Auto-Estradas do Atlântico, SA - Annual Report 2014

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Auto-Estradas do Atlântico, SA - Annual Report 2014

The Bord of Directors p. 03

Management Report

// Global Analysis p. 06

Management Report

// Functional Analysis p. 10

Financial Statements p. 34

Notes to the Financial Statements p. 39

Report and Opinion of the Supervisor Boarder p. 70

Statutory Examinationor’s Report p. 72

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Auto-Estradas do Atlântico, SA - Annual Report 2014

THE BORD OF DIRECTORS

GENERAL ASSEMBLY

Chairman

Alexandre de Albuquerque

Secretary

Tiago Severim de Melo Alves dos Santos

THE BOARD OF DIRECTORS

Chairman

José Joaquim Cortiço da Costa Braga

Members

Lena Engenharia e Construções, S.A.

Representada por: Manuel de Sousa Pereira

Valdemar Jorge Martins Mendes

MSF - Sociedade Gestora de Participações Sociais , S.A.

Representada por: Eduardo Galán de Matos Coimbra

Luís Rua Geraldes

MSF Concessões, SGPS, S.A.

Representada por: José Ernesto Cirilo Custódio dos Santos

Lena Concessões e Serviços, SGPS, S.A.

Representada por: Paulo Jorge de Oliveira Pereira Reis

Manuel António Garcia de Matos

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Auto-Estradas do Atlântico, SA - Annual Report 2014

BOARD OF AUDITORS

Permanent

Presidente

José Vieira dos Reis

Members

Fernando Marques Oliveira

Joaquim Oliveira de Jesus

Alternate Members

Mário José Silva Jerónimo

Pedro Manuel Palma Monteiro Varela

Statuatory Auditor

Deloitte & Associados, SROC S.A.

Representada por: João Luís Falua Costa da Silva

Statuatory Auditor Alternate Member

Duarte Nuno Passos Galhardas

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Auto-Estradas do Atlântico, SA - Annual Report 2014

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Auto-Estradas do Atlântico, SA - Annual Report 2014

2014 MANAGEMENT REPORT

OVERVIEW

To the shareholders

Road concessionaires have been severely and directly affected by the crisis hitting the most developed societies, notably in Europe.

Adjustment policies and, as a direct result thereof, restrictions to spending, the reduction in purchasing power of many population groups and the increase in oil prices have led to a climate of distrust among citizens, which has markedly affected the levels of use of motorways in recent years, and has caused average daily traffic volumes to regress to figures only witnessed several years before.

However, since mid-2014, the economic recovery, albeit moderate, has inverted the deterioration in demand and has led to sustained growth in traffic volumes in the network under concession.

The soundness of the project, the prompt implementation of measures intended to contain the adverse impact of the crisis and, finally, the increase in demand have made it possible to close our annual cycle with very positive results, confirming the optimism of all the employees of this Company, who are also confident about its future.

OPERATIONAL ANALYSIS

In the 2014 financial year, we tested a modification to the Company's governance model, under which we sought, in our day-to-day management, to expand the information pool and increase the diversity of points of view while maintaining proper decision-making capabilities and timing. Accordingly, the number of Executive Directors increased to four. They meet weekly to conduct the Company's business, while the Board of Directors retains the ability to ratify the decisions made and determine the strategic development guidelines for the Company's future in its monthly meetings.

The arbitration proceedings concerning restoration of the financial balance as a result of the works (for which the State was liable) the Company had to perform and the costs it bore to maintain the / stretch in operation were completed in 2014. The decision was rendered in April, the State having been sentenced

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Auto-Estradas do Atlântico, SA - Annual Report 2014

to reimburse €2,379,426.53 to AEA in respect of interest matured since the notice and to be matured, in addition to the sum AEA will still spend on the works to be performed on this stretch, up to €1,116,836.00.

A process which was pending since the Company commenced operation was thus concluded.

The arbitration proceedings relating to the Company's dispute with the State concerning the loss of traffic and income following the legislative changes made to the stretches and substretches of the former shadow toll concessions (Costa da Prata and Beira Litoral/Beira Alta), now subject to a real toll system, are still pending. All hearings have already been concluded and the timetable set by the Court suggests that the decision might be issued by mid-June 2015.

The Quality Management System, due to the improvements and rigour it demands of many management and internal information processes and the proven efficiency achieved, continues to be an essential tool for all employees. Therefore, our certification was renewed, following an audit performed by APCER.

Upon the expansion of APCAP (Associação Portuguesa das Sociedades Concessionárias de Auto-Estradas ou Pontes com Portagem) (the Portuguese Association of Tolled Motorway and Bridge Concessionaires), of which our Company is a founding member, new and greater tasks were assigned, for instance to the coordinators of its Standing Committees, two of whom are Heads of Department of our Company.

With its usual watchfulness, the Company continued to pay particular attention to current maintenance and conservation of the infrastructure and tolling and operational equipment, always ensuring high levels of quality in services provided to its clients.

Road safety was a major and continuous concern. As a result, the accident figures achieved place us in a prominent place at the national level.

We will end by reiterating that we are firmly convinced of the good future performance of this project, grounded on the results already achieved, our strong motivation and the positive indicators anticipated.

Finally, we would like to express a word of praise for the professionalism and dedication of our employees, as well as our sincere appreciation for the support, interest and cooperation of the Supervisory Board, the Statutory Auditor and the public and financial entities.

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Auto-Estradas do Atlântico, SA - Annual Report 2014

Finally, we would like to express our gratitude for the unflinching confidence of our shareholders.

PROPOSAL FOR THE APPROPRIATION OF PROFITS

It is proposed that the net profits for the year, amounting to €3,660,302.76 (three million six hundred and sixty thousand three hundred and two euros and seventy six cents), be transferred to profits (losses) brought forward.

Catefica, 23 February 2015

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Auto-Estradas do Atlântico, SA - Annual Report 2014

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Auto-Estradas do Atlântico, SA - Annual Report 2014

FUNCIONAL ANALYSIS

A) OPERATION AREA

Traffic and revenue

The tables below summarise AEA’s main traffic and revenue indicators for 2014.

Compared to 2013, AADT in the tolled network steadily increased by 3.25% over the quarters in question. (1Q14 +0.8%; 2Q14 +4.1%; 3Q14 +3.4%; 4Q14 +4.4%).

Tolled stretches 2013 2014 ∆ % 2014/2013

A8 (South) - Annual Average Daily Traffic (AADT) 22,864 23,547 2.99%

- Circulation 455 469 2.99%

A8 (North)

- Annual Average Daily Traffic (AADT) 8,407 8,770 4.31%

- Circulation 151 158 4.31%

A8 (Total)

- Annual Average Daily Traffic (AADT) 16,005 16,536 3.32%

- Circulation 607 627 3.32%

A15 - Annual Average Daily Traffic (AADT) 3,793 3,887 2.48%

- Circulation 56 57 2.48%

Total network

- Annual Average Daily Traffic (AADT) 12,595 13,004 3.25%

- Circulation 662 684 3.25%

1) AADT - Circulation/km/days 2) Circulation - (Σ vehicles x km x days of operation)/106 3) The lengths of substretches where there is local traffic were taken into account

AADT in the tolled network under concession stood at 13,004 vehicles/day in 2014, which corresponds to an increase of 3.25% compared to 2013. In the breakdown by type of vehicle, the AADT of light vehicles increased by 3.16% and that of heavy vehicles by 5.62%. During 2014, light vehicles represented 3.17% and heavy vehicles 96.83%.

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Auto-Estradas do Atlântico, SA - Annual Report 2014

In line with traffic, toll income rose by 3.12% compared to the preceding year.

3 Income (10 euros) 2013 2014 2014/2013

Tolls 52,188.72 53,817.26 3.12% Assistance to customers 10.50 9.82 -6.44%

Service areas 1,818.26 1,829.51 0.62% Total 54,017.48 55,656.59 3.03%

Toll rates were not changed on 1 January 2014, in accordance with the formula laid down in the Concession Agreement and taking into account the amendment resulting from Joint Decree no. 39/2005 (of 17 February) of the Ministry of Finance and the Ministry of Public Works.

VAT remained unchanged over the year, at 23%.

The most popular means of payment with clients was Via Verde (70.8%), followed by cash (14.7%). Payment by bank cards was the third most used means of payment (14.3%).

Means of payment Amount %

Via Verde 38,107,623.96 70.8% - Agreements 37,939,201.68 70.5% - Invoices 168,422.28 0.3%

Manual lanes 15,709,634.64 29.2% - Cash 7,937,536.05 14.7% - Multibanco 7,671,275.88 14.3%

- Invoices 77,807.90 0.1% - Other 23,014.81 0.0%

Total 53,817,258.60 100.0%

If we analyse the evolution of means of payment, we note that the Via Verde system increased once again in percentage terms compared to preceding years (61.1% in 2010, 64.8% in 2011, 68.9% in 2012 and 70.1% in 2013). In contrast, payments in manual lanes decreased, from 29.9% in 2013 to 29.2% in 2014. Within payments in manual lanes, payments by debit card (Multibanco) presented the opposite behaviour, by increasing 1% compared to 2013.

Revenues from service areas grew by 0.6% compared to 2013. This growth chiefly resulted from adjustments to 80% of the turnover stated in the economic studies of the , Torres Vedras and Óbidos service areas.

Revenues from assistance to customers stood at €9,824.26, 6.4% less than in the preceding year.

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Auto-Estradas do Atlântico, SA - Annual Report 2014

Accidents

Accidents in the Concessionaire's network rose by 21.6% compared to the preceding year.

It should be highlighted that the number of accidents with fatalities and the number of fatalities increased from 3 to 4, in line with the increase in the accident rate.

Activity

During 2014, the Operation Division carried out the following activities, among others:

 The proceedings with the Tax Authority under Law no. 25/2006 were monitored.  In February 2014, APCER's monitoring audit took place, and AEA's Quality Management System certification, obtained in 2010, was maintained, as a result of the work undertaken in all areas of the Company. During 2014, various documents of the Operation Division were reviewed as a result of the roll-out of ATLAS, which led to changes in some practices of the Traffic Control Centre. The QMS (Quality Management System) continued to be developed and enhanced, as a result of input from AEA's portal, as well as significant input from internal audits.  During the year, the Company continued to work to rationalise the use of electricity, notably for public lighting.  Various meetings with the subconcessionaire petrol companies of AEA's network service areas were held with a view to optimising operations.  Training sessions concerning pavements were also held for the AMC's conservation and maintenance area.  We proceeded with the development of functional specifications for Project XI, software intended to cross-check and control the entire life cycle of Via Verde transactions from their generation in the lanes,

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Auto-Estradas do Atlântico, SA - Annual Report 2014

through the possible methods of payments, cross-check against Via Verde and SIBS files, and including control of the activities of the (VVP) Income Recovery Service and the initiation of regulatory breach proceedings with the Tax Authority (TA). This system will further make it possible to control cash management in respect of deposits of toll income, as well as enhance the cash forecasting system.  Work was performed with a view to collecting file formats and the corresponding test files to be used as inputs for the abovementioned system (Project XI).  We proceeded with the review of the Protocol between Concessionaires and the Portuguese Insurers' Association (Associação Portuguesa de Seguros). In this context, BIT was contacted in its capacity as supplier of the Atlas system in order to make changes to this system with a view to accommodating the changes resulting from the new protocol.  Some studies were performed during the year to validate the systems that support operations in terms of calculation of traffic and income.  Studies were also performed to assess the impact of the Rip Curl Pro event on traffic on the A8 during the days this event takes place.  Participation in a project to recover VAT led by the Financial Division, with implementation of controls to detect new receipts.  Together with VVP, implementation of a mechanism to deduct sums returned to clients from income.  Participation in a study extended to other concessionaires, concerning developments in the number of breaches in the Via Verde environment.  During 2014, the work to review the agreement with Via Verde continued.  Participation in the various Standing Committee 1 and Standing Committee 2 work groups within APCAP.  Parameterisation of systems due to the opening of the new Soure toll barrier.  Implementation of procedures to control interoperability flows (transactions, income, costs and cash).  The Toll Operator Shift Report Module, which will improve the reading of the Toll Operations Centre's records, was rolled out within the SiDE.  With regard to assistance to users, major efforts were deployed to meet the constant development of the Via Verde systems. The redundancy capabilities that face-to-face and telephone assistance present should be highlighted, given that all members of the Client and Complaint Management Unit are prepared to assist clients both face-to-face and over the phone, in addition to AEA's customer assistance staff.  Monitoring and inspection of the demolition of the Venda do Pinheiro toll booths and toll plaza cover.  Monitoring and safety inspection of the pavement improvement works between Ramalhal and Bombarral.  Execution of the annual periodic inspection programme concerning safety equipment, vertical and horizontal signage, pavements, vegetal cover, cleaning of the infrastructure, fences, drainage, slopes and buildings.

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Auto-Estradas do Atlântico, SA - Annual Report 2014

 Refurbishment works of the changing rooms of the conservation / maintenance area.  Training in safety and firefighting.  Participation in various meetings of the Municipal Civil Protection Committee and the Municipal Forest Protection Committee.  Internal training on OHS and cargo handling.  Some database queries of Atlas in the context of accidents were implemented.  Participation in a training session in EP concerning the area adjacent to the carriageway.  Participation in a training session concerning the main changes to the new Highway Code.  Monitoring and inspection of agreements falling under the duties of the AMC.  The Operation Division presented a work called “Tolling: A journey along with technology” in the context of the ASECAP Days 2014.

SCHEDULE I - Traffic tables

1. Traffic by substretch 2014 and 2013

2. Traffic by toll barrier 2014 and 2013

3. Evolution of AADT by subsystem in 2014

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0.1% 0.7% 0.5% 0.2%

0.3% 0.4% 0.1% 0.8% 0.1% 1.2% 1.0% 1.2% 0.3% 1.4% 2.6% 1.4% 2.0% 1.9% 1.9% 0.4% 1.9% 2.2% 0.7% 0.7%

- - - -

% Via Verde Via %

1.7% 0.2% 0.7% 2.9% 3.3% 0.4%

∆ 2014/2013

2.2% 8.1% 2.3% 0.5% 0.9% 1.3% 2.3% 5.2% 1.1% 3.6% 7.9% 0.3% 5.5% 7.9% 2.8%

traffic

------

15.5% 14.5% 23.4%

% heavy heavy %

0.5% 0.2%

2.5% 7.0% 2.1% 5.2% 5.4% 3.6% 4.1% 3.8% 4.1% 0.7% 3.5% 7.1% 1.1% 5.2% 4.3% 8.2% 1.8% 2.0% 7.4% 5.0% 4.7% 3.6%

AADT

- -

70.4% 75.8% 73.2% 68.7% 70.2% 67.9% 68.5% 73.4% 69.6% 72.7% 70.9% 72.3% 66.3% 71.3% 75.7% 75.9% 73.4% 64.5% 55.8% 58.6% 74.3% 66.6% 67.9% 70.5%

% Via Verde Via %

2013

2.0% 3.0% 2.5% 2.8% 2.8% 2.9% 5.9% 9.6% 3.6% 4.4% 1.6% 4.9% 2.8% 7.7% 7.3% 9.4% 4.3% 8.9% 4.0% 6.5% 7.4% 6.3% 3.7%

traffic

22.6%

% heavy heavy %

0 5

578 472 856 497 850 440 561 654 804 224

20,85 2,770 4,074 1,178 3,786 3,093 2,971 6,680 4,255 1,768 1,217 2,601 1,679 62,85

AADT

70.6% 76.1% 73.2% 69.2% 70.3% 67.8% 69.4% 72.8% 70.3% 73.5% 70.5% 72.5% 67.2% 73.1% 76.7% 77.4% 74.8% 65.7% 56.1% 59.7% 75.9% 66.4% 68.4% 71.0%

% Via Verde Via %

2014

2.0% 3.1% 2.5% 3.0% 2.9% 2.9% 6.0% 9.5% 3.7% 4.3% 1.7% 5.1% 2.7% 7.8% 7.5% 4.6% 8.9% 4.2% 6.5% 8.0% 7.8% 3.8%

traffic

10.8% 25.9%

% heavy heavy %

3 8

601 475 886 502 887 439 572 703 844 235

21,37 2,963 4,052 1,203 3,983 3,261 3,078 6,934 4,430 1,893 1,280 2,815 1,709 65,11

AADT

2 1 1 1 1 1 1 1 1 2 1 1 1 1 1 1 2 1 1 1 1 1 1

26

VV

2 1 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 4

ML

3 2 2 2 3 3 3 2 3 4 2 2 3 2 2 2 2 3 2 2 2 2 2

Exit Exit Lanes

55

Etoll

2 1 1 1 1 1 1 1 1 2 1 1 1 1 1 1 2 1 1 1 1 1 1

26

VV

Profile

3 2 2 1 2 2 2 1 2 2 1 1 2 1 1 1 2 2 1 1 1 1 1

35

ML

Entry Lane Entry

7 6 5 7 7 7 5 8 5 5 7 5 5 5 8 7 5 5 5 5 5

12 10

146

Total Total

Lanes

Exit Barrier Exit

A15

-

A8 North

A8 (South) A8

Traffic

Tornada Motorway Tornada Interchange Tornada Alfeizerão Pataias South Grande Marinha South East Maior Rio

Loures Lousa Pinheiro do Venda Enxara South Vedras Torre North Vedras Torres Ramalhal Campelos Bombarral Frades de Valado East Grande Marinha Motor- Negros dos A way Inter- Negros dos A change Francos dos A West Maior Rio Malaqueijo Total

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SCHEDULE II - Accidents

1. Accident table - 2014

2. Evolution of rate of bodily injuries in 2014

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Auto-Estradas do Atlântico, SA - Annual Report 2014

B) TECHNICAL DIVISION

RELATIONS WITH THE GRANTOR

Performance bonds/final acceptance

The Decision of the Arbitration Court rendered on 1 April 2014, in the context of the action brought against the Portuguese State, whose hearings took place in June 2013, found in favour of AEA. The State was sentenced to pay compensation for default under its contractual obligations to the Concessionaire with regard to the bonds of the Torres Vedras North/Bombarral Stretch, on the A8/IC1.

CONSERVATION AND MAINTENANCE

In respect of conservation and maintenance works, the following should be highlighted:

 Routine inspections of the structures of AEA's network were performed.  The works pertaining to the repair/maintenance contract concerning the expansion joints of the A8 and the A15 were completed.  The annual pavement inspection campaign (deflection, attrition, texture and IRI) along the entire length of the network under concession, including interchanges with the road network, was successfully completed. On the basis of the results of this campaign, works to improve the pavement on the A8 and the A15 were executed, including strengthening of the pavement structure, surface treatment with cold double-layer bituminous mixture and application of traditional bituminous mixtures on the branches of some interchanges.

 The main pavement structural reinforcement works were performed on the Ramalhal/Campelos and Campelos/Bombarral substretches.  Various sealing works on the rigid pavement, minor isolated repairs and an increase in attrition through shot blasting were carried out.  Horizontal signage was repainted on the A8's Enxara/Torres Vedras North and East/Leiria stretches.  After surveying the condition of vertical signage on the A8 (road signs and information boards) between the Malveira and the Leiria Interchanges, the corresponding replacement works were commenced. These works will take place up to the end of the first half of 2015.  In the light of the weather conditions prevailing during the 2013/2014 winter, it was necessary to

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Auto-Estradas do Atlântico, SA - Annual Report 2014

repair several drainage devices and rebuild/repair some motorway slopes, on both the new and the transferred network. Among these, the works at km 34+400 and 80+000 on the A8 and 7+300 on the A15 stand out due to their scale.  Following completion of the widening works on the CRIL/Loures and Loures/Malveira stretches, as well as of the Leiria motorway toll plaza, the works to update AEA's Information and Management System (SIGA) commenced.  The Concessionaire continues to pay particular attention to the monitoring of motorway slopes with signs of instability, using appropriate equipment. Accordingly, the agreements executed with an external consultant to monitor and follow up on these cases remained in effect.

ENVIRONMENT

The work in respect of environmental monitoring (air, water and noise) on the CRIL/Loures and Loures/Malveira stretches was awarded. The duration of this contract is two years, expiring in 2016.

The work to draw up action plans and review strategic noise tables, as determined by Decree Law no. 146/2006, was commenced.

C) INFORMATION SYSTEMS

Applications and databases

In respect of applications, in addition to the current maintenance of all existing applications and databases, the following activities should be highlighted:

SiDE and AtlanTIS systems

 SiDE software certification: In compliance with Ordinance no. 240/2013, the necessary software was developed within SiDE (the Operation Division's Information System) so as to obtain the Tax Authority's Certificate for the Tolling Invoicing, Customer Assistance Invoicing and Credit Invoicing component. Auto-Estradas do Atlântico obtained its certificate, numbered 2144/AT, on 11 September 2014.

 Toll Shift Report: A new functionality was developed within SiDE. It enables Senior Toll Operators and Automated Tolling Operators to record all events occurring in the tolls during their shifts, with

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the corresponding management approval flows. This functionality replaced the reports generated in Word format.

 Updating of tolling software: During 2014, two new software versions of the Toll Management and Monitoring System (TMMS) were installed in AEA's network. Accordingly, the necessary developments were made in the SiDE and AtlanTIS applications over the year, in order to accommodate the changes made to the tolling software.

 Files of external entities: Changes were made to the format of some files exchanged with external entities, such as Via Verde Portugal, Unicre and other concessionaires.

Datawarehouse/BI

 We continued the work done in preceding years to optimise the monthly traffic and income calculation processes, as well as the dashboards used to extract data.

 SGI and SiDE dashboards: On the basis of data recorded in the Event Management System (EMS) module of the Atlas application used by the Traffic Control Centre (TCC) and SiDE, dashboards were created with relevant information concerning accidents and availability of motorway lanes.

Intranet

 Employee area: A new survey concerning occupational health and safety was drawn up.

 Changes to leave: Development of a new functionality which enables the Company’s employees to change their leave without having to use physical forms to this end.

 Insurance repair procedure: Changes to the procedure existing between the Technical Division and the Operation Division to make repairs (accidents/incidents) notified to insurers.

Project XI

In 2014, the tender to implement Project XI was concluded. This software will provide AEA with a tool to trace Via Verde transactions so as to cross-check and control their entire collection process with the various entities involved: SIBS, Via Verde and the Tax Authority.

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Telematics and tolling equipment

In telematics, in addition to current maintenance, the following activities stand out:

 Atlas: Taking into account the critical nature of the Atlas application, notably its component that controls the equipment that supports operations, a disaster recovery environment was configured in the Tornada Data Centre.

 Video wall: With a view to renewing AEA's video wall in 2015, two solutions were analysed: installation of LED LCDs and installation of a projector.

With regard to tolling equipment, we highlight the transformation of the manual lane adjacent to the Bombarral dedicated Via Verde lane into an alternative exit lane (AEL), enabling it to operate in both manual mode and Via Verde mode, thus facilitating operations.

Networks and systems

In networks and systems, in addition to current maintenance, the following activities stand out:

 Road technical gallery (RTG): Following the assessment and georeferenced survey of the RTG done in 2013, all data was inserted in our Geographic Information System (SIGA), in which the entire management/maintenance of the RTG will now be ensured.

 Virtualisation of servers: Following a thorough technical analysis of some of the main technologies existing in the market for infrastructure virtualisation, a tender to implement the solution designed in line with AEA's requirements was launched. This tender was awarded at the end of the year, and its completion is expected during the first half of 2015.

 Backups: We highlight the cost savings (approximately 50%) achieved upon implementation of a new backup solution: Symantec's Backup Exec.

 Printers: During the second half of 2014, we launched a tender for the supply of new printers and ancillary services under a lease agreement. This tender was awarded to Canon's proposal, achieving significant cost savings compared to the preceding agreement.

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Quality Management System

In the context of AEA's Quality Management System (QMS), the Information Systems Department (ISD) carried out the following activities:

 Development of new functionalities in AEA's portal to respond to the needs identified by the Quality Management area;,  Maintenance of dashboards with the indicators defined in the processes of the Operation Division (OD) and the ISD; the change to the ISD indicator, by adding breakdowns and Via Verde traffic, should be highlighted.  Participation of the ISD in several internal audits, both as audited and auditor.

APCAP Activities

In the context of the activities of the work group of APCAP's Standing Committee 3, the following activities carried out in 2014 should be highlighted:

 Due support was given to IMT in the context of the MedTIS and Atlantic Programmes with regard to decisions and actions in the European Community to defend Portugal’s interests.

D) ECONOMIC AND FINANCIAL ANALYSIS

Net results

At the end of the year, the Concessionaire had achieved profits of €3,660 thousand, a very positive development compared to the preceding year (€78.8 thousand).

The combination of several aspects contributed to this change:

i) Operating profit (loss) Services provided reached €55.6 million, which represents an increase of approximately €1.6 million compared to 2013. Generally speaking, this increase is due to the behaviour of paying traffic, which grew by approximately 3.25% and caused toll income to increase proportionally. With regard to supplementary income, €3,274 thousand stands out, corresponding to sums received, to date, from the Grantor following the Arbitration Court's decision on the Torres Vedras/Bombarral lawsuit, which

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sentenced the State to pay for the works already performed and to be performed on this stretch which would be required under the initial guarantee of the works.

In respect of operating costs, these increased by approximately €942 thousand compared to the preceding year. This increase was chiefly due to efforts deployed by the Company with regard to conservation and maintenance of its infrastructure, whose costs rose by approximately €638 thousand. The combined behaviour of this income and costs led to operating profits of €42.4 million, which represents approximately €4.4 million more than in the preceding year.

ii) Operating profit (loss) Depreciation costs fell by approximately €202 thousand, chiefly due to assets which became fully depreciated.

As to movements in provisions associated with the major repair plan (IFRIC12), we highlight their increase by some €1,706 thousand (considering the financial effect – €588 thousand and less write- backs). The sum booked as provisions written back (€0.96 million) results from the impossibility of performing all the works foreseen for the Ramalhal/Campelos and Enxara/Torres Vedras South substretches in 2014 and review of other future investment plans.

With regard to impairment losses, the impact on the recovery of overdue claims, primarily as a result of the intervention of the Tax Authority in collection processes, should be noted. This explains the fact that the increase in this provision (€88.6 thousand), which had a total balance of around €2,333.4 thousand at the end of the year, was substantially less than in 2013 (€160.1 thousand).

The behaviour of these accounts, combined with that witnessed in the income accounts, made it possible to achieve operating profits of €19.4 million, approximately €3.8 million more than in 2013.

ii) Financial results The reduction in remunerated liabilities by approximately €26.5 million, which led to a reduction in financial costs and expenses, made it possible to improve these results by approximately €812.9 thousand compared to 2013, in spite of the slightly negative evolution in interest received as a result of interest rate fluctuations.

iv) Income tax The Company calculates its income tax on the basis of its taxable profits and, naturally, takes deferred taxation into account. The sum calculated for the year, amounting to €1,043.1 thousand, results, on the one hand, from the combined operations in deferred tax assets and liabilities (which reduced the opening balance by €863.9 thousand and €458.5 thousand, respectively, and whose impact on the

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calculation of income tax amounts to approximately minus €405.4 thousand) and the sum calculated for current taxation, amounting to €637.7 thousand.

Evolution of the main indicators:

(10^3euros) Indicators 2014 2013 Change Operating income 60,812.4 55,516.0 5,296.4 Toll income 53,817.3 52,188.7 1,628.5 Other operating income 6,995.1 3,327.3 3,667.8 Operating costs 18,398.6 17,455.7 942.8 Subcontracts 5,696.7 5,741.8 -45.1 Other supplies and services 6,223.5 5,405.1 818.4 Staff costs 6,298.5 5,979.0 319.5 Other operating costs 179.9 329.8 -149.9 Operating cash flow (EBITDA) 42,413.8 38,060.4 4,353.5 Margin EBITDA (%) 69.7% 68.6%

Depreciation and amortisation 21,783.5 21,985.4 -201.9

Impairment losses; net 88.6 151.1 -62.4 IFRIC12 (major repairs; net) 1,117.6 282.3 835.3

Operating profit (loss) (EBIT) 19,424.1 15,641.5 3,782.6 Margin EBIT (%) 31.9% 28.2%

Financial results (14,720.7) (15,533.5) 812.9

Profit (loss) before taxes 4,703.4 108.0 4,595.4 Income tax -1,043.11 -29.24 -1,013.9 Net profit (loss) 3,660.30 78.79 3,581.5

Asset cover (units) 1.00 1.00 0.0 Equity/total assets (units) (a) 0.18 0.15 0.1

(a) Considering shareholders' loans as equity, given their nature

It should be mentioned that:

- in addition to the aforementioned compensation received from the State, the sum booked under other income and gains, chiefly resulting from fines and recovery of overdue credits (default by clients – €1,002.4 thousand), compensation received from insurers for damage caused to the motorway by third parties (€609.7 thousand) and the sum received from Portugal Telecom in the context of creation of the road technical gallery that uses AEA's infrastructure (€68 thousand), should be highlighted.

The increase in operating costs, amounting to approximately €1,312.8 thousand (3.2%), is chiefly due to:

- third-party supplies and services - the aforementioned efforts deployed by the Company with regard to conservation and maintenance of its infrastructures, whose costs rose by approximately €638 thousand;

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Auto-Estradas do Atlântico, SA - Annual Report 2014

- with regard to staff costs, the variation is almost entirely related to the reconfiguration of the Board of Directors in April 2013, from 2 to 4 Executive Directors, and severance payments to employees whose employment contracts were terminated by mutual agreement;

- the decrease in depreciation results from the number of fixed assets that became fully depreciated;

- allowances for provisions – these concern IFRIC12 (major repairs) and their change results from the significant alterations made to the major repair plan.

Assets

Net fixed assets fell by approximately €21,775.6 thousand, as a result of an increase in gross assets amounting to around €7.9 thousand and in amortisation and depreciation (net of those related to transfers and write-offs) amounting to €21,783.5 thousand.

The evolution of net fixed assets clearly reflects the strong capital expenditure incurred up to completion of the entire network under concession in 2002 and its natural reduction in subsequent years.

As to the significant sum (€33,143.3 thousand) booked under cash and bank deposits, it should be noted that the Finance Agreements oblige the Company to fund both substantial investment and debt service reserve accounts. These reserve accounts presented the following balances as at 31.12.2014:

Bank Debt Service Reserve Account: €9,854,206 EIB Debt Service Reserve Account: €10,160,830 Investment Reserve Account: €9,613,871 Other: €957

The sum booked under other accounts receivable, amounting to €1,950.0 thousand, corresponds chiefly to sundry debts of various entities, among which the service areas (€607 thousand) and the balance of joint operations (Brisa, LusoLisboa and EP), amounting to €322 thousand, stand out.

Finally, a word concerning deferred tax assets, which stood at €4,498.2 thousand, which represents a reduction of approximately €863.8 thousand compared to 2013, given that the profits for the year made it possible to absorb greater losses made in prior years.

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Auto-Estradas do Atlântico, SA - Annual Report 2014

Shareholders' equity and liabilities

The results achieved in the year – €3,660.3 thousand – enabled shareholders' equity to improve from minus €53,315.9 thousand as at 31.12.13 to minus €44,656.1 thousand as at 31.12.14.

At year-end, liabilities stood at €378,540.7 thousand, of which €352,871.5 thousand (93.2%) corresponds to remunerated liabilities, which evolved during the year as follows:

(in thousand euros)

Remunerated debt As at 31/12/2013 Movements in 2014 As at 31/12/2014

EIB Facility 124 687,1 (13 722,4) 110 964,7

Commercial Bank Facility 66 630,9 (18 599,6) 48 031,3

Subordinated debt 47 500,0 - 47 500,0 28 329 28 329 Stand-by Facility 32 062,2 3 852,5 35 914,7

Total bank debt 270 880,2 (28 469,5) 242 410,7

Shareholders' loans 107 374,5 2 206,5 109 581,0

Shareholders 107 374,5 2 206,5 109 581,0

Other * 1 143,9 (264,1) 879,8

Total 379 398,6 (26 527,1) 352 871,5 * Concerns toll equipment acquired under a lease agreement

In the table above, short-term bank loans are as follows:

EIB: €13,687.2 million;

Commercial banks: €19,010.6 million.

The following should be noted in respect of the facilities evidenced in the table above: the Stand-By Facility matures in December 2019, has a maximum limit of €46.2 million and may be used to: support financial costs resulting from the extension in question; accommodate any excess used under the Subordinated Debt Facility; provide for unexpected fluctuations in the interest rate (EURIBOR); the Subordinated Debt Facility matures on 31 December 2018.

The current scheme of – irrevocable and unconditional – shareholders' guarantees created in the context of the aforementioned facility is maintained.

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Auto-Estradas do Atlântico, SA - Annual Report 2014

In the terms of the Equity Subscription Agreement, interest capitalised under shareholders’ loans during the year totalled €2,206.5 thousand.

Of the €4,308.6 thousand booked under other accounts payable, the following headings stand out: suppliers of fixed assets (€639.7 thousand), creditors for accrued costs (€2,530.6 thousand), in which accrued technical costs (subcontracts and specialist work - €1,607.6 thousand) stand out, sums payable to staff (€690.4 thousand), almost entirely corresponding to wages and holiday allowances concerning 2014 and payable in 2015, and the adjustments resulting from joint operations payable to Brisal (€432.0 thousand).

The sum under deferrals, totalling €4,401.2 thousand and broken down into current and non-current, chiefly concerns the sums received in the context of subconcession of the Torres Vedras, Óbidos, Rio Maior and Nazaré service areas.

Capital expenditure

Capital expenditure on facilities and plant made by the Company in 2014 stood at approximately €8 thousand and was almost entirely directed towards IT equipment, most actions foreseen having been postponed to 2015.

E) HUMAN RESOURCES AND ADMINISTRATIVE AREA

A. Human resource management

At the end of 2014, AEA's permanent staff stood at 184 employees, one employee less than at the end of 2013.

Evolution of staff

2012 2013 2014

Men 126 126 126 Women 59 59 58

Total as at 31 Dec. 185 185 184

Average staff 184 185 185

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Auto-Estradas do Atlântico, SA - Annual Report 2014

The overall breakdown of AEA’s human resources by functional area has remained virtually unchanged in the last three years.

Age structure

2012 2013 2014 25 – 34 34 23 19 35 – 44 108 112 109 45 – 54 37 43 46 + 55 6 7 10 Total 185 185 184

Average age 40.7 41.7 42.8

Turnover

Severances were due to the incentive programme for 2012 2013 2014 Admissions 1 0 4 termination of employment contracts by mutual Severances 0 0 5 agreement for employees of the toll area. The 4 Admission ratio 0.54 0 2.17 admissions correspond to the transfer of two senior toll

operators and two toll operators from GEIRA to AEA, in Severance ratio 0.00 0.00 2.71 the context of the process of adjustment of GEIRA's Overall ratio 0.27 0.00 2.44 permanent staff to the agreement entered into with Estradas de Portugal.

Absenteeism

2012 2013 2014 The remunerated absenteeism rate remains at Short-term absenteeism rate 1.5% 2.2% 1.8% consistently low levels, even witnessing a new Long-term absenteeism rate 2.0% 2.0% 2.7% reduction in 2014. On the other hand, there was a significant increase in long-term medical leave, Remunerated absenteeism rate 0.6% 0.5% 0.4% which explains the strong increase in non- Non-remunerated absenteeism rate 3.0% 3.8% 4.2% remunerated absenteeism, which, in turn, affected the overall absenteeism rate. Overall absenteeism rate 3.6% 4.3% 4.5%

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Labour relations

The Collective Labour Agreement entered into by and between AEA and GEIRA and Setaccop – Sindicato da Construção, Obras Públicas e Serviços Afins (the Construction, Public Works and Related Services Union) was successfully revised once again. The CTA has been instrumental in maintaining harmonious labour relations in AEA since its inception.

Training

In 2014, 467 hours of professional training were given, focusing on matters related to occupational health and safety, such as: use of personal protection equipment, firefighting and cargo handling.

It should also be mentioned that a team composed of AEA's officials participated in the Global Management Challenge, an international strategy and management competition sponsored by SDG - Simuladores e Modelos de Gestão and the newspaper Expresso.

Occupational health and safety

Maintaining its standards well above the minimum required under the law in respect of occupational medicine, 193 medical consultations (including ECGs) were held, including regular consultations, consultations following return from medical leave and pursuant to indications by occupational health practitioners. 173 sets of laboratory tests were also performed.

In the context of curative medicine, 91 general practice consultations were held. Also in the context of health, and with particular regard to prevention, anti-flu vaccines were supplied and/or administered to 103 employees.

Audits relating to safety at work were made of all toll plazas, the headquarters, the Torres Vedras AMC and the Tornada Advanced Station. A study concerning the levels of lighting in the workplace was carried out in the headquarters, the Torres Vedras AMC, the Tornada Advanced Station and 9 toll plazas.

It should be further highlighted that a comprehensive survey concerning occupational health and safety was developed, having been answered by 85 employees.

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B. Fleet management

On 31 December 2014, Auto-Estradas do Atlântico's fleet was composed of 43 vehicles, 42 under operational leases and one owned by the Company (a heavy vehicle allocated to the AMC’s maintenance area). In 2014, renewal of the fleet resulted in 16 vehicles being returned and 15 vehicles being received. The complete renewal of the fleet (7 vehicles) allocated to the Guarda Nacional Republicana (a Portuguese law enforcement authority) stands out.

In the second half of 2014, a tender was launched and led to a change in our car insurer. With regard to fuels, the agreement for the next three years was renegotiated.

B. Administrative management

The procurement of goods and services necessary for the Company's activity, as well as the management of a set of agreements, from cleaning of the facilities to supply of electricity, were ensured. These purchases and agreements caused 1,726 accounting documents to be checked by the Administrative and Human Resources Division (AHRD).

The agreement with CTT, for which the AHRD is liable, provided for the dispatch of 12,452 letters/packages, AEA having received 9,047 letters/packages.

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BALANCE SHEETS AS OF DECEMBER 31, 2014 AND 2013

(Amounts expressed in Euros)

(Translated from the Portuguese original – Note 27)

ASSETS Notes 31.12.2014 31.12.2013

NON-CURRENT ASSETS: Tangible fixed assets 7 10.996.147 13.005.810 Intangible assets 8 275.067.005 294.832.965 Deferred tax assets 10 4.498.212 5.362.069

Total non-current assets 290.561.364 313.200.844

CURRENT ASSETS: Trade receivables 13 2.833.521 3.254.676

State and other public entities 14 95.284 1.427.956 Other receivables 11 1.950.006 1.475.235 Deferrals 12 301.031 299.934 Cash and bank deposits 4 33.143.348 32.592.488 Total current assets 38.323.190 39.050.289

Total assets 328.884.554 352.251.133

SHAREHOLDERS' EQUITY AND LIABILITIES

SHAREHOLDERS' EQUITY: Share capital 15 55.000.000 55.000.000 Legal reserve 15 82.302 82.302 Other reserves 17.408 17.408 Retained earnings/(losses) (108.422.559) (108.501.346)

Other changes in shareholders' equity 15 6.444 6.910 (53.316.405) (53.394.726)

Net profit for the year 3.660.303 78.787 Total shareholders' equity (49.656.102) (53.315.939)

LIABILITIES: NON-CURRENT LIABILITIES:

Provisions 16 12.184.420 11.442.300 Loans 18 319.895.513 347.287.609

Deferred tax liabilities 10 - 458.488

Deferrals 12 3.526.537 4.382.958

Total non-current liabilities 335.606.470 363.571.355

CURRENT LIABILITIES: Provisions 16 1.356.299 973.140 Suppliers 1.609.117 2.433.797 State and other public entities 14 1.809.604 1.978.553 Loans 18 32.975.943 32.110.961 Other payables 19 4.308.574 3.624.622 Deferrals 12 874.649 874.644

Total current liabilities 42.934.186 41.995.717

Total liabilities 378.540.656 405.567.072

Total shareholders' equity and liabilities 328.884.554 352.251.133

The accompanying notes form an integral part of the balance sheet as of December 31, 2014.

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Auto-Estradas do Atlântico, SA - Annual Report 2014

STATEMENTS OF PROFIT AND LOSS BY NATURE

FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013

(Amounts expressed in Euros)

(Translated from the Portuguese original – Note 27)

EARNINGS AND LOSSES Notes 31.12.2014 31.12.2013

Sales and services rendered 20 55.656.588 54.017.484

Supplies and services 21 (11.920.183) (11.146.829) Payroll expenses 22 (6.298.483) (5.979.009)

Impairment in accounts receivable 13 (88.634) (151.078) Provisions (increase/decrease) 16 (1.117.569) (282.289)

Other operating income 24 5.155.801 1.498.526

Other operating expenses 25 (179.890) (329.820)

Net profit before depreciation, financial expenses and taxes 41.207.630 37.626.985

Amortization and depreciation 7 and 8 (21.783.537) (21.985.417)

Operating profit (before financial expenses and income taxes) 19.424.093 15.641.568

Financial income 23 368.304 386.726 Financial expenses 23 (15.088.984) (15.920.266) Net profit before tax 4.703.413 108.028

Corporate income tax for the year 10 (1.043.110) (29.241)

Net profit for the year 3.660.303 78.787

Net profit per share 26 0,33 0,01

The accompanying notes form an integral part of the statement of profit and loss by nature for the year ended December 31, 2014.

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Auto-Estradas do Atlântico, SA - Annual Report 2014

- -

(466) (466)

78.787 78.787

Total

3.660.303 3.660.303 3.659.837

(53.394.260) (53.315.939)

- -

78.787 78.787 78.787

(78.787)

year

2.507.052 2.507.052 3.660.303 3.581.516

(2.507.052)

Net profit / profit Net

(loss)for the

2014.

- - - -

31,

(466) (466) (466)

7.376 7.376 6.910

equity

Otherchanges

in shareholders' in

- - - -

78.787 78.787 78.787

(losses)

Retained

(2.507.052)

earnings/

(105.994.294) (108.501.346)

Note 27) Note

------

-

17.408 17.408 17.408

Other

reserves

------

82.302 82.302 82.302

(AmountsEuros) expressed in Legal

reserve

(Translated from the Portuguese original (Translatedfrom original the Portuguese

STATEMENTS OF CHANGES IN SHAREHOLDERS' CHANGES OF IN SHAREHOLDERS' EQUITY STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2014 2014 31, YEARS DECEMBER ANDENDED THE 2013 FOR

------

-

Share

capital 55.000.000 55.000.000

55.000.000

15 15 15 15 15

Notes

The accompanying notes part accompanying form integral an the of statement The for equity shareholders' December the changes of year in ended

Changesthe ocurred year: in Amortisationsubsidies of

Transferearnings/(losses) to retained Transferearnings/(losses) to retained

Amortisationsubsidies of

Net profit for profit the Net year

Appropriation of 2012 results: 2012 of Appropriation results: 2013 of Appropriation Changesthe ocurred year: in for profit the Net year

Balance as of December 31, 2012 31, as December of Balance 2013 31, as December of Balance 2014 31, as December of Balance

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Auto-Estradas do Atlântico, SA - Annual Report 2014

STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013

(Amounts expressed in Euros)

(Translated from the Portuguese original – Note 27)

Notes 31.12.2014 31.12.2013

OPERATING ACTIVITIES:

Received from clients 67.816.414 66.186.296

Paid to suppliers (15.601.849) (14.861.988)

Paid to employees (5.277.064) (5.067.125)

Net cash from operations 46.937.501 46.257.183

Income tax received / (paid) 793.306 719.335

Other payments relating to operating activities (6.541.368) (10.134.407) Net cash provided by operating activities (1) 41.189.439 36.842.111

INVESTMENT ACTIVITIES: Receipts relating to: Interest and similar income 376.978 390.286

Payments relating to: Intangible and tangible assets (1.728) (1.883.393) 375.250 (1.493.106) Net cash provided by/(used in) investing activities (2)

FINANCING ACTIVITIES: Payments relating to: Loans (32.309.860) (31.510.999) Interest and similar income (6.543.756) (7.455.281) Bank guarantees comissions (1.522.376) (1.695.702) Other financial expenses (375.960) (524.916)

Expenses with lease contracts (261.877) (268.797)

(41.013.829) (41.455.695) (41.013.829) (41.455.695) Net cash used by financing activities (3)

Variation in reserve accounts (4) 4 (1.111.684) (3.383.832)

Variation of cash and cash equivalents (5) = (1) + (2) + (3) - (4) 1.662.544 (2.722.858)

Cash and cash equivalents at the beginning of the year 4 1.850.940 4.573.798 Cash and cash equivalents at the end of the year 4 3.513.484 1.850.940

The accompanying notes form an integral part of the statement of cash flows for the year ended December 31, 2014.

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NOTES TO THE FINANCIAL STATEMENTS AS OF 31 DECEMBER 2014 (Amouts expressed in Euros - Translation of Notes originaly issued in Portuguese - Notes 27)

1. INTRODUCTORY NOTE

Auto-Estradas do Atlântico – Concessões Rodoviárias de Portugal, S.A. (”the Company” or “the Concessionaire”) was founded on 4 November 1998, has its head office in Torres Vedras and its corporate object consists on the conception, construction, financing, operation and maintenance of motorways and other roads in western Portugal. In accordance with its articles of association the Company will exist during the period of its concession.

The bases of the Company’s concession for the stretches of motorway and related roads in western Portugal were approved by Decree-Law 393-A/98 of 4 December and the Company signed a concession contract with the Portuguese State on December 21, 1998. The concession is in force from midnight, December 21, 1998 to midnight, December 21, 2028 and establishes the form and conditions for early expiry of the contract, as well as the guarantees that remain in force afterwards.

On the beginning date of the contract the stretches of motorway and related equipment and installations, among others, as well as personnel and guarantees relating to the stretches already constructed were transferred to the Company. For such transfer the Company paid 88,536,627 Euros (Note 8).

On October 9, 2001 the A8 motorway stretch between and Marinha Grande (East) and the whole – Caldas da Rainha/Santarém began operating. The last stretch of motorway (Marinha Grande (East)/Leiria) began operating on March 28, 2002, thus been completed all the stretches included in the concession.

Powers to monitor the Company’s compliance with the obligations arising from the concession contract have been given to the Ministry of Finance in the financial area and to the Ministry of Equipment, Planning and Administration of the Territory in the remaining areas.

It is the Board of Directors understanding that these financial statements present a true and fair view of the financial position of the Company and the results of its operations, its changes in shareholders’ equity and its cash flows.

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2. ACCOUNTING REFERENCE FOR THE PREPARATION OF FINANCIAL STATEMENTS

The accompanying financial statements have been prepared in compliance with the provisions in force in Portugal, in accordance with Decree-Law 158/2009 of 13 July, and the conceptual structure, accounting and financial reporting standards (Normas Contabilísticas e de Relato Financeiro - “NCRF”) and related interpretation standards (“IS”) consigned, in Notices 15652/2009, 15655/2009 and 15653/2009 of 27 August 2009, which together make up the Portuguese Accounting Standards System (“Sistema de Normalização Contabilística” or “SNC”). These standards and interpretations are hereinafter referred to generally as “NCRF”.

The SNC establishes that whenever the NCRF do not cover the needs of users in terms of the accounting treatment of certain situations, they must use the IFRS as endorsed by the European Union and, subsequently, other IFRS not adopted by the European Union.

In this respect, in the case of the concession of public services in general and in the case of the Company in particular, the interpretation of the International Accounting Standards Board – (“IASB”) relating to this matter, included in IFRIC 12 – Public Service Concession Contracts, is deemed applicable (“IFRIC 12”).

3. BASES OF PRESENTATION

The main accounting policies used in the preparation of the financial statements are as follows:

3.1. Bases of presentation

The financial statements were prepared on a going concern basis as from the Company’s accounting records, in accordance with the principles defined in the NCRF, completed by International Financial Reporting Standards.

3.2. Reversible tangible fixed assets

In accordance with the current concession contract, assets directly related to the conceded activity revert, with no compensation, to the State at the end of the concession contract. These assets are subject to the public domain regime and relate to the activity, being freely managed, within this scope,

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Auto-Estradas do Atlântico, SA - Annual Report 2014

but not to what concerns private legal commerce.

Revertible tangible fixed assets are originally recorded at construction or acquisition cost, including related indirect expenses incurred during the construction period.

Revertible tangible fixed assets are depreciated using the straight-line method over its estimated useful life, as follows, limited by the period of the concession contract:

Years of useful life

Buildings and other constructions 10 - 28 Transport equipment 4 Tools and utensils 4 - 8 Administrative equipment 3 – 10

Costs of maintenance and repair (subsequent expenditure) that are not likely to generate future economic benefits are recorded as expenses in the period they are incurred.

The gain (or loss) on disposal or write-off of a tangible fixed asset is determined as the difference between the amount received in the transaction and the net accounting value of the asset and is recognized in the period in which the sale occurs.

3.3. Non-reversible tangible fixed assets

Non-reversible tangible fixed assets are recorded at acquisition cost including indirect expenses related to their acquisition.

Depreciations are recognised on a straight-line basis over an estimated useful life, as in the case of reversible tangible fixed assets.

3.4. Intangible assets

Intangible assets include costs incurred with specific projects of future economic value, and are

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Auto-Estradas do Atlântico, SA - Annual Report 2014

recorded at cost less accumulated amortization and impairment losses.

Amortizations are recognised on a straight-line basis during their estimated useful lives.

In particular, concerning the concession right, that corresponds to amounts paid to the grantor, plus expenses incurred directly with the infrastructure construction, its amortization is made until the end of the concession contract.

3.5. Impairment of non-current assets

Impairment assessments are made as of the balance sheet date and whenever an event or change in circumstances is identified that indicates that the book value of an asset may not be recovered. Where such indications exist, the Company determines the recoverable value of the asset, so as to determine the possible extent of the impairment loss. In situations in which the individual asset does not generate cash flows independently of other assets, the estimated recoverable value is determined for the smaller cash generating unit to which the asset belongs.

The recoverable amount is the highest between (i) the fair value less costs to sell and (ii) the value in use of the asset. In determining value in use, the estimated future cash flows are discounted using a pre-tax discount rate that reflect market expectations as to the time value of money and the asset specific risks or cash-generating unit for which estimates of future cash flows have not been adjusted.

Whenever the book value of an asset exceeds its recoverable amount, an impairment loss is recognised. The impairment loss is immediately booked in the statement of profit and loss.

Impairment losses recognised in prior years are reversed when there is evidence that such losses no longer exist or have decreased. Impairment losses are reversed through the statement of profit and loss. However, impairment losses are reversed only up to the amount that would have been recognised (net of amortization and depreciation) if the impairment loss had not been recorded before.

3.6. Leases

Lease contracts are classified as: (i) financial leases, if through them, substantially all the risks and benefits relating to their ownership are transferred; and (ii) operational leases, if through them,

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Auto-Estradas do Atlântico, SA - Annual Report 2014

substantially all the risks and benefits relating to their ownership are not transferred.

Classification of financial and operational leases is made based on the substance and not on the form of the contract.

Fixed assets acquired under financial lease contracts and the corresponding liabilities are recognised in accordance with the financial method, booking the tangible fixed assets, its accumulated depreciation and the liabilities pending settlement being recognized in accordance with the contractual financial plan. In addition, interest included in the lease instalments and depreciation of the tangible fixed assets are recognized as costs in the statement of profit and loss for the period to which they relate.

In the case of leases considered as operational, the lease instalments are recognized as costs in the statement of profit and loss on a straight-line basis over the period of the lease contract.

Contingent lease instalments are recognised as losses in the period that they occur.

3.7. Subsidies

State subsidies are recognized at their fair value when there is reasonable certainty that they will be received and the Company will comply with the conditions required for their concession.

Investment subsidies relating to the acquisition of tangible fixed assets are considered as equity and amortized on a consistent basis with the depreciation of the respective assets acquired.

3.8. Provisions, contingent liabilities and assets

Provisions are recognised only when the Company has a legal or implicit obligation resulting from a past event, under which it is probable that an outflow of resources to solve the obligation will occur, and the amount of the obligation can be reasonably estimated.

The recognised provision is the best estimate of the present value, at each balance sheet date, of the needed resources to solve the obligation. Such estimate is determined considering the risks and uncertainties related with the obligation.

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Auto-Estradas do Atlântico, SA - Annual Report 2014

In particular, provisions are recognised to ensure the contractual obligation to maintain or restore the infrastructure to a specified service level based on the upcoming related repaving plans.

The present obligations resulting from onerous contracts are recognised and measured as provisions. There is an onerous contract when the Company is part of an agreement, where costs that cannot be avoided exceed the economic benefits to be obtained with it.

At each balance sheet date, provisions are reviewed and adjusted to reflect the best estimate as of that date.

Contingent liabilities are not recognised in the financial statements, being disclosed whenever the possibility of an outflow of resources covering economic benefits is not remote. Contingent assets are not recognized in the financial statements, being disclosed when it is probable that a future economic inflow will occur.

3.9. Financial assets and liabilities

Financial assets and liabilities are recognised when the Company becomes part of a contractual relationship.

Financial assets and liabilities at cost or at amortized cost

The financial assets and liabilities are measured at cost or at amortized cost less impairment losses (for financial assets) when:

- The maturity is defined;

- They have a fix or determinate repayment; and

- Do not constitute or incorporate a financial instrument.

The amortized cost is the amount at which a financial asset or financial liability is measured at initial recognition, less principal repayments and plus or minus a cumulative amortization, using the effective interest method, of any difference between the original amount and the amount at maturity. The effective interest rate is the rate that discounts the estimated cash flows in the financial instrument booked net carrying amount.

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Auto-Estradas do Atlântico, SA - Annual Report 2014

The assets and liabilities at cost or at amortized cost losses include:

- Trade receivables; - Other receivables; - Suppliers; - Other payables; - Loans.

Cash and cash equivalents

The caption “Cash and cash equivalents” includes cash, bank deposits, term deposits and other treasury applications which mature in less than three months and can be demanded immediately with insignificant risk of change in its amount.

Impairment of financial assets

Financial assets classified in the category "at cost or amortized cost" are tested for impairment at each reporting date and always that evidence indicates they might be impaired. Such financial assets are impaired when there is objective evidence that, as a result of one or more events after initial recognition, their estimated future cash flows are affected negatively.

For financial assets measured at amortized cost, the impairment loss recognised correspond to the difference between the assets’ carrying amount and the present value of estimated future cash flows discounted at the respective original effective interest rate.

For financial assets measured at cost, the impairment loss recognised corresponds to the difference between the asset's carrying amount and the best estimate of the fair value of the asset.

Impairment losses are recognized in the statement of profit and loss in the period in which they are determined.

Subsequently, if the amount of the impairment loss decreases and such a reduction can be objectively related to an event that took place after the recognition of the loss, it must be reversed through results. The reversal shall be effected within the limits of the amount that would be recognized (amortized cost) if the loss had not been initially registered. Reversal of impairment losses are

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recognized in the statement of profit and loss.

Derecognition of financial assets and liabilities

The Company derecognizes financial assets only when the contractual rights to receive the cash flows expire, or when the financial assets and the risks and rewards of its ownership are transferred to other entity. The Company derecognizes the financial assets transferred when the transfer of control occurs, even if some significant risks and rewards were not transferred.

The Company derecognizes financial liabilities only when the corresponding obligation is either settled, cancelled or expires.

3.10. Revenue and accrual basis

Revenue from services rendered is recognized in the statement of profit and loss based on the stage of completion of the services as of the date of the balance sheet.

For construction contracts where the outcome can be estimated reliably, revenue and costs are recognized by reference to the stage of completion of the contract at the end of the reporting period. The stage of completion is measured based on the stage of realization of the construction work in the infrastructure. When the outcome of a construction contract cannot be reliably estimated, revenue is recognized to the extent of contract costs incurred that are probable to be recovered. Contracts costs are recognized as expenses in the period in which they are incurred. When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognized as an expense immediately.

Interest and financial income are recognized on an accrual basis in accordance with the applicable effective interest rate.

Costs and income are recognized in the period to which they relate, independently of the date they are paid or received. Costs and income, for which the actual amount is not known, are estimated.

Costs and income applicable to the current period, for which the costs and income will only be paid or received in future periods, as well as costs and income which have already occurred, but correspond to

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future periods and will be allocated to the results of each of those periods by the corresponding amounts, are recorded as assets or liabilities.

3.11. Income tax

Income tax for the period is calculated based on the Company’s taxable results, considering deferred tax.

Current income tax for the period is calculated based on the taxable results (which differ from the accounting results) of the Company in accordance with the tax rules in force.

Deferred taxes correspond to the temporary differences between the amounts of assets and liabilities for accounting and for tax purposes, as well as those resulting from tax benefits obtained and temporary differences between the tax and accounting results.

Deferred tax assets and liabilities are calculated and periodically assessed using the tax rates expected to be in force on the date the temporary differences reverse.

Deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recorded only when there is reasonable expectation of sufficient future taxable income to use them. Temporary differences underlying deferred tax assets are reviewed at each reporting date in order to recognise or adjust them based on the current expectation of their future recovery.

3.12. Financing costs

Loans related costs are recognised in the statement of profit and loss for the period to which they relate.

Financing costs directly related to assets that take a substantial period of time to be completed (including intangible and tangible fixed assets), are capitalised as part of the assets’ cost.

3.13. Critical judgements/estimates in applying the accounting standards

Preparing the financial statements involves making judgements, estimates and assumptions that can

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affect the value of assets and liabilities, as well as of earnings and losses.

These estimates are based on the best knowledge available at the time and on the actions planned. Changes in the facts and circumstances can result in a prospective revision of such estimates, and so the actual future results of such transactions can differ from such estimates.

The main judgements and estimates made by the Board of Directors when preparing the financial statements were as follows:

- Impairment of non-current assets

The determination of impairment losses can be triggered by several events, including events outside the Company’s influence, such as future financing availability, cost of capital or any other internal or external changes. The identification of the impairment indicators and the determination of the assets’ recoverable amounts imply a high degree of judgement by the Board of Directors to what concerns identifying and evaluating those indicators, such as expected cash flows, applicable discount rates, useful lives and transactions’ amounts.

- Useful life of tangible fixed assets

The useful life of an asset is the period during which the Company expects that asset to be available for use and should be revised at the end of each reporting period. The determination of useful lives, the depreciation method and the estimated losses arising due to the replacement of equipment’s before the end of the useful life justified by technologic obsolescence or other reasons, is essential to determine the value of depreciation to recognize on the statement of profit and losses for the year. These parameters are defined according to the best management’s estimate, for the referred assets.

- Recognition of deferred tax assets

Deferred tax assets are recorded only when there is reasonable expectation of sufficient future taxable income to use the temporary differences, or when deferred tax liabilities whose reversion would be expected to be used in the same period exist. The assessment of deferred tax assets is performed by the Board of Directors at each reporting period, considering future performance expectations.

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- Provisions

Provisions, in particular the ones related with a contractual obligation in maintaining or replacing the infrastructure at a specific level, are based on programmed intervention plans. The moment and cost of those estimated interventions incorporate a level of uncertainty. The change on considered assumptions and the occurrence of certain events may lead to significant adjustments in the provision.

3.14. Subsequent events

Events that occur after the balance sheet date that provide additional information on conditions that existed as of that date (“adjustable events”) are reflected in the financial statements. Events that occur after the balance sheet date that provide information on conditions that exist after that date (“non-adjustable events”), if material, are disclosed in the notes to the financial statements.

4. CASH FLOWS

The caption “Cash and cash equivalents” includes cash, bank deposits immediately available and other short- term debt equivalents.

As of December 31, 2014 and 2013, this caption was made up as follows:

31/12/2014 31/12/2013

Cash 322 675 322 825 Demand deposits 3 190 809 1 528 115 3 513 484 1 850 940 Reserve accounts Demand deposits 94 764 99 448 Term deposits 29 535 100 30 642 100 29 629 864 30 741 548 Cash and bank deposits 33 143 348 32 592 488

Bank deposits in BPI bank, bear interests at normal market rates for similar operations.

Bank deposits related to reserve accounts are required under the financing contracts terms, which establish that sufficient funds must be kept in bank deposits to cover the next debt service maturity (Note 18) and the investment obligations and bear interests at normal market values.

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These reserve accounts, include the following amounts:

31/12/2014 31/12/2013 Demand Term Demand Term deposits deposits Total deposits deposits Total

Debt service reserve - Commercial Bank 206 9 854 000 9 854 206 153 9 859 300 9 859 453 Debt service reserve - EIB 230 10 160 600 10 160 830 212 10 302 800 10 303 012 Investment reserve 93 371 9 520 500 9 613 871 98 126 10 480 000 10 578 126 Other 957 - 957 957 - 957 94 764 29 535 100 29 629 864 99 448 30 642 100 30 741 548

5. ACCOUNTING POLICIES, CHANGES IN ESTIMATES AND ERRORS

During the year ended December 31, 2014 there were no changes in accounting policies and estimates, in relation to those used in the preparation of the financial information for 2013, presented for comparative purposes, nor were material errors identified related to previous years.

6. RELATED PARTIES

Related parts identification

As of December 31, 2014 and 2013, the Company’s fully subscribed and paid up capital was made up of 11,000,000 shares with nominal value of 5 Euros each, held by Auto-Estradas do Oeste, S.A. and Via Oeste, SGPS, S.A., with 50% each.

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Balances and transactions

Balances as of December 31, 2014 and transactions occurred during the year then ended with group and other related parties were as follows:

AEA - GROUP RELATED PARTIES AS OF 31-12-2014

BALANCES TRANSACTIONS Supplies and Financial Entity Loans Other payables Other receivables Payroll ex- Suppliers services expenses (Notes 9, 18) (Note 19) (Note 11) penses (Note 21) (Note 23)

Lena Engenharia e Constru- ções, S.A. 350 686 - - - 232 600 147 000 - Lena Concessões e Serviços, S.A. 2 538 - - - - 30 000 - MSF, Concessões, SGPS, S.A. 12 434 - - - - 147 000 -

MSF-SGPS, S.A. 2 538 - - - - 30 000 - Brisa - Auto-Estradas de Portugal, S.A. - - 177 000 - - 354 000 -

Brisa - O & M, S.A. 166 611 - 136 525 - 1 630 316 - - Brisa Inovação e Tecnolo- gia, S.A. 101 020 879 771 179 810 - 1 038 996 - 53 071

Brisal, S.A. - - 431 970 - - - - Brisa Concessão Rodoviária S.A. - - - 152 680 - - - Via Verde, S.A. 72 337 - 9 794 2 022 1 446 648 - -

Controlauto - - - - 347 - -

Viamarca, S.A. 46 954 - 28 893 - 359 136 - - MSF, Engenharia, S.A. (Alarg: CRIL/Loures) ------LMNS Atlantico S.A. (Alarg. Loures/Malv) 147 657 - 436 440 320 443 - - -

Geira, S.A. - - - 32 467 - 72 472 -

Via Oeste, SGPS, S.A. - 54 790 507 - - - - 1 103 273

Autoestrada do Oeste, S.A. - 54 790 507 - - - - 1 103 273

TOTAL 902 775 110 460 785 1 400 432 507 612 4 708 043 780 472 2 259 617

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Balances as of December 31, 2013 and transactions occurred during the year then ended with group and related parties were as follows:

AEA - GROUP RELATED PARTIES AS OF 31-12-2013

BALANCES TRANSACTIONS Other receiva- Supplies and Financial ex- Entity Loans Other payables Payroll expen- Suppliers bles services penses (Note (Notes 9, 18) (Note 19) ses (Note 11) (Note 21) 23)

Lena Engenharia e Constru- ções, S.A. 12 434 - 12 250 - 294 251 147 000 - Lena Concessões e Serviços, S.A. 2 538 - 2 500 - - 30 000 - MSF, Concessões, SGPS, S.A. 12 434 - 12 250 - - 118 725 - MSF-SGPS, S.A. 2 538 - 2 500 - - 30 000 - Brisa - Auto-Estradas de Portugal, S.A. 319 750 - 725 130 828 - 320 475 - Brisa - O & M, S.A. 332 892 - 992 - 1 624 784 - - Brisa Inovação e Tecnologia, S.A. 115 214 1 143 920 173 619 - 1 123 667 - 66 411 Brisal, S.A. - - 415 365 - - - - Via Verde, S.A. 52 003 - 19 214 3 972 1 528 498 - - Controlauto 28 - - - 493 - - Viamarca, S.A. 124 807 - 15 632 - 269 334 - - MSF, Engenharia, S.A. (Alarg: CRIL/Loures) ------LMNS Atlantico S.A. (Alarg. Loures/Malv) 147 657 - 436 440 271 354 - - - Via Oeste, SGPS, S.A. - 53 687 234 - - - - 1 074 871 Autoestrada do Oeste, S.A. - 53 687 234 - - - - 1 074 871 TOTAL 1 122 295 108 518 388 1 091 487 406 154 4 841 027 646 200 2 216 153 Remuneration of governing bodies

The remuneration of the governing bodies in the years ended December 31, 2014 and 2013 were as follows (Note 22):

31/12/2014 31/12/2013

Board of Directors 684 000 646 200 Supervisory board 36 400 36 400 Chairman of the Shareholders's General Meeting - 2 000 720 400 684 600

7. TANGIBLE FIXED ASSETS

Tangible fixed assets are divided between reversible and non-reversible, based on whether or not they revert to the State at the end of the concession, without compensation.

In accordance with the current concession contract, assets directly related to the conceded activity revert, with no compensation, to the State at the end of the concession contract (reversible assets). These assets are

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subject to the public domain regime and relate to the activity, being freely managed, within this scope, but not to what concerns private legal commerce.

The changes in reversible tangible fixed assets during the years ended December 31, 2014 and 2013 were as follows:

2014 Beginning Transfers / Ending balance Additions Decreases reclassifications balance

Reversible tangible fixed assets Gross assets Buildings and other constructions 17 392 843 - - - 17 392 843 Basic equipment 23 516 929 4 351 - - 23 521 280 Transport equipment 66 160 - - - 66 160 Administrative equipment 1 291 940 723 (2 007) (785) 1 289 871 Other tangible assets 371 711 - (991) - 370 720 Total 42 639 583 5 074 (2 998) (785) 42 640 874

Accumulated depreciation Buildings and other constructions 10 142 054 670 232 - - 10 812 286 Basic equipment 17 860 976 1 296 022 - - 19 156 998 Transport equipment 66 160 - - - 66 160 Administrative equipment 1 225 171 33 814 (2 007) (785) 1 256 193 Other tangible assets 354 108 8 247 (991) - 361 364 Total 29 648 469 2 008 315 (2 998) (785) 31 653 001

Net reversible tangible fixed assets 12 991 114 10 987 873

2013 Beginning Transfers / Ending reclassificati- balance Additions Decreases balance

Reversible tangible fixed assets Gross assets Buildings and other constructions 17 392 843 - - - 17 392 843 Basic equipment 23 519 740 4 351 (8 200) 1 038 23 516 929 Transport equipment 66 160 - - - 66 160 Administrative equipment 1 247 762 42 487 (511) 2 202 1 291 940 Other tangible assets 378 298 175 (6 762) - 371 711 Total 42 604 803 47 013 (15 473) 3 240 42 639 583

Accumulated depreciation Buildings and other constructions 9 469 340 672 714 - - 10 142 054 Basic equipment 16 364 841 1 503 297 (8 200) 1 038 17 860 976 Transport equipment 66 160 - - - 66 160 Administrative equipment 1 181 394 42 086 (511) 2 202 1 225 171 Other tangible assets 343 404 17 466 (6 762) - 354 108 Total 27 425 139 2 235 563 (15 473) 3 240 29 648 469

Net reversible tangible fixed assets 15 179 664 12 991 114

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The basic equipment reversible as of December 31, 2014 and 2013 was composed of the following items at acquisition cost: 2014 2013

Signalling and safety equipment 8 040 270 8 040 270 Telecommunications equipment 1 743 744 1 743 744 Electrical installations and lighting 956 352 952 001 Tolls equipment 8 199 998 8 199 998 Operations support equipment 2 826 012 2 826 012 Accessory works and other infrastructures 1 754 904 1 754 904 23 521 280 23 516 929

The changes in non-reversible tangible fixed assets during the years ended December 31, 2014 and 2013 were as follows:

2014 Beginning Transfers / Ending Additions Decreases reclassificati- balance balance

Non-reversible tangible fixed assets Gross assets Administrative equipment 1 159 997 2 840 (2 989) 785 1 160 633 Other tangible assets 64 903 - - - 64 903 Total 1 224 900 2 840 (2 989) 785 1 225 536

Accumulated depreciation Administrative equipment 1 155 015 4 405 (2 989) 785 1 157 216 Other tangible assets 55 189 4 857 - - 60 046 Total 1 210 204 9 262 (2 989) 785 1 217 262

Net non-reversible tangible fixed assets 14 696 8 274

2013 Beginning Transfers / reclas- Ending balance Additions Decreases sifications balance

Non-reversible tangible fixed assets Gross assets Administrative equipment 1 165 487 4 439 (6 689) (3 240) 1 159 997 Other tangible assets 64 903 - - - 64 903 Total 1 230 390 4 439 (6 689) (3 240) 1 224 900

Accumulated depreciation Administrative equipment 1 159 270 5 674 (6 689) (3 240) 1 155 015 Other tangible assets 50 332 4 857 - - 55 189 Total 1 209 602 10 531 (6 689) (3 240) 1 210 204

Net non-reversible tangible fixed assets 20 788 14 696

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8. INTANGIBLE ASSETS

The changes in intangible assets during the years ended December 31, 2014 and 2013 were as follows:

2014 Beginning Ending

balance Additions balance

Intangible assets Gross assets

Computer software 795 776 - 795 776 Contractual right 529 326 032 - 529 326 032

Total 530 121 808 - 530 121 808

Accumulated amortization Computer software 795 776 - 795 776

Contractual right 234 493 067 19 765 960 254 259 027 Total 235 288 843 19 765 960 255 054 803 Net intangible assets 294 832 965 275 067 005

2013 Beginning Transfers/ reclas- Ending balance Additions sification balance

Intangible assets Gross assets Computer software 795 776 - - 795 776 Contractual right 528 882 678 2 488 440 866 529 326 032 Total 529 678 454 2 488 440 866 530 121 808 Intangible assets in progress 440 866 - (440 866) - 530 119 320 2 488 - 530 121 808

Accumulated amortization Computer software 795 776 - - 795 776 Contractual right 214 753 744 19 739 323 - 234 493 067

Total 215 549 520 19 739 323 - 235 288 843 Net intangible assets 314 569 800 294 832 965

As explained in the Introductory Note, when the concession started, a group of motorway stretches, equipment and installations relating to the stretches already built were transferred to the Company, to which the amount of 88,536,627 Euros was attributed, and are referred to as initial infrastructure and are part of the contractual right.

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As of December 31, 2014 and 2013, the gross value of the intangible assets related to the contractual right was as follows:

2014 2013

Floors and respective equipment 236 484 812 236 484 812 Bridges and tunnels 171 436 784 171 436 784 Initial infraestructure (Note 1) 88 536 627 88 536 627 Accessory works and other infrastructures 15 117 721 15 117 721 Telecommunications equipment 3 853 765 3 853 765 Electrical installations and lighting 3 243 794 3 243 794 Signalling equipment 10 652 529 10 652 529 529 326 032 529 326 032

9. FINANCIAL LEASES

As of December 31, 2014 and 2013, the Company had the following assets under financial lease:

31/12/2014 31/12/2013 Accumulated Cost depreciation Net value Net value Operations support equipment 2 471 100 2 066 562 404 538,24 539 384

As of December 31, 2014 and 2013, the Company’s liabilities with financial leases instalments not yet due, amounted to 879,711 Euros and 1,143,920 Euros, respectively (Notes 6 and 18), and are payable as follows:

2014 2013

2014 - 264 149 2015 278 198 278 198 2016 292 995 292 995 2017 308 578 308 578 879 771 1 143 920

10. CORPORATE INCOME TAX

The Company is subject to Corporate Income Tax at the rate of 23%. This rate can be increased up to a maximum of 1.5% of taxable income regarding Municipal Surcharge.

For 2014, the nominal rate of income tax can vary between 24.5% and 31.5%, depending on the amount of taxable profit (TP), on which the following rates apply:

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- Corporate Income Tax rate: 23% on TP; - Municipal Surcharge: 1,5% on TP; - State Surcharge: 3% on TP if 1.5M€ < TP <= 7.5M€, 5% on TP if 7.5M€ 35M€.

In accordance with article 88 of the Portuguese Corporate Income Tax Code, the Company is also subject to autonomous taxation of certain expenses at the rates mentioned therein.

In accordance with the applicable Portuguese legislation, income tax returns are subject to review and correction by the tax authorities for a period of four years (five years for social security) except where there are tax losses, tax benefits have been granted or there is litigation in progress where, depending on the circumstances, the period can be extended or suspended. Accordingly, the Company’s tax returns for the years 2011 to 2014 are still subject to review. The Company’s Board of Directors believes that possible corrections arising from inspections by the tax authorities of those tax returns will not have a significant impact on the financial statements as of December 31, 2014.

The expiracy period of tax losses recorded in tax periods beginning on or after January 2014 is twelve years (this period is five years for tax losses of 2012 and 2013, four years for tax losses of 2010 and 2011 and six years for previous periods).

After January 1, 2014, the deduction of tax losses is limited to 70% of taxable income, regardless of the tax period they were originated in.

As of December 31, 2014 tax losses available to be carried forward amounted to 11,722,140 Euros, which mature as follows:

2014 7 311 821 2015 2 646 580 2017 1 763 739 11 722 140

Deferred taxes

Income tax for the years ended December 31, 2014 and 2013, have been adjusted to reflect the effect of deferred taxes. Deferred tax assets are only recognised if there is reasonable expectation that they will be recovered by decreasing future taxable profits.

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Auto-Estradas do Atlântico, SA - Annual Report 2014

The detail of deferred tax assets and liabilities as of December 31, 2014 and 2013, in accordance with the respective temporary differences was as follows:

Deferred tax assets Deferred tax liabilities 2014 2013 2014 2013

Tax losses carried forward (a) 926 167 1 197 707 - - Provision for repaving 3 572 045 3 632 606 - - Transition adjustments for NCRF - 531 756 - 458 488 4 498 212 5 362 069 - 458 488

(a) As of December 31, 2014, the Company estimated that the recoverable amount of tax losses amounts to 4,410,319 Euros. a) Changes in deferred tax assets:

2014 2013

Beginning balance 5 362 069 5 773 120

Changes during the year: Provision for repaving 293 010 234 422 Utilization of tax losses (834 809) (96 515) Tax losses carried forward 651 476 52 541 Transition adjustments to NCRF (531 756) (531 756) (422 079) (341 308) Effect of the change in the income tax rate: Provision for repaving (353 572) 34 405 Tax losses (88 206) (104 148) (441 778) (69 743) Ending balance 4 498 212 5 362 069

b) Changes in deferred tax liabilities:

2014 2013

Beginning balance 458 488 916 976 Transition adjustments to NCRF (458 488) (458 488) Ending balance - 458 488

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c) Reconciliation of the tax rate:

31/12/2014 31/12/2013

Net profit before tax 4 703 413 108 028 Nominal tax rate 24,5% 26,5% Expected tax 1 152 336 28 627

Permanent differences: Quotes (17 950) (30 174) Other situations, net (1 798) (946) (19 748) (31 120) Nominal tax rate 23% 25,0% (4 542) (7 780)

Income tax adjustments (i) 49 323 36 786 Tax losses carried forward (651 476) (52 541) Effect of the change in the income tax rate 441 778 69 743 State Surcharge 121 689 - Others (65 998) (45 595) Income tax for the year 1 043 110 29 241

Current income tax (Note 14) 637 741 76 678 Deferred income tax 405 369 (47 437) 1 043 110 29 241 (i) This amount corresponds to the portion of corporate income tax resulting from the autonomous taxation of passenger vehicles.

11. OTHER RECEIVABLES

As of December 31, 2014 and 2013 this caption was made up as follows:

31/12/2014 31/12/2013

Employees 6 570 6 499 Accrued income (i) 607 430 101 221 Estradas de Portugal, S.A. 41 184 225 483 Other debtors 972 651 844 500 Joint operation (ii): Brisa - Auto Estradas de Portugal, S.A. 152 680 130 828 LusoLisboa- Auto-estradas da Grande Lisboa, S.A. 69 400 64 721 EP- Estradas de Portugal, S.A. 100 091 101 983 1 950 006 1 475 235 (i) These balances are mainly related to rents of the Motorway Service Areas.

(ii) The amount related to Joint operation corresponds to revenue collected by other concessionaires.

Other receivables as of December 31, 2014 and 2013, include balances with related parties of 507,612 Euros and 406,154 Euros, respectively (Note 6).

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12. DEFERRALS

Deferred assets as of December 31, 2014 and 2013 were made up as follows:

31/12/2014 31/12/2013

Insurances 252 881 253 614 Other deferrals 48 150 46 320 301 031 299 934

As of December 31, 2014 and 2013, current and non-current deferred liabilities correspond mainly to rents received from the Motorway Service Areas, which were paid in advance.

13. TRADE RECEIVABLES

The main captions of trade receivables, as of December 31, 2014 and 2013, were:

2014 2013

Tolls 5 076 317 4 843 961 Customer assistance 53 494 51 289 Service areas 41 128 608 218 Others (4 055) (4 063) 5 166 884 5 499 405 Impairments (2 333 363) (2 244 729) 2 833 521 3 254 676

The impairments presented the following movements during the years ended December 31, 2014 and 2013:

31/12/2014 31/12/2013

Beginning balance 2 244 729 2 133 005 Reversals - (9 051) Utilization - (39 354) Additions 88 634 160 129 Ending balance 2 333 363 2 244 729

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14. STATE AND OTHER PUBLIC ENTITIES

As of December 31, 2014 and 2013, these captions comprised:

31/12/2014 31/12/2013 Assets Corporate Income Tax (a) 95 284 1 427 956

Liabilities

Value Added Tax 1 622 870 1 797 851 Personal Income Tax 82 697 76 342 Social Security Contributions 104 038 104 360 1 809 605 1 978 553

(a) As of December 31, 2014 and 2013, this caption is made up as follows:

31/12/2014 31/12/2013

Withholding income tax 345 237 782 633 Income tax advance payments 387 788 722 000 Estimated income tax for the year (Note 10) (637 741) (76 678) 95 284 1 427 956

15. CAPITAL AND RESERVES

Share capital: As of December 31, 2014 the Company’s fully subscribed and paid up capital was made up of 11,000,000 shares with nominal value of 5 Euros each.

The capital was owned by Auto-Estradas do Oeste, S.A. and Via-Oeste, SGPS, S.A. with 50% of share capital each.

Legal reserve: Portuguese legislation establishes that at least 5% of annual net profit must be appropriated to a legal reserve until the reserve equals the statutory minimum requirement of 20% of share capital. This reserve is not available for distribution, except in the case of liquidation of the Company, but may be capitalised or used to absorb losses once other reserves and retained earnings have been used.

Appropriation of 2012 net loss: In accordance with a decision of the Shareholders’ General Meeting held on March 27, 2013 the net loss of 2012 was transferred to retained earnings/(losses).

Appropriation of 2013 net profit: In accordance with a decision of the Shareholders’ General Meeting held

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on March 20, 2013 the net profit of 2013 was transferred to retained earnings/(losses).

Other changes in equity: The caption other changes in equity consists of government subsidies, which in accordance with the current accounting standards, are initially recognized in shareholders’ equity.

Because of the nature of the Company’s operations as a motorways concessionaire, it has been presenting net losses, in line with its approved business plan. Mechanisms are provided for in the concession contract to maintain the Company’s financial stability so as to ensure its ability to continue on a going concern basis.

16. PROVISIONS

The recorded provision reflects the Company’s contractual obligation of maintaining and replacing the infrastructure at a certain level of service specified in the Concession Contract namely through repaving works.

This provision is recognized over the period between the referred repairs, through an operational loss, based on the present value of the estimated expense to incur at each moment.

The changes in provisions during the years ended December 31, 2014 and 2013 were as follows:

2014 2013 Current Non current Current Non current

Beginning balance 973 140 11 442 300 562 516 11 181 972 Transfers 1 519 155 (1 519 155) 499 454 (499 454) Utilization (580 607) - (127 246) - Reversals (955 722) (5 769) (689 762) (463 771) Increases 400 333 2 267 044 728 178 1 223 553 1 356 299 12 184 420 973 140 11 442 300

In 2014 and 2013, the projections for investment related with these repairs have been revised, supported by the understanding of technical consultants, which resulted in the reversal of the provision previously accounted for.

The provision is subject to financial adjustment in each reporting date, through a financial loss, being the discount rate equal to the contracted financing rate.

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Increases have two components, one relating to the cost of the works and others relating to the financial adjustment:

31/12/2014 31/12/2013

Charge for the period 2 079 060 1 435 822 Financial adjustments (Note 23) 588 317 515 909 2 667 377 1 951 731

As of December 31, 2014, the Company is involved in several lawsuits, amounting to, approximately, 9,539,000 Euros, including a process where AEA is a third party, where is pretended the condemnation of Estradas de Portugal, in a minimum of 3,541,929 Euros. Taking into account (i) the nature of the indemnities requests, (ii) the coverage by insurance companies in some cases and (iii) the primary responsibility of third parties in others, and therefore AEA’s subsidiary responsibilities, the maximum responsibility of the Company is approximately, 333,000 Euros. The Border of Directors considers that from these actions no responsibilities will result for the Company, other than the ones reflected in the financial statements as of December 31, 2014.

17. GUARANTEES GIVEN

As of December 31, 2014 and 2013, the Company had responsibilities under guarantees given in favour of the Portuguese Government, amounting to 5,369,709 Euros and 5,358,777 Euros, respectively.

18. LOANS

As of December 31, 2014 and 2013, the Company loans were made up as follows:

31/12/2014 31/12/2013 Current Non current Total Current Non current Total Bank loans Capital EIB (a) 13 687 159 97 277 561 110 964 720 13 168 850 111 518 240 124 687 090 Commercial Bank (b) 19 010 586 29 020 766 48 031 352 18 677 953 47 952 979 66 630 942 Subordinated debt (c) - 47 500 000 47 500 000 - 47 500 000 47 500 000 Stand-by (d) - 35 914 600 35 914 600 - 32 062 150 32 062 150 32 697 745 209 712 927 242 410 672 31 846 813 239 033 369 270 880 182

Financial leases (Notes 6 and 9) 278 198 601 573 879 771 264 148 879 772 1 143 920 Shareholders' loan (e) Capital - 69 113 561 69 113 561 - 69 113 561 69 113 561 Interests - 40 467 452 40 467 452 - 38 260 907 38 260 907 - 109 581 013 109 581 013 - 107 374 468 107 374 468

TOTAL 32 975 943 319 895 513 352 871 456 32 110 961 347 287 609 379 398 570

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(a) The loan from the European Investment Bank (EIB – Facility Agreement) comprises three parts, which bear interests at the annual rates of 4.94%, 5.07% and 2.361%, respectively. The loan is payable as follows:

Current 13 687 159 Non current:

2016 14 749 454 2017 15 302 122 2018 15 869 754 2019 16 475 294 2020 17 103 780 2021 17 777 157 97 277 561 110 964 720

As of December 31, 2014 and 2013, the Company’s shareholders requested the presentation of bank guarantees in favour of the EIB, amounting to 111,518,241 Euros and 125,265,111 Euros, respectively.

(b) The “Term Loan Facility”, obtained from a group of banks, bears interests at the six month Euribor rate plus 1.5% and is repayable in accordance with the following plan:

Current 19 010 586 Non current: 2016 29 020 766 48 031 352

(c) As of December 31, 2014, the “Subordinated – Debt Facility” loan obtained from Banco BPI, S.A. and Caixa – Banco de Investimento, S.A., bears interests at the six month Euribor rate plus 5%. This loan should be paid by December 31, 2018.

(d) As of December 31, 2014, the “Stand-by Facility” loan, obtained from a banks’ group led by Banco BPI, S.A. and Caixa – Banco de Investimento, S.A., bear interest at the one month Euribor rate plus 2.5%. This loan matures on December 18, 2019.

(e) The Shareholders' loans were granted in equal parts by each of the shareholders. As of December 31, 2014 and 2013 these loans capital amounted to 69,113,562 Euros in both years, plus interests of 40,467,452 Euros and 38,260,907 Euros, respectively, corresponding to interests at a 12 months Euribor interest rate, plus 1.5%. The Company's expectation is that the reimbursement of such amounts will occur in the long term.

Some of those loans required the maintenance of sufficient funds on bank deposits to cover the next service debt maturity and other investment obligations (Note 4).

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As of December 31, 2014, the Company comply with all covenants related to loans contracts, with exception of the Debt Service Coverage Ratio (“DSCR”) ratio, regarding which, in previously years, a consent request to change the calculation formula was delivered, and is still pending the banks approval.

19. OTHER PAYABLES

Other payables as of December 31, 2014 and 2013, were made up as follows:

31/12/2014 31/12/2013

Employees 690 403 684 225

Investment suppliers 639 712 652 036

Accrued costs: Financial expenses 58 159 87 230

Administrative expenses 198 471 68 051 Tecnichal expenses 1 607 608 1 201 057 Other expenses 666 353 516 062 2 530 591 1 872 400

Joint operation - Brisal - Auto-estradas do Litoral, S.A. 431 970 415 365

Other creditors 15 898 596

4 308 574 3 624 622

As of December 31, 2014 and 2013, other payables include balances with related parties amounting to 1,400,432 Euros and 1,091,487 Euros, respectively (Note 6).

20. SERVICES RENDERED

Services rendered for the years ended December 31, 2014 and 2013, were made up as follows:

31/12/2014 31/12/2013

Tolls 53 949 230 52 256 486 Service areas 1 829 505 1 818 260 Customer assistance 9 824 10 500 Discounts (131 971) (67 762) 55 656 588 54 017 484

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21. SUPPLIES AND SERVICES

The detail of supplies and services for the years ended December 31, 2014 and 2013 was as follows:

31/12/2014 31/12/2013

Subcontracts 5 696 728 5 741 769 Specialized services 4 661 430 3 724 297 Materials 34 969 42 717 Energy and fluids 648 177 675 915 Travel expenses 14 453 17 583 Other services 864 426 944 548

11 920 183 11 146 829 Supplies and services include transactions with related parties, during the years ended December 31, 2014 and 2013, of 4,708,043 Euros and 4,841,027 Euros, respectively (Note 6).

22. PAYROLL EXPENSES

The caption “Payroll expenses” during the years ended December 31, 2014 and 2013, was detailed as follows:

31/12/2014 31/12/2013

Remuneration of executive bodies (Note 6) 720 400 684 600 Staff remuneration 4 277 378 4 207 731 Indemnities 182 472 - Social security charges 947 497 933 475 Work accidents insurance 31 302 29 688 Social expenses 115 138 106 863 Other payroll expenses 24 296 16 652

6 298 483 5 979 009

During the years ended December 31, 2014 and 2013, the average number of personnel was 185.

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23. FINANCIAL INCOME AND EXPENSES

Financial expenses for the years ended December 31, 2014 and 2013 were made up as follows:

31/12/2014 31/12/2013

Financial interests Loans interests 10 005 532 10 784 209 Shareholders' loans interests 2 206 545 2 149 741 Other interests 53 071 66 411 12 265 148 13 000 361

Financial ajustments - IFRIC 12 provision (Note 16) 588 317 515 909

Expenses with loan contracts 2 223 869 2 392 345

Other financial expenses 11 650 11 651

15 088 984 15 920 266

Financial expenses include transactions with related parties, during the years ended December 31, 2014 and 2013, of 2,259,617 Euros and 2,216,153 Euros, respectively (Note 6).

In the years ended December 31, 2014 and 2013, financial income includes, essentially, interests from demand deposits and term deposits amounting to 368,285 Euros and 386,719 Euros, respectively.

24. OTHER OPERATING INCOME

As of December 31, 2014 and 2013, the caption “Other operating income” was made as follows:

31/12/2014 31/12/2013

Compensations from EP (a) 3 273 974 - Additional tolls 1 002 407 535 047 Accidents' compensations 609 694 609 993 Other income 269 726 353 486 5 155 801 1 498 526

(a) Income of 3,273,974 Euros recorded in the year December 31, 2014, corresponds to an amount received from EP – Estradas de Portugal, S.A., as decided by Arbitral Court in April 1, 2014, which confirmed, attending to the clauses of the concession contract, the right of the Company to be compensated from incurred costs and recorded in financial statements in previous years, related with

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maintenance and repairs works in the motorway section of Torres Vedras / Bombarral.

25. OTHER OPERATING COSTS

As of December 31, 2014 and 2013, the caption “Other operating costs” was made up as follows:

31/12/2014 31/12/2013

SIEV's fares 85 167 108 505 Quotes 34 780 59 229 Accidents' compensations 55 563 77 019 Taxes 803 64 492 Other operating costs 3 577 20 575 179 890 329 820

26. EARNINGS PER SHARE

The basic earnings per share of the years ended December 31, 2014 and 2013 were as follow:

2014 2013

Profit for the year 3 660 303 78 787

Number of shares in circulation 11 000 000 11 000 000

Basic earnings per share 0,33 0,01

During the years ended December 31, 2014 and 2013 there were no dilution effects, thus diluted earnings per share are equal to basic earnings per share.

27. NOTE ADDED FOR TRANSLATION

These financial statements are a translation of financial statements originally issued in Portuguese. In the event of discrepancies, the Portuguese language version prevails.

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REPORT AND OPINION OF THE SUPERVISOR BOARDER

To the Shareholders,

1. In the terms of the law and the articles of association, the Supervisory Board is responsible for preparing an annual report on its inspection activities and issuing an opinion on the financial statements of Auto Estradas do Atlântico – Concessões Rodoviárias de Portugal, S.A. (AEA), concerning the financial year ending 31 December 2014.

2. The Management Report submitted by the Board of Directors clearly outlines the macro, economic and industry framework in which AEA carries out its business, as well as the developments in its human and material resources and its financial and economic condition concerning the financial year ending 31 December 2014.

3. The financial statements and accounting system that support the same in general comply with the Portuguese Accounting Standards System (“SNC”) and give a fair view of the financial condition of AEA as at 31 December 2014, as well as the results of its operations in the financial year ending on the aforementioned date.

4. The Supervisory Board was also made aware of the Legal Certification of Accounts concerning the year in question, issued by the Statutory Auditor.

5. In the light of what has been expounded above, the Supervisory Board is of the opinion that the

Shareholders’ Meeting: a) Should approve the financial statements for the 2014 financial year, as submitted by the Board of Directors; b) Should approve the proposal for appropriation of profits submitted by the Board of Directors.

6. Finally, the Supervisory Board wishes to thank the Board of Directors and the Company’s Services for all the cooperation given in the performance of its duties.

Lisbon, 17 March 2015

The Supervisory Board

José Vieira dos Reis, Chairman

Fernando Marques Oliveira, Member

Joaquim Oliveira de Jesus, Member

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STATUTORY AUDITOR’S REPORT

(Translation of a report originally issued in Portuguese - Note 27)

Introduction

1. We have audited the accompanying financial statements of Auto-Estradas do Atlântico – – Concessões Rodoviárias de Portugal, S.A. (“the Company”), which comprise the balance sheet as of 31 December 2014, that presents a total of 328,884,554 Euros and negative shareholders’ equity of 49,656,102 Euros, including a net profit of 3,660,303 Euros, the statements of profit and loss by nature, changes in shareholders’ equity and cash flows for the year then ended and the corresponding notes.

Responsibilities

2. The preparation of financial statements that present a true and fair view of the financial position of the Company, the results of its operations, the changes in its shareholders’ equity and its cash flows, as well as the adoption of adequate accounting principles and criteria and the maintenance of an appropriate internal control system are the responsibility of the Company’s Board of Directors. Our responsibility is to express a professional and independent opinion on those financial statements based on our audit.

Scope

3. Our audit 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 audit be planned and performed with the objective of obtaining reasonable assurance about whether the financial statements are free of material misstatements. The audit included verifying, on a sample basis, evidence supporting the amounts and disclosures in the financial statements and assessing the estimates, based on judgements and criteria defined by the Board of Directors, used in their preparation. The audit also included assessing the adequacy of the accounting principles used and their disclosure, taking into consideration the circumstances, verifying the applicability of the going concern concept and assessing the adequacy of the overall presentation of the financial statements. Our audit also included verifying that the financial information contained in the Board of Directors’ Report is in accordance with the financial statements. We believe that our audit provides a reasonable basis for expressing our opinion.

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Opinion

4. In our opinion, the financial statements referred to in paragraph 1 above, present fairly, in all material respects, the financial position of Auto-Estradas do Atlântico – Concessões Rodoviárias de Portugal, S.A. as of 31 December 2014 and the results of its operations, the changes in its shareholders’ equity and its cash flows for the year then ended, in accordance with generally accepted accounting principles in Portugal.

Emphasis

5. The financial statements mentioned in paragraph 1 above were prepared on a going concern basis, although, as of 31 December 2014: (i) the Company’s shareholders’ equity is negative by 49,656,102 Euros, which determines the application of articles 35 and 171 of the Commercial Companies Code (“Código das Sociedades Comerciais”) and (ii) current liabilities exceed current assets. As explained in Note 15 of the financial statements, the concession contract establishes financial support mechanisms for the Company, to the extent necessary to ensure the ability of the Company to continue on a going concern basis, and financing agreements require the maintenance of sufficient deposits to ensure debt service (Note 4). Consequently, the ability of the Company to continue on a going concern basis, the realisation of its assets (which include deferred tax assets of, approximately, 4,498,000 Euros) and the settlement and classification of its liabilities, depend on the future success of its operations and on the financial support to be rendered in the terms of the referred concession contract.

Report on legal requirements

6. It is also our opinion that the financial information included in the Board of Directors’ Report is consistent with the financial statements of the year.

Lisbon, 23 February 2015

______

Deloitte & Associados, SROC S.A.

Represented by Carlos Alberto Ferreira da Cruz

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TECHNICAL SUPPORT

Property

Auto-Estradas do Atlântico

Concessões Rodoviárias de Portugal, S.A.

Catefica - Apartado 327

2560 - 587 Torres Vedras

Portugal

Tel.: +351 261 318 500

Fax.: +351 261 318 501 www.aeatlantico.pt

E-mail: [email protected]

Edition

AEA - Gabinete de Comunicação e Imagem

August 2015

Public Trade Company - Share Capital Social 55.000.000 euros

Registered at Conservatória do Registo Comercial de Torres Vedras,

Com o nº 3830

Contribuinte nº 504 290 592

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