futebol clube do porto – futebol, sad de contas/rc_consolidado... · futebol clube do porto –...

FUTEBOL CLUBE DO PORTO – Futebol, SAD Listed Company

Share capital: 75.000.000 euros Own Capital: 9.882.700 euros (approved in General Meeting on the 25th of November 2013)

Head Office – Estádio do Dragão, Via FC Porto, Entrada Poente Piso 3 Registration at 1st Registration of Commercial Registry of Porto and

Legal Person n.º 504 076 574

Management Report and Consolidated Accounts 2013/2014

A. Management Report

1. Message from the Chairman 2. Governing Bodies 3. Highlights 4. Activity Evolution 5. Other Facts that Occurred During the Financial Year 6. Relevant Facts Occurred after the End of the Financial Year 7. Future perspectives 8. Information on own shares 9. Statement of the Board of Directors

B. Consolidated Financial Statements and Appendix

1. Statements of Consolidated Financial Position 2. Consolidated Statements of Results by Category 3. Consolidated Statements of Comprehensive Income 4. Consolidated Statements of Changes in Equity Capital 5. Consolidated Statements of Cash flow 6. Notes to Consolidated Financial Statements 7. Legal Certification of Accounts and Audit Report 8. Report and Opinion of the Audit Committee

C. Corporate Governance Report D. Shares held by members of the Board of Directors and Audit Committee

Consolidated Accounts Report 2013/2014

___________________________________________________________________________________________

___________________________________________________________________________________________

Futebol Clube do Porto – Futebol, SAD 2

A. Management Report

1. Message from the Chairman

FC Porto had a season below expectations. After three years of great success, having been national

champion three years in a row, the main objective of the team, and an European competition, we had

a negative year, which we used to do a complete restructuring of the professional squad, including

hiring Julen Lopetegui as coach of the team

We aimed at hiring players with proven quality, all youngsters, offering us excellent prospects to

achieve not only immediate results, but also for midterm results, starting a new cycle of victories.

At the same time, we gave the group the necessary financial tools to adapt to the UEFA regulations,

the so called financial fair-play, assuring us for the future.

As they say, we took one step back to take two or three forward. That has been our path since the

creation of the company and I am certain it will remain that way.

Jorge Nuno Pinto da Costa


___________________________________________________________________________________________

___________________________________________________________________________________________


2. Governing Bodies

General Meeting

Chairman: – José Manuel de Matos Fernandes Secretary – Rui Miguel de Sousa Simões Fernandes Marrana

Board of Directors

Chairman: – Jorge Nuno de Lima Pinto da Costa Directors: – Adelino Sá e Melo Caldeira

– Fernando Manuel Santos Gomes – Reinaldo da Costa Teles Pinheiro – Rui Ferreira Vieira de Sá (non-executive)

Audit Committee

Chairman: – José Paulo Sá Fernandes Nunes de Almeida Members: – Armando Luís Vieira de Magalhães

– Filipe Carlos Ferreira Avides Moreira

Audit Firm

Deloitte & Associados, SROC SA, represented by António Manuel Martins Amaral

Company Secretary

Secretary: – Daniel Lorenz Rodrigues Pereira Substitute: – Raul Filipe Pais da Costa Figueiredo

Advisory Board

Chairman: – Alípio Dias Members: – Álvaro Jose Pereira Pinto Júnior

– Álvaro Rola – António Fernando Maia Moreira de Sá – António Manuel Gonçalves – Artur Santos Silva – Fernando Alberto Pires Póvoas – Fernando José Guimarães Freire de Sousa – Fernando Manuel dos Santos Gomes – Ilídio Costa Leite Pinho – Ilídio Pinto – Jaime Eduardo Lamego Lopes – João Espregueira Mendes – Jorge Nuno de Lima Pinto da Costa – Joaquim Manuel Machado Faria e Almeida – José Alexandre de Oliveira – José Paulo Sá Fernandes Nunes de Almeida – Jorge Alberto Carvalho Martins – Luís Portela – Rui de Carvalho de Araújo Moreira

Remuneration Committee

Chairman: – Alípio Dias Members: – Fernando José Guimarães Freire de Sousa

– Joaquim Manuel Machado Faria e Almeida


___________________________________________________________________________________________

___________________________________________________________________________________________


3. Highlights

• Negative Consolidated Net Incomes of 40,701m€, far inferior to the one obtained in the previous

period, with positive 20,356m€, caused essentially by the fewer gains obtained from the trade of

players. EBITDA (Operational Cash-Flow) remained positive, at 1,817m€;

• Operational Gains, excluding the trade of players, are down by 5,829m€, reaching 72,613m€,

which still represents a decrease inferior to the revenues from European competitions;

• Costs with staff decreased 5,180m€, representing a decrease of 10% in comparison to the previous

period, excluding the trade of players, set at 1,410m€;

• Incomes from the trade of players reached 23,907m€, representing a decrease of 52,538m€ in

comparison to 2012/2013, as the sale of sporting rights of players this season was far inferior to

the previous season, leading to a decrease in operational gains, which reached negative 25,786m€;

• The gains disclosed do not include the trade of Mangala to Manchester City, for 30,500m€, as it

was done after the period was closed.

• Despite the negative result, the Company remains within the value recommended by UEFA in

terms of Salaries vs. Operational Gains ratio (70%), excluding the gains with trade of players,

showing a value of about 67% for 2013/2014;

• Total Net Assets decreased 12% as of the 30th of June 2013, reaching a global amount of

200,396m€, considering the for the decrease in accounts from clients and for the trade value of

the squad;

• Total Liabilities increased 6%, to 233,463m€, with a bigger impact to the current component. The

Board is analysing the possibility of a financial operation to restructure that Liability to distribute

the debt on the long term;

• Negative individual Equity Capital, reaching 28,512m€ as of the 30th of June 2014, due to the net

result of that period;

• By the end of the first semester of the 2014/2015 period, the Company is expecting to once again

present positive Equity Capital, considering the increase of Equity of the Company in 37,500m€,

caused by the cash influx from the private subscription by Futebol Clube do Porto of 7,500,000

preferential stocks, without par value, to be issue by the Company, as approved in the General

Meeting of the 2nd of October.


___________________________________________________________________________________________

___________________________________________________________________________________________


4. Activity Evolution

FC Porto – Futebol, SAD fulfils its obligations to present economic and financial information, regarding

the financial year of 2013/2014, from the 1st of July 2013 to the 30th of June 2014.

This document has been executed in compliance with the current legal framework, namely the

provisions of the Companies Code, the Securities Code and the regulations of the Portuguese Securities

Market Commission (Comissão do Mercado de Valores Mobiliários – CMVM).

As required by the regulations of the European Parliament, companies with shares traded in regulated

markets seated in the European Union must use, in their consolidated financial statements, the

international accountancy standards (IAS/IFRS) adopted by the Union for all the financial years starting

on or after the 1st of January 2005.

Regarding FC Porto – Futebol, SAD, these regulations started on the fiscal year of 2005/2006. The

accounts presented for each quarter, and this annual report, were drawn up in accordance with the

international accountancy standards.


___________________________________________________________________________________________

___________________________________________________________________________________________


SUMMARY OF SPORTING ACTIVITY

The season 2013-14 started positively, with FC Porto winning another SuperCup and adding to the

history of absolute dominance in the competition. In Aveiro, against Vitória SC, in a stadium brimming

with celebration, the white and blue team won with an undisputable score of 3-0.

The weeks that followed seemed to indicate a good start in the league for FC Porto, a pace that would

prove to be irregular and ended up meaning a premature drop from the first position, a usual position

for FC Porto in last three decades.

For the UEFA competitions, despite having had good performances in the group, FC Porto missed the

qualification in Group G of the UEFA Champions League by a few inches, then moving on to the UEFA

Europa League, where they were able of eliminating Eintracht Frankfurt and Napoli, before being

eliminated by Sevilla (who would win the competition).

As for domestic competitions, FC Porto was able to qualify for several rounds of the Portuguese Cup,

being eliminated in the semi-finals, played in two legs.

At that time, the team was led by Luís Castro, who started has the coach of the B team, but ended up

being invited to lead the main squad, after the Paulo Fonseca mutual termination of contract with

Paulo Fonseca.

By the end of the period in analysis, the Board decided to present Spanish coach Julen Lopetegui as

the future coach of a squad with several well-known players, with the intention of resuming the path

of sporting success that has been the trend in the last years, interrupted in 2013-14.

Apart of the arrivals of Andrés Fernandez, Ricardo Nunes, Opare, Indi, Marcano, José Angel, Casemiro,

Campaña, Evandro, Oliver Torres, Brahimi, Otávio, Adrián Lopez, Tello and Aboubakar, several players

were traded out, including Fernando and Mangala, both to Manchester City.

The participation in the 2014-15 edition of the UEFA Champions League, reached after beating Lille in

the qualification play-off, put FC Porto in a small elite: the club holds the record of participations in the

competition (19), along with Manchester United, Barcelona and Real Madrid.


___________________________________________________________________________________________

___________________________________________________________________________________________


ECONOMIC ACTIVITY

The 2013/2014 season will remain in history as one of the most modest for Futebol Clube do Porto –

Futebol, SAD. Not only was the sporting result below expected, as the team only won the SuperCup

Cândido de Oliveira, something unseen in the last years, the Company had the worst economic and

financial net results ever, of around negative 40,701m€.

The economic and financial situation of the Company, analysed in this report, will reflect the

consolidated result, meaning, the results obtained through the individual participations of the

companies of the group included in the consolidation perimeter (FC Porto – Futebol, SAD,

PortoComercial, PortoEstádio, PortoMultimédia, PortoSeguro and Dragon Tour – and, after

2013/2014, also PortoMedia), net of the transactions done among them. Despite the fact that the

business volume of PortoComercial keeps gaining significance in the group, it is still FC Porto – Futebol,

SAD, individually, that is contributing the most for the consolidated results presented.

The period in analysis has, for the first time, the participation of the activity developed by FC Porto

Media, SA. On the 30th of July 2013, FC Porto – Futebol, Sad increased capital, by 4,000m€, in FC Porto

Media, becoming the biggest shareholder of the Company, with a direct participation of 98.78%

(corresponding to 98.81% directly and indirectly). This company’s main goal is the conception,

creation, development, production, recording, promotion, sale, acquirement, display, distribute and

broadcast of audio-visual works and programs, multimedia, television, video, cinema, theme networks,

internet, events regarding tourism, culture and sports, in any formats and system; management, use

and offer of services in the fields of recording, production and communication of audio-visual works,

TV shows, sound, images, multimedia, or any other audio-visual means; edition of periodical

publishing, books and multimedia. Still, the biggest project of this company is the TV network “Porto

Canal”.

Further ahead in this report, there is a summary of the individual results of each company in the

consolidation perimeter, and for now the focus will remain in the analysis of the last two years of

consolidated results.

As mentioned in previous reports, FC Porto – Futebol, SAD, and other Companies in this field of activity,

balance their budgets with gains obtained from trading players. The revenues described in this section,


___________________________________________________________________________________________

___________________________________________________________________________________________


which have been a major part of the gains of the Company, are fundamental for the balance of its

budget. The variations in this section are the main cause for positive/negative results of FC Porto –

Futebol, SAD. In this summer’s Transfer Market, and until the end of the current period, there were

not enough gains from the trade of players to cover the costs, as the Company delayed those trades in

order to maximize the possible gains, as happened with the sale of the player Mangala, on the 11th of

August, to Manchester City for 30,500m€.

This means that, in the period analysed, there were gains of 23,907m€, far below the usual amount

the Company achieves, resulting in negative 40,701€. The previous period had gains of around

76,445m€, which led to a net result of 20,356m€.

This result is composed of three different results:

• Operational results excluding the trade of players;

• Results related to the trade of players;

• Financial and obtained from investments results (plus taxes over income)


___________________________________________________________________________________________

___________________________________________________________________________________________


All these results had a negative behaviour in comparison to the previous period. The first component,

operational results excluding the trade of players, is the most stable throughout the periods, as they

hold recurring gains and costs year after year, and they are obtained mostly by long term contracts.

The second component, the trade of players, is the most volatile, and reflects the decisions of the

Board to, each year, reinforce, keep or let go of players in the squad. These decisions are usually the

main responsible for positive/ negative results in the Company. Lastly, the financial results show the

need for funds and access to credit of the Company.

By analysing the operational gains, excluding the trade of players, it is noticeable that there was a

significant drop in the income obtained in European competitions, which made a significant impact,

leading to a 7% break in total.

values in thousand euros

Operational Gains, excluding the trade of passes 2013/2014 % 2012/2014 %

Merchandising 3.720 5% 2.786 4%

Tickets 6.228 9% 6.521 8%

UEFA Competitions 9.552 13% 20.390 26%

Other Sporting Revenues 2.400 3% 1.136 1%

TV rights 15.928 22% 13.185 17%

Publicity and Sponsorship 13.594 19% 13.067 17%

Corporate Hospitality 14.353 20% 15.161 19%

Other Services 4.923 7% 5.091 6%

Other Gains 1.915 3% 1.105 1%

TOTAL 72.613 100% 78.441 100%

Opposing all statistics on consumerism in Portugal, the merchandising numbers increased by 34% in

this period, which is remarkable in the current economic context.

The gains from tickets, which include the sales of Dragon Seats (season tickets), game tickets and

quotas paid by the associates, decreased by 4% in 2013/2014, to 6,228m€. Despite the increase in

game tickets in this period, with the bigger number of European matches, the drop in sales of Dragon

Seats led to a decrease of 293m€ in gains from tickets.


___________________________________________________________________________________________

___________________________________________________________________________________________


The bad sporting performance in European competitions led to a decrease in revenues for the

Company of 10,838m€. the fact that the team didn’t make it to the Round of 16 of the UEFA Champions

League, being demoted to the UEFA Europa League (where the team made it to the quarter-finals) –

with lower prize money –, partly explain the difference to the previous period, which had prize money

for four victories and one tie, and the prize for the qualification to the Round of 16.

In addition to that, the accounting policy adopted by the Company implicates that the set prize for the

access to the UEFA Champions League is only accounted in the period where it was obtained, which

means that this period only had 2,100m€ for the play-off of the competition in 2014/15. The 8,600m€

that the Company won for playing the 2013/2014 edition were recorded in the 2012/2013 numbers,

when the team assured the access to the competition for the next season.

Under “Other Sporting Gains” are accounted the gains regarding the participation in other sporting

competitions other than the UEFA Champions League – the Portuguese Cup, the Supercup Cândido de

Oliveira, the League Cup and the pre-season tournaments – and the gains from the Dragon Force. The

high gains achieved for the participation of the team in tournaments in the Latin America and the

London Tournament, at the start of the season, led to an increase of 1,265m€ in this category.

Gains from broadcasting rights grew by 2,743m€ in comparison to last year. Part of this growth is due

to the progressive gains assured by the contract between FC Porto – Futebol, SAD and PPTV –

Publicidade de Portugal e Televisão S.A. (a company part of Grupo Controlinveste, which is the

contracting entity of Olivedesportos – Publicidade, Televisão e Media S.A.), for the exclusive rights of

audio-visual communication, national and international, of the FC Porto games played for the main

competition of the Portuguese League for Professional Football when playing at home. Still, the period

analysed also includes the revenues from distribution rights of PortoCanal, around 1,628m€, by

PortoMedia, who joined the Company during the 2013/2014 period.

The gains from advertisement and sponsorship come mainly from the advertisement made in the

official FC Porto gear, by their main sponsors, which were, in 2013/2014, Portugal Telecom, Nike and

Unicer. Apart from the growing set amounts throughout the season, contracts include performance

prizes, which, considering the sporting performance of this period, were below the previous season.

The commercialization of advertisement supports by PortoComercial remained stable, but it was the

gains obtained by the newest company to enter the consolidation perimeter, PortoMedia, that

contributed the most to an increase in this category, by 527m€.


___________________________________________________________________________________________

___________________________________________________________________________________________


The item “Corporate Hospitality” includes the gains regarding the management and exploration of this

segment, which belong to the companies analysed here. This business, in short, includes the availability

of a set of products and services meant for companies and include the use of cabins and seats for

companies at the Estádio do Dragão to attend the team matches. These services are billed by

PortoComercial and redirected to the company EuroAntas, held by FC Porto (Club), who uses these

gains to address the debt for the building of the stadium. The amount in excess from this business,

after all the agreements with the project finance are met, is then offered to the sporting company.

This amount was below the previous period as the associated costs were far superior, given the bigger

number of European matches.

The remaining operational gains, still not mentioned, described in the category “Other Services” and

“Other Gains”, come from operational gains of the companies, excluding the already mentioned

Merchandising gains, Rights to Broadcast, Advertise and Sponsor of PortoCanal and PortoMedia. These

gains increased by 642m€ in total.

Below is a graphical representation of the evolution of operational gains, excluding the trade of

players, considering the variables described.


___________________________________________________________________________________________

___________________________________________________________________________________________


Now taking in consideration the structure of operational costs, excluding the costs with the trade of

players, there was a decrease of 1,410m€ in comparison to 2012/2013, reaching 95,175m€ in this

period.


Operational Costs excluding costs with passes 2013/2014 % 2012/2013 %

CMV 2.607 3% 2.065 2%

External Supplies and Services 42.048 44% 37.499 39%

Costs with Staff 48.885 51% 54.065 56%

Amortizations excluding depreciation of passes 559 1% 716 1%

Provisions and impairment losses excluding passes -86 0% -733 -1%

Other costs 1.162 1% 2.974 3%

TOTAL 95.175 100% 96.585 100%

Following the increase of the merchandising sales, the sales on assets also increased, even if by a lower

percentage, leading to an improvement in this result.

The increased observed in terms of external services is explained by the costs in travelling and stays

during the participation in the pre-season tournaments played in Latin America, but also, and above

all, by the integration of the costs of PortoMedia.

A positive fact in this period is the decrease in costs with personnel, in comparison to the previous

year, by 5,180m€. Despite the inclusion of costs with salary of the employees of PortoMedia, the

decrease in the prizes associated with sporting performance, to be paid to the players, allowed for a

considerable saving to the Company.

Amortizations, excluding devaluation of passes, which have very little impact in the structure of the

costs of the Company, as they reach 1% in total, decreased around 22% in comparison to the last

period.


___________________________________________________________________________________________

___________________________________________________________________________________________


The category “Provisions and impairment losses excluding passes” has both the record of new

provisions and impairment losses and the reversion of the ones done before, if the circumstances from

which they originated from were dealt with. This category presents a negative value in both periods,

which means that their total value was above that of the new impairments recorded.

“Other costs”, where lesser, unmentioned, costs are represented, reach only 1% in total, in this period.

In 2012/2013, this category had a bigger impact as it included the repurchase of 15% of the economic

rights of João Moutinho, who ended up being transferred in that period for 25,000m€.

The graphic below shows a global representation of 1,410m€ in operational costs, excluding costs with

trade of players, justified by the described variables.

The net value resulting from the sum of operational gains and costs, excluding trades of players,

reached a global negative value of 22,562m€, representing a decrease of 4,419m€ in comparison to

the previous period.


___________________________________________________________________________________________

___________________________________________________________________________________________


It is now important to add to this analysis the second component of the net result, regarding the trade

of players (Amortizations and impairment losses with trade of players and the Result of Transactions

from the Trade of Players) which, in FC Porto – Futebol, SAD, have an undeniable and determinant

weight for the results of the Company. In this period, this balance is negative, which is unusual.

With a negative impact on the results of the Company, amortizations and impairment losses with trade

of players reached 27,131m€, representing an increase of 2% in comparison to the previous period,

associated to an increase in cuts and impairment losses with the trade of players, as amortizations

remained stable.

The Result from Trade of Players, including costs and gains from selling and loaning the sporting rights

of players, has usually been a positive category in the financial reports of the group. The 23,907m€ of

the results obtained basically came from the net assets (the costs of each business and the accounting

net value must be subtracted from any sale value) which result from the sales of sporting and economic

rights of players to other clubs/entities, and have been a substantial part of the gains of FC Porto –

Futebol, SAD and many Companies in the same activity, allowing for the balance of results. The net

assets obtained from trading players have been growing gradually throughout the seasons, but

decreased abruptly in this period by 52,538m€. The period of 2013/2014 includes the sale of sporting

rights of players Otamendi, Iturbe and Fernando to Valencia, Hellas and Manchester City, by 12,000,

15,000 and 15,000m€, respectively. Still, considering that the passes of the first two were shared by


___________________________________________________________________________________________

___________________________________________________________________________________________


other entities, the assets obtained by FC Porto – Futebol, SAD were considerably reduced. In the

previous period, the assets from selling players Alvaro Pereira and Hulk, to Inter Milan and Zenit, for

10,000 and 40,000m€, respectively, at the start of the period and, closer to the end, of João Moutinho

and James Rodríguez, to Monaco, for 25,000m€ and 45,000m€, respectively.

The results with the trade of players, which was not enough to compensate for the negative

contribution of Amortizations and impairment losses with passes, resulted in a negative balance of

3,224m€. This is the exact cause why the operational results (results before the costs and financial

gains, results regarding investments and taxes over income) were drastically reduced, going into

negative 25,786m€, representing a break of 57,561m€ in comparison to the previous season.

Lastly, the third component, financial.

In this period, there was a reduction in financial costs, caused by the decrease in costs supported by

interests. Still, financial gains also decreased, regarding the update in deadlines for incoming accounts.

Considering the decrease in gains exceeded the decrease in costs, the financial gains aggravated by

1,048m€ in comparison to the previous period.


___________________________________________________________________________________________

___________________________________________________________________________________________


The results regarding investments, which include the results obtained in investments in economic

rights of players of which the Company does not fully hold, improved 216m€ in this period, despite

remaining negative.

Lastly, the last category in the results of the Group, the tax over income of the period, reached

3,220m€. this number, compared to the previous period, grew significantly, as FC Porto – Futebol, SAD

joined a special regime to address tax debts, which hurt the results of the Group in 2,714m€, in this

period. Still, the company will keep building a case to address the audits established, which may mean

the inversion of part of these costs in the next periods.

To conclude this analysis, the Consolidated Net Result of the Company was negative by 40,701m€,

attributable to owners of own capital of the mother-company.

Still, what EBITDA – the operational cash-flow measured by the operational result, net amortizations,

impairment losses and provisions – shows is that, despite presenting a considerable decrease, it

remains positive in this period, by 1,817m€.


___________________________________________________________________________________________

___________________________________________________________________________________________


Even if the accounting of the Company is openly negative, it matters to present a fundamental

indicator in this sector of activity, which shows the weight that the costs with staff have on the gain

structure. Using an indicator that has been frequently used by experts in the financial analysis of the

world of football, this ratio, which must not include gains from trade of players, has to be below 70%,

as recommended by UEFA. As the following graphic shows, the Company has been able to keep that

ratio under the number advised, despite the club’s constraints, as a club of a small country, in raising

normal ticket sales (tickets, television revenues and advertisement), in comparison to major European

clubs, in order to retain the same competitiveness and pay lower salaries.

Now moving on to the situation of patrimony of the Group on the 30th of June 2014, the negative own

capital is highlighted, due to the inclusion of the net result presented. The individual own capital of FC

Porto – Futebol, SAD reach negative 28,512m€, so the Company is still under article 35º of the

Portuguese Companies Code.

Regarding the net assets, which reach 200,396m€, there was an overall decrease of 27,457m€, in

comparison to the 30th of June 2013, split by the short and long term component. A big part of that

decrease is based on the drop of amounts being received by clients; still, there was also a decrease in

accounting value on the squad, which now reaches 61,506m€, even if that doesn’t fully reflect the

value of the market, as the Company has been receiving relevant assets in the sale of those rights.


___________________________________________________________________________________________

___________________________________________________________________________________________


The total liability of the Group reached, as off the 30th of June 2014, 233,463m€, representing an

increase of 6% in comparison to the 30th of June of the previous year.


___________________________________________________________________________________________

___________________________________________________________________________________________


The structure of the liability appears penalized, in comparison to the 30th of June 2014, due to the

proximity of a reimbursement of one of the bond loan, reaching 30M€. At the moment, the Company

has two bond loans active, one for 30M€, to be reimbursed on the 21st of May 2015 and a second one

for 20M€, which will be fully paid on the 6th of June 2017. The Board of Directors is considering a

financial operation to restructure that liability, to settle a significant part of it on the long term.

As stated, FC Porto – Futebol, SAD is, as off the 30th of June 2014, under the terms of article 35º of the

Portuguese Companies Code, with its own capitals, on an individual level, representing less than half

the social capital.

To reinforce the own capital, on the 2nd of October, Futebol Clube do Porto – Futebol, SAD, in a special

General Meeting, approved, among other things, the increase of the social capital of the Company by

37,500m€, allowed by the cash inflow through the private subscription by Futebol Clube do Porto of

7,500,000 shares, not carrying voting rights, to be emitted by the Company.


___________________________________________________________________________________________

___________________________________________________________________________________________


INDIVIDUAL PERFORMANCE OF THE COMPANIES IN THE CONSOLIDATION PERIMETER

The numbers shown so far present the consolidated economic and financial situation of FC Porto –

Futebol, SAD, which means that the accounting of all the seven companies (six in 2012/2013) in the

consolidation perimeter are taken into account.

Below is the individual performance of each of them, before the consolidation adjustments:


Companies in the group FC Porto

Futebol, SAD

Porto

Comercial

Porto

Estádio

Porto

Multimédia

Porto

Seguro

Dragon

Tour

Porto

Media

Operational Gains excluding Trade of Players 48.791 19.196 3.798 648 955 2.787 2.927

Operational Costs excluding Trade of Players (69.658) (20.630) (3.901) (305) (573) (2.817) (3.780)

Operational Results excluding Trade of Players (20.867) (1.434) (102) 343 381 (30) (854)

Amortizations and Impairment loses with Trades (27.131) - - - - - -

(Costs)/Gains with Trades 23.907 - - - - - -

Operational Results (24.091) (1.434) (102) 343 381 (30) (854)

Financial Results (9.759) (411) (0) - 0 (0) -

Results related to Investments (1.532) - - - - - -

Taxes over Income (3.013) (39) (40) (12) (93) (6) (18)

Net Result of the year (38.395) (1.883) (143) 331 289 (36) (872)

The table above shows that the consolidated result reached by FC Porto – Futebol, SAD was achieved

almost exclusively by the individual result of the Company. Still, the aggregate of the other companies

part of the consolidation perimeter was also negative, leading to a decreased individual result.


___________________________________________________________________________________________

___________________________________________________________________________________________


5. Other Facts Occurred During the Exercise

• On the 30th of July 2013, FC Porto – Futebol, SAD did an increase to capital by 4,000m€ on FCP

Media, SA with the social object “Activities regarding Public Relations and Communication.

Conception, creation, development, production, recording, promotion, sale, acquirement, display,

distribute and broadcast of audio-visual works and programs, multimedia, television, video,

cinema, theme networks, internet, events regarding arts, culture and sports, in any formats and

system; management, use and offer of services in the fields of recording, production and

communication of audio-visual works, TV shows, sound, images, multimedia, or any other audio-

visual means; edition of periodical publishing, books and multimedia; providing of services related

to those activities”, does become the main shareholder.

• Following the emission of bonds by the Company, there was a payment of interests on coupon n.

2 and n. 3 of the bonds “FC PORTO SAD MAIO 2015”, on the 21st of November 2013 and 21st of

May 2014, respectively. The reimbursement of the operation will occur on the 21st of May 2015,

as set in the prospect of public offer.

• Following the emission of bonds by the Company, there was a payment of interests on coupon n.

5, on the 3rd of December 2013, and the payment of interests on coupon n. 6 and reimbursement

of bonds “FC PORTO SAD 201-2014”, on the 3rd of June 2014, as set in the terms for the loan,

included in the public offer.

• Angelino Cândido de Sousa Ferreira renounced, on the 19th of February 2014, to his role as Director

of FC Porto – Futebol, SAD, starting as off the 31st of March 2014. On that same day, Fernando

Manuel Santos Gomes was appointed to replace him.

• On the 5th of March 2014, FC Porto – Futebol, SAD reached an agreement to terminate the contract

with Paulo Fonseca from coach of the main squad. Luís Castro took over the role of interim coach

on the same day.

• The Company reached an agreement on the 6th of May 2014 with Julen Lopetegui to become the

coach of the main squad, valid for 3 sporting seasons.


___________________________________________________________________________________________

___________________________________________________________________________________________


• On the 4th of June 2014, in a special regulated market session, the result of the Public Offer for

Subscription of Bonds “FC PORTO SAD 2014-2017” was presented. The offer was composed of 4

million bonds (after the emission was broadened), worth 5€ (global amount: 20,000m€), but the

demand was over 51.9 million bonds (worth 259,000m€), which means it surpassed the offer by

12.98 times, leading to a ratio of around 0.0742. it should be noted that the demand fully

surpassed the offer on the first day, after the extended emission, with 32.2 million bonds and 8,442

investors.


___________________________________________________________________________________________

___________________________________________________________________________________________


6. Relevant Facts that Occurred after the Term of the Period

• On the 12th of July 2014, FC Porto – Futebol, SAD reached an agreement with Club Atlético de

Madrid for the acquisition of the sporting rights, and 60% of the economic rights, of professional

player Adrián López Álvarez, for 11,000m€. The player signed a contract valid for 5 sporting

seasons, with a release fee of 60,000m€.

• On the 15th of July 2014, FC Porto – Futebol, SAD reached an agreement with Feyenoord Rotterdam

for the acquisition of sporting rights, and full economic rights, of professional player Bruno Martins

Indi, for 7,700m€. The player signed a contract valid for 4 sporting seasons, with a release fee of

40,000m€.

• On the 16th of July 2014, the Company assured the rights to inscribe player Cristian Tello Herrera,

from Futbol Club Barcelona, for 2 sporting seasons, with a purchase fee for the sporting and

economic rights.

• On the 19th of July 2014, the Company assure the rights to inscribe player Carlos Henrique

Casemiro, from Real Madrid Club de Fútbol, until the 30th of June 2015, with a purchase fee for the

sporting rights.

• On the 22nd of July 2014, FC Porto – Futebol, SAD reached an agreement with Granada Club de

Fútbol for the acquisition of the sporting rights, and full economic rights, of professional player

Yacine Brahimi, for 6,500m€. The player signed a contract valid for 5 sporting seasons, with a

release fee of 50,000m€. On the 24th of July 2014, the Company alienated, under economic

association, 80% of the economic rights of this athlete for 5,000m€, to Doyen Sports Investments

Limited.

• On the 2nd of August 2014, FC Porto – Futebol, SAD extended, for an extra year, until the 30th of

June 2017, the contract binding the Company and player Jackson Martínez, changing his release

fee to 35,000m€. In this renewal process, 5% of the net value of any future transfer was conceded

to his agent – Luiz Henrique Ferreira Pompeo –, as a prize for the negotiations with the athlete.


___________________________________________________________________________________________

___________________________________________________________________________________________


• On the 11th of August 2014, FC Porto – Futebol, SAD reached an agreement with Manchester City

for the full transfer of sporting rights, and the 56.67% of economic rights held by the Company, of

professional player Eliaquim Mangala, for 30,500m€.

• On the 13th of August 2014, FC Porto – Futebol, SAD, the Company reached an agreement with

Royal Sporting Club Anderlecht for the full transfer of the sporting rights of professional player

Steven Defour, for 6,000m€. The agreement for this transfer included the payment of a variable

prize, which means the total amount may reach 6,500m€.

• On the 24th of August 2014, FC Porto – Futebol, SAD reached an agreement with Football Club

Lorient Bretagne Sud for the transfer of sporting rights, and 30% of economic rights, of professional

player Vincent Aboubakar, for 3,000m€. The player signed a contract valid for 4 sporting seasons,

with a release fee of 50,000m€.

• On the 2nd of October 2014, FC Porto – Futebol, SAD gathered in special General Meeting, having

approved, among others, the following orders:

o Increase of social capital of the Company by 37,500m€, through the cash influx by the private

subscription by Futebol Clube do Porto of 7,500,000 shares, without vote rights, to be issued

by the Company.

o The acquisition, by the Company to Futebol Clube do Porto, of shares representing 50% of the

social capital of the company EuroAntas, a company whose main asset is Estádio do Dragão,

with an evaluation report being presented, by the independent Auditor, setting its value at

110,120,750 Euros.

• On that same day, the 2nd of October, Futebol Clube do Porto acquired 2,818,185 ordinary shares

of the Company, for €0.65 per share, from Somague Imobiliária, S.A. and Somague – Engenharia,

S.A., companies under Sacyr Vallehermoso, S.A., corresponding to 18.79% of the social capital and

voting rights of Sociedade Visada, becoming the main holder of the social capital of Futebol Clube

do Porto, SAD.

• As 50% of the vote rights were overcome, and according to n. 187 of the Portuguese Securities

Market Code, Futebol Clube do Porto launched a public offer to acquire the full ordinary shares

issued by Futebol Clube do Porto – Futebol, SAD.


___________________________________________________________________________________________

___________________________________________________________________________________________


7. Future Perspectives

After an economic period with a net result above 20,000m€, FC Porto – Futebol, SAD presents a

negative result in the current period. This period is set by the strategic decision to not selling some of

the assets held by the Company, in order to compete at higher level in 2014/2015. We believe to be in

condition to do so.

The FC Porto DNA is to be national champion, and we will always fight for that trophy that keeps

landing in the FC Porto Museum (FC Porto won 9 of the 14 championships played in the XXI Century).

Apart from sporting glory, the access to the UEFA Champions League is extremely important for

acknowledgement and for the budget of the Company.

This season started with Julen Lopetegui taking the role of coach of the main squad, a man that is seen

as ideal to lead the team. Several young athletes were recruited, players with guaranteed value, quality

and considerable potential. These assets and the ambition of the coach are determinant for a steady

and long evolution of the squad, and to go as far as possible in every competition. The team was able

to win the qualification play-off for the UEFA Champions League, assuring the participation in the

biggest competition in European football, where FC Porto is usually seen, holding a record in

participations, along Barcelona, Real Madrid and Manchester United.

FC Porto insists on winning, but does it with a sense of responsibility, preserving values and anticipating

a surely auspicious future ahead.


___________________________________________________________________________________________

___________________________________________________________________________________________


8. Information on own shares

FC Porto – Futebol, SAD holds 100 own shares, consolidated, worth 499€. These shares, although a

small representation of the social capital of the company, belong to PortoSeguro, a company of the

group held at 90% by FC Porto – Futebol, SAD.

PortoSeguro has acquired 100 shares at the moment the SAD was formed, in 1997, and never alienated

or acquired any more shares. Thus, in the beginning and the end of the financial year, FC Porto –

Futebol, SAD had 100 shares, worth 500€.

9. Statement of the Board of Directors

Under the terms of paragraph c) of point 1 of article 245 of the Securities Code, the directors of FC

Porto – Futebol, SAD, in charge of the company, state that, to their knowledge, the information

presented in this report, the annual accounts and other accounting documents required by law or

legislation, even if not approved by General Meeting, has been gathered in conformity with

international financial reporting standards adopted in the European Union, giving a true and accurate

image of assets and liabilities, of the financial situation and results of the issuer and of the companies

included in the Group, and that the management report faithfully lays out the evolution in business,

performance and position of the issuer and of the companies included in the Group, and contains a

description of the main risks and uncertainties the company has to face.


___________________________________________________________________________________________

___________________________________________________________________________________________


Porto, 9th of October 2014

Board of Directors

________________________________

Jorge Nuno Lima Pinto da Costa

________________________________

Adelino Sá e Melo Caldeira

________________________________

Fernando Manuel Santos Gomes

________________________________

Reinaldo da Costa Teles Pinheiro

________________________________

Rui Ferreira Vieira de Sá


___________________________________________________________________________________________

___________________________________________________________________________________________


B. Consolidated Financial Statements and Appendix

1. Statements of Consolidated Financial Position

ASSETS Notes 30.06.2014 30.06.2013

NON-CURRENT ASSETS

Tangible assets 7 1.197.406 1.561.106

Intangible assets - Players' registrations 8 61.505.641 76.158.898

Other intangible assets 7 1.764.128 1.748.553

Other financial assets 9 and 22 720.999 2.246.568

Goodwil l 6 and 10 3.139.715 238.045

Trade receivables 11 11.243.921 24.766.753

Other non-current assets 13 24.691.949 15.253.094

Total non current assets 104.263.759 121.973.017

CURRENT ASSETS

Inventories 12 and 22 1.596.982 1.112.554

Trade receivables 11 and 22 64.498.529 64.129.401

Other current assets 13 15.071.223 22.819.817

Cash and cash equivalents 14 14.965.439 17.817.786

Total current assets 96.132.173 105.879.558

TOTAL ASSETS 200.395.932 227.852.575

EQUITY AND LIABILITIES

EQUITY

Share capital 16 75.000.000 75.000.000

Own shares (499) (499)

Share issue premiums 259.675 259.675

Legal reserve 169.075 132.753

Other reserves 652.307 188.262

Retained earnings (68.266.976) (88.122.609)

Consolidated net result for the year (40.701.114) 20.355.997

Equity attributable to equity holders of the parent company (32.887.532) 7.813.579

Non-controll ing interests 17 (179.808) (186.224)

TOTAL EQUITY (33.067.340) 7.627.355

LIABILITIES

NON-CURRENT LIABILITIES

Bank loans 18 19.112.500 13.225.000

Bonds 18 19.395.933 29.526.645

Other creditors 19 - 7.669.894

Trade payables 20 1.006.255 3.745.563

Other non current l iabilities 21 12.762.622 10.206.032

Pension l iabil ities 23 448.818 -

Provisions 22 410.555 1.924.649

Total non current liabilities 53.136.683 66.297.783

CURRENT LIABILITIES

Bank loans 18 71.040.781 43.004.014

Bonds 18 29.591.657 9.617.134

Other creditors 19 10.027.940 -

Trade payables 20 35.846.536 61.677.137

Other current liabil ities 21 33.819.675 39.629.152

Total current liabilities 180.326.589 153.927.437

TOTAL LIABILITIES 233.463.272 220.225.220

TOTAL EQUITY AND LIABILITIES 200.395.932 227.852.575


___________________________________________________________________________________________

___________________________________________________________________________________________


2. Consolidated Statements of Results by Category

Notes 30.06.2014 30.06.2013

Sales 3.720.078 2.785.715

Services rendered 24 66.978.193 74.550.782

Other income 28 1.914.559 1.104.858

Cost of goods sold 12 (2.606.929) (2.064.513)

External supplies and services 25 (42.048.016) (37.498.709)

Payroll expenses 26 (48.885.294) (54.065.254)

Amortisation and depreciation excluding amortisation of players' registrations 7 (559.339) (716.489)

Provisions and impairment losses excluding players' registrations 22 86.273 733.305

Other expenses (1.161.977) (2.973.531)

Operational profit/(loss) excluding results with players' registrations (22.562.452) (18.143.836)

Amortisation and impairment losses of players' registrations 27 (27.130.704) (26.526.558)

Income/(expenses) related with transactions of players' registrations 27 23.906.857 76.445.209

(3.223.847) 49.918.651

Total operacional profit/(loss) (25.786.299) 31.774.815

Financial expenses 29 (12.734.466) (12.893.251)

Financial income 29 2.564.942 3.771.307

Gains and losses in investments 9, 10, 22 and 30 (1.532.169) (1.747.916)

Profit/(loss) before income tax (37.487.992) 20.904.955

Income tax 15 (3.219.926) (575.060)

Consolidated profit/(loss) for the year (40.707.918) 20.329.895

Attributable to:

Equity holders of the parent company (40.701.114) 20.355.997

Non-controlling interests 17 (6.804) (26.102)

32 (2,71) 1,36

Earnings per share

Basic (2,71) 1,36

Diluted (2,71) 1,36


___________________________________________________________________________________________

___________________________________________________________________________________________


3. Consolidated Statements of Comprehensive Income

Notes 30.06.2014 30.06.2013

Net consolidated profit / (loss) for the year (40.707.918) 20.329.895

Other comprehensive income for the year

Items that wil l not be reclassified to net income - -

Items that future will be reclassified to net income - -

Total consolidated comprehensive income for the year (40.707.918) 20.329.895

Attributable to:

Equity holders of the parent company (40.701.114) 20.355.997Non-controlling interests 17 (6.804) (26.102)


___________________________________________________________________________________________

___________________________________________________________________________________________


4. Consolidated Statements of Changes in Equity Capital

Att

rib

uta

ble

to

eq

uit

y h

old

ers

of

the

pa

ren

t co

mp

an

y

Sha

re

Sha

reA

cçõ

es

Ow

nis

sue

Lega

lO

ther

Ret

ain

ed

Co

nso

lid

ate

d n

etN

on

-co

ntr

oll

ing

cap

ita

lP

róp

ria

ssh

are

sp

rem

ium

sre

serv

ere

serv

esea

rnig

s r

esu

lt f

or

the

yea

rTo

tal

in

tere

sts

Tota

l

Ba

lan

ce a

s a

t 1

Ju

ly 2

01

27

5.0

00

.00

0-

(49

9)

25

9.6

75

13

2.7

53

65

2.3

07

(52

.82

4.0

85

)(3

5.7

62

.56

8)

(12

.54

2.4

17

)(1

15

.67

8)

(12

.65

8.0

95

)

Ap

pro

pri

ati

on

of

con

soli

da

ted

pro

fit

of

20

11

:

Tra

nsf

er t

o r

eta

ined

ea

rnin

gs-

--

--

(46

4.0

45

)(3

5.2

98

.52

4)

35

.76

2.5

68

(1)

-(1

)

Div

iden

ds

dis

trib

uti

on

--

--

--

--

-(4

4.4

44

)(4

4.4

44

)

Tota

l co

nso

lid

ate

d c

om

pre

hen

sive

in

com

e fo

r th

e ye

ar

--

--

--

20

.35

5.9

97

20

.35

5.9

97

(26

.10

2)

20

.32

9.8

95

Ba

lan

ce a

s a

t 3

0 J

un

e 2

01

37

5.0

00

.00

0-

(49

9)

25

9.6

75

13

2.7

53

18

8.2

62

(88

.12

2.6

09

)2

0.3

55

.99

77

.81

3.5

79

(18

6.2

24

)7

.62

7.3

55

Ba

lan

ce a

s a

t 1

Ju

ly 2

01

37

5.0

00

.00

0-

(49

9)

25

9.6

75

13

2.7

53

18

8.2

62

(88

.12

2.6

09

)2

0.3

55

.99

77

.81

3.5

79

(18

6.2

24

)7

.62

7.3

55

Ap

pro

pri

ati

on

of

con

soli

da

ted

pro

fit

of

20

12

Tra

nsf

er t

o l

ega

l re

serv

e -

--

-3

6.3

22

--

(36

.32

2)

--

-

Tra

nsf

er t

o o

ther

res

erve

s-

--

--

46

4.0

45

-(4

64

.04

5)

--

-

Tra

nsf

er t

o r

eta

ined

ea

rnin

gs-

--

--

-1

9.8

55

.63

3(1

9.8

55

.63

3)

--

-

Ch

an

ges

in r

eser

ves

--

--

--

-3

31

3.2

20

13

.22

3

Tota

l co

nso

lid

ate

d c

om

pre

hen

sive

in

com

e fo

r th

e ye

ar

--

--

--

(40

.70

1.1

14

)(4

0.7

01

.11

4)

(6.8

04

)(4

0.7

07

.91

8)

Ba

lan

ce a

s a

t 3

0 J

un

e 2

01

47

5.0

00

.00

0-

(49

9)

25

9.6

75

16

9.0

75

65

2.3

07

(68

.26

6.9

76

)(4

0.7

01

.11

4)

(32

.88

7.5

32

)(1

79

.80

8)

(33

.06

7.3

40

)


___________________________________________________________________________________________

___________________________________________________________________________________________


5. Consolidated Statements of Cash flow

Notes

Operating activities:Cash receipts from trade debtors 65.454.943 74.264.191Cash payments to trade creditors (47.834.299) (44.354.617)Cash payments to employees (50.468.736) (54.689.110)Other cash receipts/(payments) relating to operating activities (4.022.410) (4.667.460)Income taxes (paid)/received (4.566.891) (41.437.393) (613.240) (30.060.236)

Net cash flow from operating activities (1) (41.437.393) (30.060.236)

Investment activities:Cash receipts arising from:Tangible assets 23.700 49.000Players' registrations 71.246.628 122.183.176Interest and similar income 620.168 71.890.496 1.073.518 123.305.694

Cash payments arising from:

Players' registrations (68.127.923) (55.690.981)

Tangible assets (159.085) (68.287.008) (597.365) (56.288.346)

Net cash from/(used in) investment activities (2) 3.603.488 67.017.348

Financing activities:

Cash receipts arising from:

Loans obtained from investors (Note 19) 1.500.000 -

Loans obtained 95.368.000 96.868.000 131.993.634 131.993.634

Cash payments arising from:

Loans obtained from investors (Note 19) - (8.750.000)

Dividends - (44.444)

Loans obtained (51.017.500) (133.132.585)

Interest and similar charges (10.868.942) (61.886.442) (11.122.488) (153.049.517)

Net cash from/(used in) financing activities (3) 34.981.558 (21.055.883)

Cash and cash equivalents at the beginning of the financial year14 17.817.786 1.916.557

Net increase/(decrease) of cash and cash equivalents: (1)+(2)+(3) (2.852.347) 15.901.229Cash and cash equivalents at the end of the financial year 14 14.965.439 17.817.786

30.06.2014 30.06.2013


___________________________________________________________________________________________

___________________________________________________________________________________________


6. Notes to Consolidated Financial Statements 1. INTRODUCTION Futebol Clube do Porto - Futebol, S.A.D. (‘FCPorto, SAD’ or ‘the Company’), with head office at

Estádio do Dragão, Via F.C. Porto, Entrada Poente, 3rd Floor, 4350-451 Porto, was incorporated on 30 July 1997, and is the parent company of a group companies as presented in Note 5 as the FCP Group (‘Group’). Its’ main activity considers the participation in professional football competitions and the sporting events promotion and organization.

These consolidated financial statements are presented in euro, rounded to units, which is the currency presented by the Company in its operations and therefore considered its functional currency.

2. SIGNIFICANT ACCOUNTING POLICIES The significant accounting policies used in the preparation of the accompanying consolidated

financial statements are as follows: 2.1 BASIS OF PRESENTATION The accompanying consolidated financial statements have been prepared on a going concern

basis from the books and accounting records of the companies included in the consolidation, adjusted in the consolidation process to reflect International Financial Reporting Standards effective for financial years beginning 1 July 2013, as adopted by the European Union. Such standards include the International Financial Reporting Standards (‘IFRS’) issued by the International Accounting Standards Board (‘IASB’), the International Accounting Standards (‘IAS’) issued by the Accounting Standards Committee (‘IASC’) and the respective interpretations – SIC and IFRIC issued by the International Financial Reporting Interpretation Committee (‘IFRIC’) and Standing Interpretation Committee (‘SIC’), that have been adopted by the European Union. These standards and interpretations are referred to hereinafter collectively as ’IAS/IFRS’.

The interim financial statements were prepared, quarterly, in accordance with IAS 34 – Interim

Financial Report. During the year ended as of 30 June 2014, no changes occurred in relation to the accounting policies presented in the consolidated financial statements as of 30 June 2013.

The following standards, interpretations, amendments and revisions adopted (“endorsed”) by the European Union have become effective during the year ended as of 30 June 2014:

Standard/Interpretation Effective date

IFRS 1 (Amendment) - First time adoption of IFRS

01-Jan-2013 This amendment exempts entities adopting IFRS for the first time the retrospective application of the provisions of IAS 39 and paragraph 10A of IAS 20 relating to government loans.


___________________________________________________________________________________________

___________________________________________________________________________________________


IFRS 7 - (Amendment) - Disclosures of Financial Instruments Amendment to IAS 19 – Employees benefits

01-Jan-2013 01-Jan-2013

This amendment requires additional disclosures regarding financial instruments, particularly, information related with compensation of financial assets and liabilities. The revision of this standard included the following alterations:

(i) Actuarial gains and losses arising from differences between the assumptions used in determining liability and the expect return plan assets and the effective amounts, as well as those resulting from change of actuarial and financial assumptions during the year are to be recognized immediately and only in "Other comprehensive income”: (ii) it shall be applied to a single interest rate in determining the present value of liabilities and the expected return on plans assets; (iii) The costs recorded in results correspond only to the current services and costs with net interests; (iv) New disclosures are required;

IFRS 13 (New) – Fair value: measurement

1-Jan-13 This standard establishes a single source of guidance for fair value measurements and disclosures about fair value measurement. IFRS 13 applies when another IFRS requires or permits measurements or disclosure of fair value.

IFRIC 20 – Discovery costs in the production phase of an open cast mine

1-Jan-13 This interpretation clarifies the recording of certain costs during the production phase of a surface mine.

Improvements to International Financial Reporting Standards (cycle 2009-2011)

1-Jan-13 These standards involve the review of several standards, including IFRS 1 (repeated application of the standard), IAS 1 (comparative information), IAS 16 (classification of servicing equipment), IAS 32 (tax effect of equity distributions) and IAS 34 (segment information).

The adoption and application of these standards and interpretations did not produce material changes in the financial statements of the Group as of 30 June 2014.

The following standards, interpretations, amendments and revisions, with mandatory application in future years, were, until the approval date of the accompanying financial statements, endorsed by the European Union:


___________________________________________________________________________________________

___________________________________________________________________________________________


Standard/Interpretation

Effective date

IFRS 10 – Consolidated Financial Statements

01-Jan-2014

This standard requires a parent to present consolidated financial statements as a single economic entity, replacing the requirements previously contained in IAS 27 Consolidated and Separate Financial Statements and SIC-12 Consolidation - Special Purpose Entities. The Standard also introduces new rules with respect to the definition of control and determination of the scope of consolidation.

IFRS 11 – Joint Arrangements

2014 This standard replaces IAS 31 - Joint Ventures and SIC 13 - Jointly Controlled Entities – Non-Monetary contributions by ventures and comes to eliminate the possibility of using the proportionate consolidation method to account the interests in joint ventures.

IFRS 12 – Disclosure of Interests in Other Entities

01-Jan-2014

This standard has established a new set of disclosures related to the interests in subsidiaries, joint arrangements, associates and unconsolidated entities.

IAS 27 - Separate Financial Statements (2011)

1-Jan-14

This amendment restricts the IAS 27’s scope to the Separate Financial Statements.

IAS 28 – Investments in Associates and Joint Ventures (2011)

1-Jan-14 This amendment is to ensure consistency between IAS 28 - Investments in associates and new standards adopted, in particular IFRS 11 - Joint Arrangements.

Amendment to the following standards:

• IFRS 10 - Consolidated Financial Statements;

• IFRS 12 - Disclosure of Interests in other entities

1-Jan-14 This amendment introduces an exemption from consolidation for certain entities that meet the definition of investment entity. It also determines rules for measurement of investments held by these investment entities.

IAS 32 – Amendments (Financial assets and liabilities)

1-Jan-14 This amendment clarifies certain aspects of the standard due to the diversity of requirements in applying for compensation between financial assets and liabilities.

IAS 36 (Amendment) – Impairment (Recoverable Amount Disclosures for Non-Financial Assets)

1-Jan-14 This amendment eliminates the disclosure requirements of the recoverable amount of a cash-generating unit like goodwill or intangible assets with indefinite useful lives allocated to periods where it was not recorded any impairment loss or reversal of impairment. Introduces additional disclosure requirements for assets for which it was recorded an impairment loss or reversal of impairment and the recoverable amount of these has been determined based on fair value less costs to sell.


___________________________________________________________________________________________

___________________________________________________________________________________________


IAS 39 (Amendment) – Financial Instruments: Recognition and Measurement (Novation of Derivatives and Continuation of Hedge Accounting)

1-Jan-14 This amendment allows, the continuation of hedge accounting when a derivative designated as a hedging instrument is overhauled.

The Group didn’t early adopt any of these standards to the Financial Statements of the year ended 30 June, 2014. There aren’t expected any material impacts in the consolidated financial statements arising from its adoption. The following standards, interpretations, amendments and revisions with mandatory application in future years, have not yet been endorsed by the European Union at the date of approval of these financial statements:

Standard/Interpretation

IFRS 9 – Financial Instruments (2009) and subsequent amendments

T TThis standard is inserted in the IAS 39 revision project and eestablishes the requirements for classifying and measuring fifinancial assets.

Amendments to the standards:

• IFRS 9 – Financial instruments (2013);

• IFRS 7 – Financial instruments - Disclosures

TThe amendment to IFRS 9 is inserted in the IAS 39 revision pproject and establishes the requirements to the application of the hhedging accounting rules. IFRS 7 was also revised following this aamendment.

Amendment to IAS 19 – Employees benefits

TThis amendment clarifies in what circumstances the employees’ ccontributions to retirement benefit plans constitute a reduction of t the cost with short-term benefits.


TThese improvements involve the revision of several standards.


TThese improvements involve the revision of several standards.

IFRIC 21 – Levies

This amendment establishes the conditions of the timing of recognition of a liability related with a levy imposed by a government in result of determined event (for example the participation in certain market) in cases that payment has, as counterpart goods or services.


___________________________________________________________________________________________

___________________________________________________________________________________________


Amendment to IAS 16 - "Tangible Fixed Assets" and IAS 38 - "Intangible Assets" Amendment to IFRS 11 - "Joint Arrangements"

This amendment clarifies the methods accepted for depreciation and amortization of tangible and intangible assets. This amendment clarifies the accounting for acquisitions of interests in joint arrangements.

IFRS 14- “Regulatory deferral accounts”

The purpose of this standard is to specify the disclosure requirements applicable to balances arising from the supply of goods or services to customers at prices or rates that are subject to regulation.

IFRS 15- “Revenue from contracts with customers”

The purpose of this standard is to specify disclosure requirements for related with revenue recognition.

These standards have not yet been approved (“endorsed”) by the European Union and, as such, were not adopted by the Group for the year ended June 30, 2014.

2.2 BASIS OF CONSOLIDATION The consolidation methods adopted by the Group in the preparation of the consolidated financial

statements are as follows:

a) Investments in Group companies Investments in companies in which the Group owns, directly or indirectly, more than 50% of

the voting rights at Shareholders’ General Meetings or is able to establish financial and operational policies (definition of control used by the Group), are included in the consolidated financial statements using the full consolidation method. Equity and net profit attributable to minority shareholders are shown separately, under the caption ‘Non-controlling interests’, in the consolidated statement of financial position and in the consolidated income statement. Companies included in the consolidated financial statements using the full consolidation method are listed in Note 5.

Adjustments to the financial statements of Group companies are performed, whenever

necessary and considered relevant, in order to adapt accounting policies to those used by the Group. Intra-group balances and transactions are eliminated on consolidation process.

b) Goodwill

Differences between the cost of acquisition of investments in Group companies and the fair

value of the identifiable assets and liabilities of those companies at the date of acquisition, when positive, are shown as Goodwill (Note 10).


___________________________________________________________________________________________

___________________________________________________________________________________________


Goodwill is not amortised, being subject to impairment tests on an annual basis. Net recoverable amount is determined based on business plans performed by the Group management or on valuation reports issued by independent entities. Impairment losses recognized in the period are recorded in the income statement under the caption ‘Provisions and impairment losses, excluding players’ registrations. Impairment losses related with goodwill may not be reversed.

2.3 MAIN ACCOUNTING POLICIES The main accounting policies used in the preparation of the consolidated financial statements are

as follows:

a) Tangible assets Tangible assets acquired up to 1 July 2004 (transition date to IFRS) are recorded at deemed

cost, which corresponds to the acquisition cost net of accumulated depreciation and impairment losses recorded up to that date.

Tangible assets acquired after that date are recorded at acquisition cost net of accumulated

depreciation and impairment losses. Depreciation is calculated on a straight line basis, as from the date the assets are first used,

over the expected useful life for each group of assets. The expected useful life of the main groups of assets is as follows:

Buildings and other constructions - 8 to 20 years Machinery and equipment - 4 to 10 years Transport Equipment - 3 to 8 years Office equipment - 3 to 8 years Other tangible assets - 1 to 10 years Maintenance and repair costs relating to tangible assets which do not increase their useful life

nor result in significant benefits or improvements are recorded directly as expenses in the period they are incurred.

Gains or losses arising on sale or disposal of tangible assets are calculated as the difference

between the selling price and the carrying amount of the asset at the date of its sale/disposal; these are recorded in the income statement under either ‘Other income’ or ‘Other expenses’.

b) Intangible assets - Players’ registrations

The caption ‘Intangible assets - Players’ registrations’ includes costs related with the

acquisition of players’ registrations, including intermediation service costs, as well as signing-on fees paid directly to the players, in accordance with the Decree-Law 103/97 of 13 September.

When the percentage owned of players’ registrations is less than 100% (see Note 8), it means

that although the Company is entitled to full use of the player’s registration, it has entered into


___________________________________________________________________________________________

___________________________________________________________________________________________


an associated financial interests contract with a third party, which consists of an investment partnership in the registration rights, resulting in the proportional sharing of the inherent results in future the transaction of these rights.

If is estimated a loss on the recoverable amount of a player’s registration (‘impairment loss’),

the corresponding impact is recognized in the income statement under the caption ‘Amortization and impairment losses of players' registrations’. The recognition and quantification of such impairment losses consider the carrying amount of players’ registrations, as of 30 June 2014, of players whose labour contracts have been terminated up to the approval date of the consolidated financial statements.

Costs associated with securing the extension of a player’s labour contract are also recorded

under the caption ‘Intangible assets - Players’ registrations’, being determined a new book value for the player’s registration which is amortized over the remaining revised contract term.

Costs included in the caption ‘Intangible assets - Players’ registrations’ are amortized over the

period covered by contracts celebrated between the players and the Company, in accordance with Decree-Law 103/97 of 13 September.

“Players on loan” The acquisition costs of players’ registrations that are on temporary loan to other clubs are maintained in the caption ‘Intangible assets - Players’ registrations’ and continue to be amortized over the number of years these rights expire, according to the player’s labour contract, as it’s considered to exist a potential valorization of the player registration while the player plays by other club under the referred loan. If a loss is estimated on the recoverable amount (‘impairment loss’) of the players’ registrations on loan up to the end of the contract period, namely when the player is borrowed in its last year of contract, the corresponding effect is recorded in the income statement under the caption ‘Amortization and impairment losses of players' registrations’.

c) Other intangible assets Other intangible assets (non-players’ registration) are stated at acquisition cost net of

depreciation and accumulated impairment losses. Intangible assets are only recognized if it is probable that future economic benefits will flow from them to the Group, if they are controlled by the Group and if their value can be reliably measured.

Depreciation is charged, on a straight-line basis over the estimated useful life of the assets as

from the date the assets are available for use (Note 7). d) Leasing and long term rental

Tangible assets acquired under finance lease contracts and the corresponding liabilities are

recorded in accordance with the financial method, when complying with the requirements of IAS 17 - ‘Leases’. Accordingly, tangible assets are recorded as assets and corresponding obligations as liabilities in the statement of financial position. Both the finance charge and the depreciation expense for depreciable assets, calculated as explained in Note 2.3.a), are taken to the income statement in the period in which they are incurred.


___________________________________________________________________________________________

___________________________________________________________________________________________


Long term rental instalments on assets acquired under this regime are recognised in full as

expenses in the period to which they refer. Determination of whether contracts relate to finance leases or long term rentals is made based

upon the substance rather than the form of the contracts. Operating lease instalments are recognized as expenses on a straight-line basis over the rental

period.

e) Impairment of non-current assets, except for Goodwill Assets are assessed for impairment whenever events or changes in circumstances indicate that

the carrying amount of an asset may not be recoverable. Whenever the book value of an asset exceeds its recoverable amount, an impairment loss is

recognised in the profit and loss statement caption ‘Provisions and impairment losses excluding players’ registrations’.

The recoverable amount is the higher of an asset’s fair value less costs to sell and its value in

use. Fair value less costs to sell is the amount obtainable from the sale of an asset in an arm’s length transaction between knowledgeable parties, less costs of disposal. Value in use is the present value of estimated future cash-flow from the continued use of an asset and from its disposal at the end of its useful life. Recoverable amounts are estimated for each asset individually.

Impairment losses recognised in prior years are reversed when it is concluded that the

impairment losses previously recognised no longer exist or have decreased. This assessment is made whenever there is an indication that impairment losses previously recognised have been reversed. The reversal is recorded in the income statement caption ‘Other income’. However, reversal of the impairment loss is recognised only up to the amount at which the asset would have been recorded (net of depreciation) had no impairment loss been recognised for that asset in prior years.

f) Borrowing costs Borrowing costs are recognised on an accruals basis in the income statement for the period in

which they are incurred. g) Inventories

Inventories are stated at acquisition cost or net realizable value, whichever is lower, using the

average cost as costing method. Differences between cost and net realizable value, if negative, are shown as operating

expenses under the caption ‘Cost of sales’.


___________________________________________________________________________________________

___________________________________________________________________________________________


h) Provisions Provisions are recognised when, and only when, the Group has a present obligation (legal or constructive) as result of a past event, it is probable that a outflow of resources will be required to settle the obligation, and a reliable estimate can be made of that obligation. Provisions are reviewed and adjusted at the end of the reporting period to reflect the best estimate as of that date.

i) Financial instruments

i) Investments Investments are classified into the following categories: - Held to maturity - Investments measured at fair value through profit or loss - Available-for-sale Held to maturity investments are classified as non-current assets unless they mature within 12 months of the end of the reporting period. Investments classified as held to maturity have defined maturities and the Group has the intention and ability to hold them until the maturity date. The investments measured at the fair value through profit or loss include the investments held for trading that the Group acquires with the purpose of trading in the short term. They are classified in the consolidated statement of financial position as current investments. The Company classifies as available-for-sale investments those that are neither included as investments measured at fair value through profit or loss neither as investments held to maturity. These assets are classified as non-current assets, except if the sale is expected to occur within 12 months from the date of classification. All purchases and sales of investments are recognised on the trade date, independently of the settlement date. Investments are initially measured at cost, which is the fair value of the consideration paid for them, including transaction costs. Investments that do not have a quoted price and whose fair value cannot be reliably measured are stated at cost less any impairment losses.

ii) Trade receivables and Other receivables

Non-current accounts receivables are measured at amortised cost using the effective interest method, less any impairment.

Current account receivables are presented in the statement of financial position, net of

any impairment losses, and are recorded at their nominal value, except when the effect


___________________________________________________________________________________________

___________________________________________________________________________________________


of discounting is material, when they are recorded at amortised cost using the effective interest method.

Financial income is calculated in accordance with the effective interest rate, except for

very short term receivables when the income amounts to recognize would be immaterial. Accounts receivables are recorded as current assets, except when its maturity is greater

than 12 months from the end of the reporting period, when they are classified as non-current assets. These financial assets are included in the captions presented in Note 11.

Impairment is recognized if there is objective and measurable evidence that, as a result

of one or more events that occurred, the balance will not be fully received. Therefore, each group company takes into consideration information that indicates:

- significant financial difficulty of the counterparty; - default or delinquency in payments; - it becoming probable that the counterparty will enter bankruptcy or financial re-

organization.

iii) Financial liabilities and equity instruments

Financial liabilities and equity instruments are classified and recorded based upon their contractual substance. Equity instruments are contracts that evidence a residual interest in the assets of the Group after deducting all of its liabilities, and are recorded at the proceeds received, net of direct issue costs.

iv) Loans

Loans are recorded as liabilities at their nominal value net of transaction costs directly related to the issuance of those instruments. Financial expenses are calculated based on the effective interest rate and are recorded in the income statement on an accruals basis.

v) Trade payables and Other payables

Accounts payables are recorded at amortized cost using the effective interest rate method. Current accounts payable are stated at their nominal value, unless the effect of discounting is considered material, when they are recorded using the effective interest rate method. The financing costs are calculated according to the effective interest rate, except for amounts payable to very short-term securities which would be to recognize immaterial. Accounts payable are classified as current liabilities, except in cases where the maturity is longer than 12 months of the end of the reporting period, which are classified as non-current. These liabilities are included in the classes identified in Note 20.


___________________________________________________________________________________________

___________________________________________________________________________________________


vi) Discounted bills

Trade receivables represented by discounted bills that have not yet matured at the end of the reporting period remain recorded in the statement of financial position until they are collected.

vii) Cash and Cash Equivalents

‘Cash and cash equivalents’ include cash on hand, cash at banks, term deposits and other

treasury applications which mature in less than three months and are subject to insignificant risk of change in value.

In the consolidated statement of cash-flows, ‘Cash and cash equivalents’ also include bank

overdrafts, which are included in the statement of financial position caption ‘Bank loans’.

viii) Other financial assets – Players economic rights

The amounts includes in the caption “Other financial assets – Players economic rights” are related to the economic rights over several players whose sporting rights were sold by FCPorto SAD, while keeping part of their economic rights. These assets are registered at cost, less possible impairment losses.

ix) Effective interest rate method

Effective interest rate method is a method of calculating the amortized cost of a financial asset or liability and of allocating interest income or expense over the relevant period. The effective interest rate method is the one used to calculate the amortization cost of a financial asset or liability and to realize the income or cost allocation up to maturity of the financial instrument. The effective interest rate is the one that, being used to discount estimated future cash flows associated to the financial instrument, allows to meet its actual value to the financial instrument value on the initial recognition date.

x) Impairment of financial instruments

Financial assets are analysed at each consolidated financial statement date to verify the existence of impairment losses indicators.

The financial assets are considered in situation of impairment when there is objective

evidence that, as a consequence of one or more events occurred after the assets initial recognition the estimated cash flows had been negatively affected.

For the financial assets measured at amortized cost, the impairment is calculated by the

difference between the asset's carrying amount and the present value of estimated future cash flows, discounted at the financial asset's original effective interest rate.

For investments on subsidiaries, measured at acquisition cost less impairment, the impairment analysis evolves the use of discounted cash flows models to estimate the value in use of the referred investments. Such models imply that the Company estimated


___________________________________________________________________________________________

___________________________________________________________________________________________


the present value of future cash flows of the subsidiary company according to a discount rate in line with its associated risk.

It is the Board of Directors understanding that the use of the above mentioned

methodology is adequate to conclude on the eventual existence of financial investments impairment as it incorporates the best available information as at the date of the financial statements

j) Contingent assets and liabilities

Contingent assets are possible assets arising from past events and whose existence will be

confirmed only by the occurrence or non-occurrence of one or more uncertain future events not within the full control of the Group.

Contingent assets are not recorded in the consolidated financial statements but disclosed

when future economic benefits are probable. Contingent liabilities are defined by the Group as (i) possible liabilities arising from past events,

the existence of which will only be confirmed by the occurrence, or not, of one or more uncertain future events not under full control of the Group, or (ii) present obligations arising from past events, but which are not recognised because it is unlikely that there will be an outflow of financial benefits to settle the obligation or the amount of the obligation cannot be reliably measured.

Contingent liabilities are not recorded in the consolidated financial statements. Instead they

are disclosed in the notes to the financial statements, unless the probability of a cash outflow is remote, in which case, no disclosure is made.

k) Income tax

The below mentioned group of companies, which is dominated by Futebol Clube do Porto –

Futebol, S.A.D., has been taxed in accordance with the special regime for taxation of company groups (‘Regime Especial de Tributação de Grupo de Sociedades’ – ‘RETGS’).

The companies included in the tax group, the June 30, 2014, taxed according to RETGS are as follows:

Futebol Clube do Porto – Futebol, S.A.D. PortoComercial – Sociedade de Comercialização, Licenciamento e Sponsorização, S.A. PortoEstádio, Gestão e Exploração de Equipamentos Desportivos, S.A. PortoSeguro - Sociedade Mediadora de Seguros do Porto, Lda. Dragon Tour – Agência de Viagens, S.A. Income tax for the year is determined based on the taxable results of the companies included

in the consolidation and takes into consideration deferred taxation. According to existing Portuguese legislation, company’s tax returns included in the

consolidation are subject to revision and correction by the Tax Administration during a period of four years (five years for Social Security), unless there were tax losses, have been granted


___________________________________________________________________________________________

___________________________________________________________________________________________


tax benefits, or there are ongoing inspections, complaints or disputes, these cases where, depending on the circumstances, the deadlines are elongated or suspended. Besides the referred in Note 22 and 35 relatively to inspections, complaints and ongoing impeachments, the tax situation on the years ended on 30 June 2011 and 30 June 2014 may still be subject to review and possible corrections.

The Board of Directors of the Parent-Company and its subsidiaries believe that any

adjustments resulting from review by the Tax Administration and the tax situation for tax-businesses, for the years in open, should not have a significant effect on the consolidated financial statements.

Under Article 88 of the Tax Code the corporate income businesses of the Group, are subject to

additional taxation on a separate set of charges at the rates provided for in the mentioned article.

Deferred taxes are calculated using the balance sheet liability method and reflect the

temporary differences between the amount of assets and liabilities for accounting purposes and the corresponding amounts for tax purposes. Deferred taxes are calculated and annually evaluated using the tax rates expected to be in force or announced at the time the temporary differences are reversed.

Deferred tax assets are only recorded when there is reasonable expectation that sufficient

taxable profits will arise in the future to allow such deferred tax assets to be used or when there are temporary taxable differences that compensate temporary tax deductible differences in the period they reverse. At the end of each period the Group reviews the deferred tax assets and reduces them whenever their realisation ceases to be likely.

l) Revenue and Accruals

Revenue is recorded at fair value of assets received or receivable, net of discounts.

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

ii) Sale of players’ registrations

Gains or losses on disposal of players’ registrations are recorded in the income statement under the caption ‘Income/(expenses) related with transactions of players' registrations’ and are calculated as the difference between the selling price and the carrying amount of the player’s registration at the date of the sale and any other costs related directly with


___________________________________________________________________________________________

___________________________________________________________________________________________


the sale, including intermediation service costs and costs with liabilities relating to the ‘solidarity mechanism’ (that corresponds to a compensation at the time of the transfer of a player to another club, before the term of the respective sporting contract in is actual club, to its former clubs that the players where registered since their 12th and their 23rd birthday – this amount corresponds to 5% of the transfer value, to distribute proportionally among them, 0.25% from 12th to 15th anniversary and 0.5% from 16th to 23rd anniversary). Whenever relevant, the effect of discounting future receipts to its present value is considered in the determination of the transaction result. Gains or losses on sale of players’ registrations are recognized in the income statement when the significant risks and benefits of the player’s registration have been transferred.

iii) Contracts of association of economic interests The gains arising from the celebration of contracts of association of economic interests, which consists of an investment partnership, as mentioned in paragraph b), are recorded in the income statement or in statement of financial position (liabilities), depending if the significant benefits and risks arising from those transactions have been, or not, effectively and materially transferred, according to the contractually defined.

iv) Bonuses for participation in European Competitions Fixed bonuses for obtaining the right to participate in the UEFA Champions League are recognised in the period in which participation is guaranteed, which is independent of the performance in that competition. The related costs, namely the players’ and technical staff’s bonuses are equally recorded in the period in which participation is guaranteed. Variable bonuses depending on sporting performance are recorded in the period the matches are played.

v) Other income Income relating to broadcasting rights, advertising and sponsorships is recorded in the income statement in accordance with the duration period of the respective contracts. Income relating to football matches is recognised in the period the matches are played.

Interest and financial income are recognised on an accruals basis at the applicable effective interest rates. Other income and expenses are recorded in the period to which they relate, regardless of their date of payment or receipt. Differences between the amounts received or paid and the corresponding income and expenses are recognised in captions ‘Other non-current assets’, ‘Other current assets’, ‘Other current liabilities’ and ‘Other non-current liabilities’.

m) Post-Employment benefits

The Group has committed to grant to certain employees cash benefits as pension complements for retirement, which configure a defined benefit plan.


___________________________________________________________________________________________

___________________________________________________________________________________________


In order to estimate its liability for payment of these benefits, actuarial liabilities were calculated in accordance with the “Projected Unit Credit Method”. Actuarial gains and losses are recorded in the statement of other comprehensive income in the year they occur, as defined in IAS 19. Pension liabilities are recognized on the balance sheet date under the caption "Pension liabilities" and represent the present value of obligations for defined benefit plans, adjusted for actuarial gains and / or liabilities for past services not recognized.

n) Foreign currency balances and transactions

All foreign currency assets and liabilities are translated to Euro at the official year-end

exchange rates. Exchange gains and losses resulting from differences between the exchange rates in force on the date of the transactions and those in force on the date of collections, payment or the end of the reporting period are recognised as gain or loss in the income statement of the period.

o) Subsequent events

Events after the end of the reporting period that provide additional information on conditions existing at the end of the reporting period (adjusting events), are reflected in the consolidated financial statements. Events after the end of the reporting period that provide information about conditions arising after the end of the reporting period (non-adjusting events), when material, are disclosed in the notes to the financial statements (Note 36).

p) Judgements and estimates

In the preparation of the accompanying consolidated financial statements judgments and estimates were made and several assumptions were used that affected the value of the assets and liabilities presented, as well as the presented amounts of revenues and expenses for the period. Estimates used and underlying assumptions were determined based on the best information available of the ongoing events and transactions, at the approval date of these financial statements, as well as based on best knowledge of past and present events. However, not foreseeable situations may occur in subsequent periods, which were not considered in these estimates. Changes to these estimates that occur in subsequent periods will be prospectively corrected. For this reason and considering the uncertainty level incorporated, actual results of these transactions may differ of the corresponding estimates. The most significant accounting estimates reflected in the consolidated income statements include:

(i) Useful lives of tangible and intangible assets; (ii) Impairment analysis of Goodwill, of financial assets (namely, players’ economic

rights), of the intangible assets – players’ registrations (Note 2.3.b)), and of other tangible and intangible assets;

(iii) Recognition of adjustments on assets and provisions.


___________________________________________________________________________________________

___________________________________________________________________________________________


q) Segment information

Every year, the Group’s most adequate applicable segments are identified considering the developed activities. Information regarding income by business segment is included in Note 33.

3. FINANCIAL RISK MANAGEMENT

In addition to the risks inherent to the results of the sports’ activity and its’ impacts on the economic results and on the assets appreciation, the Group’s activity is also exposed to a variety of financial risks, such as market risk, credit risk and liquidity risk. These risks are the result of the uncertainty inherent to the financial markets, which is reflected in the capacity to estimate future cash-flows and returns. The Group’s risk management policy seeks to minimize any adverse effects arising from these uncertainties characteristic of financial markets.

3.1. Market risk

a) Interest rate risk

The interest rate risk is primarily result of loans indexed to variable interest rates. The Group's debt is mainly indexed to variable and fixed interest rates, exposing the cost of debt to a risk of volatility. The impact of such volatility in the profits and equity of the Group is significant given the high level of indebtedness of the Group. Although the interest rate risk is significant, the Group does not, usually, use interest rate derivatives for hedging this risk. As of 30 June 2014 and 2013, the Group presents a debt of approximately 149,169 thousand Euro and 103,043 thousand Euro, respectively, divided between current and non-current loans (Notes 18 and 19) contracted with various financial institutions. Interest rate sensitivity analysis The sensitivity analysis presented below was computed on the basis of the Group's exposition to changes in interest rate on financial instruments with reference to the estimate of average indebtedness in the season 2013/2014. For financial instruments, the analysis was prepared on the understanding that changes in market interest rates affect interest income or expenses of financial instruments indexed to variable interest rates. The mentioned analysis pointed out that if the Euribor had been 50 basis points higher and all other variables held constant, the financial charges for the year ended 30 June 2014 would increase by, approximately 327,000 Euro (207,000 Euro in the financial year ended 30 June 2013).


___________________________________________________________________________________________

___________________________________________________________________________________________


b) Exchange rate risk

Developing its activity, the Group carries out some transactions denominated in currencies other than Euro, namely transactions of players’ registrations. However, such transactions in foreign currency have been insignificant, being the vast majority contracted in Euro, and residually in U.S. dollars. Thus, the Group does not use derivatives for hedging, namely exchange rates forwards.

3.2. Credit risk

The Group's exposure to credit risk is mainly related with accounts receivable arising from the sale of players’ registrations and other transactions related with the Group’s activity, namely the sale of broadcasting rights, advertising and various sponsorships. The credit risk refers to the risk of the counterparty defaulting on its payment contractual obligations, resulting in a financial loss to the Group. The objective of this risk management is to ensure the effective credit collections on established deadlines without affecting the Group’s financial stability. The evaluation of this risk is made on a regular basis, and the management’s goal is (a) to evaluate the counterparty in order to assess its ability to pay the debt, (b) to monitor the evolution of the amount of trade receivables, and (c) to perform an impairment analysis of accounts receivables on a regular basis. The Group does not consider there is significant credit risk with any entity in particular, or with a group of entities with similar characteristics, to the extent that accounts receivables are spread across various customers and different geographical areas. The Group asks for credit guarantees, when the financial position of the client recommends so. For customers with higher credit risk, or when the account receivable is greater than normal, these guarantees should be bank guarantees. Impairment losses related to accounts receivables are calculated taking into consideration: (a) the client’s risk profile, (b) the term of collection of each contract, which differs in each line of business, and (c) the customer’s financial conditions. Changes in accumulated impairment losses for the years ended 30 June 2014 and 2013 are disclosed in Note 22. As of 30 June 2014 and 2013, the Group considers that there is no need to book additional impairment losses besides the amounts recorded on those dates and summary disclosed in Note 22.

3.3. Liquidity risk

Liquidity risk is defined as the risk of lack of ability to settle or accomplish its obligations on stipulated time and reasonable price. The existence of liquidity implies that management parameters are set which maximize the return and minimize the opportunity costs associated with the liquidity in a safe and efficient manner. This risk management in the Group aims to:


___________________________________________________________________________________________

___________________________________________________________________________________________


- Liquidity - ensure the permanent and efficient access to funds to meet correct payments to the respective due dates;

- Security - minimize the probability of default in the refund of any application of funds; and - Financial efficiency -minimise the cost of opportunity of excessive short term liquidity.

The Group aims to make compatible the due dates of assets and liabilities through an active management of its maturities. Normally, each contract loan is guaranteed by a receivable account balance (due to player’s registration sale, or due to receivables amounts related to European competitions bonuses and broadcasting rights); additionally, usually, the maturity dates of such loans match the due dates of the accounts receivables. The information considered in the notes to the consolidated financial statements, regarding the maturity analysis of financial liabilities includes the due amounts, not discounted, and based upon the worst case scenario, which is, the shortest period in which the liability becomes due, assuming the compliance of all requirements set contractually. Regarding the liquidity risk, as of 30 June 2014, despite the consolidated financial statements show a negative equity attributable to equity holders of the parent company of 33 million Euro and a negative working capital in approximately 84 million Euro (48 million Euro as of 30 June of 2013), it is conviction of the Board of Directors that based (i) on loans obtained, or in the process of be obtained, of approximately 48 million Euro, (ii) on the renegotiation of maturities of existing loans in the amount of 47 million Euro (Note 36), as well as (iii) the predictions of the eventual financial reinforcement resulting from the sale of players registration sporting rights, as it has been usual in prior years, this risk is properly mitigated.

3.4. Regulatory risk - “ Financial Fair Play “ FCP, SAD is subjected to the licensing system for admission of football clubs in participating on UEFA organized competitions: "UEFA Club Licensing and Financial Fair Play Regulations". This regulation governs the rights, duties and responsibilities of all parties involved in the club licensing system for participation in the UEFA competitions and sets in particular the sport’s related to infrastructures, administrative and staff-related, legal and financial minimum criteria to be met by a sports company in order to obtain a license to participate in UEFA club competitions as part of the admission process to the competition. According to this system FCP SAD, will have to meet a set of requirements, among which the following stands out: 1. Inexistence of overdue and unpaid debts (i) with football clubs regarding the players’ registrations transfers and (ii) towards employees and/or tax authorities and social security; 2. Verification of the equilibrium ("breakeven") between the relevant revenues and relevant costs, which the acceptable deviation accumulated raises to a 5 million Euro for a monitoring period equivalent to the sum of three exercises (the three previous seasons, except the first year of application of this criteria (season 2013/2014) in which it was considered only two seasons). However, this deviation may be exceeded if such excesses are fully covered by equity contributions from shareholders or and / or related parties:


___________________________________________________________________________________________

___________________________________________________________________________________________


• Seasons of 2013/14 and 2014/15: 45 million Euro; • Seasons of 2015/16, 2016/17 and 2017/18: 30 million Euro The sanctions for non-compliance with these rules may include (i) warnings, (ii) fines, (iii) retention of premiums paid and, ultimately, (iv) the prohibition to participate in UEFA’s organized competitions. The FCP-SAD has been monitoring his situation regarding the new Financial Fair Play criteria and is currently complying with these requirements.

3.5. Sportive risk

The main activity of FCP, SAD is the participation in national and international professional football competitions. Therefore, the Company depends on the existence of these sportive competitions, the maintenance of their participation’s rights, the maintenance of the premiums paid under these competitions and the sportive performance achieved by its professional football team, particularly the possibility of qualifying for the European competitions mainly the UEFA Champions League. By its turn, sports performance may be affected by the sale or purchase of players’ registrations considered essential for the sportive performance of FCP, SAD. As predicted in the sports companies’ activity, FCP, SAD regularly sells regularly its players’ registrations. In the acquisition of each players’ registrations, there is no guarantee that the value of a potential sale corresponds to their fair value or even that there will be interested buyers in acquiring the players’ registrations of a certain player. As usual in its activity, FCP, SAD has players’ registrations that may be sold at any time, and, in case of sale of those players’ registrations, it may not be possible to find players that replace the players that were sold, providing at least the same level of performance. Significant part of the operating income of FCP, SAD arises from the sale of football matches’ broadcasting rights of advertising contracts. These revenues are dependent on the media and sports projection of their main football team as well as the negotiating power of FCP, SAD towards the entities to which these exploitation rights are transferred of those activities. In addition, FCP, SAD is dependent on the ability of counterparties to such contracts comply with the agreed payments and, ultimately, to be possible to find other competitors in the market of those entities. Costs related with the set of FCP, SAD football players, assume a determining weight in its operating results. The profitability and the economic and financial balance of the Company are, therefore, significantly dependent on the ability of the FCP, SAD Management to ensure a moderate increase in average costs per player and the rationalization of the number of players, specially taking into account the criteria of Financial Fair Play defined in Section 3.4.

4. CHANGES IN ACCOUNTING POLICIES, ESTIMATES AND ERRORS

During the year there were no changes in accounting policies, nor changes in estimates and

material errors related with prior periods.


___________________________________________________________________________________________

___________________________________________________________________________________________


5. COMPANIES INCLUDED IN THE CONSOLIDATED FINANCIAL STATEMENTS The companies included in the consolidation by the full consolidation method (Note 2.2.a), their

head offices, the percentage of share capital held by the Group and activity as of 30 June 2014 and 2013 are as follows:

Company

Head Office

Activity % participation held 30.06.2014

% participation held 30.06.2013

Futebol Clube do Porto – Futebol, S.A.D.

Porto Participation in professional football competitions and the sporting events promotion and organization.

Parent company

Parent company

PortoComercial – Sociedade de Comercialização, Licenciamento e Sponsorização, S.A. (“PortoComercial”)

Porto Image rights commercialization, sponsoring, merchandising and products licensing.

93.5% 93.5%

F.C.PortoMultimédia - Edições Multimédia, S.A. (“PortoMultimédia”)

Porto Editing, production and commercialization of multimedia material and to the Internet, periodical and non-periodical publications.

70% 70%

PortoEstádio – Gestão e Exploração de Equipamentos Desportivos, S.A. (“PortoEstádio”)

Porto Sport equipment management and exploration.

100% 100%

PortoSeguro - Sociedade Mediadora de Seguros do Porto, Lda. (“PortoSeguro”)

Porto Insurance brokerage. 90% 90%

Dragon Tour, Agência de Viagens, S.A. (“DragonTour”)

Fc Porto- Media, S.A(a)

Porto

Porto

Organization and sale of travel and tour packages; ticket and seat reservation; representation of other travel agencies and tourism.

Concept, design, development, production, direction, promotion, marketing, acquisition, exploration rights, recording, distribution and dissemination of works and audiovisual programs, multimedia, television, video, cinema, theme, internet channels, tourist events, cultural and sporting in any formats and systems; managing, operating and providing services in the areas of recording, production and communication of audiovisual works, television shows, sounds, images, and any other audiovisual media; issue periodic publicities, books and multimedia.

93.5%

98.78%

93.5%

1%


___________________________________________________________________________________________

___________________________________________________________________________________________


(a) Entity that was included in the consolidation perimeter as of July 31, 2013, and which activity during the years ended as of June 30, 2014 and 2013 was reduced, not affecting the comparability of financial statements of this year compared with the previous year.

6. CHANGES TO THE CONSOLIDATION PERIMITER

The detail of the caption "Goodwill" as of June 30, 2014 and 2013 is as follows:

During the year ended June 30, 2014, FC Porto Media Company, SA was included in the consolidation perimeter. On July 30, 2013, was approved at the General Shareholders’ Meeting of FC Porto Media, S.A., the increase of its share capital from 50,000 Euro to 4,050,000 Euro by the reinforcement of four million Euro, carried solely by the shareholder Football Club Porto - Futebol, SAD as follows: (i) in the form of new contributions in kind - conversion of loans into equity in the amount of 1,355,850 Euro, through the issue of 271,170 shares with a nominal value of 5 Euro each and (ii) in the form of new cash inflows in the amount of 2,644,150 Euro, through the issuance of 528,830 shares with a nominal value of 5 Euro each. In the sequence of this capital increase operation in FC Porto - Media, S.A., FC Porto, SAD now holds directly 98.78% of the subsidiary’s share capital (which corresponds to a total holding percentage, directly and indirectly, of 98.81%) and the control of that company, therefore it was included in the consolidation perimeter by the full consolidation method with reference to that date. The fair value of assets and liabilities at the date of the first consolidation of that subsidiary (July 31, 2013), as well as the computation of goodwill generated, was as follows:

30.06.2014 30.06.2013

PortoSeguro 238,045 238,045

FC Porto - Media, S.A. 2,901,670 -

3,139,715 238,045


___________________________________________________________________________________________

___________________________________________________________________________________________


The goodwill of the FCP - Media, S.A., arising from the acquisition, was computed based on the financial statements of the subsidiary acquired as of July 31, 2013. In fair value allocating exercise of the assets and liabilities acquired, no differences were detected when comparing with its book value, so the difference between these and the value of the investment was recorded as Goodwill. However, the determination of the Goodwill has been provisionally determined, as the Group can proceed to its recalculation and recognition of eventual adjustments to those provisional values within twelve months after the acquisition date. If this acquisition had been reported as of July 1, 2013, the revenue of the Group for the year ended as of June 30, 2014 would have increased in the amount of approximately 282,000 Euro and net income would have decreased by approximately 53,000 Euro. 7. TANGIBLE AND OTHER INTANGIBLE ASSETS

During the years ended 30 June 2014 and 2013, the movements in tangible and other intangible assets, as well as depreciation and accumulated impairment losses, were as follows:

Assets

Tangible fixed assets 262,933

Costumers 902,946

Other current assets 340,207

Cash and cash deposits 2,149,061

Liabilities

Auppliers (1,851,128)

Other current liabilities (690,469)

Net assets 1,113,550

Total effective percentage 98.81%

Equity value acquired 1,100,330 (i)

Non-controlling interests 13,220

1,113,550

Capital increase amount 4,000,000

Investment of the Group on FCP Media

before the capital increase operation 2,000

Acquisition value 4,002,000 (ii)

Computed Goodwill 2,901,670 (iii) = (ii) - (i)


___________________________________________________________________________________________

___________________________________________________________________________________________


Buildings and Other Tangible fixed

other Machinery and Office tangible assets in

constructions equipment Vehicles equipment assets progress Total

Gross cost:

Opening balance (30.06.2013) 822,598 3,438,884 1,264,527 2,292,025 256,679 218,551 8,293,264

Changes in consolidation perimeter (Note 6) 279,500 - - 831 - - 280,331

Additions - 6,428 37,303 - - - 43,731

Disposals - - (158,600) - - - (158,600)

Regularizations - - - - - (218,551) (218,551)

Closing balance (30.06.2014) 1,102,098 3,445,312 1,143,230 2,292,856 256,679 - 8,240,175

Accumulated depreciation

and impairment losses

Opening balance (30.06.2013) 714,362 2,599,694 1,129,255 2,037,514 251,333 - 6,732,158

Changes in consolidation perimeter (Note 6) 17,029 - - 369 - - 17,398

Depreciations 86,500 197,469 66,858 98,260 5,078 - 454,165

Sales - - (158,599) - - - (158,599)

Regularizations (2,353) - - - - - (2,353)

Closing balance (30.06.2014) 815,538 2,797,163 1,037,514 2,136,143 256,411 - 7,042,769

Carrying amount 286,560 648,149 105,716 156,713 268 - 1,197,406

Tangible Assets

30.06.2014

Tangible Assets

Buildings and Other Tangible fixed

other Machinery and Office tangible assets in

constructions equipment Vehicles equipment assets progress Total

Gross cost:

Opening balance (30.06.2012) 811,598 3,164,753 1,511,191 2,292,025 256,679 123,164 8,159,410

Additions 11,000 150,967 - - - 218,551 380,518

Sales - - (246,664) - - - (246,664)

Transfers - 123,164 - - - (123,164) -

Closing balance (30.06.2013) 822,598 3,438,884 1,264,527 2,292,025 256,679 218,551 8,293,264



Opening balance (30.06.2012) 636,406 2,337,647 1,244,199 1,895,974 242,696 - 6,356,922

Depreciation 77,956 262,047 131,720 141,540 8,637 - 621,900

Sales - - (246,664) - - - (246,664)

Closing balance (30.06.2013) 714,362 2,599,694 1,129,255 2,037,514 251,333 - 6,732,158

Carrying amount 108,236 839,190 135,272 254,511 5,346 218,551 1,561,106

30.06.2013

Industrial

property Others Total

Gross cost

Opening balance (30.06.2013) 2,344,848 227,432 2,572,280

Additions 120,749 - 120,749

Closing balance (30.06.2014) 2,465,597 227,432 2,693,029



Opening balance (30.06.2013) 668,603 155,124 823,727

Depreciation 36,476 68,698 105,174

Closing balance (30.06.2014) 705,079 223,822 928,901

Carrying amount 1,760,518 3,610 1,764,128

Other intangible assets

30.06.2014


___________________________________________________________________________________________

___________________________________________________________________________________________


The caption ‘Industrial property’ relates, essentially, to the right to use the FCP trademark during a period of 99 years, and is being amortised over that period. 8. INTANGIBLE ASSETS - PLAYERS’ REGISTRATIONS

During the financial years ended 30 June 2014 and 2013, the movement in ‘Players’ registrations’ as well as depreciation and accumulated impairment losses, was as follows:

Industrial

property Others Total

Gross cost

Opening balance (30.06.2012) 2,344,848 226,632 2,571,480

Additions - 800 800

Closing balance (30.06.2013) 2,344,848 227,432 2,572,280



Opening balance (30.06.2012) 647,287 81,851 729,138

Depreciation 21,316 73,273 94,589

Closing balance (30.06.2013) 668,603 155,124 823,727

Carrying amount 1,676,245 72,308 1,748,553

Other intangible assets

30.06.2013

Intangible assets

- 'Players' registrations

30.06.2014 30.06.2013

Gross cost:

Opening balance 120,789,429 156,767,366

Acquisitions 18,789,708 46,509,554

Sales (20,827,879) (71,235,609)

Transfers (Note 9) (8,599) (2,883,182)

Write-offs (Note 27) (1,044,143) (8,368,700)

Closing balance 117,698,516 120,789,429


and impairment losses:

Opening balance 44,630,531 57,512,037

Depreciation (Note 27) 26,379,179 26,225,716

Impairment losses (Note 27) 563,333 300,842

Utilization of impairment losses - (3,988,349)

Sales (14,524,217) (28,090,273)

Transfers (Note 9) - (1,596,314)

Write-offsWrite-offs (Note 27) (855,951) (5,733,128)

Closing balance 56,192,875 44,630,531

Carrying amount 61,505,641 76,158,898


___________________________________________________________________________________________

___________________________________________________________________________________________


Acquisitions The main acquisitions made in the year ended 30 June 2014, in amount, can be resumed as follow:

The caption “Additional expenses” refers to expenses related to the purchase of players’ registrations, namely charges for intermediation services, legal services, signing-on fees paid directly to the players, etc. It should be noted that in situations where the registration is less than 100%, although the Company is entitled to full use of the player’s registration, it has entered into an associated financial interests contract with a third party, which consists of an investment partnership in the registration rights, resulting in the proportional sharing of the inherent results in a future transaction of these rights, if it happens. The main acquisitions made in the year ended 30 June 2013, in amount, can be resumed as follow:

The charges for intermediation services related with the purchase of players’ registrations in the years ended 30 June 2014 and 2013 referred above, as well as with the negotiation and renegotiation of labour contracts with players, amounted to 4,829,328 Euro and 2,539,120 Euro, respectively. In the financial year ended 30 June 2014 these services were provided by Pearl Design Holding Limited, Edenresults, Danubio GmbH, DNN Lda., Idolasis, Soc. Unipessoal, Lda., Onsoccer, Gestão de Carreiras Desportivas S.A., Foot Expande, Lda. RAMP Managment Group International, DL Soccer Service SAS, Unifoot – Gestão e Eventos de Carreiras de Profissionais Desportivas, SA,

Player

Economic

rights

percentage

Acquisition

date Vendor

Contract

end date

Acquisition

cost

Additional

expenses

Total

acquisition

cost

Quintero 50% Jul-13 Delfino Pescara 1936 SRL Jun-17 5,000,000 800,000 5,800,000

Ghilas 50% Jul-13 Moreirense Jun-17 3,800,000 - 3,800,000

Kayembe 85% Jun-14 Danubio GmbH Jun-19 2,615,000 61,587 2,676,587

Igor Lichnovski 100% Jun-14 Universidade do Chile Jun-18 1,837,000 100,000 1,937,000

Others 5,050,444

19,264,031

Discounting effects to NPV (474,323)

Carrying amount 18,789,708

Player

Economic

rights

percentage

Acquisitio

n date Vendor

Contract

end date

Acquisition

cost

Signatue

bonuses

Additional

expenses

Total

acquisition

cost

Jackson Martinez 100% Jul-12 Club Jaguares de Chapas Jun-16 8.887.453 - 750.000 9.637.453

Diego Reyes 95% Dez-12 Club de Futbol América Jun-18 7.000.000 517.320 2.092.320 9.092.320

Herrera 80% Mai-13 Pachuca Club de Fútbol Jun-17 8.000.000 700.000 1.000.000 9.000.000

James Rodriguez 35% Jan-13 Gol Football Luxembourg Jun-16 8.750.000 - 8.750.000

Hector Quiñones 100% Ago-12 Asociación Deportivo Cali Jun-16 1.982.396 - 99.120 2.081.516

Ricardo Pereira 80% Abr-13 Vitória Sport Clube Jun-18 1.600.000 100.000 1.700.000

Licá 60% Mai-13 Estoril Praia Jun-17 1.500.000 150.000 1.650.000

Mauro Caballero 100% Jan-13 MHD, S.A. Jun-18 1.531.863 - 1.531.863

Others - - - - - - 5.274.516

48.717.668

Discounting effects to NPV (2.208.114)

Carrying amount 46.509.554


___________________________________________________________________________________________

___________________________________________________________________________________________


Asesorias e Inversiones Aim Futbol Limitada, C.B. Nafricatalentsport, Lda., SportConsult and Pacheco & Teixeira, Lda and by the agent Ricardo Calleri. In the financial year ended 30 June 2013 these services were provided by Northfields Sports BV, Grupo Comercializador Conclave S.A., Gondry Financial Services, Foot2Foot - Gestão de Carreiras Desportivas, Lda., Promosport, JOD Gestão de Carreiras Desportivas, Lda., Proeleven - Gestão Desportiva Lda., Energy Soccer Lda., Magnitude Partnership e by the agent Giancarlo Uda. The amounts of players registrations’ purchases in the years ended as of June 30, 2014 and 2013, consider the effect of discounting future payments to its present value, where applicable, in the amounts of, approximately, 798,204 Euro and 2,208,000 Euro, respectively. These amounts refer to the long term account payables balances related with the acquisition of the registrations of players, namely Ghilas, Quintero, Kayembe, Opare and Igor Lichnovski (as of June 30, 2014) and Jackson Martinez, Diego Reyes, Herrera, Hector Quinones and James Rodriguez (as of June 30, 2013). Sales Sales made during the financial year ended 30 June 2014 generated capital gains of 22,397,504 Euro (Note 27) which result mainly from: a) sale of the registration rights of Atsu to Chelsea, by the amount of 3,000,000 Euro, generating

capital gains of 1,991,667 Euro after the deduction of (i) the effect of discounting future medium term receipts and payments to its present value arising from these transactions; (ii) the proportional sale value of the registration player’s owned by third parties (25%); (iii) intermediation service costs provided by Energy Soccer and (iv) the carrying amount of the player’s registration on the date of sale, in the global amount of 1,008,333 Euro;

b) sale of the registration rights of Otamendi to Valencia, by the amount of 12,000,000 Euro,

generating capital gains of 7,980,195 Euro, after deduction of: (i) the effect of discounting future medium term receipts and payments to its present value arising from these transactions; (ii) the proportional sale value of the registration player’s owned by third parties; (iii) intermediation service costs provided by Vela Management Limited; and (iv) the carrying amount of the player’s registration on the date of sale in the global amount of 4,026,000 Euro. Additionally this agreement foresees the payment of a variable remuneration, payable upon the achievement of certain sport objectives by the athlete, so the global amount receivable could rise up to 15,000,000 Euro;

c) sale of the registration rights of André Castro to Kasimpasa, by the amount of 2,058,000 Euro, generating capital gains of, approximately, 1,654,000 Euro, net of: (i) the effect of discounting future medium term receipts and payments to its present value arising from these transactions; (ii) intermediation service costs provided by Pacheco & Teixeira, Ltd.; (iii) the proportional sale value of the registration player’s owned by third parties (5%); (iv) liabilities relating to the ‘solidarity mechanism’, and (v) the carrying amount of the player’s registration on the date of sale in the global amount of approximately 404,000 Euro;

d) sale of the registration rights of Fernando to Hellas Manchester City, by the amount of

15,000,000 Euro, generating capital gains of, approximately, 5,298,000 Euro, net of: (i) the effect of discounting future medium term receipts and payments to its present value arising


___________________________________________________________________________________________

___________________________________________________________________________________________


from these transactions; (ii) intermediation service costs provided by Onsoccer Internacional Career Gestão de Carreiras, SA; (iii) the proportional sale value of the registration player’s owned by third parties (20%); (iv) amounts payable to the player as indemnity; and (v) the carrying amount of the player’s registration on the date of sale in the global amount of approximately 9,702,000 Euro;

e) sale of the registration rights of Iturbe to Hellas Verona Football Club, by the amount of

15,000,000 Euro, generating capital gains of, approximately, 4,736,000 Euro, net of: (i) intermediation service costs provided by IG Teams & Players, SA; (ii) the proportional sale value of the registration player’s owned by third parties (55%); and (iii) the carrying amount of the player’s registration on the date of sale in the global amount of approximately 10,264,000 Euro;

The disposals in the year ended June 30, 2013, which generated capital gains in the amount of 74,016,304 Euro (Note 27), resulted mainly from:

a) sale of the registration rights of James Rodriguez to AS Monaco, by the amount of 45,000,000 Euro, generating capital gains of, approximately, 25,757,000 Euro, net of: (i) intermediation service costs provided by the entity Gestifute; (ii) the proportional sale value of the registration player’s owned by Orel (10%) ; (iii) liabilities relating to the ‘solidarity mechanism’; (iv) the carrying amount of the player’s registration on the date of sale, in the global amount of, approximately, 19,243,000 Euro.

b) sale of the registration rights of Hulk to Zenit St. Petersbourg, by the amount of

40.000.000 Euro, generating capital gains of, approximately, 23.871.000 Euro, net of: (i) the effect of discounting future medium term receipts and payments to its present value arising from these transactions (ii) the carrying amount of the player’s registration on the date of sale and (iii) the annulment of loyalty bonuses in the global amount of, approximately, 16,129,000 Euro;

c) sale of the registration rights of João Moutinhho to AS Monaco, by the amount of

25,000,000 Euro, generating capital gains of, approximately, 15,071,000 Euro, net of: (i) intermediation service costs provided by the entity Gestifute; (ii) the right to receive 25% of the capital gains by a higher value of 11,000,000 Euro by Sporting Clube de Portugal – Futebol, SAD (“Sporting SAD”) established in the original contract of purchase of economic rights to this entity (iii) liabilities relating to the ‘solidarity mechanism’; and (iv) the carrying amount of the player’s registration on the date of sale, in the global amount of, approximately, 9,929,000 Euro;

d) sale of the registration rights of Álvaro Pereira to Inter Milan, by the amount of 10,000,000

Euro, generating capital gains of, approximately, 4,550,000 Euro, net of: (i) intermediation service costs provided by the entity IG Teams & Players; (ii) the proportional sale value of the registration player’s owned by Cluj (20%) and Avendi (5%); (iii) the effect of discounting future medium term receipts and payments to its present value arising from these transactions; and (iv) the carrying amount of the player’s registration on the date of sale, in the global amount of approximately 5,450,000 Euro. Additionally this agreement foresees the payment of a variable remuneration, payable upon the achievement of certain sport objectives by athlete and the club, so the total amount


___________________________________________________________________________________________

___________________________________________________________________________________________


receivable could rise up to 15,000,000 Euro; in 2012/13 season the Company recognized an additional income of 1,000,000 Euro, regarding this clause.

Additionally, in January 2013, was sold 47.5% of the economic rights of the player Diego Reyes to Gol Football Luxembourg for 3,500,000 Euro; this operation did not generate any capital gains or losses. Impairment losses During the financial year ended 30 June 2014, impairment losses amounting 563,333 Euro were recorded related with the registration of the players Stefanovic because FCP SAD terminated the labour contract with this player during the season 2014/15 and Izmailov, by the fact of the player has been lent during the season 2014/15 being this the last season with labour contract. Additionally, during the year ended June 30, 2014, player registrations with a net value of 188,192 Euro were write-offed, related to the players Lucho Gonzalez and Thibaut Vion by the fact that FCP SAD terminated the labour contract with this players during the season. During the financial year ended 30 June 2013, impairment losses amounting 300,842 Euro were recorded related with the registration of the players Emídio Rafael, Bracali, Ukra and Sereno by the fact that FC Porto SAD terminated the labour contract with this players during the sports season of 2012/2013 or in the beginning of the sports season 2013/14.

Players’ registrations

As of 30 June 2014 and 2013, the aggregation of the players by range of its’ registrations net book value is as follows:

As of 30 June 2014 and 2013, in the carrying amount of players’ registrations are included the following players:

30.06.2014 30.06.2013

Carrying amount of Number of Number of

players registrations players Amount players Amount

Greather than 2 million Euro 10 42,003,228 12 59,667,316

Between 1 and 2 million Euro 7 9,979,852 6 8,568,576

Less than 1 million Euro 28 9,522,561 19 7,923,006

45 61,505,641 37 76,158,898


___________________________________________________________________________________________

___________________________________________________________________________________________


(a) Player loaned to another club or sports entity in the season 2014/15, whose loan period is not beyond June 30,

2015;

(b) Players whose percentage of economic rights evidenced is deduced, as of June 30, 2014, the share of 50% (Walter

da Silva) and 33.33% (Mangala and Defour) transferred to third parties by associated financial interests contracts;

(c) Player loaned to another club or sports entity in sports season 2013/14, but which the loan period is not beyond

December 31, 2015;

(d) Player whose registration rights was sold to another club or sports entity during the 2013/14 sports season;

(e) Player whose registration rights was sold to another club or sports entity during the 2014/15 sports season (Note

36)

The registrations’ percentages presented above take into consideration the sharing of economic rights made on the acquisition date of each player’s registration, or its sale at a later date, as well as the percentages assigned by FCPorto SAD to third parties related with the sharing of the amount resulting from a future sale of these rights. In addition, commitments were established with third parties, including clubs and sports agents, in order to share the amount of future capital gains that may be obtained through FC Porto SAD players registration rights’ sale, upon verification of specific contractual conditions. As of 30 June 2014, FCP SAD kept player’s registrations that had been pledged as security for loans, as follow:

30.06.2014 30.06.2013

Players' End of Players' End of

Player registration (%) Contract registration (%) Contract

Danilo 100.0% jun/16 100.0% jun/16

Herrera 80.0% jun/17 80.0% jun/17

Jackson Martinez 100.0% jun/16 100.0% jun/16

Quintero 50.0% jun/17 - -

Diego Reyes 47.5% jun/18 47.5% jun/18

Alex Sandro 100.0% jun/16 100.0% jun/16

Defour (b) (e) 56.7% jun/16 56.7% jun/16

Mangala (b) (e) 56.7% jun/16 56.7% jun/16

Ghilas (a) 50.0% jun/17 - -

Kayembe 85.0% jun/19 - -

Igor Lichnoski 100.0% jun/18 - -

Walter da Silva (b) (c) 15.0% jun/17 40.0% jun/15

Kléber (a) 70.0% jun/16 70.0% jun/16

Caballero (a) 70.0% jun/18 100.0% jun/18

Kelvin 75.0% jun/16 75.0% jun/16

Ricardo Pereira 80.0% jun/18 80.0% jun/18

Licá (a) 60.0% jun/17 60.0% jun/17

Hector Quiñones (a) 100.0% jun/16 100.0% jun/16

Iturbe (d) - - 45.0% jun/16

Otamendi (d) - - 100.0% jun/15


___________________________________________________________________________________________

___________________________________________________________________________________________


Additionally, buy and sale option rights contracts regarding players’ economic rights were established with third parties, namely clubs and sports agents, exercisable for periods and amounts contractually established. 9. OTHER FINANCIAL ASSETS

During the financial years ended 30 June 2014 and 2013, the movements under the caption ‘Other financial assets’ as well as accumulated impairment losses, were as follows:

The detail of this caption as of 30 June 2014 and 2013 is as follows:

Bank

Amount

30.06.2014 Due date Player registrations'

End of

contract

Millennium BCP 3,750,000 30/06/2017 Helton Jun17

BES 30,000,000 31/10/2014 Mangala e Jackson Jun16 / Jun 17

BES 1,750,000 31/01/2016 Mangala e Jackson Jun16 / Jun 17

Other financial assets

30.06.2014 30.06.2013

Gross cost:

Opening balance 3,951,834 3,608,147

Adjustments (1,999) (1)

Transfers (Note 8) 8,599 1,286,868

Disposals - (52,500)

Write-offs (2,035,398) (890,680)

Closing balance 1,923,036 3,951,834


and impairment losses:

Opening balance 1,705,266 890,680

Impairment losses for the period (Notes 22 and 30) 1,532,169 1,731,516

Disposals - (26,250)

Write-offs (2,035,398) (890,680)


Carrying amount 720,999 2,246,568


___________________________________________________________________________________________

___________________________________________________________________________________________


The caption ‘Other financial assets’, detailed above includes economic rights of several players, whose sporting rights were sold by FCPorto SAD, while keeping part of their economic rights. During the year ended 30 June 2014 were estimated impairments related to these players’ economic rights that match the best Board of Directors’ estimate of the recoverable value expected from these investments.

10. GOODWILL In the year ended June 30, 2014 and 2013, the detail of goodwill is as follows:

This balance as of June 30, 2014, refers to the Goodwill computed as follow:

(i) During the year ended June 30, 2014, following the capital increase operation in FCP Media, S.A., the FCP SAD holds now 98.78% of the its share capital in the amount of 2,901,670 Euro as described in Note 6.

(ii) During the year ended June 30, 2007, in the acquisition of 90% of the share capital of PortoSeguro, Lda., in the amount of 717, 647 Euro, deducted from the accumulated impairment losses calculated in previous years in the amount of 479,602 Euro.

The Group carries out annual impairment tests on goodwill and whenever there are indications

that it may be impaired. During the years ended 30 June 2014 and 2013, the Group has tested the goodwill impairment, having estimated an impairment loss in the amount 221,000 Euro related to the subsidiary PortoSeguro at the year ended June 30, 2013.

30.06.2014 30.06.2013

Acquisition Acquisition

Description % Held cost % Held cost

Other entities 15,120 17,119

Other investments

Economic rights of players

Tomás Costa - - 50% 861,465

Stepanov - - 50% 818,750

Prediger 50% 664,950 50% 664,950

Souza 25% 658,333 25% 658,333

Soares 70% 448,000 70% 448,000

Orlando Sá - - 25% 355,183

Other players 136,633 128,035

1,907,916 3,934,716

Accumulated impairment losses (Note 22) (1,202,037) (1,705,267)

720,999 2,246,568

30.06.2014 30.06.2013

PortoSeguro 238,045 238,045

FC Porto - Media, S.A. 2,901,670 -

3,139,715 238,045


___________________________________________________________________________________________

___________________________________________________________________________________________


For impairment assessment purposes of the subsidiaries PortoSeguro and FC Porto – Media, S.A., the recoverable amount of the Cash Generating Unit was calculated based of value in use, using the discounted cash flow method, based on the business plan developed by the company’s representative and duly approved by the Group’s Board of Directors.

The key assumptions used in the mentioned business plan are as follows: Period used: 5 years cash-flow projection Growth rate (g)(1): 2.0% Discount rate (2): 10,7%

(1) Growth rate used to extrapolate cash flows beyond the business plan period (2) Discount rate applied to projected cash flows The Board of Directors, based on the discounted value of the forecasted cash flows of the Cash

Generating Unit of these business segments, discounted at the rate of 10.7%, concluded that, as of 30 June 2014, the recoverable amounts exceed the carrying amount of their net assets, not having been established any additional need of impairment recognition. The projected cash flows were based on the historic performance and on the expectations regarding future development of the business.

11. TRADE RECEIVABLES

Non-current assets The detail of non-current balances of ‘Trade receivables’ as of 30 June 2014 and 2013 is as follows:

The balance of the caption ‘Non-current assets - Trade receivables - Futebol Clube do Porto’ refers to the medium and long term Futebol Clube do Porto’s account receivable. The FCPorto, SAD Board of Directors’, together with the FCP Clube Management, defined an action plan to reduce the debt gradually, having this plan been formalized as of 30 June 2011. This payment plan requires the Club endowment of financial capacity through a set of different measures such as: (i) change of the actual operating model of Futebol Clube do Porto Group, based in the transference of the Dragon Stadium rents’ related income to the Club; (ii) revision of the price policy and internal redistribution of the quotas of the associates between the Club and

30.06.2014 30.06.2013

Trade receivables:

Transactions of players' registrations - 13,500,000

Futebol Clube do Porto 11,243,921 12,268,718

11,243,921 25,768,718

Effect of discouting trade receivables - (1,001,965)

11,243,921 24,766,753


___________________________________________________________________________________________

___________________________________________________________________________________________


FCPorto, SAD; and (iii) the amateur sports’ medium term budget rationalization under the Club´s management. The mentioned plan, which estimates the recovery of that amount trough fifteen years, until the season of 2025/26, considers an interest rate at Euribor 6M, increased of a 6% spread. The payment plan assumes the settlement of biannual raising instalments (capital and interests), with maturity in 31 December and 30 June of each sporting season. In the season 2014/15 two instalments totalizing 740,197 Euro of capital and 759,803 Euro of interests will take place at interest rate above referred. On medium and long term, the maturity of those instalments can be resumed as follows:

At the time of the statement of financial position, the non-current receivables are not due and was not recorded any impairment losses on these. Current assets

The detail of current balances of ‘Trade receivables’ as of 30 June 2014 and 2013 is as follows:

As of 30 June 2014 and 2013 the balance of the current and non-current caption “Trade receivables - Transactions of players' registrations” includes, essentially, the following receivables:

Maturity Capital Interests

01.07.2015 a 30.06.2016 621,636 878,364

01.07.2016 a 30.06.2020 3,422,712 2,939,970

01.07.2020 a 30.06.2026 7,199,572 1,754,873

11,243,921 5,573,206

30.06.2014 30.06.2013

Trade receivables - current accounts:

Transactions of players' registrations 40,313,212 44,367,319

Current operations 19,925,711 15,586,676

60,238,923 59,953,995

Trade receivables - bills receivable:

Current operations 5,000,000 4,450,000

5,000,000 4,450,000

Trade receivables - doubtfull accounts: 4,878,254 5,042,712

70,117,177 69,446,707

Effect of discouting trade receivables (740,393) (274,594)

Accumulated impairment losses (Note 22) (4,878,255) (5,042,712)

64,498,529 64,129,401


___________________________________________________________________________________________

___________________________________________________________________________________________


On June 30, 2014, the balances receivable from entities mentioned above resulted essentially from the sale of the economic rights of the players Otamendi, Hulk, Fernando Falcao, Ruben Micael, Walter, Lisandro Lopez, Cissokho, Atsu and Andre Castro.

The account receivables from Zenit St. Petersbourg and Valencia CF were settled after June 30,

2014. The balance of the caption ‘Trade receivables - Current Accounts - Current operations’ includes

balances resulting from several operations, with emphasis on the account receivables of:

(i) Futebol Clube do Porto (“Clube”) (5,736,126 Euro as of 30 June 2014 and 989,679 Euro as of 30 June 2013);

(ii) Euroantas, Promoção e Gestão de Empreendimentos Imobiliários S.A. (“Euroantas”) (7,102,589 Euro as of 30 June 2014 and 5,715,804 Euro as of 30 June 2013);

(iii) Portugal Telecom SGPS, S.A. (2,244,750 Euro as of 30 June 2014 and 2,469,004 Euro as of 30 June 2013).

The caption ‘Trade receivables – bills receivable’ includes bills not due at the end of the reporting period, part of which were discounted (Note 18). As of 30 June 2014 and 2013, these bills are related to accounts receivable resulting from the sale of television broadcasting rights.

The Group's exposition to credit risk is attributed to accounts receivable relating with its’

operational activity. The amounts presented on the face of the statement of financial position are net of impairment losses, which were estimated, based upon the Group’s past experience and on the assessment of the actual situation and economic environment. The Group considers that the book value of accounts receivable, net of impairment losses, reflects their fair value.

As of 30 June 2014 there are no indications that the debtors of trade accounts receivable not due

will not fulfil their obligations on normal conditions, thus no impairment loss was recognised. As of 30 June 2014 and 2013 the ageing of trade receivables are as follows:

Entity jun/14 jun/13

Current Non Current Current Non Current

Valencia CF 11,000,000 - - -

Zenit St Petersburg 10,000,000 - 10,000,000 10,000,000

Manchester City 7,500,000 - - -

Atlético de Madrid 3,875,803 - 12,750,000 3,500,000

Fluminense FC 2,125,000 - - -

Olympique Lyon 1,661,788 - 1,661,788 -

Chelsea FC 1,500,000 - - -

Kasimpasa 1,058,000 - - -

Inter Milão - - 9,500,000 -

AS Monaco - - 3,500,000 -

Gol Football Luxembourg - - 3,500,000 -

Others 1,592,622 - 3,455,531 -

40,313,212 - 44,367,319 13,500,000


___________________________________________________________________________________________

___________________________________________________________________________________________


At June 30, 2014 and 2013 the majority of the balance of "Trade receivables – current accounts - Transactions of players’ registrations” with seniority over 360 days, refers essentially to receivables from Olympique Lyon regarding interests from the sale of the economic rights of Lisandro Lopez and Cissokho, having FCP, SAD received, after June 30, 2014, an amount of approximately 1,000,000 Euro. Since the nature of the invoices paid after June 30, 2014 (having the Company obtained a communication from FIFA's decision of the Player's Status Committee condemning Lyon to its payment) is the same of invoices still outstanding after that same date, the Board of Directors of the Company believes that the remaining amount is due and recoverable by which does not considers the need to record any impairment loss regarding this account receivable. As of June 30, 2014 and 2013 almost of the balance of "Trade receivables - current accounts - Transactions of players’ registrations” with seniority over 180 days refers to contractually defined amounts. There are no cases of significant settlement delays. As of June 30, 2014 and 2013 a significant portion of the balance of "Trade receivables - current accounts - Current operations" with seniority over 180 days refers to the accounts receivables from FC Porto and Euroantas, both related parties belonging to the Futebol Clube do Porto Group. As of June 30, 2014 and 2013 the balance of "Doubtful Accounts receivable" includes, mainly, receivables from football clubs, such as União Desportiva de Leiria, Futebol, Futebol SAD, Club Atlético Independiente and Esporte Clube Vitória. In determining the recoverability of accounts receivable the Group considers all the changes in credit quality of counterparties from the date the granting of credit by the reporting date of the consolidated financial statements. The Group has no significant concentration of credit risk, since the risk is diluted by a scattered set of customers. Management believes that credit risk does not exceed the impairment loss recorded for doubtful debts and that the maximum exposure to credit risk corresponds to the total number of costumers shown in the consolidated statement of financial position.

Due date

30.06.2014 Total - 90 days 90 - 180 days 180 - 360 days + 360 days

Trade receivables - current accounts 60,238,923 42,862,552 1,689,711 5,928,599 9,758,061

Transactions of players' registrations 40,313,212 38,342,945 - - 1,970,267

Current operations 19,925,711 4,519,607 1,689,711 5,928,599 7,787,794

Trade receivables - bills receivable 5,000,000 5,000,000 - - -

Trade receivables - doubtfull accounts 4,878,254 - - 129,777 4,748,477

70,117,177 47,862,552 1,689,711 6,058,376 14,506,538

Due date


Trade receivables - current accounts 59,953,995 43,516,614 5,435,355 2,930,820 8,071,206

Transactions of players' registrations 44,367,319 36,033,417 4,682,671 1,889,096 1,762,135

Current operations 15,586,676 7,483,197 752,684 1,041,724 6,309,071

Trade receivables - bills receivable 4,450,000 4,450,000 - - -

Trade receivables - doubtfull accounts 5,042,712 - - - 5,042,712

69,446,707 47,966,614 5,435,355 2,930,820 13,113,918


___________________________________________________________________________________________

___________________________________________________________________________________________


12. INVENTORIES

The detail of the caption ‘Inventories’ as of 30 June 2014 and 2013 is as follows:

The inventories’ caption, as of 30 June 2014 and 2013, considers the merchandise related with the exploration of the commercial areas of Futebol Clube do Porto, carried out by the subsidiary Porto Comercial. The cost of sales, for the years ended 30 June 2014 and 2013 was calculated as follows:

13. OTHER CURRENT AND NON-CURRENT ASSETS

Other non-current assets The detail of caption "Other non-current assets" as of 30 June 2014 and 2013 is as follows:

During the year ended June 30, 2014 was signed between PortoComercial and the Futebol Clube do Porto a contract for the exploitation of the FCP Museum (which opening to the public occurred in October 2013). Under this contract PortoComercial acquired the right to explore the museum during a period of 8 years and paid in advance the amount of 12 million Euro relating to outstanding rents. On June 30, 2014 the caption “Other non-current assets - Museum exploitation” correspond to the rents for the year 2015/16 and following.

30.06.2014 30.06.2013

Inventories 1,974,275 1,415,250

Accumulated impairment losses on inventories (Note 22) (377,293) (302,696)

1,596,982 1,112,554

30.06.2014 30.06.2013

Opening balance 1,415,250 916,896

Purchases 3,091,357 2,411,386


2,532,332 1,913,032

Impairment losses (Note 22) 74,597 151,481

2,606,929 2,064,513

30.06.2014 30.06.2013

Prepayment - 'Estádio do Dragão' rent (Note 34) 14,963,937 14,963,937

Prepayment - 'Centro de treinos do Olival' rent 253,012 289,157

Prepayment - Museum exploitation 9,375,000 -

Deferred expenses - contract loans of players 100,000 -

24,691,949 15,253,094


___________________________________________________________________________________________

___________________________________________________________________________________________


Other current assets The detail of caption "Other current assets" as of 30 June 2014 and 2013 is as follows:

As of 30 June 2014, the amount recorded in the caption “Other debtors” includes advances to athletes (1,140,527 Euro). As of June 30, 2013 this caption refers essentially to (i) advances to athletes (755,719 Euro), as well as (ii) advances made to Futebol Clube do Porto (6,547,669 Euro) intended, mainly to the construction of the Futebol Clube do Porto Museum, which was inaugurated in October 2013.

As of June 30, 2014 and 2013 the caption "Advances for expenses relating to the next season"

includes essentially deferred expenses related to scouting contracts (940,260 Euro as of June 30, 2014 and 844,270 Euro as of June 30, 2013), deferred costs with players’ loans and intermediation costs from technical staff hiring (808,200 Euro as of June 30, 2014) and sports equipment (413,102 Euro on June 30, 2013).

As of 30 June 2014 and 2013 the ageing of other debtors is as follows:

30.06.2014 30.06.2013

State and public sector 4,778,499 2,657,658

Other debtors 2,594,626 8,925,603

7,373,125 11,583,261

Accrual income

Champions league participation bonus (Note 2.3 l) iv))

to be received2,100,000 8,600,000

Interests receivable from group companies 393,845 -

Advirtis ing revenue to be billed 472,044 177,567

Insurance claims 381,600 -

Bonus for FC Porto, SAD players participation in the

Football World Cup 2014 to receive 555,572-

Other accrual income 137,378 474,926

Deferred expenses

Advances for expenses relating to the next season 1,800,571 1,707,373

Prepayment - Museum exploitation 1,500,000 -

Insurance 303,945 218,478

Other deferred expenses 53,143 58,212

7,698,098 11,236,556

15,071,223 22,819,817

Due date


Athletes 1,140,527 46,709 - 309,231 784,587

Other debtors 1,454,099 1,056,509 - - 397,590

2,594,626 1,103,218 - 309,231 1,182,177


___________________________________________________________________________________________

___________________________________________________________________________________________


As of 30 June 2014 and 2013 the remaining financial assets recorded in the caption “Other non-

current assets” and “Other current assets” are not due. 14. CASH AND CASH EQUIVALENTS

The caption ‘Cash and cash equivalents’ as of 30 June 2014 and 2013 is made up as follows:

As of 30 June 2014 and 2013 the amounts recorded in the caption “Treasury applications” refer to bank deposits repayable in less than three months and bear market interest rates.

15. TAXES

The Group has not recognised deferred taxes in its consolidated financial statements as there are no significant temporary differences between the amounts of expenses and income recognised for accounting and for tax purposes, except for deferred tax assets relating to tax losses carried forward and non-tax deductible provisions and impairment losses, which were not recognised for reasons of prudence. The tax losses carried forward according to the income declarations presented by the companies included in the consolidation perimeter amounted to 116,619,727 Euro and mature as follows:

Due date


Athletes 755,719 10,489 - 130,572 614,658

Other debtors 8,169,884 6,881,946 645,680 439,547 202,711

8,925,603 6,892,435 645,680 570,120 817,368

30.06.2014 30.06.2013

Cash 4,550 5,385

Bank deposits repayable on demand 14,695,889 17,547,401

Treasury applications 265,000 265,000

14,965,439 17,817,786

Amount Expiry date

Generated in the year ended:

30 de Junho de 2009 11,233,087 30 June 2015

30 de Junho de 2010 12,066,788 30 June 2016

30 de Junho de 2011 12,895,224 30 June 2015

30 de Junho de 2012 39,861,295 30 June 2016

30 de Junho de 2013 1,675,950 30 June 2018

30 de Junho de 2014 38,887,383 30 June 2019

116,619,727


___________________________________________________________________________________________

___________________________________________________________________________________________


Following is the reconciliation between profit before income tax and income tax for the year:

(1) In the calculation of the taxable profit, the Group chose to consider the reinvestment of capital gains on the sale of players registrations', in legal terms, which allowed to deduct 50% of tax capital gains generated in the year. (2) Municipality tax of companies taxed according to RETGS and which present taxable profit for the year. (3) Limitation on the deductibility of financing costs in accordance with Article 67 of the Corporate Income Tax – CIT (Código do Imposto sobre as Pessoas Colectivas) Code.

Under the Extraordinary Regime for the Settlement of Debts to Social Security and to Tax Authority ("RERD") granted by the Ministry of Finance to the voluntary payments made by taxpayers until December 31, 2013, regarding taxes due, the FC Porto SAD paid the amount of 4,227,685 Euro related to tax processes, using the provision recorded for this purpose in the amount of 1,514,094 Euro (Note 22), recognizing the remaining difference as an expense for the year, in the amount of 2,713,591 Euro. Notwithstanding the settlement of this amount, the Company maintains the complaints and judicial claims, having the Company contingent assets related with them as detailed in Note 35.

30.06.2014 30.06.2013

Profit before income tax (37,487,992) 20,904,955

Increases:

Non tax deductible amortisation, depreciation and impairment of assets

depreciable or amortizable 2,856,537-

Non tax deductible provisions - 1,952,516

Fiscal gains (1) 11,499,919 51,038,904

Accounting losses (1) - -

Non tax deductible financing costs (3) 6,499,883 -

Adjustments not deductible or beyond the legal limits 260,494 158,859

Others 489,018 362,226

Decreases:

Accounting gains (1) (22,296,904) (73,583,305)

Reversal of non tax deductible adjustments - (976,237)

Others (84,063) (9,570)

Taxable profit (38,263,108) (151,652)

Tax losses utilized (254,062) -

Tax base (38,517,170) (151,652)

Income tax rate 25.0% 25.0%

Municipal tax rate 1.5% 1.5%

Calculated tax 22,710 767

Municipality tax (2) 10,902 8,443

Autonomous taxation 487,696 271,227

Corporate income tax assessments - 309,725

Payments under the RERD 2,713,591 -

Estimated income tax excess/(insufficiency) 213 (14,682)

Others (15,186) (420)

Income tax for the year 3,219,926 575,060


___________________________________________________________________________________________

___________________________________________________________________________________________


16. SHARE CAPITAL

As of 30 June 2014, the Company’s share capital was fully subscribed and paid for and was made up of 15,000,000 nominal shares of 5 Euro each. As of 30 June 2014 the following entities held more than 20% of the subscribed share capital: - Futebol Clube do Porto – 40%

The individual financial statements of the Company as of 30 June 2014 present a shareholders’ negative equity in the amount of 28,512,038 Euro comparing with a share capital of 75,000,000 Euro, whereby the provisions of Articles 35 and 171 of the Portuguese Commercial Code (Código das Sociedades Comerciais) are applicable. With the goal to quickly fulfil this obligation, the Board of Directors has been analysing other solutions that allow the reinforcement of shareholders’ equity as referred in the Board of Directors’ Report. The Board of Directors besides planning to review this matter on the Shareholders’ General Meeting held to approve the accounts for the year, it may also call upon an Extraordinary Shareholders’ General Meeting to discuss and approve the proposals that would be presented, which can include the following alternatives: • Share capital decrease to an amount not less than the Company’s shareholders’ equity; • Capital increase paid up by the shareholders; and • A combination of these two alternatives. Following this, on September 10, 2014 was called a General Shareholders’ Meeting to be held on 2 October 2014 whose aim is the deliberation of a capital increase in the amount of 37,500,000 Euro (Note 36) of FC Porto SAD. According to Article 171 of the Portuguese Commercial Code (Código das Sociedades Comerciais), a company which shareholders’ equity is less than half of its share capital, should indicate the share capital, the amount of share capital paid and the amount of shareholders’ equity according to the last approved statement of financial position in all contracts, mail, publications, ads, websites, and in overall external activity.

17. NON-CONTROLLING INTERESTS

The changes in this caption during the years ended 30 June 2014 and 2013 were as follows:


___________________________________________________________________________________________

___________________________________________________________________________________________


18. BANK LOANS AND BONDS

The captions ‘Bank loans’ and ‘Bonds’ as of 30 June 2014 and 2013 are made up as follows:

As of 30 June 2014 the repayment schedule of the nominal value of non-current loans may be summarised as follows:

From the loans classified as liabilities at 30 June 2014, emphasis to:

Balance as at 1 July 2012 (115,678)

Net consolidated profit for the year attributable to non-controlling interests (26,102)

Distribution of dividends (44,444)

Balance as at 30 June 2013 (186,224)

Balance as at 1 July 2013 (186,224)

Net consolidated profit for the year attributable to non-controlling interests (6,804)

Changes in consolidation perimeter (Note 6) 13,220

Balance as at 30 June 2014 (179,808)

Nature Current Non-current Current Non-current

Bank loans 41,283,012 16,112,500 40,100,000 16,112,500

Credit on current accounts 10,000,000 - 10,000,000 -

Factoring 14,757,769 3,000,000 14,877,500 3,000,000

Discounted bills (Note 11) 5,000,000 - 5,000,000 -

71,040,781 19,112,500 69,977,500 19,112,500

Bonds 29,591,657 19,395,933 30,000,000 20,000,000

100,632,438 38,508,433 99,977,500 39,112,500

30.06.2014

Amortised cost Nominal value

Nature Current Non-current Current Non-current

Bank loans 23,964,514 13,125,000 22,475,000 13,125,000

Credit on current accounts 5,100,000 100,000 5,100,000 100,000

Factoring 9,489,500 - 9,489,500 -

Discounted bills (Note 11) 4,450,000 - 4,450,000 -

43,004,014 13,225,000 41,514,500 13,225,000

Bonds 9,617,134 29,526,645 10,000,000 30,000,000

52,621,148 42,751,645 51,514,500 43,225,000

30.06.2013

Amortised cost Nominal value

30.06.2014

2015/2016 10,200,000

2016/2017 28,912,500

39,112,500


___________________________________________________________________________________________

___________________________________________________________________________________________


(*) Currently designated as “Novo Banco”. (**) Subsequent to June 30, 2014 the payment due dates of this loan were renegotiated, being this loan now repayable in five annual instalments: three instalments of 3,000,000 Euro in September 2014, 2015 and 2016; and two instalments of 4,000,000 Euro in September 2017 and 2018 (Note 36). (***) Subsequent to June 30, 2014 the payment due dates of this loan were renegotiated, being this loan now repayable in 3 instalments to occur in September 2014 in the amount of 3,000,000 Euro, in October 2014 in the amount of 2,000,000 Euro and in September 2015 in the amount of 25,000,000 Euro (Note 36).

The average annual rate of bank and bond loans as of 30 June 2014 is 7.31% (8.51% as of 30 June 2013).

19. OTHER CREDITORS As of 30 June 2014 and 2013, the caption “Other creditors” is as follows:

Bank CurrentNon-

currentTotal

Open

dateInterest rate Instalments interest

Maturity

dateGuarantee / collateral

Loan issues

FC Porto SAD 2012-2015 30,000,000 - 30,000,000 Dec-12 8.25% At face value at maturity Semi-annual May-15 -

FC Porto SAD 2014-2017 - 20,000,000 20,000,000 May-14 6.75% At face value at maturity Semi-annual May-17 -

Bank loans

BES (*) (**) 5,500,000 11,500,000 17,000,000 Aug-10Euribor 12M +

spread

3 and successive annual

installmentsAnual Sep-16

Revenue for the season tickets, ticket and membership

fees until 2015/2016 season

BES (*) 875,000 875,000 1,750,000 Jan-14Euribor 6M +

spread

4 semi-annual installments of equal

valueSemi-annual Jan-16

Tax credits pledge, Club's real estate assets mortgage,

Mangala and Jackson players' registration.

BES (*) (***) 30,000,000 - 30,000,000 Oct-13Euribor 3M +

spreadAt face value at maturity Quarterly Oct-14 Mangala and Jackson's player registration.

BES (*) 1,650,000 - 1,650,000 Aug-12Euribor 1M +

spread

34 monthly equal and consecutive

installmentsMonthly May-15 Advertising revenues

Millennium BCP 825,000 1,237,500 2,062,500 Dec-13Euribor 6M +

spread

10 quarterly installments of equal

valueQuarterly Dec-16

Tax credits pledge and Club's real estate assets

mortgage.

Millennium BCP 1,250,000 2,500,000 3,750,000 May-99Euribor 1M +

spreadAt face value at maturity Monthly Sep-14 Helton's player registration.

"Factoring"

Internationales Bankhaus

Bodensee AG4,489,500 - 4,489,500 Dec-13 6.75%

Tw o equal installments in Jul-14

and Jan-15Antecipated Jan-15

Revenues from advertising sponsorship to receive from

Portugal Telecom from 2014/15 season.

Internationales Bankhaus

Bodensee AG4,000,000 - 4,000,000 May-14 6.75%

3 installments on the dates of

receipt of the UEFA scheduled for

Sep-14, Dec-14 and Jan-15

Antecipated Jan-15Amount to receive from the play off UCL 14/15 access,

group's stage 14/15 and 14/15 market pool.

BIC 1,560,000 1,560,000 3,120,000 Apr-14Euribor 6M +

spreadAt face value at maturity Antecipated Feb-16


Unicer f rom 2014/15 and 2015/16 seasons.

BIC 1,440,000 1,440,000 2,880,000 Jul-14Euribor 6M +

spreadAt face value at maturity Antecipated Jun-16


Unicer f rom 2014/15 and 2015/16 seasons.

GL Europe Luxembourg 3,388,000 - 3,388,000 Apr-14 6.75% At face value at maturity Antecipated Jul-14Discounted bill f rom Atletico Madrid - 3,5M€ untill July 31,

2014

Bil ls discounted

BES (*) 5,000,000 - 5,000,000 Apr-14 6.32% At face value at maturity Antecipated Jan-15 Amount receivable from PPTV - TV Broadcasting rights

Secured current accounts

BES (*) 10,000,000 - 10,000,000 Feb-13Euribor 3M +

spreadAt face value at maturity Quarterly Aug-14

Amount (partial) to receive f rom Zenit St. Petersbourg

regarding the disposal of Hulk player registation.

99,977,500 39,112,500 139,090,000

Entity Current Non-current Current Non-current

Pearl Design 2,125,000 - - 2,125,000

Doyen Sports Investments Ltd. 2,352,941 - - 2,352,941

Doyen Sports Investments Ltd. 2,647,059 - - 2,647,059

Goog for Sports Ltd. 1,500,000 - - -

8,625,000 - - 7,125,000

Interests 1,402,940 - - 544,894

10,027,940 - - 7,669,894

30.06.2014 30.06.2013


___________________________________________________________________________________________

___________________________________________________________________________________________


In the financial year ended 30 June 2011, the Company entered into associated financial interests contracts with third parties, in order to transfer part of the economic rights of two of the players above mentioned: (i) 25% of Walter economic rights’ by 2,125,000 Euro to Pearl Design Holding, Ltd.. Once that, according to the referred contracts, the significant risks and benefits regarding to the detention of those rights were not fully transferred, those transactions were not recorded as sales, and therefore, the part of the economic rights of that intangible assets was not derecognised. The amounts received from those entities were recorded in the caption of the statement of financial position “Other creditors”. On 14 December 2011, the Company entered, with Doyen Sports Investments Limited, into two associated financial interests’ contracts in order to transfer part of the economic rights of the players Defour and Magala amounting 2,352,941 Euro and 2,647,059 Euro, respectively. Once that, according to the referred contracts, the significant risks and benefits regarding to the detention of those rights were not fully transferred, those transactions were not recorded as sales, and therefore, the part of the economic rights of that intangible assets was not derecognised. On January 2, 2014, the Group ceded to Good Sports Limited the amount receivable from Chelsea FC, in the amount of 1,500,000 Euro, related with the sale of the player’s registration rights of Christian Atsu. This loan bears interest at 8% and the maturity date is August 25, 2014. Thus, the percentages held of the players, referred to in Note 8, take in consideration the sharing with those entities of the inherent results in future transactions of the players Walter, Defour and Mangala.

20. TRADE PAYABLES Non-current liabilities The detail and maturity of non-current trade payables balances as of 30 June 2014 and 2013 is as follows:

30.06.2014 > 1 YEAR > 2 YEARS > 3 YEARS > 4 YEARS > 5 YEARS

Trade payables - non-current

Tangible and intangible assets' supliers:

Transactions of players' registrations 987,333 987,333 - - -

Other tangible and intangible assets' supliers 51,364 38,523 12,841 - - -

Effect of discounting trade payables (32,442) (32,442) - - - -

1,006,255 993,414 12,841 - - -

30.06.2013 > 1 YEAR > 2 YEARS > 3 YEARS > 4 YEARS > 5 YEARS

Trade payables - non-current


Transactions of players' registrations 4,000,000 4,000,000 - - - -

Other tangible and intangible assets' supliers 89,501 38,358 38,357 12,786 - -

Effect of discounting trade payables (343,938) (343,938) - - - -

3,745,563 3,694,420 38,357 12,786 - -


___________________________________________________________________________________________

___________________________________________________________________________________________


The balance of the non-current trade payable account “Suppliers – transactions of players’ registrations” as at 30 June, 2014, is due to: (I) the acquisition of economic and sporting rights of Lichonvski in the amount of 612,333 Euro; and (ii) the acquisition of economic and sporting rights of Chidrera Ezeh in the amount of 375,000 Euro. The balance of the non-current trade payable account “Suppliers – transactions of players’ registrations” as at 30 June, 2013, is due to: (i) sporting and economic rights of the player Herrera, in the amount of 2,000,000 Euro; (ii) acquisition of 35% of the economic rights of the player James Rodriguez, in the amount of 2,000,000 Euro. Current liabilities As of 30 June 2014 and 2013, the balances of current trade payables and their exigibility may be detailed as follows:

As of 30 June 2014 and 2013 the main balances included in the captions, current and non-current, ‘Fixed assets’ suppliers – Transactions of players’ registrations’ can be detailed as follows:

Payable to

30.06.2014 - 90 days 90 - 180 days + 180 days

Trade payables - current account 11,544,496 11,544,496 - -


Transactions of players' registrations 24,534,256 22,569,104 51,409 1,913,743

Obligations under finance leases 38,524 9,631 9,631 19,262

24,572,780 22,578,735 61,040 1,933,005

Effect of discounting trade payables (270,740) (156,623) (45,292) (68,825)

35,846,536 33,966,608 15,748 1,864,180

Payable to

30.06.2013 - 90 days 90 - 180 days + 180 days

Trade payables - current account 5,546,113 5,546,113 - -


Transactions of players' registrations 56,176,292 32,497,830 9,397,801 14,280,661

Leasing 60,827 15,207 15,207 30,413

Other tangible and intangible assets' supliers - - - -

56,237,119 32,513,037 9,413,008 14,311,074


61,677,137 37,997,774 9,395,259 14,284,104


___________________________________________________________________________________________

___________________________________________________________________________________________


On June 30, 2014, the balances payable to the entities mentioned above have resulted mainly from the acquisition of economic rights, the proportional sale values of the registration player’s held by third parties and intermediation service costs provided in acquisition and disposals of players’ registrations regarding the athletes Iturbe, Fernando, Kayembe, James Rodriguez, Herrera, Ghilas, Igor Lichnovski and Quintero.

21. OTHER CURRENT AND NON-CURRENT LIABILITIES

The captions ‘Other non-current liabilities’ and ‘Other current liabilities’ as of 30 June 2014 and 2013 can be detailed as follows:

Entity jun/14 jun/13

Current Non-current Current Non-current

Pencilhill 5,400,000 -

Onsoccer International, S.A. 2,500,000 - 238,311 -

Danubio Finanzierungsleistungen und Marketing GMBH2,065,000 - - -

Gol Football Luxembourg 2,000,000 - 6,750,000 2,000,000

Promotora del Club Pachuca SA de CV 2,000,000 - 6,000,000 2,000,000

Universidade do Chile 1,224,667 612,333 - -

Moreirense Futebol Clube, SAD 1,675,000 - - -

Delfino Pescara 1,110,800 - - -

MHD, S.A. 586,874 - 1,548,282 -

MS Entertainmnet Law-Melanie Schärrer 586,874 - - -

Soccer Invest Fund 550,000 - 2,200,000 -

DNN Lda. 500,000 - - -

Cluj 380,000 - 1,330,000 -

River Lane Youyh Club - 375,000 - -

Estoril - SAD 207,500 - 1,500,000 -

Gestifute, S.A. 134,000 - 3,057,057 -

Clube de Futebol America S.A. de C.V. - - 5,500,000 -

Standard de Liége S.A. - - 4,233,021 -

Club Jaguares de Chapas - - 4,204,893 -

Orel B.V. - - 3,945,814 -

Sporting Sociedade Desportiva Futebol, SAD - - 2,841,953 -

Play International B.V. - - 154,500 -

C.D. Nacional - - 151,500 -

Others 3,613,541 - 6,228,349 -

24,534,256 987,333 49,645,369 4,000,000

30.06.2014 30.06.2013

Other non-current liabilities

Accrued expenses:

Cost of transactions of players' registrations, not yet due 1,852,280 2,655,736

Deferred income:

Broadcasting rights advances/antecipated invoicing

- seasons 2015/16 to 2017/18 (Note 31) 6,000,000 8,000,000

Deferred revenue sponsorship - BMG Museum 5,046,639 -

Effect of discounting trade payables (136,297) (449,704)

12,762,622 10,206,032


___________________________________________________________________________________________

___________________________________________________________________________________________


The caption ‘Other current/non-current liabilities – Cost of transactions of players' registrations, not yet due’ includes commitments assumed in players registrations transactions supported by the respective contracts and not yet invoiced as of the end of the reporting period. As of 30 June 2014, includes, namely, amounts related to: (a) intermediation costs of players in the amount of 5,583,452 Euro related, to among others,

with the sale of registration rights of the players Iturbe, Fernando and Otamendi; (b) celebration and/or renewal of the labour contracts, namely signing-on fees and image rights

in the amount of 3,417,565 Euro related, among others, to the players Reyes and Diego Herrera.

As of 30 June 2013, includes, namely, amounts related to: (a) registration’s sale commission amounting 2,730,108 Euro related, among other to: economic

rights acquisition of Danilo , Herrera and Mangala and the sale of Guarín economic rights; (b) solidarity mechanism, amounting 3,472,400 Euro, related, among others, to economic rights

sale of Falcao and James Rodriguez; (c) celebration and/or renewal of the labour contracts, namely signing-on and loyalty fees,

amounting 3,857,740 Euro related, among others, to the players: Diego Reyes, Herrera and Defour.

In the classification as non-current balance, which regards the signing-on fees, were considered the agreed payment dates. The item "Other payables" as of June 30, 2014, includes remunerations, bonuses and termination compensations payable to players who have terms of payment in the short term (approximately 7,567,000 Euro as of June 30, 2014 and 5,800,000 Euro as of June 30, 2013). On June 30, 2013,

30.06.2014 30.06.2013

Other current liabilities

State and public sector 3,127,033 6,537,415

Advances to clients 5,000,000 4,450,000

Other creditors 9,902,184 9,643,050

18,029,217 20,630,465

Accrued expenses:

Accrued payroll 767,371 654,351

Cost of transactions of players' registrations, not yet due 7,839,508 7,697,823

Competition bonuses pending processing 2,071,921 330,642

Other accrued expenses 519,099 1,329,362

11,197,899 10,012,178

Deferred income:


- seasons 2014/15 (Note 31) 2,000,000 1,750,000

Sale of season tickets 328,613 503,576

Advertising 1,825,000 2,238,102

Deferred revenue sponsorship - BMG Museum 651,679 3,946,300

Other deferred income 221,509 974,575

5,026,801 9,412,553

Effect of discounting trade payables (434,242) (426,044)

33,819,675 39,629,152


___________________________________________________________________________________________

___________________________________________________________________________________________


this caption also includes the amount of 600,000 Euro received from the Bank of Minas Gerais as an advance under the signature of a partnership agreement concerning advertising and support of the construction of the FCP Museum, inaugurated on 26 October 2013. On June 30, 2014 and 2013, the caption "Competition bonuses pending processing" includes amounts relating to matches participation premiums and amounts and bonuses attributed to certain athletes in order to guarantee the minimum annual wage contracted in their respective labour contract. The caption "Deferred Revenue Sponsorship - BMG Museum" refers to the deferral of revenue related to the agreement signed between the subsidiary PortoComercial and Banco de Minas Gerais (“BMG”) as an advance under the signature of a partnership agreement concerning advertising and support of the construction of the FC Porto Museum. This contract establishes the sponsorship and naming of the Museum in the amount of 8,000,000 Euro until 2025. As mentioned in Note 13, PortoComercial acquired, in October 2013, to Futebol Clube do Porto the right to explore the Museum, having paid in advance 12,000,000 Euro, corresponding to the rents of 8 years of the Museum exploration. The maturity of the captions ‘Other non-current liabilities’ and ‘Other current liabilities’ as of 30 June 2014 and 2013 can be detailed as follows:

30.06.2014 > 1 Year > 2 years > 3 years > 4 years > 5 years


Accrued expenses:

Cost of transactions of players' registrations, not yet due 1,852,280 1,120,352 453,464 278,464 - -

Deferred income:


- seasons 2015/16 to 2017/18 (Note 31)6,000,000 2,000,000 2,000,000 2,000,000 - -

Deferred revenue sponsorship - BMG Museum 5,046,639 651,679 651,679 651,679 651,679 2,439,923

Effect of discounting trade payables (136,297) (82,439) (33,367) (20,490) - -

12,762,622 3,689,592 3,071,776 2,909,653 651,679 2,439,923

30.06.2014 < 90 days90-180

days

180-360

days


State and public sector 3,127,033 3,127,033 - -

Advances to clients 5,000,000 - - 5,000,000

Other creditors 9,902,184 9,902,184 - -

18,029,217 13,029,217 - 5,000,000

Accrued expenses:

Accrued payroll 767,371 - 255,790 511,581

Cost of transactions of players' registrations, not yet due 7,839,508 6,887,175 612,333 340,000

Competition bonuses pending processing 2,071,921 2,071,921 - -

Other accrued expenses 519,099 519,099 - -

11,197,899 9,478,195 868,123 851,581

Deferred income:


- seasons 2014/15 (Note 31) 2,000,000 500,000 500,000 1,000,000

Sale of season tickets 328,613 82,153 82,153 164,307

Advertising 1,825,000 912,500 912,500 -

Deferred revenue sponsorship - BMG Museum 651,679 162,919 162,290 326,470

Other deferred income 221,509 221,509 - -

5,026,801 1,879,081 1,656,943 1,490,777


33,819,675 23,933,677 2,522,341 7,318,397


___________________________________________________________________________________________

___________________________________________________________________________________________


22. PROVISIONS AND ACCUMULATED IMPAIRMENT LOSSES

The movement in provisions and accumulated impairment losses in the years ended 30 June 2014 and 2013 is as follows:

30.06.2013 > 1 Year > 2 years > 3 years > 4 years > 5 years


Accrued expenses:

Cost of transactions of players' registrations, not yet due 2,655,736 1,156,935 766,873 453,464 278,464 -

Deferred income:


- seasons 2014/15 to 2017/18 (Note 31)8,000,000 2,000,000 2,000,000 2,000,000 2,000,000 -

Effect of discounting trade payables (449,704) (195,907) (129,857) (76,786) (47,153) -

10,206,032 2,961,028 2,637,016 2,376,678 2,231,311 -

30.06.2013 < 90 days90-180

days

180-360

days


State and public sector 6,537,415 6,537,415 - -

Advances to clients 4,450,000 4,450,000 - -

Other creditors 9,643,050 9,643,050 - -

20,630,465 20,630,465 - -

Accrued expenses:

Accrued payroll 654,351 - 218,117 436,234

Cost of transactions of players' registrations, not yet due 7,697,823 7,269,428 43,750 384,645

Competition bonuses pending processing 330,642 330,642 - -

Other accrued expenses 1,329,362 1,329,362 - -

10,012,178 8,929,432 261,867 820,879

Rendimentos a reconhecer:


- seasons 2013/14 (Note 31) 1,750,000 437,500 437,500 875,000

Sale of season tickets 503,576 125,894 125,894 251,788

Advertising 2,238,102 1,119,051 1,119,051 -

Deferred revenue sponsorship - BMG Museum 3,946,300 1,973,150 1,973,150 -

Other deferred income 974,575 974,575 - -

9,412,553 4,630,170 3,655,595 1,126,788

Actualização de responsabilidades com terceiros (426,044) (402,334) (2,421) (21,289)

39,629,152 33,787,733 3,915,041 1,926,378

Opening Closing

Balance Balance

Captions 30.06.2013 Increase Utlisation Decrease 30.06.2014

Accumulated impairment loss on investments (Note 9) 1,705,267 1,532,169 - (2,035,399) 1,202,037

Accumulated impairment loss on account receivables (Note 11) 5,042,712 322,016 (78,184) (408,289) 4,878,255

Accumulated impairment loss on inventories (Note 12) 302,696 74,597 - 377,293

Provisions 1,924,649 - (1,514,094) - 410,555

8,975,324 1,928,782 (1,592,278) (2,443,688) 6,868,140

Opening Closing

Balance Balance

Captions 30.06.2012 Increase Utlisation Decrease 30.06.2013

Accumulated impairment loss on investments (Note 9) 890.680 1.731.516 (916.929) - 1.705.267

Accumulated impairment loss on account receivables (Note 11) 5.833.849 821.467 (57.832) (1.554.772) 5.042.712

Accumulated impairment loss on inventories (Note 12) 151.215 151.481 - - 302.696

Provisions 1.924.649 - - - 1.924.649

8.800.393 2.704.464 (974.761) (1.554.772) 8.975.324


___________________________________________________________________________________________

___________________________________________________________________________________________


Provisions Tax litigations As of June 30, 2013 the Group presented provisions in the amount of 1,514,094 Euro to cover any contingencies that might arise from an unfavourable outcome of tax litigations, which had been challenged through complaints/administrative appeals or judicial challenges by the Group, by the fact that the Board of Directors and theirs legal and tax advisors consider that the reasons given by the Tax Administration on the matters referred, were not in accordance with Portuguese law. However, under the Extraordinary Regime for the Settlement of Debts to Social Security and to Tax Authority ("RERD") granted by the Ministry of Finance to the voluntary payments made by taxpayers until December 31, 2013, regarding taxes due, the FC Porto SAD paid the amount of 4,227,685 Euro related to tax processes, using the provision recorded for this purpose in the amount of 1,514,094 Euro, recognizing the remaining difference as an expense for the year Note 15). Notwithstanding the settlement of this amount, the Company maintains the complaints and judicial claims, having the Company contingent assets related with them as detailed in Note 35. Currently, the Company does not have any tax assessments settlements’ pending from regularization, by which no additional provisions were not registered in order to face tax contingencies. Other litigations During the year ended 30 June 2008 a judicial process was brought by a third party against the subsidiary PortoEstádio; in May 2009 a sentence was issued by the the Judicial Court’s (7ª Vara Cível do Tribunal Judicial do Porto) condemning PortoEstádio to pay a compensation of 404,241 Euro, plus default interests. Despite PortoEstádio presented an appeal against this verdict, as of 30 June 2014 the caption ‘Provisions’ consider the amount of, approximately, 410.000 Euro to cope with the risk of an unfavourable outcome of this process. Bank guarantees As of June 30, 2014, the Group had the following bank guarantees: (a) PortoComercial: bank guarantees in the amount of 137,511 Euro in favour of malls store’s leaseholders; (b) PortoEstádio: bank guarantee of 410,555 Euro regarding the judicial process described above; (c) PortoSeguro: bank guarantees of 15,000 Euro in favour of the “Instituto de Seguros de Portugal” – “ISP”, the Portuguese Insurance Institute; (d) Dragon Tour: bank guarantee of 75,000 Euro in favour of IATA - International Air Transport Association. As of June 30, 2013, FC Porto, SAD had requested the issuance of bank guarantees in favour of the Tax Authorities in the amount of 5,445,230 Euro, related with the additional tax settlements for the years ended June 30, 2004, 2008 and 2009. With the settlement of the amounts claimed by the Tax Authorities associated with these inspections in December 2013, under the RERD, these guarantees were extinguished.


___________________________________________________________________________________________

___________________________________________________________________________________________


Other responsibilities The FC Porto, SAD endorsed a guarantee towards FCP Serviços Partilhados, S.A. in the amount of 503,574 Euro, under the financial leasing of computer equipment purchased by this entity of the Futebol Clube do Porto Group. Impairment losses During the financial year ended 30 June 2013, the Company reversed impairment losses on accounts receivables in the amount of 1,554,772 Euro, from which 1,142,229 Euro are referring to accounts receivable of FCPBasquetebol, SAD which the respective impairment losses had been recorded in the year ended as at 30 June 2012, since the accounts receivable proved to be uncollectible due to the decision of liquidation and dissolution of that company at the beginning of the season of 2012/13. However given that, by agreement with the FC Porto, the club took their loss in receivables towards this company, impairment losses were reversed counterpart of an increase in accounts receivable from Futebol Clube do Porto.

23. PENSION LIABILITIES The Group has committed to grant to certain employees cash contributions as retirement complement plans. These benefits are set out in the Collective Agreement between FC Porto and CESP – “Sindicato dos Trabalhadores do Comércio, Escritórios e Serviços de Portugal e Outros” (Trade Union for workers of Commerce, Offices and Services of Portugal). The most recent actuarial valuation of the plan and the present value of defined benefits obligation was made in July 18, 2014 by Mercer (Portugal) Lda.. The present value of the defined benefit obligation and the cost of the current services and past services were measured using Projected Unit Credit method. The main actuarial assumptions followed in the actuarial evaluation were as follows:

During the year ended as of June 30, 2014 the Group recorded, for the first time the responsibilities associated with this pension plan under the caption "Pension liabilities " with the respective counterpart the Income Statement in the amount of 448,818 Euro (Note 26).

The major risks for which the pension plan may be exposed are as follow: • Behaviour of demographic variables; • Changes to occur in the Social Security system; • Pension indexation.

30.06.2014

Retirement normal age 66 years

Mortality table TV 88/90

Disability table EVK 80 at 50%

Discount rate 2.75%

Inflation rate 2.00%

Salaries increase rate 3.00%

Pension increase rate 2.00%


___________________________________________________________________________________________

___________________________________________________________________________________________


A sensitivity analysis was performed in order to measure the impact on pension liabilities caused by changes in the discount rate (increase of 25 basis points) and a negative impact of approximately 17,000 Euro was calculated. 24. SERVICES RENDERED

Services rendered for the years ended 30 June 2013 and 2012 are made up as follow:

The caption "European competitions participating bonus" includes participation and performance bonuses regarding the Champions League groups stage and the Europa League qualifiers, where FC Porto SAD participated in season 2013/14 (3,285,956 Euro); prizes related to Market Pool (4,166,000 Euro) as well as the guaranteed amount for the access for the play-off of the Champions League season 2014/15 (2,100,000 Euro). The reduction in this caption is justified by the fact that, in the year ended June 30, 2013, the Company has recognized the award for participation in the Champions League 2013/14 group’s stage, in the amount of 8,600,000 Euro, which didn’t occurred in the 2013/14 season regarding the participation in the Champions League 2014/15 group’s stage because the Company didn´t earned the right to access this stage in the present season but only for the following season (Note 36). The increase in the caption "Ticket income" is related to a larger number of matches in the European competitions (including the Europa League). The decrease in the caption "Season tickets" is related to a lower level of commercialization of season tickets for the season 2013/14. The caption "Membership contributions” correspond to the transfer of 25% of the total contributions charged by FC Porto. The caption 'Corporate Hospitality' includes: (i) the gross amount of 5,060,155 Euro (777,948 Euro net of the cost of 4,282,207 Euro - Note 25; 1,191,145 Euro on June 30, 2013) related to the income of "Lugares Euroantas" (surplus calculated as described in Note 34), (ii) the amount of 1,268,175 Euro (1,272,685 Euro on June 30, 2013) related to the commission over the corporate segment charged to Euroantas by PortoComercial within the business contract terms between the two entities; and (iii) the amount of 7,979,500 Euro related by the commercialization of box seats (commercialization by the subsidiary PortoComercial and charged invoiced by Euroantas - Note 25).

30.06.2014 30.06.2013

Sporting income

European competitions participating bonus 9,551,956 20,390,070

Ticketing income 2,493,309 2,311,731

Season tickets 2,835,578 3,237,993

Membership contributions 899,123 971,003

Other sporting income 2,400,405 1,135,521

18,180,371 28,046,318

Advertising 13,594,159 13,067,314

Broadcasting rights 15,928,072 13,185,000

Corporate Hospitality (Note 33) 14,352,830 15,161,233

Others 4,922,761 5,090,917

66,978,193 74,550,782


___________________________________________________________________________________________

___________________________________________________________________________________________


25. EXTERNAL SUPPLIES AND SERVICES As of 30 June 2014 and 2013, the main balances included in this caption were as follows:

The caption ‘Corporate Hospitality” includes: (i) the amount of 4,282,207 Euro – Note 23, related to “Lugares Euroantas” (surplus calculated as described in Note 33), and (ii) the amount of 7,979,500 Euro related to the use of boxes by Euroantas to commercialization by the subsidiary PortoComercial – Note 24. The caption ‘Specialised services’ includes several types of costs associated with the Group’s activity, namely: (i) expenses with market research services, (ii) costs with legal advisory services, (iii) costs with advisory services, namely theones provided by FC Porto – Serviços Partilhados S.A. (Note 31); (iv) costs relating to the cession of the exploitation and management rights of the TV channel "Porto Canal" and to the alterations of the referred TV Channel grid, as agreed with the company “Avenida dos Aliados de Comunicações, SA.”. The reason for the increased of this caption relates to the last refered component, by the integration of company FC Porto Media, S.A. in the consolidation perimeter for the first time this year (an impact of approximately 3 million Euro), as well as increased spending on scouting services. In the caption ‘Subcontracts’ are included costs incurred in connection with the protocol signed between the Group and Futebol Clube do Porto, mainly related with the use of several facilities, as well as the utilization of the training centre by the senior team and the junior teams, as well the costs of travel and accommodation incurred by the subsidiary Dragon Tour.

The caption "Organization costs" considers various costs associated with matches’ organization. The increase of this caption, of the captions "Subcontracts" and " Security" is justified by the greater number main team matches’, both official (in Europa League) and pre-season tournaments, held outside of Portugal.

30.06.2014 30.06.2013

Specialised services 10,865,542 6,943,023

Corporate Hospitality (Nota 34) 12,261,707 12,697,403

Subcontracts 4,902,667 3,717,198

Rentals 3,817,848 3,668,955

Advertising 1,672,386 1,691,891

Security 1,370,372 1,143,791

Organization costs 1,295,064 975,687

Insurance 1,016,266 1,206,130

Fees 787,335 871,723

Sports equipment 617,127 783,344

Repair and maintenance 536,159 584,601

Cleaning up services 515,000 439,658

Representation expenses 488,439 458,668

Fuels 427,793 400,387

Communication 392,237 403,787

Electricity 370,819 394,635

Other costs 711,255 1,117,828

42,048,016 37,498,709


___________________________________________________________________________________________

___________________________________________________________________________________________


26. PAYROLL EXPENSES

The balances related to payroll expenses for the years ended 30 June 2014 and 2013 of the Company and subsidiaries are detailed as follows:

The decrease in the caption "Players / Coaches" and "Charges on salaries" for the year ended June 30, 2014 is justified mainly by the non-attribution of National Champion and the Champions League’ Round of 16 prizes, to the professional football team, contrary to what happened in the year ended June 30, 2013. Net payroll expenses for the year ended June 30, 2014, of players on temporary loan to other clubs, amounted to, approximately 3,500,000 Euro (2,100,000 Euro on June 30, 2013). The remuneration of the members of the Board of Directors of FC Porto, SAD and its subsidiaries for the years ended June 30, 2014 and 2013 is as follows:

The detail of the remunerations for each Board of Directors’ member and remaining governing bodies is disclosed in the Corporate Governance Report. As of 30 June 2014 and 2013, the number of people working for the Group is as follows:

30.06.2014 30.06.2013

Governing bodies 2,853,989 2,564,179

Players/Coaches 34,362,160 40,662,364

Technical and administrative staff 5,303,599 5,106,072

Post-Employment Benefits 448,818 -

Indemnities 545,718 -

Charges on salaries 3,252,683 3,673,280

Insurance 1,571,613 1,537,705

Other costs 546,716 521,654

48,885,294 54,065,254

30.06.2014 30.06.2013

Fixed Remuneration 2,853,989 2,564,179

2,853,989 2,564,179

30.06.2014 30.06.2013

Governing bodies 8 7

Administrative staff 159 120

Technical staff 31 31

Museum 7 -

Vendors (stores) 33 33

Football players 58 52

296 243


___________________________________________________________________________________________

___________________________________________________________________________________________


27. RESULTS OF TRANSACTIONS WITH PLAYERS’ REGISTRATIONS

The results of transactions with players’ registrations in the years ended 30 June 2014 and 2013 can be detailed follows:

Impairment losses of players’ registrations rights consider the carrying amount of players’ registrations as of 30 June 2014 whose employment contracts were terminated by the Company until the approval date of these financial statements, as well as the estimated impairment loss of the players’ registrations considering the players’ sport situation as of the approval date of the financial statements. The balance of this caption as of 30 June 2014 corresponds essentially to players Izmailov and Stefanovic. On June 30, 2013 the balance of this caption corresponds mainly to the players Emidio Rafael, Bracali, Ukra and Sereno. On June 30, 2014, the caption "Costs relating to players on loan" refers to expenses incurred under the loan of the player Pavlovsky. The caption "Other costs relating to players” essentially includes the effect of the adjustment in the calculation of the gain from the sale of the player James Rodriguez with Orel BV (438,000 Euro) and the compensation paid to Paços Ferreira by the hiring of the coach Paulo Fonseca (450,000 Euro). The amounts included in the captions "Gains from the sales of players’ registrations” and "Losses from the sales of players’ registrations " are presented net of the carrying amount of the players’ registrations, intermediation service costs incurred with that sales, and liabilities under the “solidarity mechanism” (if and when applicable), the discount effect of accounts receivable and payable related with those transactions and the cost of eventual compensation payments (Note 8). On June 30, 2014, the caption "Gains from the sales of players’ registrations" mainly refers to sale of players’ registration rights of: Otamendi (7,974,000 Euro), Fernando (5,298,000 Euro), Iturbe (4,736,000 Euro), Christian Atsu (1,991,000 Euro) and André Castro (1,654,000 Euro), among others. On June 30, 2013, the most expressive amounts refer to sale of players’ registration rights of Hulk, Joao Moutinho, James Rodriguez and Álvaro Pereira.

30.06.2014 30.06.2013

Amortisation and impairment losses of players' registrations

Amortisation of players' sporting registration rights (Note 8) 26,379,179 26,225,716

Impairment losses of players' sporting registration rights (Note 8) 563,333 300,842

Write offs of player's registration rights 188,192 -

27,130,704 26,526,558

Income/(expenses) related with transactions of players' registrations

Costs relating to players on loan (145,000) -

Other costs relating to players (1,660,800) (727,294)

(1,805,800) (727,294)

Gains from the sales of players' registrations (Note 8) 22,397,504 74,016,304

Income relating to players on loan 1,483,937 2,095,000

Other income relating to players 1,831,215 1,061,199

25,712,656 77,172,503

23,906,857 76,445,209

(3,223,847) 49,918,651


___________________________________________________________________________________________

___________________________________________________________________________________________


The caption "Other income relating to players” includes training compensations and solidarity mechanism, whereas in the year June 30, 2014 the increase in this caption was due to the amount received from Sport Lisboa e Benfica, SAD of 913,655 Euro, regarding training rights of the player Feher (Note 35).

28. OTHER INCOME As of June 30, 2014, the caption "Other income" included an amount of, approximately, 550,000 Euro to the FIFA compensation for the FCP, SAD players’ participation in the World Cup 2014, and 419,510 Euro (770,148 Euro on June 30, 2013) regarding the refund of withholding taxes of personnel income tax from athletes of FCP, SAD following the change of theirs status from resident to non-residents.

29. FINANCIAL RESULTS

Financial expenses and income for the years ended 30 June 2014 and 2013 are made up as follows:

The balance of the captions ‘Discount effect of accounts receivable’ and ‘Discount effect of accounts payable’ relate to interest resulting from the temporal difference between the transaction date of sale / purchase of the registration rights of several sports players and the dates of receipt / payment contractually agreed. In the year ended 30 June 2014 the income interest relate, mainly, to interest payable by FC Porto in accordance with the signed debt settlement agreement (Note 11).

30. GAINS AND LOSSES IN INVESTMENTS

The detail of caption “Gains and losses in investments” for the years ended 30 June 2014 and 2013 is as follows:

30.06.2014 30.06.2013

Financial expenses:

Interest 9,824,932 10,165,873

Discount effect of accounts payable 1,457,890 1,545,787

Other financial expenses 1,451,644 1,181,591

12,734,466 12,893,251

Financial income:

Interest 1,045,448 1,073,517

Discount effect of accounts receivable 1,519,494 2,697,790

2,564,942 3,771,307

Net financial expenses (10,169,524) (9,121,944)

30.06.2014 30.06.2013

Impairment losses - players' economic rights (Note 9) (1,532,169) (1,731,516)

Impairment losses - Goodwill (Note 10) - (221,000)

Capital gain arising on the disposal of economic rights - 204,600

(1,532,169) (1,747,916)


___________________________________________________________________________________________

___________________________________________________________________________________________


31. RELATED PARTIES

The balances and transactions between the Company and its subsidiaries, which are related parties, were eliminated in consolidation and therefore are not mentioned in this note. The main balances with related entities, identified below, as of 30 June 2014 and 2013 and the main transactions performed with these entities during the year ended as of that date are as follows:

Futebol Clube do Porto is the main shareholder of FC Porto, SAD (Note 16), and Euroantas is 99.99% owned by this entity. Additionally, is presented above information of Group balances and transactions with the entities Sportinveste - Multimédia, S.A. (‘Sportinveste’) and

30.06.2014

Accounts receivable Accounts payable Other current and Other current and

Balances current and non-current current and non-current non-current assets non-current liabilities

Futebol Clube do Porto (Note 11) 16,980,047 48,076 11,268,845 -

Euroantas (Notes 24, 25 and 34) 7,102,589 4,048,748 14,963,937 -

F.C.P. Serviços Partilhados 650,139 641,265 - 29,523

FCP Media - - - -

Fundação Porto-Gaia 10,086 - 289,157 -

PPTV/Olivedesportos 5,000,000 - - 13,000,000

Investiantas 5,600 - - -

Sportinveste 50,896 11,600 - -

29,799,356 4,749,689 26,521,938 13,029,523

30.06.2013

Accounts receivable Accounts payable Other current and Other current and

Balances current and non-current current and non-current non-current assets non-current liabilities

Futebol Clube do Porto (Note 11) 13,258,397 2,306 6,547,669 44,748

Euroantas (Notes 24, 25 and 34) 5,715,804 2,709,177 15,074,195 393,981

F.C.P. Serviços Partilhados 620,484 775,607 - -

FCP Media 1,508,066 61,869 - -

Fundação Porto-Gaia - - 335,387 -

PPTV/Olivedesportos 4,450,000 - - 14,200,000

Investiantas - - - -

Sportinveste 102,406 7,037 - 6,240

25,655,157 3,555,996 21,957,251 14,644,969

30.06.2014

Sales and Purchases and

services External supplies Income Other

Transactions rendered and services interests expenses

Futebol Clube do Porto 2,381,320 6,700,742 797,629 976

Euroantas (Notes 24, 25 and 34) 6,650,672 11,633,841 - -

FCP Serviços Partilhados 109,270 4,900,514 - (751)

FCP Basket SAD - - - -

FCP Media - - - -

Fundação Porto-Gaia - 36,145 - -

PPTV/Olivedesportos 15,303,867 - - -

Sportinveste 90,072 46,500 - -

24,535,201 23,317,742 797,629 225

30.06.2013

Sales and Purchases and

services External supplies Income Other

Transactions rendered and services interests expenses

Futebol Clube do Porto 2,471,793 4,241,828 843,722 37,545

Euroantas (Notes 24, 25 and 34) 7,324,041 13,046,586 - 350

FCP Serviços Partilhados 396,918 4,621,870 - 5,711

FCP Basket SAD 1,125 - - -

FCP Media 57,555 237,777 - 891

Fundação Porto-Gaia - 36,145 - -

PPTV/Olivedesportos 14,003,951 - - -

Sportinveste 67,199 98,674 - 16,713

24,322,582 22,282,880 843,722 61,210


___________________________________________________________________________________________

___________________________________________________________________________________________


PPTV/Olivedesportos - Publicidade Televisão e Media, S.A. (‘Olivedesportos’), as the Chairman of the Board of Directors of these entities is a referral shareholder of FC Porto, SAD. As of 30 June 2014 and 2013, the transactions with the entity PPTV/Olivedesportos recorded in the caption “Sales and services rendered” are justified by the cession contract, in exclusivity, of the broadcasting rights relating to the FCP – Futebol, SAD main team games in ‘Estádio do Dragão’ for the Professional Football I League, as well as the static and virtual advertising commercial exploration relating to those games, signed between the parties. On the other hand, the balance recorded on the captions ‘Other current/non-current liabilities’ as of 30 June 2014 corresponds, essentially, to the advance received by the Company form the entity above relating to the mentioned rights applicable to the seasons 2014/15, as well as anticipated invoicing to the same entity on televising rights for the seasons 2015/16 to 2017/18 (Note 21).

32. EARNINGS PER SHARE

Earnings per share were calculated considering the following amounts:

33. SEGMENT INFORMATION

Operationally, the Group is organised in two major segments: Segment A: activity related to the participation in professional football competitions, and the

promotion and organisation of sporting events represented by FCP SAD Segment B: activity relating to the sale of image rights, sponsorship, merchandising and

product licensing represented by PortoComercial Other services: includes the activities of the subsidiaries PortoMultimedia, PortoEstádio

,PortoSeguro, FCP Media and Dragon Tour.

30.06.2014 30.06.2013

Earnings

Net profit/(loss) considered for the computation of basic

earnings per share(40,701,114) 20,355,997

Effect of potencial shares - -

Net profit/(loss) considered for computation of diluted earnings

per share(40,701,114) 20,355,997

Number of shares

Weighted number of shares used to compute the basic earnings

per share15,000,000 15,000,000

Effect of potencial shares - -

Weighted number of shares used to compute the diluted earnings

per share15,000,000 15,000,000

Earning per share (basic and diluted) (2.71) 1.36


___________________________________________________________________________________________

___________________________________________________________________________________________


Operational income, indicating transactions with other segments and those resulting from transactions with third parties, may be presented as follows:

The amounts related to operational profit, operational cash-flow and cash-flow, by segment, are as follows:

Data on total assets and total liabilities, as well as on the investment made in the year in tangible and intangible assets, including players’ registrations, can be presented, by segment, as follows:

30.06.2014

Segm. A Segm. B Other

services

Total

Operational income excluding income related w ith transactions of

players' registrations

Resulting f rom operations w ith external clients 48,523,451 18,368,234 5,721,145 72,612,830

Resulting f rom operations w ith other segments 267,614 827,816 5,394,219 6,489,649

30.06.2013


services

Total

Operational income excluding income related w ith transactions of

players' registrations

Resulting from operations w ith external clients 57,640,978 17,679,770 3,120,607 78,441,355

Resulting from operations w ith other segments 278,016 781,417 4,992,970 6,052,403

30.06.2014


services

Intra-grup Total

Operational profit / (loss) (24,090,881) (1,434,037) (261,381) - (25,786,299)

Amortisation and depreciation excluding amortisation of players'

registrations

342,685 71,009 145,645 - 559,339

Provisions and impairment losses excluding players' registrations (296,686) 210,563 (150) - (86,273)

Amortisation and impairment losses of players' registrations 27,130,704 - - - 27,130,704

Operational cash-flow - EBITDA (a) 3,085,822 (1,152,465) (115,886) - 1,817,471

Gains and losses in investments (1,532,169) - - - (1,532,169)

Financial expenses (12,396,891) (626,365) (236) 289,026 (12,734,466)

Financial income 2,637,911 215,850 207 (289,026) 2,564,942

Income tax (3,012,708) (38,868) (168,350) (3,219,926)

Cash-flow (b) (11,218,035) (1,601,848) (284,265) - (13,104,148)

(a) - Earnings before taxes, f inancial results, depreciation and amortisation, provisions and impairment losses

(b) - Profit plus depreciation and amortisation, provisions and impairment losses

30.06.2013


services

Intra-grup Total

Operational profit / (loss) 30,585,378 900,737 288,700 - 31,774,815

Amortisation and depreciation excluding amortisation of players'

registrations

424,207 83,863 208,418 - 716,488

Provisions and impairment losses excluding players' registrations (55,057) (123,513) (554,734) - (733,304)

Amortisation and impairment losses of players' registrations 26,526,558 - - - 26,526,558

Operational cash-flow - EBITDA (a) 57,481,086 861,087 (57,616) - 58,284,557

Gains and losses in investments (1,747,916) - - - (1,747,916)

Financial expenses (12,382,455) (435,420) (75,376) - (12,893,251)

Financial income 3,953,674 217,255 378 (400,000) 3,771,307

Income tax (376,177) (141,868) (57,015) (575,060)

Cash-flow (b) 46,928,212 501,054 (189,629) (400,000) 46,839,637

(a) - Earnings before taxes, f inancial results, depreciation and amortisation, provisions and impairment losses

(b) - Profit plus depreciation and amortisation, provisions and impairment losses


___________________________________________________________________________________________

___________________________________________________________________________________________


As FCP Group is currently developing its activity exclusively in the internal market, geographical segments are not reported.

34. ‘ESTÁDIO DO DRAGÃO’

On 7 July 2003 a Cooperation Agreement was signed between PortoEstádio, Euroantas, Futebol Clube do Porto and Futebol Clube do Porto – Futebol, S.A.D. relating to the construction, financing, operation and utilisation of ‘Estádio do Dragão’ (‘the Stadium’), which consists of an operating lease contract. Under this agreement, Euroantas, the present owner of the Stadium, assigned to FCP, SAD the exploitation of certain activities from the Sporting Area of the Stadium for a period of 30 years, in return of an annual global charge, which approximates an “linear rent” over the 30 years period, supported by FCPorto, SAD through two components:

i) An amount equal to the debt service borne by Euroantas during the first 15 years on the Loan Contract entered into for the construction of the Stadium and, in the last 15 years, a lower amount indexed to the debt service for the last year (2018) on the Loan Contract; and

ii) The amount of 14,963,937 Euro, settled in the year ended 30 June 2003 and recorded as

‘Other non-current assets (Note 13), as a remuneration for the amount of the falling due rents during the 15 year period, determined from 2018. This amount will be recognized as a linear cost over the period of 15 years from 2018.

In accordance with the agreement, FCPorto, SAD also retains the right to receive from Euroantas, any excess, determined annually, of the income, net of the inherent operating expenses, commercialisation of Boxes and Business Seats of ‘Estádio do Dragão’ (‘Lugares Euroantas’) over the amount of the ‘rent’ mentioned above. Starting on 2012/13 season, following the change in the accounting method, these two portions started to be invoiced separately from FCPorto SAD to Euroantas and from Euroantas to FCPorto, SAD by the gross amount. Under such terms, the net excess for the year ended 30 June 2014 amounted to 777,948 Euro (Services rendered – 5,060,155 Euro – Note 24; External services and supplies – 4,282,207 Euro –

30.06.2014


services

Eliminations

and

adjustments

Total

Total assets 183,935,179 23,753,881 7,377,310 (14,670,438) 200,395,932

Total liabilities 212,447,217 27,213,322 6,118,896 (12,316,163) 233,463,272

Investment made in the current year (c) 18,834,334 800 - - 18,835,134

30.06.2013


services

Eliminations

and

adjustments

Total

Total assets 215,068,141 12,914,230 3,745,650 (3,875,446) 227,852,575

Total liabilities 205,185,442 14,490,251 3,171,027 (2,621,500) 220,225,220

Investment made in the current year (c) 46,520,554 151,767 218,551 - 46,890,872


___________________________________________________________________________________________

___________________________________________________________________________________________


Note 25). Regarding the year ended as of 30 June 2013, the net excess amounted to 1,191,145 Euro (Note 24).

35. CONTINGENT ASSETS AND LIABILITIES Contingent liabilities

i) Pepe- Marítimo da Madeira-Futebol SAD

On 14 October 2010, Marítimo da Madeira – Futebol, SAD (“Marítimo”) brought a declarative action against FCPorto, SAD in the Professional Football Portuguese League claiming a rectification in the amount due regarding the sale of the Pepe’s registration to Real Madrid in the amount of, approximately, 840,000 Euro, which includes late payment interests. On 14 September, 2012, the Arbitral Comission of LPFP decided as unfounded all the claims from Marítimo, acquitting FCP, SAD. Subsequently, on 17 October, 2012, Marítimo presented appealed to decision to the plenary of LPFP. In December 2013 the request for the annulment of the decision of the Plenary of the LPFP Arbitral Commission initiated by Maritime Football SAD within the Porto Civil Courts of Porto was denied, and from this decision has brought an appeal to the Court of Appeal of Porto, by Maritimo SAD being this process at the moment yet to be processed.

ii) Kléber- Marítimo da Madeira-Futebol SAD On 18 October 2011, Marítimo da Madeira – Futebol, SAD (“Marítimo”) brought a declarative action against FCPorto, SAD in the Professional Football Portuguese League claiming a sum by way of "compensation for promotion or appreciation" of the player Kléber Laube Pinheiro, having been rejected. Subsequently, the decision was annulled by the civil courts of Porto at the request of Marítimo and the appeal of FC Porto, SAD, from this annulment decision was denied. The Board of Directors, as well as its’ legal consultants, consider that the grounds presented by Marítimo is not correct; therefore no impacts over the consolidated financial statements are estimated to occur arising from the outcome of this action.

iii) João Moutinho- Sporting Was brought by Sporting Clube de Portugal, SAD, within the LPFP Arbitral Commission, a declarative judgment action concerning the definitive cession of the palyers’ registration rights relating to the athlete João Filipe Iria Santos Moutinho, contract under which it was attributed to Sporting SAD the right to receive 25% of the capital gain recorded in a future transfer of the player to a third club. On September 17, 2014 the LPFP Arbitral Commission notified FCP, SAD from the decision concerning this process in which the Company has condemned to the payment, to Sporting Clube de Portugal, SAD, of the amount of 658,047 Euro plus interest. The Board of Directors of the Company and its legal consultants, understands that the grounds presented by Sporting are not correct, so it appealed from the decision, not estimating to occur, from the outcome of this action, any material impacts over the consolidated financial statements.

iv) Feher- Sport Lisboa e Benfica, SAD ( SLB,SAD)

Following the enforcement of the decision from the LPFP Arbitral Commission, FCP SAD, SAD received from the SLB, in February 2014, the amount of 913,655 Euro regarding a lawsuit brought


___________________________________________________________________________________________

___________________________________________________________________________________________


by FCP, SAD against SLB, SAD in 2002, arising from the hiring by SLB of the player Miklos Feher; this amount was recognized as an income for the year ended 30 June 2014 (Note 27). On June 19, 2014 a decision from the Court of Appeal of Porto was delivered in which denied the appeal presented by SLB, SAD regarding this process, confirming the decision of the LPFP Arbitral Commission. On September 8, 2014, the SLB, SAD filed an appeal in the Supreme Court, being the deadline for submission of counter-allegations on course. The Board of Directors of the Company and its legal consultants, understands that the grounds considered by the clubs in the above processes are not correct, by which it was presented contestation, and it’s not estimated that from the outcome of these processes arise in any material impact on the consolidated financial statements. Contingent assets i) Tax litigations As mentioned in Note 22, the Company does not have any tax assessments settlements’ pending from regularization. However, this year and in prior years, the Company made payments for additional tax assessments, recording these payments as expenses in the period in which these payments occurred. However, the Company maintains the complaints and judicial claims, calling for the return of such amounts. In this year, FC Porto SAD paid, in December 2013, 4,227,685 Euro, using the provision of 1,514,094 Euro (Note 22) and recording the differential as an expense for the year in the amount of 2,713,591 Euro (Note 15). Thus there are the following contingent tax assets in the June 30, 2014:

36. SUBSEQUENT EVENTS The following events took place after the date of the financial statements and, by its relevance, are presented as follows:

Tax NatureAmount paid in

prior years

Amount paid in

13/14

Contingent

Asset

30.06.2014

IRC 2003 Additional tax settlement 148,641 2,007,275 2,155,916

IVA 2003 Additional tax settlement - 171,369 171,369

IRC 2005 Additional tax settlement 626,650 - 626,650

IRC 2007 Additional tax settlement 117,484 298,991 416,475

IRC e IVA 2008 Additional tax settlement 53,232 770,500 823,732

IRC 2009 Additional tax settlement - 979,550 979,550

IRC e IRS 2010 Additional tax settlement 316,366 - 316,366

1,262,373 4,227,685 5,490,058


___________________________________________________________________________________________

___________________________________________________________________________________________


i) Players’ registration acquisitions:

a. Acquisition of the registration rights for 5 seasons and 60% of the economic rights of

the player Adrian Lopez from Club Atlético Madrid for 11,000,000 Euro;

b. Acquisition of the registration rights for 5 seasons and 100% of the economic rights of the player Brahimi to Granada Club de Fútbol for 6,500,000 Euro; and disposal, under the economic regime association, of 80% of the economic rights of the player for the amount of 5,000,000 Euro, to Doyen Sports Investments Limited, with an option to repurchase the economic rights;

c. Acquisition of the registration rights for 4 seasons and 30% of the economic rights of the player Vincent Aboubakar to FC Lorient for 3,000,000 Euro;

d. Acquisition of the registration rights for 4 seasons and 100% of the economic rights of the player Martins Indi to Feyenord by 7,700,000 Euro;

ii) Players’ registration sales: a. Transfer, on a permanent basis, of the player’s registration of the professional

football player Steven Defour in the amount of 6,000,000 Euro. This agreement forecasts the payment of variable compensation, so the total amount receivable may reach 6,500,000 Euro.

b. Transfer, on a permanent basis, of the player’s registration, and 56.67% of the economic rights held of the professional football player Eliakim Mangala in the amount of 30,500,000 Euro.

iii) Players’ Contract Renewals

Extension for one more year, until June 30, 2017, of the labour contractual agreement between the Company and Jackson Martinez Valencia. The amount of the termination clause was fixed in 35,000,000 Euro. Additionally, a 5% stake of the net value from a future transfer of the registration rights of the athlete was granted to his agent - Luis Henrique Ferreira Pompeo - as compensation for the services rendered in negotiations with the player.

iv) Loan of Players

The FC Porto SAD secured the registration rights of the player Cristian Tello Herrera from Futbol Club Barcelona for two sporting seasons, until June 30, 2016 and Carlos Henrique Casimiro from Real Madrid Club de Fútbol until June 30, 2015. The contracts include the call option right of those rights and the totality of their economic rights.

v) Capital Increase

On 2 October 2014 was held a General Shareholders’ Meeting, which included the resolution of the increase in share capital of the Company in the amount of 37,500,000


___________________________________________________________________________________________

___________________________________________________________________________________________


Euro, to be realized by contributions in cash through private subscription by Futebol Clube do Porto of 7,500,000 preferred shares without voting rights, which aim to reinforce the shareholder’s equity of FCP, SAD and to fulfil the Financial Fair Play requirements established by UEFA.

vi) Acquisition of Euroantas shares

Within the General Shareholder’s Meeting referred in the previous paragraph, it was approved the acquisition, by the Company to Futebol Clube do Porto, of shares representing up to 50% of the share capital of the company Euroantas, a company whose main asset is the Dragao Stadium, having been presented an evaluation report of the company, from an independent auditor, fixing its value at 110,120, 750 Euro.

vii) Acquisition of shares and launch of a takeover bid

As a result of the acquisition by FC Porto, on 2 October 2014, of 2,818,185 ordinary shares of Futebol Clube do Porto, SAD, at the price of 0.65 Euro per share to SOMAGUE Imobiliária, SA and to Somague - Engenharia SA (corresponding to 18.79% of the share capital and voting rights of the Company), now is attributed to FC Porto a total of 9,078,035 shares, which represents 60.52% of the share capital and voting rights of the Company. This forced Futebol Clube do Porto, on the same date to launch a takeover bid for the same price of the referred acquisition over the totality of the shares of Futebol Clube do Porto, SAD admitted to negation on the Euronext Lisbon’s regulated market.

viii) Renegotiation of loans

FC Porto SAD renegotiated in September 2014, two loans with the Novo Banco (formerly BES). Thus, the financing identified in Note 18 with the total amount of 17,000,000 Euro had its reimbursement plan extended until September 30, 2018 and will be repaid in 5 annual payments (Note 18). Regarding the loan of 30,000,000 Euro, it was agreed to extend the reimbursement plan, being now of 3,000,000 Euro in September 15, 2014; 2,000,000 Euro on October 31, 2014 and 25,000,000 Euro on September 15, 2015 (Note 18). According to this renegotiation if FC Porto SAD sell, give away or transfer, ceasing to obtain the ownership, directly or indirectly, of (i) 100% of the economic rights of the footballer Danilo Luiz da Silva, or (ii) 100 % of economic rights of footballer Jackson Martinez, the amounts arising from these sales, free of commissions, will be used to refund, all or part, of the amounts under the contract.

ix) Champions League group’s stage qualification

During the 2014/15 season, FC Porto SAD ensured the presence in the Champions League group’s stage.

37. APPROVAL OF THE FINANCIAL STATEMENTS

The accompanying financial statements were approved by the Board of Directors on 9 October 2014.


___________________________________________________________________________________________

___________________________________________________________________________________________


38. EXPLANATION ADDED FOR TRANSLATION

These consolidated financial statements are a translation of financial statements originally issued in Portuguese in accordance with International Financial Reporting Standards (IFRS/IAS) as adopted by the European Union and the format and disclosures required by those Standards, some of which may not conform to or be required by generally accepted accounting principles in other countries. In the event of discrepancies, the Portuguese language version prevails.


___________________________________________________________________________________________

___________________________________________________________________________________________


7. Legal Certification of Accounts and Audit Report (Translation of a report originally issued in Portuguese – Note 37)

Introduction

1. In compliance with the applicable legislation, we hereby present our Statutory Audit and Auditors’ Report on the consolidated financial information contained in the Board of Directors’ Report and on the accompanying consolidated financial statements for the year ended 30 June 2013 of Futebol Clube do Porto – Futebol, S.A.D. (“Company”) and subsidiaries (“Group”), which comprise the Consolidated Statement of Financial Position as of 30 June 2013 (that presents total net assets of 227,852,575 Euro and shareholders’ equity of 7,627,355 Euro, including a net consolidated profit attributable to the Parent company of 20,355,997 Euro), the Consolidated Statements of Profit and Loss, of Comprehensive Income, of Changes in Equity and of Cash Flows for the year then ended and the corresponding notes.

Responsibilities

2. The Company’s Board of Directors is responsible for: (i) the preparation of consolidated financial statements that present a true and fair view of the financial position of the companies included in the consolidation, the consolidated results and comprehensive income of their operations, the changes in consolidated equity and their consolidated cash flows; (ii) the preparation of historical financial information in accordance with International Financial Reporting Standards as adopted by the European Union and that is complete, true, timely, clear, objective and licit, as required by the Portuguese Securities Market Code; (iii) the adoption of adequate accounting policies and criteria and the maintenance of appropriate internal control systems; and (iv) the disclosure of any significant facts that have influenced the operations of the Company and companies included in the consolidation, their financial position, results and comprehensive income.

3. Our responsibility is to examine the financial information contained in the documents referred to above, including verifying that, in all material respects, the information is complete, true, timely, clear, objective and licit, as required by the Portuguese Securities Market Code, and to issue a professional and independent report based on our examination.

Scope

4. Our examination was performed in accordance with the Auditing Standards (“Normas Técnicas e as Directrizes de Revisão/Auditoria”) issued by the Portuguese Institute of Statutory Auditors (“Ordem dos Revisores Oficiais de Contas”) which require that the examination be planned and performed with the objective of obtaining reasonable assurance about whether the consolidated financial statements are free of material misstatement. Such an examination includes verifying, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements and assessing the significant estimates, based on judgments and criteria defined by the Board of Directors, used in their preparation. Such an examination also includes: verifying the consolidation procedures and that the financial statements of the companies included in the consolidation have been appropriately examined, assessing the adequacy of the accounting policies used and their uniform application and disclosure, taking into consideration the circumstances, verifying the applicability of the going concern concept, verifying the adequacy of the overall presentation of the consolidated financial statements, and assessing that, in all material respects, the consolidated financial information is complete, true, timely, clear, objective and licit. Our examination also comprised verifying that the consolidated financial information included in the consolidated Board of Directors’ Report is consistent with the consolidated financial statements as well as the verifications established in numbers 4 and 5 of the article 451º of the


___________________________________________________________________________________________

___________________________________________________________________________________________


Commercial Company Code (“Código das Sociedades Comerciais”). We believe that our examination provides a reasonable basis for expressing our opinion.

Opinion

5. In our opinion, the consolidated financial statements referred to in paragraph 1, present fairly, in all material respects, the consolidated financial position of Futebol Clube do Porto – Futebol, S.A.D. and subsidiaries as of 30 June 2013, the consolidated results and comprehensive income of its operations, consolidated changes in its equity and its consolidated cash flows for the year then ended, in accordance with the International Financial Reporting Standards as adopted by the European Union, and the financial information contained therein is, in terms of the definitions included in the auditing standards referred to in paragraph 4, complete, true, timely, clear, objective and licit.

Emphasis

6. The Company’s individual financial statements as of 30 June 2013, show that half of its share capital has been lost and, as such, the provisions of articles 35 and 171 of the Commercial Company Code (“Código das Sociedades Comerciais”) are applicable. As mentioned in the Board of Directors’ Report and in Note 16 of the Notes to the consolidated financial statements, the Board of Directors believes that this situation should be analysed and decided in the Shareholders’ General Meeting in order to adjust equity to the legal requirements. In addition, the individual and consolidated financial statements as of that date present a negative working capital and almost all the accounts receivable from Futebol Clube do Porto have an estimated recovery period in the long term, as mentioned in Note 11 of the Notes to the consolidated financial statements. The accompanying consolidated financial statements were prepared on a going concern basis, which considers the continued financial support of the financial institutions (Note 18), as well as the success of the Company’s future operations, namely the positive outcome of the disposal of players’ registrations, as has occurred in previous years, and as foreseen in its operating and cash-flow budgets, essential to the balance and fulfilment of financial commitments.

Reporting over other legal requirements

7. It is also our opinion that the financial information included in the Board of Directors’ Report is in accordance with the consolidated financial statements of the year and that the Corporate Governance Report includes the information required to the Company, as established by the Article 245º- A of the Securities Market Code.

Porto, 11 October 2013 Deloitte & Associados, SROC S.A. Represented by António Manuel Martins Amaral


___________________________________________________________________________________________

___________________________________________________________________________________________


8. Report and Opinion of the Audit Committee To the Shareholders, In compliance with the applicable legislation and in accordance with the terms of our mandate, the Audit Committee issues its report and opinion over the management report and the remaining documents of individual and consolidated financial statements of FUTEBOL CLUBE DO PORTO – FUTEBOL SAD, for the year ending on the 30th of June 2014, under the responsibility of the Board of Directors.

Supervision

During the financial year, we have accompanied the management of the Company, the evolution of its activities and participations, promoting meetings as we saw fit. These meetings, considering the subjects analysed, had the presence of the operational heads of the financial department, the Board of Directors. We also kept a close proximity to the Statutory Auditor, who kept us informed on the nature and conclusions of the audits performed. On keeping his duties, the Audit Board received from the Board of Directors, the services of all the companies in the Group and the Statutory Auditor, all the requested information and explanations, necessary for a full evaluation and understanding of the evolution of the businesses, the performance and the financial standing, as well as risk management and internal control.

The Audit Board also accompanied the preparation and disclosing procedures of the financial information, as well as the review to the documents of individual and consolidated financial statements of the company, and received from the Statutory Auditor all the information and explanations required. Additionally, considering the attributions, the Audit Board analysed the individual and consolidated balances on the 30th of June 2014, the individual and consolidated demonstrations of the results by type, cash-flows, full income and changes to the own capital in the period ending in that date and its attachments.

There was also an evaluation of the management report disclosed by the Board of Directors, and the legal certification of accounts and audit report over accounts, disclosed by the auditor, to which the Audit Board agrees.

Considering the data, the Audit Board believes that the constant information of the financial demonstrations was done in conformity with the accounting, legal and statuary regulation applicable, offering an honest and appropriate view of the of assets and liabilities, financial situation and results of Futebol Clube do Porto – Futebol, SAD and the companies in the consolidation perimeter and that the management report faithfully lays out the evolution in business, performance and position of the issuer and of the companies included in the Group, and contains a description of the main risks and uncertainties the company has to face.

After the accountings were closed, the Audit Board analysed the facts that occurred and that are fully explained in the Management Report.

The Audit Board appreciates the cooperation of the Board of Directors and services.


___________________________________________________________________________________________

___________________________________________________________________________________________


Advice

As a consequence of what has been stated above, the Audit Committee suggests that the following are to be approved: a) the Management Report, the individual and consolidated balance sheets on the 30th of June 2014, the individual and consolidated statements of results by nature, of cash flows and correspondent annexes; b) the proposition to apply the results of individual accounts presented by the Board of Directors. Certificate of Responsibility

Under the terms of paragraph c) of n. 1 of article 245º of the Securities Code, the members of the Audit Committee state that, to their knowledge, the information presented in this report, and other accounting documents, has been gathered in conformity with applicable accounting standards, giving a true and accurate image of assets and liabilities, of the financial situation and results of the issuer and of the companies included in the Group. Furthermore, they believe that the management report faithfully lays out the evolution in business, performance and position of the Group and of the companies included in the Group, and contains a description of the main risks and uncertainties the company has to face. Porto, 10th of October 2014 The Audit Committee José Paulo Sá Fernandes Nunes de Almeida - Chairman Armando Luís Vieira de Magalhães - Member Filipe Carlos Ferreira Avides Moreira - Member


___________________________________________________________________________________________

___________________________________________________________________________________________


C. Corporate Governance Report

PART I – INFORMATION ON THE SHAREHOLDER,

ORGANIZATION AND CORPORATE GOVERNANCE STRUCTURE

A. SHAREHOLDER STRUCTURE

I. Capital structure

1. Capital structure

On the 30th of June 2014, the social capital was fully subscribed and conducted, reached seventy five million Euros, and was split up in fifteen million shares of category A and B (respectively 40 and 60% of the capital), depending on the entity of the holder. The shares of category A are only in that category if belonging to Futebol Clube do Porto, or the Managing Company of Social Participation where the Club has the majority of social capital, automatically switching to category B if alienated to third parties, on any share. For voting effects, each share counts as one vote. The category A shares give the holder the following special rights: • Right to veto the decisions of the general meeting intended to merge, split, transform or dissolve the company and the change in statutes, increase or reduction of social capital and change of headquarters (article 7, n. 2 of statutes), according to article 23, n. 3 od Decree 10/2013 of the 25th of January. • Right to appoint at least one of the members of the Board of Directors, which will have the right to veto in consideration of that entity with a similar objective as n. 2 of article 7 in the Statutes (article 11, n. 3 in statutes1). 2. Restrictions regarding the transmission of shares and share holders

There are legal restrictions to the holding of shares representing the capital of FC Porto – Futebol, SAD, due to the specific demands of the sporting activity that rule its existence. Sporting companies are ruled by the special legal regime set in Decree 67/97, on the 3rd of April according to the changes introduced by Law n. 107/97, on the 16th of September, followed by Decree n. 10/2013, on the 25th of January. Among those specific demands are:

• The existence of two categories for shares, with category A shares remaining subscribed and held, at any time, by the founding club, can only be legally apprehended or encumbrance in favour of collective people of public right;

• The special loyalty system of the Company to the founding club, which means that the club is forced to maintain a minimum participation in the Company (not inferior to 10%); in attributing special rights to the shares held by the founding club.

3. Own shares


___________________________________________________________________________________________

___________________________________________________________________________________________


FC Porto – Futebol, SAD holds 100 own shares, consolidated, worth 499€. These shares, with a very small representation in the social capital of the company, are held by PortoSeguro, a company in the consolidation perimeter, held at 90% by FC Porto – Futebol, SAD. PortoSeguro acquired 100 shares when the SAD was created, in 1997, and hasn’t alienated or acquired any share since. Thus, FC Porto – Futebol, SAD had, both at the start and at the end of the period under analysis, 100 own shares, worth 500€ at the time of buy. 4. Significant agreements involving the company and which start, change or cease in case the control

of the company changes following a public acquisition offer, as well as its effects

There are no significant agreements of which the company is part and that will start, change or cease, in case the control of the Company changes following a public acquisition, or agreements between FC Porto – Futebol, SAD and the holders of the board of directors or workers foreseeing compensations for renounce or destitution of members of the board, nor in case of dismissal of worker, firing without a cause or termination of work relation, following a public acquisition offer. FC Porto – Futebol, SAD has also not adopted any measure intending to stop the success of public offers of acquisition that disrespect the interests of the Company and the shareholders. 5. Regime controlling the renewal or revocation of defensive measures, especially those that foresee

the limitation in number of detainable votes or belonging to a single shareholder, individually or

under several shareholders

FC Porto – Futebol, SAD does not foresee any defensive for automatic and deep erosion to the patrimony of the Company in case of transition in control or change in composition of the Board, endangering the free trade of shares and free appreciation by shareholders of the performance of holders of the Board. 6. Prosocial agreements known to the company and that may lead to restrictions in terms of

transmission of assets or rights to vote

The Board of Directors is unaware of any prosocial agreement as described in Art. 19 of the Portuguese Security Code regarding the exercise of social rights, or the transmission of shares of FC Porto – Futebol, SAD. There is no union to vote or defence agreement against public acquisition offers (OPA).

II. Social Participations and Obligations detained 7. Qualified holdings

Under and for the purposes of Articles 16 and 20 of the CMVM and Article 448 of the Companies Code, it is reported that the Company and / or individuals with qualified social participation exceeding 2%, 5%, 10%, 20%, a third, 50%, two thirds and 90% of the votes, and according to reports received at the headquarters of the Company are, as of the 30th of June 2014, as follows:


___________________________________________________________________________________________

___________________________________________________________________________________________


Futebol Clube do Porto N. of Shares % Voting rights

Directly 6.000.000 40,00%

Through Jorge Nuno de Lima Pinto da Costa 206.000 1,23%

Through Reinaldo da Costa Teles Pinheiro 9.850 0,07%

Total Attributable 6.245.850 41,44%

Imobiliária Sacyr Vallehermoso, S.A. N. of Shares % Voting rights

Through Somague Imobiliária 1.359.093 9,06%

Through Somague Engenharia 1.459.092 9,73%


Note: The Company Somague Imobiliária is owned 100% by Vallehermoso, which in turn is owned 100% by Sacyr Vallehermoso, S.A. The company Somague Engenharia is owned 100% by Somague, S.G.P.S., S.A., which in turn is owned 100% by Sacyr SAU, owned 100% by Sacyr Vallehermoso, S.A.. The company Somague Investimentos Gestão e Serviços, S.A. is fully owned by Somague Engenharia, which is owned 100% by Somague, S.G.P.S., S.A., in turn owned 100% by Sacyr SAU, owned 100% by Sacyr Vallehermoso, S.A..

António Luís Alves Oliveira N. of Shares % Voting rights

Directly 1.650.750 11,01%

Through Francisco António de Oliveira 980 0,01%


Joaquim Francisco Alves Ferreira de Oliveira N. of Shares % Voting rights

Through Sportinveste – SGSPS, SA 1.502.188 10,01%

8. Number of shares and bounds held by members of the Board of Directors and Advisory Council,

under the terms of n. 5 of art. 447 of the Portuguese Companies Code

Under the terms of art. 447 of the Portuguese Companies Code, it should be informed that, as of the 30th of June 2014, the directors of FC Porto – Futebol, SAD had the following shares:

Shares held by members of the Board of Directors Number of shares

Jorge Nuno de Lima Pinto da Costa* 250.000

Adelino Sá e Melo Caldeira* 0

Fernando Manuel Santos Gomes * 0

Reinaldo Costa Teles Pinheiro* 9.850

Rui Ferreira Vieira de Sá* 0

* Futebol Clube do Porto, of which he is Chairman/Vice-Chairman of the Board, had 6.000.000 shares as off the 30th of June 2014

Shares held by members of the Advisory Council Number of shares

José Paulo Sá Fernandes Nunes de Almeida 100

Armando Luís Vieira de Magalhães 0

Filipe Carlos Ferreira Avides Moreira 10


___________________________________________________________________________________________

___________________________________________________________________________________________


As off the 30th of June 2014, the Auditor had no representative shares of the social capital of FC Porto – Futebol, SAD. 9. Special powers of the Board of Directors, regarding the increase of capital

Without prejudice of the several given by Law and the Statutes of the Company, the Board of Directors must assure the management of any social business and any operation regarding social focus, as they are given full powers, namely to:

a) Represent the Company, at all times, propose and dispute any actions, demand and release and make commitments in terms of decisions. For that, the board must delegate these powers in one mandatary;

b) Create a company budget, to be approved by the General Meeting;

c) Acquire, alienate and ornate or relocate assets, including shares, quotas, bounds and right to sign players;

d) Sign sporting contracts and sporting training contracts and proceed to dismiss them, by mutual or unilateral agreement;

e) Acquire real-estate;

f) Decide if the Company should associate with other entities, under the terms of art. 4 of the Statutes;

g) Decide on the emission of bounds and apply for loans in the national and/or international financial market and accept audits from relevant entities;

h) Appoint any other individual or collective entity for social positions in other companies.

The Board of Directors does not hold powers to decide on the increase of capital. As determined in article 7 of the Statutes of the Company, any increase to the capital requires previous analysis of the General Meeting, as shares of Category A, held by Futebol Clube do Porto (Clube), offer right to veto of any decision of the General Meeting which aim at increasing or decreasing if social capital. Still, as line b) of article 23, n. 2 of Decree n. 10/2013, of the 25th of January goes into effect, FC Porto no longer has, by Law, the right to veto over the change in statutes of FC Porto SAD or over the increase and decrease of social capital of that company, now being given the right to veto any chance to the emblem or equipment of its professional football teams. 10. Relevant commercial relations between owners of bounds and the Company

There are no significant economic businesses for any of the parties involved, between the Company and the member of the Board of Directors, Audit Board, owners of qualified holdings or Companies under control of the Group, except the businesses or operations done under normal circumstances for similar operations, part of the current activity of the Company.


___________________________________________________________________________________________

___________________________________________________________________________________________


B. SOCIAL BODIES AND COMMITTEES

I. GENERAL MEETING

a) Members of the General Meeting Board 11. Identification and position of the members of the board of the general meeting and its term

In the General Meeting on the 13th of February 2012, it was decided to elect, for the period 2012/2015, José Manuel de Matos Fernandes as chairman of the General Meeting and Rui Miguel de Sousa Simões Fernandes Marrana as secretary of the General Meeting. b) Exercising right to vote 12. Possible restrictions in terms of right to vote

FC Porto – Futebol, SAD, before each General Meeting, and following the legal dates, discloses the warning that a meeting will be held, including in the institutional website of the Company (www.fcporto.pt). According to the Statutes of the Company, all shareholders with voting right may participate in a General Meeting, as long as the shares are under their name by zero hours (GMT) of the 5th working day before the meeting, and if they prove their registration before the Company until the same of that 5th day, stating their intention to be a part of the meeting in a written letter addressed to the Chairman of the General Meeting no later than the sixth day before the General Meeting, with the option of using electronic mail to do so. Still, the last Chairmen of the General Meeting have decided that, considering the issues with delivery of declarations of shares, any copies received by fax or e-mail should be accepted, as long as they follow the date disclosed in the Statutes and if the original is received before the General Meeting. Shareholders that have a statute of singular person may be represented in the General Meetings under the current Law. Collective should be represented by someone designated to do so through a letter that must be admitted by the Chairman of the General Meeting. The Company offers the Shareholders a representation form which can be requested at the Company, by phone (+351225070500) or e-mail ([email protected]). The documents for voluntary representation must be handed at the social headquarters, addressed to the Chairman of the General Meeting, at least three days before the General Meeting, and specifying the relevant meeting, by stating the date, time and location it will be held and the Order of Work, leaving no doubts to the Chairman about the representative, which must be identified. The statutes of the Company, on n. 4 of art. 8, admit the issuing of preferential shares, without vote rights, that may be redeemable, for the nominal value, added of a prize or not, if the General Meeting decides to do so. Should this be the case, the prize for the remission must be defined. In case the remission is not complied, the company must compensate the holder, for an amount set during the remission. However, this type of share was never emitted.


___________________________________________________________________________________________

___________________________________________________________________________________________


By the end of each General Meeting, the Company issues a statement, made available on their website, as well as in the official website of CMVM, with the decisions made, the capital represented and the results of the voting. The minutes of the meetings are sent to any shareholder that requests them. To follow the recommendations of CMVM, the Company, as of 2009, made these minutes available at their website, for fifteen days, as stipulated in Decree n. 49/2010. 13. Maximum percentage of vote rights that may be used by a single shareholder or by shareholders

connected through n. 1 of art. 20

Regarding the right to vote, each share means one vote, and attendance at the General Meeting is not restricted to a minimum number of shares. There are also no statutory rules that foresee the existence if shares that do not offer right to vote or that establish that voting rights should be ignored after a certain number of shares, when issued by a single shareholder or several related to him. 14. Decisions that, by statutory requirement, can only be taken by a qualified majority

According to article 20 of the Statutes, the General Meeting will rule over any number of shareholders present or represented, in both calls, without legal demands of a constitutive number for certain acts, and, namely, the need to, in the first call, there are at least two thirds of the total number of votes for the Meeting to approve some of the acts foreseen in art. 13, n. 2 of these Statutes (“Any act exceeding the previsions inscribed in the budget requires authorization of the general meeting, after a deliberation approved by simple majority, and the alienation and transaction, of any kind, of assets pertaining to the patrimony of the Company must be approved by two thirds of the votes issued”).

II. ADMINISTRATION AND SUPERVISION

a) Composition 15. Identification of the business model adopted

The structure of the Governing Body of the Company is based on the reinforced Latin model and is composed of the Board of Directors, Audit Board and the Auditor, voted by the General Meeting of Shareholders. 16. Statutory rules on procedural requirements and applicable material to appoint and replace the

members, if applicable, of the Board of Directors

The replacement of a director will occur under the terms of the Portuguese Companies Code, as there are no statutory rules on that matter, occurring in one of the following: if there are no substitute directors, the Board must choose a director, which will be approved in the next General Meeting; if a choice isn’t done in 60 days, the Audit Board will appoint a substitute director, which must also be approved on the next General Meeting; if that doesn’t occur, the new director will be elected on the General Meeting.


___________________________________________________________________________________________

___________________________________________________________________________________________


There are no statutory rules that set the selection process of the non-executive directors. The election of the Governing Bodies, namely the Board of Directors, including all the members, is done as one process, in a list presented by the shareholders that wish it and approved in General Meeting. 17. Composition of the Board of Directors

According to the Statutes of the Company, the Company is ran by a Board of Directors, composed of three, five, seven or nine members, which must be professional managers, elected in General Meeting, and appoint a chairman, if one hasn’t been set in the Meeting. The mandate of the governing bodies lasts four years, and re-election may occur one or more times. Currently, this body is composed of 5 members, 4 of which are executive, and all must manage the Company. In a Shareholder General Meeting, held on the 13th of February 2012, the following elements were elected for the 2012/2015 mandate of the Board of Director, with the following positions:

Name Date of first

election

Date of term of

mandate

Jorge Nuno de Lima Pinto da Costa (Chairman) 23-Sept-1997 31-Dec-2015

Adelino Sá e Melo Caldeira 23-Sept-1997 31-Dec-2015

Fernando Manuel Santos Gomes (*) 31-Mar-2014 31-Dec-2015

Reinaldo Costa Teles Pinheiro 23-Sept-1997 31-Dec-2015

Rui Ferreira Vieira de Sá (non-executive) 13-Feb-2012 31-Dec-2015

(*) Following the renunciation of Angelino Cândido de Sousa Ferreira from the position of Director, Fernando Manuel Santos Gomes was chosen for that position, starting on the 31st of March 2014. 18. Difference between executive and non-executive members and identification of non-executive

members that may be considered independent

On the 30th of June 2014, the Board of Directors included a non-executive member: Rui Ferreira Vieira de Sá. The members of the Board of Directors are not independent, as all, except for Rui Ferreira Vieira de Sá, are part of the Board of Futebol Clube do Porto, holder of about 40% of the capital of Futebol Clube do Porto – Futebol, SAD, and have a dominant influence on it. Rui Ferreira Vieira de Sá is part of the Board of Directors of Somague Engenharia, SA, which is owned 100% by Somague, S.G.P.S., S.A., which in turn is owned 100% by Sacyr SAU, owned 100% by Sacyr SYV, a company that owns 18,79% of the social capital of Futebol Clube do Porto – Futebol, SAD. The non-executive director conducted his duties not only by participating in the meetings of the Board of Directors, but also by accompanying and supervising the work of the executive directors, by requesting further information on matters analysed by the Board of Directors, such as financial, governance and regulatory aspects. It should be said there were no restraints to the work done by the non-executive director.


___________________________________________________________________________________________

___________________________________________________________________________________________


Any information requested to the other members of the Governing Bodies was given as quickly as possible and adequately. 19. Professional qualifications of the members of the Board of Directors

Jorge Nuno de Lima Pinto da Costa

• Education: Secondary complete

• Other positions held at FC Porto Group, referred to in section 2.2.2.

Adelino Sá e Melo Caldeira

• Degree in Law by the Universidade Federal do Estado do Rio de Janeiro, in 1980

• Lawyer since 1980 until today

• Member of the Law Firm Graça Moura & Associates from 1996 to 2005

• Member of the Law Firm Gil Moreira dos Santos, Caldeira, Cernadas & Associates since 2005


Fernando Manuel Santos Gomes

• Degree in Economics by the Instituto Superior de Ciências Económicas e Financeiras da Universidade Técnica de Lisboa, in 1971

• Member of the Board of Directors of Galp Energia, SGPS

• Other positions held at the Grupo FC Porto, referred to in section 2.2.2.

Reinaldo Costa Teles Pinheiro

• Education: 1st Cycle of Basic Education


Rui Ferreira Vieira de Sá • Degree in Civil Engineering by the Faculdade de Engenharia of Universidade do Porto, in 1977

• From 1977 to 1996, Head of Services and Construction Director of Grupo Somague

• Other positions referred to in section 2.2.2.

20. Family or financial relations, usual or significant, between members of the Board of Directors

and shareholders with a qualified participation above 2% of the voting rights

There are no family, professional or business relations, usual or significant, between members of the Board of Directors and shareholders with a qualified participation above 2% of the voting rights. 21. Organigram or functional maps regarding the distribution of competences between the several

governing bodies, committees and/or departments of the Company, including information about

delegation of competences, especially referring to the delegation of the daily management of the

Company

The Governing Bodies of FC Porto - Futebol, SAD are composed of the General Meeting, the Board of Directors, the Audit Committee, the Statutory Auditors, the Company Secretary, the Advisory Board and the Remuneration Committee.


___________________________________________________________________________________________

___________________________________________________________________________________________


FC Porto - Futebol, SAD has no executive committee, given its small dimension, and holds the Management Board responsible for ensuring the daily management of the Company. b) Functioning 22. Existence and location where the regulations for the functioning of the Board of Directors may

be consulted

The Governing Bodies of FC Porto – Futebol, SAD do not have formally approved functioning regulations. However, the members intend to set those regulations and disclose them afterwards in the website of Futebol Clube do Porto (www.fcporto.pt). 23. Number of meetings held and attendance of each member of the Board to the meetings

In this period, the Board of Directors met 11 times, and a minute was made for each meeting. These are available to any Governing Body who wishes to consult them. All members of the Board attended all the meetings. 24. Indication of the bodies of the Company that may assess the performance of the executive

directors

Considering the model of the Governing Body implemented by FC Porto – Futebol, SAD, that integrates a Remuneration Committee, and given the small size of the Company, it was decided that there was no need for the creation of specialized commissions with the single purpose of evaluating the performance of the executive directors or the activity of existing commissions. On the other hand, FC Porto – Futebol, SAD, for its specificity as a Sporting Company, in the performance of its activity, has a number of obligations to keep in face of sporting bodies. In order to participate in national and European competitions, the Company has to meet a number of criteria, especially of financial order, which, in a way, will prove the competence of the Board, as, if they are not met, the team will be excluded from competing.


___________________________________________________________________________________________

___________________________________________________________________________________________


25. Pre-established criteria to evaluate the performance of the executive directors

Under the terms of their competences, the Remuneration Committee, re-elected on February 2012 for the period 2012/2015, decided to change the remuneration policy approved in General Meeting, which, despite being analysed annually, remained the same throughout the term. The effects on the period analysed led to a revocation of variable remunerations, considering the sporting performance of the main squad of FC Porto. The proposition for the new remuneration policy of the Board of Directors and supervision of the Company was presented and analysed by the shareholders in the General Meeting of 2013, having been approved. In this period, the remunerations of the members of the governing body did not depend on the evolution of the quotas of shares or any other variable. There was no plan to offer shares or options to acquire shares to the directors. There was also no policy or measure set in terms of offering compensations contractually negotiated, in case of termination of duties or early retirement, or mechanisms to limit the variable remuneration. There was no contractual obligation regarding the compensation for dismissal without cause. 26. Availability of each member of the Board of Directors, indicating the positions held

simultaneously with other companies, in and out of the Group, and other relevant activities held by

the members of those Bodies during this period

Jorge Nuno de Lima Pinto da Costa • Chairman of the Board of FC Porto

• Chairman of the Board of InvestiAntas, SGPS, SA

• Chairman of the Board of EuroAntas, Promoção e Gestão de Empreendimentos Imobiliários, SA

• Chairman of the Board of Directors of PortoEstádio, Gestão e Exploração de Equipamentos Desportivos, SA

• Chairman of the Board of Directors of Fundação PortoGaia para o Desenvolvimento Desportivo

• Chairman of the Board of FCPortoMultimédia, Edições Multimédia, SA

• Chairman of the Board of PortoComercial, Sociedade de Comercialização, Licenciamento e Sponsorização, SA

• Chairman of the Board of FC Porto – Serviços Partilhados, SA

• Chairman of the Board of FCP Media, SA

• Chairman of the Board of Dragon Tour, Agência de Viagens, SA

Adelino Sá e Melo Caldeira • Vice-Chairman of the Board of FC Porto

• Member of the Board of Directors of Investiantas, SGPS, SA

• Member of the Board of Directors of EuroAntas, Promoção e Gestão de Empreendimentos Imobiliários, SA

• Member of the Board of Directors of PortoEstádio, Gestão e Exploração de Equipamentos Desportivos, SA

• Member of the Board of FCPortoMultimédia, Edições Multimédia, SA

• Member of the Board of PortoComercial, Sociedade de Comercialização, Licenciamento e Sponsorização, SA

• Manager of PortoSeguro – Sociedade Mediadora de Seguros do Porto, Lda.

• Member of the Board of FC Porto – Serviços Partilhados, SA

• Member of the Board of FCP Media, SA

• Member of the Board of Dragon Tour, Agência de Viagens, SA

Fernando Manuel Santos Gomes • Member of the Board of Directors of Galp Energia, SGPS

• Vice-Chairman of the Board of FC Porto


___________________________________________________________________________________________

___________________________________________________________________________________________


• Member of the Board of EuroAntas, Promoção e Gestão de Empreendimentos Imobiliários, SA

• Member of the Board of PortoComercial, Sociedade de Comercialização, Licenciamento e Sponsorização, SA

• Member of the Board of PortoEstádio, Gestão e Exploração de Equipamentos Desportivos, SA

• Manager of PortoSeguro – Sociedade Mediadora de Seguros do Porto, Lda.

• Member of the Board of FC Porto – Serviços Partilhados, SA

• Member of the Board of FCP Media, SA

• Member of the Board of Dragon Tour, Agência de Viagens, SA

Reinaldo Teles da Costa Pinheiro • Vice-Chairman of the Board of FC Porto

Rui Ferreira Vieira de Sá

• Chairman of the Board of Somague SGPS, SA, since January 15th 2013;

• Chairman of the Board of Somague Engenharia, SA;

• Chairman of the Board of Somague Concessões de Infraestruturas, SA;

• Chairman of the Board of Somague Imobiliária, SA;

• Chairman Director of Somague Engenharia Brasil;

• Member of the Board of Directors of Viaexpresso da Madeira, S.A.;

• Member of the Board of Directors of Escala Parque – Gestão de Estacionamento, S.A.;

• Non-executive Member of the Board of Directors of Somague MPH Construções, S.A.;

c) Commissions in the Governing Bodies and delegated directors 27. Identification of commissions created in the Board of Directors and where can the regulations be

found

The Board of Directors believes that the only specialized commission capable of facing the needs of the Company, considering the dimension and complexity, is the Remuneration Committee. The Remuneration Committee of FC Porto – Futebol, SAD aims at setting the remunerations of the members of the Governing Bodies of the Company and set the remuneration policy to be applied to the member of the Board of FC Porto – Futebol, SAD. The current Remuneration Committee of FC Porto – Futebol, SAD (for the period 2012-2015) is composed of the following members:

• Alípio Dias (Chairman)

• Fernando Freire de Sousa

• Joaquim Manuel Machado Faria de Almeida 28. Composition, if applicable, of the executive commission and/or identification of delegate

director(s)

FC Porto – Futebol, SAD did not appoint an Executive Commission of the Board of Directors, and any decisions regarding strategies adopted by the Board of Directors as a body will be composed of all members, executive and non-executive, in the normal performance of their duties.


___________________________________________________________________________________________

___________________________________________________________________________________________


29. Competences of each commission created and summary of the activities developed when doing

those competences

The Board of Directors believes that the only specialized commission capable of facing the needs of the Company, considering the dimension and complexity, is the Remuneration Committee. The Remuneration Committee is composed of members independent to the administration. To that extent, the Remuneration Committee does not include any member of another governing body to which it sets the respective remuneration, and the three members have no family bonds with members of other bodies, including as their spouses, kin or straight line to the 3rd degree. The members of the Remuneration Committee have knowledge and experience concerning remuneration policy. During the financial year of 2013/2014 the Remuneration Committee did not find necessary to hire additional support to their duties. After each meeting, the Remuneration Committee produces a minute. This committee is responsible for assessing the performance of the executive directors and consequent remuneration, and will follow the criteria they see as fit, in compliance with the law and the current statutory practices.

III. SUPERVISION

a) Composition 30. Identification of the supervision body on the adopted model

The structure of the Governing Body of the Company is based on the reinforced Latin model and is composed of the Board of Directors, Audit Board and the Auditor, voted by the General Meeting of Shareholders. 31. Composition of the Audit Committee, indicating the minimum and maximum statutory number

of members, statutory duration of terms, number of effective members, date of the first

appointment and date of term of mandate of each member.

According to the Statutes of the Company, the supervision of the Company will be made by an Audit Committee and an Auditor. The Audit Committee is composed of three effective members and one replacement. The mandate of the members of governing bodies lasts for four years, and the re-election is allowed for one or more times. In a Shareholder General Meeting held on the 13th of February of 2012, the following members were elected to be part of the Audit Committee for the period 2012/2015:

Name Date of first election Date of term of

mandate

José Paulo Sá Fernandes Nunes de Almeida 13-Nov-2008 31-Dec-2015

Armando Luís Vieira de Magalhães 29-Feb-2008 31-Dec-2015

Filipe Carlos Ferreira Avides Moreira 29-Feb-2008 31-Dec-2015


___________________________________________________________________________________________

___________________________________________________________________________________________


This body is currently composed of three members, as the replacement member asked to be excused from duties. 32. Identification of the independent members of the Audit Committee, according to art. 414.º, n.º

5 of the CSC

As stated by the members, the regulations for incompatibility and independence criteria foreseen in nº 1 or article 414 A and nº 5 of article 414, respectively, both part of the Portuguese Companies Code, apply. 33. Professional qualifications of each member of the audit Committee and other relevant

information

José Paulo Sá Fernandes Nunes de Almeida • Degree in Economics from the Faculdade de Economia do Porto

• Business Activity: � 1982/1984 Technical Sales Department at the Banco Português do Atlântico. � 1984/2005 Director of the Company Sofite - Sociedade Industrial de Fibras Têxteis, SA. � 1984/2004 Managing Partner of the ATM - Gabinete de Gestão, Lda. � 1990/2000 Manager of the Gorem - Sociedade Técnica de Serviços, Lda. � 1991/1993 Director of Risfomento - Sociedade de Fomento Empresarial, SA. � 1994/2014 Managing Partner of TRL - Têxteis em Rede, Lda. � 1994/2011 Managing Partner of Expomoda – Têxteis e Representações, Lda. � 2002/2004 Managing Partner of Ninfamar - Indústria de Confecções, Lda. � 2010/2013 Managing Partner of Hot Pink – Comércio, Lda.

• Corporate Activity: � 1986/1996 Vice-Chairman of ANJE - Associação Nacional de Jovens Empresários. � 1991/1994 Director of APET – Associação Portuguesa dos Exportadores de Têxteis. � 1994/2003 Vice-Chairman of the General Council of the ATP – Associação Portuguesa de Têxteis e Vestuário. � 1996/2000 Member of the Economic and Social Council. � 1996/2002 Chairman of the General Meeting of ANJE – Associação Nacional de Jovens Empresários. � 1996/2011 Vice-chairman of the Board of Sport Club do Porto. � 1997/2001 Director of the Associação Comercial do Porto – Câmara de Comércio e Indústria do Porto. � 1997/2002 Member of the National Commission for Monitoring the IMIT – Iniciativa para a Modernização da

Indústria Têxtil. � Since 1999 Member of the Executive Committee of the project Portugal Fashion. � 2001/2003 Member of the Audit Committee of MTV – Movimento do Têxtil e do Vestuário. � 2002/2006 Chairman of the General Office of the Associação Gabinete de Desporto do Porto. � 2003/2008 Chairman of the Board of ATP – Associação Têxtil e Vestuário de Portugal. � 2004/2008 Vice-Chairman of the Board of CIP – Confederação da Indústria Portuguesa. � 2004/2010 Member of the Monitoring Committee of Prime – Programa de Incentivos à Modernização da

Economia. � Since 2004 Chairman of the General Meeting of AAJUDE – Associação de Apoio à Juventude Deficiente. � 2005/2008 Member of the General Council and the Board of Directors of AEP – Associação Empresarial de

Portugal � Since 2005 Chairman of the Audit Committee ofAssociação Fórum Manufuture Portugal � 2007/2013 Chairman of the General Council of PortoLazer – Empresa Municipal � Since 2007 Member of the Advisory Board of Fundação da Juventude. � 2007/ 2008 Vice-Chairman of the Supervisory Board of Futebol Clube do Porto � 2008/ 2014 Vice-Chairman of General Board and Board of Directors of AEP – Associação Empresarial de

Portugal. � 2008/2013 Chairman of the Board of EURISKO Estudos, Projectos e Consultoria, S.A. � Since 2008 Member of the Board of Associação para a Feira Internacional do Porto – Exponor � Since 2008 Vice-Chairman of the Board of Europarque – Centro Económico e Social


___________________________________________________________________________________________

___________________________________________________________________________________________


� Since 2008 Chairman of General Board of Exponor Brasil – Feiras e Eventos, Lda. � Since 2008 Chairman of the Board of CESAE – Centro de Serviços e Apoio às Empresas � Since 2008 Chairman of the Audit Committee of Futebol Clube do Porto, da Futebol Clube do Porto – Futebol,

SAD, da Porto Estádio – Gestão e Exploração de Equipamentos Desportivos, S.A. and Euroantas – Promoção e Gestão de Empreendimentos Imobiliários, S.A.

� Since 2009 Chairman of the Board of Directors of Fundação AEP � Since 2010 Chairman of the Audit Committee of ATP – Associação Têxtil e Vestuário de Portugal � 2011/ 2013 Chairman of the Audit Committee of Futebol Clube do Porto – Basquetebol, SAD. � Since 2011 Vice-Chairman of the General Board of CIP – Confederação Empresarial de Portugal � Since 2011 Chairman of the General Meeting of AGAVI – Associação para a Promoção das Gastronomia, Vinhos,

Produtos Regionais e Biodiversidade � Since 2012 Chairman of the General Meeting of Paredes Industrial- Parques Industriais, S.A. � Chairman of the General Meeting of Tirso Parques – Parques Empresariais de Santo Tirso, S.A. � Chairman of the General Meeting of Parque-Invest – Sociedade Promotora de Parques Industriais, SA., among

others. � Since 2013 Vice-Chairman of CCIAP – Câmara de Comércio e Indústria Árabe-Portuguesa. � Since 2014 Chairman of the General Meeting of Delegação Regional Norte da DECO � Since 2014 Chairman of the General Board and the Board of Directors of AEP – Associação Empresarial de

Portugal. � Other positions referred in 2.3.1.

Armando Luís Vieira de Magalhães • Executive MBA - European Management (IESF / IFG), completed in 1996

• Degree in Economics from the Faculdade de Economia do Porto, completed in 1978

• Degree in Accounting (former ICP and current ISCAP), completed in 1972

• From 1964 to 1989 he pursued his work in Portuguese credit institution and has held the following functions: - Technical Analysis of the Department of Management; - Head of Office of Planning and Management Control in the Northern Region; - Head of Services Department of Accounting; - Deputy Director; - Deputy Director, appointed as head of the department North Executive Operation.

• Certified Public Accountant since 1972

• Statutory Auditor, individually, since 1989

• Statutory Auditor, integrated in Sociedade Santos Carvalho & Associados, SROC, SA from 1989 to 2010

• Statutory Auditor, integrated in Sociedade Armando Magalhães, Carlos Silva & Associados, SROC, Lda., since 2010

• Other positions held referred to in section 2.3.1.

Filipe Carlos Ferreira Avides Moreira

• Degree in Law at the Faculdade de Direito de Coimbra, in 1996

• Course of Commercial Law (Public Company) at Facoltà di Giurisprudenza dell’Università di Roma “La Sapienza” (Italy) - in the 1st semester of 1995/96, under the ERASMUS project

• Postgraduate in European Studies at the Centro de Estudos Europeus da Faculdade de Direito de Coimbra, concluded in 1997

• Accounting Course for Lawyers and Engineers at Universidade Católica Portuguesa, concluded in 1998

• Post-Graduation in Estudos Europeus at the Centro de Estudos Europeus of the Faculdade de Direito de Coimbra, concluded in December 1997;

• Attendance of Graduate Public Law - The New Legal Director, Universidade Católica Portuguesa, during 2002/2003

• Attendance of Postgraduate in “The New Code for Public Contracts” at Escola de Direito of Universidade Católica Portuguesa (Porto), 2009/2010

• Training in Specialization in “Public Contracts, Assessment of Propositions in Tender Procedures”, at Faculdade de Direito of Universidade de Coimbra (CEDIPRE), 2009/2010

• Practiced as a lawyer in a law firm in Porto (February to April 1999)

• Practiced as a lawyer in law firm in Macau (Drª Manuela António) from April 1999 to April 2001;

• Practiced as a lawyer in a law firm in Porto (in his own name and as a collaborator/associate of the Company of Advocates Cerqueira Gomes & Associados) from 2001 to 2009;

• Lawyer of Câmara Municipal do Porto from March 2003 to June 2004;

• Associate Attorney of Cuatrecasas, Gonçalves Pereira & Associates (from 2009 to 2013);

• Associate of Cuatrecasas, Gonçalves Pereira & Associados (2014);


___________________________________________________________________________________________

___________________________________________________________________________________________


• Instructor of the Law Bar, District Center of Porto, in the module “Company Law” (2006/2011);

• Instructor of Course for Expert Evaluators, organized by the Centro de Estudos Judiciários, 2009 Edition;

• Trainer at Cuatrecasas, Gonçalves Pereira in Escola de Direito of Universidade Católica Portuguesa (Porto), for the seminars on Public Law, since 2010;

• Member of Editorial Board for Legal Area of Editora Brasileira Juruá;

• Member of União Internacional dos Advogados (UIA);

• Member of the Board of Comité Português da UIA since 2012;

• Vice-Chairman of the Conselho de Justiça of the Federação Portuguesa de Ténis since 2012;

• Other positions held referred to in section 2.3.1.

b) Functioning 34. Existence and location where the regulations for the functioning of the Audit Committee may be

consulted

The Governing Bodies of FC Porto – Futebol, SAD do not have formally approved functioning regulations. However, the members intend to set those regulations and disclose them afterwards in the website of Futebol Clube do Porto (www.fcporto.pt). 35. Number of meetings held and attendance of each member of the Audit Committee to the

meetings

In this period, the Audit Committee met 4 times, and a minute was made for each meeting. These are available to any Governing Body who wishes to consult them. All members of the Board attended all the meetings.

36. Availability of each member of the Audit Committee indicating the positions held simultaneously

with other companies, in and out of the Group, and other relevant activities held by the members

of those Bodies during this period

José Paulo Sá Fernandes Nunes de Almeida • Member of the Executive Board of the Project Portugal Fashion

• Chairman of the General Assembly of AAJUDE - Associação de Apoio à Juventude Deficiente

• Chairman of the Audit Committee of the Associação Fórum Manufuture Portugal

• Member of the Advisory Board of Fundação da Juventude

• Vice-Chairman of the General Council and the Board of Directors of AEP - Associação Empresarial de Portugal

• Chairman of the General Council of Fundação AEP

• Vice-Chairman of the Board of Europarque - Económico e Social

• Chairman of the General Council of Exponor Brazil - Feiras e Eventos, Lda

• Chairman of the Board of CESAE - Centro de Serviços e Apoio às Empresas

• Vice-Chairman of the General Board of CIP – Confederação Empresarial de Portugal

• Chairman of the General Meeting of AGAVI – Associação para a Promoção das Gastronomia, Vinhos, Produtos Regionais e Biodiversidade

• Chairman of the General Meeting of Paredes Industrial - Parques Industriais, SA

• Chairman of the General Meeting of Tirso Parques – Parques Empresariais de Santo Tirso, SA

• Chairman of the General Meeting of Parque-Invest – Sociedade Promotora de Parques Industriais, SA

• Chairman of the Audit Committee of Futebol Clube do Porto

• Chairman of the Audit Committee of PortoEstádio, Gestão e Exploração de Equipamentos Desportivos, SA

• Chairman of the Audit Committee of EuroAntas, Promoção e Gestão de Empreendimentos Imobiliários, SA

• Chairman of the General Meeting of Delegação Regional Norte da DECO.


___________________________________________________________________________________________

___________________________________________________________________________________________


• Vice-Chairman of CCIAP – Câmara de Comércio e Indústria Árabe-Portuguesa.

Armando Luís Vieira de Magalhães • Member of the Audit Committee of Sonae Indústria, SGPS, SA

• Member of the Audit Committee of Sonae Capital, SGPS, SA

• Member of the Audit Committee of Sonaecom, SGPS, SA

• Member of the Audit Committee of the Fundação Eça de Queiroz

• Account Rapporteur of the Audit Committee of Futebol Clube do Porto

• Member of the Audit Committee Real Vida Seguros, SA

• Member of the Audit Committee Sonae Investimentos SGPS, SA

Filipe Carlos Ferreira Avides Moreira • Chairman of the General Assembly of the CPC AFRICA, SA

• Chairman of the Board of Directors of Porto Digital – Operador Neutro de Telecomunicações, S.A.

• Substitute of the Audit Committee of Futebol Clube do Porto

• Member of the Audit Committee of PortoComercial, Sociedade de Comercialização, Licenciamento e Sponsorização, SA

c) Competences and duties 37. Description of the procedures and applicable criteria for the intervention of the supervision body

to contract the additional services of an external auditor

The Audit Committee, whenever appropriate, meets with the External Auditor not only in its own name but also in that of the Company, pursuant to its powers. It is not under his role, however, to propose the provider of the External Audit, given his recruitment precedes the appointment of a separate Audit Committee of the Statutory Auditors. The external auditing services have been analysed independently and standing by the supervisory board, issuing an annual opinion on the activity of the Auditor during the year and making mention of any facts that could hinder the continuity of the office for just cause. The Audit Committee is, along with the Board of Directors, the first recipient of the reports issued by the external audit firm. 38. Other duties of the supervision body

The Audit Committee must supervise the activity of the company, confirming the compliance of the law and statutes. As a result, the Audit Committee shall, on an annual basis, create a report on the activities developed, stating any incompliance verified, and issue an opinion on the documents of accountability and on the proposed appropriation of results, presented by the Board to the General Meeting. This report is available for consultancy on the website of the Company, and on the website of CMVM, together with the documents of accountability. The annual reports on the activity of the Audit Committee are disclosed on the website of the Company, together with the documents of accountability. It must also represent the Company, for all purposes, at its External Auditor, responsible for, among others, propose the person responsible for these services, their remuneration, ensure there are, within the company, proper conditions to the provision of services, as well as being the partner of the company, as the recipient of the reports at issue, together with the Board of Directors.


___________________________________________________________________________________________

___________________________________________________________________________________________


IV. Statutory Auditor

39. Identification of the statutory auditor and its representative

The position of Statutory Auditors of the Company is held by the Accounting Company Deloitte & Associados, Sociedade de Revisores Oficiais de Contas, based in Edifício Atrium Saldanha, Praça Duque de Saldanha, 1 - 6º 1050-094 Lisboa, registered in Ordem dos Revisores Oficiais de Contas with the number 43 and with the CMVM under number 231, represented by António Manuel Martins Amaral (ROC n.º 1130). 40. Indication of how long the statutory auditor has been working with the company and/or group

Deloitte & Associados, SROC, S.A. has been responsible for the statutory audits of the Company and the companies in the Group since 2004, through its representative António Manuel Martins Amaral since 2011. 41. Description of other services carried out by the Statutory Auditor to the company

The statutory auditor is also the external auditor of the Company, as detailed below.

V. EXTERNAL AUDITOR

42. Identification of the external auditor appointed under art. 8 and the statutory auditor

representative in those duties, and number of registration in the CMVM

The external auditor of the Company, appointed under art. 8 of the CVM, is Deloitte & Associados, SROC, S.A., registered under the number 231 in the CMVM, represented by António Manuel Martins Amaral. 43. Indication of how long the statutory auditor has been working with the company and/or group

The statutory auditor was elected for the first time in 2004 and is now on its third mandate, through its representative António Manuel Martins Amaral since 2011. 44. Policy and frequency of rotation of the external auditor and its representative in its duties

The company has not set a period of rotation for the external auditor. However, the accounting company has their own internal regulations, which demand the rotation of the external auditor every seven years. This method has the full support of the Board of FC Porto – Futebol, SAD and its Audit Committee.


___________________________________________________________________________________________

___________________________________________________________________________________________


45. Indication of the body responsible for the evaluation of the external auditor and frequency of

evaluation

The Audit Committee, in the function of its duties, ensures an annual evaluation of the independence of the External Auditor. Additionally, the Audit Committee promotes, whenever possible or fitting for the activity of the Company of the general market, an analysis on the adequacy of the External Auditor to the exercise of its duties. 46. Identification of works, apart from audits, done by the external auditor, as well as indication of

internal procedures for the effects of approval in contracting such services and indication of reason

to the contracting

Other services done by the external auditor in 2013/2014 included those regarding the validation of financial assumptions, so that the Company may play in the competitions organized by LPFP. Other services are provided by different technicians involved in the audit procedure, which implies the independence of the auditor. The Audit Committee analysed and approved the services mentioned, concluding that they did not question the independence of the External Auditor. On that consideration, the decision to contract Deloitte proved to be optimal, due to their consolidated experience and knowledge in the operation and accounting of the Company. 47. Indication of the amount in annual remuneration paid to the auditor and to other employees

belonging to the same network and indication of the percentages belonging to each service:

By the Company* € %

Services for account audit (€) 89,000 73%

Services for compliance assessment (€) 10,000 8%

Services for tax consulting (€) 23,250 19%

Other services unrelated to accounting (€) 0 0%

By entities part of the group*

Services for account audit (€) 0 0%

Services for compliance assessment (€) 0 0%

Services for tax consulting (€) 0 0%

Other services unrelated to accounting (€) 0 0%

TOTAL 122,250 100%


___________________________________________________________________________________________

___________________________________________________________________________________________


C. INTERNAL ORGANIZATION

I. Statutes

48. Applicable regulation to the change in statutes of the Company

As line b) of article 23, n. 2 of Decree n. 10/2013, of the 25th of January goes into effect, FC Porto no longer has, by Law, the right to veto over the change in statutes of FC Porto SAD, and so the regulation set by the Portuguese Companies Code will apply on this matter.

II. Communication of irregularities

49. Means and policy to communicate irregularities occurring in the company

Although the policy statement of internal irregularities is not formally defined, considering the proximity of the members of the Board to the activities of the Company and its employees, FC Porto - Futebol, SAD considers that such proximity allows the communication of whichever irregularities may appear to the Board, ensuring the implementation of procedures aimed at dealing effectively and fairly with any irregularities detected. At the level of expertise in evaluating ethical issues and the structure and governance of the company, these functions are performed directly by the Board, specifically by the administrator responsible for the legal department, which maintains a constant debate on the issue. The staff of FC Porto – Futebol, SAD must report to the legal department, or to the director in charge, any irregular practices detected or suspected, in order to prevent or stop irregularities that may be cause damages to the financial health of the company or to its honour. This report must be done in writing and describe all the existing elements and information necessary to the assessment of the irregularity; a first approach to the report may be done directly or by phone. The communication of irregularities in the Company have ensured confidentiality and its sequel by any preliminary investigation of the responsibility of those who, to this end, will be designated by the concerning director.

III. 2.1. Internal control and risk management system

50. Persons, bodies or committees responsible for the internal audit and/or implementation of

internal control

The Internal Audit department is the department responsible for the internal control of the Company. 51. Description of the hierarchical and/or functional dependence relations with other bodies or

committees of the company

Both the Internal Audit and Compliance and the Management Planning and Control depend of the Board of Directors.


___________________________________________________________________________________________

___________________________________________________________________________________________


The Audit Committee has no responsibility in the creation and functioning of the internal control systems, but takes into consideration its existence and efficacy when assessing the risks to the company. 52. Other functional areas with competences in risk control

There is also a Management Planning and Control department with the main intent of supporting the administration in the detection of relevant financial risks, which means analysing periodically the information related to financial planning and control, such as the business plan, the operation budgets and treasury and its control, management indicators, among others. These procedures are designed to help in the quality of the information disclosed to the market. 53. Identification and description of the main types of risk (economic, financial and legal) to which

the company is expose in its activity

The Board of Administration considers that FC Porto – Futebol, SAD is exposed to risks inherent to its activity. Thus, the main financial risks the company believes to be subjected to are: market risk (interest rate risk and currency risk), credit risk, liquidity risk, regulation risk (Financial Fair Play) and sporting risk. The control mechanisms of these risks are described in the attachment regarding financial demonstrations. Apart from the financial risk, the activity of the company is also very reliant of the sporting performance of the main football team. The sporting success is a key factor to obtain the traditional revenues and to the value of its assets, as they represent invaluable gains to the company due to transfers. 54. Description of the process of risk identification, evaluation, accompaniment, control and

management

The administration and supervising bodies of the company have been giving growing importance to the development and improvement of the internal control and risk management systems, concerning the operational, economic and financial aspects with a relevant impact to the activities of the group, as recommended by national and international experts, including the CMVM. Thus, for the financial year of 2010/2011, a department of Internal Audit has been created, developing its activity in assessing the efficiency and efficacy of the internal control system and the business procedures concerning the entire group, independently and systematically, in examining and evaluating the rigour, quality and application of the operational, accounting and financial controls, promoting an effective control at a reasonable cost and proposing measures that present themselves as necessary to prevent possible deficiencies in the internal control system. Its function also includes assuring the full compliance with legislation and regulations affecting the organization. The department for Internal Audit has set an annual plan where it was determined the audits that should be carried out in order to assess the quality of the control processes that certify the compliance of the objectives of the Internal Control System, namely those that certify the operation efficiency, the reliability of the financial and operational reports and the compliance with laws and regulations. The


___________________________________________________________________________________________

___________________________________________________________________________________________


failures in the internal control will be reported to the upper rank and the most severe to the Board of Directors. 55. Main elements in the internal control and risk management systems implemented in the

company regarding the process of disclosing financial information

Regarding the risk control in financial reporting process, only a very limited number of collaborators of FC Porto - Futebol, SAD is involved in the financial reporting process. All those involved in the financial analysis of the Company are deemed to have access to privileged information and to be particularly aware of their obligations and the sanctions resulting from the misuse of such information. The system of internal control in the areas of accounting and preparation and report of financial information is based on the following key elements:

• The use of accounting principles, detailed throughout the notes to the financial statements, constitutes one of the bases of the control system;

• The plans, procedures and records of the Company and its subsidiaries enable reasonable assurance that only properly authorized transactions are recorded and that these transactions are recorded in accordance with generally accepted accounting principles;

• Financial information is analysed, in a systematic and orderly manner, by the management of operating units, ensuring ongoing monitoring and the respective budgetary control;

• During the process of preparing and reviewing financial information, a schedule of closing accounts is provided in advance and shared with the different areas involved, and all documents are reviewed in depth;

• At the level of individual financial statements of the various companies in the group, the accounting records and the preparation of financial statements are provided by administrative and accounting services. The financial statements are prepared by statutory auditors and reviewed by the financial management of each subsidiary;

• The consolidated financial statements are prepared quarterly by the consolidation team. This process represents an additional control element of the reliability of financial reporting, namely ensuring the uniform application of accounting principles and procedures of cutting operations as well as the verification of balances and transactions between companies in the group;

• The consolidated financial statements are prepared under the supervision of the CFO. The documents forming the annual report are sent for review and approval by the Board of Directors. After approval, the documents are sent to the External Auditor, which emits its Legal Certification of Accounts and the Audit Report; and

• The process of preparing the individual and consolidated financial information and the Management Report is supervised by the Audit Committee and the Board of Directors. On a quarterly basis, these bodies gather and analyse the individual and consolidated financial statements of the Company.

Concerning risk factors that may materially affect the accounting and financial reporting, we emphasize the use of accounting estimates that are based on the best information available at the date of preparation of the financial statements as well as the knowledge and experience of past and / or present events. We emphasize also the balances and transactions with related parties: in the group


___________________________________________________________________________________________

___________________________________________________________________________________________


FC Porto, balances and transactions with related parties mainly refer to current operating activities of the companies in the group, as well as the granting and obtaining of loans bearing interest at market rates. The Board, in conjunction with the Audit Committee, regularly examines and supervises the preparation and disclosure of financial information, in order to circumvent the access, improper and untimely, of third parties, to relevant information.

IV. Support to the Investor

56. Service responsible for investor relations, composition, functions, information provided by these

services and elements for contact

The representative of FC Porto - Futebol, SAD for relations with the capital market is the main contact for all investors, institutional and private, national and international. This representative ensures the provision of all relevant information regarding relevant events, applicable facts and relevant facts, disclosure of quarterly results and answer to any clarification requests by investors or the general public about financial information of a public nature. He is also responsible for all matters pertaining to the relationship with the Committee on Securities Market, to ensure the timely fulfilment of obligations to the supervisory authority of capital and other financial authorities. He is also responsible for developing and maintaining the webpage for Investor Relations in the website of the Company. For the exercise of his duties, the address, phone and fax number and e-mail of the representative for market relations are the following: Address: Estádio do Dragão, Via FC Porto, Entrada Poente, piso 3, 4350-451 Porto Phone: 22 5070500 Telefax: 22.5506931 E-Mail: [email protected] 57. Representative for market relations

The current representative of FC Porto - Futebol, SAD for market relations Fernando Manuel Santos Gomes, member of the Board of Directors. 58. Information on proportion and response time to information requests received during the year

or outstanding from previous years

When necessary, the representative of market relations ensures the provision of all relevant information regarding relevant events, applicable facts and relevant facts, disclosure of quarterly results and answer to any clarification requests by investors or the general public about financial information of a public nature. All information requested by investors is analysed and answered in a maximum of five working days.


___________________________________________________________________________________________

___________________________________________________________________________________________


V. Website

59. Addresses(s)

FC Porto - Futebol, SAD has an internet website (www.fcporto.pt) with a wide range of information about the Group. The aim is to provide to interested parties a general knowledge of the Group, its business areas, information of institutional and financial nature. In the webpage dedicated to Investor Relations, there is frequent presentation of results, documents of accountability, information on General Meetings of shareholders, including summons and supporting documentation, and information of institutional nature, namely the Statutes and the identification of Governing Bodies. It is also possible to consult qualified holdings, all the privileged information and other communications issued by the Company as well as the minutes of the General Meetings since 2009. 60. Address where information about the firm, its listed company, registered office and other

elements mentioned in Article 171 of the Companies Act can be found

http://www.fcporto.pt/pt/clube/grupo-fc-porto/Pages/futebol-clube-do-porto-futebol-sad.aspx#ancora_topo

61. Address with the statutes and regulations of the functioning of the bodies and/or commissions

N.a. 62. Address with information about the identity of the corporate officers, the representative for

market relations, the Office for Support to the Investor or equivalent, respective roles structure and

means of access

http://www.fcporto.pt/pt/clube/grupo-fc-porto/Pages/futebol-clube-do-porto-futebol-sad.aspx#ancora_topo http://www.fcporto.pt/pt/clube/grupo-fc-porto/Pages/contactos.aspx#ancora_topo

63. Address with accountability documents, which must be accessible for at least five years, as well

as the biannual calendar of corporate events, at the beginning of each semester, including, among

others, general meetings, disclosure of annual, semi-annual and, if applicable, quarterly accounts

http://www.fcporto.pt/pt/clube/grupo-fc-porto/Pages/r-c-2013-2014.aspx#ancora_topo http://www.fcporto.pt/pt/clube/grupo-fc-porto/Pages/calendario.aspx#ancora_topo

64. Address with the summon for a General Meeting and all the preparatory and subsequent

information related to it

http://www.fcporto.pt/pt/clube/grupo-fc-porto/Pages/ag-2014.aspx#ancora_topo

65. Address with the historical record of resolutions approved at general meetings of the company,

the represented share capital and the voting results, with reference to the previous 3 years

http://www.fcporto.pt/pt/clube/grupo-fc-porto/Pages/ag-2014.aspx#ancora_topo


___________________________________________________________________________________________

___________________________________________________________________________________________


D. REMUNERATIONS

I. Competence for determination

66. Indication as to the competence to determine the remuneration of corporate bodies

The body responsible for conducting the performance evaluation of Executive Directors for the purpose of remuneration is the Remuneration Committee, which follows the criteria it sees fit in every moment, complying with legal and statutory standards.

II. Remuneration Committee

67. Composition of the Remuneration Committee, including identification of contracted individual

or collective persons to provide them support and statement on the independence of each of the

members and advisors

The current Remuneration Committee of FC Porto - Futebol, SAD (from 2012 to 2015) is composed of the following members:

• Alípio Dias (Chairman)

• Fernando Freire de Sousa

• Joaquim Manuel Machado Faria de Almeida The Remuneration Committee is composed of independent members from the Board. To this extent, the Remuneration Committee does not include any member of another corporate body to which it sets its remuneration, and none of the three members in office has any family relationship with other members of these governing bodies, as their spouses or relatives in a straight line to the 3rd degree. During the financial year of 2013/2014, the Remuneration Committee did not deem as necessary contracting services to assist in carrying out its functions. 68. Knowledge and experience of the members of the remuneration committee on remuneration

policy

The members of the Remuneration Committee have knowledge and experience in matters of remuneration policy. FC Porto - Futebol, SAD believes that the experience and professional careers of the members of the Remuneration Committee allow them to perform their duties accurately and efficiently. Additionally, whenever necessary, that committee will recur to specialized resources, internal or external, to support their decisions.


___________________________________________________________________________________________

___________________________________________________________________________________________


III. Remuneration structure

69. Description of the remuneration policy of the management and supervisory bodies referred to

in Article 2 of Decree n. 28/2009, of the 19th of June

As stipulated in Decree n. 28/2009, of the 19th of June, there is an annual submission to the General Assembly of a statement on the remuneration policy of the management and supervision bodies. The policy on remuneration and compensation of corporate bodies of FC Porto - Futebol, SAD, approved by the General Assembly on the 21st of November, 2013, is as follows: The Remuneration Committee, which is responsible for setting the remuneration policy of the Board of Directors, submits to the General Assembly the following statement of principles:

• Members of the Board of Directors should perform their duties diligently and prudently in the interests of the company, taking into account the interests of its shareholders, employees and other stakeholders;

• It is the interest of the company and its shareholders to set a remuneration policy that creates adequate conditions and procedures to allow the performance of the members of the Board of Directors to align with the criteria previously defined;

• The performance and setting should consider, first, the level of compensation currently practiced, and, secondly, must be conditioned by the degree of achievement of the strategic objectives for the company.

Taking into account the principles listed above, the Remuneration Committee proposes to the General Meeting a remuneration model based on a fixed monthly component and possible also fixed annual bonuses, which will ensure a remuneration that rewards Executive Directors for the performance of the Company. At the beginning of each term (every 4 years), the Compensation Committee establishes the general parameters of remuneration of the Board of Directors, with the aim of making it more competitive in the market and serve as a motivating element for high individual and collective performance. The Remuneration Committee considers that the remuneration of the executive members of the Board of Directors of the Company shall be fixed in the month of June each year with effect staring on the following month of July, taking into account the sporting results achieved. The executive members of the Board of Directors of the Company may also be assigned fixed annual bonuses. The remunerations of members of the board are not dependent on the evolution of the price of the issued shares or of any other variable, including the profits made each year. The Remuneration Committee also intends to point out to shareholders that there is no type of plan of attribution of shares or acquirement of shares to the Directors. Likewise, there is no policy or measure defined in the sense of granting compensation negotiated by contract, in the event of termination of service or early retirement. Beyond any fixed annual bonus, there are no explicit premiums or non-cash benefits. Regarding the Company of Statutory Auditors of the Company, their remuneration is made through the contract for provision of audit services to the Group Futebol Clube do Porto, which covers nearly all of its subsidiaries. The planned remuneration is in line with market practices.


___________________________________________________________________________________________

___________________________________________________________________________________________


Members of other corporate bodies: the General Meeting, Audit Board, Company Secretary; Advisory Board and Remuneration Committee are not remunerated for these duties at FC Porto - Futebol, SAD. 70. Information on how remuneration is structured so as to align the interests of members of the

board with the long-term interests of company, as well as on how it is based on performance

assessment and how it discourages taking extreme risks

The remuneration policy for executive directors intends to ensure proper and rigorous consideration of the performance and contribution of each director to the organization's success, by aligning the interests of executive directors with those of shareholders and the Company. Proposals for remuneration of executive directors are made, taking into account the functions performed at FC Porto - Futebol, SAD and in its different subsidiaries; responsibility and added value by individual performance; knowledge and experience gained on the job; the financial position of the Company; the remuneration in companies of the same sector and other companies listed on NYSE Euronext Lisbon. Regarding the latter point, the Remuneration Committee takes into account the limits of available information, all national companies of equivalent size, namely listed on the NYSE Euronext Lisbon, and also companies in international markets with characteristics equivalent to FC Porto - Futebol, SAD. 71. Reference to the existence of a variable remuneration component and information about

possible impact of performance evaluation on this component

The remuneration of the members of the Board of Directors of the company has not foreseen for the existence of variable components. 72. Deferment of payment of the variable remuneration component, specifying the period of

deferment

The remuneration of the members of the Board of Directors of the company does not foresee the existence of variable components. 73. Criteria followed when setting the variable remuneration in shares

The remuneration of the members of the Board of Directors of the company does not foresee the existence of variable components. There was no sort of plan to attribute shares or allow for the acquisition of shares to the Directors. 74. Criteria followed when setting the variable remuneration in options

The remuneration of the members of the Board of Directors of the company does not foresee the existence of variable components. There was no sort of plan to attribute shares or allow for the acquisition of shares to the Directors.


___________________________________________________________________________________________

___________________________________________________________________________________________


75. Main parameters and grounds for any system of annual bonuses and other non-cash benefits

FC Porto - Futebol, SAD does not have any system of annual bonuses or other non-cash benefits. 76. Main features of supplementary pension or early retirement plans for directors and date they

were approved in general meeting, in individual terms

The Company has not established any plans to attribute shares or allow for the acquisition of shares or retirement benefit systems options, to members of the board of directors, and, as such, they were never brought to the attention of the General Assembly.

IV. Disclosure of remunerations

77. Indication of the annual amount of the remuneration, in aggregate and individually, of the

members of the management bodies of the company, coming from the company, including fixed and

variable remuneration and, for the latter, mentioning the different components that led to it

The remunerations attributed to the Board of FC Porto – Futebol, SAD during this financial year reached 2.297.500 euros and are fully paid. The gross earnings in the year in question, by all the members of the board, relates exclusively to the executive directors.

Director Fix Prizes

Jorge Nuno de Lima Pinto da Costa 520,000 320.000

Reinaldo Costa Teles Pinheiro 287,000 192.000

Adelino Sá e Melo Caldeira 287,000 192.000

Angelino Cândido Sousa Ferreira 225,500 192.000

Fernando Manuel Santos Gomes 82,000 0

Rui Ferreira Vieira de Sá 0 0

78. Amounts paid by other companies in dominion or group, or which are subject to a common

domain

The members of the Board of Directors are not remunerated by other companies in the group or by companies controlled by shareholders with qualified holdings. 79. Remuneration paid in the form of profit sharing and/or payment of premiums and the reasons

why these bonuses or profit sharing were granted

During the exercise, no remunerations were paid by way of profit sharing or in the form of prizes.


___________________________________________________________________________________________

___________________________________________________________________________________________


80. Compensation paid or owed to former executive directors leaving their duties during the year

During the exercise, no amounts were paid or owed relating to compensation to directors whose functions have ceased. 81. Indication of the annual amount of remuneration, in aggregate and individually, of members of

the supervision bodies of the company

Members of the Audit Board are not remunerated for these duties at FC Porto - Futebol, SAD. 82. Details on the remuneration in the reference year of the chairman of the general meeting

The Chairman of the General Assembly is not paid for these duties at FC Porto - Futebol, SAD.

V. Agreements with implications on remunerations

83. Contractual limitations provided for compensation payable for unfair dismissal of directors and

its relation with the variable remuneration component

The remuneration policy maintains the principle of not contemplating compensations to directors, or members of other governing bodies, associated with the early termination of duties or the expiry of their terms, subject to compliance by the Company with legal provisions in force in this field. 84. Reference to the existence and description, indicating the sums involved, of agreements

between the company and members of the board of directors and managers, under the terms of

paragraph 3 of article 248-B of the Portuguese Securities Code, which provide for compensation in

case of dismissal without cause or termination of contract following a change of control of the

company

There are no agreements between the Company and members of the board of directors or other managers of FC Porto - Futebol, SAD, within the meaning of paragraph 3 of article 248-B of the Portuguese Securities Code, which provide for compensation in case of resignation, unfair dismissal or termination of contract following a change of control of the Company. No agreements are foreseen with the directors to ensure any compensation in the event of non-renewal of the mandate.

VI. Plans to attribute shares or allow for the acquisition of shares (‘stock options’)

85. Identification of the plan and its recipients

The Company does not have in place any kind of Plans to attribute shares or allow for the acquisition of shares to members of governing bodies or employees.


___________________________________________________________________________________________

___________________________________________________________________________________________


86. Characterization of the plan

The Company does not have in place any kind of Plans to attribute shares or allow for the acquisition of shares.

87. Option rights attributable to the acquisition of shares ('stock options') to workers and employees

of the company

There are no option rights granted for the acquisition of shares to workers and employees of the company. 88. Control mechanisms in any possible system of employee participation in capital to the extent

that the voting rights are not exercised directly by them

Not applicable as explained above. E. TRANSACTIONS BETWEEN RELATED PARTIES

I. Control mechanisms and procedures

89. Mechanisms implemented by the Company for purposes of monitoring of transactions with

related parties

Currently, there are no established procedures or criteria to define the relevant level of significance in business between the Company and the holders of qualifying holdings or entities who are with them in any relationship or group, from which the intervention is required of the supervisory board. 90. Indication of the transactions that were subject to control in the reference year

No businesses or significant transactions between the Company and members of its governing bodies (administration and supervision), holders of qualified shareholdings or companies in a control or dominion or group were performed, except those part of the current activity, and that were carried out under normal market conditions for similar transactions. There were no business transactions with members of the Audit Committee. The services rendered by the Statutory Auditors of the various audit services were approved by the Audit Committee and are detailed in paragraph 47 above. 91. Description of the procedures and criteria for intervention by the supervision body for the

purpose of preliminary assessment of the business carried out between the company and holders of

qualifying holdings or entities that are related to them

In addition to the legal requirements applicable to the activities of the Audit Committee, there were no additional mechanisms established by the company for the purpose of preliminary assessment of


___________________________________________________________________________________________

___________________________________________________________________________________________


conducting business between the Company and holders of qualifying holdings or entities that are related to them, in accordance with Article 20 of the Securities Code.

II. Business related elements

92. Indication of the location of accounting documents where information about the business with

related parties is made available

Information on the business with related parties can be found in Note 31 of the Attachment to Consolidated Financial Statements and Note 28 of the Attachment to the individual accounts of the Company.


___________________________________________________________________________________________

___________________________________________________________________________________________


PART II – EVALUATION OF THE CORPORATE GOVERNANCE

1. Identification of the code of corporate governance adopted

This report was prepared in accordance with CMVM Regulation n. 4/2013, of 1st of August and the Code of Corporate Governance, available at www.cmvm.pt, and to summarize the key aspects of Company management, regarding the Board of Directors, taking into account the need for transparency on this matter and the need for communication with investors and other stakeholders. The reporting model adopted by the Company is stipulated by paragraph 4 of Article 1 of that Regulation and Annex I thereto. The report meets the standards of Article 245-A of the Portuguese Securities Code and discloses, to the principle comply or explain, the degree of compliance with the CMVM Recommendations included in the 2013 CMVM Code of Corporate Governance. The duties of disclosure required by Decree 28/2009 of 19th of June, by Articles 447 and 448 of the Commercial Companies Code and CMVM Regulation n. 5/2008, dated 2nd of October 2008 are also met. 2. Analysis of compliance with the Code of Corporate Governance adopted

FC Porto - Futebol, SAD complies with most of the CMVM recommendations relating to Corporate Governance as follows:

CMVM CORPORATE GOVERNANCE RECOMMENDATIONS DEGREE OF

COMPLIANCE REPORT

I. VOTING AND CORPORATE CONTROL

I.1. Companies shall encourage shareholders to attend and vote at general meetings and shall not set an excessively large number of shares required for the entitlement of one vote, and implement the means necessary to exercise the right to vote by mail and electronically.

Adopted Part I / B / I. / b) / 12, 13 and 14

I.2. Companies shall not adopt mechanisms that hinder the passing of resolutions by shareholders, including fixing a quorum for resolutions greater than that provided for by law.

Adopted Part I / B / I. / b) / 13 and 14

I.3. Companies shall not establish mechanisms intended to cause mismatching between the right to receive dividends or the subscription of new securities and the voting right of each common share, unless duly justified in terms of long-term interests of shareholders.


I.4. The company’s articles of association that provide for the restriction of the number of votes that may be held or exercised by a sole shareholder, either individually or in concert with other shareholders, shall also foresee for a resolution by the General Assembly (5 year intervals), on whether that statutory provision is to be amended or prevails – without super quorum requirements as to the one legally in force – and that in said resolution, all votes issued be counted, without applying said restriction.


I.5. Measures that require payment or assumption of fees by the company in the event of change of control or change in the composition of the Board and that which appear likely to impair the free transfer of shares and free assessment by shareholders of the performance of Board members, shall not be adopted.

Adopted Part I / A / I. / 2, 4, 5 and 6

II. SUPERVISION, MANAGEMENT AND OVERSIGHT

II.1. SUPERVISION AND MANAGEMENT


___________________________________________________________________________________________

___________________________________________________________________________________________


II.1.1. Within the limits established by law, and except for the small size of the company, the board of directors shall delegate the daily management of the company and said delegated powers shall be identified in the Annual Report on Corporate Governance.

Not adopted Part II / 2 and Part I / B / II. / a) / 21

II.1.2. The Board of Directors shall ensure that the company acts in accordance with its objectives and shall not delegate its responsibilities as regards the following: i) define the strategy and general policies of the company, ii) define business structure of the group iii) decisions considered strategic due to the amount, risk and particular characteristics involved.

Adopted Part I / B / II. / a) / 21

II.1.3. The General and Supervisory Board, in addition to its supervisory duties supervision, shall take full responsibility at corporate governance level, whereby through the statutory provision or by equivalent means, shall enshrine the requirement for this body to decide on the strategy and major policies of the company, the definition of the corporate structure of the group and the decisions that shall be considered strategic due to the amount or risk involved. This body shall also assess compliance with the strategic plan and the implementation of key policies of the company.

Not applicable

II.1.4. Except for small-sized companies, the Board of Directors and the General and Supervisory Board, depending on the model adopted, shall create the necessary committees in order to: a) Ensure a competent and independent assessment of the performance of the executive directors and its own overall performance, as well as of other committees; b) Reflect on the system structure and governance practices adopted, verify its efficiency and propose to the competent bodies, measures to be implemented with a view to their improvement.

Not adopted Part II / 2 and Part I / B / II. / c) / 29

II.1.5. The Board of Directors or the General and Supervisory Board, depending on the applicable model, should set goals in terms of risk-taking and create systems for their control to ensure that the risks effectively incurred are consistent with those goals.

Not adopted Part II / 2 and Part I / C / III. / 52, 54 and 55

II.1.6. The Board of Directors shall include a number of non-executive members ensuring effective monitoring, supervision and assessment of the activity of the remaining members of the board.


II.1.7. Non-executive members shall include an appropriate number of independent members, taking into account the adopted governance model, the size of the company, its shareholder structure and the relevant free float. The independence of the members of the General and Supervisory Board and members of the Audit Committee shall be assessed as per the law in force. The other members of the Board of Directors are considered independent if the member is not associated with any specific group of interests in the company nor is under any circumstance likely to affect an exempt analysis or decision, particularly due to: a. Having been an employee at the company or at a company holding a controlling or group relationship within the last three years; b. Having, in the past three years, provided services or established commercial relationship with the company or company with which it is in a control or group relationship, either directly or as a partner, board member, manager or director of a legal person; c. Being paid by the company or by a company with which it is in a control or group relationship besides the remuneration arising from the exercise of the functions of a board member; d. Living with a partner or a spouse, relative or any first degree next of kin and up to and including the third degree of collateral affinity of board members or natural persons that are direct and indirectly holders of qualifying holdings; e. Being a qualifying shareholder or representative of a qualifying shareholder.


II.1.8. When board members that carry out executive duties are requested by other board members, said shall provide the information requested, in a timely and appropriate manner to the request.


II.1.9. The Chairman of the Executive Board or of the Executive Committee shall submit, as applicable, to the Chair of the Board of Directors, the Chair of the

Adopted Part I / B / II. / a) / 18 and


___________________________________________________________________________________________

___________________________________________________________________________________________


Supervisory Board, the Chair of the Audit Committee, the Chair of the General and Supervisory Board and the Chairman of the Financial Matters Board, the convening notices and minutes of the relevant meetings.

Part I / B / II. / b) / 23

II.1.10. If the chairman of the board of directors carries out executive duties, said body shall appoint, from among its members, an independent member to ensure the coordination of the work of other non-executive members and the conditions so that said can make independent and informed decisions or to ensure the existence of an equivalent mechanism for such coordination.


II.2. SUPERVISION

II.2.1. Depending on the applicable model, the Chair of the Supervisory Board, the Audit Committee or the Financial Matters Committee shall be independent in accordance with the applicable legal standard, and have the necessary skills to carry out their relevant duties.

Adopted Part I / B / III. / a) / 32

II.2.2. The supervisory body shall be the main representative of the external auditor and the first recipient of the relevant reports, and is responsible, inter alia, for proposing the relevant remuneration and ensuring that the proper conditions for the provision of services are provided within the company.

Adopted Part I / B / III. / c) / 38

II.2.3. The supervisory board shall assess the external auditor on an annual basis and propose to the competent body its dismissal or termination of the contract as to the provision of their services when there is a valid basis for said dismissal.

Adopted Part I / B / V. / 45

II.2.4. The supervisory board shall assess the functioning of the internal control systems and risk management and propose adjustments as may be deemed necessary.

Not adopted Part I / B / III. / c) / 38

II.2.5. The Audit Committee, the General and Supervisory Board and the Supervisory Board decide on the work plans and resources concerning the internal audit services and services that ensure compliance with the rules applicable to the company (compliance services), and should be recipients of reports made by these services at least when it concerns matters related to accountability, identification or resolution of conflicts of interest and detection of potential improprieties.

Not applicable Part I / C / III. / 50

II.3. REMUNERATION SETTING

II.3.1. All members of the Remuneration Committee or equivalent should be independent from the executive board members and include at least one member with knowledge and experience in matters of remuneration policy.

Adopted Part I / D / II. / 67 and 68

II.3.2. Any natural or legal person that provides or has provided services in the past three years, to any structure under the board of directors, the board of directors of the company itself or who has a current relationship with the company or consultant of the company, shall not be hired to assist the Remuneration Committee in the performance of their duties. This recommendation also applies to any natural or legal person that is related by employment contract or provision of services with the above.

Adopted Part I / D / II. / 67

II.3.3. A statement on the remuneration policy of the management and supervisory bodies referred to in Article 2 of Law No. 28/2009 of 19 June, shall also contain the following: a) Identification and details of the criteria for determining the remuneration paid to the members of the governing bodies ; b) Information regarding the maximum potential, in individual terms, and the maximum potential, in aggregate form, to be paid to members of corporate bodies, and identify the circumstances whereby these maximum amounts may be payable; d) Information regarding the enforceability or unenforceability of payments for the dismissal or termination of appointment of board members.

Adopted Part I / D / III. / 69

II.3.4. Approval of plans for the allotment of shares and/or options to acquire shares or based on share price variation to board members shall be submitted to the General Meeting. The proposal shall contain all the necessary information in order to correctly assess said plan.

Not applicable Part I / D / III. / 73 and 74


___________________________________________________________________________________________

___________________________________________________________________________________________


II.3.5. Approval of any retirement benefit scheme established for members of corporate members shall be submitted to the General Meeting. The proposal shall contain all the necessary information in order to correctly assess said system.

Not applicable Part I / D / III. / 76

III. REMUNERATION

III.1. The remuneration of the executive members of the board shall be based on actual performance and shall discourage taking on excessive risk-taking.


III.2. The remuneration of non-executive board members and the remuneration of the members of the supervisory board shall not include any component whose value depends on the performance of the company or of its value.

Adopted Part I / D / III. / 69 and Part I / D / IV. / 78, 81 and 82

III.3. The variable component of remuneration shall be reasonable overall in relation to the fixed component of the remuneration and maximum limits should be set for all components.


III.4. A significant part of the variable remuneration should be deferred for a period not less than three years, and the right of way payment shall depend on the continued positive performance of the company during that period.


III.5. Members of the Board of Directors shall not enter into contracts with the company or with third parties which intend to mitigate the risk inherent to remuneration variability set by the company.


III.6. Executive board members shall maintain the company's shares that were allotted by virtue of variable remuneration schemes, up to twice the value of the total annual remuneration, except for those that need to be sold for paying taxes on the gains of said shares, until the end of their mandate.

Not applicable Part I / D / III. / 73 and 74

III.7. When the variable remuneration includes the allocation of options, the beginning of the exercise period shall be deferred for a period not less than three years.


III.8. When the removal of board member is not due to serious breach of their duties nor to their unfitness for the normal exercise of their functions but is yet due on inadequate performance, the company shall be endowed with the adequate and necessary legal instruments so that any damages or compensation, beyond that which is legally due, is unenforceable.

Adopted Part I / D / III. / 69 and Part I / D / V. / 83

IV. AUDITING

IV.1. The external auditor shall, within the scope of its duties, verify the implementation of remuneration policies and systems of the corporate bodies as well as the efficiency and effectiveness of the internal control mechanisms and report any shortcomings to the supervisory body of the company.

Adopted Part I / B / III. / c) / 38

IV.2. The company or any entity with which it maintains a control relationship shall not engage the external auditor or any entity with which it finds itself in a group relationship or that incorporates the same network, for services other than audit services. If there are reasons for hiring such services - which must be approved by the supervisory board and explained in its Annual Report on Corporate Governance - said should not exceed more than 30% of the total value of services rendered to the company.

Adopted Part I / D / IV. / 41 and Part I / D / V. / 47

IV.3. Companies shall support auditor rotation after two or three terms whether four or three years, respectively. Its continuance beyond this period must be based on a specific opinion of the supervisory board that explicitly considers the conditions of auditor’s independence and the benefits and costs of its replacement.

Adopted Part I / D / V. / 44

V. CONFLICTS OF INTEREST AND RELATED PARTY TRANSACTIONS

V.1. The company's business with holders of qualifying holdings or entities with which they are in any type of relationship pursuant to article 20 of the Portuguese Securities Code, shall be conducted during normal market conditions.

Adopted Part I / E / I. / 90

V.2. The supervisory or oversight board shall establish procedures and criteria that are required to define the relevant level of significance of business with holders of qualifying holdings - or entities with which they are in any of the relationships described in article 20/1 of the Portuguese Securities Code – thus significant relevant business is dependent upon prior opinion of that body.

Not adopted Part II / 2 and Part I / E / I. / 91

VI. INFORMATION


___________________________________________________________________________________________

___________________________________________________________________________________________


VI.1. Companies shall provide, via their websites in both the Portuguese and English languages, access to information on their progress as regards the economic, financial and governance state of play.

Adopted Part I / C / V. / 59 to 65

VI.2. Companies shall ensure the existence of an investor support and market liaison office, which responds to requests from investors in a timely fashion and a record of the submitted requests and their processing, shall be kept.

Adopted Part I / C / IV. / 56 to 58

Recommendations II.1.1., II.1.4., II.1.5., II.1.7., II.1.10., II.2.4. e V.2. are not fully adopted by FC Porto – Futebol, SAD, as explained below.

• Recommendation II.1.1.: The directors of FC Porto – Futebol, SAD focus their activity in the management of participations of the Group and in the definition of strategic development lines. The decisions regarding strategic and relevant matters are adopted by the Board of Directors as a composed college body by all members, executive and non-executive, in the normal performance of their duties. Additionally, some of the directors of the Company are in the Board of Directors of other operational units in the Group, which means the recommendation is not fully followed.

• Recommendation II.1.4.: FC Porto – Futebol, SAD believes that, given its size, the only indispensable specialized commission to the needs of the Company in the Remuneration Committee, not presenting any committees with the specific purpose of identifying candidates to directors and to reflect on the adopted governing system, for which the recommendation cannot be considered adopted.

• Recommendations II.1.5.: In this report, there is a description of the most important aspects in the risk management that were implemented in the Group. However, FC Porto – Futebol, SAD does not have a system for internal control and risk management to include all the components foreseen in that type of system, for which the recommendation is not fully adopted.

• Recommendations II.1.7. and II.1.10.: the members of the Board of Directors are not independent, as all, with the exception of Rui Ferreira Vieira de Sá, are part of the Board of Futebol Clube do Porto, holder of around 40% of the capital of Futebol Clube do Porto – Futebol, SAD, having a dominant influence over it. Rui Ferreira Vieira de Sá is in the Board of Directors of Somague Engenharia, SA, which is owned 100% by Somague, S.G.P.S., S.A., which in turn is owned 100% by Sacyr SYV, a company that owns 18,79% of the social capital of Futebol Clube do Porto – Futebol, SAD. Considering the company model adopted and the composition and functioning of its governing bodies, namely the independence of audit bodies, without any delegation of competence between that or any other committees, the Group believes that appointing independent directors would not add any benefits to the proper functioning of the model adopted, which has been proving to be adequate and efficient.

• Recommendations II.2.4.: Even if the Audit Committee does not have any responsibilities in the creation and functioning of internal control systems, it does take into consideration their existence and efficiency when analysing the risks to the Company.

• Recommendation V.2.: Currently, there are no procedures or criteria regarding the definition of relevant level of significance of businesses between the Company and holders of qualified participations, or entities that are under any type of dominion or group, for which it would be required an intervention of the audit body. However, the transactions with directors of FC Porto – Futebol, SAD, or with companies related to the group or dominion represented by the director, regardless of the amount, should be previously cleared by the Board of Directors, properly accepted by the audit body, under the terms of art. 397 of the Portuguese Companies Code.


___________________________________________________________________________________________

___________________________________________________________________________________________


3. Other information

Futebol Clube do Porto – Futebol, SAD believes that, despite the only partial compliance with the recommendations of CMVM, as explained above, the degree of adoption if still wide and complete.


___________________________________________________________________________________________

___________________________________________________________________________________________


D. Shares held by members of the Board of Directors and Advisory Council

Board of Directors Jorge Nuno de Lima Pinto da Costa

Had 206.000 shares as off the 30th of June 2013. By then, further 44.000 shares were acquired, making a total of 250.000 shares as off the 30th of June 2014. According to n. 7 of article 14 of the Regulation of CMVM 5/2008, we disclose the operations carried out between 1st of July 2013 and the 30th of June 2014:

Hour Market Date Operation Amount Price Amount

(in Euros) Balance

15:30 08-08-2013 Buy 10 0,3200 3,20 206.010

15:54 08-08-2013 Buy 3.990 0,3200 1.276,80 210.000

15:30 11-11-2013 Buy 542 0,3700 200,54 210.542

15:30 11-11-2013 Buy 975 0,3700 360,75 211.517

15:30 11-11-2013 Buy 40 0,3700 14,80 211.557

15:30 11-11-2013 Buy 8.443 0,3700 3.123,91 220.000

15:30 02-01-2014 Buy 1 0,4000 0,40 220.001

15:30 02-01-2014 Buy 20 0,4000 8,00 220.021

15:30 02-01-2014 Buy 1.500 0,4000 600,00 221.521

15:30 02-01-2014 Buy 8.479 0,4000 3.391,60 230.000

15:30 08-01-2014 Buy 3.196 0,4000 1.278,40 233.196

10:30 10-01-2014 Buy 20 0,4000 8,00 233.216

10:30 15-01-2014 Buy 40 0,4100 16,40 233.256

10:30 15-01-2014 Buy 100 0,4100 41,00 233.356

10:30 15-01-2014 Buy 859 0,4100 352,19 234.215

15:30 16-01-2014 Buy 341 0,4400 150,04 234.556

15:30 16-01-2014 Buy 100 0,4400 44,00 234.656

15:30 16-01-2014 Buy 3.000 0,4400 1.320,00 237.656

15:30 16-01-2014 Buy 59 0,4400 25,96 237.715

15:30 29-01-2014 Buy 386 0,4200 162,12 238.101

15:30 29-01-2014 Buy 614 0,4200 257,88 238.715

15:30 18-02-2014 Buy 1 0,4200 0,42 238.716

15:30 18-02-2014 Buy 10 0,4200 4,20 238.726

10:30 20-02-2014 Buy 500 0,4400 220,00 239.226

15:30 20-02-2014 Buy 250 0,4400 110,00 239.476

15:30 03-03-2014 Buy 906 0,4400 398,64 240.382

15:30 03-03-2014 Buy 170 0,4400 74,80 240.552

15:30 03-03-2014 Buy 924 0,4400 406,56 241.476

15:30 04-03-2014 Buy 50 0,4400 22,00 241.526

15:30 04-03-2014 Buy 198 0,4400 87,12 241.724

15:30 04-03-2014 Buy 1.000 0,4400 440,00 242.724

10:30 08-05-2014 Buy 40 0,5200 20,80 242.764

15:30 08-05-2014 Buy 10 0,5700 5,70 242.774

15:30 08-05-2014 Buy 1 0,5700 0,57 242.775

15:30 08-05-2014 Buy 100 0,5700 57,00 242.875

15:30 08-05-2014 Buy 50 0,5700 28,50 242.925

15:30 08-05-2014 Buy 839 0,5700 478,23 243.764

15:30 13-05-2014 Buy 3.999 0,5800 2.319,42 247.763


___________________________________________________________________________________________

___________________________________________________________________________________________


15:30 13-05-2014 Buy 1 0,5800 0,58 247.764

15:30 13-06-2014 Buy 1.835 0,5400 990,90 249.599

15:30 13-06-2014 Buy 200 0,5400 108,00 249.799

15:30 13-06-2014 Buy 200 0,5400 108,00 249.999

15:30 13-06-2014 Buy 1 0,5400 0,54 250.000

Futebol Clube do Porto, of which he is Chairman of the Board, held, on the 30th of June 2014, 6.000.000 shares. Fernando Manuel Santos Gomes

No shares held. Futebol Clube do Porto, of which he is Vice-Chairman of the Board, held, on the 30th of June 2013, 6.000.000 shares. Adelino Sá e Melo Caldeira

No shares held. Futebol Clube do Porto, of which he is Vice-Chairman of the Board, held, on the 30th of June 2014, 6.000.000 shares. Reinaldo da Costa Teles Pinheiro

Had 9,850 shares as off the 30th of June 2013. Has not acquired or alienated any share since, and, as off the 30th of June 2014, had the same number of shares, 9,850. Futebol Clube do Porto, of which he is Vice-Chairman of the Board, held, on the 30th of June 2013, 6,000,000 shares. Rui Ferreira Vieira de Sá

No shares held. Audit Committee José Paulo Sá Fernandes Nunes de Almeida

Had 100 shares as off the 30th of June 2013. Has not acquired or alienated any share since, and, as of the 30th off June 2014, had the same number of shares, 100. Armando Luís Vieira de Magalhães

No shares held. Filipe Carlos Ferreira Avides Moreira

Had 10 shares as off the 30th of June 2013. Has not acquired or alienated any share since, and, as of the 30th off June 2014, had the same number of shares, 10. Statutory Auditors Deloitte & Associados, SROC S.A. represented by António Manuel Martins Amaral

No shares held.

futebol clube do porto – futebol, sad de contas/rc_consolidado... · futebol clube do porto –...

Documents