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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

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CONSOLIDATED REPORT

NINE MONTHS ENDED 30 SEPTEMBER 2012



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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 Headquarters: 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



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CONSOLIDATED

MANAGEMENT REPORT NINE MONTHS ENDED 30 SEPTEMBER 2012



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MANAGEMENT REPORT


Dear 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 nine months ended 30 September 2012.

Preliminary remark:With the R$ 300 million capital increase at the Unidas Affiliate on 13 July 2011 and the resulting entrance of three new Investors in the Company’s shareholder structure, SAG Gest now holds a 52.7% stake in that Affiliate’s share capital.Following the agreements established between SAG Gest and Unidas’s new Shareholders under this operation, and in accordance with the International Financial Reporting Standards (IFRS), Unidas is now consolidated in SAG Gest’s Consolidated Financial Statements using the Proportional Consolidation Method.

Therefore, comparability of SAG Gest’s Consolidated Financial Statements as at 30 September 2012 with the Financial Statements reported for previous periods has been affected because during the 1

st Semester 2011, SAG

Gest’s Consolidated Statements included Unidas' total Financial Statements with the application of the integral consolidation method.

1. GENERAL COMMENTS

The Group’s operations in Portugal in 2012 in the areas of Automotive Distribution and Retail were confonted withan extremely adverse macroeconomic frameworkthat was the main driver for a decrease in turnover and results due to deteriorating market conditions.In spite of this, SIVA has consistently strengthened the competitive position of the Brands it distributes, and consolidated the leadership it had in the light vehicle and light passenger vehicle segment, having achieved its highest share ever in both these markets.

In Brazil, Unidas maintained an operational growth of approximately 9% in the two sectors in which it operates:Fleet Management (“Renting”) and “Rent-a-Car”, where the figure tends to increase more significantly in the coming quarters, in line with the expected performance of the Brazilian GDP.

Unidas, as was the case of its competitors, recognized during the 1st Half 2012 an impairment of

approximately R$ 31,1 million (Eur 12,3 million), representing the estimated loss in value of (i) the vehicles available for sale on 30 June 2012, and of (ii) the vehicles expected to become available for sale until 31 December 2012. Due to the adption of this methodology, the extension of the period during which the temporary car tax (IPI) reductionshall be in force (until 31 October 2012) did not require the recognition of additional impairment charges.

The impact of this situation in Unidas’s net result was R$ 20.5 million (Eur 8.1 million), which caused an impact in SAG Gest's consolidated net result of approximately Eur 4.3 million.Excluding this effect, Unidas would have shown a positive result of R$ 22.7 million (Eur 9.0 million) for the nine-month period ended on 30 September 2012, contributing positively to SAG Gest’s consolidated result with approximately Eur 4.8 million.

2. BUSINESS ACTIVITIES

2.1. Portugal – Automotive Retail

During the first nine months of 2012, the passenger (PC) and light commercial vehicle (LCV) markets recorded decreases of 39.7% and 55.1%, respectively when compared with the same period in 2011, both reaching their lowest level since 1985 (where the import quota system was still in force) and three years before the market deregulation (in 1988).



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The passenger car market recorded a total of 74,461 registered units, 49,003 less vehicles than in the previous year.10,823 units were licensed in the Light Commercial Vehicle market, 13,284 less units than the total achieved at the end of the 3rd Quarter of 2011.

The Brands distributed by SIVA recorded 14,829 units, 6,129 (29.2%) less than in the same period in 2011, in a market that decreased 42.2%.In this context, SIVA strengthened its leadership in the light vehicle distributor market in Portugal, and achieved its best market share ever at17,4%.

In the Passenger Car market, SIVA’s market share was also the highest ever: 18.4%. Also in this case, the decrease of 29.3% in sales volume was clearly smaller than the decrease in the overall market (39.7%).

In the passenger car market, Volkswagen increased its market share and now ranks second, with 10.2%.The Brand sold 7,578 passenger cars, less 37.5% than in the first nine months of 2011.

The Audi Brand also achieved its highest market share ever in Portugal(6.2%), corresponding to the sale of 4,638 vehicles, 7.1% less than in the same period in the previous year.

Škoda sold 1,468 units, achieving a 2% share in the PC market (1.8% in the same period in 2011).

Volkswagen Commercial Vehicles sold 1,141 units.This performance enabled the Brand to increase its market share to 10.5% of the LCV market, which compares to 6.7% achieved at the end of the 3rd Quarter of 2011, going up two places in the ranking, where it now stands in the 4th position.

2.2. Brazil

On 30 September 2012, in the Fleet Management (Renting) business (which accounts for approximately 60% of Unidas' total revenue)the Company was managing a portfolio of 17,404 operational contracts representing a 13.3% increase when compared to the 15,361 operational contracts were in force as at 30 September 2011. The production of 7,432 new Renting contracts represented a 14.9% increase when compared with the 6,471 contracts produced during the same period in 2011.

The Own Network of the Rent-a-Car business recorded a 3.4% increase in the number of daily rentals, which increased from 1,160 thousand to 1,200 thousand.Increases in occupancy rates and in the average rental ticket contributed to a 9.6% increase in net revenue, (excluding Franchises) in Brazilian Reals, from around R$ 95 million to around R$ 104 million.

The Brazilian Government decreed temporary measures again in May 2012, (initially in force until August 2012, and subsequently extended until the end of October 2012) suspending the IPI (Tax on Industrialized Products) for the sale of new vehicles.As was the case in 2008, when similar measures were announced, the suspension of the IPI tax resulted in a reduction in sales prices in semi-new and used cars, which negatively impacts the results of Renting and Rent-a-Car operators doing business in Brazil.

Due to this external change, and as was the case with the majority of its competitors, and in spite of increasingly conservative residual value estimates for its vehicles, Unidas recognized during the 1stHalf of 2012 an impairment charge of approximately R$ 31.1 million (Eur 12.3 million) in the form of increased depreciation.This amount was calculated on the basis of vehicles (i) available for sale on 30 June 2012, and of (ii) the vehicles expected to become available for sale until 31 December 2012. Due to the adoption of this method, the extension of the period during which the IPI reduction measures are to be in force did not create the need to recognize any additional impairment charges

During the nine months ended September 2012, Unidas sold a total of 9,235 semi-new and used vehicles, of which 5,899 (64%) directly to End Customers and 3,336 (36%) to used car dealers.These numbers represent a decrease of approximately 4.9% when compared to the number of vehicles sold during the same period in 2011 (9,713 vehicles).

Excluding the impact of the above mentioned adjustment to the market value, Unidas’ net result during the nine-month period ended 30 September 2012 would have been R$ 22.7 million (Eur 9.0 million).After the said adjustment, the net result of the Affiliate was R$ 2.1 million (Eur 0.9 million), which corresponds to a contribution to SAG Gest’s consolidated net result of Eur 0.5 million (in the



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same period in 2011, Unidas’ contribution to SAG Gest’s consolidated net result had been Eur 15.0 million negative.)

3. CONSOLIDATED RESULTS - 3

rd QUARTER 2012

3rd

Quarter

Note: During the 3rd

Quarter 2011, the Unidas Subsidiary was already consolidated in SAG Gest’s Consolidated Financial Statements using the proportional consolidation method. Therefore, and notwithstanding the Preliminary Note above, amounts for the three-months ended 30 September 2012 are comparable to the same period in the previous year.

Consolidated Turnover for the 3rd

Quarter of 2012 was Eur 125 million. In Portugal, turnover was Eur 89.4 million, a decrease of Eur 32 million when compared with the same period in the previous financial year. The Unidas Affiliate contributed Eur 35.6 million in turnover during the quarter.

Consolidated EBITDA for the Quarter was Eur 11.2 million, a 19.0% decrease when compared with the same period in 2011.

Consolidated EBIT totaled Eur 6 million, an 11.4% increase when compared with the 3rd Quarter in the previous year.

Net Interest during this period was Eur - 7.1 million, a 52.9% decrease when compared with the cost for the same period in the previous year.

Consolidated Net Result for the 3rd

Quarter 2012 was Eur 913 thousand negative, with contributions from operational businesses in Portugal and Brazil of Eur 2.1 million and Eur 2.0 million, respectively, absorbing practically the full interest costs incurred by the Group's holding company.

Results for the nine months ended 30 September 2012

Cumulative Consolidated Turnover at the end of the 3rd

Quarter of 2012 was Eur 401.4 million. In Portugal, turnover was Eur 297.7 million, a decrease of Eur 137.2 million when compared with the same period in the previous financial year, reflecting the impact of the trends of the Portuguese automotive market.

The Unidas Affiliate’s operations in Brazil contributed Eur 103.6 million to Consolidated Turnover.The above mentioned change in the consolidation method prevents a comparison with the Affiliate’s contribution during the same period in 2011. However, and on an individual basis, Unidas recorded an 8.7% increase when compared with the same period last year, in Brazilian Reals, in turnover from its renting and rent-a-car businesses.Turnover from the sale of semi-new and used vehicles decreased 13.6%, mainly due to the decrease in the number of vehicles sold.



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Consolidated EBITDAwas Eur 36.7 million. The Unidas Affiliate’s contribution was Eur 30.4 million, with operations in Portugal contributing Eur 6.3 million.

Consolidated EBIT was Eur 11.7 million. In Portugal, EBIT totaled Eur 4.2 million, which represents an 80% decrease vs. 2011, mainly due to the above mentioned decrease in business activities.

Consolidated Net Financial Result for the nine months ended 30 September 2012 represented a cost of Eur 22.1 million.

Consolidated Net Resultattributable to SAG Gest was Eur 8.6 million negative.This result reflects essentially the weight of the holding company’s Interest Expense (Eur 15.8 Million) and the impact of the additional depreciation recorded by the Unidas Affiliate (Eur 4.3 million).Contribution from the activities in Portugal to the Consolidated Net Income (excluding interest from the holding company) was Eur 6.7 million, and Unidas’ operational net result (excluding the above mentioned additional depreciation) was Eur 4.8 million.

Consolidated Net Debtas at 30 September 2012 was Eur 394.1 million, representing a Eur 36.2 million decrease when compared with the amount as at 31 December 2011. The Eur 56.2 million decrease in the net amount of financial investments made by SAG Gest in Related Parties allowed, on the one hand, a decrease of the Group’s debt in Portugal and, on the other, the financing the increased working capital requirements resulting from a slowdown in the automotive business in Portugal

Consolidated Equity as at 30 September 2012 was Eur 11.5 million. The Eur 19.0 million decrease in value when compared with the amount reported on 31 December 2011 (Eur 30.5 million) includes:

The negative effects of the exchange rate variation of the Brazilian Real vs. the Euro during the first nine months of 2012 (Eur 10.7 million);

The net results of the operations during the period (net loss of Eur 8.6 million)

4. OUTLOOK FOR THE 3rd

QUARTER 2012

In Portugal, macroeconomic constraints, in general, and the behavior of the automotive market, in particular, do not suggest a possible reversal in the trends which were present at the beginning of 2012 which impacted the contributions from SIVA and Automotive Retail which, albeit positive, are expected to be lower than those recorded in 2011. However, the consumer awareness of theBrands and their acceptance suggest that, as was the case in the first nine months of the year, decreases in volume will be less significant than those of the overall automotive market, with the resulting increases in market share.



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In Brazil, and since Unidas has already recognized during the 1st Half 2012 the impact of changes in automotive taxation decreed by the Brazilian Government, the Affiliate is expected to maintain a positive contribution to SAG Gest’s consolidated results, as was already the case in the 3

rd Quarter of this

financial year.

5. RISK MANAGEMENT

The Company’s Risk Management Policy aims to ensure an accurate identification of the risks involved in the businesses conducted by its Affiliates and Subsidiaries, as well as to adopt and implement the measures required to minimize the negative impacts that adverse developments of factors inherent to those risks can have on SAG Gest’s financial structure and sustainability.

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

Reliance on Suppliers

The business activities of the SIVA Subsidiary are based on Distribution Agreements entered into with the VW AG Group for an undetermined period, subject to the relevant EU Regulation, which have been fully complied with.

Financial Risks

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

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

Recent developments in the financial markets, as well as changes in the credit rating of Portugal and the Group’s main financial partners have increased the liquidity risk to which the Group is exposed. However, the renegotiation of liabilities conducted in December 2010 extended the maturity profile of the Group’s financial liabilities to ensure its stability.

Exchange rate risk management controls the impact that exchange rate changes can have on the Group’s equity and attempts to ensure accurate measurement and dynamic management of global exchange risk. Furthermore, the exchange risk management policy in force also defines the limits of exposure to this risk, as well as suitable coverage levels.

The Brazilian Real’s exchange rate vs. the Euro has evolved adversely, with a negative impact on Consolidated Net Equity which, in 2012, has therefore deteriorated by Eur 10.7 million. Following a decision by the Board of Directors, no financial instruments were engaged to cover this risk, and for this reason the amount for Consolidated Net Equity is exposed to subsequent variations – representing unrealized profit or loss – due to the said exchange rate variations.

Interest rate risk management aims to ensure the assessment and dynamic management of this risk through the definition and setting of limits of exposure of the Group’s Statement of the Financial Position and Consolidated Statement of Comprehensive Income to interest rate variations. The control policy in force aims to select suitable strategies for each business area in order to ensure that this risk factor does not negatively affect 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 regards credit risk management, 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.



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6. TREASURY STOCK INFORMATION

On 31 December 2011, 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.

During the nine months ended 30 September 2012, SAG Gest did not purchase or sell any treasury stock and, therefore, on 30 September 2012, 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 30 September 2012, with an average unit price of Eur 1,9760.

7. 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 30 September 2012 and the nine months then ended, was prepared in compliance with the applicable accounting standards and gives an accurate and adequate image of the Company’s assets and liabilities, financial situation and results, and that the Management Report accurately reflects the development of business, performance and position of the Company and contains a description of the main risks and uncertainties that confront it.

Alfragide, 12 November 2012

The Board of Directors



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CONSOLIDATED FINANCIAL STATEMENTS


(Unaudited)



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NOTES TO THE

CONSOLIDATED FINANCIAL STATEMENTS


(Unaudited)



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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NINE MONTHS ENDED 30 SEPTEMBER 2012

(Unaudited)

1. GENERAL INFORMATION REGARDING THE GROUP’S ACTIVITY

The Consolidated Financial Statements of SAG Gest - Soluções Automóvel Globais SGPS, SA (hereafter SAG Gest) as at 30 September 2012 have been approved and authorized for release by the Board of Directors on 11 October 2012.

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 and in Brazil, as follows:

Distribution and retail operations in Portugal of new cars of the Volkswagen, Volkswagen – Commercial Vehicles, Audi, Škoda, Bentley and Lamborghini brands

Sales of multi-brand used cars, in Portugal and Brazil

Preparation of new vehicles and body repairs

Operational Vehicle Renting (“Renting”) – medium and long-term car rental products and services

Rent-a-car services – short-term car rental products and services

Semi-new and used car auctions

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 as at 30 September 2012 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 disclosed in Note 3) relate to the nine months ended on 30 September 2012, and were prepared using accounting policies that are consistent among them.

All amounts shown in the Notes herein are expressed in euros, except where otherwise stated.

2.2 Compliance statement

The Consolidated Financial Statements were prepared in accordance with the International Financial Reporting Standards (IFRS), as adopted by the European Union, applicable as at 30 September 2012.

2.3 Changes to accounting policies

2.3.1 New Standards and Interpretations applicable to the nine months ended 30 September 2012

Following endorsement by the European Union (EU), the following issues, revisions, amendments and improvements to Standards and Interpretations were made effective 1

st

January 2012:



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a) Revisions, amendments and improvements to the Standards and Interpretations endorsed by the EU affecting the accounting policies and disclosures adopted by SAG Gest.

IFRS 7 – Financial Instruments: Disclosure of information (only applicable to periods starting after 30 June 2011)

The amendment to IFRS 7 requires new qualitative and quantitative disclosures regarding asset transfers when:

An Entity de-recognizes financial assets transferred in their entirety, but maintains a continued involvement with those assets (options or warrants on transferred assets);

An Entity does not de-recognize financial assets in their entirety;

2.3.2 New Standards and Interpretations already issued but not yet of mandatory adoption

The following are the new Standards and Interpretations which were recently issued by IASB and only apply to periods starting after 1 January 2012 and which SAG Gest chose to not adopt early:

a) Already endorsed by the EU:

IAS 19 (Amended) – Employee Benefits

This amendment introduced the following changes:

The option to defer recognition of actuarial gains and losses has been suppressed, and actuarial gains and losses are now recognized in the Statement of Comprehensive Income in the period when they occur.

Disclosure shall include quantitative information on sensitivity analyses in respect of

the amount of defined benefits liabilities, according to possible changes in each of the

main actuarial assumptions.

Employment termination benefits shall be recognized on the moment immediately

preceding:

The commitment for its awarding cannot be withdrawn;

Restructuring provisions are constituted in accordance with IAS 37 – Provisions,

Contingent Liabilities and Contingent Assets

Distinction between short and long term benefits is based on the timing of the

payment of the benefit, regardless of the fact that entitlement to the benefit has

already been granted.

b) Not yet endorsed by the EU:

IASB issued changes to the IFRS, with improvements added to IFRS 1, IAS 1, IAS 16, IAS 32, IAS 34 and IFRIC 20, of which the more relevant are:

IFRS 1 (Amended) - First-time Adoption of International Financial Reporting Standards – Hyperinflationary Currency (applies only to periods starting after 30 June 2011)

The amendment to IFRS 1 establishes that on the date of transition to the IFRS's, Entities may measure all assets and liabilities at fair value. The fair value may be considered as the cost on the date of transition, where the relevant assets and liabilities are denominated in a hyperinflationary currency.

IFRS 7 – Financial Instruments: Disclosures (Amendment) – Compensation of financial assets and liabilities



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The amendment requires Entities to disclose information in respect of compensation rights and related agreements. This disclosure provides useful information for the establishment of the net effect that such agreements could have on each Entity’s Statement of the Financial Position.

IFRS 9 – Financial Instruments (Introduces new requirements for the recognition and measurement of financial assets)

This issuance is part of a staged project involving the revision and gradual replacement of IAS 39 - Financial Instruments: Recognition and Measurement, with the objective of reducing the complexity in its adoption. The more significant amendments are as follows:

Recognition and measurement:

Reduction of the categories of financial assets;

Suppression of the requirements for the separation of embedded derivatives;

Suppression of restrictions on re-classification;

The classification of the assets will now follow the business model of the relevant business unit, while also taking into account the features of the financial instruments;

Differences of fair value in equity instruments considered to be strategic are now to be recognized under reserves without flowing through profit and loss, even on situations of impairment or sale.

IFRS 10 - Consolidated Financial Statements

This issue establishes a new concept of control and requires a significant judgment to be made in order to determine which Entities are controlled and hence included in the Consolidated Financial Statements of the parent company.

IFRS 11 – Joint Arrangements

Replaces IAS 31 - Interest in Joint Ventures, and SIC 13 - Jointly Controlled Entities – Non-Monetary Contributions by Venturers.

Changes the concept of joint control and removes the option of accounting for a jointly controlled Entity using the proportional consolidation method. Entities are now required to account for their interest in such Entities using the equity method.

It further defines the concept of joint operations (combining the existing concepts of controlled assets and jointly controlled operations) and redefines the concept of proportional consolidation for these operations. Each Entity must now recognize in its Financial Statements the absolute or relative interests held in assets, liabilities, income and costs.

IFRS 12 – Disclosure of Interests in Other Entities

The Standard establishes a minimum level of disclosures in respect of Subsidiaries, Joint Arrangements, Affiliates and other non-controlled Entities.

IFRS 13 – Fair Value Measurement

The Standard gives guidance on how to establish fair value whenever allowed or required.

IAS 12 – Income Taxes

The Standard clarifies that calculation of the deferred tax on Investment Property valued at fair value in accordance with IAS 40 – Investment Property shall be performed bearing in mind recovery of the same through the future sale of the relevant Investment Property.

IAS 27 (Amended in 2011) – Consolidated and Separate Financial Statements



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With the introduction of IFRS 10 – Consolidated Financial Statements and IFRS 12 – Disclosure of Interests in Other Entities, IAS 27 merely defines the accounting treatment of Subsidiaries, Joint Arrangements and Affiliates in the Separate Consolidated Statements.

IAS 28 – Investments in Associates

The Standard now requires that the equity method be applied also to jointly controlled Entities, as was the case of Affiliated Entities.

IAS 32 – Financial Instruments: Presentation (Compensation of Financial Assets and Liabilities)

The amendment clarifies the meaning of “currently enforceable right to set off” and the application of IAS 32 to the offset criteria used by compensation systems (such as centralized payment and compensation systems) applying gross offset mechanisms that are not simultaneous.

SAG Gest has not early adopted any other Standard, Interpretation or amendment that has been issued but that is not yet in force. With the exception of IFRS 11 which, at reporting date, has not been endorsed by the EU, and which will require a change to the Unidas Affiliate consolidation method, from the Proportional Consolidation Method to the Equity Method, SAG Gest considers that the remaining amendments to Standards will not cause significant impact to its Consolidated Financial Statements.

2.4 Bases for Consolidation

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 and majority stake or controls management, as well as the Financial Statements of Affiliates under joint control.

b) Entities controlled by SAG GEST are considered to be 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 integral consolidation method.

c) As disclosed in Note 3.2 and as set forth in IAS 31 – Interests in Joint Ventures, and effective 13 July 2011, the Group started to jointly control the management of the Unidas Affiliate which, consequently, became consolidated using the proportional consolidation method. In this process, the procedures described in paragraph h) of this Note were adopted.

d) Affiliates where SAG Gest has a significant influence, namely the Autolombos and Manheim Affiliates, were consolidated using the equity method.

e) Subsidiaries are consolidated using the integral 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 and use accounting principles that are consistent between them.

f) Changes in the percentage of interests in those Subsidiaries, where no loss of control occurs, are accounted as capital transactions, in accordance with the terms of IAS 27 - Consolidated and Separate Financial Statements.

g) Losses are attributed to Non-Controlling Interests (previously Minority Interests) even where that results in a negative amount for Non-Controlling Interests.



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h) 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 value of any Non-Controlling Interests is de-recognized;

Cumulative Translation Adjustments included in Equity and relating to such Subsidiary are de-recognized;

The fair value of the consideration received is recognized;

The fair value of the interest retained is recognized;

Any remaining balance is 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.

These procedures were fully adopted within the process of changing the Unidas Affiliate consolidation method which was required as set forth in IAS 31 – Interests in Joint Ventures, as a consequence of circumstances disclosed in Note 3.2.

i) Inter-company balances and inter-company transactions (with their corresponding

income and expenses) between the Companies included in the consolidation perimeter

were eliminated in the consolidation process.

j) Differences between the book value of Financial Investments and the acquisition values of the Entities consolidated using the integral consolidation method are reported as follows:

Where the acquisition price is higher than the acquired Entity’s equity value, such difference is recognized as Goodwill, under 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.

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” as follows:

k) The amount representing third party stakes is included in the Consolidated Statement of the Financial Position and in the Consolidated Statement of the Comprehensive Income under “Non-Controlling Interests”.



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Non-Controlling Interests represent the interests of unrelated third parties in the Rolporto, Rolvia and Loures Automóveis Subsidiaries.

l) SAG Gest adopted IFRS 3 – Business Combinations, effective 1st 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 Goodwil” 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 has applied the revised IFRS 3. Acquisitions of businesses are recognized using the purchase method, the cost being measured by the sum of the fair value as at the acquisition date, the consideration paid and the value of any Non-Controlling Interests in the acquired Entity.

n) 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.

o) Where acquisitions of businesses are staged, 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 any 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 the Comprehensive Income. If that contingency is considered as Equity, it shall not be re-measured until it is established as a component of Equity.

p) Transactions, balances and 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.



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2.5 Main accounting policies

Property, Plant and Equipment (Note 18)

Property, Plant and Equipment, with the exception of Buildings, are recognized at cost. 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 cases mentioned below, in order to fully depreciate the assets during 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

At the Unidas Affiliate, depreciation of vehicles assigned to its Renting operations, which are recognized as Basic Equipment, is estimated so as to reflect the estimated loss in value of the car between its purchase date and its expected sales date, using the straight-line method. Each vehicle is depreciated until its book value equals the defined residual value.

At the Globalrent Subsidiary and at the Unidas Affiliate, depreciation of vehicles included as Basic Equipment assigned to the Rent-a-Car operation (short-term car rental without a driver), is recognized so as to reflect the estimated loss in value of the car during the time it is used, 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.

Investment Properties (Note 22)

Investment Properties reported in Note 22, 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 fair value and are reevaluated every two years. Differences in the evaluations are recognized in the Consolidated Statement of the Comprehensive Income for the relevant year.

Costs 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 Comprehensive Income for the relevant year.

Intangible Assets 20 (Note 20)

a) Goodwill

The positive consolidation differences (Goodwill) represent the excess of the acquisition cost 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, of the identifiable Equity. Goodwill is assigned to the cash generating units for the performance of impairment tests. Each of these cash generating units represents a business segment. Goodwill is not amortized, and its value is reduced by any impairment losses. Impairment losses are determined annually on the 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.



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Gains or losses 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

Store Key-money with an undefined useful life is not depreciated. Store Key-money is assigned to the cash generating units for the purpose of performing 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 these assets until the end of their useful life.

Investments in Affiliates (Note 21)

Group 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 Companies. The corresponding Goodwill is not amortized nor is it subject to individual impairment tests. However, if any signs of impairment are detected, 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 Affiliate operations.

Dividends recognized during the year are deducted from the 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).

Financial Assets (other than Financial Investments)

Financial Assets are classified as described below depending on the intention of the Board of Directors at the time of their acquisition:

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

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 Financial Statements reflect their net realizable value.

b) Held-to-Maturity Investments

Held-to-Maturity Investments 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 capacity to hold until such date, are recognized under this item. Held-to-Maturity Investments are recognized at their amortized cost, deducted of impairment losses, if any.



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c) Investments Held for Trading measured at their fair value through profit and loss

This category includes non-derivative Financial Assets held for trading, and derivative financial instruments that do not qualify for hedge accounting purposes, and are presented as Current Assets.

A Financial Asset is considered to be held for trading if:

it was acquired or incurred on with the main purpose 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 the Comprehensive Income for the period.

During the period under review, no situation exists to which the above mentioned policy applies.

d) Financial Assets Available for Sale

Investments Available for Sale are Non-Derivative Financial Assets that:

SAG Gest intends to keep for undetermined 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 the reporting date.

Following initial recognition, Investments 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. Depreciation of assets in these conditions ceases from the moment they are classified as held for sale.

Investments that are not listed and whose fair value is impossible to determine are held at cost, with deduction of eventual impairment losses.

Gains or losses resulting from changes in the fair value of Investments Available for Sale are recognized in Net Equity, under Reserves, until:

the Investment is sold, proceeds are received or the investment is disposed of in any way, or

the fair value of the Investment is lower than its acquisition cost and represents an impairment loss.

When any of these situations occurs, cumulative gains or losses are recognized in the Consolidated Statement of the Comprehensive Income.

During the period under review, no situation exists to which the above mentioned policy applies.

Inventories (Note 23)

Inventories are measured at cost or market value, whichever is the lowest. Market value represents the normal sales price less sale costs.

Cost is determined as follows:



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

Used Cars:

When cars recognized as Inventory result from trade-in transactions, they are valued at the purchase cost defined at the trade-in valuation;

Cars included in Inventories that have been the object of expired renting contracts and are available for sale are recognized at their corresponding net book value as at the date of termination of the relevant renting contract. This amount, which represents the “residual value” mentioned in Note 2.5 – Main Accounting Policies – Property, Plant and Equipment, is the best estimate of the vehicles’ market value, as at the contract’s termination date, as determined at the starting date of the rental contract, and deducted of impairment losses;

Buy-Back vehicles – 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.

For the purposes of calculation of the Parts Inventory Adjustment, stock turnover is established by type of material, based on changes recorded during the last 24 months. This criterion is applied consistently.

Income Tax (Note 16)

The Companies included in the consolidation that comply with the provisions of section 69 of the Portuguese Corporate Income Tax Code (CIRC) chose to apply the Portuguese Special Regime for the Taxation of Groups of Companies (RETGS) during the year 2012.

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

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). In Brazil, this period is 5 years. Hence, the tax returns of the Companies included in the consolidation in respect to the years 2008 to 2011, (2007 to 2011 in the case of the Unidas Affiliate) may still be subject to review, although the Group considers that any possible corrections resulting from tax reviews by Tax Authorities to such tax returns will not have a material impact on the Consolidated Financial Statements as at 30 September 2012.

SAG Gest adopted the recognition of deferred taxes, in accordance with the terms and conditions set forth in IAS 12 – Income Taxes, so as to suitably match 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 25% income corporate tax rate was considered and, in situations not related to tax losses, the 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.



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Cash and Cash Equivalents (Note 31)

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

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 the Comprehensive Income for the period.

b) Bank Loans

Loans are measured at their amortized cost, and the amount received is net of charges incurred when issuing such Loans. Financial charges are calculated using the effective interest rate method and recognized in the Consolidated Statement of the Comprehensive Income on an accrual basis.

c) Accounts Payable

The Suppliers and other Creditors balances 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.

Contingent Assets and Liabilities (Note 24 and 34)

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 these Notes, unless the likelihood of an outflow of funds is remote, in which case they are not disclosed.

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.

Equity Instruments (Note 32)

Equity Instruments are classified according to contract terms, regardless of their legal form. Equity Instruments issued by Group Companies are recognized at the amount received, net of the costs incurred with their issuing.

Income Recognition (Note 4)

Income is recognized as such to the extent that the Company is likely to derive future economic gains and that the value of that Income can be assessed reliably.

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



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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 said 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 Company or any other Company included in the consolidation perimeter, undertakes a repurchase commitment for the same vehicle (“buy-back” transactions), the principles set forth in IAS 18 – Revenue are applied. Therefore, the invoiced amounts for such transactions are not recognized as Income, and other costs 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 they 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 Company has an obligation to declare a Dividend.

Leasing

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

Accordingly, Tangible Assets are recognized after deduction of the respective cumulative depreciation and 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.

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 value of the Asset corresponding to the highest of the corresponding market value, after deducting eventual sales costs, 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.

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 the Unidas Affiliate, whose functional currency is the Brazilian Real.

The Financial Statements of the Unidas Affiliate are translated into Euros in accordance with the following procedures:

The Statement of the Financial Position is converted to Euros using the exchange rate prevailing on the closing date of the reporting period;



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The Income Statement expressed in Euros is 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.

Transactions denominated in foreign currencies (outside the Euro Zone) are converted into Euros using the exchange rate prevailing on the date of the transaction. Foreign currency denominated accounts receivable and payable are converted into Euros 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 the Financial Statements of the Unidas Affiliate, which are recorded against Consolidated Equity.

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 the Consolidated Equity.

Financial Instruments (and Derivative Financial Instruments)

Certain Group Companies regularly use Financial Instruments or Derivative Financial Instruments in the regular course of their operations, exclusively in order to minimize impacts resulting from their exposure to risks related to the fluctuation of interest and exchange rates, and not for trading or speculation purposes.

The most commonly used Coverage Instruments for said interest and exchange rates fluctuation risks are as follows:

Coverage of interest rate fluctuation risks

Interest rate swaps and forward rate agreements: the fair value of Derivative Financial Instruments is determined using the Discounted Cash Flows (DCF) method, and is recognized in Consolidated Net Equity, and subsequently recognized as Income for the period, as the cash flows associated with the said covered operations occur. Interest paid and/or received is recognized on a monthly basis during the period of the operation.

Coverage of exchange rate fluctuation risks

Exchange rate options or exchange rate forwards related to investments in foreign Subsidiaries or Affiliates: the fair value of Derivative Financial Instruments is determined using the Discounted Cash Flows (DCF) method and is recognized in Consolidated Net Equity, where Cumulative Translation Adjustments resulting from the conversion into Euros of the Financial Statements of such Subsidiaries or Affiliates are also recognized;

Exchange rate forwards to cover interest rate fluctuation risks associated with foreign currency denominated financing: the fair value of Derivative Financial Instruments is recognized using the Discounted Cash Flows (DCF) method in Consolidated Net Equity and subsequently recognized as Income on a monthly basis, simultaneously with the monthly recognition of exchange rate variances associated with the corresponding Liabilities.

These procedures were adopted by SAG Gest in accordance with the corresponding written policy approved by the Board of Directors, which came into effect on 1 January 2004.

De-recognition of Financial Instruments occurs when SAG Gest no longer controls the contractual rights that govern them, which happens when Financial Instruments are sold or when cash-flows from said Instruments are transmitted to a third party.

During the period under review, there were no situationsrequiring the use of the above mentioned policy applies.

Calculation of the Fair Value of Financial Instruments (and Derivative Financial Instruments)



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The principles and procedures defined in IAS 32 – Financial Instruments:Presentation and IAS 39 – Financial Instruments:Recognition and Measurement are fully adopted.

Subsequent Events (Note 44)

Events taking place after reporting date that provide additional information on the conditions existing on reporting date are recognized in the Consolidated Financial Statements.

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

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 regarding 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 more 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 indicate that the 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 Companies, which include an estimate of future revenues, discount rates and useful life of the said assets.

c) Recognition of Provisions and Adjustments

The Group 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 recognized in respect of such contingencies.

Adjustments for Accounts Receivable are calculated based essentially on the ageing of the open items that compose 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 Inventory are calculated on the basis of the expected sales price of the relevant goods.

d) Assessment of the market value ofFinancial 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.



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3. CONSOLIDATED COMPANIES

3.1.Companies Included in Consolidation

The Subsidiaries, Affiliates and Associates included in the Consolidated Financial Statements as well as their main financial indicators as at 30 September 2012 are as follows:

a) Companies included in consolidation using the Integral Method

b) Companies included in consolidation using the Proportional Method

c) Companies included in consolidation using the Equity Method

(1) Balance sheet amounts relating to 2011

3.2. Main Changes in the Consolidation Perimeter

In June 2012, SAG Gest sold the minority stake (20.93%) it held in CRE - S.G.P.S., S.A Affiliate which, consequently, is no longer included in the Consolidated Financial Statements.

During the 3rd

Quarter 2011, SAG Gest sold the minority interests (40%) held in the Santander Consumer Iber-Rent SL and Santander Consumer Multirent Sp.z.o.o. Affiliates Consequently, these Affiliates are no longer included in the Consolidated Financial Statements.

On 13 July 2011, the share capital of theUnidas Affiliate was increased.This share capital increase entirely subscribed by three Brazilian Investment Funds.As a result of this operation and of the related agreements, SAG Gest’s stake in Unidas was reduced to 52.72%, and SAG Gest now has joint control of the Company together with its new Shareholders. The Unidas Affiliate, which until then was consolidated using the integral method, is now included in the Consolidated Financial Statements using the proportional consolidation method. Due to this change, it is not possible to compare the financial information reported herein with the information disclosed in respect of the 1

st Half of 2011, a period during which the Unidas

Affiliate was consolidated using the integral method, and where SAG Gest held a 100% stake.

On 30 June 2011, SAG Gest sold its entire stake (100%) in the share capital of the Ecometais Subsidiary, which has since no longer been included in the Consolidated Financial Statements.



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4. REPORTING BY BUSINESS SEGMENT

For management purposes, the Group is organized into business segments, and within these, by geographical areas, as follows:

The Distribution segment which includes namely the distribution in Portugal of the Volkswagen, Volkswagen – Commercial Vehicles, Škoda, Audi, Bentley and Lamborghini Brands, as well as sale of spare parts and accessories;

The Retail segment, which includes the retail sales of new and semi-used Volkswagen, Volkswagen – Commercial Vehicles, Škoda and Audi Brands, the sale of used multibrand vehicles, the sale of parts and accessories, as well as repair and maintenance services for Volkswagen, Volkswagen – Commercial Vehicles, Škoda and Audi vehicles;

The Rent-a-Car Service essentially includes the Fleet Management, Renting, Rent-a-Car and Daily services – short, medium and long-term car rental products and sale of semi-new and used cars;

The segment of Discontinued Businesses which corresponds to businesses that were disposed of (the Ecometais Subsidiary and the Santander Consumer Iber-Rent SL, Santander Consumer Multirent, Sp.z.o.o. and CRE - S.G.P.S., S.A Affiliates).

Other Operations include activities of the Group’s Holding company, as well as the Group’s shared services unit.

Operating results of the cash flow 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 business segments are determined on an arm’s length basis, similar in all aspects to transactions conducted with bona fide unrelated third parties.



32

Business Segments

The following chart represents the results, assets and liabilities as at 30 September 2012 and their comparison with identical information as at 30 September 2011, of the various business segments where the Group develops its activities:



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To remove any signs of impairment in the Rent-a-Car segment in Brazil and Europe, SAG Gest evaluated these business segments in accordance with the Discounted Cash Flows (DCF) method, as disclosed in Note 19.

Amounts shown as Discontinued Business are a consequence of the facts described in Note 15.



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5. OTHER OPERATING INCOME

Other Operating Expenses are as follows:

6. OTHER OPERATING EXPENSES

Other Operating Expenses are as follows:

Other Operating Expenses includes expenses relating to the extension of original guarantees of new cars.

7. SALES, GENERAL AND ADMINISTRATIVE EXPENSES – COMMERCIAL EXPENSES

Sales, General and Administrative Expenses – Commercial Expenses are as follows:

8. SALES, GENERAL AND ADMINISTRATIVE EXPENSES – CAR EXPENSES

Sales, General and Administrative Expenses – Car Expenses are as follows:



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9. SALES, GENERAL AND ADMINISTRATIVE EXPENSES – OVERHEADS

Sales, General and Administrative Expenses – Overheads are as follows:

10. PAYROLL EXPENSES

Payroll Expenses are as follows:

The Group’s number of Employees was as follows:



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11. GAINS AND LOSSES IN THE SALE OF FIXED ASSETS

Gains and Losses in the Sale of Fixed Assets are as follows:

The amounts reported as Gains or (Losses) on Sales of Fixed Assets represent the net amount of realized losses and gains in the sale of fixed assets.

During 2012, amounts regarding the scrapping of parts and accessories acquired by the Unidas Affiliate to equip its fleet, were recognized as Depreciation and Amortization. During the ninemonthsended 30 September 2012, the total for these items represented an increase of Eur 530,992 in Depreciation and Amortization. This amount compares to Eur 475,593 which, in the same period in the previous year, was recognized under Gains and Losses in the Sale of Fixed Assets.

12. FINANCIAL EXPENSES

Financial Expenses are detailed as follows:

As a result of the facts disclosed in Note 3.2, the Unidas Affiliate is now consolidated using the proportional method, and consequently it is not possible to establish a comparison between the figures reported for the periods indicated above. The following table segregates the expenses incurred in Portugal and the expenses incurred at the Unidas Affiliate.

13. FINANCIAL INCOME

Financial Income is detailed as follows:

As a result of the facts disclosed in Note 3.2, the Unidas Affiliate is now consolidated using the proportional method, and consequently it is not possible to establish a comparison between the figures reported for the periods indicated above. The following table segregates incomegenerated in Portugal and incomegenerated at the Unidas Affiliate.



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14. INCOME AND GAINS IN GROUP COMPANIES

Income and Gains in Group Companies represent the appropriation, by SAG Gest, of the net results reported during the period by Affiliates consolidated using the equity method. In these Affiliates, SAG Gest does not hold a majority stake but has significant influence on their management.

Due to the facts disclosed in Note 15, and to ensure comparability of data reported in respect of the nine monthsended 30 September 2011, amounts for the CRE – S.G.P.S., S.A. Affiliate in respect of the 3rd Quarter and the first nine months of 2011 were adjusted, and were detailed and calculated in the following manner:

15. DISCONTINUED OPERATIONS

Discontinued Operations result from the implementation of a corporate restructuring process which included the divestment from the assets indicated below, which were considered as not strategic for the Group’s future development.

The results from the Ecometais Subsidiary and from the Santander Consumer Iber-Rent and Santander Consumer Multirent S.p. z.o.o. Affiliates, that are reported with reference to the three and nine monthsended 30 September 2011 and 30 September 2012 as Results from Discontinued Operations are as follows:



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In June 2012, the Group sold the minority stake (20.93%) it held in the CRE – S.G.P.S., S.A Affiliate and consequently recognized a loss of Eur 748,475. The amount of Capital Losses was determined as follows:

Following this reclassification, it was necessary to adjust the reported elements for comparison purposes, in respect of the three and nine months ended 30 September 2011, as per Note 14.

16. INCOME TAX

The estimate for Income Tax recognized in the Consolidated Statement of the Comprehensive Income for the nine and three monthsended 30 September 2012 and 30 September 2011, as well as the reconciliation between the statutory income tax rate and the effective income tax rate are as follows:

Note 1: The 1.5% Portuguese Municipal Tax applies to positive taxable income on an individual basis per Entity. In the nine months ended 30 September 2012, SAG Gest and the SIVA, AA00, Rolporto and Globalrent Subsidiaries have recognized positive taxable income.



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Note 2: The 3% Portuguese State Tax applies to positive taxable income exceeding Eur 1.5 million, applied on an individual basis per Entity. In the nine months ended 30 September 2012, SAG Gest and the SIVA Subsidiary recognized positive taxable income exceeding Eur 1.5 million.

Income Tax has been calculated according to tax rates in force in each country where taxable results are generated, in accordance with the relevant tax regulations.

Deferred Tax balances are detailed as shown on the table below, which include the differences between the tax and the reporting bases for the corresponding Assets and/or Liabilities:

(1) The total net change recorded in Deferred Taxes in the period includes adjustments of Eur 113,332 which were recognized directly in Consolidated Shareholders Equity and which, as such, did not affect the net results for the year. It also includes the effect of reclassification between items in the Consolidated Statement of the Financial Position in the amount of Eur 3,548,019.

(2) The amount of Deferred Taxes which impacted the results for the period was Eur 2,149,898, as detailed in the tables above.

The amount of Deferred Taxes related to Tax Losses Carried Forward, in Portugal, by year of origin and expiry date is detailed in the table below. Management expects that positive taxable results will be generated in the future which will enable the use of the cumulative tax losses.



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Tax losses generated by Brazilian Companies have no statute of limitations imposing a time limit for their utilization.

17. EARNINGS PER SHARE

As at 30 September 2012, the SAG Group owned 16,771,015 shares as treasury stock. During the first nine months of 2012, no transactions were made (purchases or sales) involving treasury stock, and therefore the number of treasury stock held on 31 December 2011 has not changed.

The nominal value of each SAG Gest share is Eur 1.

Due to the facts disclosed in Note 15, and to ensure proper comparison of information reported in respect of the three and nine months ended 30 September 2011, the amounts reported in respect of such periods had to be adjusted.



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18. PROPERTY, PLANT AND EQUIPMENT

Changes in the Tangible Fixed Assets accounts during the nine months ended 30 September 2012 and the twelve months ended 31 December 2011 were as follows:



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IAS 16 – Property, Plant and Equipment applies where an entity, in the normal course of its operations, regularly sells Fixed Assets that are assigned to rental agreements with third parties.In these cases, the value of those goods, when the relevant rental expires or when, due to any other reasons, these goods become available for sale, shall be transferred to Inventories.Consequently, the sales amount for these goods are recognized, when the sale occurs, as Income according to IAS 18 – Revenue, and the cost of the assets sold is recognized as cost of goods sold.Within the SAG Group, this situation applies to vehicles owned by the Unidas Affiliate that are allocated to the renting business.

The Group considers that, as at 30 September 2012, no impairment signs exist in respect of its Tangible Fixed Assets.

19. INTANGIBLE ASSETS - GOODWILL

In December 2011, the SAG Group conducted valuations usiing the Discounted Cash Flows (DCF) method, supporting the recoverability of the Goodwill amount recognized in the Consolidated Statement of the Financial Position, as follows:

1. The amount for Goodwill on 30 September 2012 and on 31 December 2011 determined in accordance with the disclosed procedure is as follows:

2. For the purposes of determining the existence of an impairment signs affecting the above-mentioned Goodwill amounts, these have been allocated to the relevant business segments.

The amounts resulting from the valuations performed in December 2011 were supported by past results and future market development outlooks in the markets where the Group operates, and 5 year projections were prepared for the future cash-flows for each of the businesses, in accordance with the plans defined by the Board of Directors.



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In 2011, the valuations were performed using discount rates ranging between 8.6% and 11.1% for Portugal, and between 11% and 13% for Brazil, a growth rate in perpetuity between 1.3% and 3.3% in Portugal and between 1% and 3% for Brazil.

In 2011, valuations were performed in respect of the more relevant Subsidiaries and Affiliates, and it was concluded that no signs of impairment exist in the recognized Goodwill amounts, with the exception of the amount in respect of the Globalrent Subsidiary.The results (enterprise value) of these valuations, and the sensitivity of the values to discount rate changes (WACC and Ke) and to the growth rate in perpetuity (“g”) are indicated in the tables below, where the amount corresponding to the base scenario is highlighted.

a. Retail Segment

Soauto – Comércio de Automóveis, SA

Rolporto, S.A.

Loures Automóveis, S.A.



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Rolvia, S.A.

b. Rent-a-car Services - Portugal

Globalrent, Lda.

In view of the amount resulting from the valuation of the Globalrent Subsidiary, SAG Gest recognized in December 2011 an impairment charge in respect of this Investment for Eur 800,000.

c. Rent-a-car Services - Brazil

Unidas, S.A.

The value of the Unidas Affiliate was determined using the Free Cash Flow to Equity, which requires the applicable discount rate to match the Cost of Equity (Ke).

It was considered that no major changes occurred in the assumptions or in the future development prospects in markets where the Group operates, on which the assessments made in December 2011 were based, and therefore it is considered that these assessments remain valid for the purpose of establishing whether signs of Goodwill impairment exist as at 30 September 2012.

The Group considers that, as at 30 September 2012, there are no impairment signs regarding the value of the registered goodwill.

20. INTANGIBLE ASSETS

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

controlled by the Company as a result of past events;

expected to produce future economic benefits for the Company.



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Changes in the Intangible Assets accounts during the nine months ended 30 September 2012 and the twelve months ended 31 December 2011 were as follows:

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

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21. INVESTMENTS IN AFFILIATES

The amount for Investments in Affiliates is as follows:

Changes in investments relating in the Manheim and Autolombos Affiliates refer to the appropriation by SAG Gest of its share in the changes recorded in these Companies’ Net Equity, as shown in the tables below. Due to the facts reported in Note 15, as at 30 September 2012, there is no investment relating to the CRE – SGPS Affiliate due to its sale.

22. INVESTMENT PROPERTIES

Investment Properties are as follows:

The amount of Investment Properties relates to four buildings owned by the Imocar Real Estate Investment Fund that are not being used by the Group within the regular course of its operations. These buildings are recognized at their fair value and were valued using the Discounted Cash-Flow (DCF) method, using current rentals up to the term of the rental agreements in force, in respect of the two rented buildings (Building in Porto and Building in Pedro Álvares Cabral).Market rentals were considered in respect of the buildings that are not rented, considering in this case that they will be rented after a 6-month period.

The amount for income during the current period for the rented buildings was Eur 46,566, and expenses incurred with the same were Eur 4,839. Expenses connected with the building that was not rented were Eur 2,253.

The table below includes data on future rental income, based on the amounts agreed in the rental contracts in force on 30 September 2012.

The term of the existing rental agreements is between 34 and 49 months.



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23. INVENTORIES

Inventories are as follows:

Changes recorded during the first nine months of 2012 under Adjustments for Inventories were as follows:

Vehicles under buy-back schemes will only become available for sale upon expiry of the holding period defined in each contract.



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24. ACCOUNTS RECEIVABLE – TRADE CUSTOMERS

Trade Customers Accounts Receivable are as follows:

Customers of the SIVA Subsidiary provided, upon this Subsidiary’s request, bank guarantees for the total amount of Eur 44,095,014. Under the agreements established between the SIVA Subsidiary and Financial Institutions operating in Portugal, said bank guarantees are subrogated to such Financial Institutions.

During the nine months ended 30 September 2012, the Group recorded a net decrease in the amount of the Adjustments for Accounts Receivable of Eur 113,399.

Adjustments for Accounts Receivable and Other Debtors had the following changes during the first 9 months of 2012:

The detailed ageing of Customer Accounts Receivable as at 30 September 2012 is as follows:



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25. ACCOUNTS RECEIVABLE – RELATED ENTITIES

The balance with Related Entities is as follows:

The nature of the balances with other Related Parties (Shareholders, Related Companies, Affiliates and Associates) is indicated in Note 39.

26. ACCOUNTS RECEIVABLE – OTHER DEBTORS

The balance of Other Debtors is as follows:

The balance of Other Debtors is adjusted in Eur 3,251,596 so as to reflect the recoverability risk of balances included under the same item, the remaining balance of which does not have any sign of impairment.

27. DEFERRED COSTS

Deferred Costs are as follows:

28. ACCRUED INCOME

Accrued Income is as follows:



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29. CURRENT INCOME TAX RECEIVABLE

The balance receivable in respect of Current Income Taxes is as follows:

Regular Corporate Income Tax in Portugal is 25% and 34% in Brazil. The Portuguese Local Surtax is 1.5% and the State Surtax also applied in Portugal is 3% on companies with taxable income in excess of Eur 1.5 million.

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 within no more than three months from the reporting date, and include creditor balances of bank accounts on the same date.

32. ISSUANCE OF CAPITAL AND RESERVES

As at 30 September 2012, Registered Share Capital was represented by 169,764,398 ordinary shares with a nominal value of Eur 1 each, and was fully paid up.



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Treasury stock is owned by the Group’s Parent Company which, as at 30 September 2012, 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 required for the purchase of treasury stock, as set forth in Article 317 of the Companies Act.

In accordance with Article 296 of the Companies Act, Legal Reserves can only be used for:

Incorporation into the Capital;

Offset of the part of losses shown in the Statement of the Financial Position which cannot be covered by the use of other Reserves;

Offset of part of the losses brought forward from the previous period which cannot be covered by the profit of the period or by the use of other Reserves;

The Reserve for Revaluation of Tangible Fixed Assets cannot be distributed to Shareholders because it has not been realized.

The Cumulative Translation Adjustment is a reserve generated from the translation of the Financial Statements of Companies whose functional currency is not the Euro, as mentioned on Note 2.5. – Summary of Main Accounting Policies (Transactions in Foreign Currency).

The amount of Eur 10,728,722 recognized as Cumulative Translation Adjustment corresponds to the negative variance shown in the Consolidated Financial Statements as at 30 September 2012 in the translation into Euros, for consolidation purposes, of the assets, liabilities and results of the Unidas Affiliate due to the devaluation of the Euro versus the Brazilian Real which occurred during period between 31 December 2011 and 30 September 2012.

The recognition at fair value, in accordance with IAS 39 – Financial Instruments:Recognition and Measurement, of Derivative Financial Instruments purchased to provide coverage in respect of interest rate fluctuation risks (considered as Cash Flow Hedging Instruments) produced an increase in Other Reserves of Eur 314,334.

These Instruments were engaged in accordance with the Exchange Rate Risk Coverage Policy approved by the Board of Directors, as specified in Note 40.

Unidas Affiliate Stock Option Plan

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



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The Plan establishes the general conditions and terms under which the Unidas Affiliate acquires and awards stock options of the same Affiliate to Employees, Professionals and Members of the Board of the Unidas Affiliate and its Subsidiaries (the “Participants”) who meet the eligibility criteria defined in the Plan, in accordance with the terms and conditions set forth in the Affiliate’s By-laws and by its Board of Directors.

The main features of the Plan are as follows:

“Vesting”: For every twelve months period starting on 13 July 2011, or from the date they joined the Affiliate as Employees (in those cases where they joined after 13 July 2011), Participants shall be entitled to exercise ¼ (one fourth) of the Options awarded to them in accordance with the terms of the program or of the relevant 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 when a Liquidity Event occurs, 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 what relates to each Stock awarding program or contract, establish different vesting or term conditions, 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 the Unidas Affiliate awarded stock options to its beneficiaries.

A maximum of 11,405,551 of Options was established for this Program, which corresponds to a maximum stock dilution of 4% of the total of 285,138,785 shares issued by the Unidas Affiliate.

The amount of Eur 89,192 recognized in Consolidated Shareholders Equity under “Stock Option Plan – Unidas” corresponds to the share assignable to SAG Gest (52,72%) in the said 1st Program of the Plan.



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33. BANK DEBT

On 30 September 2012, 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) The balance relates to several credit facilities with a term of less than one year, engaged with several Financial Institutions. The applicable interest rates are between 10.10% and 12.58%, and the facilities’ maturity dates fall between April and September 2013.

(3) The balance represents the percentage that corresponds to SAG Gest’s stake in the Unidas Affiliate (52.72%) in the various credit facilities with a term of over one year, granted to the Unidas Affiliate by several Brazilian Financial Institutions. The applicable interest rates are between 10.10% and 12.58%, and maturities fall between March and November 2014.



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(4) A set of four Commercial Paper Programs negotiated with a syndicate comprising 4 Portuguese Financial Institutions in December 2010. The four operations are regulated by a Framework Agreement entered into between SAG Gest and those Financial Institutions.

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

The Commercial Paper Programs mentioned in Note 4 above have the following features:

Total Nominal Value: Eur 242,950,000

Term: 5 years, with the possibility of annual termination after the end of the 2nd

year;

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

According to IAS 39 – Financial Instruments: Recognition and Measurement, Bank Debt is recognized at its Amortized Cost, with financial charges recognized in accordance with the effective interest rate method.

Adoption of this method results in debt being recognized for amounts that differ from its nominal value.

The difference between the amounts for which current Bank Debt obtained in Portugal is recognized in the Consolidated Statement of the Financial Position on 30 September 2012 and its nominal value is as follows:

The SAG Group’s bank debt indicated above has the following contractually defined maturities:



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On 31 December 2011, 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) The balance relates to several credit facilities with a term of less than one year, engaged with several Financial Institutions. The applicable interest rates are between 13.69% and 16.26%, and the facilities’ maturity dates fall between April and December 2012.

(3) The balance relates to a credit facility with maturity in March 2012. The applicable interest rate on 31 December 2011 was 11.76%.

(4) The balance indicates the percentage that corresponds to SAG Gest’s stake in the Unidas Affiliate (52.72%) in the various credit facilities with a term of over one year, granted to the Unidas Affiliate by several Brazilian Financial Institutions. The applicable interest rates are between 13.69% and 16.26%, and maturities fall between March and November 2014.

(5) A set of four Commercial Paper Programs negotiated with a syndicate comprising 4 Portuguese Financial Institutions in December 2010. The four operations are regulated by a Framework Agreement entered into between SAG Gest and those Financial Institutions.



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34. PROVISIONS

Provisions refer to specific risks and are reassessed on a yearly basis.

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

court proceedings, including of a fiscal nature;

situations of misappropriation of assets.

35. ACCRUED EXPENSES

Accrued Expenses are as follows:



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36. DEFERRED INCOME

Deferred Income is as follows:

37. CURRENT INCOME TAX PAYABLE

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

38. OTHER TAXES PAYABLE

The balance of Other Taxes Payable was as follows:

39. 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:



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Balances with SGC – SGPS and with the Autolombos Affiliate represent to short-term treasury operations (with less than one-year maturity) performed by SAG Gest and by the LGA Subsidiary.

The balance of treasury operations with Volpe Participações Ltda represents 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.

40. 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 Group’s financial risk management policies, and is also responsible for monitoring and assessing the implementation of recommended coverage strategies on a regular basis.



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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

During each reporting period, the Financial Statements of the Unidas Affiliate, a Brazilian Company whose functional currency is the Brazilian Real, are translated using the exchange rate as at the date of the Financial Statements, as disclosed in Note 2.5 – Summary of Main Accounting Policies (Foreign Currency Denominated Transactions).

Exchange rate market fluctuations and the consequent use of different exchange rates in each reporting period, generate exchange differences that are recognized in Consolidated Equity (Cumulative Translation Adjustments).

Because there is no liquid market actively performing transactions between the Brazilian Real and the Euro, SAG Gest analyses and manages the exchange risk generated by this Investment in two different ways, considering that its entire exchange rate exposure from investments 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 risk coverage is usually implemented through the engagement of different Financial Instruments regarding the risks inherent to each of these variables.

Results achieved with such coverage Financial Instruments are recognized in Consolidated Equity.

On the other hand, in accordance with the defined policies, the transaction costs associated to the Financial Instruments used to cover such risks may imply that, at certain times, certain exposures may not be covered or are only partially covered.

As at 30 September 2012, SAG Gest did not have any active exchange rate coverage operations.

Due to exchange rate fluctuations, the amount for the said investment by the Group generated in the first nine months of 2012 a total loss of Eur 10,734,932, as follows:

Eur 10,884,540 loss as a result of the valuation of the BRL versus the USD;

Eur 149,608 profit as a result of the valuation of the USD versus the Euro

Sensitivity Analysis:

For the purpose of sensitivity analysis in respect of SAG Gest’s exposure to currency variations resulting from the investment in the Unidas Affiliate, two alternative scenarios were considered for each of the risks involved:



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Variations vis-à-vis 30

September 2012

Scenario 1 Scenario 2

Change of the Brazilian Real against the US Dollar 25% 50%

Change of the US Dollar against the Euro 10% 20%

Therefore, four alternative scenarios were considered for an adverse change of the Brazilian Real’s exchange rate against the Euro. The effects that these potential exchange rate changes would have on SAG Gest’s Consolidated Shareholders Equity as at 30 September 2012 are summarized in the table below. It is worth highlighting that favorable currency rate developments of equal absolute value would have a symmetrical impact on SAG Gest’s Equity:

2. Variable Interest Rate Liabilities – Portugal

Although all interest derived from loans negotiated by SAG Gest in Portugal is indexed to the Euribor interest rate, with the addition of a risk spread, on 30 September 2012 there were no Financial Instruments to cover the risk of interest rate changes. The decision to obtain this type of coverage is made on a case-by-case basis and depends on the expected market trends of interest rates, which justifies the fact that no coverage existed on this date.

3. Variable Interest Rate Liabilities – Brazil

The majority of financing operations and the Unidas Affiliate cash balances accrue interest on the basis of interest rates indexed to CDI’s variation. CDI is the reference interest rate for the Brazilian market.

As at 30 September 2012, the cash balance subject to changes in CDI was BRL 155.4 million (Eur 59.2 million) and the amount for loans under similar conditions was BRL 315.2 (Eur 120.1 million).

None of the current operations was covered in respect of CDI changes.

Sensitivity Analysis:

For the purpose of performing sensitivity tests and to evaluate the effects of CDI changes on SAG Gest’s Financial Statements, two alternative scenarios were considered: i) a 25% increase of the CDI and ii) a 50% increase of the CDI.

The results are summarized as follows:



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B) Credit Risk

SAG Gest’s policy in respect of the definition of Customer credit limits, both nationally and internationally, is prepared with resort to Companies specializing in credit risk analysis.

A detailed analysis of the changes in Adjustments for Accounts Receivable clearly shows that Customer credit risk is practically non-existent. Furthermore, SAG Gest has access to major market databases which, together with its team of technical experts, enable it to assess and clearly minimize credit risk.

Note 24 shows the ageing of Accounts Receivable.

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.

The main contractual obligations of the Group involve loans obtained (Note 33) and interest.

Some of the loans listed on Note 33 are subject to the fulfillment of several covenants, which include:

Financial Covenants:

1) Portugal, in what relates to the Consolidated Financial Statements

Net Debt / EBITDA < 10.5

Net Debt / Equity < 3.5

The two above mentioned Financial Ratios relate to the Commercial Paper Programs engaged in December 2010, in the total amount of Eur 242,950,000. On 30 September 2012, neither were met, and therefore the total amount of said Commercial Paper Programs was subject to early termination clauses.

2) Brazil, as regards the Unidas Affiliate’s Financial Statements

Net Debt / EBITDA < 3.5

EBITDA / Net Interest > 1.5

Operational Revenue for the last 12 months cannot decrease by more than 30% when compared to the Operational Revenue for the period between June 2010 and June 2011, adjusted annually according to the variation of the HCPI index since 30 June 2011.

Ownership:



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Ownership by SGC SGPS of at least 50,1% of the Registered Share Capital and voting rights of SAG Gest.

Ownership of the 99,8% stake held by Dr. João Manuel de Quevedo Pereira Coutinho in the Registered Share Capital and voting rights of SGC SGPS

Other

Maintenance of Import 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 finance agreements implies a default situation in all its remaining finance agreements

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

41. 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, bearing in mind the amounts defined in the agreements in force on 30 September 2012.

Property rental agreements provide for terms between 1 and 79 months, while the terms of vehicle operating leases agreements vary between 1 and 23 months.

Rentals and Leases as a Lessor

Due to its operational activity, SAG Gest, through the Unidas Affiliate, has agreed contractually with its Clients on future amounts that it will be paid in respect of vehicle rentals and other services detailed as follows:



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42. FINANCIAL INSTRUMENTS

On 30 September 2012 and 2011, as defined by IAS 39, the book value of each category of financial assets and liabilities was recognized as follows:

43. COMMITMENTS AND CONTINGENCIES

Guarantees

As at 30 September 2012, several bank guarantees had been issued by third parties to Group Companies for approximately Eur 44,095,014. On 31 December 2011, this amount was Eur 44,709,790. Group Companies’ liability in respect of bank guarantees issued, at their request, for the benefit of third parties was, on 30 September 2012, Eur 145,772,789.

As indicated in Note 33, to guarantee full payment of liabilities related to the Eur 242,950,000 Commercial Paper Programs negotiated on 28 December 2010, SAG Gest pledged all the shares that it owns on the registered share capital of the Unidas Affiliate as collateral for the benefit of the Financial Institutions.



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Contingencies

The Portuguese Tax Authorities issued additional Income Tax assessment notes to SAG Gest and other Companies within the consolidation perimeter, related to Corporate Income Tax and Corporate Income Tax Surtax (“Derrama”) for the years 1999 to 2007, for a total amount of Eur 14,539,985, as shown in the following table.

(*) This includes administrative fines calculated on the date the claim was issued

The said Companies disagree with the basis for the issuance of such additional assessments and have initiated, within the applicable legal deadlines, legal proceedings in respect of each of the said assessments. Therefore these costs have not been reflected in the Consolidated Financial Statements as at 30 December 2012. Bank guarantees have been submitted to ensure suspension of all executive processes.

In the opinion of the Board of Directors, based on opinions issued by renowned independent entities, the probabilities of success of the injunction proceedings are high.

Since the reasoning used by the Portuguese Tax Administration in issuing said additional Income Tax assessment notes for the tax years 1998-2007 is considerably and materially similar to the one used in a previous assessment note in respect of tax year 1997, the Board’s opinion was further supported by the unappealed decision issued on 10 March 2009 by the Central Administrative Court which was favorable to SAG GEST SGPS, SA, in respect of the cancellation of the tax adjustment request for the tax year 1997.

The Brazilian Tax Administration has also issued a claim to the Unidas Affiliate in respect of the collection of debits concerning Brazilian Corporate Income Taxes (“Imposto de Renda Sobre Pessoa Jurídica” and “Contribuição Social Sobre o Lucro Líquido”) for the tax years 2004 through 2007, for the total amount of BRL 31.8 million.

The Unidas Affiliate disagrees with the basis for the issuance of such additional tax assessments, it has initiated, within the applicable legal deadlines, legal proceedings in respect of each of the said assessments.

In the opinion of the Board of Directors, based on recommendations issued by its Legal Counsel, there are good chances that such legal proceedings will be successful, and therefore no provision has been recognized in respect of this issue.

44. SUBSEQUENT EVENTS

No events have taken place after the Balance Sheet date that could have a material impact on the financial statements.

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