ANNUAL REPORT SEPARATE ACCOUNTS 2008

Transcription

1 ANNUAL REPORT SEPARATE ACCOUNTS 2008 Sede: Estrada de Alfragide, Nº 67 Amadora 1

2 SAG GEST Soluções Automóvel Globais, SGPS,SA Listed Company Registered Share Capital: EUR 169,764,398 Taxpayer no Registered at the Amadora Registrar of Companies under no Headquarters: Estrada de Alfragide, nº Amadora Offices: Alfrapark Edifício SGC, Piso Amadora Tel: (351) Fax: (351) investor.relations@sag.pt Web: Sede: Estrada de Alfragide, Nº 67 Amadora 2

3 MANAGEMENT REPORT SEPARATE ACCOUNTS 2008 Sede: Estrada de Alfragide, Nº 67 Amadora 3

4 SAG GEST SOLUÇÕES AUTOMÓVEL GLOBAIS, SGPS, S.A. Listed Company REPORT OF THE BOARD OF DIRECTORS FISCAL YEAR 2008 In accordance with the applicable regulations and the Company s By-Laws, we hereby present the Management Report and the Financial Statements regarding the financial year ending on 31 December 2008 to our Shareholders. The information contained in these documents concerns SAG GEST Soluções Automóvel Global, SGPS, S.A. s individual activity as parent company of Grupo SAG. The information concerning Grupo SAG s consolidated business is presented separately. ACTIVITY REPORT In accordance with estimates which were recently published by the European Commission, by Banco de Portugal and by the Portuguese Ministry of Finance, the Portuguese GDP stagnated in 2008 and the diverging trend of this indicator vs. the European average continued for the seventh consecutive year. GDP slowdown was particularly felt in exports and investments, reflecting a sharp deterioration in the evolution of demand both in the domestic and in the foreign market. The Brazilian economy saw a 5.3% increase in GDP, an amount which was similar to that in 2007 and substantially higher than in 2006 (5.4% and 4.0%, respectively), driven mainly by increased spending and strong consumption by households in the first three quarters of the year. Brazilian GDP growth already takes into account the deceleration which hit the Brazilian economy in the final quarter of 2008, due to the effects of the international economic crisis. Business activity of the Group that SAG SGPS leads reflected the impacts of these situations, although business conducted in the automotive sector in Portugal saw a positive operational development in the various business areas, with performances above the market average. Business activities by the Group in Brazil continued with high growth rates, as had been the case in previous years. Apart from the current business operations of the Group Companies, several operations conducted in 2008 are worth highlighting: Sede: Estrada de Alfragide, Nº 67 Amadora 4

5 As concerns development of the retail network, Affiliate Soauto SGPS acquired the majority of the capital of Loures Automóveis SA, a Dealer who handles all the makes represented by SIVA (with the exception of Luxury Brands) in the Loures region, strengthening the business area expansion strategy of the automobile retain in the Greater Lisbon area. During the 2008 financial year, SAG SGPS strengthened Unidas equity with two capital increase operations conducted in April and December, in an amount equivalent to approximately EUR 34.7 million, ensuring the balance of the relevant balance sheets. In October, SAG SGPS successfully conducted the refinancing of the SAG 2004 Bond issue, which reached maturity on that date. On November 5th 2008, SAG Gest sold the total share capital of its Affiliate Brienz Mobilidade Automotiva Ltda (Brienz) to Growth Capital Invest S.A., a Grupo SGC company and therefore a Related Entity. Brienz is a company incorporated according to the Brazilian law which was bought by SAG Gest in March 2008 and which, on the date of the transaction, was not active and did not have any assets or liabilities. For this reason, the price was BRL 1,613,058.00, which corresponded to the Company s Net Equity on the date of the transaction. In accordance with para. 2 of Clause 397 of the Companies Act, the said sale transaction was submitted to the Audit Board for its opinion, which was favourable. ACTIVITY CONDUCTED BY NON-EXECUTIVE MEMBERS OF THE BOARD OF DIRECTORS Non-executive directors are advised about all relevant decisions made by the Executive Committee, and therefore permanently monitor the company s business. This knowledge, as well as their professional qualifications enable an active presence in the Board of Directors, both in the supervision of the management activity as well as in pursuing the company s interests in a cooperative manner. Therefore, they provide full support and advise the executive committee, namely as concerns strategy, target achievement and compliance of applicable regulations. They assess the company s monthly accounts and challenge the motive of any positive or negative deviations shown. They monitor and assess all matters concerning corporate governance, sustainability and internal codes of conduct, and address possible situations of conflict of interest regarding the company s relationship with its shareholders. Non-executive directors do not meet autonomously but, further to board meetings, maintain informal conversations about the business or operations of significant economic or strategic value, implicitly assessing the performance of their executive colleagues. OUTLOOK FOR 2009 During 2009, SAG GEST SGPS hopes to continue to strengthen the competitive position of its Affiliates in the areas in which they operate, based on a strategy that promotes sustained growth and with adequate profitability levels. TREASURY STOCK INFORMATION (CLAUSE 66 OF THE COMPANIES ACT) On 31 December 2007, the Company had 10,378,415 treasury stock, of which 10,373,315 held directly, and indirectly, 5,100 treasury stock held by affiliate Rolporto, all with the nominal value of EUR 1 each. The average unit acquisition price of these stocks was EUR During the financial year, SAG Gest bought 6,387,500 shares for an average unit price of EUR 2,3952. These acquisitions were made throughout the year, in the following manner: Sede: Estrada de Alfragide, Nº 67 Amadora 5

6 Quantity Average Unit Price Total Amount 1st Semester 6,387,500 2, ,299,450 2nd Semester Total for the Year 6,387,500 2, ,299,450 These acquisitions were made throughout the year, as follows: Under the contract with Banco de Investimento Global in its capacity as Liquidity Provider, 1,700,000 shares were bought for an average unit price of Eur 2,3636. Upon maturity of a swap contract established with a Financial Institution, 4,687,500 shares were bought for an average unit price of Eur On 31 December 2008, the Company owned directly 16,760,815 treasury stock, with the nominal value of EUR 1 each, and also controlled indirectly a further 5,100 shares held by affiliate Rolporto, as well as 5,100 shares held by affiliate Loures Automóveis, all with a nominal value of EUR 1 each. The portfolio of treasury stock held directly and indirectly corresponded to 9.879% of the total stock representing the Company s share capital on 31 December 2008, with an average unit price of EUR 1,9760. PROPOSAL FOR PROFIT APPROPRIATION The Net Result for FY 2008 was positive for an amount of 30,783,985, and the following distribution is hereby proposed: Legal Reserve (5%) EUR 1,539,200 Dividends EUR 3,429,241 Retained Earnings EUR 25,815,544 This result is affected by non-recurring results following the sale of part of the investments held by SAG Gest in some of its Affiliates. The consolidated Net Result of the Group totalled Eur Since the dividend payment policy that has been adopted determines the distribution of at least 50% of the Group s consolidated results, the Board of Directors considers that the above mentioned result should be used as reference. Therefore, following the decision of the Shareholders Meeting on 21 October 2008, the Company announced an interim dividend in the gross amount of 3,429,240.84, corresponding to Eur 0,0202 (two point two cents) per share, and for this reason the above proposal does not provide for any additional payment of dividends. Interim dividends were paid on 10 November 2008, and the amount corresponding to treasury stock held on that date is Eur 338,568.46, which is hereby proposed to be applied against Retained Earnings. SUBSEQUENT EVENTS As announced on 11 March 2009, Executive Director Manuel Ferro da Silva Meneses resigned from the post he had been elected to by the Shareholders Meeting held on 31 March 2006, effective 30 April Sede: Estrada de Alfragide, Nº 67 Amadora 6

7 FINAL NOTE In compliance with the legal and statutory provisions, the Board of Directors submits to the Shareholders approval the Annual Report 2008, in the firm belief that, to the best of its knowledge, information contained in the same was prepared in compliance with the applicable accounting standards and gives an accurate and adequate image of the Company s assets and liabilities, financial situation and results, and that the Management Report accurately reflects the development of business, performance and position of the Company and contains a description of the main risks and uncertainties that confront them. Alfragide, 27 March 2009 THE BOARD OF DIRECTORS João Manuel de Quevedo Pereira Coutinho Esmeralda da Silva Santos Dourado Carlos Alexandre Antão Valente Coutinho Fernando Jorge Cardoso Monteiro António Carlos Romeiras de Lemos Manuel Ferro da Silva Meneses Rui Eduardo Ferreira Rodrigues Pena José Maria Cabral Vozone Pedro Roque de Pinho de Almeida Sede: Estrada de Alfragide, Nº 67 Amadora 7

8 SHAREHOLDER POSITION SEPARATE ACCOUNTS 2008 Sede: Estrada de Alfragide, Nº 67 Amadora 8

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10 QUALIFIED OWNERSHIP POSITIONS SEPARATE ACCOUNTS 2008 Sede: Estrada de Alfragide, Nº 67 Amadora 10

11 QUALIFIED OWNERSHIP POSITIONS 31 December 2008 SGC Investimentos - SGPS, SA (*) Direct ownership 17,391,110 shares, representing 10.24% of the share capital and corresponding to 11.37% of voting rights. (*) 100% owned by SGC - SGPS, SA SGC - SGPS, SA (**) Direct ownership Indirect ownership 111,525,324 shares, representing 65.69% of the share capital and corresponding to 72.90% of voting rights. 17,391,110 shares held by SGC Investimentos SGPS, SA, representing 10.24% of share capital and corresponding to 11.37% of voting rights. (**) 100% owned by João Manuel de Quevedo Pereira Coutinho João Manuel de Quevedo Pereira Coutinho Direct ownership 3,915 shares, representing % of the share capital and corresponding to % of voting rights. Indirect ownership Global Sum 111,525,324 shares held by SGC SGPS, SA, representing 65.69% of share capital and corresponding to 72.90% of voting rights. 17,391,110 shares held by SGC Investimentos SGPS, SA, representing 10.24% of share capital and corresponding to 11.37% of voting rights. 128,920,349 shares, representing 75.94% of the share capital and corresponding to 84.26% of voting rights. Millennium bcp Gestão de Fundos de Investimento, SA Millennium Acções Portugal 2,371,391 shares, representing 1.40% of the share capital and corresponding to 1.55% of the voting rights. Millennium PPA 1,786,985 shares, representing 1.05% of the share capital and corresponding to 1.17% of the voting rights. Sede: Estrada de Alfragide, Nº 67 Amadora 11

12 Millennium Poupança PPR Millennium Investimento PPR Millennium Aforro PPR Global Sum 192,839 shares, representing 0.11% of the share capital and corresponding to 0.13% of the voting rights. 231,413 shares, representing 0.14% of the share capital and corresponding to 0.15% of the voting rights. 17,450 shares, representing 0.01% of the share capital and corresponding to 0.01% of the voting rights. 4,600,078 shares, representing 2.71% of the share and corresponding to 3.00% of the voting rights. Barclays Bank Plc Barclays Bank Plc Barclays Fundos Global Sum 4,687,500 shares, representing 2.76% of the share capital and corresponding to 3.06% of the voting rights. 454,562 shares, representing 0.27% of the share capital and corresponding to 0.30% of the voting rights. 5,142,062 shares, representing 3.03% of the share capital and corresponding to 3.36% of the voting rights. Sede: Estrada de Alfragide, Nº 67 Amadora 12

13 FINANCIAL STATEMENTS SEPARATE ACCOUNTS 2008 Sede: Estrada de Alfragide, Nº 67 Amadora 13

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18 NOTES TO THE FINANCIAL STATEMENTS SEPARATE ACCOUNTS 2008 Sede: Estrada de Alfragide, Nº 67 Amadora 18

19 NOTES TO THE FINANCIAL STATEMENTS AS AT 31 DECEMBER 2008 INTRODUCTION The following Notes were prepared closely bearing in mind the requirements set forth in the International Financial Reporting Standards, since it is considered that the additional information provided in accordance with these terms exceeds the minimum requirements established in the local standards (Portuguese Official Chart of Accounts - POC). Therefore, and except in what concerns their numbering, the Notes to the Financial Statements comply with the criteria defined in the POC. 1. GENERAL INFORMATION REGARDING THE COMPANY S ACTIVITY Financial Statements as at 31 December 2008 were approved by the Board of Directors. The main activity of SAG GEST SGPS, SA is the management of investments in other Companies, as an indirect form of conducting economical activities. 2. SUMMARY OF MAIN ACCOUNTING POLICIES Bases for Preparation The Financial Statements of SAG SGPS, SA were prepared in accordance with accounting principles that are generally accepted in Portugal. Therefore, this report was prepared in accordance with the historical cost convention (modified by the re-evaluation of tangible assets), on the basis of the continuity of operations in accordance with the accounting principles of prudence, consistency, substance over form and materiality. All amounts shown in the Notes herein are expressed in Euros, unless stated otherwise. Changes in accounting policies The accounting policies are consistent with those applied in previous years (unless stated otherwise). Instead of adopting the minimum requirements set forth in the Portuguese accounting regulations, it was decided to implement certain adaptations, which were deemed to be necessary for a better understanding of the Company s economic and financial situation as explained herein. Investments in affiliates Investments in the share capital of Affiliated Companies, as well as securities, are recognized at cost. The corresponding dividends are only recognized when their payment has been secured. Any interest from securities is booked in the corresponding period. Sede: Estrada de Alfragide, Nº 67 Amadora 19

20 Foreign Exchange Transactions The functional currency used in the preparation of SAG SGPS SA s Financial Statements is the Euro. Transactions in foreign currencies (outside the Euro zone) are converted into Euros using the exchange rate prevailing on the date of the transaction. Foreign currency denominated accounts receivable and payable are converted into Euros using the exchange prevailing on Balance Sheet date. All exchange rate differences are recognized as income or expense during the period in which they occur. Land, Buildings and Equipment Buildings and Equipment are recognized at cost, net of the corresponding accumulated depreciation. Depreciation is calculated using the straight-line method, in compliance with the provisions of Decree no. 2/90, dated 12 January The value of fixed assets is fully depreciated during the assets useful life, and the following depreciation rates apply: % Buildings and Other Constructions 2,00 Basic Equipment 25,00 to 31,25 Office Equipment 12,50 to 25,00 Autos and Trucks 25,00 Other Tangible Assets 20,00 to 33,33 Financial costs Loans are recognized as liabilities at their nominal value, and their costs are recognized as expenses in the period to which they relate. Intangible assets Intangible assets are valued at cost. Depreciation is calculated on a straight-line basis, using depreciation rates that allow the complete depreciation of these assets during their respective useful lives. Debtors Accounts Receivable are recognized at invoice value after deducting any adjustments for bad or doubtful accounts. Adjustments for bad and doubtful accounts are recognized when there are doubts regarding the possibility to collect debt, when collection is no longer probable or on the basis of their respective ageing. Creditors Accounts Payable are booked at invoice value. Cash and cash equivalents The Cash and Cash equivalents amount shown includes money and highly liquid investments that can be quickly converted into cash with an insignificant impact to their value. Bank Debt Bank debt recognized in the Company s Balance Sheet is exclusively engaged with financial entities that conduct their operations in Portugal. Sede: Estrada de Alfragide, Nº 67 Amadora 20

21 Provisions Provisions are made when the Company has a present (legal or constructive) obligation based on past actions, when it is probable there may be a future financial payment in connection with such obligation, and the latter can be measured reliably. Income Recognition Income is recognized as such and to the extent that it is possible that the Company will obtain a future economic benefit and that the latter value can be assessed reliably. In order for income to be recognized, the following criteria also have to be fulfilled: Services Income from services is recognized during the period in which they are provided, regardless of whether or not the relevant invoice was issued. Interest Interest income is accrued so that it is recognized in the corresponding period, regardless of whether or not the corresponding support document was generated. Dividends Dividend income is recognized when the Shareholder s right to receive such dividends is established. Income tax In accordance with current legislation, tax returns can be subject to revision and correction by the tax authorities for a four-year period (five to ten years for Social Security, depending on the application of the transitional regime). Therefore, the Company s tax returns in respect of the years 2005 to 2008 could still be subject to revisions, although the Company considers that any possible corrections resulting from tax revisions to such tax returns will not have any material impact on the Financial Statements as at 31 de December de Under the terms and conditions set forth in Portuguese Accounting Standard no. 28, the Company recognizes deferred taxes as a procedure to adequately match the tax effects of its operations and to exclude distortions associated with tax criteria that affect the economic results of certain transactions. The movement recognized during the period, and the reconciliation between the Provision for Income Taxes for the period and current income tax, as well as the breakdown of deferred taxes are described in Note 5 below. Financial instruments The Company regularly uses financial instruments or derivative financial instruments in the regular course of its operations, with the single and explicit purpose of minimizing its exposure to risks related to the fluctuation of interest and exchange rates, and not for negotiation or speculation purposes. The Company s preferential coverage instrument to protect against the said interest rate fluctuation risks is interest rate swap operations. Interest payable or receivable with regard to these instruments is balanced against income or expenses until maturity of the operations. De-recognition of financial instruments occurs when the Company no longer controls the contractual rights that govern such financial instruments, which regularly occurs when they are sold or when cash-flows from said instruments are transmitted to a third party. The Company normally engages forwards or currency options to cover exchange rate fluctuations. A mark-to-market assessment is made on a monthly basis as regards these instruments. The result of this assessment is recognized in the income statement (Note 4). Sede: Estrada de Alfragide, Nº 67 Amadora 21

22 3. REPORTING BY BUSINESS SEGMENT The Company s main reporting format is the report by business segments. The identified business areas are managed separately based on the nature of the products or services provided. Each segment represents a strategic business unit that offers different products and serves various markets. The presented segment refers to legal, financial and tax consultancy services provided to the Affiliated Companies. Business segments The following chart represents the results, assets and liabilities as at 31 December 2008 and their comparison to identical information as at 31 December 2007, with regard to the several business segments in which the Company does business: Geographical Segments With the exception of the balance in the amount of 301,992 euros corresponding to Shareholders Assets involving operations in Brazil (Note 22), all services were provided within the Portuguese domestic market, and therefore information by geographic segment is not applicable. Sede: Estrada de Alfragide, Nº 67 Amadora 22

23 4. OTHER OPERATING INCOME AND EXPENSES Other Income and Expenses are detailed as follows: Financial Income and Expenses are detailed as follows: 5. INCOME TAX The main Income Tax components as at 31 December 2008 and 2007 are as follows: Sede: Estrada de Alfragide, Nº 67 Amadora 23

24 The Company is taxed according to the Special Tax Arrangements applicable to Corporate Groups. Therefore, the amount shown under Deferred Income Tax corresponds to the tax benefit resulting from the application of the above-mentioned Arrangements which will be used by the Group in the financial year. The reconciliation between statutory tax rates applied to recognized income and the actual effective tax rate (after corrections) for the periods ending 31 December 2008 and 2007 are as follows: The following entries were booked to the Deferred Tax accounts during the years 2008 and 2007: Sede: Estrada de Alfragide, Nº 67 Amadora 24

25 7. EARNINGS PER SHARE Earnings per share as at 31 December 2008 and 2007 are as follows: 8. DIVIDENDS PAID AND PROPOSED Dividends paid in respect of the years 2007 and 2006 were as follows: The proposed distribution of dividends in respect of the 2008 period is presented in the Board of Directors Management Report: - Shareholders: Sede: Estrada de Alfragide, Nº 67 Amadora 25

26 9. LAND, BUILDINGS AND EQUIPMENT Movements in the Buildings and Equipment accounts during 2008 and 2007 were as follows: Sede: Estrada de Alfragide, Nº 67 Amadora 26

27 11. INTANGIBLE ASSETS Movements in the Intangible Assets accounts in 2008 and 2007 were as follows: Sede: Estrada de Alfragide, Nº 67 Amadora 27

28 12. FINANCIAL INVESTMENTS Financial investments in 2008 and 2007 are detailed as follows: Sede: Estrada de Alfragide, Nº 67 Amadora 28

29 In 2008, changes in Financial Investments were as follows: In 2008, the result of sales was as follows: Sede: Estrada de Alfragide, Nº 67 Amadora 29

30 16. ACCOUNTS RECEIVABLE Accounts payable are broken down as follows: Terms and conditions applied to related party (intra-group) transactions are described in Note 22. Sede: Estrada de Alfragide, Nº 67 Amadora 30

31 17. CASH AND MARKETABLE SECURITIES The Cash and Marketable Securities balance shown in the Balance Sheet includes values with a maturity of three months or less. The Cash and Cash Equivalents information as shown in the Statement of Cash Flows is net of bank overdrafts. As at 31 December 2008, the Company had a total of 147,530,993 in bank facilities available to be used in the fulfilment of its operating requirements. Sede: Estrada de Alfragide, Nº 67 Amadora 31

32 18. ISSUANCE OF CAPITAL AND RESERVES Excluding the treasury stock held on 31 December 2008 (16,760,815 shares), Registered Share Capital is fully subscribed and paid up, and is represented by 169,764,398 bearer shares with a par value of 1.00, of which 111,221,824 shares are owned by the majority shareholder SGC-SGPS, SA (65.5 % of share capital), and 17,391,110 shares are owned by SGC-Investimentos, SGPS, SA (10.2% of share capital). Sede: Estrada de Alfragide, Nº 67 Amadora 32

33 Movements in Equity during 2008 were as follows: The amount shown under Other Reserves represents the difference between the acquisition value and the sales value of treasure stock. Sede: Estrada de Alfragide, Nº 67 Amadora 33

34 19. BANK DEBT Bank Debt as at 31 December 2008 and 2007 is detailed as follows: Interest rates on overdrafts are in line with standard market rates. 20. PROVISIONS FOR OTHER RISKS AND CHARGES Changes in the balance of Provisions for Other Risks were as follows: Provisions for other risks and charges refer to specific risks and are reassessed every year. Sede: Estrada de Alfragide, Nº 67 Amadora 34

35 21. CREDITORS Accounts payable are broken down as follows: Terms and conditions applied to related (intra-group) transactions are described in Note RELATED PARTY DISCLOSURES The balance and transactions with related parties, i.e. with Companies capable of controlling or significantly influencing financial and operational decisions, are as follows: Terms and conditions applicable to transactions performed with related Companies are the same as those applied to transactions with bone fide unrelated third parties, which are identical to normal market practices. Sede: Estrada de Alfragide, Nº 67 Amadora 35

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38 23. FINANCIAL INSTRUMENTS As at 31 December 2008, the following financial instruments were active: 24. COMMITMENTS AND CONTINGENCIES Guarantees On 31 December 2008 and 2007, the Company s liability for bank guarantees issued was as follows: Other Commitments Within the scope of a swap operation conducted with a Financial Institution in December 2000, which involved the sale of 4,687,500 shares from treasury stock through the stock market at a unit sales price of 2.06, SAG Gest made the commitment to, under certain circumstances, possibly repurchase such shares for the same unit price. In December 2005, the Company renegotiated the said operation and a stock re-purchase price of 1,71 was agreed. This transaction was performed in 2008 with the acquisition of 4,687,500 shares which are included in Note 18, under the terms and conditions specified in the relevant and applicable contract documents, and therefore Net Equity saw a decrease reflecting the total corresponding amount, as well as the amount of 1,625,100, which had already been paid under another operation conducted within the scope of the same operation and had been booked as Deferred Costs, together with 1,640,625 booked under Other Debtors and corresponding to the balance between the initial repurchase value and the value agreed in December Contingencies The Portuguese Tax Authorities issued additional Income Tax assessment notes to SAG Gest with regard to Income Tax owed for the years 1999 to 2004 totalling EUR 4,249, Sede: Estrada de Alfragide, Nº 67 Amadora 38

39 Tax returns concerned by these additional liquidation notes have been presented under the terms of special taxation regime for company groups. Because the Company disagrees with the basis for issuance of the said notes, it has initiated, or will initiate, within the applicable legal deadlines, legal proceedings against each one of the said notes, reason why these costs have not been reflected in the Financial Statements as at 31 December In the opinion of the Board of Directors, based on recommendations issued by well renowned independent entities, probabilities of success of the contesting processes are high. 25. SUBSEQUENT EVENTS Besides the subsequent events mentioned in this annual report, no other events have taken place after the Balance Sheet date that could have a material impact on the financial statements. Sede: Estrada de Alfragide, Nº 67 Amadora 39

40 CORPORATE GOVERNANCE REPORT SEPARATE ACCOUNTS 2008 Sede: Estrada de Alfragide, Nº 67 Amadora 40

41 CORPORATE GOVERNANCE REPORT The purpose of this report is to describe the Corporate Governance practices adopted by SAG GEST Soluções Automóvel Globais, SGPS, SA. This report has been prepared in accordance with the form appended to the Securities Commission (CMVM) Regulation no 1/2007. Also, the purpose of this report is compliance with the obligation to annually divulge in detail the corporate governance structure and practices, in accordance with clause 245-A of the Securities Code, which applies to issuers of shares listed for trading in a regulated market. CHAPTER 0. STATEMENT OF COMPLIANCE 0.1. Location where the public may find the Corporate Governance Codes to which the issuer is subject to or those by which the issuer voluntarily abides SAG GEST is an issuer of shares admitted for trade by a regulated market, namely in the official share price market of NYSE Euronext Lisbon, and the Recommendations of the Corporate Governance Code which was approved by Comissão do Mercado de Valores Mobiliários (CMVM Portuguese Securitires and Exchange Committee) in September 2007 apply. The full text of the said Code can be consulted on CMVM s website Detailed description of the recommendations contained in the CMVM Corporate Governance Code that have or have not been adopted by the Company, and 0.3. Explanation and justification of differences existing between the Company s structure or governance practices and CMVM s Recommendations. The table below identifies the Recommendations of CMVM that are part of the Corporate Governance Code, and full adoption or non adoption of the same by SAG GEST is identified on a comply or explain basis, as well as the relevant part of the report where a more detailed description regarding the adoption can be consulted. COMPLIANCE STATEMENT Recommendation I. GENERAL MEETING I.1. Board of the Shareholders Meeting: I.1.1. The Chair of the General Meeting Board shall be equipped with the necessary and adequate human resources and logistics support, taking the financial position of the company into consideration. Status on adoption of the Recommendation Remarks Adopted The Chair of the General Meeting Board is equipped with adequate human resources and logistics support as needed and also to ensure proper functioning of the meeting, namely through legal Description in the Report Sede: Estrada de Alfragide, Nº 67 Amadora 41