2014 CONSOLIDATED REPORT AND ACCOUNTS - … · Sonae Sierra, SGPS, SA and subsidiaries Consolidated...

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2014 CONSOLIDATED REPORTAND ACCOUNTS

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SONAE SIERRA 2014 Consolidated Report and Accounts

1 Consolidated statements of financial position as of 31 December 2014and 2013

2 Consolidated statements of profit or loss for the periodsended 31 December 2014 and 2013

3 Consolidated statements of comprehensive income for the periodsended 31 December 2014 and 2013

4 Consolidated statements of changes in equity for the periodsended 31 December 2014 and 2013

5 Consolidated statements of cash flows for the periodsended 31 December 2014 and 2013

6 Notes to the consolidated financial statementsas of 31 December 2014

74 Statements of financial position as of 31 December 2014 and 2013

75 Statements of profit or loss for the years ended31 December 2014 and 2013

76 Statements of comprehensive income for the years ended31 December 2014 and 2013

77 Statements of changes in equity for the years ended31 December 2014 and 2013

78 Statements of cash flows for the years ended31 December 2014 and 2013

79 Notes to the financial statements as of 31 December 2014

99 Statutory Audit Report and Auditors’ Report, Consolidated andSeparate Financial Statements

CONTENTS

Sonae Sierra, SGPS, SA and subsidiaries

Consolidated statements of financial position as of 31 December 2014 and 2013(Translation of the statement of financial position originally issued in Portuguese – Note 46)(Amounts stated in thousands of Euro)

1SONAE SIERRA 2014 Consolidated Report and AccountsBack to main contents

31 December31 December 2013

ASSETS Notes 2014 Restated

Non-Current Assets:Investment properties 8 866,407 833,862Investment properties under development 8 25,217 65,434Property, plant and equipment 9 1,516 1,551Goodwill 10 7,193 7,193Intangible assets 11 2,879 2,579Investments in joint ventures and associates 4 and 5 928,565 786,636Shareholders 20 109,314 96,912Deferred tax assets 22 7,704 13,343State and other public entities 25 102 –Other non current assets 12 4,652 7,514

Total non-current assets 1,953,549 1,815,024

Current Assets:Trade receivables 13 21,986 22,405Shareholders 20 – 15,046Other receivables 14 30,880 30,719State and other public entities 25 5,259 6,296Other current assets 15 12,262 11,511Cash and cash equivalents 16 71,651 89,319

Total current assets 142,038 175,296

Total assets 2,095,587 1,990,320

EQUITY, NON-CONTROLLING INTERESTS AND LIABILITIES

Equity:Share capital 17 162,245 162,245Reserves 17 57,329 57,329Currency translation reserve (88,933) (91,695)Hedging reserve (6,929) (11,807)Retained earnings 677,953 674,701Consolidated net profit for the period attributable to the equity holders of Sonae Sierra 96,311 3,637

Equity attributable to the equity holders of Sonae Sierra 897,976 794,410Non-controlling interests 7 409,317 332,486

Total equity 1,307,293 1,126,896

Liabilities:Non Current Liabilities:Bank loans – net of current portion 18 393,628 399,386Debentures loans – net of current portion 18 74,575 74,424Derivative financial instruments 18 18,229 27,716Shareholders 20 3,610 7,419State and other public entities 25 – 13Accounts payable to suppliers 24 29 –Other non current liabilities 21 9,169 7,797Provisions 28 142 –Deferred tax liabilities 22 126,623 125,686

Total non current liabilities 626,005 642,441

Current Liabilities:Current portion of long term bank loans 18 38,871 76,591Current portion of long term debentures loans 18 (150) (139)Short term bank loans and other borrowings 19 20,000 5,661Shareholders 20 3,864 695Accounts payable to suppliers 24 13,327 14,214State and other public entities 25 11,020 8,470Other payables 26 10,300 44,724Other current liabilities 27 64,929 70,202Provisions 28 128 565

Total current liabilities 162,289 220,983

Total equity, non-controlling interests and liabilities 2,095,587 1,990,320

The accompanying notes form an integral part of these consolidated statements of financial position.

The Board of Directors


Consolidated statements of profit or loss for theperiods ended 31 December 2014 and 2013(Translation of statement of profit or loss originally issued in Portuguese – Note 46)(Amounts stated in thousands of Euro)


2013Notes 2014 Restated

Services rendered 29 186,119 201,376Variation in fair value of the investment properties 30 32,138 (75,755)Other operating revenue 31 15,538 7,728

233,795 133,349

External supplies and services (92,150) (96,481)Personnel expenses (44,173) (42,551)Depreciation and amortisation 9 and 11 (1,506) (1,655)Provisions and impairment 28 (4,650) (5,735)Impairment losses and write-off 32 (17,972) (4,755)Other operating expenses 33 (4,868) (4,860)

(165,319) (156,037)

68,476 (22,688)Finance income 34 4,634 6,907Finance expenses 34 (26,677) (26,707)Share of results of joint ventures and associates 36 157,174 29,851Gains and losses on investments 35 (3,095) (11,661)

Profit before income tax 200,512 (24,298)

Income tax 23 (14,423) 10,733

Profit after income tax 186,089 (13,565)

Consolidated net profit for the period 186,089 (13,565)

Attributable to:Equity holders of Sonae Sierra 96,311 3,637Non-controlling interests 7 89,778 (17,202)

186,089 (13,565)

Consolidated net profit per share:Basic 42 2.96 0.11Diluted 42 2.96 0.11

The accompanying notes form an integral part of these consolidated statements of profit or loss.



Consolidated statements of comprehensive incomefor the periods ended 31 December 2014 and 2013(Translation of the statement of comprehensive income originally issued in Portuguese – Note 46)(Amounts stated in thousands of Euro)

20132014 Restated

Consolidated net profit for the period 186,089 (13,565)

Changes in the currency translation differences 2,762 (59,315)Changes in the fair value of hedging instruments 9,001 18,382Deferred tax related to components of other comprehensive income (2,533) (5,218)Others (37) 464

Other comprehensive income for the period 9,193 (45,687)

Total comprehensive income for the period 195,282 (59,252)

Attributable to:Equity holders of Sonae Sierra 103,566 (46,400)Non-controlling interests 91,716 (12,852)

195,282 (59,252)

The accompanying notes form an integral part of these consolidated statements of comprehensive income.




Consolidated statements of changes in equity forthe periods ended 31 December 2014 and 2013(Translation of statements of changes in equity originally issued in Portuguese – Note 46)(Amounts stated in thousands of Euro)


Equity attributable to the equity holders of Sonae Sierra————————————————————————————————————————————————————

ReservesNon-controlling

Share Legal Translation Hedging Retained interests Notes capital reserves reserve reserve earnings Total (Note 7) Total

Balance as of1 January 2013 – Restated 2 162,245 57,329 (32,380) (19,504) 719,001 (45,881) 840,810 354,205 1,195,015

Appropriation of consolidated net profit for 2012

Transfer to legal reserves and retained earnings – – – – (45,881) 45,881 – – –

– – – – (45,881) 45,881 – – –

Currency translation differences – – (59,315) – – – (59,315) – (59,315)

Fair value of hedging instruments 18 – – – 12,204 – – 12,204 6,178 18,382

Deferred tax in fair value of hedging instruments 22 – – – (3,390) – – (3,390) (1,828) (5,218)

Capital increase/decrease 7 – – – – – – (8,867) (8,867)

Acquisitions/sale ofsubsidiaries effect – – – (1,117) 1,117 – – –

Consolidated net profitfor the period ended31 December 2013 – – – – – 3,637 3,637 (17,202) (13,565)

Others – – – – 464 – 464 – 464

Balance as of31 December 2013– Restated 162,245 57,329 (91,695) (11,807) 674,701 3,637 794,410 332,486 1,126,896

Balance as of1 January 2014– Restated 2 162,245 57,329 (91,695) (11,807) 674,701 3,637 794,410 332,486 1,126,896

Appropriation ofconsolidated net profitfor 2013:

Transfer to legal reservesand retained earnings – – – – 3,637 (3,637) – – –

.

– – – – 3,637 (3,637) – (14,894) (14,894)

Currency translationdifferences – – 2,762 – – – 2,762 – 2,762

Fair value ofhedging instruments 18 – – – 6,252 – – 6,252 2,749 9,001

Deferred tax in fair valueof hedging instruments 22 – – – (1,720) – – (1,720) (813) (2,533)

Capital increase/decrease 7 – – – – – – 11 11

Acquisitions/sale ofsubsidiaries effect – – – 346 (346) – (2) (2)

Consolidated net profitfor the period ended31 December 2014 – – – – – 96,311 96,311 89,778 186,089

Others – – – – (39) – (39) 2 (37)

Balance as of31 December 2014 162,245 57,329 (88,933) (6,929) 677,953 96,311 897,976 409,317 1,307,293

The accompanying notes form an integral part of these consolidated statement of changes in equity


Net profitattributable to theequity holders of

Sonae Sierra


Consolidated statements of cash flows for theperiods ended 31 December 2014 and 2013(Translation of statement of cash flow originally issued in Portuguese – Note 46)(Amounts stated in thousands of Euro)

Notes 2014 2013 (Restated)

Operating activities:Received from clients 188,931 203,296Paid to suppliers (93,758) (102,695)Paid to personnel (44,514) (42,000)

Flows from operations 50,659 58,601(Payments)/receipts of income tax (7,352) (9,695)Other (payments)/receipts relating to operating activities 1,943 (3,722)

Flows from operating activities [1] 45,250 45,184

Investing Activities:Receipts relating to:Investments 24,249 43,532Tangible fixed assets 30,859 68Interest income 3,927 7,658Dividends 11,399 13,393Other 29 70,463 263 64,914

Payments relating to:Investments (18,250) (33,632)Tangible fixed assets (7,659) (9,148)Intangible fixed assets (1,313) (899)Other – (27,222) – (43,679)

Variation in Loans granted (9,515) 2,903

Flows from investing activities [2] 33,726 24,138

Financing Activities:Receipts relating to:Capital increase and share premiums 11 11,086Bank loans 103,000 75,661Other – 103,011 – 86,747

Payments relating to:Interest expenses (31,437) (30,536)Dividends (36,029) –Decrease of share capital – nominal value and discounts and premiums – (19,952)Bank loans (131,744) (102,946)Other – (199,210) – (153,434)

Variation in Loans obtained – others (627) (7,656)

Flows from financing activities [3] (96,826) (74,343)

Variation in cash and cash equivalents [4]=[1]+[2]+[3] (17,850) (5,021)Effect of exchange differences 12 (299)Effect of the acquisitions and sales of companies:Cascaishopping – 2,463Alverca – 16Sierra Reval 170 –Valecenter – (1,921)Cash and cash equivalents at the beginning of the year 16 89,319 94,081Cash and cash equivalents at the end of the year 16 71,651 89,319

The accompanying notes form an integral part of these consolidated statements of cash flows.




Notes to the consolidated financial statements as of 31 December 2014(Translation of notes originally issued in Portuguese – Note 46)(Amounts stated in thousands of Euro – kEuro)

1 INTRODUCTION

SONAE SIERRA, S.G.P.S., S.A. (“the Company” or “Sonae Sierra”), which has its head office in Lugar do Espido, Via Norte, Apartado 1197, 4471-909Maia – Portugal, is the parent company of a group of companies, as explained in Notes 3,4 and 5 (“the Group”).

The Group’s operations consist of investment, management and development of shopping centres.

The Group operates in Portugal, Brazil, Spain, Greece, Germany, Italy, Romania, Colombia, Morocco, Algeria, Turkey, Hong Kong, China, Russia andNetherlands.

These financial statements are presented in Euro because that is the currency of the primary economic environment in which the group operates.Foreign operations are included in accordance with the policy set out in Note 2.2.e).

2 PRINCIPAL ACCOUNTING POLICIES

The principal accounting policies adopted in preparing the accompanying consolidated financial statements are as follows:

2.1. Basis of preparation

The accompanying consolidated financial statements have been prepared according to the International Financial Report Standards (“IFRS”)as approved by the European Union, applicable to economic years beginning on 1 January 2014. These correspond to the InternationalFinancial Reporting Standards (“IFRS”) issued by the International Accounting Standards Board (“IASB”) and interpretations issued by theInternational Financial Reporting Interpretations Committee (“IFRIC”) or by the previous Standing Interpretations Committee (“SIC”) andapproved by the European Union.

The accompanying consolidated financial statements have been prepared on a going concern basis and in accordance with the accrual basisof accounting, from the accounting records of the companies included in the consolidation maintained according to the generally acceptedaccounting principles in the countries of each company adjusted, in the consolidation process, to International Financial Reporting Standards(“IFRS”), as approved by the European Union.

New accounting standards and their impact in these consolidated financial statements

Up to the date of approval of these consolidated financial statements, the European Union endorsed the following standards, interpretations,amendments and revisions with mandatory application to the economic year beginning on 1 January 2014:

Applicable forfinancial years

beginning on/after

IFRS 10 – Consolidated financial statements 01-Jan-14IFRS 11 – Joint arrangements 01-Jan-14IFRS 12 – Disclosure of interests in other entities 01-Jan-14IAS 27 (Revised 2011) – Separate financial statements 01-Jan-14IAS 28 (Revised 2011) – Investments in associates and joint ventures 01-Jan-14Amendments to IFRS 10 and IFRS 12 – Investment entities 01-Jan-14Amendments to IAS 32 – Offsetting financial assets and financial liabilities 01-Jan-14Amendments to IAS 36 – Recoverable amount disclosures for non-financial assets 01-Jan-14Amendments to IAS 39 – Novation of derivatives and continuation of hedge accounting 01-Jan-14IFRIC 21 – Levies 01-Jan-14

These standards were applied for the first time by the Group in 2014 and there is a significant impact in the accounts mainly derived from theapplication of IFRS 11 – Joint Arrangements due to the abolition of the proportionate consolidation method regarding the Group’s investmentsin joint ventures and for the additional disclosures required by IFRS 12.

Impact of the application of IFRS 11-Joint arrangements:

Investments in joint ventures are accounted for, using the equity method (as the proportionate consolidation is no longer allowed). All thecompanies that were previously accounted for using the proportionate consolidation method have been reclassified as joint ventures underIFRS 11 and accounted using the equity method. In accordance to IAS 8 – “Accounting policies, changes in accounting estimates and errors”,these changes in the Group’s accounting policies have been applied retrospectively. Therefore the consolidated statements of financialposition as of 1 January 2013 and 31 December 2013 and the consolidated statements of profit or loss, comprehensive income, changes inequity and cash flows for the period ended 31 December 2013 have been restated.




2 PRINCIPAL ACCOUNTING POLICIES (continued)

2.1. Basis of preparation (continued)

The effect of these changes can be detailed as follows:

Consolidated statements of financial position as at 1 January 2013

31 December 2012 Effect of as approved by the adoption of 31 December 2012

ASSETS Board of Directors IFRS 11 Restated

Non-Current Assets:Investment properties 2,838,468 (2,081,810) 756,658Investment properties under development 224,722 (164,585) 60,137Property, plant and equipment 2,590 (709) 1,881Goodwill 45,721 (10,189) 35,532Intangible assets 3,658 (663) 2,995Investments in joint ventures and associates 81,730 731,712 813,442Deferred tax assets 27,319 (12,937) 14,382State and other public entities 105 – 105Other non current assets 44,295 139,744 184,039

Total non-current assets 3,268,608 (1,399,437) 1,869,171

Current Assets:Trade receivables 36,996 (8,398) 28,598State and other public entities 27,521 (17,665) 9,856Other receivables 13,084 (9,275) 3,809Other current assets 10,829 (1,844) 8,985Cash and cash equivalents 251,296 (157,211) 94,085

Total current assets 339,726 (194,393) 145,333

Total assets 3,608,334 (1,593,830) 2,014,504


Equity:Share capital 162,245 – 162,245Reserves 57,329 – 57,329Currency translation reserve (32,380) – (32,380)Hedging reserve (19,504) – (19,504)Retained earnings 719,001 – 719,001Consolidated net profit for the period attributable to the equity holders of Sonae Sierra (45,882) – (45,882)

Equity attributable to the equity holders of Sonae Sierra 840,809 – 840,809Non-controlling interests 531,676 (177,471) 354,205

Total equity 1,372,485 (177,471) 1,195,014

Liabilities:Non Current Liabilities:Bank loans – net of current portion 1,195,149 (792,089) 403,060Debentures loans – net of current portion 54,378 (54,378) –Derivative financial instruments 53,466 (15,335) 38,131Other shareholders 6,766 (3,337) 3,429Accounts payable to suppliers 513 (486) 27Other non current liabilities 22,956 (17,368) 5,588Provisions 237 – 237Deferred tax liabilities 467,254 (354,523) 112,731

Total non current liabilities 1,800,719 (1,237,516) 563,203

Current Liabilities:Current portion of long term bank loans 126,123 (107,876) 18,247Current portion of long term debentures loans 74,876 – 74,876Short term bank loans and other borrowings 13,122 – 13,122Other shareholders 10,791 1,785 12,576Accounts payable to suppliers 33,481 (11,528) 21,953State and other public entities 34,241 (25,027) 9,214Other payables 52,021 (6,610) 45,411Other current liabilities 89,034 (28,485) 60,549Provisions 1,441 (1,102) 339

Total current liabilities 435,130 (178,843) 256,287

Total equity, non-controlling interests and liabilities 3,608,334 (1,593,830) 2,014,504






Consolidated statement of financial position as at 31 December 2013

31 December 2013 Effect of as approved by the adoption of 31 December 2013

ASSETS Board of Directors IFRS 11 Restated

Non-Current Assets:Investment properties 2,798,666 (1,964,804) 833,862Investment properties under development 102,589 (37,155) 65,434Property, plant and equipment 3,310 (1,759) 1,551Goodwill 16,384 (9,191) 7,193Intangible assets 3,363 (784) 2,579Investments in joint ventures and associates 78,153 708,483 786,636Shareholders 826 96,086 96,912Deferred tax assets 20,441 (7,098) 13,343Other non current assets 21,294 (13,780) 7,514

Total non-current assets 3,045,026 (1,230,002) 1,815,024

Current Assets:Trade receivables 31,165 (8,760) 22,405Shareholders – 15,046 15,046Other receivables 35,126 (4,407) 30,719State and other public entities 24,577 (18,281) 6,296Other current assets 10,741 770 11,511Cash and cash equivalents 193,939 (104,620) 89,319

Total current assets 295,548 (120,252) 175,296

Total assets 3,340,574 (1,350,254) 1,990,320


Equity:Share capital 162,245 – 162,245Reserves 57,329 – 57,329Currency translation reserve (91,695) – (91,695)Hedging reserve (11,807) – (11,807)Retained earnings 674,701 – 674,701Consolidated net profit for the period attributable to the equity holders of Sonae Sierra 3,637 – 3,637

Equity attributable to the equity holders of Sonae Sierra 794,410 – 794,410Non-controlling interests 494,347 (161,861) 332,486

Total equity 1,288,757 (161,861) 1,126,896

Liabilities:Non Current Liabilities:Bank loans – net of current portion 1,060,345 (660,959) 399,386Debentures loans – net of current portion 119,724 (45,300) 74,424Derivative financial instruments 31,690 (3,974) 27,716Shareholders 6,892 527 7,419State and other public entities 13 – 13Accounts payable to suppliers 592 (592) –Other non current liabilities 24,100 (16,303) 7,797Provisions 45 (45) –Deferred tax liabilities 428,206 (302,520) 125,686

Total non current liabilities 1,671,607 (1,029,166) 642,441

Current Liabilities:Current portion of long term bank loans 182,613 (106,022) 76,591Current portion of long term debentures loans (139) – (139)Short term bank loans and other borrowings 5,661 – 5,661Other shareholders 56 639 695Accounts payable to suppliers 23,871 (9,657) 14,214State and other public entities 18,699 (10,229) 8,470Other payables 49,783 (5,059) 44,724Other current liabilities 98,444 (28,242) 70,202Provisions 1,222 (657) 565

Total current liabilities 380,210 (159,227) 220,983

Total equity, non-controlling interests and liabilities 3,340,574 (1,350,254) 1,990,320






Consolidated statement of profit or loss for the year ended 31 December 2013

2013as approved by the Effect of adoption 2013Board of Directors of IFRS 11 Restated

Services rendered 358,005 (156,629) 201,376Variation in fair value of the investment properties (82,357) 6,602 (75,755)Other operating revenue 14,656 (6,928) 7,728

290,304 (156,955) 133,349

External supplies and services (127,589) 31,108 (96,481)Personnel expenses (49,681) 7,130 (42,551)Depreciation and amortisation (2,102) 447 (1,655)Provisions and impairment (7,873) 2,138 (5,735)Impairment losses and write-off (4,755) – (4,755)Other operating expenses (12,832) 7,972 (4,860)

(204,832) 48,795 (156,037)

85,472 (108,160) (22,688)

Finance income 9,872 (2,965) 6,907Finance expenses (60,583) 33,876 (26,707)Share of results of associates (3,017) 32,868 29,851Gains and losses on investments (9,728) (1,933) (11,661)

Profit before income tax 22,016 (46,314) (24,298)

Income tax (13,591) 24,324 10,733

Profit after income tax 8,425 (21,990) (13,565)

Consolidated net profit for the period 8,425 (21,990) (13,565)

Attributable to:Equity holders of Sonae Sierra 3,637 – 3,637Non-controlling interests 4,788 (21,990) (17,202)

8,425 (21,990) (13,565)

Consolidated net profit per share:Basic 0.11 0.11Diluted 0.11 0.11

Up to the date of approval of these financial statements, the following standards and interpretations, with mandatory application in futurereporting dates, have been endorsed by the European Union:


beginning on/after

Annual improvements to IFRS (2011-2013 cycle) 01-Jan-15

These standards, despite being endorsed by the European Union, have not been adopted by the Group in 2014 because their application isnot yet mandatory. Nevertheless, no significant impacts are expected from its future adoption.






The following standards and interpretations were issued by the IASB but have not yet been endorsed by the European Union:


beginning on/after

IFRS 9 – Financial instruments 01-Jan-18IFRS 14 – Regulatory deferral accounts 01-Jan-16IFRS 15 – Revenue from contracts with customers 01-Jan-17Amendments to IFRS 11 – Accounting for acquisition of interests in joint operations 01-Jan-16Amendments to IAS 16 and IAS 38 – Clarification of acceptable methods of depreciation and amortization 01-Jan-16Amendments to IAS 16 and IAS 41 – Bearer plants 01-Jan-16Amendments to IAS 19 – Defined benefit plans: Employee contributions 01-Jul-14Amendments to IFRS 10 and IAS 28 – Sale or contribution of assets between the investor and the associate or joint venture 01-Jan-16Amendments to IAS 27 – Application of equity method to measure investments in subsidiaries 01-Jan-16Amendments to IFRS 10, IFRS 12 and IAS 28 – Clarifications related to the exception from consolidation of investment entities 01-Jan-16Amendments to IAS 1 – Improvements in disclosures 01-Jan-16Annual improvements to IFRS (2010-2012 cycle) 01-Jul-14Annual improvements to IFRS (2012-2014 cycle) 01-Jan-16

Any of these standards were adopted by the Group as they were not yet endorsed by the European Union. Nevertheless, no significantimpacts are expected from its future adoption.

The Group have adopted International Financial Reporting Standards in the preparation of consolidated financial statements since 1 January2001. The effect of the adjustments as of 31 December 2000, relating to changes in accounting principles to IFRS, amounting to kEuro222,684, was recorded in the equity captions “Retained earnings” (kEuro 223,565), “Hedging reserve” (negative amount of kEuro 946) and“Translation reserve” (kEuro 65).

2.2. Basis of Consolidation and investments in joint ventures and associates

The financial statements of the parent company and its subsidiaries, joint ventures and associates, included for the purpose of theseconsolidated financial statements, have been prepared up to 31 December 2014 and have been adjusted, where applicable, to ensureconsistency with the Group’s accounting principles, described below.

a) Basis of consolidation

The consolidated financial statements incorporate the financial statements of the parent-company (Sonae Sierra) and the entitiescontrolled by Sonae Sierra (subsidiaries). Control is achieved when the Company, has all of the following:

> power over the investee;

> is exposed, or has rights, to variable returns from its involvement with the investee; and

> the ability to use its power to affect its returns.

The Group reassesses whether or not it controls an entity if facts and circumstances indicate that there are changes to one or more ofthe three elements of control listed above. When the Company has less than a majority of the voting rights of an entity, it has power overthe entity when the voting rights are sufficient to give it the practical ability to direct the relevant activities of the entity unilaterally.TheCompany considers all relevant facts and circumstances in assessing whether or not the Company’s voting rights in an entity aresufficient to give it power, including:

> the size of the Company’s holding of voting rights relative to the size and dispersion of holdings of the other vote holders;

> potential voting rights held by the Company, other vote holders or other parties;

> rights arising from other contractual arrangements; and

> any additional facts and circumstances that indicate that the Company has, or does not have, the current ability to direct therelevant activities at the time that decisions need to be made, including voting patterns at previous shareholders’ meetings.





2.2. Basis of Consolidation and investments in joint ventures and associates (continued)

a) Basis of consolidation (continued)

As of 31 December 2014 and 2013 there were no entities to which these conditions applied.

Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of thesubsidiary, by using the full consolidation method.

The purchase method of accounting is used when recording the acquisition of subsidiaries (Note 2.2.d)).

The interests in the net assets of subsidiaries that do not belong to the Group (non-controlling interests) are presented within equity,separately from equity attributable to equity holders of the parent company, under the caption "Non-controlling interests”. Non-controlling interests consist of the amount of those interests at acquisition date (Note 2.2.d)) and of the proportion in changes in equityof subsidiaries acquired after the purchase date.

The net result and each component of comprehensive income are allocated to the Group and to the non-controlling interests inproportion to their holding (ownership interest), even if this results in a deficit balance of non-controlling interests.

All intercompany transactions (including gains/losses obtained in sales within the Group), balances and dividends distributed within theGroup are eliminated in the consolidation process.

When the Group loses control of a subsidiary, a gain or loss is recognised in the statement of profit or loss and is calculated as thedifference between (i) the aggregate of the fair value of the consideration received and the fair value of any retained interest in theformer subsidiary and (ii) the previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary and any non-controlling interests. The fair value of any investment retained in the former subsidiary at the date when control is lost is regarded as thefair value on initial recognition for subsequent accounting under IAS 39, or, when applicable, the cost on initial recognition of aninvestment in an associate or a joint venture.

The changes in ownership interest in the Group's subsidiaries that do not result in loss of control are recorded as equity transactions.

The subsidiaries included in the consolidated financial statements by the full consolidation method are listed in Note 3.

b) Joint ventures and associates

A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of thejoint arrangement instead of rights to the assets and obligations for the liabilities of the joint arrangement. Joint control is thecontractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities requireunanimous consent of the parties sharing control.

Associates are entities where the Group exercises significant influence. Significant influence (presumed when the contribution is above20%) is the power to participate in the financial and operating decisions of the entity, but do not hold the control on joint control overthose decisions.

Investments in joint ventures and associates are measured under the equity method, after initial recognition.

Under the equity method, investments in joint ventures and associates are recognised at cost on acquisition, adjusted after the date ofacquisition, by the amount corresponding to the Group's proportion in net profit or loss and other comprehensive income of joint venturesand associates after that date. By applying the equity method, the Group's share in net profit or loss and other comprehensive income ofjoint ventures and associates is recorded against the statement of profit or loss or other comprehensive income, respectively, and thedividends received are deducted from the value of the investment.

The excess of cost of acquisition over the fair value of identifiable assets and liabilities of each joint venture and associate at theacquisition date is recognised as goodwill (Note 2.2.d)) and is kept under the caption of the investments in joint venture and associates. Ifthe difference between the acquisition cost and fair value of assets and liabilities acquired is negative, it is recognised as a gain for theyear in the statement of profit or loss.

The investments in joint ventures and associates including, when applicable, any goodwill (Note 2.2. d)), included as part of theinvestment in joint venture and associates, are assessed for impairment purposes when there are indicators that the asset may beimpaired. Any existing impairment loss is recorded as a loss in the statement of profit or loss.

When the Group's share of accumulated losses of the joint venture or associate exceeds the amount at which the investment is recorded,the investment is reported at nil value and the recognition of losses is discontinued, except in the extent of the Group’s commitmenttowards the joint venture or associate.






b) Joint ventures and associates (continued)

Unrealised gains and losses arising from transactions with joint ventures and associates are eliminated to the extent of the Group’sinterest in the joint venture or associate against the investment in that joint venture or associate.

The Group discontinues the use of the equity method from the date when the investment ceases to be a joint venture or an associate orwhen the investment is classified as held for sale. When the Group retains an interest in the former joint venture or associate and theretained interest is a financial asset, the Group measures the retained interest at fair value at that date and the fair value is regarded asits fair value on initial recognition in accordance with IAS 39. The difference between: (i) the carrying amount of the joint venture orassociate at the date the equity method was discontinued, and (ii) the fair value of any retained interest and any proceeds from disposingof a part interest in the joint venture or associate, is included in the determination of the gain or loss on disposal of the joint venture orassociate.

If the investment becomes a subsidiary, the Group applies IFRS 3 – Business Combinations and IFRS 10 – Consolidated financialstatements (Notes 2.2. a) and 2.2. d)).

The Group continues to use the equity method when an investment in an associate becomes an investment a joint venture or aninvestment in a joint venture becomes an investment in an associate. There is no remeasurement to fair value upon such changes inownership interests.

Investments in joint ventures are listed in Note 4.

Investments in associates are listed in Note 5.

c) Joint operations

A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the assets, andobligations for the liabilities, relating to the arrangement.

As of 31 December 2014 and 2013 there are no joint operations within the Group.

d) Goodwill

In the acquisitions of subsidiaries after 1 January 2010, the positive differences between the transferred price (usually acquisition cost)increased by the amount of non-controlling interests at acquisition date and the fair value of identifiable net assets acquired and theassumed liabilities of such companies at the acquisition date, are recorded under caption "Goodwill". If the difference is negative, it isrecognised as a gain of the year. The non-controlling interests at acquisition date are measured at fair value or by their share of the fairvalue of identifiable net assets at the acquisition date.

The positive differences between the acquisition cost of investments in subsidiaries acquired until 31 December 2009, joint ventures andassociates and the fair value of identifiable assets and liabilities attributable to the Group of those companies at the acquisition date, arerecorded under the caption "Goodwill (in the case of investments in subsidiaries) or in investment in joint ventures and associates (in thecase of investments in joint ventures and associates). If the difference is negative, it is recognised as a gain of the year. Non-controllinginterests include, in the case of acquisition of subsidiaries, their proportion in the fair value of identifiable assets and liabilities at theacquisition date.

The goodwill resulting from acquisitions occurred until 31 March 2004 was up to 2004 inclusive and in accordance with IFRS 3 – BusinessCombinations (“IFRS 3”), depreciated during the expected period to recover the investment and the corresponding depreciation andimpairment of Goodwill was recorded in the statement of profit or loss. From 1 January 2005, the goodwill resulting from theseacquisitions was no longer depreciated, with the carrying value being subject to impairment tests, carried out at each reporting date.

The goodwill resulting from acquisitions made after 31 March 2004 is not depreciated and is tested for impairment at each reporting date.

Any impairment loss on goodwill is immediately recognised in the statement of profit or loss of the year under the caption "Write-off andimpairment losses” and not subsequently reversed.

The impairment tests of goodwill are based on the Net Asset Value (“NAV”) of the shares held, at each reporting date.

The NAV corresponds to evaluation at fair value, at each reporting date, of the net assets of the subsidiary excluding deferred taxliabilities relating to unrealised gains on investment properties.






e) Translation of financial statements of foreign entities

The entities that operate abroad and are financially, economically and organisationally autonomous are considered as foreign entities.

The assets and liabilities of the financial statements of foreign entities are translated to Euro at the exchange rate as of the reportingdate and the income and expenses and also the cash-flow statement are translated to Euro using the average exchange rate. Theamount related to the exchange rate difference is recorded in the equity under the caption “Translation reserve”.

Goodwill and fair value adjustments resulting from the acquisition of those foreign entities are considered as assets and liabilities of thatforeign entity, being translated to Euro at the exchange rate existing as of each reporting date.

Whenever a foreign entity is sold, the accumulated exchange differences are recognised as a gain or loss in the consolidated statement ofprofit or loss.

The exchange rates used for the conversion into Euro of the accounts of foreign subsidiaries, joint ventures and associates were thefollowing:

2014 2013

31.12.14 Average 31.12.13 Average

Brazilian Real 0.31049 0.32063 0.30697 0.35076New Romanian Leu 0.22311 0.22502 0.22298 0.22627Colombian Peso 0.00035 0.00038 0.00038 0.00040Algerian Dinar 0.00945 0.00936 0.00931 0.00948Hong Kong Dollar 0.10619 0.09719 0.09352 0.09712Turkish Lira 0.35311 0.34430 0.33778 0.39651Chinese Yuan Renmimbi 0.13270 0.12234 0.11977 0.12253Moroccan Dirham 0.09116 0.08964 0.08904 0.08965Russian Rouble 0.01382 0.01989 – –

2.3. Investment Properties

Investment properties consist of investments in buildings and other constructions in shopping centres to earn rentals or capital appreciationor both, rather than for use in the production or supply of goods or services or for administration purposes or for sale in the ordinary course ofbusiness.

Investment properties are recorded at their fair value based on appraisals made by independent specialised entities (fair value model).Changes in fair value of investment properties are accounted for in the period in which they occur, under the statement of profit or losscaption “Variation in fair value of investment properties”.

The Group’s assets which qualify as investment properties are recognised as such when they start being used or, in the case of theinvestment properties under development, when their development is considered irreversible. By the time the asset qualifies as investmentproperty, it is booked at its historical or production cost under “Investment properties under development” as a tangible fixed asset– Property,Plant and Equipment (Note 2.4). Thereafter, such assets are accounted at their fair value. The difference between fair value and cost (ofpurchase or production), at that date, is recorded directly in the statement of profit or loss, under caption “Variation in fair value of investmentproperties”.

Costs incurred related to investment properties in use, namely maintenance, repairs, insurance and property taxes are recognised as anexpense in the statement of profit or loss for the year to which they relate. The improvements estimated to generate additional economicbenefits are capitalised under the caption “Investment properties”.

If an investment property becomes owner-occupied, it is reclassified to the caption “Property, plant and equipment”.

Fit out contracts are contracts under which the Group supports part of the expenses incurred with the fit out expenses and the tenantassumes the responsibility to reimburse the Group by the amount invested over the term of the contract, in terms and conditions specific toeach contract. The amounts paid by the Group on each fit out contract are initially recorded at cost under the caption “Investmentproperties”, being subsequently adjusted to the corresponding fair value, at each reporting date, as determined by specialised independententities. The methodology used to determine the fair value of the fit out contracts is similar to the one used in determining the fair value ofthe investment property to which these contracts relates. Variations in fair value of the fit out contracts are recorded in the consolidatedstatement of profit or loss under the caption “Variation in fair value of the investment properties”.





2.4. Property, Plant and Equipment

Tangible fixed assets (Property, Plant and Equipment) are stated at cost less accumulated depreciation and any accumulated impairmentlosses.

Depreciation is provided on a straight-line basis, as from the date the assets start being used, over the estimated period of useful life of eachgroup of assets.

The depreciation rates used correspond to the following periods of estimated useful life:

Years

Buildings and other constructions 50Machinery and equipment 10Transport equipment 5Tools and utensils 4Administrative equipment 10Other property, plant and equipment 5

Tangible fixed assets in progress and investment properties under development are recorded at cost of acquisition or production, deductedfrom eventual impairment losses. As fixed assets in progress relate mainly to tangible fixed assets, that will qualify in the future asinvestment properties, those are classified separately in the statement of financial position, under the caption “Investment properties underdevelopment”.

Gains and losses arising from the sale or disposal (write-off) of tangible fixed assets are determined as being the difference between the saleprice and the corresponding carrying amount as of the sale/disposal date, being recorded in the statement of profit or loss, under the captions“Other operating income” or “Other operating expenses”.

2.5. Intangible assets

Intangible assets are stated at cost less accumulated depreciation and any impairment losses. Intangible assets are only recognised if it islikely to produce future economic benefits to the Group, are controlled by the Group and the cost of the asset can be reliably measured.

Expenditure on research activities are recorded as expenses in the period they are incurred.

Intangible assets as of 31 December 2014 consist mainly of:

> rights of facilities management, which are depreciated on a straight-line basis over the estimated period of the management right(periods ranging from 10 to 15 years);

> Software, which is depreciated over the estimated period of use (periods ranging from 3 to 5 years).

Depreciation of intangible assets are recorded in the statement of profit or loss under caption “Depreciation and amortisation”.

2.6. Assets available for sale

Non-current assets (and all related assets and liabilities to disclose) are classified as available for sale if it is expected that its book value willbe recovered through sale rather than through continuing use. This condition is considered fulfilled only when the sale is highly probable andthe asset (and all other related assets and liabilities to dispose) is available for immediate sale under current conditions. Additionally, theremust be in place measures that make expectable than the sale will be held within 12 months after the date of the classification under thiscaption.

Non-current assets (and all related assets and liabilities to dispose) classified as available for sale are measured at the lower of book value orfair value, less costs related to the sale. In return, these assets are not amortised.





2.7. Financial assets and liabilities

Assets and liabilities are recognised in the statement of financial position when the Group becomes party to the contract.

Financial assets are initially recorded at their acquisition value, which is the fair value, including transaction costs, except for financial assetsmeasured at fair value through profit or loss, where the transaction costs are immediately recorded in the statement of profit or loss.

The Group derecognises financial assets when: (i) the contractual rights to cash flows expire; (ii) it transfers to another entity the significantrisks and benefits associated with ownership of the property, or; (iii) despite having retained some, but not substantially the significant risksand benefits, has transferred the control over them.

The Group derecognises financial liabilities only when the corresponding obligation is settled, cancelled or expires.

Financial assets are classified into the following categories:

> Financial assets measured at fair value through profit or loss

> Financial assets held to maturity

> Loans and receivables

> Financial assets available for sale

Financial assets measured at fair value include mainly derivative financial instruments. The subsequent measurement of these financialassets are carried at fair value and recorded in the statement of changes in equity, if they qualify for hedge accounting purposes (Note 2.8). Ifthey do not qualify for hedge accounting purposes, the fair value of these financial assets is recorded in the statement of profit or loss.

Financial assets held to maturity are financial assets with fixed maturity and for which the Group has the intention and ability to hold to thatdate. In the particular case of the Group, there are currently no financial assets classified in this category.

Loans and receivables are generated during normal operations of the Group, for which there is no intention to negotiate. Classified in thiscategory are the accounts receivable and other receivables, loans to third parties and bank deposits. The subsequent measurement of thesefinancial assets is carried at amortised cost in accordance with the effective interest method.

Financial assets available for sale are financial assets that are not classified in any of the above mentioned categories. In this particular case,the Group should classify in this category financial investments which were not likely to be classified as subsidiaries, associates or jointlycontrolled entities. However, as of the date of these financial statements, no financial assets are classified in this category.

Financial liabilities are classified into the following categories:

> Financial liabilities measured at fair value through profit or loss

> Other financial liabilities

Financial liabilities measured at fair value include mainly derivative financial instruments. The subsequent measurement of these financialliabilities are carried at fair value and recorded in the statement of changes in equity if they qualify for hedge accounting purposes. If they donot qualify for hedge accounting purposes, the fair value of these financial liabilities is recorded in the statement of profit or loss.

Other financial liabilities correspond to other financial liabilities which are not classified in the former category. In this category are classifiedbank loans and loans from other entities, including shareholders and accounts payable and other payables. The subsequent measurement ofthese financial liabilities is carried at amortised cost, in accordance with the effective interest method.

a) Trade and Other Receivables

Accounts receivable and other receivables are recorded at amortised cost less any eventual impairment losses. Usually, the amortisedcost of these financial assets does not differ from its nominal value.

b) Borrowings

Loans are stated as liabilities and measured at amortised cost.

Any expenses incurred in obtaining such financing, usually paid in advance on issue, namely the bank fees and stamp duty as well asinterest and similar expenses, are recognised using the effective interest method in the results of the year, over the lifetime of suchfinancing. These prepaid expenses are deducted from the caption “Bank loans”.

Financial expenses including interest expenses and similar expenses (namely stamp duty), are recorded in the statement of profit or losson an accrual basis of accounting. The amounts due and not paid at the reporting date are recorded under the caption “Other currentliabilities”.





2.7. Financial assets and liabilities (continued)

c) Trade and Other Payables

Accounts payable and other payables are stated at amortised cost. Usually, the amortised cost of these liabilities does not differ from itsnominal value.

d) Cash and cash equivalents

The amounts under caption "Cash and cash equivalents" includes cash on hand, bank deposits on demand and other treasury applicationswhich mature in less than three months that are subject to insignificant risk of change in value.

These assets are measured at amortised cost. Usually, the amortised cost of these financial assets does not differ from its nominal value.

For purposes of the statement of cash flows, “Cash and cash equivalents” also include bank overdrafts, which are included in thestatement of financial position under caption “Other loans”.

e) Derivative financial instruments

The Group uses derivative financial instruments in managing their financial risks associated with fluctuating interest rate, only as a wayto hedge those risks. Derivatives are not used for trading purposes (speculation).

Derivative financial instruments used by the Group relate mainly to instruments for hedging interest rate on bank loans obtained, usuallycorresponding to "swap" or "zero cost collars" of interest rate.

Derivative financial instruments are initially recorded at fair value on the date of their contract. At each reporting date, they areremeasured at fair value, with the corresponding gain or loss on the remeasurement recorded immediately in the statement of profit orloss, unless such instruments are designated as hedging instruments. When they are designated as a hedging instrument (Note 2.8), thecorresponding gain or loss in the remeasurement is recorded against the caption "Hedging reserve" in equity and transferred to resultswhen the covered position affects the statement of profit or loss.

A derivative with a positive fair value is recognised under caption "Derivative financial instruments" as a financial asset. A derivativefinancial instrument with a negative fair value is recognised under the same caption but as a financial liability.

A derivative is presented as non-current if the remaining maturity exceeds 12 months and is not expected that it will be executed orsettled within that period.

In situations where there are derivatives embedded in other financial instruments or other host contracts, they are treated as separatederivatives in situations where the risks and characteristics are not closely related to the host contracts and in situations where the hostcontracts are not presented at fair value with unrealised gains or losses recorded in the statement of profit or loss.

2.8. Hedge accounting

As mentioned above, the Group uses derivative financial instruments (usually swaps and zero cost collars) to cover the risk of changinginterest rate on Group’s bank loans (cash flow hedge). The amount of loans, maturities, interest rates and reimbursement plan of loansunderlying such financial instruments to hedge interest rate are usually identical in all conditions established for the correspondentcontracted loans, which usually sets the perfect relationship coverage.

The criteria for classifying financial derivatives for hedging interest rate as cash flow hedges are as follows:

> The hedge transaction is expected to be highly effective in achieving offsetting changes in fair value or cash flows attributable to thehedged risk;

> the effectiveness of the hedge can be reliably measured;

> there is adequate documentation of the hedging relationships at the inception of the hedge;

> the forecasted transaction that is subject of the hedges is highly probable.

Derivative financial instruments used by the Group to hedge the exposure to changes in the interest rate of its loans are initially recorded atcost, if any, and subsequently adjusted to the corresponding fair value. Changes in fair value of these hedging instruments are recorded inequity under the caption “Hedging reserve”, and then recognised in the statement of profit or loss over the period the hedged instrumentaffects results, when those meet the conditions to hedge accounting, otherwise the changes in fair value are recognised through thestatement of profit or loss.

Hedge accounting of derivative instruments is discontinued when the instrument matures or is sold. Whenever a derivative instrument can nolonger be qualified as a hedging instrument, the fair value differences recorded in equity under the caption “Hedging reserve” are transferred toprofit or loss of the year or to the book value of the hedged asset; subsequent variations in fair value are recorded in the statement of profit or loss.





2.9. Accounting for leases

A lease is classified as (i) finance lease whenever the terms of the lease transfer substantially all the risks and rewards of ownership to thelessee and as (ii) an operating lease if the risks and rewards of ownership are not transferred to the lessee.

Classifying a lease as finance or an operating lease depends upon the substance of transaction rather than the form of the contract.

Accounting for leases where the Group is the lessee

The assets acquired through finance lease contracts, as well as the corresponding responsibilities are recognised by the financial method,including in the statement of financial position the acquired asset and the pending debts in accordance with the contractual terms. Inaddition, the interests included in the rents amount and the changes in the fair value of the investment property or the depreciation of thetangible assets, are posted in the statement of profit or loss of the year.

The existing situations where the Group is the lessee are operating leases and as such the lease payments are recognised as an expense on astraight-line basis over the lease term.

Accounting for leases where the Group is the lessor

The existing situations where the Group is the lessor relate to the contracts with the tenants of the shopping centres. These contracts areusually for a period of six years and establish the payment by the tenant of a monthly fixed rent (invoiced in advance), a turnover rent(invoiced if the monthly sales of the tenant are higher than the limit established in the contract) and the payment of tenant’s share in theshopping centre operating expenses (common charges). The contract with the tenant may also establish the payment of an entrance fee inthe shopping centre (key money income) and some discounts (usually in the first three years of the contract) to the fixed rent. Thesecontracts can be renewed or cancelled by any of the parties involved (the company or the tenant). If the cancellation is proposed by the lessorit must pay a cancellation fee (buy-out cost) to the tenant.

In accordance to the conditions of these contracts, they are classified as operating leases, being the rents (fixed and turnover rents) and thecommon charges recorded as revenue in the statement of profit or loss in the year to which they relate. The expenses (namely discounts onfixed income and buy-out costs) as well as the key income and the cancellation fee related with the operating leases are recorded asexpenses or income in the statement of profit or loss in the year to which they incurred or are received. This procedure is consistent with theone followed by the independent specialised entity which determines the fair value of the investment property to which the lease contractsare related (Note 2.3).

2.10. Borrowing costs

Financial costs related to borrowings are generally recognised as expense as incurred.

Borrowing costs related directly to the acquisition, construction or production of tangible assets (usually investment properties underdevelopment) are capitalised as part of the cost of the qualified asset. Borrowing costs are capitalised from the time of preparation of theactivities to construct or develop the asset to the time the production or construction is completed or when the development is suspended.Any eventual financial income derived from a loan obtained earlier and allocable to a qualifying account, are deducted from the financialexpenses that qualify for capitalisation.

2.11. Provisions

Provisions are recognised when, and only when, the Group has an obligation (legal or implicit) resulting from a past event and it is probablethat an outflow of resources will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.Provisions are reviewed and adjusted at the reporting date in order to reflect the best estimate as of that date.

Provisions for restructuring expenses are recognised by the Group when there is a formal and detailed restructuring plan and that such planhas been communicated to the involved parties.





2.12. Income tax

The income tax for the period comprises current and deferred tax.

The current income tax is determined based on the taxable results of the companies included in the consolidation in accordance with the taxlaws enacted or substantively enacted at the reporting date in the countries where their head offices are located.

Deferred taxes are calculated using the financial position liability method, reflecting the net tax effects of temporary differences between thecarrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Deferred tax assetsand liabilities are not recognised when the corresponding temporary differences arise from goodwill or from the initial recognition of assetsand liabilities other than in a business combination.

Deferred tax assets and liabilities are calculated and evaluated annually at the tax rates expected to apply to the period when the asset isrealized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantially issued at the reporting date.

Deferred tax assets are recognised only when it is probable that sufficient taxable profits will be available against which the deferred taxassets can be utilised. At the reporting date, a review is made of the deferred tax assets and they are reduced whenever their future use is nolonger probable.

Deferred tax assets and liabilities are recorded in the statement of profit or loss, except if they relate to items directly recorded in equitycaptions. In these situations the corresponding deferred tax is also recorded under the same caption.

2.13. Revenue

The Group's revenue is basically due to income from investment properties via the operating lease contracts and services related to commoncharges management of shopping centres, car parking operations, management fees in shopping centres held by third parties anddevelopment fees invoiced to third parties.

The revenue related to income from investment properties via the operating lease contracts with the tenants (Note 2.9) is recognised in theyear to which it relates, as follows:

> Fixed rent:

This income is invoiced in the previous month to which it relates and is recognised in the statement of profit or loss in the period to whichit relates.

> Turnover rent:

This income is contingent and payable when the sales exceed the limit specified in the lease contract. As such, this income is recorded onan accrual basis.

> Other income and expenses:

Revenue arising from key money is recognised when received from the tenants and the revenue arising from contract transfer fees isrecognised when charged to tenants, in the statement of profit or loss under captions "Other operating income" and "Services rendered",respectively. The discounts on fixed rents and the buy-out costs are recognised in the statement of profit or loss when granted totenants, under captions "Services rendered” (as a deduction) and "Other operating expenses", respectively.

This procedure is consistent with the methodology used by the independent specialised entity that determines the fair value of theinvestment property to which the lease contracts are related.

Extra-contractual discounts granted to tenants, on a casuistic basis, are recorded when granted, on the statement of profit or loss, underthe caption “Services rendered” (as a deduction).

Revenues arising from the services rendered related to common charges of the shopping centres, car parking operations, managementand development fees are recognised in the statement of profit or loss in the year to which they relate on an accrual basis of accountingand observing the stage of completion of service at the reporting date, provided that all the following conditions are met:

> The amount of the revenue can be reliably measured;

> It is likely that future economic benefits associated with the transaction will flow into the Group;

> The expenses incurred or to be incurred with the transaction can be reliably measured;

> The stage of completion of the transaction/service, at the reporting date, can be reliably measured.

The dividends are recognised as gains in the year they are assigned to the shareholders.





2.14. Accrual basis of accounting

The income and expenses are recognised in the year to which they relate, regardless of the date of payment or receipt (accrual basis ofaccounting). The income and expenses for which actual amounts are not known are estimated.

Under the captions "Other current assets" and "Other current liabilities” are recorded income and expenses attributable to the current year,which settlement or receipt will only occur in future years, as well as amounts paid and received that have occurred on the reporting date, butwhich relate to future periods, and that will be charged to the statement of profit or loss of the corresponding year.

2.15. Impairment of assets

a) Non-financial assets, excluding goodwill

With the exception of investment properties (Note 2.3) and deferred tax assets (Note 2.12), non-financial assets are assessed forimpairment at each reporting date and whenever events or changes in circumstances indicate that the amount by which the asset isregistered may not be recovered.

Whenever the carrying amount of an asset exceeds its recoverable amount, an impairment loss is recognised under the statement ofprofit or loss caption “Write-off and impairment losses”.

The recoverable amount is the higher of an asset’s net selling price and value in use. The net selling price is the amount obtainable fromthe sale of an asset in an arm’s length transaction less the costs of disposal. Value in use is the present value of estimated future cashflows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life. Recoverable amounts areestimated for individual assets or, if this is not possible, for the cash-generating unit to which the asset belongs.

Reversal of impairment losses recognised in prior years is recorded when there is an indication that the impairment losses recognised forthe asset no longer exists or has decreased. The reversal is recorded in the statement of profit or loss as operating result. However, theincreased carrying amount of an asset due to a reversal of an impairment loss is recognised to the extent it does not exceed the carryingamount that would have been determined (net of depreciations) in case no impairment loss had been recognised for that asset in prioryears.

b) Financial assets apart from investments in joint ventures and associates (note 2.2.b)) (usually accounts receivable, in the case of Group)

Whenever there are objective indicators that the Group will not receive the amounts it is entitled to, in accordance with the arrangementsagreed between the parties, an impairment loss is recorded in the statement of profit or loss. The indicators used by the Group to identifythe signs of impairment are:

> Failure on the maturity and/or other terms agreed between the parties;

> Financial constraints of the debtor;

> Probability of insolvency of the debtor.

Whenever there is such evidence, the existence of impairment losses is assessed, which is determined by the difference between theasset's carrying amount and its corresponding recoverable amount.

Impairment losses are recorded in the statement of profit or loss under the caption "Write-off and impairment losses" in the period theyare determined.

Subsequently, if the amount of the impairment loss reduces, it is reversed by results and recorded under the caption "Other operatingrevenue”.

2.16. Balances and transactions expressed in foreign currency

Transactions in currencies other than Euro are recorded at the exchange rates prevailing on the transaction date.

At each reporting date, all monetary assets and liabilities expressed in foreign currencies are translated to Euro using the closing exchangerates as of that date (Note 2.2.e)).

Exchange gains or losses, arising from differences between exchange rates effective at the date of transaction and those prevailing at thedate of collection, payment or at the reporting date, are recorded as income or expenses in the statement of profit or loss.

2.17. Current/non-current classification on the statement of financial position

Assets and liabilities due in more than one year from the reporting date are classified as non-current assets and liabilities, respectively.





2.18. Contingent assets and liabilities

Contingent liabilities are not recognised in the consolidated financial statements. They are disclosed in the notes unless the possibility of anoutflow of resources incorporating economic benefits is remote.

A contingent asset is not recognised in the consolidated financial statements but disclosed in the notes when an inflow of economic benefitsis probable.

2.19. Risk management policies

The Group’s activities are exposed to a variety of financial risks: market risk (including currency risk, interest rate risk and price risk), creditrisk and liquidity risk. The Group’s overall risk management programme focuses on the unpredictability of financial markets and seeks tominimise potential adverse effects on the Group’s financial performance.

Risk management is carried out by a central treasury department of the Group Sonae Sierra, under policies approved by the Board ofDirectors. The Board provides written principles for overall risk management, as well as written policies covering specific areas, such as foreignexchange risk, interest rate risk, and credit risk.

a) Foreign exchange risk

The main operating activity of each company is developed inside its country and consequently the majority of the company transactionsare maintained in the same currency of its country. The policy to cover this specific risk is to avoid, whenever possible, the contracting ofservices in foreign currency.

As the operational activity of the Company is maintained in Euros, the Company policy is to obtain its borrowings also in Euros, in order toeliminate the foreign currency risk.

b) Credit risk

The group’s credit risk results essentially from the credit risk of the tenants of the shopping centres managed by the Group. The controlof this risk is made by an adequate evaluation of the quality of the tenants before its acceptance in the shopping centre and theadequate control over the credit limits attributed to each tenant.

c) Liquidity risk

The needs of treasury are managed by the financial department of the Sonae Sierra Group, which monitors the surplus and deficits ofliquidity of each one of the companies included in the consolidation. The occasional needs for liquidity are covered by an adequate controlof the accounts receivables and by the maintenance of adequate limits of credit arranged by the Group with its banks.

d) Interest rate risk

The Group’s income and operating cash-flows are influenced by changes in market interest rates, since its cash and cash equivalents andintragroup financing granted are dependent on the evolution of the interest rates in Euro which, historically, have had little volatility.

On long-term financing, and as a way to mitigate the changes in the long-term interest rates, the Group contracts cash flow hedgeinstruments (“swaps”, “zero cost collars” or “caps”). Additionally, the Group also chose to fix the interest rate of some financings.





2.19. Risk management policies (continued)

d) Interest rate risk (continued)

Interest rate sensitivity analysis:

The sensitivity analysis below has been determined based on the exposure to interest rates for both derivatives and non-derivativeinstruments in place during the reporting period. For floating rate assets and liabilities, the analysis is prepared based on the followingassumptions:

> Changes in market interest rates affect the interest income or expense of floating rate interest financial instruments and, in the caseof fixed rates that were contracted during the period of analysis, changes in the interest rates also affect this component;

> Changes in market interest rates only affect interest income or expense in relation to financial instruments with fixed interest rates ifthese are recognised at their fair value. As such, all financial instruments with fixed interest rates that are carried at amortised costare not subject to interest rate risk, as defined in IFRS 7;

> In the case of fair value hedges designed for hedging interest rate risks, when the changes in the fair values of the hedged item andthe hedging instrument attributable to interest rate movements are offset almost completely in the income statement in the sameperiod, these financial instruments are also not exposed to interest rate risk;

> Changes in market interest rates affect the fair value of derivatives designated as hedging instruments;

> The fair value of derivative financial instruments (“swaps”, “zero cost collars” or “caps”) and other financial assets and liabilities isestimated by discounting the future cash flows to their net present values, using appropriate market rates prevailing at yearend andassuming a parallel shift in yield curves;

> For the purposes of this sensitivity analysis, such analysis is performed based on all financial instruments outstanding at the end ofthe relevant year.

Sensitivity analyses are performed by changing one variable while holding all other variables constant. Nonetheless, this is a restrictiveand highly unlikely assumption, since variables tend to be correlated.

If interest rates had been 75 basis points higher and all other variables were held constant, assumptions unlikely to occur due to interestrates correlation with other variables, the impact in the Group net profit and equity would be the following:

20132014 (Restated)

+75 b.p. +75 b.p.

Net Profit (1) 547 1,130Reserves (2) 1,844 2,996

(1) This is mainly attributable to the Group’s exposure to interest rates on its variable rate borrowings;

(2) This is mainly a result of the changes in the fair value of derivatives entered as cash flow hedges which are efficient.

As of 31 December 2014 and 2013 the interest rate sensitive analysis if the interest rates had been 25 basis points lower was not donebecause Euribor in 2014 and 2013 was close to 0.25%.

In management’s opinion the sensitivity analysis is representative of the inherent interest rate risk of the year and expenses may notreflect the exposures during the year, due to any repayments made.





2.20. Financial instruments by category

The financial instruments according to the policies described in Note 2.7. were classified as follows:

Financial Assets

Loans and accounts receivable

As of 31 December 2014Non current assetsOther non-current assets 113,966

113,966

Current assetsTrade receivables 21,986Other receivables 30,880Cash and cash equivalents 71,651

124,517

238,483

As of 31 December 2013 – restatedNon current assetsOther non-current assets 104,426

104,426

Current assetsTrade receivables 22,405Other receivables 45,765Cash and cash equivalents 89,319

157,489

261,915





2.20. Financial instruments by category (continued)

Financial Liabilities

Liabilities at fair Derivatives value through used for cash Financial

profit or loss flow hedging liabilities at(Note 18) (Note 18) amortised cost Total

As of 31 December 2014Non current liabilities:Bank loans 393,628 393,628Debentures loans 74,575 74,575Finance Lease creditors 78 78Derivative financial instruments 7,532 10,697 18,229Other Shareholders 3,610 3,610Trade payables 29 29Other non-current liabilities 9,091 9,091

7,532 10,697 481,011 499,240

Current liabilities:Bank loans 58,871 58,871Debentures loans (150) (150)Finance Lease creditors 23 23Other Shareholders 3,864 3,864Accounts payable to suppliers 13,327 13,327Other payables 10,277 10,277

– – 86,212 86,212

7,532 10,697 567,223 585,452

As of 31 December 2013 – restatedNon current liabilities:Bank loans 399,386 399,386Debentures loans 74,424 74,424Derivative financial instruments 11,693 16,023 27,716Other Shareholders 7,419 7,419Other non-current liabilities 7,797 7,797

11,693 16,023 489,026 516,742

Current liabilities:Bank loans 82,252 82,252Debentures loans (139) (139)Other Shareholders 695 695Accounts payable to suppliers 14,214 14,214Other payables 44,724 44,724

– – 141,746 141,746

11,693 16,023 630,772 658,488





2.21. Judgments and estimates

In the preparation of the accompanying consolidated financial statements estimates were used which affected the assets and liabilities andalso the amounts recognised as income and expenses during the reporting period.

The estimates were calculated using the best information available, at the date of approval of the financial statements, of the events andtransactions in course and of the experience from current and/or past events. However, events may occur in subsequent periods that wereunanticipated as of the date of these statements and, consequently were not included in those estimates. Changes in the estimates after theclosing of the consolidated financial statements will be booked in the subsequent year, as required in IAS 8.

The principal estimates of the Group relates to fair value, namely the fair value of the investment properties, the goodwill, the derivatives anddeferred tax assets, as follows:

a) Investment properties

The investment properties in operation are recorded at their fair value based on annual appraisals by independent specialised entities.Those valuations assume several assumptions, including the estimate of future income and expense of each property and the use of anappropriate discount rate.

The investment properties under development measured at cost, the Group follows the procedure of, on an annual basis, evaluating theirperformance through assessments carried out by independent specialized agencies and/or testing carried out internally, in which the netcash flows expected of those properties are considered.

b) Derivative financial instruments

The derivative financial instruments are usually used by the Group to hedge the cash flow in the form of swaps (“interest rate swap”) orzero cost collars. The fair value of those derivatives is, at each reporting date, calculated by external entities (usually the financialinstitution with which the derivative was contracted). The fair value calculated by them is internally tested in order to validate thecalculation performed by the third parties.

c) Goodwill

The impairment tests on Goodwill are based on the “Net Asset Value” (“NAV”) at the reporting date of the financial investment.

d) Deferred tax assets

The deferred tax assets are recognised only if it is expected that future fiscal profits will be enough to use the deferred tax assets. At eachreporting date, the deferred tax assets are assessed and they are reduced if future recoverability is unanticipated. This revision is basedon projections of the future activity of each company where it is applicable.

e) Other assets and liabilities

Concerning the other assets and liabilities, such as VAT to be reimbursed by tax authorities and the legal and fiscal processes that arereflected in the financial statements of the companies, the Legal and Fiscal departments are consulted by the Board to assess theprobability of receiving and/or paying such amounts. With that information the Board will estimate which adjustments will be made in thefinancial statements.

The main assumptions used in the Group estimates are disclosed in each related note.

2.22. Operating segments

Operating segments are reported in accordance with the information used internally by the management of the Group.

2.23. Subsequent events

Events occurred after the reporting date that provide additional information about conditions that existed at the reporting date (adjustingevents) are reflected in the financial statements. Events occurred after the reporting date that provide information on conditions that occurafter the reporting date (non-adjusting events) are disclosed in the consolidated financial statements, if materially significant.




3 SUBSIDIARIES

The subsidiaries of the Group, their head offices, and the percentage of interests held by the Group as of 31 December 2014 and 2013, are asfollows:

Ownership interests and voting rights held

Company Head office 31.12.14 31.12.13

Parent companySonae Sierra, SGPS, S.A. Maia (Portugal) – –

Subsidiaries

Corporate servicesSierra Services Holland B.V. Amsterdam (Netherlands) 100.00% 100.00%Sierra Services Holland 2 B.V. Amsterdam (Netherlands) 100.00% 100.00%

Investment3shoppings – Holding, SGPS, S.A Maia (Portugal) 50.10% 50.10%ALEXA Holding GmbH Dusseldorf (Germany) 100.00% 100.00%ALEXA Shopping Centre GmbH Dusseldorf (Germany) 100.00% 100.00%Algarveshopping- Centro Comercial, S.A. Maia (Portugal) 50.10% 50.10%Avenida M-40 B.V. Amsterdam (Netherlands) 50.10% 50.10%Beralands B.V. Amsterdam (Netherlands) 100.00% 100.00%Cascaishopping-Centro Comercial, S.A. Maia (Portugal) 57.24% 57.24%Cascaishopping Holding I, SGPS, S.A. Maia (Portugal) 57.24% 57.24%Coimbrashopping- Centro Comercial, S.A. Maia (Portugal) 50.10% 50.10%Dos Mares – Shopping Centre B.V. Amsterdam (Netherlands) 50.10% 50.10%Dos Mares-Shopping Centre, S.A. Madrid (Spain) 50.10% 50.10%Estação Viana- Centro Comercial, S.A. Viana do Castelo (Portugal) 50.10% 50.10%Gli Orsi Shopping Centre 1 Srl Milan (Italy) 100.00% 100.00%Guimarãeshopping- Centro Comercial, S.A. Maia (Portugal) 50.10% 50.10%

3) Inparsa – Gestão de Galeria Comercial, S.A. Maia (Portugal) – 100.00%Land Retail B.V. Amsterdam (Netherlands) 64.37% 64.37%Luz del Tajo – Centro Comercial S.A. Madrid (Spain) 50.10% 50.10%Luz del Tajo B.V. Amsterdam (Netherlands) 50.10% 50.10%Maiashopping- Centro Comercial, S.A. Maia (Portugal) 50.10% 50.10%Münster Arkaden, B.V. Amsterdam (Netherlands) 50.10% 50.10%Paracentro – Gestão de Galerias Comerciais, S.A. Maia (Portugal) 100.00% 100.00%Plaza Eboli – Centro Comercial S.A. Madrid (Spain) 100.00% 100.00%Plaza Mayor Parque de Ócio B.V. Amsterdam (Netherlands) 50.10% 50.10%Plaza Mayor Parque de Ocio, S.A Madrid (Spain) 50.10% 50.10%Plaza Mayor Shopping B.V. Amsterdam (Netherlands) 50.10% 50.10%Plaza Mayor Shopping, S.A. Madrid (Spain) 50.10% 50.10%Project Sierra 8 B.V. Amsterdam (Netherlands) 50.10% 50.10%

3) Project Sierra Spain 2 B.V. Amsterdam (Netherlands) – 100.00%River Plaza B.V. Amsterdam (Netherlands) 100.00% 100.00%River Plaza Mall, Srl Bucharest (Romania) 100.00% 100.00%Shopping Centre Parque Principado B.V. Amsterdam (Netherlands) 50.10% 50.10%Sierra Berlin Holding B.V. Amsterdam (Netherlands) 100.00% 100.00%Sierra European Retail Real Estate Assets Holdings B.V. Amsterdam (Netherlands) 50.10% 50.10%Sierra GP Limited Guernsey 100.00% 100.00%Sierra Investments (Holland) 1 B.V. Amsterdam (Netherlands) 100.00% 100.00%Sierra Investments (Holland) 2 B.V. Amsterdam (Netherlands) 100.00% 100.00%Sierra Investments Holdings B.V. Amsterdam (Netherlands) 100.00% 100.00%Sierra Investments SGPS, S.A. Maia (Portugal) 100.00% 100.00%Sierra Solingen Holding GmbH Dusseldorf (Germany) 100.00% 100.00%SPF – Sierra Portugal Luxembourg 100.00% 100.00%




3 SUBSIDIARIES (continued)



ManagementSierra Germany GmbH Dusseldorf (Germany) 100.00% 100.00%Sierra Italy Srl Milan (Italy) 100.00% 100.00%Sierra Management, SGPS, S.A. Maia (Portugal) 100.00% 100.00%Sierra Portugal, S.A. Lisbon (Portugal) 100.00% 100.00%Sierra Romania Shopping Centers Services, SRL Bucharest (Romania) 100.00% 100.00%

2) Sierra Spain, Shopping Centers Services, SL Madrid (Spain) – 100.00%1) Sierra Spain, Shopping Centers Services, S.A Madrid (Spain) 100.00% 100.00%4) 5) Sierra Turkey Gayrimenkul Yönetim Pazarlama ve Danışmanlık A.Ş. Istanbul (Turkey) 100.00% 50.00%

DevelopmentARP Alverca Retail Park, S.A. Maia (Portugal) 100.00% 100.00%CCCB Caldas da Rainha – Centro Comercial, S.A. Maia (Portugal) 100.00% 100.00%

3) Craiova Mall, B.V. Amsterdam (Netherlands) – 100.00%Dortmund Tower GmbH Dusseldorf (Germany) 100.00% 100.00%Ioannina Development of Shopping Centres, S.A. Athens (Greece) 100.00% 100.00%Parque de Famalicão – Empreendimentos Imobiliários, S.A. Maia (Portugal) 100.00% 100.00%Project Sierra 2 B.V. Amsterdam (Netherlands) 100.00% 100.00%Project Sierra 10 B.V. Amsterdam (Netherlands) 100.00% 100.00%Project Sierra 11 B.V. Amsterdam (Netherlands) 100.00% 100.00%Project Sierra 12 B.V. Amsterdam (Netherlands) 100.00% 100.00%Project Sierra Four, SA Bucharest (Romania) 100.00% 100.00%Project Sierra Germany 2 (two) – Shopping Centre, GmbH Dusseldorf (Germany) 100.00% 100.00%Project Sierra Germany 4 (four) – Shopping Centre, GmbH Dusseldorf (Germany) 100.00% 100.00%Project Sierra Spain 1 B.V. Amsterdam (Netherlands) 100.00% 100.00%Project Sierra Spain 2- Centro Comercial S.A. Madrid (Spain) 100.00% 100.00%Project Sierra Spain 3 B.V. Amsterdam (Netherlands) 100.00% 100.00%Project Sierra Two, Srl Bucharest (Romania) 100.00% 100.00%Microcom Doi, Srl Bucharest (Romania) 100.00% 100.00%Sierra Asia Limited Hong Kong 100.00% 100.00%Sierra Greece, S.A. Athens (Greece) 100.00% 100.00%Sierra Developments Holding B.V. Amsterdam (Netherlands) 100.00% 100.00%Ownershipinterests and votingrights heldSierra Developments, SGPS, S.A. Maia (Portugal) 100.00% 100.00%

3) Sierra Italy Holding B.V. Amsterdam (Netherlands) – 100.00%Sierra Project Nürnberg B.V. Amsterdam (Netherlands) 100.00% 100.00%Sierra Real Estate Greece B.V. Amsterdam (Netherlands) 100.00% 100.00%Sierra Zenata Project B.V. Amsterdam (Netherlands) 100.00% 100.00%Weiterstadt Shopping B.V. Amsterdam (Netherlands) 100.00% 100.00%

1) Ex – Sierra Spain 2 Services, S.A.2) Company merged into Sierra Spain, Shopping Centers Services, S.A. with effects since 1 January 2014.3) Companies liquidated during 2014.4) Ex – Sierra Reval Gayrimenkul Yönetim Pazarlama ve Danışmanlık A.Ş.5) Acquisition in December 2014 of the remaining 50% of the share capital.

.These subsidiaries were included in the consolidation by the full consolidation method, as explained in Note 2.2.a)




4 JOINT VENTURES

The joint ventures of the Group, their head offices, and the percentage of interests held by the Group as of 31 December 2014 and 2013, are as follows:



InvestmentCompanies owned by Sierra BV:Arrábidashopping- Centro Comercial, S.A. Maia (Portugal) 25.05% 25.05%Centro Vasco da Gama – Centro Comercial, S.A. Maia (Portugal) 25.05% 25.05%Gaiashopping I- Centro Comercial, S.A. Maia (Portugal) 25.05% 25.05%Gaiashopping II- Centro Comercial, S.A. Maia (Portugal) 25.05% 25.05%Harvey Dos Iberica, S.L. Madrid (Spain) 25.05% 25.05%Vuelta Omega, S.L. Madrid (Spain) 25.05% 25.05%Iberian Assets, S.A Madrid (Spain) 24.95% 24.95%

1) La Farga Shopping Centre, S.L Madrid (Spain) – 24.95%Madeirashopping- Centro Comercial, S.A. Funchal (Portugal) 25.05% 25.05%Norte Shopping Retail and Leisure Centre B.V. Amsterdam (Netherlands) 25.05% 25.05%Norteshopping- Centro Comercial, S.A. Maia (Portugal) 25.05% 25.05%Parque Atlântico Shopping – Centro Comercial, S.A. Ponta Delgada (Portugal) 25.05% 25.05%

4) SC Mediterranean Cosmos B.V. Amsterdam (Netherlands) – 25.05%Shopping Centre Colombo Holding B.V. Amsterdam (Netherlands) 25.05% 25.05%Centro Colombo- Centro Comercial, S.A. Maia (Portugal) 25.05% 25.05%Via Catarina- Centro Comercial, S.A. Maia (Portugal) 25.05% 25.05%Zubiarte Inversiones Inmobiliarias, S.A Madrid (Spain) 24.96% 24.96%

Other investment companies:Adlands B.V. Amsterdam (Netherlands) 50.00% 50.00%Colombo Towers Holding, B.V. The Hague (Netherlands) 50.00% 50.00%Torre Ocidente – Imobiliária, S.A. Maia (Portugal) 25.00% 25.00%Freccia Rossa- Shopping Centre Srl Milan (Italy) 50.00% 50.00%

5) Le Terrazze – Shopping Centre 1 Srl Milan (Italy) 10.00% 50.00%Loop 5 – Shopping Centre, GmbH Dusseldorf (Germany) 50.00% 50.00%Pantheon Plaza B.V. Amsterdam (Netherlands) 50.00% 50.00%Larissa Development of Shopping Centres, S.A. Athens (Greece) 50.00% 50.00%Solingen Shopping Centre GmbH Dusseldorf (Germany) 50.00% 50.00%

Management2) Citic Capital Sierra Limited Hong Kong (China) 50.00% –3) Citic Capital Sierra Property Management (Shanghai) Limited Shanghai (China) 50.00% –2) Sierra – OST Property Management Moscow (Russia) 50.00% –4) Project Sierra 6 B.V. Amsterdam (Netherlands) – 50.00%

DevelopmentALEXA Administration GmbH Berlin (Germany) 50.00% 50.00%Project SC 1 B.V. Amsterdam (Netherlands) 50.00% 50.00%Park Avenue Development of Shopping Centers S.A. Athens (Greece) 50.00% 50.00%SC Aegean B.V. Amsterdam (Netherlands) 50.00% 50.00%Aegean Park Constructions Real Estate and Development, S.A. Athens (Greece) 50.00% 50.00%Parklake Shopping S.A. Bucharest (Romania) 50.00% 50.00%Sierra Central S.A.S. Santiago de Cali (Colombia) 50.00% 50.00%




4 JOINT VENTURES (continued)



BrazilFundo Investimento Imobiliário Parque Dom Pedro Shopping Center Rio de Janeiro (Brazil) 20.68% 20.68%Fundo Investimento Imobiliário Shop. Parque Dom Pedro Rio de Janeiro (Brazil) 31.56% 31.56%Parque D. Pedro 1 B.V. Sarl Luxembourg 50.00% 50.00%Pátio Boavista Shopping, Ltda. São Paulo (Brazil) 33.32% 33.32%Pátio Campinas Shopping, Ltda. São Paulo (Brazil) 33.32% 33.32%Pátio Goiânia Shopping, Ltda. São Paulo (Brazil) 33.32% 33.32%Pátio Londrina Empreendimentos e Participações, Ltda. São Paulo (Brazil) 33.32% 33.32%Pátio São Bernardo Shopping Ltda São Paulo (Brazil) 33.32% 33.32%Pátio Sertório Shopping Ltda Manaus (Brazil) 33.32% 33.32%Pátio Uberlândia Shopping Ltda São Paulo (Brazil) 33.32% 33.32%Sierra Brazil 1 B.V. Amsterdam (Netherlands) 50.00% 50.00%Sierra Investimentos Brasil Ltda São Paulo (Brazil) 33.32% 33.32%Sonae Sierra Brasil, S.A. São Paulo (Brazil) 33.32% 33.32%Sonae Sierra Brazil B.V. Sarl Luxembourg 50.00% 50.00%Unishopping Consultoria Imobiliária Lda São Paulo (Brazil) 33.32% 33.32%

1) Company sold in December 2014.2) Companies acquired during 2014.3) Company incorporated in 2014.4) Companies liquidated during 2014.5) In June 2014 40% of the share capital of this joint venture was sold.





The detail of joint ventures of the Group as of 31 December 2014 and 2013 is as follows:

31 December 2014

Head Net % own Carrying Proportion DividendsOffice Equity profit (*) amount in P/L received

InvestmentCompanies owned by Sierra BVArrábidashopping- Centro Comercial, S.A. Maia (Portugal) 31,913 4,968 50.00% 15,957 2,484 –Centro Vasco da Gama – Centro Comercial, S.A. Maia (Portugal) 136,619 38,183 50.00% 68,310 19,092 3,000

1) Gaiashopping I- Centro Comercial, S.A. Maia (Portugal) 39,543 10,329 50.00% 19,771 5,165 5002) Harvey Dos Iberica, S.L. Madrid (Spain) 8,215 (17) 50.00% 4,107 (9) –3) Iberian Assets, S.A Madrid (Spain) 169,452 49,485 49.79% 84,377 24,640 –

Goodwill Iberian 6,471 – –Madeirashopping- Centro Comercial, S.A. Funchal (Portugal) 24,484 3,789 50.00% 12,242 1,894 617

4) Norte Shopping Retail and Leisure Centre B.V. Amsterdam(Netherlands) 181,422 47,271 50.00% 90,711 23,635 –

Parque Atlântico Shopping – Centro Comercial, S.A. Ponta Delgada(Portugal) 23,990 4,121 50.00% 11,995 2,060 –

5) SC Mediterranean Cosmos B.V. Amsterdam (Netherlands) – 318 50.00% – 159 –6) Shopping Centre Colombo Holding B.V. Amsterdam (Netherlands) 245,636 103,401 50.00% 122,818 51,700 –

Via Catarina- Centro Comercial, S.A. Maia (Portugal) 2,205 (49) 50.00% 1,103 (24) –Zubiarte Inversiones Inmobiliarias, S.A Madrid (Spain) 33,543 (786) 49.83% 16,713 (392) –

Other investment companiesAdlands B.V. Amsterdam (Netherlands) 73 26 50.00% 37 13 –

7) Colombo Towers Holding, B.V. Amsterdam (Netherlands) 8,231 2,304 50.00% 4,116 1,152 –Freccia Rossa- Shopping Centre Srl Milan (Italy) (4,847) 802 50.00% (2,423) 401 –

8) Le Terrazze – Shopping Centre 1 Srl Milan (Italy) – 1,453 50.00% – 726 –Loop 5 – Shopping Centre, GmbH Dusseldorf (Germany) 117,927 472 50.00% 58,964 236 –

9) Pantheon Plaza B.V. Amsterdam (Netherlands) (4,102) (9,209) 50.00% (2,050) (4,605) –Solingen Shopping Centre GmbH Frankfurt (Germany) 16,845 (2,455) 50.00% 8,422 (1,228) –

Management10) 11) Citic Capital Sierra Limited Hong Kong (China) (158) (139) 50.00% (79) (70) –10) Sierra – OST Property Management Moscow (Russia) 94 11 50.00% 47 5 –5) Project Sierra 6 B.V. Amsterdam (Netherlands) – (5) 50.00% – (3) –12) Sierra Turkey Gayrimenkul Yönetim

Pazarlama ve Danışmanlık A.Ş. Istanbul (Turkey) – (766) 50.00% – (383) –

DevelopmentALEXA Administration GmbH Berlin (Germany) 2 (9) 50.00% 1 (4) –Parklake Shopping Srl Bucharest (Romania) 1,247 (2) 50.00% 624 (1) –

13) Project SC 1 B.V. Amsterdam (Netherlands) (44) (117) 50.00% (23) (55) –14) SC Aegean B.V. Amsterdam (Netherlands) 9,724 (10,617) 50.00% 4,862 (5,308) –

Sierra Central S.A.S. Santiago de Cali (Colombia) 138 (77) 50.00% 69 (39) –

Brazil15) Sonae Sierra Brazil B.V. Sarl Luxembourg 614,810 48,611 50.00% 307,404 24,306 6,990

834,546 145,547 11,107

(*) The ownership interests are identical to voting rights.





31 December 2013 (Restated)

Head Net % own Carrying Proportion DividendsOffice Equity profit (*) amount in P/L received

InvestmentCompanies owned by Sierra BVArrábidashopping- Centro Comercial, S.A. Maia (Portugal) 26,504 (11,932) 50.00% 13,252 (5,966) –

16) Cascaishopping-Centro Comercial, S.A. Maia (Portugal) – 1,850 50.00% – 925 –Centro Vasco da Gama – Centro Comercial, S.A. Maia (Portugal) 103,785 7,060 50.00% 51,893 3,530 1,500

1) Gaiashopping I- Centro Comercial, S.A. Maia (Portugal) 30,214 (3,585) 50.00% 15,106 (1,793) 3,2722) Harvey Dos Iberica, S.L. Madrid (Spain) 8,232 (1,075) 50.00% 4,116 (538) –

Goodwill Principado – (997)3) Iberian Assets, S.A Madrid (Spain) 120,118 (13,393) 49.79% 59,812 (6,669) –

Goodwill Iberian 6,471 –Madeirashopping- Centro Comercial, S.A. Funchal (Portugal) 21,930 (946) 50.00% 10,965 (473) 1,072

4) Norte Shopping Retail and Leisure Centre B.V. Amsterdam(Netherlands) 140,152 4,263 50.00% 70,076 2,132 –

Parque Atlântico Shopping – Centro Comercial, S.A. Ponta Delgada(Portugal) 19,869 (351) 50.00% 9,935 (176) –

SC Mediterranean Cosmos B.V. Amsterdam (Netherlands) (318) (19) 50.00% (159) (10) –6) Shopping Centre Colombo Holding B.V. Amsterdam (Netherlands) 139,767 4,169 50.00% 69,884 2,084 –

Via Catarina- Centro Comercial, S.A. Maia (Portugal) 1,954 (3,784) 50.00% 977 (1,892) –Zubiarte Inversiones Inmobiliarias, S.A Madrid (Spain) 34,329 (4,129) 49.83% 17,105 (2,057) –

Other investment companiesAdlands B.V. Amsterdam (Netherlands) 22 (23) 50.00% 11 (11) –

7) Colombo Towers Holding, B.V. Amsterdam (Netherlands) 5,927 (2,661) 50.00% 2,964 (1,330) –Freccia Rossa- Shopping Centre Srl Milan (Italy) (7,678) 3,538 50.00% (3,839) 1,769 –Le Terrazze – Shopping Centre 1 Srl Milan (Italy) 52,558 222 50.00% 26,279 111 –Goodwill Le Terrazze 2,720 –Loop 5 – Shopping Centre, GmbH Dusseldorf (Germany) 117,455 7,662 50.00% 58,728 3,831 –

9) Pantheon Plaza B.V. Amsterdam (Netherlands) 5,049 4,227 50.00% 2,525 2,114 –Solingen Shopping Centre GmbH Frankfurt (Germany) 12,300 12,275 50.00% 6,150 6,138 –

ManagementProject Sierra 6 B.V. Amsterdam (Netherlands) 9 (8) 50.00% 5 (4) –Sierra Turkey Gayrimenkul Yönetim Pazarlamave Danışmanlık A.Ş. Istanbul (Turkey) 59 (322) 50.00% 29 (161) –Goodwill Sierra Turkey – (310)

DevelopmentALEXA Administration GmbH Berlin (Germany) 11 (4) 50.00% 5 (2) –

17) ARP Alverca Retail Park, S.A. Maia (Portugal) – (280) 50.00% – (140) –Parklake Shopping Srl Bucharest (Romania) 43 (74) 50.00% 22 (37) –

13) Project SC 1 B.V. Amsterdam (Netherlands) (17,965) (180) 50.00% (8,982) (90) –14) SC Aegean B.V. Amsterdam (Netherlands) 20,301 (19) 50.00% 10,150 (10) –

Sierra Central S.A.S. Santiago de Cali (Colombia) 158 (48) 50.00% 79 (24) –

Brazil15) Sonae Sierra Brazil B.V. Sarl Luxembourg 574,607 68,458 50.00% 287,303 34,229 7,170

713,582 34,173 13,014






1) Amounts related to the consolidated accounts of Gaiashopping I- Centro Comercial, S.A. that owns 100% of Gaiashopping II- Centro Comercial, S.A..2) Amounts related to the consolidated accounts of Harvey Dos Iberica, S.L. that owns 100% of Vuelta Omega, S.L. and 100% of Parque Principado, S.L. until

October 2013 when was sold.3) Amounts related to the consolidated accounts of Iberian Assets, S.A. that owns 100% of La Farga Shopping Centre, S.L. until December 2014 when was sold.4) Amounts related to the consolidated accounts of Norte Shopping Retail and Leisure Centre B.V. that owns 100% of Norteshopping- Centro Comercial, S.A..5) Companies liquidated during 2014.6) Amounts related to the consolidated accounts of Shopping Centre Colombo Holding B.V. that owns 100% of Centro Colombo- Centro Comercial, S.A..7) Amounts related to the consolidated accounts of Colombo Towers Holding, B.V. that owns 50% of Torre Ocidente – Imobiliária, S.A..8) In June 2014 40% of the share capital of this associate was sold (Note 5).9) Amounts related to the consolidated accounts of Pantheon Plaza B.V. that owns 100% of Larissa De-velopment of Shopping Centres, S.A..10) Companies acquired during 2014.11) Amounts related to the consolidated accounts of Citic Capital Sierra Limited that owns 100% of Citic Capital Sierra Property Management (Shanghai)

Limited.12) Acquisition in December 2014 of the remaining 50% of the share capital.13) Amounts related to the consolidated accounts of Project SC 1 B.V. that owns 100% of Park Avenue Developement of Shopping Centers S.A..14) Amounts related to the consolidated accounts of SC Aeean BV that owns 100% of Aegean Park Con-structions Real Estate and Development, S.A..15) Amounts related to the consolidated accounts of Sonae Sierra Brasil B.V. Sarl. This company owns the following investments:

Percentage of interests and voting rights held

31.12.14 31.12.13

Fundo Investimento Imobiliário Parque Dom Pedro Shopping Center 41.36% 41.36%Fundo Investimento Imobiliário Shop. Parque Dom Pedro 63.12% 63.12%Parque D. Pedro 1 B.V. Sarl 100.00% 100.00%Pátio Boavista Shopping, Ltda. 66.65% 66.65%Pátio Campinas Shopping, Ltda. 66.65% 66.65%Pátio Goiânia Shopping, Ltda. 66.65% 66.65%Pátio Londrina Empreendimentos e Participações, Ltda. 66.65% 66.65%Pátio São Bernardo Shopping Ltda 66.65% 66.65%Pátio Sertório Shopping Ltda 66.65% 66.65%Pátio Uberlândia Shopping Ltda 66.65% 66.65%Sierra Brazil 1 B.V. 100.00% 100.00%Sierra Investimentos Brasil Ltda 66.65% 66.65%Sonae Sierra Brasil, S.A. 66.65% 66.65%Unishopping Consultoria Imobiliária Lda 66.63% 66.63%

16) Acquisition in May 2013 of the remaining 50% of the share capital.17) Acquisition in August 2013 of the remaining 50% of the share capital.

As mentioned in Note 2.2.b), joint ventures are measured by using the equity method.





During the years ended 31 December 2014 and 2013, the movement of investments in joint ventures was as follows:

2014 2013 (Restated)

Investment Investment

Companies Other Companies Otherowned by investment Manage- Develop- owned by investment Manage- Develop-Sierra BV companies ment ment Brazil Total Sierra BV companies ment ment Brazil Total

Opening balance 329,433 95,538 34 1,274 287,303 713,582 356,868 80,830 1 (17,512) 316,914 737,101

Le Terrazze:

– sale of 40% – (23,914) – – – (23,914) – – – – – –

– transfer to associates

of the remaining 10% (Note 5) – (5,978) – – – (5,978) – – – – – –

Sale of Shopping Principado held

by Harvey and Vuelta:

- Goodwill (Note 36) – – – – – – (997) – – – – (997)

Citic Capital Sierra Limited

– acquisition – – – – – –

Sierra – OST Property Management

– acquisition – – 65 – – 65

Sierra Turkey – acquisition:

- Equity held – – – – – – – – 50 – – 50

- Goodwill – – – – – – – – 310 – – 310

Sierra Turkey – percentage change

effect (acquisition of the remaining

50%) (Note 6) – – 361 – – 361 – – – – – –

Alverca – percentage change


50%) (Note 6) – – – – – – – – – 108 – 108

Cascaishopping – percentage change


50%) (Note 6) – – – – – – (34,090) – – – – (34,090)

Capital decrease (3,000) – – – – (3,000) (3,000) – – – – (3,000)

Capital increase 150 4,543 – 9,690 – 14,383 22,197 1,473 148 20,579 – 44,397

Liquidation effect – – (2) – – (2) – – – – – –

Effect of the application

of the equity method:

– Hedging reserve

(hedge accounting) 1,705 182 – (21) – 1,866 5,202 613 – – – 5,815

– Translation reserve – – (39) (3) 2,785 2,743 – – – (1,598) (56,670) (58,268)

– Net profit (Note 36) 130,404 (3,305) (451) (5,407) 24,306 145,547 (10,903) 12,622 (165) (303) 34,229 35,480

– Dividends (4,117) – – – (6,990) (11,107) (5,844) – – – (7,170) (13,014)

Impairment losses of

Goodwill (Note 36) – – – – – – – – (310) – – (310)

454,575 67,066 (32) 5,533 307,404 834,546 329,433 95,538 34 1,274 287,303 713,582

The main acquisitions and sales of companies occurred during the years ended 31 De-cember 2014 and 2013 were as follows:

Transactions in 2014:

In June 2014, Sierra Developments Holding BV sold 40% of the share capital of the joint venture Le Terrazze by the amount of kEuro 19,967. Thistransaction generated a loss of kEuro 3,948 (Note 35). After this date Le Terrazze becomes an associate (Note 5).

In December 2014, the joint venture Iberian Assets, S.A. (“Iberian Assets”), sold 100% of the share capital of La Farga Shopping Centre, S.L. (“LaFarga”) by the amount of 1 Euro. This transaction generated a net loss of kEuro 81 on Group accounts (of which a gain by Iberian Assets of kEuro1,859, included in profit or loss as part of the net profit of Iberian, appropriated through the application of the equity method, and a loss of kEuro1,940 (Note 36)).

Transactions in 2013:

In October 2013, the joint ventures Harvey Dos Iberica, S.L. (“Harvey”) and Vuelta Omega, S.L.(“Vuelta”) each sold its 50% held on the share capitalof the joint controlled entity Parque Principado, S.L. (“Principado”) by the amount of kEuro 33,676. This transaction generated a gain of kEuro2,549 net of the write-off of the goodwill in the amount of kEuro 997 This transaction generated a net gain of kEuro 2,549 on the Group accounts(of which a gain of kEuro 3,546 by Harvey and Vuelta, included in profit or loss as part of the net profit of those joint ventures appropriated throughthe application of the equity method and a loss of kEuro 997 (Note 36) as write-off of goodwill).





As of 31 December 2014 and 2013 the summarised financial information (adjusted when applicable to comply with the Group accounting policiesmentioned in Note 2) of the Group’s joint ventures, is as follows:

31 December 2014

Investment

Companies Otherowned by investmentSierra BV companies Management Development Brazil Total

Investment properties 2,217,623 576,313 – 67,241 1,306,437 4,167,614Other non-current assets 80,078 13,389 77 2 39,261 132,807

Total non-current assets 2,297,701 589,702 77 67,243 1,345,698 4,300,421

Other current assets 25,953 7,689 190 2,802 40,044 76,678Cash and cash equivalents 84,203 8,734 888 314 99,040 193,179

Total current assets 110,156 16,423 1,078 3,116 139,084 269,857

Non current bank loans and other facilities 808,990 258,007 – – 230,232 1,297,229Other non-current liabilities 580,296 100,786 934 52,392 235,719 970,127

Total non-current liabilities 1,389,286 358,793 934 52,392 465,951 2,267,356

Current bank loans and other facilities 88,727 84,655 – – 19,239 192,621Other current liabilities 32,822 28,550 285 6,900 35,296 103,853

Total current liabilities 121,549 113,205 285 6,900 54,535 296,474

Equity 897,022 134,127 (64) 11,067 964,296 2,006,448

Non-controlling interests – – – – 349,486 349,486Equity attributable to the equity holdersof the parent company 897,022 134,127 (64.0) 11,067 614,810 1,656,962


Investment


Investment properties 2,007,755 722,386 – 66,591 1,207,187 4,003,919Other non-current assets 94,624 6,382 17 4 21,922 122,949

Total non-current assets 2,102,379 728,768 17 66,595 1,229,109 4,126,868

Other current assets 28,062 24,724 285 269 37,773 91,113Cash and cash equivalents 52,797 21,415 138 490 134,399 209,239

Total current assets 80,859 46,139 423 759 172,172 300,352

Non current bank loans and other facilities 750,117 425,736 – – 236,663 1,412,516Other non-current liabilities 559,918 84,005 296 63,795 195,883 903,897

Total non-current liabilities 1,310,035 509,741 296 63,795 432,546 2,316,413

Current bank loans and other facilities 183,467 11,441 – – 17,133 212,041Other current liabilities 43,200 68,092 75 1,011 53,888 166,266

Total current liabilities 226,667 79,533 75 1,011 71,021 378,307

Equity 646,536 185,633 69 2,548 897,714 1,732,500

Non-controlling interests – – – – 323,107 323,107Equity attributable to the equity holdersof the parent company 646,536 185,633 69 2,548 574,607 1,409,393





2014

Investment


Services rendered 162,286 50,979 908 – 111,266 325,439Variation in fair value of the investment properties 209,371 (12,158) – – 66,970 264,183Other revenue 5,891 1,700 4 (95) 1,281 8,781Depreciation and amortisation – (2) (6) (2) (773) (783)Other expenses (41,639) (34,371) (1,755) (10,721) (47,563) (136,049)Interest income and similar 2,796 155 1 – 15,628 18,580Interest expense and similar (27,573) (13,856) (51) (2) (33,367) (74,849)Share of results of associates – 2,318 – – 2,166 4,484Income tax (50,119) (1,372) – (2) (34,046) (85,539)Profit/(loss) from continuing operations 261,013 (6,607) (899) (10,822) 81,562 324,247

Net profit/(loss) 261,013 (6,607) (899) (10,822) 81,562 324,247

Attributable to:Equity holders of parent company 261,013 (6,607) (899) (10,822) 48,611 291,296Non-controlling interests – – – – 32,951 32,951

261,013 (6,607) (899) (10,822) 81,562 324,247

Other comprehensive income for the period 3,410 332 3 (49) 8,536 12,232

Total comprehensive income for the period 264,423 (6,275) (896) (10,871) 90,098 336,479

Attributable to:Equity holders of parent company 264,423 (6,275) (896) (10,871) 54,183 300,564Non-controlling interests – – – – 35,915 35,915

264,423 (6,275) (896) (10,871) 90,098 336,479





2013 (Restated)

Investment


Services rendered 175,356 54,099 453 8 111,347 341,263Variation in fair value of the investment properties (145,005) 16,109 – – 115,693 (13,203)Other revenue 15,482 953 29 – 2,958 19,422Depreciation and amortisation – (34) (4) (3) (852) (893)Other expenses (67,732) (21,938) (835) (433) (50,818) (123,789)Interest income and similar 4,031 70 45 2 16,074 20,222Interest expense and similar (40,966) (13,873) (18) (157) (27,029) (82,043)Share of results of associates – – – – 2,610 2,610Income tax 18,995 (10,146) – (22) (57,477) (48,650)Profit/(loss) from continuing operations (21,872) 25,240 (330) (605) 112,506 114,939

Net profit/(loss) (21,872) 25,240 (330) (605) 112,506 114,939

Attributable to:Equity holders of parent company (21,872) 25,240 (330) (605) 68,458 70,891Non-controlling interests – – – – 44,048 44,048

(21,872) 25,240 (330) (605) 112,506 114,939

Other comprehensive income for the period 10,402 867 – (3,197) (177,746) (169,674)

Total comprehensive income for the period (11,470) 26,107 (330) (3,802) (65,240) (54,735)

Attributable to:Equity holders of parent company (11,470) 26,107 (330) (3,802) (44,882) (34,377)Non-controlling interests – – – – (20,358) (20,358)

(11,470) 26,107 (330) (3,802) (65,240) (54,735)

5 ASSOCIATES

The detail of associates of the Group as of 31 December 2014 and 2013 is as follows:

31 December 2014

Head Net profit/ % own Carrying Proportion DividendsOffice Equity (loss) (*) amount in P/L received

InvestmentALEXA Asset GmbH & Co, KG Dusseldorf (Germany) 221,767 12,756 9.00% 19,959 1,148 225Goodwill Alexa 519

2) Le Terrazze – Shopping Centre 1 Srl Milan (Italy) 67,142 1,779 10.00% 6,714 178 –Goodwill Le Terrazze 544

1) Sierra Portugal Real Estate ("SPF") Luxembourg 121,623 25,366 47.50% 57,772 12,049 –Goodwill SPF 8,131Sonaegest – Soc. Gestora de Fundos de Investimento, S.A. Maia (Portugal) 1,422 315 20.00% 284 63 67

ManagementSierra Cevital Shopping Center, Spa Algeria 193 267 49.00% 95 131 –

DevelopmentZenata Commercial Project Morocco 6 (21) 11.00% 1 (2) –

94,019 13,567 292




5 ASSOCIATES (continued)


Head Net profit/ % own Carrying Proportion DividendsOffice Equity (loss) (*) amount in P/L received

InvestmentALEXA Asset GmbH & Co, KG Dusseldorf (Germany) 206,582 29,083 9.00% 18,592 2,618 284Goodwill Alexa 519 –

1) Sierra Portugal Real Estate ("SPF") Luxembourg 95,915 (7,498) 47.50% 45,561 (3,562) –Goodwill SPF 8,131 (3,346)Sonaegest – Soc. Gestora de Fundos de Investimento, S.A. Maia (Portugal) 1,439 369 20.00% 288 74 95

ManagementSierra Cevital Shopping Center, Spa Algeria (75) (216) 49.00% (37) (106) –

73,054 (4,322) 379


1) Amounts related to the consolidated accounts of "SPF". This company owns the following investments:

Percentage of interests and voting rights held

Head office 31.12.14 31.12.13

8ª Avenida Centro Comercial, S..A. Maia (Portugal) 100% 100%a) ALBCC Albufeirashopping C.Comercial S.A. Maia (Portugal) 100% 50%

Arrábidashopping- Centro Comercial, S.A. Maia (Portugal) 50% 50%Gaiashopping I- Centro Comercial, S.A. Maia (Portugal) 50% 50%Gaiashopping II- Centro Comercial, S.A. Maia (Portugal) 50% 50%LCC LeiriaShopping Centro Comercial S.A. Maia (Portugal) 100% 100%Loureshopping- Centro Comercial, S.A. Maia (Portugal) 50% 50%

a) PORTCC – Portimaoshopping C.Comercial S.A. Maia (Portugal) 100% 50%Rio Sul- Centro Comercial, S.A. Lisbon (Portugal) 50% 50%Serra Shopping- Centro Comercial, S.A. Lisbon (Portugal) 50% 50%

a) Acquisition in March 2014 of the remaining 50% of the share capital.

2) In June 2014 40% of the share capital of this associate was sold.

As mentioned in Note 2.2.b), associates are measured by using the equity method.

During the years ended 31 December 2014 and 2013, the movement of investments in associates was as follows:


Alexa Le Sierra Alexa SierraAsset Terrazze SPF Sonaegest Cevital Zenata Total Asset SPF Sonaegest Cevital Total

Opening balance 19,111 – 53,692 288 (37) – 73,054 16,277 59,686 309 69 76,341

Zenata – acquisition:

- Equity held – – – – – 3 3 – – – – –

Le Terrazze – transfer from

joint ventures (Note 4) – 5,978 – – – – 5,978 – – – – –

Capital decrease – – (124) – – – (124) – (76) – – (76)

Capital increase – 1,015 – – – – 1,015 – – – – –

Effect of the application of

the equity method:

Hedging reserve (hedge accounting) 444 87 286 – – – 817 500 990 – – 1,490

Translation reserve – – – – 1 – 1 – – – – –

Net profit (Note 36) 1,148 178 12,049 63 131 (2) 13,567 2,618 (3,562) 74 (106) (976)

Dividends (225) – – (67) – – (292) (284) – (95) – (379)

Impairment losses of Goodwill

(Note 36) – – – – – – – – (3,346) – – (3,346)

20,478 7,258 65,903 284 95 1 94,019 19,111 53,692 288 (37) 73,054




5 ASSOCIATES (continued)

As of 31 December 2014 and 2013 the summarised financial information (adjusted when applicable to comply with the Group accounting policiesmentioned in Note 2) of the Group’s associates, is as follows:

31 December 2014 31 December 2013 (Restated)

Alexa Le Sierra Alexa SierraAsset Terrazze SPF Sonaegest Cevital Zenata Asset SPF Sonaegest Cevital

Total non-current assets 399,943 122,153 212,278 – 89 8,477 399,393 165,431 1 116Total current assets 16,683 16,381 10,484 1,727 820 2,172 12,921 10,375 1,691 735Total non-current liabilities 189,912 69,015 95,383 – – 4,531 201,627 75,559 – 75Total current liabilities 4,947 2,377 5,756 305 716 6,112 4,105 4,332 253 851

Equity 221,767 67,142 121,623 1,422 193 6 206,582 95,915 1,439 (75)


Alexa Le Sierra Alexa SierraAsset Terrazze SPF Sonaegest Cevital Zenata Asset SPF Sonaegest Cevital

Variation in fair value of the investment properties 2,193 6,126 6,024 – – – 19,428 (2,617) – –Other revenue 30,038 5,936 18,280 1,073 389 – 120 10,075 1,081 456Expenses (19,475) (10,283) 1,062 (758) (122) (21) 9,535 (14,956) (712) (672)Profit/(loss) from continuing operations 12,756 1,779 25,366 315 267 (21) 29,083 (7,498) 369 (216)

Net profit/(loss) 12,756 1,779 25,366 315 267 (21) 29,083 (7,498) 369 (216)

Other comprehensive income for the period 4,929 532 602 – 1 – 5,561 2,083 – (1)

Total comprehensive income for the period 17,685 2,311 25,968 315 268 (21) 34,644 (5,415) 369 (217)

6 ACQUISITION AND SALE OF COMPANIES

The main acquisitions of companies occurred during the years 2014 and 2013 were as follows:

Acquisition of subsidiaries in 2014

In December 2014, Sierra Services Holland B.V. acquired the remaining 50% of the share capital of the company Sierra Turkey GayrimenkulYönetim Pazarlama ve Danışmanlık A.Ş. (“Sierra Turkey”) by the amount of Euro 2. This transaction generated a goodwill of kEuro 361 expensed inthe consolidated statement of profit or loss. Until the date of this transaction, the joint venture company Sierra Turkey was measured under theequity method and after the transaction started to be consolidated by the full consolidation method.

Acquisition of subsidiaries in 2013

In May 2013 the subsidiary Cascaishopping Holding I, SGPS, S.A. acquired the remaining 50% of the share capital of the company Cascaishopping-Centro Comercial, S.A. (“Cascaishopping”) by the amount of kEuro 32,969. On the same date Sierra European Retail Real Estate Assets HoldingsB.V. (owner of 100% of the subsidiary Cascaishopping Holding I, SGPS, S.A.) sold 50% of its ownership to Land Retail B.V. by the amount of kEuro32,016. This transaction generated a negative goodwill of kEuro 1,120 recognised in the consolidated statement of profit or loss. Until the date ofthis transaction, the joint venture Cascaishopping was measured under the equity method and after the transaction started to be consolidated bythe full consolidation method.

In August 2013, Sierra Investments Holding, B.V. acquired the remaining 50% of the share capital of the company ARP Alverca Retail Park, S.A.(“Alverca”) by the amount of 1 Euro. This transaction generated a goodwill of kEuro 108 expensed in the consolidated statement of profit or loss.Until the date of this transaction, the joint venture company Alverca was measured under the equity method and after the transaction started tobe consolidated by the full consolidation method.

The main sales of companies occurred during the year 2013 were as follows:

Sale of subsidiaries in 2013

In December 2013 Sierra European Retail Real Estate Assets Holdings, BV (“Sierra BV”) sold its 100% held on the share capital of Valecenter, Srl(“Valecenter”) (owner of the shopping centre Valecenter and owner of the subsidiary Airone – Shopping Centre, Srl (“Airone”) that owns theshopping centre Airone) by the amount of kEuro 31,132. This transaction generated a loss of kEuro 13,514.




6 ACQUISITION AND SALE OF COMPANIES (continued)

Effect of the acquisitions and sales

The effect of the acquisitions occurred during 2014 was as follows:

2014Acquisitions

Sierra Turkey

Cash and cash equivalents (I) 170Property, plant and equipment 11Trade receivables 273Other current assets 29Other non current liabilities (1,103)Accounts payable and other liabilities – current (102)

Identifiable assets and liabilities at acquisition date (722)Carrying amount of the previous investment at acquisition date (Note 4) 361

Goodwill:Recorded as expense (Note 35) 361

Purchase amount (II) –

Net cash flow (II-I) (170)

The effect of the acquisitions occurred during 2013 was as follows:

2013 (Restated)

Acquisitions

Cascaishopping Alverca Total

Cash and cash equivalents (I) 5,382 373 5,755Investment properties (Note 8) 280,990 – 280,990Investment properties under development (Note 8) 30 12,313 12,343Deferred tax assets (Note 22) 1,831 – 1,831Trade receivables 1,396 – 1,396Other current assets 1,427 23 1,450Accounts payable and other liabilities – non-current (152,207) (12,228) (164,435)Deferred tax liabilities (Note 22) (62,476) (173) (62,649)Accounts payable and other liabilities – current (8,194) (524) (8,718)

Identifiable assets and liabilities at acquisition date 68,179 (216) 67,963Carrying amount of the previous investment at acquisition date (Note 4) (34,090) 108 (33,982)Goodwill:

Recorded as expense (Note 35) – 108 108Recorded as income (Note 35) (1,120) – (1,120)

Purchase amount (II) 32,969 – 32,969

Net cash flow (II-I) 27,587 (373) 27,214




6 ACQUISITION AND SALE OF COMPANIES (continued)

The effect of the sales occurred during 2013 was as follows:

2013 (Restated)Sales Valecenter

and Airone

Cash and cash equivalents (I) 1,921Investment properties (Note 8) 144,500Goodwill (Note 10) 28,340Deferred tax assets (Note 22) 348Other non current assets 5Trade receivables 482Other current assets 671Deferred tax liabilities (Note 22) (29,756)Accounts payable and other liabilities – non-current (79,990)Other non current liabilities (7,534)Accounts payable and other liabilities – current (14,342)

Identifiable assets and liabilities at sales date 44,645Transaction Result:

– Profit/(loss) on sale (Note 35) (13,514)

Sale amount (II) 31,131Expenses incurred with the sale (Note 35) (III) 700

Net cash flow (II-I-III) 28,510

7 NON-CONTROLLING INTERESTS

As of 31 December 2014 and 2013, the detail of non-controlling interests is as follows:

31 December 2014

Head Net profit/ Carrying Proportion DividendsOffice Equity (loss) % (*) amount in P/L received

InvestmentSierra BV Amsterdam (Netherlands) 788,504 171,083 49.90% 393,463 85,370 14,894Land Retail BV Amsterdam (Netherlands) 44,501 12,284 35.63% 15,854 4,408 –

409,317 89,778 14,894


Head Net profit/ Carrying ProportionOffice Equity (loss) % (*) amount in P/L

InvestmentSierra BV Amsterdam (Netherlands) 643,934 (34,314) 49.90% 321,323 (17,114)Land Retail BV Amsterdam (Netherlands) 31,334 (247) 35.63% 11,163 (88)

332,486 (17,202)





7 NON-CONTROLLING INTERESTS (continued)

During the years ended 31 December 2014 and 2013 the movement in non-controlling interests was as follows:


Sierra BV Land Retail BV Total Sierra BV Land Retail BV Total

Opening balance 321,323 11,163 332,486 354,205 – 354,205Capital decrease – (19,953) (19,953)Capital increase 11 11 11,086 11,086Hedging reserve (hedge accounting) 1,664 272 1,936 4,185 165 4,350Translation reserve – –Net profit 85,370 4,408 89,778 (17,114) (88) (17,202)Dividends (14,894) – (14,894) – – –

393,463 15,854 409,317 321,323 11,163 332,486

As of 31 December 2014 and 2013 the summarised financial information of the subsidiaries with Non-controlling interests, before the elimination ofintragroup balances and transactions, is as follows:

31 December 2014 31 December 2013 (Restated)

Sierra BV Land Retail BV Sierra BV Land Retail BV

Total non-current assets 1,031,882 44,633 880,221 32,549Total current assets 58,726 6 99,774 42Total non-current liabilities 256,951 – 263,716 –Total current liabilities 45,153 138 72,345 1,257

Equity 788,504 44,501 643,934 31,334

.


Sierra BV Land Retail BV Sierra BV Land Retail BV

Variation in fair value of the investment properties 15,324 – (51,301) –Other revenue 44,828 – 61,388 –Expenses 110,931 12,284 (44,401) (247)Profit/(loss) from continuing operations 171,083 12,284 (34,314) (247)

Net profit/(loss) 171,083 12,284 (34,314) (247)

Other comprehensive income for the period 3,335 764 8,386 464

Total comprehensive income for the period 16,091 13,048 21,142 217




8 INVESTMENT PROPERTIES

The movement in investment properties, during the years ended 31 December 2014 and 2013 was as follows:

2014

Investmentproperties under

In operation "Fit Out" development at cost Advances Total

Opening balance 831,714 2,148 63,709 1,725 899,296Increases 626 – 5,309 – 5,935Receivables – 50 – – 50Impairments and write-off – – (24,096) – (24,096)Sales – – (21,459) – (21,459)Fit-out receivables – (269) – – (269)Variation in fair value of the investment propertiesbetween years (Note 30):

– Gains 36,114 38 – – 36,152– Losses (3,974) (40) – – (4,014)

Currency translation differences – – 29 – 29

Closing balance 864,480 1,927 23,492 1,725 891,624

2013 (Restated)

Investmentproperties under

In operation "Fit Out" development at cost Advances Total

Opening balance 754,392 2,266 58,412 1,725 816,795Increases 12,915 – 3,446 – 16,361Receivables – 38 – – 38Impairments and write-off (Note 32) – – (4,755) – (4,755)Fit-out receivables – (262) – – (262)Transfers – – (1,319) – (1,319)Increases by transfer from investmentproperties under development:

– Production cost 3,778 – (3,778) – –Variation in fair value of the investment propertiesbetween years (Note 30):

– Gains – 116 – – 116– Losses (75,861) (10) – – (75,871)

Increases through business combination (Note 6) 280,990 – 12,343 – 293,333Sales of companies (Note 6) (144,500) – – – (144,500)Currency translation differences – – (640) – (640)

Closing balance 831,714 2,148 63,709 1,725 899,296

The amount of kEuro 24,096 recorded in “Impairments and write-off” refers mainly to impairment losses relating to some of the propertiescurrently under development, for which there are some uncertainties over their future viability (Note 32).

The amount of kEuro 21,459 recorded in “Sales” relates essentially to: (i) the sale of Alexa Tower located in Germany (kEuro 17,256) that generateda gain of kEuro 6,683 (Note 31) and (ii) the sale of two land plot in Nuremberg, Germany (kEuro 4,203) that generated a net gain of kEuro 2,821(Notes 31 and 33).




8 INVESTMENT PROPERTIES (continued)

At 31 December 2014 and 2013 investment properties in operation and the information about the fair value assessment can be detailed as follows:

31.12.1331.12.14 (Restated)

Other OtherEuropean European

Portugal/Spain Countries Portugal/Spain Countries

10 yr discount rateFloor 8.90% 9.60% 9.05% 9.60%Weighted average 10.00% 9.76% 10.37% 9.89%Cap 14.35% 10.30% 14.05% 10.75%

10 yr cap rateFloor 6.90% 7.40% 7.05% 7.40%Weighted average 7.82% 7.66% 8.20% 7.74%Cap 12.35% 8.50% 12.05% 8.75%

Annual rent per sqm (€)Floor 14 13 14 15Weighted average 22 16 23 18Cap 48 19 46 21

Fair Value (Level 3) 758,158 106,322 726,250 105,464

The fair value of each investment property was determined by means of a valuation as of the reporting date made by independent specialisedentities (Cushman & Wakefield and CBRE).

The valuation of these investment properties was made in accordance with the Practice Statements of the RICS Appraisal and Valuation Manualpublished by The Royal Institution of Chartered Surveyors (“Red Book”), located in England.

The methodology used to compute the market value of the investment properties consists in preparing 10 years projections of income andexpenses of each shopping centre added to the residual value, corresponding to a projected net income at year 11 and a return market rate (“Exityield" or "cap rate"). These projections are then discounted to the valuation date using a discount market rate. Projections are intended to reflectthe actual best estimate of the valuer regarding future revenues and costs of each shopping centre. Both the return rate and discount rate aredefined in accordance to the local real estate and institutional market conditions, being the reasonableness of the market value obtained inaccordance to the methodology referred above, tested also in terms of initial return using the estimated net income for the first year of projections.

In the valuation of investment properties, some assumptions, that in accordance with the Red Book are considered to be special, were in additionconsidered, namely in the case of recently inaugurated shopping centres, in which the possible costs still to be incurred were not considered, as theaccompanying financial statements already include a provision for them.

In 2013 the Group adopted for the first time IFRS 13 – Fair value measurement. This standard provides a single source of fair value measurementand disclosure requirements for use across IFRSs.

IFRS 13 requires disclosure of fair value measurements by level of the following fair value measurement hierarchy:

> Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.

> Level 2: Inputs other than quoted prices included within level 1 that are observable.

> Level 3: Inputs that are not based on observable market data (that is, unobservable inputs).

Considering the above hierarchy investments properties of the Group are all within Level 3.

The relationship of unobservable inputs to fair value can be described as follows:

> A decrease in the estimated annual rent will decrease the fair value;

> An increase in the discount rates and the capitalization rates will decrease the fair value.

As mentioned in the valuation reports of the investment properties prepared by independent specialised entities, the assessment of their fair valuetook into account the definition of fair value in IFRS 13, which is consistent with the definition of market value defined by the investment propertiesvaluation international standards.





Market Commentary

According to the valuers, whenever uncertainty could have a material effect on the opinion of value, the Red Book requires the valuer needs to drawattention to this, indicating the cause of the uncertainty and the degree to which this is reflected in the valuation reported.

Since September 2008 we have seen unprecedented events at a global level, driven by the banking sector and the sovereign debt crisis.Additionally, the economic impact of the austerity measures, implemented by the European governments have strongly contributed to adeceleration of the Global Economy, with the property market being no exception. As a response to this European crisis, European Central Bank(ECB) has been smoothly revising downwards the interest rate on the main refinancing operations of the Eurosystem which is currently at 0.05%(245bp less than in 2008) in order to introduce liquidity and guarantee price stability in the Eurozone.

There is a renewed cross border demand and risk taking approach by international investors generally, which gives good prospects for 2015. Higherliquidity levels in Europe and major appeal of the European property market in the eyes of investors from other continents are expected to fuel theinvestment market activity in Portugal, with a special focus on prime products.

Although some companies are facing financial difficulties, it is not appropriate to conclude all recent market activity represents forced transactions.An imbalance between supply and demand (for example, fewer buyers than sellers) is not always a determinant of a forced transaction. A sellermight be under financial pressure to sell, but it is still available to sell at a market price if there is more than one potential buyer in the market and areasonable amount of time is available for marketing. Similarly, transactions initiated during bankruptcy should not automatically be assumed to beforced.

It has been held that valuers may properly conclude within a range of values. This range is likely to be greater in an illiquid market where inherentuncertainty exists and a greater degree of judgment must therefore be applied.

The valuers strongly recommend that the company keep the valuation of the properties under review. The Group should also anticipate a longermarketing period than would previously have been expected in the event that any property is offered for sale.

As of 31 December 2014 and 2013, the fair value of the fit out contracts existing in each investment property was as follows:


10 yr discount rate 10 yr cap rate 10 yr discount rate 10 yr cap rate

Weighted Weighted Weighted WeightedFloor average Cap Floor average Cap Amount Floor average Cap Floor average Cap Amount

Portugal/

Spain 9.85% 11.53% 14.35% 7.60% 9.87% 12.35% 1,927 10.20% 11.33% 14.05% 7.95% 9.66% 12.05% 2,148

1,927 2,148

The fair value of the fit out contracts was determined by means of a valuation as of the reporting date made by an independent specialised entity(Cushman & Wakefield). The methodology used to compute the fair value of the fit out contracts consisted in determining the discountedestimated cash flows of each one of the fit out contracts, using a discounted market rate similar to the one used in determining the fair value of theinvestment property to which each fit out contract relates.

During the years ended on 31 December 2014 and 2013, the income (fixed rents net of discounts, turnover rents, mall income, key income andtransfer fees) and the corresponding direct operating expenses (property tax, insurance expense, maintenance expense, management fee and assetmanagement fee and other direct operating expenses), relating to the investment properties of the Group, was as follows:

Rents Direct operating expenses

31.12.13 31.12.1331.12.14 (Restated) 31.12.14 (Restated)

Portugal/Spain 71,125 65,293 3,996 3,000Other european countries 8,527 22,049 888 2,114

79,652 87,342 4,884 5,114





At 31 December 2014 and 2013 the following investment properties had been given in guarantee of bank loans:

> Algarveshopping > Estação Viana > Maiashopping

> Alverca > Gli Orsi > Plaza Mayor Parque de Ócio

> Cascaishopping > Guimarãeshopping > Plaza Mayor Shopping

> Coimbrashopping > Luz del Tajo > River Plaza Mall

> Dos Mares

At 31 December 2014 and 2013 there were no material contractual obligations to purchase, construct or develop investment properties or forrepairs or maintenance, other than those referred to above, except for the obligations mentioned in notes 39 and 40.

Investment properties under development at 31 December 2014 and 2013 are made up as follows:

31.12.1331.12.14 (Restated)

Investment properties at cost:Portugal/Spain 15,691 15,689Other european countries 68,453 79,320

84,144 95,009Impairment for assets at risk (58,927) (29,575)

25,217 65,434

The amounts of kEuro 58,927 and kEuro 29,575 at 31 December 2014 and 2013, respectively, recorded under caption “Impairment for assets atrisk”, relate to the provision made to anticipate losses due to the delays on the development of some of the actual pipeline because of theuncertainty of markets.




9 PROPERTY, PLANT AND EQUIPMENT

The movement in property, plant and equipment and corresponding accumulated depreciation during the years ended 31 December 2014 and 2013was as follows:

31.12.13

31.12.14 (Restated)

Buildings Machinery Other Tangible

and other and Transport Administrative Tools and tangible fixed assets

constructions equipment equipment equipment utensils fixed assets in progress Total Total

Assets:Opening balance 1,076 1,234 125 3,119 163 1,049 – 6,766 7,361Increases 66 33 36 132 2 14 94 377 367Sales – – – – – – – – (163)Transfers and disposals – (1) – – – – – (1) (797)Currency translation differences – – – 5 – 1 – 6 (2)Change in consolidation perimeter – – – 30 – 6 – 36 –

Closing balance 1,142 1,266 161 3,286 165 1,070 94 7,184 6,766

Accumulated depreciationand impairment losses:Opening balance 425 877 34 2,709 162 1,008 – 5,215 5,480Depreciation for the year 117 67 25 192 3 27 – 431 440Sales – (1) – – – – – (1) (131)Transfers and disposals – – – – – – – – (573)Currency translation differences – – – 2 – – – 2 (1)

Change in consolidation perimeter – – – 15 – 6 – 21 –

Closing balance 542 943 59 2,918 165 1,041 – 5,668 5,215

Net assets 600 323 102 368 – 29 94 1,516 1,551

10 GOODWILL

The movement in goodwill during the years ended 31 December 2014 and 2013 was as follows:

20132014 (Restated)

Opening balance 7,193 35,533Sales (Note 6) – (28,340)

Closing balance 7,193 7,193

At 31 December 2014 and 2013 goodwill was made up as follows:

31.12.1331.12.14 (Restated)

Year of Carrying Carryingaquisition Amount Amount

Luz del Tajo 2005 2,919 2,919Dos Mares 2005 1,298 1,298River Plaza Mall 2007 1,334 1,334Gli Orsi 2008 1,642 1,642

7,193 7,193

The impairment tests made to the goodwill are based on the “Net Asset Value” (“NAV”) at the reporting date of the participations held.




11 INTANGIBLE ASSETS

The movement in intangible assets and corresponding accumulated depreciation during the years ended 31 December 2014 and 2013 was asfollows:

31.12.1331.12.14 (Restated)

Software Other rights Total Total

Assets:Opening balance 1,713 13,052 14,765 15,992Increases 984 411 1,395 863Sales, disposals and regularisations 535 (555) (20) (2,060)Change in consolidation perimeter – – – (30)

Closing balance 3,232 12,908 16,140 14,765

Accumulated depreciation and impairment losses:Opening balance 1,140 11,046 12,186 12,996Depreciation for the year 435 640 1,075 1,215Sales, disposals and regularisations – – – (1,995)Change in consolidation perimeter – – – (30)

Closing balance 1,575 11,686 13,261 12,186

Net assets 1,657 1,222 2,879 2,579

12 OTHER NON CURRENT ASSETS

At 31 December 2014 and 2013 other non-current assets were made up as follows:

31.12.1331.12.14 (Restated)

Malaga City Council 790 790Rent deposits from tenants 3,164 3,263Escrow Account 209 2,883Other non current assets 489 578

4,652 7,514

The amount of kEuro 790 due by the Municipal Council of Malaga relates to works developed by Plaza Mayor Parque de Ocio, S.A. (kEuro 530) andPlaza Mayor Shopping, S.A. (kEuro 260) on behalf of the Municipal Council of Malaga at the surroundings of the Plaza Mayor Shopping centre.

The amount of kEuro 3,164 and kEuro 2 (Note 14) relates to the deposit in official entities of rents received from tenants of shopping centreslocated in Spain (Plaza Mayor, Luz del Tajo, Plaza Mayor Shopping and Dos Mares). The rent deposits received from tenants are classified under“Other non-current liabilities” (Note 21) and “Other payables” (Note 26).




13 TRADE RECEIVABLES

At 31 December 2014 and 2013 trade receivables were made up as follows:

31.12.1331.12.14 (Restated)

Accounts receivable from customers:Portugal 27,960 30,749Spain 5,413 6,161Italy 930 2,498Germany 1,799 1,760Greece 54 191Romania 4,373 1,294Other costumers 410 55

40,939 42,708Accumulated impairment losses on accounts receivable from customers (Note 28) (18,953) (20,303)

21,986 22,405

The Group’s exposure to credit risk is attributed to accounts receivable relating to the operating activity of the Group. The amounts shown in thestatement of financial position are net of the corresponding impairment losses on accounts receivable, which were estimated by the Group, basedon the past experience of the Group and assessment of the economic environment. The Board of Directors believes that the carrying amount of itstrade receivables is similar to the corresponding fair value. The Group has not a significant concentration of credit risk, as that risk is diluted over avariety of different customers.

According to the information included in the statement of financial position, the ageing of the trade receivables is as follows:

31.12.1331.12.14 (Restated)

Not due 4,726 1,003Due but not impaired:

0-30 days 5,371 6,75130-90 days 3,199 5,205+ 90 days 8,652 9,444

Due and impaired:0-90 days 980 71590-180 days 422 930180-360 days 1,319 1,527+ 360 days 16,270 17,133

40,939 42,708




14 OTHER RECEIVABLES

At 31 December 2014 and 2013 this caption was made up as follows:

31.12.1331.12.14 (Restated)

Rent deposits from tenants (Note 12) 2 2Advance for capital increase in Zenata to be reimbursed 1,954 –Sale of land plots in Nuremberg 1,400 –Tax notification paid 4,244 4,369Escrow account 21,224 21,224Advances to suppliers 1,641 1,115Other 2,002 4,014

32,467 30,724Accumulated impairment losses on other receivables (Note 28) (1,587) (5)

30,880 30,719

The amount of kEuro 4,244 includes:

> the amount of kEuro 3,707 regarding the payment made in 2013 by Sonae Sierra SGPS, S.A. within the Special Tax Debts Payment Regime(RERD) established by the Portuguese government in the law approved in October 2013 (Law 151-A/2013) by which the entities that pay thetax notification will be exempt of the payment of interests and penalties; this amount relates to corrections of the 2005 CIT due to: (i) non-deductible interest expenses amounting to kEuro 378; and (ii) corrections concerning the price adjustment related with the sale of shares ofCascaishopping in 1996 amounting to kEuro 3,329. The company contested the tax notifications received and did not record any impairmentloss to face eventual losses on those amounts, as the Board of Directors believes that the result will be favourable to the company;

> the amount of kEuro 518 (kEuro 662 as of 31 December 2013)related to tax notifications on the income tax statements relating to years1991 to 1997 paid by Cascaishopping – Centro Comercial, S.A. (“Cascaishopping”) to tax authorities. The corrections proposed by taxauthorities relate basically to the depreciation policy of improvements made in third parties property that, for tax purposes, were beingdepreciated over five years and that the Tax Authorities believe should be depreciated over 50 years. Cascaishopping contested the taxnotifications received and did not record any impairment to cover eventual losses on those amounts, as the Board of Directors believes thatthe result will be favourable to Cascaishopping. During 2014 Cascaishopping received an amount of kEuro 144.

The amount of kEuro 21,224 under "Escrow Account" includes:

> an escrow account from 2005 relating to a lawsuit from a tenant, on which the court requested that the Group made a deposit of kEuro2,295, in the event of the case being won by the tenant. Although the case has been won by the Group, the amount was incorrectly paid tothe tenant. Therefore, a full refund of the amount paid is expected as the court's decision has been favourable to the Group.

> an escrow account in the amount of kEuro 19,000 relating to the sale of the investment property Münster Arkaden in the year ended 31December 2012 that matures at the beginning of 2015. This escrow account exists as collateral to the bank guarantee granted at time of thistransaction (Note 39) that was released on January 2015 (Note 44).

The Group’s exposure to credit risk is attributed to accounts receivable relating the operating activity of the Group. The amounts shown in thestatement of financial position are net of the corresponding impairment losses on accounts receivable, which were estimated by the Group, basedon the past experience of the Group and assessment of the economic environment. The Board of Directors believes that the carrying amount of itstrade receivables is similar to the corresponding fair value. The Group has not a significant concentration of credit risk, as that risk is diluted over avariety of different customers.




15 OTHER CURRENT ASSETS


31.12.1331.12.14 (Restated)

Interest income receivable 2,659 1,840Variable rents receivable 3,164 3,537Recovered costs receivable 514 767Deferred rents 86 144Key Money 1,426 1,426Management and administration services receivable 3,470 3,452Others 943 345

12,262 11,511

16 CASH AND CASH EQUIVALENTS

At 31 December 2014 and 2013 cash and cash equivalents were made up as follows:

31.12.1331.12.14 (Restated)

Cash 748 541Bank deposits 70,903 88,778

71,651 89,319

The bank deposits include term deposits made by several companies included in the consolidation, repayable in less than three months of inceptionand that bear interest at market interest rates.

17 SHARE CAPITAL AND LEGAL RESERVES

At 31 December 2014 the share capital was made up of 32,514,000 fully subscribed and paid up ordinary shares of Euro 4.99 each.

The following entities own the share capital at 31 December 2014 and 2013:

Entity 2014 2013

Sonae SGPS. S.A. 50.00% 50.00%Grosvenor Investments (Portugal), Sarl 50.00% 50.00%

At 31 December 2014 and 2013 the legal reserves were as follows:

31.12.1331.12.14 (Restated)

Legal reserve 32,449 32,449Special reserve 24,880 24,880

57,329 57,329

Legal reserve: According to the company law, at least 5% of the annual net profit, if positive, should be used in the reinforcement of the legalreserve until it represents 20% of the capital. This reserve can only be distributed in case of liquidation of the company but can be used to coverlosses after the other reserves have been used or can be incorporated in the share capital.

As mentioned in the Portuguese commercial code, and in consequence of the capital reduction in 2003, Sonae Sierra recorded a special reserve, towhich the rules of the legal reserve apply, by an amount equivalent to the nominal amount of the shares extinguished (kEuro 24,880).




18 BANK LOANS

At 31 December 2014 and 2013 bank loans obtained were made up as follows:

31.12.14 31.12.13 (Restated)

Used amount Used amount

Non NonLimit Current current Limit Current current

Bond Loans:Sonae Sierra SGPS 75,000 – 75,000 75,000 – 75,000

Total Bond Loans 75,000 – 75,000 75,000 – 75,000Bank Loans:Portugal/Spaina),b) 144,576 23,901 120,675 165,903 54,785 111,118a) 196,182 10,824 185,358 206,094 9,912 196,182

340,758 34,725 306,033 371,997 64,697 307,300

Other European Countriesa),b) 94,994 5,097 89,897 106,832 12,651 94,181

Total Bank Loans 435,752 39,822 395,930 478,829 77,348 401,481Deferred bank expenses incurred onthe issuance of bank debt (1,101) (2,727) (896) (2,671)

510,752 38,721 468,203 553,829 76,452 473,810Fair value of the financial hedging instruments – liability – 18,229 – 27,716

38,721 486,432 76,452 501,526

(a) To guarantee the repayment of these loans, the Group pledged the real estate properties owned by the corresponding companies of the Group.(b) To guarantee the repayment of these loans, the Group pledged the shares of the related subsidiaries.

Bank loans bear interests at market interest rates and were all contracted in Euro.

At 31 December 2014 and 2013 the covenants in force can be detailed as follows:

31.12.14 31.12.13 (Restated)


Non NonLimit Current current Limit Current current

"Covenants":"Loan to Value", "Debt ServiceCover Ratio" (1),(2) 375,202 34,586 340,616 412,710 71,871 340,839"Loan to Value", "Interest Cover Ratio" (1),(3) 33,501 2,647 30,854 37,207 3,614 33,593"Debt to equity cover ratio" (4) 7,997 666 7,331 7,997 – 7,997

(1) "Loan to Value": Financial liabilities/Fair value of the investment property(2) "Debt Service Cover Ratio": Cash flow/(Paid interests plus capital amortization)(3) "Interest Cover Ratio": Cash flow/Paid interests(4) "Debt to equity cover ratio": Equity/Financial liabilities




18 BANK LOANS (continued)

Bank loans with covenants were analysed by the Group at the reporting date and, whenever breaches to these covenants occurred theclassification of the current portion was made accordingly. These situations have occurred in case of loans obtained by River Plaza. Negotiations areon-going in order to obtain a debt rescheduling with the correspondent bank.

At 31 December 2014 and 2013, loans and the respective interests are repayable as follows:

31.12.14 31.12.13 (Restated)

Repayment Interest Repayment Interest

N+1 39,822 12,722 77,348 12,989N+2 161,112 11,155 36,635 12,446N+3 30,289 8,424 161,112 10,615N+4 116,970 5,324 31,194 7,653N+5 96,217 2,384 114,981 4,465N+6 and following years 66,342 47,497 132,559 5,696

510,752 87,506 553,829 53,864

At 31 December 2014 and 2013, the Group’s financial instruments related to interest rate swaps and zero cost collars were as follows:

31.12.14 31.12.13 (Restated)

Fair value Fair valueof the financial of the financial

hedging instrument hedging instrument

Loan Liability Loan Liability

Financial hedging instruments:"Swaps":3 Shoppings/Caixa BI 48,309 – 55,338 676Algarve/ING 21,150 806 21,600 938Cascaishopping/Novo Banco 52,000 1,095 52,000 1,813Cascaishopping/Novo Banco 90,299 1,628 94,599 3,090Gli Orsi/Bayerische Landesbank 53,818 2,335 64,500 3,925Luz del Tajo/Bankinter 18,000 72 – –Luz del Tajo/Banco Popular Espanhol 18,000 75 – –Plaza Mayor Shopping/Novo Banco 15,263 1,152 16,003 1,308Project Sierra 8 BV/ING 21,150 806 21,600 938River Plaza/Société Générale 20,027 2,728 20,732 2,988

10,697 15,676Zero cost collars:

Luz del Tajo/Deustche Pfandbriefbank – – 9,140 347

– 347

10,697 16,023

Financial hedging instruments ineffective:Luz del Tajo/BPI Madrid (*) – – 36,560 1,066Plaza Mayor Shopping/BPI Madrid (*) 15,263 1,138 16,003 1,558Sierra BV/BPI Madrid – 889 – 1,170Sierra BV/BPI Madrid – 1,480 – 2,058Sierra BV/BPI Madrid – 1,011 – 1,463Sonae Sierra SGPS/Novo Banco

75,0001,453

75,0002,240

Sonae Sierra SGPS/BPI Madrid 1,561 2,138

7,532 11,693

18,229 27,716

(*) The Group is committed to the bank to pay any amount due.




18 BANK LOANS (continued)

The fair value of the effective financial hedging instruments was recorded under hedging reserves of the Group (kEuro -8,080 and kEuro -11,827 in31 December 2014 and 2013, respectively) and hedging reserves of the non-controlling interests (kEuro -2,617 and kEuro -4,197 in 31 December2014 and 2013, respectively).

The interest rate swaps and zero cost collars are stated at their fair value at the reporting date, determined by the valuation made by the bankentities, with which the derivatives were contracted. The computation of the fair value of these financial instruments was made taking intoconsideration the reporting date, the update of the future cash-flows relating to the difference between the interest rate to be paid by the companyto the bank entity, with which the swap or collar was negotiated, and the variable interest rate to be received by the company from the bank entitythat granted the loan. In addition, tests to the fair value of those derivative financial instruments were made by the treasury department of theGroup, in order to validate the fair value determined by those entities.

The main hedging principles used by the Group when negotiating these hedging financial instruments are as follows:

> Matching between the cash-flows paid and received: there is coincidence between the dates of interest payments of the loans obtained andtheir date of the derivatives flows with the bank;

> Matching in the index interest rate used: the reference index interest rate used in the derivatives and in the loan are coincident;

> In a scenario of increase or decrease in interest rates, the maximum amount of interest payable is perfectly calculated.

19 OTHER BANK LOANS


31.12.14 31.12.13 (Restated)

Limit Current Limit Current

Short term facilities:Cascaishopping – C.C., S.A. 1,746 – 873 –Sierra B.V. 8,000 – 8,000 –Sierra Portugal, S.A. 249 – 249 –Sonae Sierra, SGPS, S.A. 72,970 20,000 52,970 5,661

82,965 20,000 62,092 5,661




20 SHAREHOLDERS LOANS


31.12.14 31.12.13 (Restated)

Asset Non- Current Current Non-current

Loans receivable:Project Sierra 10 BV:

Parklake Shopping, S.A. 3,805 – 599Izzie, Sarl 3,000 – –

6,805 – 599

Sierra Developments Holding BVParklake Shopping, S.A. 22,327 – 22,327Project SC 1 BV – – 9,014

22,327 – 31,342

Sierra BV:Arrábidashopping – Centro Comercial, S.A. 5,997 – 4,272Zubiarte Inversiones Inmobiliarias, S.A. 6,682 – 6,662Iberian Assets, S.A. 11,208 108 10,687Centro Vasco da Gama Centro Comercial, S.A. 7,596 – 7,596Parque Atlântico Shopping-C.Comerc., S.A. 350 – 350Shopping Centre Colombo Holding BV 9,000 – 9,000La Farga – Shopping Centre, SL – – 2,079

40,833 108 40,646

Sierra Investments Holding BV:Freccia Rossa – Shopping Centre, Srl 20,720 – 20,839Zubiarte Inversiones Inmobiliarias, S.A. 3,224 – 3,214SC Mediterranean Cosmos BV – – 137

23,944 – 24,189

Sierra Solingen Holding GmbH:Solingen Shopping Center GmbH 14,938 14,938 –

14,938 14,938 –

Sierra Corporate Services Holland BV:Sierra Turkey Gayrim.Yön.P.Dan.An.Sirket – – 136

– – 136

Sierra Asia Limited:Citic Capital Sierra Limited 467 – –

467 – –

109,314 15,046 96,912




20 SHAREHOLDERS LOANS (continued)

31.12.14 31.12.13 (Restated)

Liability Current Non-current Current Non-current

Loans payable:SIERRA Investments (Luxembourg) 1 S.A. ("Luxco 1"):

Plaza Mayor Shopping B.V. – 2,006 31 1,975

– 2,006 31 1,975

SIERRA Investments (Luxembourg) 2 S.A. ("Luxco 2"):Plaza Mayor Shopping B.V. – 1,604 25 1,580

– 1,604 25 1,580

Shopping Centre Parque Principado B.V.Harvey Dos Iberica, S.L. 3,864 – – 3,864

3,864 – – 3,864

Sierra BV:Madeirashopping- Centro Comercial, S.A. – – 639 –

– – 639 –

3,864 3,610 695 7,419

The amounts payable to Luxco 1 and Luxco 2 relate to shareholder loans payable by the subsidiaries of Sierra BV to the other shareholders of SierraBV. These loans bear interests at market interest rates and were contracted in Euro.

21 OTHER NON CURRENT LIABILITIES


31.12.1331.12.14 (Restated)

Rents deposits from tenants (Note 12) 9,112 7,661Other non current accounts payable 57 136

9,169 7,797




22 DEFERRED TAXES

Deferred income tax assets and liabilities at 31 December 2014 and 2013, in accordance with the temporary differences that generate them, aremade up as follows:

Deferred tax assets Deferred tax liabilities

31.12.13 31.12.1331.12.14 (Restated) 31.12.14 (Restated)

Difference between the fair value and tax cost of tangiblefixed assets and intangible assets – – 127,423 126,086Difference between the fair value and tax costof the fit-out contracts and the correspondent tax basis – – (109) (112)Write-off of deferred income relating entrance fees (key money)and expenses relating the opening of shopping centres – – (802) (399)Fair value of hedging financial instruments 2,600 4,162 111 111Tax losses carried forward 4,194 8,098 – –Impairment losses on accounts receivable from customers 351 574 – –Impairment losses on other assets and write-off of deferred costs 559 509 – –

7,704 13,343 126,623 125,686

Deferred income tax assets relating to the fair value of the financial hedging instruments were recorded under hedging reserves of the Group (kEuro-1,835 and kEuro -2,903 at 31 December 2014 and 2013, respectively) and under hedging reserves of the non-controlling interests (kEuro -654 andkEuro -1,148 at 31 December 2014 and 2013, respectively).

The movement in deferred income tax assets and liabilities during the years ended 31 December 2014 and 2013 was as follows:

31.12.14 31.12.13 (Restated)

Asset Liability Asset Liability

Opening balance 13,343 125,686 14,382 112,731Effect in net result:

Difference between fair value and tax cost oftangible fixed assets and intangible assets 51 13,187 52 (13,468)Difference between fair value and tax cost of thefit-out contracts – (8) – 28Write-off of movements ocurred in the year in deferred incomerelating key money and expenses relatedto the opening of shopping centers – (461) 5 (665)Increase/(Decrease) of impairment losses not accepted for tax purposes (194) – (1,227) –Increase/(Decrease) of tax losses carried forward (3,234) – 1,780 –Valuation of hedging financial instruments ineffective – – (1,284) –Other assets impairment and deferred costs write-off – – 333 312Effect of change in tax rate (Note 23) (700) (11,784) (43) (6,220)

Sub-total (Note 23) (4,077) 934 (384) (20,013)Effect in equity:

Valuation of hedging financial instruments (1,481) – (2,045) (16)Tax rate change effect related to the hedging (82) – (88) 127

Currency translation differences 1 3 (5) (36)Changes in perimeter:

Sales (Note 6) – – (348) (29,756)Acquisitions (Note 6) – – 1,831 62,649

Closing balance 7,704 126,623 13,343 125,686




22 DEFERRED TAXES (continued)

As approved in the Portuguese and Spanish State budget for 2015 the corporate income tax rate will reduce from 23% to 21% and from 30% para28% in 2015 and 25% in 2016, respectively for Portugal and Spain. As result of these changes the Group updated its deferred tax assets andliabilities. The impact of this change of rate on deferred tax, was determined with reference to 31 December 2014 and amounted to kEuro -11,002,being the effect recorded in the statement of profit or loss (kEuro -11,084) and in the hedging reserves (kEuro 82).

The deferred income tax assets related to tax losses carried forward as of 31 December 2014 and 2013 are made up as follows:

31.12.14 31.12.13 (Restated)

Tax Deffered Tax Deffered Limitloss tax asset loss tax asset expire date

Spain:Generated in 2002 – – 679 203 2020Generated in 2003 – – 358 107 2021Generated in 2004 – – 105 31 2022Generated in 2005 – – 732 220 2023Generated in 2006 – – 670 201 2024Generated in 2007 – – 185 56 2025Generated in 2008 – – 2,188 657 2026Generated in 2009 – – 1,382 415 2027Generated in 2010 – – 1,243 373 2028Generated in 2011 – – 1,474 442 2029Generated in 2012 – – 4,946 1,484 2030Generated in 2013 – – 4,718 1,415 2031

– – 18,680 5,604

Without limit of use 14,893 3,819

14,893 3,819 18,680 5,604

Italy:Without limit of use 41 11 41 11Germany:Without limit of use 2,296 364 15,794 2,483

17,230 4,194 34,515 8,098

At the end of 2014 a revision of the tax losses likely to be recovered in the future was carried out and only deferred tax assets related to tax losseswhich future recovery is probable to occur, were recognised.





At the reporting date the tax losses carried forward for which no deferred taxes were recognised are as follows:

31.12.14 31.12.13 (Restated)

Tax Deffered Limit Tax Deffered Limitloss tax credit expire date loss tax credit expire date

Portugal:Generated in 2008 – – 68 16 2014Generated in 2009 351 74 2015 351 81 2015Generated in 2010 – – 206 47 2014Generated in 2011 180 38 2015 180 41 2015Generated in 2012 475 100 2017 475 109 2017Generated in 2013 1,407 295 2018 1,407 324 2018Generated in 2014 671 141 2026 – – 2026

3,084 648 2,687 618

Spain:Generated in 2001 – – 2 – 2019Generated in 2006 – – 558 167 2024Generated in 2007 – – 2,340 702 2025Generated in 2008 – – 4,868 1,460 2026Generated in 2009 – – 25,012 7,504 2027Generated in 2010 – – 5,539 1,662 2028Generated in 2011 – – 22,864 6,859 2029Generated in 2012 – – 1,502 451 2030Generated in 2013 – – 396 119 2031

– – 63,081 18,924Without limit of use 59,574 14,893 – –

59,574 14,893 63,081 18,924

Italy:Without limit of use 6,904 1,898 4,741 1,304Germany:Without limit of use 33,742 6,852 35,230 7,234Greece:Generated in 2009 – – 1,239 322 2014Generated in 2010 1,318 343 2015 1,318 343 2015Generated in 2011 329 86 2016 329 86 2016Generated in 2012 284 74 2017 284 74 2017Generated in 2013 273 71 2018 338 88 2018Generated in 2014 434 113 2019 – – 2019

2,638 687 3,508 913

Netherlands:Generated in 2005 – – 614 138 2014Generated in 2006 1,173 264 2015 1,476 332 2015Generated in 2007 2,426 546 2016 3,019 679 2016Generated in 2008 10,189 2,293 2017 10,598 2,385 2017Generated in 2009 81 18 2018 81 18 2018Generated in 2010 8,698 1,957 2019 8,698 1,957 2019Generated in 2011 6,977 1,570 2020 9,257 2,083 2020Generated in 2012 376 85 2021 409 92 2021Generated in 2013 1,939 436 2022 1,942 437 2022Generated in 2014 2,846 640 2023 – – 2023

34,705 7,809 36,094 8,121





31.12.14 31.12.13 (Restated)

Tax Deffered Limit Tax Deffered Limitloss tax credit expire date loss tax asset expire date

Romania:Generated in 2009 8,913 1,426 2015 7,285 1,166 2015Generated in 2010 2,110 338 2017 2,103 337 2017Generated in 2011 2,167 347 2018 2,129 341 2018Generated in 2012 2,693 431 2019 2,553 408 2019Generated in 2013 2,544 407 2020 2,558 409 2020Generated in 2014 583 93 2021 – – 2021

19,010 3,042 16,628 2,661

Others:Generated in 2013 286 57 2018 – –Generated in 2014 822 164 2019 – –Without limit of use 1,009 189 186 48

2,117 410 186 48

161,774 36,239 162,155 39,823

23 INCOME TAX

Income tax for the years ended 31 December 2014 and 2013 is made up as follows:

20132014 (Restated)

Current tax 9,412 8,896Deferred tax (Note 22) 5,011 (19,629)

14,423 (10,733)

The numerical reconciliation between tax expense and the accounting profit multiplied by the applicable tax rate, during the years ended 31December 2014 and 2013 is as follows:

20132014 (Restated)

Profit before income tax 200,512 (24,298)Gains/losses related to the sale of companies 3,095 11,661Net result of joint ventures and associates (Note 36) (157,174) (29,851)Impairment losses in the investments under development 17,972 4,755Other permanent differences and tax losses for which the recoverability is not probable 51,327 49,484

Taxable profit 115,732 11,751Effect of different income tax rates in other countries (4,836) (29,976)

110,896 (18,225)Income tax rate in Portugal 23.0% 25.0%

25,507 (4,556)Tax rate change effect (Note 22) (11,084) (6,177)

14,423 (10,733)

The amount of kEuro 51,327 under “Other permanent differences and tax losses for which the recoverability is not probable” (kEuro 49,484 in 2013)includes the effect of:

> Non recognition of the deferred tax assets related to the tax losses carried for-ward of the companies for which the Group was not certainabout its future recovery (3 Shoppings, Alverca, Gli Orsi, Sierra Greece, Sierra Italy, Sierra Turkey, Sierra Asia and River Plaza) (3 Shoppings,Alverca, Gli Orsi, Sierra Greece, Sierra Romania and River Plaza in 2013).




24 ACCOUNTS PAYABLE TO SUPPLIERS

At 31 December 2014 and 2013 accounts payable to suppliers were made up as follows:

31.12.1331.12.14 (Restated)

C urrent Non-current C urrent

Trade payables 11,592 – 13,811Fixed assets suppliers 1,735 29 403

13,327 29 14,214

As of 31 December 2014 and 2013, this caption relates to amounts payable resulting from purchases made in the normal course of the Group’sactivities. As of 31 December 2014, the Board of Directors believes that the carrying amount of these accounts payable is similar to itscorresponding fair value.

The amounts reported above have the following periods for payment:

31.12.1331.12.14 (Restated)

Current:0-90 days 12,579 13,28190-180 days 238 359+ 180 days 510 574

13,327 14,214

Non-current:n+1 8 –n+2 3 –n+3 18 –

29 –




25 STATE AND OTHER PUBLIC ENTITIES

At 31 December 2014 and 2013 state and other public entities were made up as follows:

31.12.14 31.12.13 (Restated)


Current Non-current Current Current Current Non-current

Income tax 3,048 – 5,062 3,976 3,863 13VAT 1,096 102 4,658 1,136 3,773 –Social security contributions 483 – 1,216 8 746 –Other taxes 632 – 84 1,176 88 –

5,259 102 11,020 6,296 8,470 13

According to the current tax legislation, the tax returns of Portuguese companies included in the consolidation are subject to revision and correctionby the fiscal authorities within a period of four years; the exceptions are when fiscal losses have occurred, fiscal incentives have been granted orauditing or claims are in course, in which case, depending on circumstances, the final dates can be extended or suspended. So, the tax returns of thePortuguese companies of the years 2011 until 2014 are still subject to review and possible adjustment.

The Board of Directors believes that any possible adjustments that may be made by the tax authorities as a result of their reviews will not have asignificant effect on the financial statements as of 31 December 2014.

The amounts of kEuro 1,096 and kEuro 1,136 as of 31 December 2014 and 2013, respectively, receivable from public entities, relate basically toValue Added Tax (“VAT”) receivable. In accordance to tax legislation, the Group follows the procedure of recording under this caption the VATincluded in the invoices from third parties during the period of construction of the shopping centres and requests the reimbursement of that VATonly after the beginning of their respective operation.

As of 31 December 2014, the Board of Directors believes that the carrying amount of these accounts receivable and payable is similar to its fairvalue.

As of 31 December 2014 and 2013, there are no overdue debts to state and other public entities.

26 OTHER PAYABLES

At 31 December 2014 and 2013 other payables were made up as follows:

31.12.1331.12.14 (Restated)

Dividends – 21,134Price adjustment on Alexa acquisition – 8,207Price adjustment on Cascais acquisition – 993Ploiesti acquisition – 6,124Gift cheques 4,788 3,948Advances from customers 3,620 2,612Rent deposits from tenants (Note 12) 247 158Guimarães City Council 250 250Other payables 1,395 1,298

10,300 44,724

The amount of kEuro 4,788 of gift cheques relates to deposits received until 31 December 2014 on the sale of those gift cheques, net of giftcheques expired or settled until that date. The Group recognises in an account payable all gift cheques sold, being this account settled when thecheques are compensated by the tenants (in this case the fee charged is recognised on the statement of profit or loss) or when the cheques expire(in this case the income corresponds to the amount of the expired cheques).

In 2014 the amount kEuro 6,124, referred to the acquisition of Ploiesti, was cancelled, due to prescription on September 2014. This amount wasrecognised on the consolidated statement of profit or loss as less impairment losses in the investment properties under development (Note 32).

As of 31 December 2014 and 2013, this caption relates to amounts payable resulting from acquisitions made in the normal course of the Group’sactivities. As of 31 December 2014, the Board of Directors believes that the carrying amounts of these accounts payable is similar to its fair value.

The above balance for other creditors shows an average payment period below 90 days.




27 OTHER CURRENT LIABILITIES

At 31 December 2014 and 2013 other current liabilities were made up as follows:

31.12.1331.12.14 (Restated)

Accrued services payable 19,450 19,262Accrual for vacations and vacations bonuses and other bonuses 12,635 12,612Accrued fixed assets payable 11,049 16,045Accrued interest expense 5,195 5,421Deferred rental income 4,301 4,300Condominium margin 3,511 2,964Accrued property tax 818 767Accrued other taxes 1,649 3,358Key money invoiced in advance 1,663 1,671Others 4,658 3,802

64,929 70,202

The accrual for vacations and vacations bonuses and other bonuses as of 31 December 2014 and 2013, includes the amounts of kEuro 2,484 andkEuro 2,249, respectively, related to the remuneration bonuses attributed to some employees of the Group, which will be paid in the future, as longas the employees involved are still employees of the Group as of the payment date. These remuneration bonuses will be adjusted, in each of thefollowing periods, until the corresponding payment date, by the annual variation of the Net Asset Value (NAV) of the Group and for theremuneration bonuses attributed after 2011, inclusive, will be also adjusted according to the direct result of the Group and possible sales of assetsduring the deferred period. These remuneration bonuses are expensed linearly over the deferred period and recorded as expense, on the basis of thegross amount that was attributed to those employees, and any subsequent adjustment, derived from the variation of the Group’s NAV or other,recorded in the statements of profit or loss of the year in which the variation occurs.

As of 31 December 2014 and 2013, the amounts of kEuro 11,049 and kEuro 16,045, respectively, relate to the estimate, made by the Board ofDirectors for liabilities associated with the investments made in the investment properties, for which the corresponding invoices have not yet beenreceived.

28 VARIATIONS ON PROVISIONS AND IMPAIRMENT LOSSES

The movement in provisions and impairment losses during the years ended 31 December 2014 and 2013 is made up as follows:

2014

Balance as of Translation Balance as of31.12.13 Increase Utilization differences 31.12.14

Impairment losses on accounts receivable:Trade receivables (Note 13) 20,303 2,908 (4,259) 1 18,953Other receivables (Note 14) 5 1,582 – – 1,587

20,308 4,490 (4,259) 1 20,540Provisions for risks and expenses:Other risks and expenses 565 160 (455) – 270

20,873 4,650 (4,714) 1 20,810



Notes to the consolidated financial statements as of 31 December 2014(Translation of notes originally issued in Portuguese – Note 46)(Amounts stated in thousands of Euro - kEuro)

28 VARIATIONS ON PROVISIONS AND IMPAIRMENT LOSSES (continued)

2013 (Restated)

Balance as of Changes in Translation Balance as of31.12.2012 Increase Utilization perimeter differences 31.12.13

Impairment losses onaccounts receivable:Trade receivables (Note 13) 23,291 5,349 (7,335) (991) (11) 20,303Other receivables (Note 14) 5 – – – – 5

23,296 5,349 (7,335) (991) (11) 20,308Provisions for risks and expenses:Other risks and expenses 576 386 (130) (267) – 565

23,872 5,735 (7,465) (1,258) (11) 20,873

Impairment losses on accounts receivable are deducted from the amount of the corresponding asset.

29 SERVICES RENDERED

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

20132014 (Restated)

Services rendered:Fixed rents 64,013 72,552Turnover rents 1,980 2,304Mall income 3,908 3,828Common charges 64,794 68,092Administrative fees 43,638 45,127Parking income 2,328 2,278Other 5,458 7,195

186,119 201,376

The caption “Fixed rents” is net of the discounts (contractual and extra-contractual) granted to the tenants in the amount of kEuro 12,072 andkEuro 11,265, respectively for 2014 and 2013.

30 VARIATION IN FAIR VALUE OF INVESTMENT PROPERTIES

The variation in fair value of the investment properties in 2014 and 2013 is made up as follows:

20132014 (Restated)

Variation in fair value between years (Note 8):- Gains 36,114 –- Losses (3,974) (75,861)Variation in fair value on "fit-out" contracts (Note 8) (2) 106

32,138 (75,755)




31 OTHER OPERATING REVENUE

Other operating revenue for the years ended 31 December 2014 and 2013 is made up as follows:

20132014 (Restated)

Key money – 282Co-generation 112 118Development fees 16 215Reversal of impairment losses 4,054 4,034Gain on sale of assets (Note 8):- Alexa Tower 6,683 –- Plot of land in Nuremberg 4,117 –- Other 4 2,505Other 552 574

15,538 7,728

32 IMPAIRMENT LOSSES AND WRITE-OFF

The impairment losses and write-offs for the years ended 31 December 2014 and 2013 are the following:

20132014 (Restated)

Write-off and Impairment losses in the investment properties under development (Note 8 and 26) 17,972 4,755

17,972 4,755

33 OTHER OPERATING EXPENSES

Other operating expenses for the years ended 31 December 2014 and 2013 are made up as follows:

20132014 (Restated)

Property tax 2,262 2,844Adjustment to the VAT receivable (102) (1,280)Expenses on sale of Alexa Asset – 1,360Loss on the of plot of land in Nuremberg (Note 8) 1,296 –Other 1,412 1,936

4,868 4,860

The amount of kEuro -102 (kEuro -1,280 in 2013) recorded under caption “Adjustment to the VAT receivable” respects mainly to the VAT receivedfrom the Greek tax authorities, for which the Group recorded impairment losses in previous years.




34 NET FINANCIAL RESULTS

Net financial results are made up as follows:

20132014 (Restated)

Expenses:Interest expense 21,441 23,101Stamp duty related to financing 228 1,269Foreign currency exchange losses (3) 26Loss on fair value of ineffective hedging derivatives 1,420 102Other 3,591 2,209

26,677 26,707Net financial expenses (22,043) (19,800)

4,634 6,907

Income:Interest income 4,576 7,609Foreign currency exchange gains 4 1Other 54 (703)

4,634 6,907

35 GAINS AND LOSSES ON INVESTMENTS

Gains and losses on investments are made up as follows:

20132014 (Restated)

Loss on sale of Le Terrazze (Note 4) (3,948) –Loss on sale of Valecenter and Airone (Note 6) – (13,514)Price adjustment of Valecenter (Note 6) 1,008 (700)Goodwill on acquisitions (Note 6):– Cascaishopping – 1,120– Sierra Turkey (361) –– Alverca – (108)Price adjustment of Cascaishopping 89 1,480Other 117 61

(3,095) (11,661)

36 SHARE OF PROFIT OF JOINT VENTURES AND ASSOCIATES

Share of profit of joint ventures and associates during the years ended 31 December 2014 and 2013, is detailed as follows:

20132014 (Restated)

Share of profit of joint ventures (Note 4) 145,547 35,480Share of profit of associates (Note 5) 13,567 (976)Sale of Principado (Note 4) – (997)Sale of La Farga (Note 4) (1,940) –Impairment losses on joint ventures (Note 4) – (310)Impairment losses on associates (Note 5) – (3,346)

157,174 29,851




37 OPERATING LEASES

In the operating leases where the Group is the lessor, the minimal lease payments (fixed rents) recorded during the years ended 31 December 2014and 2013 amounted to kEuro 64,013 and kEuro 72,552 respectively (Note 29).

In addition, as of 31 December 2014 and 2013, the Group had, as lessor, operating lease contracts for which the minimal lease payments (fixed rent)are due as follows:

31.12.1331.12.14 (Restated)

Due in N+1 65,942 71,097Due in N+2 52,597 62,989Due in N+3 46,116 47,720Due in N+4 39,755 39,263Due in N+5 28,929 32,340Due after N+5 89,018 97,613Contracts automatically renewed 321 483

322,678 351,505

In the Operational Leases where the Group is the lessee, the minimum lease payments recognised as expense during the years ended 31 December2014 and 2013 reached the amounts of kEuro 2,205 and kEuro 1,773 respectively.

In addition, as of 31 December 2014 and 2013, the Group had, as lessee, operating lease contracts for which the minimum lease payments are dueas follows:

31.12.1331.12.14 (Restated)

Due in N+1 2,176 1,934Due in N+2 1,486 1,641Due in N+3 1,106 1,315Due in N+4 880 949Due in N+5 726 696Due after N+5 1,751 2,306Contracts automatically renewed – 364

8,125 9,205




38 RELATED PARTIES

Balances and transactions that existed with related parties, during the years ended 31 December 2014 and 2013, in addition to the loans obtainedfrom and payable to the shareholders mentioned in Note 20, are detailed as follows:

Balances

Accounts receivable Accounts payable Other liabilities

31.12.13 31.12.13 31.12.1331.12.14 (Restated) 31.12.14 (Restated) 31.12.14 (Restated)

BB Food Service, S.A. 22 19 – – 8 8Be Towering-Gestão de Torres de Telecomunicações, S.A. 40 4 – – 19 31Contimobe – Imobil. Castelo Paiva, S.A. 604 312 – – 13 (45)Digitmarket – Sistemas de Informação, S.A. (1) 1 3 2 (92) (92)Edificios Saudáveis Consultores, S.A. – – 16 22 388 420Estêvão Neves – Hipermercados Madeira, S.A 5 5 – – 43 –Imoconti – Sociedade Imobiliária, S.A. 126 84 – – – (1)Infofield – Informática, S.A. 4 3 (1) 3 45 44Integrum Colombo Energia, S.A. 42 126 – – (24) (21)Mainroad -Serv Tecn de Informação, S.A – – – – 221 204MDS – Corretor de Seguros, S.A. 68 – 90 – 5 –Modalfa – Comércio e Serviços, S.A. 7 16 – – 29 (19)Modalloop – Vestuário e Calçado, S.A. 3 39 – – 21 21Modelo – Dist.e materiais de Construção, S.A. 9 11 – 2 300 335Modelo Continente Hipermercados, S.A. 399 350 72 294 680 467NOS Comunicações, S.A. 201 42 52 105 158 104Pharmacontinente – Saúde e Higiene, S.A. 96 102 – – 44 10Predicomercial – Promoção Imobiliária, S.A. 172 117 – – (18) (19)Raso- Viagens e Turismo, S.A – 8 38 60 18 34Sesagest – Proj.Gestão Imobiliária, S.A. 18 – – – (7) (15)Sistavac, S.A. – – 141 482 85 14Solinca – Health & Fitness, S.A. 9 1 2 – 37 37Sonae Center Serviços II, S.A. – – – 206 56 51Sport Zone – Comércio de Artigos de Desporto, S.A. 113 121 – 1 420 427Troiaresort-Investimentos Turísticos, S.A. 11 16 – – (15) 4We Do Consulting-Sist. de Informação, S.A. – – 260 – 61 158Worten – Equipamentos para o Lar, S.A. 134 374 – 4 184 303Zippy – Comércio e Distribuição, S.A. 21 43 – 3 93 94Joint ventures and associate companies of Sonae Sierra 4,435 10,532 11,762 (2,023) (881)Sonae SGPS, S.A. – 1 427 10,780 – –Grosvenor Investments, (Portugal), Sarl – – – 10,567 – –Sierra Investments (Luxembourg) 1 Sarl ("Luxco 1") – 2 – 31 30 3Sierra Investments (Luxembourg) 2 Sarl ("Luxco 2") – 2 – 25 24 2

2,081 6,215 11,632 34,349 803 1,678




38 RELATED PARTIES (continued)

Transactions

Sales and Purchases andservice rendered services obtained Interest income Interest expense

2013 2013 2013 20132014 (Restated) 2014 (Restated) 2014 (Restated) 2014 (Restated)

BB Food Service, S.A. 108 102 – – – – – –Be Towering-Gestão de Torres de Telecomunicações, S.A. 259 145 (8) (11) – – – –Contimobe – Imobil. Castelo Paiva, S.A. 46 32 (477) (27) – – – –Digitmarket – Sistemas de Informação, S.A. – – 228 128 – – – –Edificios Saudáveis Consultores, S.A. – – 253 382 – – – –Imoconti – Sociedade Imobiliária, S.A. – – (112) (1) – – – –Infofield – Informática, S.A. 551 546 (22) (16) – – – –Integrum Colombo Energia, S.A. – – (688) (575) – – – –Mainroad -Serv Tecn de Informação, S.A – – 2,461 2,723 – – – –MDS – Corretor de Seguros, S.A. – – (1) 2 – – – –Modalfa – Comércio e Serviços, S.A. 275 287 – – – – – –Modalloop – Vestuário e Calçado, S.A. 255 273 – – – – – –Modelo – Dist.e materiais de Construção, S.A. 681 699 – – – – – –Modelo Continente Hipermercados, S.A. 8,553 8,572 352 390 – – – –NOS Comunicações, S.A. 860 448 1,001 1,192 – – – –Pharmacontinente – Saúde e Higiene, S.A. 392 519 – – – – – –Predicomercial – Promoção Imobiliária,SA – – (161) (45) – – – –Raso- Viagens e Turismo, S.A 234 250 949 846 – – – –Sesagest – Proj.Gestão Imobiliária, S.A. – – (7) (7) – – – –Sistavac, S.A. – – 2,555 2,854 – – – –Solinca – Health & Fitness, S.A. 1,043 980 (71) (81) – – – –Sonae Center Serviços II, S.A. – (12) 430 403 – – – –Sport Zone – Comércio de Artigos de Desporto, S.A. 4,901 5,018 (20) (26) – – – –Troiaresort-Investimentos Turísticos, S.A. 129 – 6 – – – – –We Do Consulting-Sist. de Informação, S.A. – – 1,326 – – – – –Worten – Equipamentos para o Lar, S.A. 4,407 – (92) – – – – –Zippy – Comércio e Distribuição, S.A. 1,176 – (9) – – – – –Joint ventures and associate companiesof Sonae Sierra 34,794 – 12,630 – 3,152 5,195 118 48Sonae SGPS, S.A. – – 218 – – – – –Sierra Investments (Luxembourg) 1 Sarl ("Luxco 1") – – (1) (2) – – 32 102Sierra Investments (Luxembourg) 2 Sarl ("Luxco 2") – – (1) (2) – – 25 82

58,664 17,859 20,739 8,127 3,152 5,195 175 232

The remuneration of the Board of Directors, during the years ended 31 December 2014 and 2013, was as follows:

2014 2013

Fixed remuneration 1,588 1,566Variable remuneration 919 370

2,507 1,936

The total fees invoiced by the statutory auditor, amounted to kEuro 419, which include the amount of kEuro 252 relating to review of accounts andthe amounts of kEuro 84, kEuro 62 and kEuro 21, relating to reliability assurance services, tax consulting and other services, respectively.




39 CONTINGENT LIABILITIES AND BANK GUARANTEES

As of 31 December 2014 and 2013, the main contingent liabilities relate to the following situations:

> In 2014 the Group has agreed to pay up to the amount of kEuro 4,000 in case of breach of the obligations undertook under the pre sales andpurchase agreement between Parklake Shopping SA and Carrefour Romania SA.

> In 2014 the Group has agreed to pay up to the amount of kEuro 3,000 in case of breach of the obligations undertook under the constructionagreement of the shopping centre Parklake between Parklake Shopping SA and Strabag, Srl.

> In December 2013 Gli Orsi received a tax notification, whereby it is asked to pay the amount of kEuro 19,463, related with real estate transfertax in the amount of kEuro 9,485 and kEuro 9,978 related with penalties and interests, plus court agent fees amounting to kEuro 905. Basedon the opinion of the tax expert there are valid reasons to consider the claim ungrounded, and so the Group has appealed to the SupremeCourt. In the specific case of the penalties requested by the tax authorities, the tax expert understands that no penalty is due. To face thiscontingency, the Group has expensed in 2013 an amount of keuro 10,390 (corresponding to real estate transfer tax (kEuro 9,485) plus countagent fee (kEuro 905).

> During 2008 – 2014, Sonae Sierra has received tax notifications regarding the tax de-ductibility of interest expenses on loans obtained,concerning the years 2004, 2005, 2007, 2008, 2009 and 2010, in the total amount of kEuro 11,993. All these tax notifications were claimedby Sonae Sierra and guarantees in the same amount were granted by the subsidiary Sierra Investments, SGPS, S.A. to the Portuguese taxadministration. No provision was recorded because the Board of Directors understands that the risk of these tax contingencies is unlikely. Forthe year of 2004, Sonae Sierra has already received a favourable first court decision and on 20 January 2015, Sonae Sierra was notified of asecond favourable court decision, facts that corroborates the Group’s assessment of these contingencies.

> In 2012 the joint venture entity Freccia Rossa received a tax notification amounting to kEuro 857 regarding interest expenses of 2008 thatwould not be deductible for tax purposes. During 2014 this joint venture received a tax notification amounting kEuro 656, regarding the samematters but related to the year of 2009. As the company has accounts receivable of VAT (VAT regarding the invoices during theconstruction phase of the shopping centre), the tax authorities retained the reimbursement of the VAT until the final outcome of the taxnotification. Freccia Rossa has presented a reclamation against these tax notifications. However, in relation to the year of 2009 the companypaid an amount of kEuro 219 (1/3 of the tax notification), as requested by law in order to be able to present the referred reclamation, whichwas recorded against an account receivable. In accordance to the tax expert engaged to assist in this process, there are valid and soundarguments to sustain the company’s procedure and as well he has considered being improbable that the company fails the litigation and sono allowance was considered by the Group.

> In 2010 the Group has agreed with the syndicate of banks that granted the loan to Gli Orsi Shopping Centre 1, Srl for the construction of theshopping centre Gli Orsi the payment of the debt service in the maximum amount kEuro 6,178, in case the company is not able to complywith its obligations.

At 31 December 2014 and 2013 the bank guarantees granted to third parties were as following:

31.12.1331.12.14 (Restated)

Bank guarantees:relating to tax processes in course 3,785 3,785relating to legal processes in course 199 325to complete the construction of several projects 660 660to secure claims of the buyer of Münster asset 19,000 19,000Others 5,342 3,228

28,986 26,998

No provision has been made for any liability arising from the tax and legal processes mentioned above, as the Board of Directors believes that thecorresponding risk is not probable.




40 COMMITMENTS NOT REFLECTED ON THE FINANCIAL STATEMENTS

Following the sale of 49.9% of Sierra European Retail Real Estate Assets Holdings BV’s (“Sierra BV”) share capital to a group of Investors, in 2003,Sonae Sierra has agreed to revise the sale price of such shares in the event of a sale, to third parties, of some of the shopping centres owned bysubsidiaries of Sierra BV (subject to some conditions).

The price revision can occur both with a sale of the asset (investment property in the case) or with a sale of the shares of the company that is,directly or indirectly, the owner of such asset.

The price revision will be made by Sonae Sierra to the Investors in Sierra Fund or to Sierra BV if, in a relevant sale, discounts related to deferredtaxes on capital gains have been made.

The price revision will be dependent on the percentage ownership in the company that owns the asset, the Investors’ ownership percentage inSierra BV (and in case of a sale of shares adjusted by a 50% discount) and is limited to:

(i) in the case of the asset sale, a maximum amount of kEuro 118,258;

(ii) in the case of a sale of shares of the company that directly or indirectly owns the asset, a maximum amount of kEuro 59,129;

(iii) in the case of a sale of shares of the company that directly or indirectly owns the asset, the price revision plus the selling price, cannot resultin a revised price that is greater than the proportion of the Net Asset Value.

Similar commitments were granted by Sonae Sierra in relation to the companies transferred to Sierra BV after 2003 and to CBRE companiesregarding the sale of 50% of Vasco da Gama.

These commitments are valid while the current agreements with the other stockholders of Sierra BV are maintained.

Furthermore, Sonae Sierra has the right to make a proposal for the acquisition of the asset or the shares at stake before they are offered for sale toa third party.

In accordance with the agreements made between the shareholders of Sierra BV at the time of its incorporation in 2003, it was agreed that SierraBV should exist for an initial period of 10 years (that ends in October 2013), that could be extended by two additional periods of one year starting in2013. On September 2013 all the shareholders of Sierra BV approved an amendment agreement relating to the continuation of the operations ofthe Fund with a long-stop date until October 2018. The Group continues to study several alternatives to dispose of the properties held by Sierra BV,but there are no intentions to proceed with forced asset sales.

In accordance with the agreements made between the shareholders of SPF at the time of its incorporation in 2008, it was agreed that SPF shouldexist for a period of 10 years (that will end in 2018), having the non Sonae Sierra shareholders the option to redeem its shares, provided that someconditions are met. The Group is not aware of any intention by any of those shareholders to redeem its shares.

The Group believes that the direct sale of the asset is a less attractive solution as it is subject to certain liabilities that are not crystalized in theevent of a sale of the shares.

41 DIVIDENDS

Regarding the net profit of 2014, the Board of Directors proposes to transfer the amount to retained earnings.

The Board of Directors also proposes the distribution of free reserves in the amount of kEuro 24,386. The respective payment should be deferred toa date to be defined by the shareholders and after the recommendation of the Board of Directors

42 EARNINGS PER SHARE

As of 31 December 2014 and 2013, basic earnings per share correspond to the net profit divided by the weighted average number of ordinary sharesof Sonae Sierra during the year, and was computed as follows:

31.12.1331.12.14 (Restated)

Profit considered to compute the basic earnings per share (net profit of the year) 96,311 3,637Number of shares 32,514,000 32,514,000

Earning per share (Euro) 2.96 0.11

Sonae Sierra has no potential diluted shares and, for that reason, the diluted earnings per share is similar to the basic earnings per share.




43 SEGMENT INFORMATION

In accordance to the Management Report, the segments used by the Management of the Group are as follows:

> Sierra Investments

> Sierra Developments

> Sierra Management

> Sonae Sierra Brazil

The Sonae Sierra’s reportable segment information for the years ended 31 December 2014 and 2013, regarding the statement of profit or loss, canbe detailed as follows:

31.12.1331.12.14 (Restated)

Net Operating MarginSierra Investments 89,206 95,155Sierra Developments (26,588) (1,507)Sierra Management 4,843 7,071Sonae Sierra Brazil 21,694 21,085Reclassifications and adjustments 18,604 (8,353)

Consolidated (1) 107,759 113,451

Net financial costsSierra Investments 31,368 31,851Sierra Developments 2,718 3,013Sierra Management (488) (698)Sonae Sierra Brazil 5,983 3,976Reclassifications and adjustments 918 (1)

Consolidated 40,499 38,141Direct profit before taxesSierra Investments 57,276 63,366Sierra Developments (29,306) (4,524)Sierra Management 5,088 7,235Sonae Sierra Brazil 15,710 16,513Reclassifications and adjustments 16,872 (9,978)

Consolidated 65,640 72,612Indirect income before taxesSierra Investments 66,466 (99,109)Sonae Sierra Brazil 21,419 36,878Reclassifications and adjustments (19,146) 9,980

Consolidated 68,739 (52,251)Corporate tax + Deferred taxSierra Investments (27,184) 6,343Sierra Developments 1,787 (1,061)Sierra Management (1,738) (2,843)Sonae Sierra Brazil (10,933) (19,163)Reclassifications and adjustments – 1

Consolidated (1) (38,068) (16,723)Net profitSierra Investments 96,559 (29,399)Sierra Developments (27,519) (5,585)Sierra Management 3,350 4,392Sonae Sierra Brazil 26,196 34,229Reclassifications and adjustments (2,275) –

Consolidated 96,311 3,637




43 SEGMENT INFORMATION (continued)

The amounts under the caption “Reclassifications and adjustments” can be analysed as follows:

Direct profit Indirect income Corporate tax +Net Operating Margin Net financial costs before taxes before taxes deferred tax Net profit

31.12.13 31.12.13 31.12.13 31.12.13 31.12.13 31.12.1331.12.14 (Restated) 31.12.14 (Restated) 31.12.14 (Restated) 31.12.14 (Restated) 31.12.14 (Restated) 31.12.14 (Restated)

Reclassification of the value

created in projects in

Sierra Developments (1) 17,557 (9,927) – – 17,557 (9,927) (17,557) 9,927 – – – –

Corporate centre 1,115 – 930 – (2,275) – – – – – (2,275) –

Others (68) 1,574 (12) (1) 1,590 (51) (1,589) 53 – 1 – –

Reclassifications and adjustments 18,604 (8,353) 918 (1) 16,872 (9,978) (19,146) 9,980 – 1 (2,275) –

(1) Up to a maximum period of 2 years after the opening date of the shopping centre or, if occurs sooner, until it is sold to third parties, Sierra Developments recognises in the Net

Operating Margin the value created in the assets, that have been sold to the Sierra Investments; in the consolidated accounts these amounts are recognised under the caption

"Indirect income before taxes" and "Deferred Taxes".

The Sonae Sierra’s reportable segment information for the year ended 31 December 2014 and 2013, regarding the statement of financial position,can be analysed as follows:

31.12.1331.12.14 (Restated)

Investment propertiesSierra Investments 1,598,328 1,565,202Sonae Sierra Brazil 423,118 391,290Investment Properties under development and others (Sierra Investments and Brazil) (5,154) (4,079)

Consolidated (1) 2,016,292 1,952,413

Bank loansSierra Investments 787,396 863,201Sierra Developments 7,997 7,997Sonae Sierra Brazil 83,443 85,069Bank loan at Sonae Sierra SGPS 75,000 75,000

Consolidated (1) 953,836 1,031,267

Deferred taxes liabilitiesSierra Investments 205,940 197,743Sierra Developments 249 244Sonae Sierra Brazil 66,754 57,347Others (1,423) (2,447)

Consolidated 271,520 252,887

(1) The reconciliation with the statutory accounts is presented on the following tables.





The reportable segment information can be reconciled with the enclosed financial statements as follows:

Statement of profit or loss

31.12.1331.12.14 (Restated)

Net Operating Margin – segments 107,759 113,451Equity method adjustment (1) (73,274) (79,517)Proportional method adjustment (2) 20,258 24,222Indirect Income:Variation in fair value of the investment properties 32,138 (75,755)Gains realized on sale of investments 4,489 (170)Other indirect income/costs 178 (835)Depreciations, write-off and impairments losses (23,038) (6,410)Withholding taxes related to Interests and dividends – (81)Other results related to taxes – 1,280Others (34) 1,127

Net Profit before interest and results from associated undertakings, as per Financial Statements 68,476 (22,688)

Corporate tax + Deferred Tax – segments (38,068) (16,723)Equity method adjustment (1) 26,879 16,752Proportional method adjustment (2) (3,250) 7,354Impairment of Goodwill – 3,346Others 16 4

Income tax as per Financial Statements (14,423) 10,733

(1) Joint ventures and associates are included in the statutory consolidated accounts by the equity method and in the management accounts by theproportionate method.

(2) The companies owned by the group by less than 100% and more that 50% are included in the manage-ment accounts by the proportionate method and inthe statutory consolidated accounts are included by the full consolidation method.





Statement of financial position

31.12.1331.12.14 (Restated)

Investment properties – segments 2,016,292 1,952,413Equity method adjustment (1) (1,491,625) (1,443,467)Proportional method adjustment (2) 359,265 344,616Goodwill (3) (17,525) (19,701)Others – 1

Investment properties as per Financial Statements 866,407 833,862

Bank loans – segments 953,836 1,031,267Equity method adjustment (1) (609,527) (659,388)Proportional method adjustment (2) 166,444 181,952Financing costs (3,828) (3,567)Short term facilities (4) 20,000 5,661Others – (2)

Debt – current and non-current as per Financial Statements 526,925 555,923

(1) Joint ventures and associates are included in the statutory consolidated accounts by the equity method and in the management accounts by theproportionate method.

(2) The companies owned by the group by less than 100% and more that 50% are included in the manage-ment accounts by the proportionate method and inthe statutory consolidated accounts are included by the full consolidation method.

(3) The Sierra Investment segment consider the Goowdill under the caption "Investment Properties".(4) The management accounts have the short term facilities recorded under the caption "Cash & Equiva-lents"

The average number of employees in 2014 and 2013, by business segment is detailed as follows:

20132014 (Restated)

Sierra Investments 20 19Sierra Developments 57 56Sierra Management 431 401Non allocated 144 171

652 647

44 SUBSEQUENT EVENTS

On 9 January 2015 the bank guarantee in the amount of kEuro 19,000 was handed back to the bank and the amount was released from the escrowaccount (Note 14) on 14 January 2015.

45 APPROVAL OF THE FINANCIAL STATEMENTS

The accompanying financial statements were approved by the Board of Directors and authorised for issuance on 27 February 2015. However, thesefinancial statements are still depending on the approval by the Shareholders General Meeting, in accordance with business legislation prevailing inPortugal.

46 NOTE ADDED FOR TRANSLATION

This is a translation of financial statements originally issued in Portuguese in accordance with Portuguese Statutory requirements, some of whichmay not conform to or be required in other countries. In the event of discrepancies, the Portuguese language version prevails.



Sonae Sierra, SGPS, SA

Statements of financial position as of 31 December 2014 and 2013(Translation of the statement of financial position originally issued in Portuguese – Note 27)(Amounts stated in thousands of Euro)

31 December 31 DecemberASSETS Notes 2014 2013

Non current assets:Investments in group companies and associated companies 3 1,148,979 750,844Suplementary capital granted 4 100,434 389,026

Total non current assets 1,249,413 1,139,870

Current assets:Loans to Group companies 5 – 535Other receivables 6 4,273 5,112State and other public entities 7 931 1,571Other current assets 8 156 145Cash and Cash Equivalents 9 1,141 155

Total current assets 6,501 7,518

Total assets 1,255,914 1,147,388

EQUITY AND LIABILITIES

Equity:Share capital 10 162,245 162,245Legal Reserve 57,329 57,329Other reserves 341,650 341,650Retained earnings 421,424 464,142Net Profit for the period 112,632 (42,718)

Total Equity 1,095,280 982,648

Liabilities:Non current liabilities:Bond Loans – net of current portion 11 74,575 74,424Derivative financial instruments 13 3,014 4,378

Total non current liabilities 77,589 78,802

Current liabilities:Bank Loans short term 12 20,000 5,661Current portion of bond loans 11 (150) (139)Loans from Group companies 14 57,091 54,514Shareholders 15 – 21,134Other Payables 16 879 323State and other public entities 7 242 67Other current liabilities 17 4,983 4,378

Total current liabilities 83,045 85,938

Total equity and liabilities 1,255,914 1,147,388

The accompanying notes form an integral part of these statements of financial position as of 31 December 2014.




Statements of profit or loss for the years ended 31 December 2014 and 2013(Translation of statement of profit or loss originally issued in Portuguese - Note 27)(Amounts stated in thousands of Euro)


Notes 2014 2013

Other operating revenue 18 5 8

5 8

External supplies and services (237) (475)Personnel expenses 22 (719) (524)Other operating expenses 19 (21) (125)

(977) (1,124)

Net operating profit (972) (1,116)Financial income 20 123 479Financial expenses 20 (10,381) (8,026)Gains and losses on investments 20 124,855 (33,201)

Profit before income tax 113,625 (41,864)

Income tax 21 (993) (854)

Profit after income tax 112,632 (42,718)

Net profit for the period 112,632 (42,718)

The accompanying notes form an integral part of these statement of profit or loss for the year ended 31 December 2014.



Statements of comprehensive income for theyears ended 31 December 2014 and 2013(Translation of the statement of comprehensive income originally issued in Portuguese - Note 27)(Amounts stated in thousands of Euro)


2014 2013

Net profit for the period 112,632 (42,718)

Total comprehensive income for the period 112,632 (42,718)

The accompanying notes form an integral part of these statements of comprehensive income for the year ended 31 December 2014.

The Accountant The Board of Directors


Statements of changes in equity for theyears ended 31 December 2014 and 2013(Translation of statements of changes in equity originally issued in Portuguese - Note 27)(Amounts stated in thousands of Euro)


Attributable to Equity Holders of Sonae Sierra

Reserves

Share Legal Other RetainedNotes capital reserves reserves earnings Net profit Total

Balance as of 31 December 2013 162,245 57,329 341,650 495,875 (31,733) 1,025,366Appropriation of net profit for 2012:Appropriation of net profit for 2012 – – – (31,733) 31,733 –Net profit for period ended 31 December 2013 – – – – (42,718) (42,718)

Balance as of 31 December 2013 162,245 57,329 341,650 464,142 (42,718) 982,648

Balance as of 1 January 2014 10 162,245 57,329 341,650 464,142 (42,718) 982,648Appropriation of net profit for 2013:Appropriation of net profit for 2013 10 – – – (42,718) 42,718 –Net loss for period ended 31 December 2014 – – – – 112,632 112,632

Balance as of 31 December 2014 162,245 57,329 341,650 421,424 112,632 1,095,280

The accompanying notes form an integral part of these statement of changes in equity for the year ended 31 December 2014.



Statements of cash flows for the years ended 31 December 2014 and 2013(Translation of statement of cash flow originally issued in Portuguese - Note 27)(Amounts stated in thousands of Euro)


Notes 2014 2013

OPERATING ACTIVITIES:Paid to personnel 675 432

Flows from operations (675) (432)(Payments)/receipts of income tax (519) (548)Other (payments)/receipts relating to operating activities 310 (4,533)

Flows from operating activities [1] 154 (4,417)

INVESTING ACTIVITIES:Receipts relating to:Investments 3 and 4 959,196 9,300Interest income 159 660Dividends 20 7,140 966,495 – 9,960

Loans granted 535 18,097

Payments relating to:Investments 3 and 4 951,025 21,531Other – 951,025 – 21,531

Flows from investing activities [2] 16,005 6,526

FINANCING ACTIVITIES:Receipts relating to:Bank loans 12 20,000 75,000Other – 20,000 – 75,000

Loans obtained – others 2,578 15,554

Payments relating to:Interest expenses 10,956 10,130Dividends 15 21,134 –Bank loans 12 5,661 82,458Other – 37,751 – 92,588

Flows from financing activities [3] (15,173) (2,034)

Variation in cash and cash equivalents [4]=[1]+[2]+[3] 986 75Cash and cash equivalents at the beginning of the year 9 155 80Cash and cash equivalents at the end of the year 9 1,141 155

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



Notes to the financial statements as of 31 December 2014(Translation of notes originally issued in Portuguese – Note 27)(Amounts stated in thousands of Euro – kEuro)

1 INTRODUCTION

SONAE SIERRA, S.G.P.S., S.A. (“the Company” or “Sonae Sierra”), has its head office in Lugar do Espido, Via Norte, Apartado 1197, 4471-909 Maia –Portugal, and its activity is holding and finance, group of companies operating in the management, development and investment of shoppingcentres business.

The financial statements are presented in Euro, the functional currency of the Company, as this is the currency of the primary economicenvironment in which the Company operates.

The Company prepared as well consolidated financial statements, which are separately presented and properly show the financial position, theresults and comprehensive income of its operations, changes in equity and cash flows of the Sonae Sierra Group.

2 PRINCIPAL ACCOUNTING POLICIES

The principal accounting policies adopted in preparing the accompanying financial statements are as follows:

2.1. Basis of preparation

The accompanying financial statements have been prepared according to the International Financial Report Standards (“IFRS”) and approvedby the European Union, applicable to economic years beginning on 1 January 2014. These correspond to the International Financial ReportingStandards (“IFRS”) issued by the International Accounting Standards Board (“IASB”) and interpretations issued by the International FinancialReporting Interpretations Committee (“IFRIC”) or by the previous Standing Interpretations Committee (“SIC”) and approved by the EuropeanUnion.

The accompanying financial statements have been prepared on a going concern basis and in accordance with the accrual basis of accounting,maintained according to International Financial Reporting Standards, as approved by the European Union.

New accounting standards and their impact in these financial statements

Until the date of approval of these financial statements, the European Union endorsed the following standards, interpretations, amendmentsand revisions with mandatory application to the economic year beginning on 1 January 2014:


beginning on/after

IFRS 10 – Consolidated financial statements 01-Jan-14IFRS 11 – Joint arrangements 01-Jan-14IFRS 12 – Disclosure of interests in other entities 01-Jan-14IAS 27 (Revised 2011) – Separate financial statements 01-Jan-14IAS 28 (Revised 2011) – Investments in associates and joint ventures 01-Jan-14Amendments to IFRS 10 and IFRS 12 – Investment entities 01-Jan-14Amendments to IAS 32 – offsetting financial assets and financial liabilities 01-Jan-14Amendments to IAS 36 – Recoverable amount disclosures for non-financial assets 01-Jan-14Amendments to IAS 39 – Novation of derivatives and continuation of hedge accounting 01-Jan-14IFRIC 21 – Levies 01-Jan-14

All these standards were first applied by the Company in 2014 and had no impact in the financial statements.

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

Applicable for (financial years

beginning on/after)

Annual improvements to IFRS (2011-2013 cycle) 01-Jan-15

Despite these standards were endorsed by the European Union, they were not yet adopted by the Company as its application is not yetmandatory. Anyway the Company does not anticipate any material effect derived from its adoption.






The following standards and interpretations were issued by the IASB and they are not yet endorsed by the European Union:

Applicable for(financial years

beginning on/after)

IFRS 9 – Financial instruments 01-Jan-18IFRS 14 – Regulatory deferral accounts 01-Jan-16IFRS 15 – Revenue from contracts with customers 01-Jan-17Amendments to IFRS 11 – Accounting for acquisition of interests in joint operations 01-Jan-16Amendments to IAS 16 and IAS 38 – Clarification of acceptable methods of depreciation andamortization 01-Jan-16Amendments to IAS 16 and IAS 41 – Bearer plants 01-Jan-16Amendments to IAS 19 – Defined benefit plans: Employee contributions 01-Jul-14Amendments to IFRS 10 and IAS 28 – Sale or contribution of assets between the investorand the associate or joint venture 01-Jan-16Amendments to IAS 27 – Application of equity method to measure investments in subsidiaries 01-Jan-16Amendments to IFRS 10, IFRS 12 and IAS 28 – Clarifications related to the exception fromconsolidation of investment entities 01-Jan-16Amendments to IAS 1 – Improvements in disclosures 01-Jan-16Annual improvements to IFRSs 2010-2012 cycle 01-Jul-14Annual improvements to IFRSs 2012-2014 cycle 01-Jan-16

In relation to these standards it is not anticipated any significant impact on the accompanying financial statements. Any of these standardswere adopted by the Company as they were not yet endorsed by the European Union.

2.2. Financial Investments

Financial investments in subsidiaries are recorded at acquisition cost less impairment losses. Impairment is assessed by comparing the cost ofthe investments with the corresponding Net Asset Value of the subsidiary company.

2.3. Financial assets and liabilities

Assets and liabilities are recognised in the statement of financial position when the Company becomes part of the corresponding contract.

Financial assets are initially recorded at their acquisition value, which is the fair value, including transaction costs, except for financial assetsmeasured at fair value through profit or loss, where the transaction costs are immediately recorded in the profit or loss statement.

The Company derecognises financial assets when: (i) the contractual rights to cash flows expire; (ii) it transfers to another entity thesignificant risks and benefits associated with ownership of the property or; (iii) despite having retained some, but not substantially thesignificant risks and benefits, has transferred the control over them.

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

Financial assets are classified into the following categories:

> Financial assets measured at fair value through profit or loss;

> Financial assets held to maturity;

> Loans and receivables;

> Financial assets available for sale.






Financial assets measured at fair value include mainly derivative financial instruments. The subsequent measurement of these financialassets are carried at fair value and recorded in the statement of changes in equity if they qualify for hedge accounting purposes (Note 2.4). Ifthey do not qualify for hedge accounting purposes, the fair value of these financial assets is recorded in the statement of profit or loss.

Financial assets held to maturity are financial assets with fixed maturity and for which the Company has the intention and ability to hold tothat date. In the particular case of the Company, there are no financial assets classified in this category.

Loans and receivables are generated during normal operations of the Company, for which there is no intention to negotiate. Classified in thiscategory are the accounts receivable and other receivables, loans to third parties and bank deposits. The subsequent measurement of thesefinancial assets is carried at amortised cost in accordance with the effective interest method.

Financial assets available for sale are financial assets that are not classified in any of the above mentioned categories. In this particular case,the Company should classify in this category financial investments which were not likely to be classified as subsidiaries, associates or jointlycontrolled entities. However, by the date of these financial statements, no financial assets are classified in this category.

Financial liabilities are classified into the following categories:

> Financial liabilities measured at fair value through profit or loss;

> Other financial liabilities.

Financial liabilities measured at fair value include mainly derivative financial instruments. The subsequent measurement of these financialliabilities are carried at fair value and recorded in the statement of changes in equity if they qualify for hedge accounting purposes (Note 2.4).If they do not qualify for hedge accounting purposes, the fair value of these financial liabilities is recorded in the statement of profit or loss.

Other financial liabilities correspond to other financial liabilities which are not classified in the former category. In this category are classifiedbank loans and other current liabilities, including shareholders and accounts payable and other payables. The subsequent measurement ofthese financial liabilities is carried at amortised cost, in accordance with the effective interest method.

a) Loans granted to Group companies

Loans granted to Group companies are recorded as assets at amortised cost which usually do not differ from the nominal value.

Financial income with interest received is recorded in the profit or loss statement on an accruals basis. The amounts due and not receivedat the statement of financial position date are recorded under the caption "Other current assets".

b) Trade and other receivables

Accounts receivable and other receivables are recorded at amortised cost less any eventual impairment losses. Usually, the amortisedcost of these financial assets does not usually differ from its nominal value.

c) Loans

Loans are stated as liabilities at amortised cost.

Any expenses incurred in obtaining such financing, usually paid in advance on issue, namely the bank fees and stamp duty as well asinterest expenses and similar expenses, are recognised using the effective interest method in the results of the year, over lifetime of suchfinancing. These expenses incurred are deducted from the caption “Bank loans”.

Financial expenses with interest expenses and similar expenses (namely stamp duty), are recorded in the statement of profit or loss onan accrual basis of accounting. The amounts due and not paid at the statement of financial position date are recorded under the caption“Other current liabilities”.

d) Trade and other payables

Accounts payable and other payables are stated at amortised cost. Usually, the amortised cost of these liabilities does not differ from itsnominal value.






e) Cash and cash equivalents

The amounts under caption "Cash and cash equivalents" includes cash on hand, cash at banks on demand and other treasury applicationswhich mature in less than three months that are subject to insignificant risk of change in value.

These assets are measured at amortised cost. Usually, the amortised cost of these financial assets does not differ from its nominal value.

For purposes of the statement of cash flows, “Cash and cash equivalents” also include bank overdrafts, which are included in thestatement of financial position under caption “Other loans”.

f) Derivatives

The Group uses derivative financial instruments in managing their financial risks associated with fluctuating interest rate, only as a wayto hedge those risks.

Derivative financial instruments in the form of swaps or zero cost collars are used by the Company to hedge interest rate risks on loansobtained.

Derivative financial instruments are initially recorded at fair value on the date of their contract. At each statement of financial positiondate, they are re-measured at fair value, with the corresponding gain or loss on the re-measurement recorded immediately in the profit or loss statement, unless such instruments are designated as hedging instruments. When they are designated as a hedging instrument(Note 2.4), the corresponding gain or loss in the re-measurement is recorded against the caption "Hedging reserve" in equity andtransferred to results when the covered position affect profit or loss statement.

A derivative with a positive fair value is recognised under caption "Derivative financial instruments" as a financial asset. A derivativefinancial instrument with a negative fair value is recognised under the same caption but as a financial liability.

A derivative is presented as non-current if the remaining maturity exceeds 12 months and is not expected that it will be executed orsettled within that period.

2.4. Hedge accounting

As mentioned above, the Company uses derivative financial instruments (usually swaps and zero cost collars) to cover the risk of changinginterest rate on Company’s bank loans (cash flow hedge). The amount of loans, maturities, interest rates and reimbursement plan of loansunderlying such financial instruments to hedge interest rate are usually identical in all conditions established for the correspondentcontracted loans, which usually sets the perfect relationship coverage.

The Company’s criteria for classifying financial derivatives for hedging interest rate as a cash flow hedges are as follows:

> The hedge transaction is expected to be highly effective in achieving offsetting changes in fair value or cash flows attributable to thehedged risk;

> the effectiveness of the hedge can be reliably measured;

> there is adequate documentation of the hedging relationships at the inception of the hedge;

> the forecast transaction that is subject of the hedges is highly probable.

Derivative hedge instruments used by the Company to hedge the exposure to changes in the interest rate of its loans are initially recorded atcost, if any, and subsequently adjusted to the corresponding fair value. Changes in fair value of these hedging instruments are recorded inequity under the caption “Hedging reserves”, and then recognised in the statement of profit or loss over the period the hedged instrumentaffects results, when those meet the conditions to hedge accounting, otherwise the changes in fair value are recognised through thestatement of profit or loss.

Hedge accounting of derivative instruments is discontinued when the instrument matures or is sold. Whenever a derivative instrument can nolonger be qualified as a hedging instrument, the fair value differences recorded in equity under the caption “Hedging reserve” are transferredto profit or loss of the year or to the carrying amount of the asset; subsequent variations in fair value are recorded in the statement of profitor loss.

At the reporting date the derivatives financial instruments held by the Company do not meet the conditions to apply the hedge accounting.





2.5. Provisions

Provisions are recognised when, and only when, the Company has an obligation (legal or implicit) resulting from a past event and it is probablethat an outflow of resources will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.Provisions are reviewed and adjusted at the reporting date in order to reflect the best estimate as of that date.

Provisions for restructuring expenses are recognised by the Company when there is a formal and detailed restructuring plan and that suchplan has been communicated to the involved parties.

2.6. Contingent assets and liabilities

Contingent liabilities are not recognized in the financial statements. They are disclosed in the notes (Note 24) unless the possibility of anoutflow of resources affecting economic benefits is remote.

A contingent asset is not recognized in the financial statements, but disclosed in the notes when an inflow of economic benefits is probable.

2.7. Income tax

Income tax represents the sum of the tax based on the taxable results of the Company and the deferred taxes.

Current income tax is determined based on the taxable result of the Company (which are different from accounting results), in accordancewith the tax rules in force where its head office is located.

Deferred taxes are calculated using the financial position liability method, reflecting the net tax effects of temporary differences between thecarrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

Deferred tax assets and liabilities are not recognised when the corresponding temporary differences arise from goodwill or from the initialrecognition of assets and liabilities other than in a business combination.

Deferred tax assets and liabilities are calculated and evaluated annually at the tax rates expected to apply to the period when the asset isrealized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantially issued at the statement offinancial position date.

Deferred tax assets are recognised only when it is probable that sufficient taxable profits will be available against which the deferred taxassets can be utilised. At the statement of financial position date, a review is made of the deferred tax assets and they are reduced whenevertheir future use is no longer probable.

Deferred tax assets and liabilities are recorded in the statement of profit or loss, except if they relate to items directly recorded in equitycaptions. In these situations the corresponding deferred tax is also recorded under the same caption.

2.8. Statement of financial position classification

Assets and liabilities due in more than one year from the date of the statement of financial position are classified as non-current assets andliabilities, respectively.

2.9. Revenue recognition and accrual basis

The dividends are recognised as gains in the year they are assigned by the shareholders.

The income and expenses are recognised in the year to which they relate, regardless of the date of payment or receipt (accrual basis ofaccounting). The income and expenses for which actual amounts are not known are estimated.

Under the captions "Other current assets" and "Other current liabilities” are recorded in-come and expenses attributable to the current year,which settlement or receipt will only occur in future years, as well as amounts paid and received that have occurred on the date of thestatement of financial position, but which relate to future periods, and that will be charged to the profit or loss of the corresponding year.

2.10. Balances and transactions expressed in foreign currency

Transactions in currencies other than Euro are recorded at the exchange rates prevailing on the transaction date.

At each reporting date, all monetary assets and liabilities expressed in foreign currencies are translated to Euro using the closing exchangerates as of that date.

Exchange gains or losses, arising from differences between exchange rates effective at the date of transaction and those prevailing at thedate of collection, payment or at the reporting date, are recorded as income or expenses in the statement of profit or loss.





2.11. Risk management policies

The Group’s activities expose it to a variety of financial risks: market risk (including currency risk, interest rate risk and price risk), credit riskand liquidity risk. The Group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimisepotential adverse effects on the Group’s financial performance.

Risk management is carried out by a central treasury department of the Group Sonae Sierra, under policies approved by the Board ofDirectors. The Board provides written principles for overall risk management, as well as written policies covering specific areas, such as foreignexchange risk, interest rate risk, and credit risk.

a) Foreign exchange risk

The activity of the Company is developed inside Portugal and consequently the majority of the company's transactions are maintained inthe same currency of the country. The policy to cover this specific risk is to avoid if possible the contracting of services in foreigncurrency.

b) Liquidity risk

The needs of treasury are managed by the financial department of Sonae Sierra which with an opportune and adequate form managesthe surplus and deficits of liquidity of each company of the Group. The occasional needs of liquidity are covered by an adequate control ofthe accounts receivables and by the maintenance of adequate limits of credit settled by the Company with banking entities.

c) Interest rate risk

The Company’s income and operating cash-flows are influenced by changes in market interest rates, since its cash and cash equivalentsand intragroup financing granted are dependent on the evolution of the interest rates in Euro which, historically, have little volatility.

On long-term financing, and as a way to mitigate the changes in the long-term interest rates, the Company’s contracts, in some cases,hedge instruments (“swaps”, “zero cost collars” or “caps”).

Interest rate sensitivity analysis:

The sensitivity analysis below has been determined based on the exposure to interest rates for both derivatives and non-derivativeinstruments in place during the reporting period. For floating rate assets and liabilities, the analysis is prepared based on the followingassumptions:

> Changes in market interest rates affect the interest income or expense of floating rate interest financial instruments and, in the caseof fixed rates that were contracted during the period of analysis, changes in the interest rates also affect the latter;

> Changes in market interest rates only affect interest income or expense in relation to financial instruments with fixed interests ratesif these are recognise at their fair value. As such, all financial instruments with fixed interest rates that are carried at amortised costare not subject to interest rate risk, as defined in IFRS 7;

> In the case of fair value hedges designed for hedging interest rate risks, when the changes in the fair values of the hedged item andthe hedging instrument attributable to interest rate movements are offset almost completely in the income statement in the sameperiod, these financial instruments are also not exposed to interest rate risk;

> Changes in market interest rates affect the fair value of derivatives designated as hedging instruments;

> The fair value of derivative financial instruments (“swaps”, “zero cost collars” or “caps”) and other financial assets and liabilities isestimated by discounting the future cash flows to their net present values, using appropriate market rates prevailing at yearend andassuming a parallel shift in yield curves;

> For the purposes of this sensitivity analysis, such analysis is performed based on all financial instruments outstanding during therelevant year.





2.11. Risk management policies (continued)

c) Interest rate risk (continued)

Sensitivity analyses are performed by changing one variable while maintaining all other variables unchanged. Nonetheless, this is arestrictive and highly unlikely assumption, since variables tend to be correlated.

If interest rates had been 75 basis points higher and all other variables were held constant, assumptions unlikely occur due to interestrates correlation with other variables, the impact in the Company’s net profit and equity would be the following:

2014 2013+75 b.p. +75 b.p.

Net Profit (1) 83 456

(1) This is mainly attributable to the Company’s exposure to interest rates on its variable rate borrowings.

As of 31 December 2014 and 2013 the interest rate sensitive analysis was not prepared considering a decrease of 25 basis points,because Euribor in 2014 is lower than 0.25% and in 2013 has been close to 0.25%.

In management’s opinion, the sensitivity analysis is unrepresentative of the inherent interest rate risk and the year-end exposure maynot reflect the exposure during the year, due to the repayments made.

2.12. Judgments and estimates

In the preparation of the accompanying financial statements estimates were used which affecting the assets and liabilities and also theamounts booked as income and expenses during the reporting period.

The estimates were calculated using the best information available, at the date of approval of the financial statements, of the events andtransactions in course and of the experience from current and/or past events. However, events may occur in subsequent periods that werenot anticipated as of the date of these statements and, consequently were not included in those estimates. Changes in the estimates afterthe closing of the consolidated financial statements will be booked on the subsequent year, as defined in IAS 8.

The most important estimates of the Company relates with the fair value, namely the fair value of the derivatives as follows:

a) Derivatives

The derivatives are usually used by the Company to hedge the cash flow in form of swaps (“interest rate swap”) or zero cost collars. Thefair value of those derivatives is, on each reporting’s date is, calculated by external entities (usually the financial institution with which thederivative was contracted). The fair value calculated by them is as well internally tested in order to validate the calculation performed bythe third parties.

The main assumptions used by the Company on its estimates are disclosed on the corresponding note.

2.13. Subsequent Events

Events occurred after the reporting date that provide additional information about conditions that existed at these statement of financialposition date (adjusting events) are reflected in financial statements. Events occurred after the reporting date that provide information onconditions that occur after the reporting date (non-adjusting events) are disclosed in the financial statements, if materially significant.




3 INVESTMENTS IN GROUP COMPANIES

As of 31 December 2014 and 2013 the Company held the following participations in group companies:

31.12.14 31.12.13

Percentage of shareCompany capital held Equity Net Profit Book value Book value

Sierra Developments, SGPS, S.A. 100.00% 1,203,734 (5,077) 1,142,429 200,028Sierra Management, SGPS, S.A. 100.00% 10,805 3,766 6,550 6,550Sierra Investments, SGPS, S.A. – – – – 677,272

1,148,979 883,850Impairment losses (Note 20) – (133,006)

1,148,979 750,844

Principal movements occurred during year 2014 in the Company's shares portfolio were the following:

Disposals Acquisition cost Nr. of shares sold Selling price

Sierra Investments SGPS, S.A. 677,272 135,175,440 661,981

677,272 661,981

During 2014, the Company sold to Sierra Developments, SGPS, S.A. its investment in the subsidiary Sierra Investments, SGPS, S.A.. Thistransaction generated a net gain of kEuro 31,599 (of which kEuro 46,890 of reversal of impairment losses recorded in previous years) (Note 20).

During the year ended 31 December 2014, the Company subscribed a share capital increase in Sierra Developments, SGPS, S.A., through a cashcontribution in the amount of kEuro 942,401.

As of 31 December 2014, and as a result of the impairment tests carried out, the Company reversed the impairment loss registered in previousyears, in the amount of kEuro 86,116 (Note 20).

4 SUPLEMENTARY CAPITAL GRANTED

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

31.12.14 31.12.13

Sierra Developments, SGPS, S.A. 100,434 91,956Sierra Investments, SGPS, S.A. – 297,070

100,434 389,026

As a result of the sale of the subsidiary Sierra Investments, SGPS, S.A. the Company also transferred the supplementary capital granted to thiscompany, in the amount of kEuro 297,070.




5 LOANS TO GROUP COMPANIES


31.12.14 31.12.13Current Current

Sierra Developments, SGPS, S.A. – 535

– 535

6 OTHER RECEIVABLES


31.12.14 31.12.13

Tax consolidation Regime (Note7):Sierra Portugal, S.A. 462 196Sierra Management, SGPS, S.A. 79 167Paracentro – Gestão de Galerias Comerciais S.A. 2 5Sierra Investments, SGPS, S.A. – 209Inparsa – Gestão de Galeria Comercial, S.A. – 55Other debtors:Solingen Shopping Center GmbH – 735Land Retail B.V. – 26Project Sierra Spain 2 B.V. – 3Sierra Investments Holdings B.V. 3 –Sierra Investments, SGPS, S.A. – 1Others 1 8Tax to be recovered (amount paid under tax debts exceptional payment regime) 3,707 3,707Others claimed taxes 19 –

4,273 5,112

The amount of kEuro 3,707 relates to the payment made in 2013 by the Company within the Special Tax Debts Payment Regime (“RERD”)established by the Portuguese government in the law approved in October 2013 (Law 151-A/2013) by which the entities that pay the taxnotifications will be exempt of the payment of interests and penalties; this amount relates to corrections of the 2005 CIT due to: (i) non-deductibleinterest expenses amounting kEuro 378; and (ii) corrections concerning the price adjustment related with the sale of shares of Cascaishopping in1996 amounting to kEuro 3,329. The Company contested the tax notifications received and did not record any impairment loss to face eventuallosses on those amounts, as the Board of Directors believes that the result will be favourable to the Company (Note 24).

The ageing of the other receivables is as follows:

31.12.14 31.12.13

Not due 563 5,1000-30 days 3 12+ 360 days 3,707 –

4,273 5,112




7 STATE AND OTHER PUBLIC ENTITIES

According to current legislation, the fiscal declarations of Portuguese companies are subject to a revision and correction by the tax authoritieswithin the period of four years, exception made when fiscal losses have occurred, fiscal incentives have been conceded or tax auditing or claims arein course. In those cases, depending on circumstances, the due dates can be extended or suspended. Because of that the fiscal declarations of thePortuguese companies of the years 2011 until 2014 can be changed.

The Board of Directors considers that any eventual modification to the fiscal declarations will not have a significant impact on the financialstatements as of 31 December 2014.

The Company is taxed for income tax purposes under the tax consolidation regime ("Regime Especial de Tributação dos Grupos de Sociedades” –RETGS), being the consolidated taxable income of the companies included in it, calculated at the level of Sonae Sierra as “mother company” of thegroup. Anyway, each company included in RETGS computes and records at its individual level its separate estimate of current income tax by creditor debit of an account receivable from or payable to Sonae Sierra.

The companies included in the RETGS are the following:

> CCCB Caldas da Rainha – Centro Comercial, S.A.,

> Paracentro – Gestão de Galerias Comerciais, S.A.,

> Parque de Famalicão, Empreendimentos Imobiliários, S.A.,

> Sierra Developments SGPS, S.A.,

> Sierra Investments SGPS, S.A.,

> Sierra Management SGPS, S.A. and

> Sierra Portugal, S.A..


31.12.14 31.12.13


Income taxTax recoverable from previous years 931 – 1,124 –Income tax – 225 447 –Income taxes retained – wages – 9 – 10Withholding tax – – – 55Social security contributions – 8 – 2

931 242 1,571 67

Income tax as of 31 December 2014 is detailed as follows:

31.12.14

Estimate of current income tax – Company (Note 21) 348Estimate of current income tax – RETGS (Notes 6 and 16) (122)Withholding taxes/Payments on account (1)

225




8 OTHER CURRENT ASSETS


31.12.14 31.12.13

Interests on loans granted to group companies:Sierra Investments, SGPS, S.A. (Nota 22) 10 –Sierra Developments, SGPS, S.A. (Nota 22) 3 49Insurance prepayment 86 85Bank commissions prepayment 57 11

156 145

The amount of kEuro 10 and kEuro 3, relates to interests receivable on short term loans granted to Sierra Investments SGPS, S.A. and SierraDevelopments, SGPS, S.A., respectively.

9 CASH AND CASH EQUIVALENTS


31.12.14 31.12.13

Bank deposits payable on demand 1,141 155

1,141 155

10 CAPITAL

At 31 December 2014 the share capital was made up of 32,514,000 fully subscribed and paid up ordinary shares of Euro 4.99 each.

The following entities own the share capital at 31 December 2014 and 2013:

Entity 2014 2013

Sonae, SGPS. S.A. 50.00% 50.00%Grosvenor Investments (Portugal), Sarl 50.00% 50.00%

Following the Shareholders General Meeting deliberation, dated 29 April 2014, the net result of 2013 had the following application:

Retained earnings (42,718)

(42,718)




11 BOND LOAN

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

31.12.14 31.12.13


ReimbursementLimit Current Non-current Limit Current Non-current plan

Bond loan 75,000 – 75,000 75,000 – 75,000 January 2018

Total Bond Loan – 75,000 – 75,000

Deferred financing costs incurred on theissuance of the bond loan (150) (425) (139) (576)

(150) 74,575 (139) 74,424

The principal conditions associated to the bond loan issued on 25 January 2013 were as follows:

> 1,500 bonds: Nominal value: 50,000 Euro.

> Maximum term: 5 (five) years.

> Annual interest rate: the interest rate, which is variable, is indexed to the EURIBOR 6 month’s rate on the second working day proceeding theinterest period, with a spread of 5.80% p.a.

> Interest Payment: half yearly in arrears, on 25 January and 25 July of each year.

> Redemption: at par, in one payment on 25 January 2018 the payment date of the last coupon.

At 31 December 2014, loans and the respective interests are repayable as follows:

31.12.14 31.12.13

Repayment Interest Repayment Interest

N+1 – 4,697 – 4,685N+2 – 4,632 – 4,695N+3 – 4,645 – 4,656N+4 75,000 2,341 75,000 7,023

75,000 16,315 75,000 21,059

12 BANK LOANS


31.12.14 31.12.13


Financing Entity Limit Current Non-current Limit Current Non-current

Bank loans Montepio Geral 20,000 20,000 – – –Santander Totta – – – 10,000 5,000 –

Short term facilities BPI – – – 12,470 661 –

Total Bank Loans 20,000 – 5,661 –

Bank loans bear interests at market interest rates and were contracted in Euro.




13 DERIVATIVE FINANCIAL INSTRUMENTS

As of 31 December 2014 and 2013, the Company’s financial instruments related to interest rate swaps were as follows:

31.12.14 31.12.13

Fair value of Fair value ofthe financial the financial

Loan instruments Loan instruments Due date

Financial hedging instruments:Novo Banco 75,000 1,453 75,000 2,240 2016BPI Madrid 1,561 2,138 2016

3,014 4,378

The fair value of the derivative financial instruments was recorded as liabilities, and the changes in fair value were recognized on the statement ofprofit or loss of year under the caption of “Derivative financial instruments” as it does not qualify for hedge accounting purposes.

14 LOANS FROM GROUP COMPANIES


31.12.14 31.12.13

Loans obtained:Sierra Investments, SGPS, SA 22,477 16,393Sierra Portugal, S.A. 18,595 23,633Sierra Management SGPS, SA 10,438 13,660Sierra Spain Shopping Centers Services, S.L. 3,438 535Sierra Developments, SGPS, S.A. 2,103 –Paracentro -Gestão Galeria Comercial S.A 40 87Inparsa – Gestão de Galeria Comercial, S.A. – 206

57,091 54,514

The amounts payable refers to loans obtained from group companies for less than one year period and bear interests at market interest rates.




15 SHAREHOLDERS


31.12.14 31.12.13

Payable dividendsGrosvenor Investments (Portugal) Sarl – 10,567Sonae SGPS, S.A. – 10,567

– 21,134

In accordance with the decision taken on 11 April 2012 by the shareholders, it was approved the deferral of the payment of the dividends attributedto the shareholders, related to the net profit of 2011, amounting to KEuro 21,134.

During the year ended 31 December 2014, and in accordance with the decision taken on 24 September 2014, the Company paid those dividends.

16 OTHER PAYABLES


31.12.14 31.12.13

Tax consolidation regime:Sierra Investments, SGPS, S.A. 461 1Sierra Developments, SGPS, S.A. 180 26Paracentro -Gestão Galeria Comercial S.A. 18 57CCCB Caldas da Rainha – Centro Comercial, S.A. 4 –Sierra Portugal, S.A. 1 23Parque de Famalicão, Empreendimentos Imobiliários, S.A. 1 –Services rendered:Sonae SGPS, S.A. 213 213Sonae Center II, S.A. 1 2Sierra Investments, SGPS, S.A. – 1

879 323

The amounts reported above have the following reimbursement plan:

31.12.14 31.12.13

Short term:0-90 days 214 21690-180 days 665 107

879 323




17 OTHER CURRENT LIABILITIES


31.12.14 31.12.13

Accrual for vacations and vacations bonuses and bonus 511 474Interest payable:

Sierra Portugal, S.A. 612 549Sierra Investments, SGPS, S.A. 495 138Sierra Developments, SGPS, S.A. 247 –Sierra Management. SGPS, S.A. 102 139Sierra Spain Shopping Centers Services, S.L. 58 31Paracentro -Gestão Galeria Comercial S.A. – 1Inparsa – Gestão de Galeria Comercial, S.A. – 6

Interest bond loans 2,036 2,047Interest derivative 780 885Interest bank loans 12 11Financing costs payable 98 61Services rendered by third parties 21 22Committees of guarantees 11 14

4,983 4,378

The caption of “Accrual for vacations and vacations bonuses and bonus” as of 31 December 2014 and 2013, include the amounts of kEuro 328 andkEuro 300, respectively, related to remuneration bonus attributed to some employees of the Group, which will be paid in the future, as long as theemployees involved are still employees of the Group as of the payment date. This remuneration bonus will be adjusted, in each of the followingperiods, until the corresponding payment date, by the annual variation of the Net Asset Value (NAV) of the Group and for the remunerationbonuses attributed in 2012, inclusive, will be also adjusted according to the direct result of the Group and possible sales of assets during thedeferred period. These remuneration bonuses are amortised on a straight line basis over the deferred period and recorded as expense, on the basisof the gross amount that was attributed to those employees, and any subsequent adjustment derived from the variation of the Group’s NAV orother is recorded in the statements of profit or loss of the year in which the variation occurs.

18 OTHER OPERATING REVENUE

Other operating income for the years ended 31 December 2014 and 2013 is made up as follows:

2014 2013

Recovery of costs 5 8

5 8

19 OTHER OPERATING EXPENSES

Other operating expenses for the years ended 31 December 2014 and 2013 are made up as follows:

2014 2013

VAT 10 68Stamp duty 1 47Other 10 10

21 125




20 NET FINANCIAL RESULTS AND NET INCOME FROM INVESTMENTS

Net financial results are made up as follows:

2014 2013

Expenses:Interests on loans obtained from group companies 2,786 2,130Interests on bond loans 4,682 4,458Interests on overdrafts 195 170Interests on bank loans 101 204Losses on fair value of financial derivatives (Note 13) 535 –Stamp duty related to financing 58 31Bank charges 727 624Committees of guarantees 173 223Contractual indemnification 930 –Others 194 186

10,381 8,026Net financial expenses (10,258) (7,547)

123 479

Income:Interest income (Note 22) 78 415Interest income on treasury applications 3 1Interest default 25 –Gains on fair value of financial derivatives (Note 13) – 47Other 17 16

123 479

The amount of kEuro 930 recorded under the caption "Contractual indemnity" refers to an indemnity paid to DDR, related to the sale of itssubsidiary Sonae Sierra Brazil, B.V., occurred in 2014.

Gains and losses on investments are made up as follows:

2014 2013

Reversal Impairment losses – group companies (Note 3) 86,116 12,208Capital gains (Note 3) 31,599 –Dividends 7,140 –Impairment losses – group companies – (46,889)Price adjustment Cascaishopping – Centro Comercial, S.A. – 1,480

124,855 (33,201)

The amount recorded under the caption "Reversal Impairment losses – group companies" refers to reversal of the impairment registered by theCompany, related to its subsidiary Sierra Developments SGPS, S.A..

The amount recorded under the caption "Dividends" refers to dividends attributed and received from its subsidiary Sierra Management, SGPS, S.A..




21 INCOME TAX

Income tax for the years ended 31 December 2014 and 2013 is made up as follows:

2014 2013

Current income tax (Note 7) 348 (972)Correction of current income tax estimate of previous year 645 672Deferred tax – 1,154

993 854

By the Law 89-B/2014, dated 31 December 2014, the CIT rate reduced to 21%, effective from 2015 onwards. Regarding the additional taxation“Derrama estadual”, foreseen in article 87ºA of the CIT code, no changes occurred and the tax rates are the following: (i) 3% regarding taxableincome higher than kEuro 1,500 and under kEuro 7,500; (ii) 5% regarding taxable income higher than kEuro 7,500 and under kEuro 35,000; and (iii)7% regarding taxable income higher than kEuro 35,000. The reduction of the CIT rate has no impact on the accompanying financial statements, asthe Company did not register deferred tax assets and liabilities.

The reconciliation between tax expense and the accounting profit multiplied by the applicable tax rate is as follows:

2014 2013

Profit before income tax 113,625 (41,864)Reversal Impairment losses – group companies (Note 20) (86,116) (12,208)Gains/Losses related to the sale of companies (Note 20) (31,599) (1,480)Dividends (Note 20) (7,140) –Impairment losses – group companies – 46,889Correction related to financial hedging instruments (Note 20) 535 –Limitation on deductibility of financing costs 7,617 4,329Other 34 102

Taxable profit (3,044) (4,232)

(3,044) (4,232)Income tax rate in Portugal 23.0% 25.0%

(700) (1,058)Deferred income tax not recognized 700 –Tax rate change effect – 85Regularization of the consolidated tax estimate 348 –Insuficiency of tax estimate 645 672Effect of the recognition/reversal of deferred taxes – 1,154Other – 1

993 854



Notes to the consolidated financial statements as of 31 December 2014(Translation of the notes issued in Portuguese – Note 46)(Amounts stated in thousands of Euro - kEuro)

22 RELATED PARTIES

Balances and transactions that existed with related parties, during the years ended 31 December 2014 and 2013, in addition to the loans concededto and obtained from the shareholders mentioned in Note 14, are detailed as follows:

Balance

Other current assets/liabilitiesOther receivables (Note 6) Other payables (Note 16) (Notes 8 and 17)

31.12.14 31.12.13 31.12.14 31.12.13 31.12.14 31.12.13

Sierra Portugal, S.A. 462 196 1 23 (612) (549)Sierra Management, SGPS, S.A. 79 167 – – (102) (139)Sierra Investments Holding, B.V. 3 – – – – –Paracentro – Gestão de Galerias Comerciais S.A. 2 5 18 57 – (1)Solingen Shopping Center GmbH – 735 – – – –Sierra Investments, SGPS, S.A. – 209 461 1 (485) (138)Inparsa – Gestão de Galeria Comercial, S.A. – 55 – – – (6)Land Retail B.V. – 26 – – – –Project Sierra Spain 2 B.V. – 3 – – – –Parque de Famalicão, Empreendimentos Imobiliários, S.A. – – 1 – – –CCCB Caldas da Rainha – Centro Comercial, S.A. – – 4 – – –Sierra Developments, SGPS, S.A. – – 180 26 (244) 49Sonae SGPS, S.A. – – 213 213 – –Sonae Center II, S.A. – – 1 2 – –Sierra Spain Shopping Centers Services, S.L. – – – – (58) (31)

546 1,397 879 323 (1,501) (815)

Transactions

Interest income (Note 20) Interest expense (Note 20)

31.12.14 31.12.13 31.12.14 31.12.13

Sierra Developments, SGPS, S.A. 68 415 247 –Sierra Investments, SGPS, S.A. 10 – 756 283Sierra Portugal, S.A. – – 1,163 1,090Sierra Management. SGPS, S.A. – – 549 709Sierra Spain Shopping Centres Services, S.L. – – 65 31Inparsa – Gestão de Galeria Comercial, S.A. – – 4 10Paracentro-Gestão de Galerias Comerciais S.A. – – 2 7

78 415 2,786 2,130

The remuneration of the Board of Directors, during the years ended 31 December 2014 and 2013, was as follows:

2014 2013

Fixed remuneration 440 370Variable remuneration 279 154

719 524




23 EARNINGS/LOSSES PER SHARE

As of 31 December 2014 and 2013, basic earnings per share correspond to the net profit divided by the weighted average number of ordinary sharesof Sonae Sierra during the year, and was computed as follows:

2014 2013

Profit/Losses considered to compute the basic earnings per share(net profit of the year) 112,632 (42,718)Number of shares 32,514,000 32,514,000

Earning/Losses per share (Euro) 3.46 (1.31)

24 CONTINGENT LIABILITIES AND BANK GUARANTEES

During the year ended 31 December 2014, no tax inspections occurred.

Nevertheless as of 31 December 2012, the Company had been notified by the tax authorities regarding to the deductibility of the interest incurredwith loans obtained in the year of 2004, in the amount of kEuro 1,019, and concerning years 2005, 2007, 2008 and 2009 and 2010 as MotherCompany of the RETGS in the amount of KEuro 9,499. All these tax notifications were claimed by the Company. No provision was recorded becausethe Board of Directors understands that the risk of this contingency is unlikely.

Regarding the deductibility of the financial expenses incurred in the year of 2004, the Company had already received a favourable first courtdecision. On 20 January 2015, the Company was notified by the court and received a favourable second court decision.

In what concerns the year 2005, the Company applied to the Tax Debts Exceptional Payment Regime (RERD) and paid the corresponding tax,which is expected to be reimbursed as the Company expects a favourable decision from the court regarding the related judicial claim (Note 6).

Additionally as of 31 December 2014 and 2013 the following bank guarantees were granted:

2014 2013

Bank guarantees:Tax processes in course 3,374 3,374To secure the reimbursement of the first instalment of the preliminary sale andpurchase agreement with Carrefour Romania 2,108 –

5,482 3,374

As of 31 December 2014 the amounts recorded under the caption "Tax processes in course", refer to guarantees issued in favour of Direcção Geraldos Impostos, related to the suspension of income tax notifications for the years 1996 (kEuro 1,493), of 2004 (kEuro 1,296), and of 2008 (kEuro585).

During the year ended 31 December 2014, the Company granted a guarantee in favour of Carrefour Romania in the amount of kEuro 2,108 onbehalf of its subsidiary Parklake Shopping S.A., to secure the reimbursement of the first instalment of the purchase price related to the acquisitionby Carrefour of the hypermarket unit.

During the year ended 31 December 2013, the Company granted a guarantee to the Portuguese tax administration in the amount of kEuro 230 onbehalf of its subsidiary Sierra Investments, SGPS, SA, for the purpose of suspending the stamp tax notification for the year 2010 related to short-term loans granted to the shareholder.

During the year ended December 31, 2011, the subsidiary Sierra Investments SGPS, SA provided a guarantee in the amount of kEuro 251, to thePortuguese tax administration on behalf of Sonae Sierra SGPS, SA, in order to suspend the effects of IRC process for the year 2010, in the FiscalUnit, under the Special Taxation Regime for groups of Societies ("RETGS").

During the year ended December 31, 2012, the subsidiary Sierra Investments SGPS, SA provided a guarantee in the amount of kEuro 8,316, to thePortuguese tax administration on behalf of Sonae Sierra SGPS, SA, in order to suspend the effects of IRC process for the year 2008, in the FiscalUnit, under the "RETGS".

During the year ended December 31, 2013, the subsidiary Sierra Investments SGPS, SA provided three guarantees in the amount of kEuro 3,191,kEuro 943 and kEuro 162, to the Portuguese tax administration on behalf of Sonae Sierra SGPS, SA, in order to suspend the effects of IRCprocesses for the years 2009, 2010 and 2012, in the Fiscal Unit, under the "RETGS".

During the year ended December 31, 2014, the subsidiary Sierra Investments SGPS, SA provided a guarantee in the amount of kEuro 182, to thePortuguese tax administration on behalf of Sonae Sierra SGPS, SA, in order to suspend the effects of IRC process for the year 2013, in the FiscalUnit, under the "RETGS".




25 DISCLOSURES REQUIRED BY LEGISLATION

The information on fees charged by the statutory auditor is included in the information disclosed on the consolidated financial statements.

26 APPROVAL OF THE FINANCIAL STATEMENTS

The accompanying financial statements were approved by the Board of Directors and authorised for issuance on the 27 of February 2015. However,these financial statements are still depending on the approval by the Shareholders General Meeting, in accordance with business legislationprevailing in Portugal.

27 NOTE ADDED FOR TRANSLATION

This is a translation of financial statements originally issued in Portuguese in accordance with Portuguese Statutory requirements, some of whichmay not conform to or be required in other countries. In the event of discrepancies, the Portuguese language version prevails.



STATUTORY AUDIT REPORT CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS(Translation of a report originally issued in Portuguese)

INTRODUCTION

1. We have audited the consolidated and separate financial statements Sonae Sierra, S.G.P.S., S.A. (the “Company”), which comprise theconsolidated and separate Statement of Financial Position as of 31 December 2014 that presents a total of 2,095,587 thousand Euros and1,255,914 thousand Euros, respectively, and consolidated and separate total equity of 1,307,293 thousand Euros and 1,095,280 thousandEuros, respectively, including a consolidated net profit attributable to the shareholders of the Company of 96,311 thousand Euros and aseparate net profit of 112,632 thousand Euros, the Consolidated and Separate Statements of Profit or Loss by Nature, ComprehensiveIncome, Changes in Shareholders’ Equity and Cash Flows for the year then ended and the corresponding notes.

RESPONSIBILITIES

2. The Company’s Board of Directors is responsible for the preparation of consolidated and separate financial statements that present a trueand fair view of the financial position of the Company and the companies included in the consolidation, the consolidated and separate resultsand comprehensive income of their operations, changes in equity and cash flows as well as the adoption of adequate accounting policies andcriteria and the maintenance of appropriate internal control systems. Our responsibility is to express a professional and independent opinionon these consolidated and separate 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 thePortuguese Institute of Statutory Auditors (“Ordem dos Revisores Oficiais de Contas”), which require that the audit be planned and performedwith the objective of obtaining reasonable assurance about whether the consolidated and separate financial statements are free of materialmisstatements. This audit included verifying, on a sample basis, evidence supporting the amounts and disclosures in the consolidated andseparate financial statements and assessing the significant estimates, based on judgements and criteria defined by the Board of Directors,used in their preparation. This audit also included verifying the consolidation procedures used and the application of the equity method andthat the financial statements of the companies included in the consolidation have been appropriately audited, assessing the adequacy of theaccounting policies used and their uniform application and disclosure, taking into consideration the circumstances, verifying the applicabilityof the going concern concept and assessing the adequacy of the overall presentation of the consolidated and separate financial statements.Our audit also comprised verifying that the financial information contained in the Management Report is in accordance with the consolidatedand separate financial statements. We believe that our audit provides a reasonable basis for expressing our opinion.

OPINION

4. In our opinion, the consolidated and separate financial statements referred to in paragraph 1 above, present fairly, in all material respects,the consolidated and separate financial position of Sonae Sierra, S.G.P.S., S.A., as of 31 December 2014, the consolidated and separate resultsand comprehensive income of its operations, the consolidated and separate changes in equity and the consolidated and separate cash flowsfor the year then ended, in conformity with International Financial Reporting Standards as adopted by the European Union.

EMPHASIS

5. As mentioned in Note 2.1. of the notes to the consolidated financial statements, the Group adopted IFRS 11 – Joint Arrangements, witheffects on 1 January 2014. In accordance with IFRS 11 – Joint Arrangements (that replaced IAS 31 – Interests in Joint Ventures), joint venturesshall be accounted by using the equity method, being the proportionate consolidation, used by the Group until 2013, no longer permitted.The effects of this change in accounting policy, were applied retrospectively at the earliest period presented (1 January 2013), being theconsolidated financial statements of the previous years restated accordingly.

REPORTING ON OTHER LEGAL REQUIREMENTS

6. Is also our opinion that the financial information included in the Management Report is in accordance with the consolidated and separatefinancial statements.

Lisboa, 27 February 2015

Deloitte & Associados, SROC S.A.

Represented by Teresa Alexandra Martins Tavares


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2014 CONSOLIDATED REPORT AND ACCOUNTS - … · Sonae Sierra, SGPS, SA and subsidiaries Consolidated...

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