in relo production

The assumpmacroeconomautomotive m

Therefore, thecar (PC) andcoming yearsonwards at 1markets, stabshown in the

Passenger c


S

e future Cashopment of tation to the dand profitab

tions that wmic framewo

market.

e trends of th the light co

s, similar to 2165 thousandbilization is following cha

cars:

Definition (

Long Term InCredit SpreaTax RateCost of Debt

Definition R

Risk Free RatIndustry BetaCompany BeRisk PremiumCountry RiskCost of Equit

Definition C

% Debt% EquityCost of DebtCost of EquitWACC


h Flows to behe markets developmen

bility indicator

were used aork, and of

he Portuguesmmercial ve2013 and alsd units (PC)expected at arts:

Long Term Interest R

nterest Rated

Risk Free Rate + Beta

tea (unlevered)ta (levered)mk Premium (Portugal)ty

Cost of Equity * (E/(D

ty


e discounted,where eacht of the assers.

are consideimpacts tha

se Automotivehicle (LCV) so during the) and 30 thot figures sign

Rate + Spread) * ( 1‐ T

a + Country Risk Prem

)

D+E)) + Cost of Debt *

WACC

Cost of Deb

Cost of Equit


, several assh Entity opeets being eva

ered in the at have bee

ve Market, bomarkets, as

e 1st Quarterousand unitsnificantly be

Tax Rate)

mium (Portugal)

* (D/(D+E))

bt

ty


sumptions weerates, and aluated, nam

context of en observed

oth in respecsumes a slig

r of 2014, stas (LCV), resplow the hist

Value1.97%5.06%24.50%5.31%

Value2.06%0.611.295.50%4.88%14.06%

60%40%5.31%14.06%8.81%

219 886

ere used in rassumptions

mely in what

Portugal’s cd in the do

ct of the passght recoveryabilizing frompectively. Fotorical avera

44

respect s were relates

current omestic

senger y in the m 2016 or both ge, as

L

M

Cv

•

•

•

•

T

ASthac(a

C.R.C

Light comme

Market share

Conservativevolumes and

Sale of vremaining

Repair sprojection

Cost stru

Payroll exevolving a

The assumpt

• Autom

• Mark

• Incre

• Disco

Analysis of Subsidiaries he recognizeassumptions changes (WAamounts in E

Market Share

Volkswagen VPVolkswagen VCLAudiSkoda


S

ercial vehicl

s used for pr

assumptionof the margi

vehicles: mag within the l

hop and san period.

cture: progre

xpenses: theaccording to

ions that hav

motive marke

et shares tre

ase of free c

ount rate (WA

the enterprand Affiliatesed Goodwillthat were co

ACC) and gEur thousand


les:

rojection pur

ns were madns trends, w

aintenance oevels record

le of parts:

ession in line

e employee the planned

ve a stronger

et volume tre

ends of the m

cash flow in p

ACC).

rise value rs, leads to thl. The resulonsidered, arowth rates

d).

2010

8.4%4.2%3.8%2.0%


rposes in the

de in respectwhich were as

of the 2013 ded since 201

maintenanc

e with revenu

structure exd level of acti

r impact on t

end (MTM PC

more represe

perpetuity.

resulting frohe conclusiolts (equity v

as well as thin perpetuit

2011 2012

9.7% 10.3%6.6% 10.3%4.3% 6.2%1.8% 2.0%


explicit perio

t of each Ens follows:

market shar10.

ce of the 20

ue trend.

xisting at thevity.

the valuation

C)

entative Bran

om the valuon that therevalue) of thee sensitivity ty (“g”) are

2013.P 2014.P

9.6% 9.6%9.6% 9.6%5.8% 5.8%1.6% 2.0%


od were as fo

ntity both in

re in all Bra

013 margins

end of 201

results are a

ds (Audi and

uations of tare no sign

ese valuatioof the valueindicated in

2015.P 2016.P

9.6% 9.6%9.6% 9.6%5.7% 5.7%2.3% 2.3%

219 886

follows:

terms of the

ands, with m

s during the

3 was consi

as follows:

d Volkswage

the most rens of impairmons and thees to discoun the tables

2017.P 2018.P

9.6% 9.6%9.6% 9.6%5.7% 5.7%2.3% 2.3%

45

e sales

margins

entire

idered,

n PC).

elevant ment of e main nt rate below

2019.P

9.6%9.6%5.7%2.3%



Soauto Comércio de Automóveis

Loures Automóveis

Rolporto

Globalrent Globalrent combines two of the SAG Group activities: management of SAG Group’s internal service fleet and sale of VW Group Brands to non-traditional channels, including the sale of vehicles (usually semi-new cars) in foreign markets.

The sale of vehicles of VW Group Brands to other European countries is a business which was started in 2012, and increased 11.1% in 2013. For the coming years, an annual growth of 10% until 2016 is expected, 5% in 2017 and stabilization from 2018 onwards.

The following tables show the sensitivity analysis to the WACC and growth trend in the volume of exported vehicles.

17,177 1.3% 1.5% 1.8%7.8% 21,080 21,799 22,9688.3% 18,728 19,329 20,299

8.8% 16,672 17,177 17,990

9.3% 14,933 15,365 16,0559.8% 13,383 13,753 14,343

G

WACC

17,177 160,000 165,000 170,0007.8% 18,718 21,799 24,8808.3% 16,541 19,329 22,1178.8% 14,644 17,177 19,7109.3% 13,046 15,365 17,6849.8% 11,625 13,753 15,881

MTM VP (2016‐2019)

WACC

17.177 160.000 165.000 170.0009,0% 12.814 15.276 17.7379,3% 13.406 15.905 18.4059,6% 14.644 17.177 19.71010,0% 16.583 19.169 21.75510,3% 17.944 20.568 23.191

MTM VP (2016‐2019)

VW VP Market

Share (2016‐2019)

17,177 160,000 165,000 170,0004.7% 9,122 11,472 13,8235.2% 12,280 14,721 17,1635.7% 14,644 17,177 19,7106.2% 17,779 20,403 23,0286.7% 20,914 23,629 26,345

Audi Market

Share (2016‐2019)

MTM VP (2016‐2019)

8,029 1.3% 1.5% 1.8%7.8% 9,537 9,812 10,2588.3% 8,630 8,860 9,2308.8% 7,836 8,029 8,3399.3% 7,164 7,329 7,5929.8% 6,563 6,705 6,930

G

WACC

8,029 160,000 165,000 170,0007.8% 9,012 9,812 10,6118.3% 8,137 8,860 9,5828.8% 7,373 8,029 8,6859.3% 6,729 7,329 7,9289.8% 6,155 6,705 7,254

MTM VP (2016‐2019)

WACC

8,029 160,000 165,000 170,0009.0% 6,785 7,424 8,0649.3% 7,093 7,741 8,3899.6% 7,373 8,029 8,68510.0% 7,812 8,480 9,14810.3% 8,121 8,797 9,473

MTM VP (2016‐2019)

VW VP Market

Share (2016‐2019)

8,029 160,000 165,000 170,0004.7% 5,777 6,386 6,9955.2% 6,575 7,208 7,8405.7% 7,373 8,029 8,6856.2% 8,172 8,851 9,5306.7% 8,970 9,672 10,374

Audi Market Share (2016‐

2019)

MTM VP (2016‐2019)

8,336 1.3% 1.5% 1.8%7.8% 9,320 9,498 9,7898.3% 8,728 8,878 9,1198.8% 8,211 8,336 8,5389.3% 7,772 7,879 8,0519.8% 7,380 7,472 7,619

G

WACC

8,336 160,000 165,000 170,0007.8% 8,928 9,498 10,0698.3% 8,358 8,878 9,3978.8% 7,861 8,336 8,8119.3% 7,442 7,879 8,3179.8% 7,068 7,472 7,876

MTM VP (2016‐2019)

WACC

8,336 160,000 165,000 170,0009.0% 6,830 7,277 7,7249.3% 7,370 7,832 8,2939.6% 7,861 8,336 8,81110.0% 8,630 9,126 9,62210.3% 9,170 9,681 10,192

MTM VP (2016‐2019)

VW VP Market

Share (2016‐2019)



Considering the enterprise values resulting from the valuations, SAG Gest considers that there are no impairment signs affecting the Goodwill carrying amount.

20. INTANGIBLE ASSETS IAS 38 – Intangible Assets, defines an Intangible Asset as a non-currency, identifiable Asset without physical substance, for use in production or supply of goods or services, leasing to others, or for administrative purposes. An asset is a resource that is:

• Controlled by the Entity as a result of past events;

• Expected to produce future economic benefits for the Entity.

6,405 1.3% 1.5% 1.8%7.8% 7,149 7,310 7,5728.3% 6,691 6,828 7,048

8.8% 6,289 6,405 6,592

9.3% 5,946 6,047 6,2089.8% 5,638 5,726 5,865

G

WACC

0 5.0% 10.0% 15.0%7.8% 6,085 7,310 8,6318.3% 5,667 6,828 8,081

8.8% 5,302 6,405 7,598

9.3% 4,992 6,047 7,1889.8% 4,714 5,726 6,820

Export Growth Rate

WACC

Changes in thefollows:

e Intangible Asse

SAC.R.C. Ama

ts accounts durin

AG GEST – Soluções Autoadora n.º 503219886 – C

Sede: Estrada

ng the three and

omóvel Globais, SGPS, SCapital Social: EUR 169.7

de Alfragide, n.º. 67 – 26

twelve months en

S.A. – Sociedade Aberta64.398 – Contribuinte N.º

614-519 Amadora

nded 31 March 2

º 503 219 886

2014 and 31 Deceember 2013 resp

48

pectively were as

21. IN

The a

Chan

Chanchang

22. IN

Inves

The Invespropemethoe Edconsi5 yeatheir

In 20experrecog

IncomthousBuild

The tcontr

The t

NVESTMENT

amount for In

nges occurre

nges in Inveges recorded

NVESTMENT

stment Prope

balance of stment Fund erties are reod, considerifício Amadoidering in thisar period wacharacteristi

013, the buirts and, follgnized.

me generatesand, and exing were Eur

table below acts that wer

term of the e

SAG GEC.R.C. Amadora

TS IN AFFIL

nvestments i

d during the

stments in Ad in these Co

T PROPERT

erties are as

Investment that are not

ecognized atring current rora), and ms case, the a

as consideredcs, the curre

ldings mentlowing said

ed by rentedxpenses incur 0.4 thousan

includes dare in force on

xisting renta

EST – Soluções An.º 503219886 – C

Sede: E

LIATES

n Affiliates is

three month

Associates rompanies’ Ne

TIES follows:

Properties rbeing used btheir fair va

rents for the rarket rents

assumption td, after whic

ent market sit

tioned aboveevaluation,

buildings durred were End.

ata on futuren 31 March 2

l agreements

Automóvel GlobaisCapital Social: EUEstrada de Alfragi

s as follows:

hs ended 31

represent theet Equity (No

relates to foby the Groupalue, and wrented propefor the currhat it will be

ch the sale otuation and t

e as Investma reduction

during the thEur 2.1 thou

e rental inco2014.

s is between

s, SGPS, SA – SocUR 169.764.398 –de, N.º 67 Amado

March 2014

e appropriatote 14).

our buildingsp within the r

were evaluateerties (Edifícirently vacantrented after

of the Propetheir location

ment Propern of its fair

hree monthssand. Expen

ome, based

n 16 and 31 m

ciedade Aberta Contribuinte N.º 5

ora

were as follo

tion by SAG

s owned by regular coursed using theo Porto, Edift property (Ea period of 6rties was co.

rties were er value of E

ended 31 Mnses incurred

on the amo

months.

503 219 886

ows:

G Gest of its

y the Imocarse of its opere Discountedfício Pedro ÁEdifício Con6 months. In

onsidered, be

evaluated byEur 225.0 t

March 2014d in respect

ounts agreed

4

s share in th

r Real Estarations. Thosd Cash FlowÁlvares Cabrde Almosterboth cases,

earing in min

y independehousand wa

4 was Eur 9of the vaca

d in the rent

49

he

te se ws ral r), a

nd

nt as

.8 nt

tal

23. INInven

Vehicdefine

The avehicestabperiodnor isthese

The aacquiAdjusacquifor sathe bo

The aNote obsol

Chanin Adj

NVENTORIEntories are as

cles under Bed in each co

amount in Incles billed toblishing that td of use ("hos the cost ofe vehicles are

amount of Aisition amoustments for isition amouale. This amook value of

amount of Ad2.5 – Summ

lete and slow

nges recordejustments fo


ES s follows:

uy-Back schontract.

nventories reo Clients (usthe Group isolding periodf the billed ve repurchase

djustments fnt in InventoInventories

nt and their ount is recogf each car ma

djustments fmary of Mainw moving Pa

ed during theor Inventories


Sede: E

hemes will on

elating to vesually Rent-as responsibled"). Under IASvehicles recoed, their net

for Inventorieories and the

of “buy-baestimated mgnized throuatches its ma

for Parts Inven Accountingrts and Acce

e three and ts were as foll


nly become a

ehicles undea-Car comp

e for repurchS 8 – Reven

ognized. Thebook value is

es of used ceir respectiveack” cars remarket value,ughout the “harket value o

entories is dg Policies (Inessories (ove

twelve monthlows:


available for

r “buy-back"anies) undeasing the bil

nue, such inverefore, said s transferred

cars represene market valepresents th, on the dateholding perioon that date.

etermined inventories), r

er 24 months

hs ending 31


ora

sale upon ex

" schemes rer Agreemenled vehicles

voices were nvehicles rem

d into used ca

nts the differlue, on repohe differencee that such vd” so that, o

n accordanceepresenting

s).

1 March 201

503 219 886

xpiry of the h

represents thnts which inc

at the end onot recognizmain in Invear Inventorie

rence betweeorting date. Te between vehicles becon the date o

e with what ithe acquisit

4 and 31 De

5

holding perio

he amount foclude clauseof their agreeed as incomntories. Whe

es.

en the vehicThe amount

the vehicleome availabof repurchas

is disclosed ion amount

ecember 201

50

od

or es ed e,

en

cle of

es’ ble e,

in of

13

24. A

Trade

CustoAuthototal SubsFinan

The d2013

Adjusmont

(1) Trare

ACCOUNTS

e Customers

omers of thorized Worksamount of

idiary and Vncial Institutio

detailed ageis as follows

stments for hs ended Ma

ansfers are ported shall


RECEIVABL

s Accounts R

e SIVA Subshop agreem

Eur 40,426olkswagen Bon.

ing of Client s:

Trade Accouarch 2014 an

performed be analyzed


Sede: E

LE – TRADE

Receivable ar

bsidiary deliments, bank 6.0 thousanBank AG’s br

Accounts R

unts Receivand 31 Decem

between th together wit


E CUSTOME

re as follows

ivered to it, guarantees

nd. Under tranch in Port

Receivable by

able had thember 2013, re

e various Ath the details


ERS :

in accorda issued for he agreemetugal, said b

y maturity as

e following cespectively:

Adjustments s for Adjustm


ora

nce with ththe benefit oents establisank guarante

s at 31 Marc

changes dur

accounts aments disclose

503 219 886

he relevant of said Subsshed betweees are subr

ch 2014 and

ring the thre

and thereforeed in Note 2

5

Dealership osidiary for th

een the SIVrogated to th

31 Decembe

ee and twelv

e the amou6.

51

or he VA his

er

ve

nt

SAG GEST – Soluções Automóvel Globais, SGPS, SA – Sociedade Aberta C.R.C. Amadora n.º 503219886 – Capital Social: EUR 169.764.398 – Contribuinte N.º 503 219 886

Sede: Estrada de Alfragide, N.º 67 Amadora 52

25. ACCOUNTS RECEIVABLE – RELATED ENTITIES The balance with Related Entities is as follows:

The nature of the balances with other Group Companies (Shareholders, Related Companies, Affiliates and Associates) is disclosed in Note 40.

26. ACCOUNTS RECEIVABLE – OTHER DEBTORS The balance Other Debtors is as follows:

Adjustments for Trade Accounts Receivable and Other Debtors had the following changes during the three and twelve months ended 31 March 2014 and 31 December 2013:

1) Transfers are performed between the various adjustment accounts and therefore the amount reported

shall be analyzed together with the details for adjustments disclosed in Note 24.

27. DEFERRED COSTS Deferred Costs are as follows:

28. A

Accru

29. CThe b

The previoAuthoContiDecre

This paymreprecancelegal

Advafollow

The Ithe Pbetwe

ACCRUED IN

ued Income i

CURRENT INbalance rece

amount of ous periods orities. Said ingencies. Tee-Law 151-

payment resment interest esent an addellation of Baprocesses.

nce Corporaws:

Income Tax Portuguese seen Eur 1,5


NCOME

is as follows:

NCOME TAXeivable in res

Eur 4,241.2 and resulti

additional aThis paymen-A/2013.

sulted in the of Eur 820

ditional contank Guarant

ate Income T

rate in forcestate surtax

500.0 thousa


Sede: E

:

X RECEIVABspect of Curre

thousand rng from addssessments

nt was made

canceling of 0.2 thousandtingency hadtees of Eur 6

Tax Payments

e until 31 Maapplied to

and and Eur


BLE ent Income T

represents tditional tax are under l

e in accorda

f compensatod, and chargd this paym6,327.2 thou

s, Municipal

arch 2014 weach entity's

r 7,500.0 tho


Taxes is as f

the paymentassessmentegal proceedance with th

ory interest cges of Eur 4ent not bee

usands that h

Tax and Co

was 23%.Thes taxable inousand and


ora

ollows:

t of corporas performeddings and arhe terms an

charges of E45.9 thousann performedhad been pr

rporate Incom

e Portuguesecome, on a5% on taxa

503 219 886

ate tax related by the Pore disclosed

nd condition

Eur 508.5 thond (amountsd) and the crovided unde

me Tax Rec

e local surtaxan individual able income

5

ed to sever

ortuguese Ta in Note 44s set forth

ousand, of las which woucorrespondiner the releva

eivable are a

x is 1.5% anbasis, is 3%between E

53

ral ax – in

te ld

ng nt

as

nd % ur



7,500.00 thousand and Eur 35,000.00 thousand and 7% on taxable income in excess of Eur 35,000.0 thousand.

Changes in Income Tax accounts are disclosed in Note 16.

30. OTHER TAXES RECEIVABLE

The balance of Other Taxes Receivable is as follows:

31. CASH AND CASH EQUIVALENTS Cash and Cash Equivalents are as follows:

The amounts reported under Cash and Cash Equivalents are determined in order to only include amounts that can be realized no later than three months from reporting date, net of creditor balances of bank accounts on the same date.

32. CAPITAL AND RESERVES

As at 31 March 2014, Registered Share Capital was represented by 169,764,398 ordinary shares with a nominal value of Eur 1 each, and was fully paid up.

SAG Gest’s controlling Shareholder is SGC - SGPS SA, a holding Company with headquarters in Estrada de Alfragide, 67 – Alfragide, Amadora. SGC – SGPS holds a direct stake in SAG Gest capital of 69.13%, and an indirect stake of 10.24% which correspond, respectively, 76,71% and 11,37% of the voting rights.

Treasury stock is owned by the Group’s Parent Company which, as at 31 March 2014, held 16,760,815 shares, and by the Rolporto and Loures Automóveis Subsidiaries which, on the same date, held 5,100 shares of SAG Gest each. The Company meets the criteria for the purchase of treasury stock, as provided in Article 317 in the Company’s Act.

a) CuCumuSubsAcco

The athe nduringReal recog

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33. SHARE OPTION PLAN – UNIDAS

Unidas S/A Stock Option Plan

The Unidas S/A Shareholders Meeting held on 15 June 2012 approved the implementation of a Stock Option Plan (the Plan) for Unidas S/A.

The Plan establishes the general conditions and terms under which the Unidas S/A acquires and awards stock options in respect of shares issued by Unidas S/A to Employees, Professionals and Members of the Board of Unidas S/A and its Subsidiaries (the “Participants”) who meet the eligibility criteria as defined in the Plan, in accordance with the terms and conditions established in the Unidas S/A’s By-laws and by its Board of Directors.

The main features of the Plan are as follows:

Vesting: On each twelve months period starting 13 July 2011, or from the date they joined Unidas S/A as Employees (in the cases where they joined after 13 July 2011), Participants shall be entitled to exercise ¼ (one fourth) of the Options awarded to them as per the terms of the program or of the relevant employment contract.

Stock Option Valuation: The fair value of the Options is estimated on the date they are awarded, based on the Black & Scholes option valuation model.

Stock Option Exercise: The exercise of vested Stock Options shall take place (i) within 2 (two) years of the date of a Liquidity Event, or (ii) within 2 (two) years from the vesting date of all Options assigned to each Participant (the “Option Term”). However, the Plan Management Committee may, in respect of each Stock awarding program or contract, establish different vesting conditions or Option Terms, and may even extend the term for Stock Option Exercise and/or its scheduling.

On 29 June 2012, the Plan Management Committee approved in its meeting the 1st Program of the Plan, through which Unidas S/A awarded stock options to its beneficiaries.

A maximum total of 2.253.176 of Options was established for this Program, which corresponds to a maximum stock dilution of 4% of the total of 56.329.399 shares issued by Unidas S/A, corresponding to the sum of the 54,076,223 shares currently issued with the 2,253,176 shares to be issued in accordance with the Plan.

The amount of Eur 281.6 thousand recognized in the Consolidated Shareholders Equity under the Stock Option Plan – Unidas represents the share attributable to SAG Gest in said 1st Program of the Plan in the 6 months ended 30 June 2013, with the annual cost recognized in Current Result of Non-Current Assets Held for Sale.

The options plan applies exclusively the Company described in the Consolidated Statement of the Financial Position as a Non-Current Assets Held for Sale



34. BANK DEBT On 31 March 2014 and on 31 December 2013, Bank Debt was as follows:

Notes:

(1) The balances relate to several short term credit facilities such as Bank Overdrafts, or creditor Bank Account balances, which are used as required and have short term maturities (revolving facilities on monthly, quarterly or semi-annual bases).

(2) A set of four Commercial Paper Programs negotiated with a syndicate of four Portuguese Financial Institutions in December 2010. The four operations are regulated by a Framework Agreement entered into between SAG Gest and those Financial Institutions, which was renegotiated on 9 August 2013.

Interest in respect of Bank Overdrafts accrues at standard market rates normally charged for this type of operations.

a) Guarantees provide in respect of Bank Loans The Commercial Paper Programs mentioned in Note 2 above have the following features:

• Total Nominal Value: Eur 196,400.0 thousand

• Term: 5 years, until 27 December 2015;

• Guarantees: SAG Gest pledged all shares that it owns representing the registered share capital of Unidas S/A as first collateral for the benefit of the Financial Institutions to guarantee full reimbursement of all liabilities related to these credit facilities.

The Bank Loan with a book value of Eur 36.235,5 thousand is guaranteed be the pledge over 10,299,470 Participation Units of Closed Real Estate Investment Fund Imocar.

The remaining funds borrowed by SAG Gest have no collateral attached.

b) Re

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503 219 886

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35. PROVISIONS Provisions refer to specific risks and are reassessed on a yearly basis. The table below shows changes recorded during the three and twelve months ended 31 March 2014 and 31 December 2013, respectively.

Contingencies associated with these Provisions refer mainly to operating risks related to the possibility of the Group incurring losses, namely as a result of:

• Court proceedings, including of a fiscal nature;

• Unjustified appropriation of assets;

• Other contingencies.

36. ACCRUED EXPENSES Accrued Expenses are as follows:



37. DEFERRED INCOME Deferred Income is as follows:

38. CURRENT INCOME TAX PAYABLE

The balance in respect of Current Income Taxes was as follows:

Changes in Income Tax, in Portugal, are disclosed in Note 16.

39. OTHER TAXES PAYABLE The balance of Other Taxes Payable was as follows:

40. RELATED PARTY DISCLOSURES In addition to the balances between, and the transactions performed with Companies included in Consolidation, as mentioned in Note 3 herein, which were eliminated in the preparation of the Consolidated Financial Statements, other balances and transactions exist with Related Parties, as follows:



Balances with the SGC – SGPS Shareholder are recognized from 31 December 2013 onwards as Non-Current Assets, since it is expected that they will be reimbursed after the conclusion of the sale of SAG Gest’s stake in Unidas S/A and after the Group’s return to positive results, by virtue of developments in the automotive market in Portugal. The balance with the Autolombos Affiliate relates to renewable, short-term treasury operations (with less than one-year maturity) performed by the Soauto Comércio de Automóveis Subsidiary.

The balance of treasury operations with Volpe Participações Ltda relates to short-term treasury operations performed by the SAG Overseas Subsidiary.

No guarantees were provided in respect of the above balances.

The transactions identified as Accrued Interest Income represent interest income accrued in respect of the financial operations indicated in the previous table. Accrued Interest Income is calculated using interest rates and other conditions that are in every way similar to prevailing market transactions between non-related bona fide third parties.



41. FINANCIAL RISKS

A) Market risk In the course of their regular activities, the SAG Group Companies are exposed to interest and exchange rate fluctuations that are monitored dynamically in order to guarantee the fulfillment of policies defined to manage such financial risks. The ALCO (Assets and Liabilities Committee) has the responsibility for defining the SAG Group financial risk management policies, and is also responsible for monitoring and assessing the implementation of recommended hedging strategies.

To implement the risk coverage strategies, Derivative Financial Instruments are negotiated from time to time, if so resolved by the ALCO, in order to freeze interest or exchange rates or, alternatively, to limit the fluctuation range of such variables. SAG Gest documents its exposure to exchange or interest rate fluctuation risks in accordance with IAS 39 – Financial Instruments: Recognition and Valuation: • the relation between the hedged item and the hedging instrument.

• the objectives to be achieved with the coverage;

• the method used to assess the efficiency of the hedge; and

• the accounting procedures adopted in the recognition of the transaction.

SAG Gest currently has the following types of positions that generate exposure to interest and exchange rate fluctuations risks, for which policies have been defined.

1. Investment in Foreign Currency

Exposure of the SAG Group to exchange rate fluctuation risk originates in the financial investment made in Unidas, S/A, a Brazilian Affiliate whose functional currency is the Brazilian Real.

Because there is no liquid market actively performing transactions between the Brazilian Real and the Euro, the exchange risk generated by this Investment is analyzed and managed in two different ways, considering that the total exchange rate exposure of investments denominated in foreign currency comprises two different, unrelated risks:

• Risk of fluctuation of the Brazilian Real against the US Dollar; and

• Risk of fluctuation of the US Dollar against the Euro. Therefore, decisions in respect of the coverage of both risks are independent and any risk coverages are implemented through the engagement of different Financial Instruments related to the risks inherent to each of these variables. Where applicable, results achieved with such coverages are recognized in Consolidated Equity. On the other hand, in accordance with the defined policies, the transaction costs and the potential effects on the Group’s liquidity position associated to the hiring of Financial Instruments used to cover such risks may imply that, at certain times, certain exposures may not be covered or are only partially covered.

During the first quarter of 2014, no exchange risk coverage was engaged and SAG Gest did not have any active coverage operation on 31 December 2013.

As reported in Note 15, from 1 July 2013 onwards, the amount of the investment in Unidas S/A (Eur 157,608.1 thousand). became recognized as Non-Current Assets Held for Sale and, consequently, Unidas' S/A's Financial Statements are no longer converted into Euros in each reporting period after that date and, as disclosed in Note 15 and in accordance with IFRS 5 – Non-Current Assets Held for Sale and Discontinued Operations, the amount of this Asset remains unchanged in the Consolidated Statement of the Financial Position, except where signs of impairment exist which result in a devaluation of the Asset, including those resulting from a currency devaluation.

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C) Liquidity Risk This risk may arise when financing sources (cash available, cash generated by operations, proceeds from divestments, credit lines, additional shareholder contributions) do not meet the cash requirements to fulfill obligations involving operational and financing activities, investments and debt repayment.

a) Credit lines available On 31 March 2014, the amount of unused credit lines was Eur 10.920,0 thousand.

b) Covenants

The main contractual obligations of the Group involve bank loans (Note 34) and the related interest.

Some of the loans disclosed in Note 34 are subject to the fulfillment of several covenants, which include:

• Financial Covenants:

As regards the Consolidated Financial Statements, adjusted in contractual terms, to eliminate the impact of the stake held in Unidas S/A (on a half-yearly basis):

Net Debt / EBITDA < 10.5

Net Debt / Equity < 3.5

On 31 December 2013 (latest date for the calculation of the above mentioned covenants), the covenant relating to Net Debt / EBITDA was not fulfilled, and the lending Financial Institutions provided a waiver for this situation.

• Ownership:

Ownership by SGC – SGPS of, at least, 50.1% of the Registered Share Capital and voting rights of SAG Gest.

Maintenance, by Dr. João Manuel de Quevedo Pereira Coutinho, of the 99.8% stake in the Share Capital and voting rights of SGC – SGPS

• Other

Maintenance of the Distribution Agreements for the Volkswagen, Audi and Škoda Brands by the SIVA Subsidiary.

Negative Pledge – inability to sell or encumber assets without prior consent from creditor Financial Institutions

Cross Default – any default situation by SAG Gest in any of its financing agreements triggers a default situation in all its remaining financing agreements

Inability to Merge or Divide SAG Gest without prior consent from creditor Financial Institutions.

42. RENTALS AND OPERATING LEASES

Rentals and Leases as a Lessee In conducting its business activities, SAG Gest took on certain responsibilities involving the rental of property and the operating leasing of vehicles.

The table below includes data on future commitments related to rentals, using the amounts defined in the agreements in force on 31 March 2014.

Property rental agreements provide for terms between 1 and 57 months, while the terms of vehicle operating leases agreements vary between 1 and 35 months.

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had been iss76 thousandousand.

arantees issu405.5 thousa

ment of liabilin the globaat it owns repnancial Instit

of the Suppleoperation waes to the Frae a seconds S/A.

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2014-03 relatório e contas - consolidado - total -...

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