FULL YEAR RESULTS 2007/YEAR ENDED 31 DECEMBER SONAE SGPS REPORT AND ACCOUNTS 2007 3 Table of contents MANAGEMENT REPORT..........................................................................................................5 At a glance..................................................................................................................................6 Key Figures ................................................................................................................................8 Message from the Chairman ......................................................................................................9 Message from the CEO............................................................................................................11 1. The Sonae Group ..............................................................................................................13 1.1. Corporate profile..........................................................................................................13 1.2. Governing Bodies........................................................................................................15 1.3. Success factors ...........................................................................................................15 1.4. Human resources ........................................................................................................17 1.5. Main corporate events during 2007.............................................................................19 1.6. Relevant facts of the year............................................................................................22 2. Economic background .......................................................................................................26 2.1. International.................................................................................................................26 2.2. Portugal .......................................................................................................................27 3. Consolidated results ..........................................................................................................28 3.1. Consolidated income statement..................................................................................28 3.2. Consolidated balance sheet ........................................................................................30 4. Business analysis ..............................................................................................................32 4.1. Retail ...........................................................................................................................32 4.2. Shopping centres ........................................................................................................34 4.3. Telecommunications ...................................................................................................36 4.4. Real estate development, Services and Joint Ventures .............................................38 4.5. Sonae SGPS company financial results .....................................................................39 5. Outlook for 2008 ................................................................................................................39 5.1. International economic environment ...........................................................................39 5.2. Portuguese economy ..................................................................................................40 5.3. Outlook for the Group’s businesses ............................................................................41 6. Sustainable management ..................................................................................................42 6.1. Environmental management .......................................................................................42 6.2. Social responsibility.....................................................................................................44 6.3. Code of conduct and internal regulations....................................................................45 7. Shareholder information.....................................................................................................45 7.1. Shareholder structure..................................................................................................45 7.2. Share performance......................................................................................................46 7.3. Total shareholder return ..............................................................................................47 7.4. Investor relations .........................................................................................................48 8. Proposed appropriation of profit for the year .....................................................................48 9. Subsequent events ............................................................................................................48 10. Financial glossary ..............................................................................................................49 11. Acknowledgements............................................................................................................50 CORPORATE GOVERNANCE REPORT................................................................................51 1. Statement of compliance ...................................................................................................52 1.1. 2005 CMVM recommendations on Corporate Governance........................................52 1.2. New CMVM recommendations on Corporate Governance.........................................54 2. Information disclosure........................................................................................................56 2.1. Areas under the supervision of members of the Executive Committee ......................56 2.2. Organisation of the corporate centre...........................................................................56 2.3. Internal committees .....................................................................................................58 2.4. Risk control..................................................................................................................58 2.5. Share price performance.............................................................................................62 2.6. Dividend distribution policy..........................................................................................62 2.7. Group remuneration policy..........................................................................................63 2.8. Share based plan ........................................................................................................64 2.9. Relevant transactions with related parties ..................................................................65 2.10. Investor relations.....................................................................................................65 2.11. Shareholders’ Remuneration Committee................................................................66 2.12. Fees of the Statutory External Auditor....................................................................66 3. Shareholder representation and voting rights....................................................................67 3.1. Statutory rules on exercising the right to vote .............................................................67 3.2. Deadline for depositing or blocking shares .................................................................67 3.3. Deadline for receiving postal votes .............................................................................68 3.4. Number of shares corresponding to one vote .............................................................68 4. Company rules...................................................................................................................68 4.1. Code of conduct and internal regulations....................................................................68 4.2. Internal procedures for risk control in company activity ..............................................69 4.3. Limitations to voting rights...........................................................................................69 5. Governing bodies...............................................................................................................69 5.1. Composition and description.......................................................................................69 5.2. Remuneration policy of the Board of Directors ...........................................................75 5.3. Remuneration and other compensation of the Board of Directors..............................77 5.4. Remuneration of the Statutory Audit Board ................................................................77 5.5. Remuneration of the Board of the Shareholders’ General Meeting............................78 5.6. Whistle blowing policy .................................................................................................78 5.7. Qualifications, experience and responsibilities of the Board of Directors ...................78 APPENDIX ...............................................................................................................................84 Statement under the terms of Article 245, paragraph 1, c) of the Securities Code…………...85 Article 447.................................................................................................................................86